U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

(Mark One)
{X}      Annual  Report  pursuant  to  Section  13 or  15(d)  of the  Securities
         Exchange Act of 1934 (Fee  Required)

         For the fiscal year ended December 31, 1997
                                   -----------------
{ }      Transition Report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 (No Fee Required)

                      Pollution Research and Control Corp.
                      ------------------------------------
           (Name of Small Business Issuer as Specified in its Charter)


         California                                         95-2746949
 ------------------------------                        ----------------------
(State or other jurisdiction of                           (IRS Employer
incorporation or organization)                         Identification Number)


506 Paula Avenue, Glendale, California                          91201
--------------------------------------                          -----
(Address of Principal Executive Offices)                      (Zip Code)

Small Business Issuer's telephone number, including area code (818) 247-7601
                                                              --------------
Securities  registered  pursuant to Section  12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

                           Common Stock, no par value
                           --------------------------
                                (Title of Class)

Check whether the Small Business Issuer (1) has filed all reports required to be
filed by Section 13 of 15(d) of the  Securities  Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Small  Business  Issuer
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements of the past 90 days. Yes X   No
                                     ---     ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-B is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by  reference  in Part III of the Form 10-KSB or any  amendment to
this Form 10-KSB {X}.

Small Business Issuer's revenues for its most recent fiscal year: $6,792,767

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Small Business Issuer, computed by reference to the average bid and asked prices
of such stock on March 24, 1998 was $1,460,000.

Total number of pages -  92                Exhibit Index is located at Page E-1

                      DOCUMENTS INCORPORATED BY REFERENCE:
       Certain exhibits to this Annual Report as set forth in the Exhibit
                           Index located at page E-1.

                                        1


<PAGE>



                      POLLUTION RESEARCH AND CONTROL CORP.
                                   Form 10-KSB
                   For the Fiscal Year Ended December 31, 1997

                                TABLE OF CONTENTS

Part I                                                                Page
                                                                      ----
         Item 1.     Description of Business                           4
                     General                                           4
                     History of the Company                            4
                     The Air Pollution Industry                        5
                     Instrument Market                                 6
                     Control Market                                    7
                     Governmental Approval                             7
                     Governmental Regulation and Enforcement           8
                     Company Products                                  9
                     Marketing and Sales; Backlog                     10
                     Foreign Sales                                    11
                     Manufacturing and Purchasing                     11
                     Research and Development                         12
                     Employees                                        12
                     Competition                                      12
                     Intellectual Property                            13

         Item 2.     Description of Properties                        13

         Item 3.     Legal Proceedings                                14

         Item 4.     Submission of Matters to a Vote of
                     Security Holders                                 14

Part II.

         Item 5.     Market for Common Equity and Related
                     Stockholder Matters                              14

         Item 6.     Management's Discussion and Analysis or
                     Plan of Operation                                14
                     Liquidity and Capital Resources                  16
                     Seasonality                                      17

         Item 7.     Financial Statements                             17

         Item 8.     Changes in and Disagreements with
                     Accountants on Accounting and
                     Financial Disclosures                            17

                                        2


<PAGE>



                                    TABLE OF CONTENTS

                                       (continued)

Part III                                                                  Page
                                                                          ----
         Item 9.     Directors, Executive Officers, Promoters
                     and Control Persons;  Compliance with
                     Section 16(a) of the Exchange Act                     17
                     Directors, Executive Officers and Key Employees       17
                     Family Relationships                                  18
                     Business Experience                                   18
                     Section 16(a) Beneficial Ownership
                     Reporting Compliance                                  20


         Item 10.    Executive Compensation                                21
                       Executive Compensation                              21
                       Compensation of Directors                           21
                       Employment Agreements                               21

         Item 11.    Security Ownership of Certain Beneficial
                     Owners and Management                                 22

         Item 12.    Certain Relationships and Related Transactions        24

         Item 13.    Exhibits and Reports on Form 8-KA
                     (a)      Exhibits                                     24
                     (b)      Reports on Form 8-KA                         24




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Item 1.                    Description of Business

General

     The Company's  core  business for over twenty years has been  primarily the
design, manufacture and marketing of automated continuous monitoring instruments
used to detect and measure various types of air pollution,  such as "acid rain,"
"ozone  depletion" and "smog  episodes,"  through its  wholly-owned  subsidiary,
Dasibi  Environmental Corp. The Company's products are generally used to measure
air  pollution  levels  in  geographic  areas  which  range in size  from  small
industrial  sites to entire  states or  countries.  The  Company  also  supplies
computer-controlled   calibration  systems  that  verify  the  accuracy  of  its
instruments,  data loggers to collect and manage pollutant information and final
reporting software for remote centralized  applications,  which is classified as
"core business related."

     Because  severe  competitive  price  pressures  in its core  business  have
developed (see "History of the Company" below),  the Company has adapted uses of
its  technology to medical  instrumentation  which  measures air  pollutants for
medical  diagnostics and to control  applications to eliminate or reduce the air
pollutants  measured in its "core business." (See  "Instrumentation  Market" and
"Control Market" below).

History of the Company

     The Company was organized as a California corporation on December 24, 1971,
under the name of "A.E. Gosselin Engineering, Inc." as a wholly-owned subsidiary
of "Pollution  Research and Control Corp."  ("PRCC"),  a California  corporation
co-founded in 1966 by Albert E. Gosselin, Jr., the Company's President and Chief
Executive  Officer,  and his wife,  Barbara  Gosselin,  an executive officer and
director of the Company. Mr. Gosselin founded the Company to design, manufacture
and market  air  pollution  monitoring  equipment  for  ambient  air (i.e.,  the
surrounding  air) as  distinguished  from the customer  stack source  monitoring
systems  then being  designed,  manufactured  and sold by PRCC.  The name of the
Company was changed to "Dasibi Environmental Corp." on March 22, 1973. (See Item
9. "Directors, Executive Officers, Promoters and Control Person; Compliance with
Section  16(a) of the  Exchange  Act -  Directors,  Executive  Officers  and Key
Employees.")

     The Company was  operated as a  wholly-owned  subsidiary  of PRCC until its
initial public  offering of securities in May 1985. In 1984,  PRCC  discontinued
its research and development  activities and assigned them to the Company.  From

                                       4


<PAGE>


1984 through May 1985, PRCC acted primarily as a holding company for the Company
and  Applied  Conservation   Technology,   Inc.  ("ACT"),  then  a  wholly-owned
subsidiary  of PRCC engaged in the business of  providing  environmental  impact
reports to electric utilities.  ACT was purchased by its management from PRCC in
November 1986. Gary Dudley,  a director and former Vice President of the Company
and a former executive  officer and director of PRCC, has been the President and
a principal shareholder of ACT, a diversified  environmental consulting firm now
located  in  Westminster,   California,   since  November  1986.  (See  Item  9.
"Directors,  Executive Officers,  Promoters and Control Persons; Compliance with
Section  16(a) of the  Exchange  Act -  Directors,  Executive  Officers  and Key
Employees.")

     The Company changed its name to "Pollution Research and Control Corp.," the
name of its former parent,  PRCC, in November 1989. In January 1990, the Company
acquired all of the issued and  outstanding  shares of Common  Stock,  $1.00 par
value per share,  of an inactive  California  corporation,  organized by Mr. And
Mrs. Gosselin as co-founders under the name of "Baral Engineering, Inc." in July
1976,  which  changed its name to "Dasibi  Environmental  Corp."  ("Dasibi")  in
January  1990.  All of the  Company's  operations  were  transferred  to  Dasibi
subsequent to the acquisition. Also in 1990, the Company changed its fiscal year
from June 30 to December 31.

     In February, 1994, the Company acquired the technology and inventory of the
Byron  Hydrocarbon  Analyzer line from General  Monitors,  Inc.  ("GMI"),  for a
purchase  price of  $225,000.  Of the purchase  price,  $200,000 was paid by the
Company in cash and $25,000 was  rescheduled  by mutual  agreement  and was paid
July 1, 1996.

     In March 1994, the Company entered into an exclusive worldwide requirements
agreement  over a  three-year  period with  London-based  Logan  Research,  Ltd.
("LRL")  to  provide  LRL with  oxides of  nitrogen  instrument  parts on an "as
required" basis for use in medical technology applications. In October 1995, the
agreement  was  modified  to be  exclusive  with a domestic  corporation,  Logan
Medical  Devices  ("LMD"),  which  acquired  Logan  Research,  Ltd. In 1995, the
Company advanced $164,000 to LRL. The $164,000 was charged against operations in
1995.  In June 1996 the  Company  acquired  100% of the common  stock of LMD for
600,500  options to LMD  shareholders,  all options  above  market bid price and
vesting in January, 1998, such bid price as existed in the date of agreement. In
addition,  the Company contributed  $250,000 to LMD for working capital.  LMD is
considered as a "start-up"  which requires  equity funding for marketing and FDA
approval. The product however, is considered "commercial." No equity funding has
been obtained to this date and there is no assurance that any equity funding can
be obtained.

     Also, in June, 1996, the Company acquired 100% of the stock of Nutek, Inc.,
a  Pensacola,  Florida,  electrical  control  panel and  printed  circuit  board
manufacturer.  No company stock was issued,  but 340,000 options at above market
bid  price  on the  date of  agreement  were  issued  to key  employees  in this
transaction,  lawyers and  "finders."  Such options  vested in January 1998. The
Company  directly paid $250,000 cash into an estimated  total  purchase price of
$1,900,000,  the balance  obtained from asset based financing  solely on Nutek's
assets.  The Company  acquired Nutek primarily for the customer list as it would
fit into the Company's air pollution control technology  diversification  plans.
To this date no air pollution  control  technology  use has been made of Nutek's
customer list.

The Air Pollution Industry

     Air pollution consist of certain gases or particles, generally the products
of combustion or other  industrial  processes,  which are or may be hazardous to
human health.  Pollutants include carbon monoxide,  ozone,  oxides of sulfur and
nitrogen,  hydrogen  sulfide and particles.  Small amounts of these  pollutants,
such as a few  parts  per  million  or part per  billion,  may be  harmful.  The
instruments  produced and sold by the Company,  the "core  business"  detect and
measure these  pollutants and are also utilized in calibrating  other  pollution
measurement equipment.  Any systems or processes such as the Company's "flue gas
purification system" patent employ chemical and mechanical means to remove these
same pollutants from combustion  exhaust gases.  (See "Research and Development"
under this Item 1. "Description of Business").

     Industrial  entities  require  equipment to detect the presence and measure
the level of pollutants  in order to comply with  governmental  regulations  and

                                       5

<PAGE>


government   regulatory  agencies  require  equipment  to  enforce  governmental
standards.  Currently,  international  priority  has been given to control  (and
therefore  to monitor)  such gaseous  pollutants  as sulfur  dioxide,  oxides of
nitrogen, carbon monoxide, ozone and particulates (suspended dust).

     Although manual sampling of both gases and  particulates is still performed
routinely, improvements in the reliability and accuracy of automated, continuous
monitoring  equipment,  such as that manufactured and sold by the Company,  have
made manual  sampling  less  desirable  and  automated  monitoring  increasingly
common.

     In basic  continuous  monitoring  instruments,  ambient air is taken into a
manifold, the function of which is to direct a fast-moving stream of ambient air
to the  monitor.  The  instrument  may use a filter  to remove  particulates  or
scrubbers to remove gasses that might interfere with accurate measurement of the
pollutant.  The pollutant is then introduced into a measurement cell environment
where it undergoes a chemical or physical  reaction,  the output of which can be
converted  to an  electrical  signal  which,  in turn,  can be read  locally  or
transmitted to some remote  monitoring plant or computer.  Measurement cells can
be based in many  different  methods  for the  detection  of the  pollutants  of
interest. Thus, an instrument designed may have many different methods available
by which a pollutant may be identified and measured.

     Some   methods   used  by  the  Company  are  flame   photometry   (wherein
concentrations  of gaseous  elements are measured by burning them and  optically
observing  the color and  intensity of the flame  generated  thereby),  infrared
absorption  (wherein  concentrations of infrared absorbing gases are measured by
detecting   changes  in   intensity   of  a   radiation   beam   closed   cell),
chemiluminescence  (wherein  a  chemical  generates  a  light  or a wave  length
measurable by a photo multiplier tube),  ultraviolet  spectroscopy  (wherein the
pollutants'   decrease  in  ultraviolet   light  intensity  is  converted  by  a
photoelectric  detector to an electric signal) and beta ray attenuation (wherein
a radioactive source's beta ray emanation is reduced in direct proportion to the
mass of a particle).

Instrument Market

     The air pollution  monitoring  equipment  market includes two markets:  (i)
source  instrumentation  for monitoring the source's pollutant emissions as they
are  discharged  into  the air and  (ii)  ambient  air for  instrumentation  for
monitoring  ambient air pollution.  The two markets are quite  different in that
source  instrumentation  is generally not subject to rigid  governmental-imposed
guidelines  because  of the  difficult  analyses  involved,  while  ambient  air
instruments are subject to rigid governmental  guidelines because the pollutants
are easier to define and measure.

     Generally,  the Company  sells its  instruments  for use in systems for the
measurement  of ambient air  pollution.  In a system,  air pollution  monitoring
instruments  are united with  additional  equipment  to provide a  comprehensive
measurement  unit.  In an ambient air  instrumentation  system,  the  monitoring
instrument  is  combined  with  a  manifold   intake,   a  calibrator  and  data
transmitters.  The system  samples the ambient air,  measure the  pollutants and
transmits the data. The Company designs and manufactures all instruments used in
a system, including the data tabulation and transmission devices. At the present
time,  the Company  believes  that it is the only  manufacturer  that is able to
furnish its customers with a complete "in-house" ambient air monitoring system.



                                       6

<PAGE>


     Until  1992,  the  Company's  products  were not  applicable  to the source
instrumentation  market.  However,  because of revised governmental  regulations
requiring  greater  accuracy and dilution  conditioning as a standard  (reducing
pollution   concentrations   to  the  parts  per   billion   level)  for  source
instrumentation  involving a continuous emission monitoring system ("CEMS"), the
Company's products became applicable. The Company is not currently able to offer
customers a CEMS because it does not manufacture the additional equipment needed
to complete the system. The Company commenced a research and development program
in July 1992 and halted in 1994 for the purpose of developing an innovative CEMS
which currently remains in the prototype stage of development.  The Company does
not require  EPA-approval of any of its instruments in order to complete a CEMS.
(See "Research and Development" under this Item 1. "Description of Business.")

     In 1995 the Company  completed  research and development in a joint venture
with Logan  Research  Ltd. for  development  of a NOX analyzer for  non-invasive
asthma  diagnostics.  Although the unit is recognized as  "Commercial",  limited
funding prohibits the Food and Drug  Administration  (FDA) testing for approval.
Currently small quantities of this analyzer are being sold in foreign countries.

Control Market

     The air  pollution  control  market makes only  minimal use of  measurement
instrumentation.  This market is concerned with  "purification" of exhaust gases
emanating  from   combustion-related  or  even  chemical-only   processes.   The
"purification" process consists of using various types of equipment which may or
may not involve  catalysts and/or reagents to cause reactions and/or  mechanical
removal of a high percentage of selected air pollutants.  The highest percentage
obtainable  will  relate,  at any given  time,  to the  state-of-the-art  of the
technology involved and the economics of implementing the technology. The market
is old, in essence dating to the beginnings of the industry when soot collectors
were first  installed  on  combustion  chambers.  However,  the  market  size is
embryonic  since  technology  has not  materially  advanced  and  implementation
remains  costly  so as not to allow any  generally  accepted  control  of source
pollutants. The Company filed a patent application in April 1994 for a "flue gas
purification system," which issued in 1996, however, the commercial viability of
a market for this invention is not assured.  (See "Research and Development" and
"Intellectual Property" under this Item 1. "Description of Business.")

     The acquisition of Nutek, which primarily designs and fabricates instrument
electrical  control  panels,  was  intended  at  first,  as an  entry  into  the
coal-fired industrial  applications and second as a manufacturer for significant
components of the Company's  patent  system.  As of this date, no application of
this potential has been made for the air pollution control market.

Governmental Approval

     The  Environmental  Protection  Agency (the "EPA")  administers the federal
Clean Air Act, as amended by the Clean Air Act  Amendments of 1990, and approves
ambient air pollution  monitoring  equipment  meeting  certain  requirements  as
either  reference  or  equivalent  methods  for  measuring  pollutants.  The EPA
established the reference  method as the basic method for measuring a pollutant.
An equivalent method measures the same pollutant utilizing a different technique
which achieves results identical to those of the referenced method.

                                       7

<PAGE>


     As a practical  matter,  before a monitoring  instrument can be sold in the
United  States,  it  must  receive  EPA-approval  as  either  a  "reference"  or
"equivalent"  method. Such approvals are given only after rigorous and expensive
testing by the applicant and the  submission to, and approval by, the EPA of the
results of such testing.  The testing and approval  process  generally  requires
between 12 and 18 months.  Following  approval,  the EPA typically  acquires and
tests a production model of the device.  If the model being tested does not meet
the  standards  established  by  the  approval  process,  the  approval  may  be
withdrawn.

     Each of the Company's  models of ozone  monitors and its sulfur dioxide and
oxides of nitrogen monitors have been approved as equivalent methods by the EPA.
Additionally,  the  Company's  carbon  monoxide have been approved as equivalent
methods by the EPA.  Additionally,  the Company's carbon monoxide  monitors have
been  approved  as  reference  methods.  The  Company  is  currently  testing  a
particulate analyzer (beta ray attenuation) for approval as an equivalent method
by the EPA. The Company has never had, or been threatened  with, a recall as the
result of  subsequent  testing  by the EPA of a  production  model of any of its
instruments.

     The Company  believes that, as the performance of air monitoring  equipment
improves and monitoring  technology becomes available in the market,  government
regulatory  agencies  tend  to  adopt  regulations  requiring  the  use of  such
technology.  The Company has never been required to modify or discontinue any of
its  products  as a result  of  improved  technology.  However,  there can be no
assurance that future technological improvements will not mandate changes in, or
cause the obsolescence of, Company products.

Governmental Regulation and Enforcement

     Legislation requiring more precise air pollution monitoring and enforcement
is increasing in the  sophistication  of the technology  improves and as concern
for the environment, particularly the depletion of the ozone layer, becomes more
acute.  The Clean Air Act and the Clean Air Act  Amendments  of 1990 (the  "1990
Amendments"),  which are being rapidly implemented, require increased control of
industrial  air pollution  and  represent an increasing  threat of shut-down for
U.S.  industrial  concerns which fail to obtain necessary  permits and engage in
other conduct  violative of the legislation.  Because increased control requires
increased  management  and  monitoring  of  air  pollutants  by  government  and
industry,  the Company expects,  but cannot assure, a steadily increasing market
for its products.  Company  management  believes that  governmental  enforcement
policy also has a significant effect on the demand for the Company's products. A
relaxation  during 1982 in the federal  enforcement  of  governmental  standards
resulted  in a decrease in demand for the  Company's  products.  Since the,  the
worldwide  trend  toward  increasingly  stringent  environmental  standards  for
industrial  air pollution  together with stricter  governmental  enforcement  of
environmental  regulations,   is  expected  by  management  to  cause  continued
expansion  of  segments  of the  analytical  instruments  market and a continued
increase in demand for the Company's products. In essence, the Company furnishes
a product that the customer does not want to buy voluntarily. In previous years,
price  difference  was not  significant  to the selection  process.  Since 1994,
sizeable discounts have become significant to the purchasers.


                                        8


<PAGE>



Company Products

     In 1972, the Company developed,  and in 1974 initially marketed,  the first
ultraviolet ozone monitor,  of which eight models are currently  marketed by the
Company,     including     high     concentration,     manual,     remote    and
microprocessor-controlled versions. The Company will continue to seek to develop
new versions of its basic model of ozone monitor, but does not expect any change
in the basic  principle  upon  which the  instrument  operates.  The  Company is
generally considered the leader in ozone measurement technology in the world.

     The Company  developed  microprocessor-controlled  carbon monoxide,  sulfur
dioxide and oxides of nitrogen monitors in 1981, 1986 and 1987, respectively. In
August   1986,   the   Company    completed    prototype    development   of   a
microprocessor-controlled  oxides of  nitrogen  monitor  based upon a  technique
acquired  from  Combustion  Engineering  Corporation.  Although the unit did not
initially  receive  EPA-approval,  a  redesigned  unit  received  the  requisite
approval of the EPA in mid-1992.

     Calibration  equipment,  which is  utilized  to  independently  verify  the
measurements made by other monitoring equipment, was first manufactured and sold
by  the  Company  in  1976  and  known  as  the  "Auditor,"  was  followed  by a
manually-operated,  portable model which performs  similar  functions.  In 1990,
both  of  these   models   were   superseded   by  the   Company's   Model  5008
state-of-the-art, programmable calibration equipment.

     The Company completed  development,  in 1991, of a Model 7001 beta-gauge to
measure  sub-micronic  particulates,  a Model  8001  data-logger  to gather  and
transmit  measured air pollutant  information  and a Model 9001  semi-CEMS to be
used as a portable stack monitoring system.

     In February 1994, the Company  acquired the technology and inventory of the
Byron  Hydrocarbon  Analyzer line. In bidding various jobs, the Company has been
asked to furnish an ambient  hydrocarbon  analyzer as a portion of the "system."
Previously,  the Company did not have the technical  capability  to  manufacture
this particular product and was forced to purchase it from other companies.  The
Company's choice,  whenever possible,  was the Byron Hydrocarbon Analyzer,  even
though it was the most  expensive.  Management  believes that the acquisition of
this  technical  capability  has  made  the  Company  more  competitive  in  bid
applications requiring a hydrocarbon  instrument.  In addition, the analyzer has
certain  proprietary  aspects which are helpful in  competitive  bid  situations
specifically requesting hydrocarbon data.

     In June  1996,  the  Company  acquired  Logan  Medical  Devices  ("LMD")  a
"start-up"  "operation".  For three years prior,  the Company  worked with LMD's
principal to modify and improve the Company's  nitric oxide  instrument to allow
non-invasive  asthma  diagnostics.  While the Company believes the instrument is
"commercial",  external funding is required for a  medically-oriented  sales and
marketing  network and additionally for completion of FDA approval.  There is no
indication that the Company will be successful in its attempt to manufacture and
market  this  product on a scale  comparable  to its "core  business,"  nor that
external funding can be realized to obtain FDA approval.




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     The Company offers a two-year warranty on all of its instruments,  with the
exception of certain  components,  such as lamps,  which have short lives.  With
respect to such  components,  the Company passes on to the customer the warranty
(usually  one year)  which it  receives  from the  manufacturer.  The  Company's
warranty provides for repair or replacement of defective  products.  During each
of the last five  fiscal  years,  the  Company  has been  required  to honor its
warranty with respect to less than 0.3% of total  instruments  sales during each
such year.

     In  June,  1996,  the  Company  acquired  Nutek,  Inc.,  -  an  established
instrument,  electrical  control panel design and  fabrication  facility.  These
products,  per se, are not synergistic with the air pollution control technology
nature of the Company except in certain cases where the panels may control large
air pollutant removal devices.  Nutek's customers are primarily  associated with
coal-fuel  combustion  and are therefore  potential  customers for the Company's
current approach to the air pollution  control  business.  However,  Nutek has a
substantial  potential  synergistic  value  in  design  and  manufacture  of the
Company's  existing  instrument  components and the Company's  proposed  control
systems.

     Historically,  Nutek has operated at low gross profit margins.  As a result
of the Company's acquisition, Nutek has been required to service its asset-based
lender's debt on receivables,  equipment and inventory.  Periodically during the
past year,  Nutek's low margins have required debt service  assistance  from the
Company.  This  unexpected  burden on the  Company has  required  the Company to
re-evaluate the fabrication business of Nutek. As a result of re-evaluation, the
Company has initiated a sale or liquidation of the  fabrication  business and/or
assets. As of this date, no sale or liquidation has been realized.

Marketing and Sales; Backlog Instruments

     The marketing and sales  activities of the Company  include  advertising by
mail in trade  journals  (primarily  Pollution  Equipment News and Air Pollution
Control  Association  Journal) and  attendance  and  exhibition at worldwide air
pollution  conferences.  The Company  attends the annual  conference  of the Air
Pollution Control  Association as well as worldwide  conferences.  The Company's
core  business  instruments  have been sold to customers  world-wide,  including
industrial  manufacturers;  federal, state, city, local and foreign governmental
agencies;  major industrial companies; and educational and research institutions
in over 30 countries.  Sales made in the United  States are handled  directly by
the  Company's  sales  staff.  All of the  Company's  foreign  sales are made to
distributors  who, in turn,  resell to the end users. The Company sells to these
distributors at a discount from the listed price.  Management  believes that the
loss of a distributor who may account for a large percentage of sales would have
little impact on net revenues as the end users of the Company's  products  could
be transferred to new distributors.

     Historically and currently foreign sales represent 60 percent to 70 percent
of the Dasibi Environmental  subsidiary - the core business.  Nutek sales are 90
percent domestic.

     The  Company's  core  business  sales  in  the  export  market  are  evenly
distributed  among all of its  products.  Export  sales are  billed  and paid in
United States dollars only.

     The Company's core business instruments have been sold during the past five
years  to  over  300  customers  in  over  30  countries,  including  industrial

                                       10

<PAGE>



manufacturers;  federal,  state, city, local and foreign governmental  agencies;
and educational and research  institutions.  However,  a significant loss in the
number of government  agencies,  industrial companies or research agencies which
typically  purchase  the  Company's  instruments  could have a material  adverse
effect on the Company.

     Historically,  none of the  Company's  business  has  been  subject  to the
re-negotiation  of profits,  and no government orders have ever been terminated.
The core business backlog at December 31, 1997 was  approximately  $65,000 which
amount the Company does not consider  material,  since it is proportional to the
"downsized"  fixed  expenses  of the  Company.  The Nutek  business  backlog  at
December  31, 1997 was  approximately  $750,000,  an amount the Company does not
consider material.

Foreign Sales

     The following table sets forth certain information  regarding the Company's
foreign sales for the last two fiscal years:
                                                              Year Ended
                                                              December 31,
                                                              ------------

                                                           1997         1996
                                                           ----         ----
                                                             (In thousands)
   Aggregate sales to unaffiliated foreign customers:

   Europe and The United Kingdom                           $ 1,104      $   866

   Asia and Pacific Rim                                    $   622      $ 1,200

   Latin America & Other                                   $   434      $   607


     During the fiscal  years ended  December  31, 1996 & 1997,  no one customer
accounted for more than 10% of net sales.

     Historically,  backlog has not been significant to the Company's operations
because  orders  usually  require  delivery in 45 to 90 days. As of December 31,
1997, the Company had  approximately  $815,000 in orders which required delivery
in 90 days or less, a backlog which the Company does not consider significant.

Manufacturing and Purchasing

     The Company  manufactures  many  components  and  subsystems for use in its
products,   including   critical  optical  components  and  analog  and  digital
circuitry. Other components, including packaging materials, integrated circuits,
microprocessors  and  minicomputers,   are  purchased  from  unaffiliated  third
parties.  Most of the raw  materials  and supplies  purchased by the Company are
either  available from a number of different  suppliers or  alternative  sources
could  be  developed  without  a  materially  adverse  effect  on the  Company's

                                       11

<PAGE>


business.  However,  the  availability  and  quality of certain  key  instrument
components, such as printed circuit board designs and lamps, are controlled by a
limited number of vendors.  A vendor's  inability to supply these  components to
the Company in a timely fashion,  or to the Company's  satisfaction,  can affect
the Company's ability to deliver its instruments on time.

Research and Development

     Historically,  the  Company  has been  actively  engaged  in  research  and
development in order to produce new products.  However,  the  competitive  price
pressures  experienced by the Company since early 1994 have sharply  limited the
new product  development to areas of software as opposed to hardware.  Developed
over the past three years,  DECS (Dasibi  Environmental  Central  Software) is a
Windows-based,  network  control  and  reporting  program  for multi  systems of
pollutant  analyzers and  ancillaries.  Similar  programs  exist but  management
believes none are under single manufacturer design and responsibility.

     Because of price pressure  demands,  the Company has been limiting CEMS and
Flue Gas Purification System development work.

Employees

     As of March 24,  1998,  the Company had 43 full-time  employees,  of whom 6
were engaged in administration,  10 in engineering, 25 in manufacturing and 2 in
sales and marketing.  None of the Company's employees are represented by a labor
union.  The Company has never had a strike or lockout and considers its employee
relations to be good. The Company's  core business had a personnel  reduction of
65% of its employees  and Nutek had a reduction of 80% of its  employees  during
1997.

Competition - Instruments

     The  Company  is the  smallest  competitor  in the  ambient  air  pollution
instrumentation   market.   Therefore,   it  is  subject   to  the   effects  of
better-financed  competitors  and their research and  development  efforts,  and
price  discounting.  The Company competes on the basis of technical  advances in
its  products  and its  reputation  among  customers  as a quality  provider  of
products and services.  To a lesser extent, the Company competes on the basis of
price.

     Although the Company is not aware of any other  company that  competes with
it in  all  of  its  product  lines,  all  of  its  competitors  have  resources
substantially  greater  than  those  of the  Company.  There  are  also  smaller
companies  that  specialize  in a  limited  number  of  the  types  of  products
manufactured by the Company.  The Company's primary  competitors in the domestic
market are Thermo Instrument  Systems,  Inc. ("Thermo  Instrument  Systems") and
Monitor  Labs,  Inc.  ("Monitor  Labs").  In the foreign  market,  the Company's
primary   competitors   are  Thermo   Instrument   Systems,   Monitor  Labs  and
Environnement S.A of France  ("Environnement")  and Horiba Instruments  ("Horiba
Instruments.")

     A  number  of  the  Company's  principal   competitors   (including  Thermo
Instrument Systems,  Monitor Labs and Environnement) offer ambient air pollution
monitoring  and also CEMS to their  customers.  As discussed  hereinabove  under


                                       12

<PAGE>


"Instrument  Market" and  "Research and  Development",  the Company is presently
unable to provide CEMS. The Company  eventually  intends to enter the market for
CEMS,  although it is  extremely  competitive  and the firms in such market have
substantially greater experience and financial resources than the Company. There
can be no assurance that the Company's  efforts to enter the CEMS market will be
successful.

Competition - Control Panels

     Nearly  all  of  Nutek's  competitors  are  considerably  larger  and  more
"well-financed"  than  Nutek.  Nearly all  awards are the result of  competitive
bidding  which  results in low gross profit  margins.  Primary  competitors  are
Instrument Control Service ("ICS") and Carter-Crawley  Engineering and Controls.
The low margins have had a negative  operating  effect on Nutek since September,
1997. (See Item 6 "Management Discussion and Analysis of Plan of Operation").

Intellectual Property

     Although  the Company  obtained  patents for its ozone  monitor and various
techniques in instrument  design,  it has generally been the Company's policy to
proceed  without  patent  protection  since it is  management's  belief that the
disclosure requirements of the federal patent laws provide competitors with easy
access to the secrets of rapidly  changing  technology.  The instrument  patents
obtained by the Company, all of which have expired, are not deemed by management
to be significant to the Company's business operations or potential success. The
Company  has no federal or state  registered  trademarks  and no  franchises  or
concessions. The Company has common law rights to the trademark "Dasibi."

     Albert E.  Gosselin,  Jr.,  the  Company's  co-founder,  has,  for the past
several years, devoted personal research time to developing an innovative,  cost
conscious system for purifying exhaust gases. His efforts resulted in the filing
of a patent  application for such system on behalf of the Company in April 1994,
subsequently granted in September 1996.

Item 2.  Description of Properties

     In  July  1994,   the   Company   moved  its   administrative,   instrument
manufacturing and employee facilities to 39,070 square feet, increased to 45,000
square feet in 1997,  at 506 Paula  Avenue,  Glendale,  California.  The Company
leases  the  space  from an  unaffiliated  third  party  for a term of ten years
commencing  as of  July 1,  1994,  at a base  rent of  $24,223  per  month  plus
operating  costs and taxes,  with a  provision  for  increases  in the base rent
related to increases in the Consumer  Price Index to the present rent of $30,000
per month.  The Company  utilizes most of its existing office and  manufacturing
space and believes  that such space is more than  adequate for its needs for the
foreseeable future.

     Nutek has two buildings located in twelve acres in a prime commercial area.
The main building  contains  offices,  sheet metal and electrical  areas and has
20,200  square feet.  The second  building,  housing  printed  circuit board and
painting,  has 18,180  square feet.  Land and  buildings are under one five year
lease to an  unaffiliated  party at rents  increasing  from  $3,000 per month to
$7,000 per month in year 5.

                                       13


<PAGE>



     LMD occupies  approximately  4000 square feet in Kent, U.K. which is leased
from Mr. Ron Logan-  Sinclair  pension fund holdings,  an affiliate of LMD, at a
rate of $600 per month which the Company believes to be fair and reasonable.

Item 3.  Legal Proceedings

     No material  legal  proceedings  are pending to which the Company or any of
its property is subject,  nor to the knowledge of the Company are any such legal
proceedings   threatened.   The  Company  is  a  party  to  legal  actions  from
time-to-time  which develop in the ordinary course of its business and which are
not, in the opinion of management, material to the Company's business.

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

     Not applicable

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

     The Company's Common Stock is traded  over-the-counter  on NASDAQ under the
symbol "PRCC." Set forth below are the high and low closing bid by quotations in
the  over-the-counter  market for the Common  Stock as reported by the  relevant
market makers for fiscal years 1997 and 1996. Quotations represent  inter-dealer
quotations,  without adjustment for retail mark-ups,  mark-downs or commissions,
and may not necessarily represent actual transactions.

                                 Fiscal 1997                   Fiscal 1996

Quarter Ended               High Bid     Low Bid          High Bid     Low Bid
-------------               --------     -------          --------     -------
Common Stock:
March 31                    $1.28        $  .69           $  .81        $ .44
June 30                       .81           .47             1.91          .59
September 30                  .69           .34             1.81          .97
December 31                   .47           .16             1.44          .81

     As of March 24, 1998, the  approximate  number of shareholders of record of
the Company's Common Stock was 1,100. The Company has never paid or declared any
dividends on its Common Stock and does not  anticipate  paying  dividends in the
foreseeable future.

Item 6.  Management's Discussion and Analysis or Plan of Operation

     The  Company's  operating  profit for fiscal  1994,  1995,  1996,  and 1997
decreased  significantly  as  compared  to  fiscal  1993.  These  declines  were
principally because of significant  competitive price pressure for the Company's
air  pollution  monitoring  instruments,  thus  forcing the Company to lower its

                                       14

<PAGE>

domestic and foreign bids, reducing the number of the Company's bids awarded and
reducing the profit margin on the bids awarded to the Company.  Beginning in the
third quarter of fiscal 1994,  the Company  implemented  certain cost  reduction
measures in its  operating  expenses,  suspended  major new product  development
efforts and scaled back its efforts to improve or modify  existing  technologies
in response to the  competitive  price  pressures.  Throughout 1995 and 1996 the
Company  shipped  record  numbers  of   instrumentation   units,  but  continued
competitive  pricing  pressure  resulted in lowered gross  margins.  In March of
1996,  efforts  were begun to reduce  fixed  expenses  by  participating  in the
Mexican Maquiladora program,  initially for all production labor associated with
the Company's  excess  backlog,  if any. This program was cancelled in July 1996
and all costs expensed.  In 1997 continued  competitive price pressures required
the Company to  significantly  reduce the number of core  business  personnel to
reduce fixed expenses.

     Net revenues in 1997 were  $6,793,000  compare to $8,805,000 in 1996, a 23%
decrease.  Both  Dasibi and Nutek  decreases  were  primarily  due to  continual
competitive  price  pressures  resulting  in fewer  contract  awards.  A monthly
average  comparison  indicated a 46% decrease in Dasibi core  business and a 43%
decrease in the Nutek  business (in 1996 Nutek  operated for 6 months as opposed
to a full year in 1997).

     Gross margin was 20% of  consolidated  net revenues in 1997 compared to 27%
in 1996, again due to an increase in competitive price pressures.

     Selling,  general and administrative  expenses increased from $2,278,000 in
1996 to $2,495,000 in 1997, or 10%. The six month  increase of selling,  general
and  administrative  expenses for 1997 of Nutek and LMD  acquired in June,  1996
were offset in part by the cost reductions made at Dasibi by downsizing.

     Research and development expense decreased from $136,000 in 1996 to $37,000
in 1997 due to further cutbacks  management made in its research and development
efforts in response to the continuing price pressures.

     Interest  expense  increased  from  $146,000  in 1996 to  $233,000 in 1997,
primarily due to the debt incurred to finance the Nutek acquisition.

     In 1996, a  non-recurring  gain from the sale of a portion of the Company's
shares in Atlanta  Technology  Group,  Inc. of $570,000 was realized.  In 1997 a
similar non-recurring gain of $83,000 was realized.

     As a result  of the  foregoing  factors,  net loss was  $1,231,000  in 1997
compared to a net income of $640,000 in 1996.

     In its low gross margin  operation,  the  Company's  Nutek  subsidiary  has
experienced  difficulty in "downsizing" and as a result, its working capital has
been reduced to a level requiring  assistance in the form of intercompany  loans
from Dasibi.  Dasibi has had difficulty supplying these cash requirements.  As a
result, the Company initiated attempts to sell Nutek on February 16, 1998. As of
March 24, 1998 the Company is investigating  liquidation of the assets of Nutek.
There is no  assurance  that a buyer will be found for the Nutek  assets or that
Dasibi can continue to supply Nutek's cash needs.

                                       15


<PAGE>



     Under forced liquidation,  if necessary, the asset base lender liability as
of March 24, 1998 is  $984,000,  of which  approximately  $410,000 is secured by
$410,000  of current  receivables.  The  balance of  $574,000 is secured by over
$1,000,000 book value of equipment and approximately  $650,000 of inventory,  at
cost.  Management believes that the debt will be significantly  satisfied by the
liquidation. (See "Liquidity and Capital Resources", below)

     Deficiency,  if any, is not  considered  material to the Company's  overall
operation. As a contingency, long term liabilities of approximately $601,651 has
been reclassified as current liabilities.



Liquidity and Capital Resources

     The Company has historically  financed  operations  through bank borrowings
and the issuance of common stock in both public and private  offerings.  Current
market value of the  Company's  Common Stock  preclude  this approach as of this
date.

     Working  capital at December 31, 1997 was $1,070,000.  Management  believes
that the  anticipated  cash flows from operations will be sufficient to meet the
Company's  short-term  cash  needs  provided  the  Nutek  subsidiary  is sold or
liquidated.  As of March 24, 1998, the Company has no material  commitments  for
capital expenditures.

     The Company has a line of credit with a bank which  provides for borrowings
of up to  $200,000  until June 3, 1998.  Interest  is at the prime rate plus 2%.
$140,000 was outstanding at December 31, 1997; $130,000 was outstanding on March
24, 1998.

     Nutek has a receivables  line of credit from an  asset-based  lender of the
lesser of $1,000,000 or the borrowing  base (as defined),  which expires on June
28, 1999.  Nutek's line of credit bears  interest at the large  commercial  bank
prime rate plus 2 1/2%. At December 31, 1997 Nutek had borrowed  $389,123 on its
receivable line, and $601,651 on the fixed term amount.  Nutek's level of vendor
payables  exceeds the available  Nutek  working  capital level and its operating
cash has been  supplemented  by  Dasibi.  As  discussed  above,  the  Company is
pursuing the sale of Nutek as a "going  business" or if necessary a  liquidation
of assets.  Management  believes that a deficiency,  if any, could be structured
into a long term note which could be accommodated by anticipated cash flows from
operations.

     Cash  decreased in 1997 due  primarily to reduction of long term debt for a
full year as opposed to half a year in 1996.







                                       16


<PAGE>



Seasonality

     Management does not believe that the Company's business is seasonal.

Item 7.  Financial Statements

     The Company's  Financial  Statements  and the related Notes thereto are set
forth at pages F-1 through F-24.

Item 8.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosures

     On  December  28,  1996,  the Company  disengaged  the  accounting  firm of
Greenberg & Jackson as its independent auditors and selected the accounting firm
of A.J. Robbins to act as the Company's independent auditors for the fiscal year
ended  December 31, 1996.  Disclosure  regarding this matter is set forth in the
Company's Current Report on Form 8-KA dated January 9, 1997.

                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act

Directors, Executive Officers and Key Employees

     Set forth below are the names,  ages,  positions  with the Company,  Dasibi
Environmental Corp, Nutek, Inc. and Logan Medical Devices:

<TABLE>
<CAPTION>


         Name                       Age           Position(S) With Company And Dasibi
         ----                       ---           -----------------------------------

<S>                                 <C>           <C>
Albert E. Gosselin, Jr. (1)(3)       65           President, Chief Executive Officer and
                                                  Chairman of the Board of Directors
Cynthia L. Gosselin                  36           Operations Manager of Dasibi
Barbara L. Gosselin  (1)(2)          62           Secretary and Director
Donald Ford (1)                      70           Chief Financial Officer
Marcia A. Smith (1)                  59           Director of Pollution Research and Control
                                                  Corp.; Manager of Administration of Dasibi
                                                  Environmental Corp.
Paul Richardson                      54           President, Director Nutek
Debbie Kendrick                      45           Vice-President, Director Nutek
Gary L. Dudley (1)                   60           Director
Craig E. Gosselin (1)                38           Director
Ron Logan-Sinclair                   48           President, Director LMD
Barry Soltani                        42           Director

                                       17

</TABLE>

<PAGE>



(1)  The  individuals  named above hold the identical  positions  indicated with
     Dasibi Environmental Corp. ("Dasibi")

(2)  The individuals named above hold identical  positions indicated with Nutek,
     Inc.

(3)  The individual above is a director of Nutek.

     All  directors  hold office until the next annual  meeting of the Company's
shareholders and until their successors have been elected and qualify.  Officers
serve at the pleasure of the board of directors.

Family Relationships

     Albert E. Gosselin, Jr., and Barbara L. Gosselin, husband and wife, are the
parents  of  Craig E.  and  Cynthia  L.,  both of whom  are  adults.  All of the
foregoing are presently  serving as executive  officers and/or  directors of the
Company.  Except as set forth herein, no family  relationship exists between any
director or executive officer of the Company.

Business Experience

     Albert E.  Gosselin,  Jr.,  has served as the  President,  Chief  Executive
Officer and Chairman of the Board of Directors of the Company  (formerly "Dasibi
Environmental Corp." and "A.E. Gosselin Engineering, Inc.") and Dasibi (formerly
"Baral  Engineering,  Inc."),  corporations  which he co-founded with Barbara L.
Gosselin, since the organization of those corporations in December 1971 and July
1976, respectively. He also served as the President, Chief Executive Officer and
Chairman of the Board of Directors of the Company's former parent corporation, a
corporation also named "Pollution  Research and Control Corp.  ("PRCC") which he
co-founded with Mrs. Gosselin under the name of "A.E. Gosselin Engineering Co.,"
from its  inception  date in 1966  through  the date of its  spin-off in October
1986. Mr.  Gosselin also served as the President,  Chief  Executive  Officer and
Chairman of the Board of  Directors  of Applied  Conservation  Technology,  Inc.
("ACT"), a former  wholly-owned  subsidiary engaged in the business of providing
environmental  impact reports to electric utilities,  together with the Company,
of PRCC,  from 1980  through the date of the  purchase of ACT by its  management
from  PRCC in  November  1986.  ACT is  presently  a  diversified  environmental
consulting  firm owned and managed by Gary L. Dudley,  a Company  director,  and
other  members of  management.  Mr.  Gosselin  received a Bachelor of Science in
mechanical engineering from Loyola University, Los Angeles, California, in 1954.
He has been a registered  mechanical  engineer in the State of California  since
1959.

     Cynthia  L.  Gosselin  has  served as the Chief  Financial  Officer  of the
Company and Dasibi from May 1990 to January 1998 when she resigned that position
and became Operations Manager of Dasibi and the Company.  Additionally,  she has
acted as  Dasibi's  Purchasing  Agent  from May  1990 to the  present..  She was
employed by Dasibi in various capacities,  including  Production  Manager,  from
1983  through  April 1990.  Ms.  Gosselin  received a B.S. in business  from the
University of California at Long Beach in 1982.

     Barbara L.  Gosselin has served as an  executive  officer and a director of
the Company,  which she  co-founded  with Albert E.  Gosselin,  Jr., in December


                                       18

<PAGE>


1971, since its inception.  Mrs.  Gosselin has served in the office of Secretary
of the Company since April 1990 and,  from  inception  through  April 1990,  she
served as the Company's Chief Financial Officer.  Mrs.  Gosselin,  together with
Mr. Gosselin, co-founded Dasibi in July 1976 and she has served as the Secretary
and a  director  of  Dasibi  since  its  organization.  Mrs.  Gosselin  was  the
co-founder in 1966,  with Mr.  Gosselin,  of PRCC,  the Company's  former parent
corporation,  for which she served as an executive  officer and a director until
it was spun-off in October 1986.

     Marcia A. Smith has served as a director of the  Company  and Dasibi  since
May 1990. She has been employed as the Manager of Administration  and in various
other capacitities with Dasibi since 1979.

     Paul  Richardson was enployed by Nutek as an Electrical  Engineer from 1970
to 1994. He returned in 1996 to serve as President and a Director of Nutek.  Mr.
Richardson received a Bachelor of Electrical  Engineering from the University of
Florida in 1964.

     Debbie  Kendrick,  a founder of Nutek,  has been  employed with Nutek since
1978 in all areas of administration. Ms. Kendrick resigned in September 1997 and
was not replaced.

     Gary L. Dudley has served as a director  of the Company  during the periods
since  June  1991 and from  1980  through  January  1991,  and he  served as the
Company's Vice President from 1979 through November 1986. Mr. Dudley also served
as an executive  officer and a director of PRCC,  the  Company's  former  parent
corporation, from 1984 through the date of the spin-off of PRCC in October 1986.
Mr.  Dudley has been the  President  and a  principle  shareholder  of ACT,  now
located in Westminster,  California, a diversified environmental consulting firm
formerly wholly-owned, together with the Company, by PRCC, since the purchase of
ACT by its  management  from PRCC in  November  1986.  He  served as ACT's  Vice
President  from 1980  through  1986.  From 1962  through  1978,  Mr.  Dudley was
employed in various engineering- related positions by Southern California Edison
Company, TRW Systems,  McDonnell Douglas Corporation and North American Rockwell
Corporation.  He received a Bachelor of Science in engineering  from  California
State University in 1962 and a Masters Degree in Mechanical Engineering from the
University of Southern California in 1966. Mr. Dudley is a registered mechanical
engineer  in  the  State  of  California  and a  member  of the  Association  of
Environmental Professionals.

     Craig E.  Gosselin has served as a director of the Company and Dasibi since
October 1987. Mr.  Gosselin is an attorney who has been licensed to practice law
in the State of California  since 1984. He has served as the Vice  President and
General  Counsel of Vans,  Inc., a publicly-held  manufacturer,  distributor and
retailer of footwear,  snowboard boots,  apparel and related accessories located
in Santa Fe  Springs,  California,  since July 1992.  He  received a Bachelor of
Business  Administration  from Loyola  Marymount  University in 1981 and a Juris
Doctor from Southwestern University School of Law in 1984.

     Ron  Logan-Sinclair  founded,  and has served as the  Managing  Director of
Logan  Research  Limited,  Rochester,  Kent,  England,  since April 1994.  Logan
Research Limited has been engaged in research and development  involving medical
devices,  primarily,  medical  inflammation  (nitric oxide) analysis devices and
artificial  heart drive devices since May 1994. For a period of approximately 24
years prior to April 1994, Mr. Logan-Sinclair was employed by the Royal Brompton
National Heart and Lung Hospital,  London, England, with responsibilities in the

                                       19

<PAGE>


areas of medical  electronics,  biomedical and clinical  engineering and medical
physics.  He is a proven  researcher  and  designer  of  medical  equipment  who
developed the  inflammation and analytical  monitor and is presently  engaged in
the development of a number of other medical devices.

     Donald Ford obtained a B.S. in Marketing  from the University of California
at Berkeley in 1952 and was a staff  assistant at Price  Waterhouse from 1953 to
1957 and has been a self-employed Economist from 1958 to present.

     Barry  Soltani   obtained  a  PhD  in  economics  from  the  University  of
California,  Riverside in 1989,  his Master's from the University of California,
Riverside in 1983, and graduated from San Diego State  University in 1981 with a
B.B.A. in economics.  Dr. Soltani is directly involved in funding for industrial
development projects in China and since 1993 has been an independent  consultant
in corporate finance for joint ventures in China.

     The Company,  Albert E. Gosselin,  Jr., President,  Chief Executive Officer
and Chairman of the Board of Directors of the Company,  and Cynthia L. Gosselin,
Chief  Financial  Officer of the Company were named as defendants in Case Number
1.94CV01425 filed by the Securities and Exchange Commission in the United States
District  Court for the  District of Columbia on June 28, 1994.  The  Commission
alleged in the Complaint for Permanent  Injunction and Other Relief, among other
things,  that the Company and Mr. Gosselin committed numerous  violations of the
federal  securities  laws  in  1989,  1990  and  1991,  including  disseminating
materially false and misleading  information  about the Company to the investing
public through public  announcements  and filings with the Commission  relating,
primarily,  to the  Company's  acquisition  and  subsequent  disposition  of two
companies, Air Instruments and Measurements,  Inc. and Environmental Information
Systems.  Additionally,  the  Complaint  alleged  that the  Company's  financial
statements  incorrectly  reported inventory figures and failed to reflect timely
write-offs of uncollectible  accounts receivable and that the Company materially
understated  annual and  quarterly  losses during this period.  The  allegations
against  Ms.  Gosselin  were that she served as the  Company's  Chief  Financial
Officer and that she was  responsible  for the  Company's  inadequate  books and
records and internal  controls  during this period.  The Commission also alleged
that the Company  violated the federal  securities  laws in  connection  with an
unregistered public distribution of securities.  The Commission sought to enjoin
the defendants from engaging in the future in similar illegal acts and practices
and to order defendant Albert E. Gosselin,  Jr., to pay civil penalties. On July
14, 1994, the defendants, without admitting or denying any of the allegations of
the Complaint,  consented to the entry of Final Judgment of Permanent Injunction
and Other Relief (the "Final  Judgment").  The Final Judgment as to Mr. Gosselin
required him to pay a civil penalty in the amount of $25,000.

 Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  required
the  Company's and executive  officers and  directors,  and persons who own more
than ten percent of a registered  calls of the Company's equity  securities,  to
file with the Securities and Exchange  Commission  initial reports of ownership,
and reports of changes in ownership, of Common Stock and other equity securities
of the  Company.  Executive  officers,  directors  and greater  than ten percent
shareholders are required by Commission  regulations to furnish the Company with

                                       20

<PAGE>


copies of all Section 16(a) reports they file. To the Company's knowledge, based
solely on a review of the copies of such reports  furnished to the Company,  and
representations that no other reports were required during the fiscal year ended
December 31, 1997, the Company's executive officers,  directors and greater than
ten per cent  beneficial  owners of its Common Stock,  complied with all Section
16(a) filing requirements applicable to them.

Item 10.  Executive Compensation

Executive Compensation

     The  following  table sets forth the total cash and  non-cash  compensation
paid by the Company for the fiscal years ended December 31, 1995, 1996, and 1997
to the  Company's  President  and  Chief  Executive  Officer  who was  the  only
executive  officer of the Company whose  aggregate  cash  compensation  exceeded
$100,000 for the 1997 fiscal year.
<TABLE>
<CAPTION>


                               SUMMARY COMPENSATION TABLE

                                  Annual Compensation

                                                                                  Long Term
                                                                            Compensation Awards
                                                                            Securities Underlying
Name and Principal Position                 Year              Salary             Options/SARs(#)
---------------------------                 ----              ------         ---------------------

<S>                                         <C>              <C>                  <C>
Albert E. Gosselin, Jr., President,         1997             $ 151,000              -------
Chief Executive Officer and                 1996             $ 211,925              55,000
Chairman of the Board                       1995             $ 196,638              -------


</TABLE>


     The Company does not provide  officers or  employees  with  pension,  stock
appreciation rights, long-term incentive or other plans.

Compensation of Directors

     Directors do not receive compensation  pursuant to any standard arrangement
for their services as directors.

Employment Agreements

     The Company has employment  agreements  with Albert E.  Gosselin,  Jr., the
President, Chief Executive Officer and Chairman of the Board of Directors of the
Company,  Cynthia L.  Gosselin,  and Marcia  Smith.  Mr.  Gosselin's  employment
agreement (the "Agreement") was first approved by the Board of Directors on July
30, 1987, and  has since been  extended  through August 31, 1999. The Agreement,

                                       21


<PAGE>



as  extended,  provides  for the  payment to Mr.  Gosselin  of a base  salary of
$200,000,  $210,000 and $220,000  during the one-year  periods  ended August 31,
1997, 1998 and 1999 respectively.  (See "Executive Compensation" under this Item
10. "Executive  Compensation"  hereinabove.) The Agreement further obligates the
Company  to permit Mr.  Gosselin  to  participate  in the  Company's  Employee's
Incentive  Stock Option Plan and Group Medical Plan and any other  health,  life
insurance,  group medical,  disability income insurance and/or stock option plan
adopted by the Company. Under the Agreement,  Mr. Gosselin's salary continues in
the event of his  disability  and for two  years  after  his  death.  He is also
entitled to a lump sum  severance  payment  equivalent to 2.99 times his current
salary in the event of his termination as President or Chief  Executive  Officer
within  eighteen  months after a "change of control" of the Company,  including,
among other events,  certain types of mergers and other  business  combinations,
material  changes in the composition of the Board of Directors or the beneficial
ownership of the Common Stock,  the sale of  substantially  all of the Company's
assets or securities and the material  downsizing or dissolution of the Company.
If such an event occurs during fiscal 1998,  Mr.  Gosselin  would be entitled to
receive $660,000 as a severance payment.

     The Company's employment agreement with Cynthia L. Gosselin first commenced
on July 20, 1994, and and was amended on February 9, 1998 and continues  through
August 31, 1999. Marcia Smith's employment  agreement  commenced on June 9, 1997
and continues through August 31, 1999. The agreements provide for the payment to
them of a base salary of $72,300  during  each  one-year  period  ended July 20,
1997,  1998,  and 1999 and annual  increases in the  discretion  of the Board of
Directors.  Pursuant  to the  employment  agreement,  they  are  required  to be
reimbursed by the Company for their  expenses  incurred in  connection  with the
performance  of  their  responsibilities.   In  the  event  of  their  death  or
disability,  the agreement  provides for their salary to continue for six months
thereafter.  They are also entitled to participate in any Company  health,  life
insurance, group medical,  disability income insurance and/or stock option plan.
The employment agreement provides that they are entitled to a lump sum severance
payment  equivalent  to 2.99 times  their  current  salary in the event of their
termination  within  eighteen months after a "change in control" of the Company,
as defined in the Company's  Employment  Agreement  with Mr. Albert E. Gosselin,
Jr., described  hereinabove.  They would each be entitled to receive a severance
payment of $216,177 if a change in control of the Company  occurs  during fiscal
1998.

Item 11. Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth information as of March 24, 1998,  regarding
the ownership of the  Company's  Common Stock by each  shareholder  known by the
Company to be the beneficial  owner of more than five percent of its outstanding
shares of Common Stock, each of the named executive officers, each director, and
all executive officers and directors as a group. Except as otherwise  indicated,
each of the  shareholders  has sole voting and investment  power with respect to
the shares of Common Stock beneficially owned.





                                       22


<PAGE>



Name and Address                             Amount                 Percent
of Beneficial Owner (1)                 Beneficially Owned        of Class (2)
------------------------------------    ------------------        ------------

Lee N. Sion                                 656,500 (4)               7.5 %

Albert E. and Barbara L. Gosselin, Jr.      686,235 (5)                7.9 %

Marcia A. Smith                             121,180 (6)                1.3 %

Cynthia L. Gosselin                         116,305 (7)                1.3%

Gary L. Dudley                              105,000 (8)                1.2%

Craig E. Gosselin                            65,000 (9)                 *

Barry Soltani                                     0 (10)                *

Ron Logan-Sinclair                                0 (10)                *

All Executive Officers and Directors as
a Group (nine persons)                                                11.7%


*    Less than one percent

(1)  The address of Mr. Lee Sion is P.O. Box 910,  Glendale,  California  91209.
     The  addresses  of the rest of the  individuals  named  above is 506  Paula
     Avenue, Glendale, California 91201.

(2)  Assumes the  exercise  of  outstanding  options and  warrants to purchase a
     total of 1,005,500 shares of the Company's Common Stock.

(4)  Includes  87,500  shares of Common  Stock  issuable  upon the  exercise  of
     options owned of record by Lee N. Sion which is exercisable within 60 days.

(5)  Includes  293,000  shares of Common  Stock  issuable  upon the  exercise of
     options owned of record by Albert E. Gosselin,  Jr.  exercisable  within 60
     days.  Does not include a total of 209,133  shares of Common Stock owned of
     record  collectively  by Craig.  E.,  Cynthia L.,  Keith A. and  Jennifer .
     Gosselin, the adult children of Albert E. and Barbara Gosselin,  Jr., as to
     which Mr. and Mrs. Gosselin disclaim any beneficial ownership. Mr. and Mrs.
     Gosselin  hold  their  shares of Common  Stock as  community  property  and
     exercise joint voting and investment power with respect to such shares.

(6)  Includes  60,000  shares of Common Stock  issuable  upon the exercise of an
     option owned of record by Marcia Smith, and exercisable within 60 days.


                                       23


<PAGE>



(7)  Cynthia  L.  Gosselin  is the adult  daughter  of Albert E. and  Barbara L.
     Gosselin,  Jr.,  who disclaim  any  beneficial  ownership of her shares and
     includes  60,000  shares of Common Stock  issuable  upon the exercise of an
     options owned of record and exercisable within 60 days.

(8)  Represents  105,000  shares of Common Stock  issuable  upon the exercise of
     options  owned of record by Gary L. Dudley which is  exercisable  within 60
     days.

(9)  Craig E.  Gosselin is the adult son of Albert E. and  Barbara L.  Gosselin,
     Jr.,  who  disclaim  any  beneficial  ownership  of his shares and includes
     60,000  shares of Common  Stock  issuable  upon the  exercise of an options
     owned of record and exercisable within 60 days.

(10) A total of 340,000  shares of Common  Stock  issuable  upon the exercise of
     options   owned  of  record   and   exercisable   within  60  days  by  Ron
     Logan-Sinclair (300,000) and Barry Soltani (40,000).

Item 12.  Certain Relationships and Related Transactions

     Not Applicable.

Item 13.  Exhibits and Reports on Form 8-KA

     (a) Exhibits

     The exhibits  listed in the Exhibit Index located at Pages E-1 through E-17
are filed pursuant to Item 13(a) of this Report.

     (b) Reports on Form 8-KA

     The  Company  filed no  reports on Form 8-KA  during the fourth  quarter of
fiscal 1997.

                                       24



<PAGE>






                                      INDEX
                                      -----

                                                                         Page
                                                                         ----

Independent Auditors' Report                                             F-2

Consolidated Balance Sheets                                              F-3

Consolidated Statements of Operations                                    F-5

Consolidated Statements of Changes in Stockholders' Equity               F-6

Consolidated Statements of Cash Flows                                    F-7

Notes to Consolidated Financial Statements                               F-8







                                      F-1


<PAGE>




                          INDEPENDENT AUDITORS' REPORT

Board of Directors
Pollution Research and Control Corp.
Glendale, California


We have  audited  the  accompanying  consolidated  balance  sheets of  Pollution
Research and Control Corp.  and  Subsidiaries  as of December 31, 1997 and 1996,
and the related consolidated statements of operations,  changes in stockholders'
equity and cash flows for the years then ended.  These financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the consolidated financial position of Pollution Research
and Control Corp.  and  Subsidiaries  as of December 31, 1997 and 1996,  and the
consolidated results of their operations and their cash flows for the years then
ended in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going  concern.  As discussed in Notes 1 and 9 to the
financial statements,  as of December 31, 1997, the Company was in default under
certain covenants of its asset-based  lending agreement.  The lender has a right
to demand  repayment  of the loans.  No such  demand has been made.  The Company
cannot  predict  what the outcome of such demand will be.  Managements  plans in
regard to this  matter  are also  described  in Note 1. These  conditions  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
The financial  statements do not include any adjustments  that might result from
the outcome of this uncertainty.

                                                AJ. ROBBINS, P.C.
                                                CERTIFIED PUBLIC ACCOUNTANTS
                                                AND CONSULTANTS
Denver, Colorado
February 13, 1998


                                      F-2

<PAGE>





              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 1997 AND 1996
                        --------------------------------


                                     ASSETS
                                     ------

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

CURRENT ASSETS:
     Cash                                               $  515,222    $  723,170
     Marketable securities                                   3,250        99,000
     Accounts receivable, trade, less
       allowance for doubtful
       accounts of $19,381 and $46,381                     643,031     1,710,970
     Inventories                                         2,504,559     2,575,252
     Other current assets                                   16,610        21,046
                                                        ----------    ----------

                  Total Current Assets                   3,682,672     5,129,438
                                                        ----------    ----------



PROPERTY, EQUIPMENT AND LEASEHOLD
     IMPROVEMENTS, less accumulated
        depreciation and amortization of
        $395,661 and $205,884                            1,469,583     1,650,563
                                                        ----------    ----------


OTHER ASSETS:
     Goodwill, less accumulated amortization
         of $11,143 and $4,265                             270,377       288,212
     Loan costs, less accumulated amortization
         of $45,412 and $15,137                             45,412        75,687
     Other intangible assets, less accumulated
         amortization of $6,800 and $5,100                  33,709        35,409
     Other assets
                                                             6,107        17,634
                                                        ----------    ----------

                  Total Other Assets                       355,605       416,942
                                                        ----------    ----------

                  Total Assets                          $5,507,860    $7,196,943
                                                        ==========    ==========

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       F-3



<PAGE>
<TABLE>
<CAPTION>


                      POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                                   CONSOLIDATED BALANCE SHEETS
                                AS OF DECEMBER 31, 1997 AND 1996
                                --------------------------------


                              LIABILITIES AND STOCKHOLDERS' EQUITY
                              ------------------------------------

                                                                      1997                1996
                                                                  -----------         -----------
CURRENT LIABILITIES:
<S>                                                               <C>                 <C>
     Secured overdraft facility                                   $    58,334         $      --
     Notes payable                                                    529,123             553,658
     Accounts payable, trade                                          632,631             967,963
     Accounts payable, officer                                          8,886               8,710
     Accrued liabilities                                              281,554             224,099
     Customer advances                                                143,695              50,820
     Income taxes payable                                                --                 9,800
     Current portion of long-term debt                                646,736             186,741
     Current portion of long-term debt, related parties               311,496               5,413
                                                                  -----------         -----------

                  Total Current Liabilities                         2,612,455           2,007,204
                                                                  -----------         -----------

LONG-TERM DEBT, less current portion                                   86,233             667,596

LONG-TERM DEBT, related parties, less current portion                  56,324             368,801

DEFERRED RENT                                                         102,669              99,203

DEFERRED INCOME TAXES                                                    --                55,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
     Preferred stock, no par value, 20,000,000 shares
         authorized, none issued and outstanding                         --                  --
     Common stock, no par value, 30,000,000 shares
         authorized, 8,673,732 issued and outstanding               6,588,980           6,588,980
     Less notes due from sale of common stock, related
         parties                                                      (86,857)            (86,857)
     Other paid-in capital                                            145,764             145,764
     Accumulated deficit                                           (4,025,545)         (2,794,573)
     Unrealized gain on marketable securities                           3,250              99,000
     Unrealized foreign currency translation gain                      24,587              46,825
                                                                  -----------         -----------

                  Total Stockholders' Equity                        2,650,179           3,999,139
                                                                  -----------         -----------

                  Total Liabilities and Stockholders' Equity      $ 5,507,860         $ 7,196,943
                                                                  ===========         ===========


                   SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                              F-4
</TABLE>

<PAGE>
<TABLE>
<CAPTION>




                 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF OPERATIONS
                    FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                    ----------------------------------------------

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

<S>                                                    <C>                  <C>
NET REVENUES                                           $ 6,792,767          $ 8,805,011

COST OF GOODS SOLD                                       5,410,574            6,463,208
                                                       -----------          -----------

GROSS PROFIT                                             1,382,193            2,341,803
                                                       -----------          -----------

OPERATING EXPENSES:
     Selling, general and administrative                 2,495,446            2,277,785
     Research and development                               36,903              136,356
                                                       -----------          -----------

          Total Operating Expenses                       2,532,349            2,414,141
                                                       -----------          -----------

LOSS FROM OPERATIONS                                    (1,150,156)             (72,338)
                                                       -----------          -----------

OTHER INCOME (EXPENSE):
     Gain on sale of marketable securities                  82,896              570,435
     Interest income                                         4,811                6,431
     Interest expense                                     (202,413)            (130,616)
     Interest expense, related parties                     (30,910)             (15,500)
                                                       -----------          -----------


          Total Other Income (Expense)                    (145,616)             430,750
                                                       -----------          -----------

INCOME (LOSS) BEFORE INCOME TAXES (BENEFIT)             (1,295,772)             358,412
                                                       -----------          -----------


PROVISION (BENEFIT) FOR INCOME TAXES:
     Current                                                (9,800)              10,000
     Deferred                                              (55,000)            (292,000)
                                                       -----------          -----------

          Total Provision (Benefit) for Income Taxes       (64,800)            (282,000)
                                                       -----------          -----------

NET INCOME (LOSS)                                      $(1,230,972)         $   640,412
                                                       ===========          ===========

NET INCOME (LOSS) PER SHARE - Basic and Diluted        $      (.14)         $       .08
                                                       ===========          ===========

Weighted Average Shares                                  8,673,732            7,786,487
                                                       ===========          ===========



              SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          F-5


</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                        POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                           FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                           ----------------------------------------------

                                                                             Notes Due       Other
                                                       Common Stock         From Sale of    Paid-in
                                                   Shares       Amount       of Stock       Capital
                                                 ---------   -----------   -------------  ----------

<S>                                              <C>         <C>           <C>            <C>
Balances, December 31, 1995                      6,932,662   $ 5,431,623   $   (86,857)   $      --

Sale of common stock                             1,350,003       884,000          --             --

Exercise of options and warrants                   391,067       273,357          --             --

Stock-based compensation expense recognized           --            --            --          145,764

Unrealized gain on marketable securities              --            --            --             --

Realized gain on marketable securities                --            --            --             --

Unrealized foreign currency translation gain          --            --            --             --

Net income for the year                               --            --            --             --
                                               -----------   -----------   -----------    -----------

Balances, December 31, 1996                      8,673,732     6,588,980       (86,857)       145,764

Realized gain on marketable securities                --            --            --             --

Unrealized foreign currency translation loss          --            --            --             --

Net loss for the year                                 --            --            --             --
                                               -----------   -----------   -----------    -----------

Balances, December 31, 1997                      8,673,732   $ 6,588,980   $   (86,857)   $   145,764
                                               ===========   ===========   ===========    ===========



                        POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                           FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                                             CONTINUED
                           ----------------------------------------------

                                                                             Unrealized
                                                              Unrealized      Foreign
                                                               Gain on       Currency         Total
                                               Accumulated    Marketable    Translation    Stockholders'
                                                (Deficit)     Securities       Gain           Equity
                                               -----------    -----------   ------------    ------------

Balances, December 31, 1995                    $(3,434,985)   $   100,000    $      --      $ 2,009,781

Sale of common stock                                  --             --             --          884,000

Exercise of options and warrants                      --             --             --          273,357

Stock-based compensation expense recognized           --             --             --          145,764

Unrealized gain on marketable securities              --           74,250           --           74,250

Realized gain on marketable securities                --          (75,250)          --          (75,250)

Unrealized foreign currency translation gain          --             --           46,825         46,825

Net income for the year                            640,412           --             --          640,412
                                               -----------    -----------    -----------    -----------

Balances, December 31, 1996                     (2,794,573)        99,000         46,825      3,999,139

Realized gain on marketable securities                --          (95,750)          --          (95,750)

Unrealized foreign currency translation loss          --             --          (22,238)       (22,238)

Net loss for the year                           (1,230,972)          --             --       (1,230,972)
                                               -----------    -----------    -----------    -----------

Balances, December 31, 1997                    $(4,025,545)   $     3,250    $    24,587    $ 2,650,179
                                               ===========    ===========    ===========    ===========

                     SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                 F-6
</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                    POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                       FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                       ----------------------------------------------


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

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                         <C>                  <C>
     Reconciliation of net income (loss) to net
        cash flows (used in) operating activities:
         Net income (loss)                                  $(1,230,972)         $   640,412
         Depreciation and amortization                          229,025              128,079
         Deferred rent                                            3,466               (2,534)
         Deferred income taxes                                  (55,000)            (292,000)
         Stock-based compensation expense                          --                121,406
     Changes in operating assets and liabilities:
         Accounts receivable, trade, net                      1,064,863             (789,107)
         Inventories                                             62,191              358,560
         Other current assets                                     4,242               20,571
         Secured overdraft facility                              58,021                 --
         Accounts payable, trade                               (333,656)            (155,505)
         Accounts payable, officer                                  176                8,710
         Accrued liabilities                                     58,091             (122,093)
         Customer advances                                       92,875             (150,810)
         Income taxes payable                                    (9,800)               9,800
         Other assets                                            11,527              (11,298)
                                                            -----------          -----------

                Net Cash Flows (Used in)
                    Operating Activities                        (44,951)            (235,809)
                                                            -----------          -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Additions to property, equipment and leasehold
         improvements                                            (9,838)             (53,023)
     Investment in patent                                          --                (23,509)
     Cash paid for acquisition of subsidiaries,
         net of cash acquired of $208,054                          --               (379,870)
                                                            -----------          -----------


                Net Cash Flows (Used in)
                    Investing Activities                         (9,838)            (456,402)
                                                            -----------          -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of common stock, net of
         expenses of $16,000                                       --              1,157,357
     Advances on notes payable                                3,774,645            2,805,095
     Payments on notes payable                               (3,799,180)          (3,026,909)
     Additions to long term debt                                100,000                 --
     Payments of long term debt                                (221,368)            (163,355)
     Payments of long term debt - related parties                (5,413)                --
                                                            -----------          -----------

                Net Cash Flows (Used In)
                    Provided by Financing Activities           (151,316)             772,188
                                                            -----------          -----------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                          (1,843)               1,498
                                                            -----------          -----------

(DECREASE) INCREASE IN CASH                                    (207,948)              81,475
CASH, beginning of year                                         723,170              641,695
                                                            -----------          -----------

CASH, end of year                                           $   515,222          $   723,170
                                                            ===========          ===========

Supplemental Cash Flow Information:
See Note 14


                 SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                            F-7




</TABLE>

<PAGE>



              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 1 - BUSINESS ACTIVITY AND GOING CONCERN


Pollution  Research  and Control  Corp.,  a  California  corporation,  primarily
designs,   manufacturers  and  markets  air  pollution  monitoring  instruments,
electrical control panels, and medical  instrumentation through its wholly-owned
subsidiaries Dasibi Environmental Corporation ("Dasibi"), Nutek, Inc. ("Nutek"),
and  Logan  Medical  Devices,  Inc.  ("LMD"),  respectively.  Nutek and LMD were
acquired in June 1996 (see Note 8). Dasibi currently  accounts for approximately
45% of consolidated revenues, Nutek 48%, and LMD 7%.

The accompanying  consolidated  financial statements have been prepared assuming
that the  Company  will  continue  as a going  concern  which  contemplates  the
realization  of assets and  liquidation  of  liabilities in the normal course of
business.  The Company is in violation of its Loan and Security  Agreement  with
its asset-based lender due to the Company's  inability to meet certain financial
ratio  covenants.  Although all principal and interest  payments have been made,
provisions of the agreement state that in event of default, or events that might
lead to  default,  the lender has the option to make all notes and loans due and
owing immediately. As of the date of this report no action has been taken by the
lender  in this  regard.  Management  intends  to sell the Nutek  subsidiary  or
liquidate  the  assets of Nutek.  Notes  and loans due to the  lender  have been
classified in the financial  statements  in  accordance  with  provisions of the
agreement. The resulting effect is a reclassification of long-term debt totaling
$601,651 to current liabilities as of December 31, 1997.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation - The consolidated  financial  statements  include the accounts of
Pollution  Research and Control Corp.  and its  wholly-owned  subsidiaries  (the
"Company").  All significant  intercompany  balances and transactions  have been
eliminated in consolidation.

Revenue Recognition - Revenue is recognized upon shipment of products.

Inventories  -  Inventories  are stated at the lower of cost or market.  Cost is
determined on the first-in first-out (FIFO) basis.

Property,  Equipment and Leasehold  Improvements  and  Depreciation  - Property,
equipment  and  leasehold  improvements  are  stated  at cost  less  accumulated
depreciation and amortization. Depreciation is provided for on the straight-line
method over the  estimated  useful  lives of the assets,  generally  five to ten
years. Amortization of leasehold improvements is over the shorter of the life of
the lease or five years.  Total  depreciation  expense was $190,047 and $107,422
for the years ended December 31, 1997 and 1996, respectively.

Goodwill - The goodwill was recorded in connection with the acquisition of Logan
Medical  Devices,  Inc.  discussed in Note 8 below,  and is being amortized on a
straight-line  basis  over 40 years.  Amortization  of  goodwill  was $7,003 and
$4,265 for the years ended December 31, 1997 and 1996, respectively.



                                      F-8

<PAGE>




              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


Stock-Based  Compensation  -  During  1996  the  Company  adopted  Statement  of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation"  ("SFAS 123"). The new standard  required the Company to adopt the
"fair value" method with respect to stock-based  compensation of consultants and
other  non-employees.  The Company did not change its method of accounting  with
respect to employee  stock options;  the Company  continues to account for these
under the  "intrinsic  value"  method,  and to furnish the proforma  disclosures
required  by SFAS  123.  See  Notes 11 and 12 for  additional  information  with
respect to stock-based compensation.

Earnings per Share - In 1997, the Financial  Accounting  Standards  Board (FASB)
issued  Statement  No. 128,  "Earnings  Per Share".  Statement  128 replaced the
calculation  of  primary  and fully  diluted  earnings  per share with basic and
diluted earnings per share.  Unlike primary  earnings per share,  basic earnings
per share  excludes any dilutive  effects of options,  warrants and  convertible
securities.  Diluted  earnings  per  share  is very  similar  to the  previously
reported  fully diluted  earnings per share.  All earnings per share amounts for
all periods have been presented,  and where appropriate,  restated to conform to
Statement 128 requirements.

Cash Equivalents - For purposes of reporting cash flows,  the Company  considers
all  funds  with  original  maturities  of  three  months  or  less  to be  cash
equivalents.

Fair Value of Financial  Instruments  - The carrying  amounts of cash,  accounts
receivable, accounts payable and accrued expenses approximate fair value because
of the short  maturity  of these  items.  The fair  value of the lines of credit
approximate market because the interest rates on all of these instruments adjust
on a periodic  basis with the market.  The fair value of various  notes  payable
were estimated  based on market values for debt with similar  terms.  Management
believes that the fair value of that debt  approximated  its carrying value. The
fair value of notes payable to related  parties  cannot be determined due to the
terms under which these instruments were negotiated.

Investments  in  Equity  Securities  -  Management  determines  the  appropriate
classification  of its investments in equity  securities at the time of purchase
and reevaluates such  determinations at each balance sheet date. The Company has
classified  its investment  portfolio as available for sale.  Available for sale
securities  are stated at fair  market  value with  unrealized  gains and losses
included as a separate  component of  stockholders'  equity.  Realized gains and
losses  are   included  in  earnings   and  are  derived   using  the   specific
identification method.

Translation of Foreign  Currencies - The translation of foreign  currencies into
U.S.  dollars is performed for balance  sheet  accounts  using current  exchange
rates in effect at the balance  sheet date and for revenue and expense  accounts
using an average  exchange  rate for the period.  The gains or losses  resulting
from translation are included in stockholders' equity.

Research and Development  Costs - Research and development  costs are charged to
operations as incurred.



                                      F-9

<PAGE>


              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income  Taxes  -  Deferred   income  taxes  are  recorded  to  reflect  the  tax
consequences in future years of temporary  differences  between the tax basis of
the assets and liabilities and their financial  statement  amounts at the end of
each reporting  period.  Valuation  allowances are established when necessary to
reduce  deferred tax assets to the amount  expected to be  realized.  Income tax
expense is the tax  payable  for the  current  period and the change  during the
period in  deferred  tax assets and  liabilities.  The  deferred  tax assets and
liabilities have been netted to reflect the tax impact of temporary differences.
A valuation  allowance has been established for the entire deferred tax asset as
management  believes that it is more likely than not that a tax benefit will not
be realized.

Use of Estimates in the Preparation of Financial Statements - 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 and  liabilities  and  disclosure  of  contingent  assets and
liabilities  at the date of the financial  statements  and revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Reclassification   -  Certain  amounts  reported  in  the  Company's   financial
statements  for the year  ended  December  31,  1996 have been  reclassified  to
conform to the current year presentation.

Recently Issued Accounting  Pronouncements - In 1997, the FASB Issued Statements
No.  130,  "Reporting  Comprehensive  Income" and No.  131,  "Disclosures  About
Segments Of An Enterprise And Related  Information",  effective for fiscal years
beginning  after  December  15,  1997.  The  adoption  by the  Company  of these
Statements  in January  1998 is not  expected  to have a material  impact on the
Company's financial statements.

NOTE 3 - MARKETABLE SECURITIES

During 1997 and 1996, the Company sold 86,000 and 301,000 of Atlanta  Technology
Group,  Inc. (ATYG) shares,  respectively,  realizing net proceeds and a gain of
$82,897 and $570,435,  respectively.  The remaining 13,000 shares are carried on
the balance  sheet at an estimated  market value of $3,250 at December 31, 1997.
At December 31, 1997,  the cost of the shares is considered to be $3,250 and the
unrealized holding gain $-0-.





                                      F-10

<PAGE>



              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 4 - INVENTORIES

Inventories at December 31, 1997 and 1996 consisted of the following:

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

Raw materials                                    $1,372,792           $1,587,232
Work in process                                     530,983              859,925
Finished goods                                      600,784              128,095
                                                 ----------           ----------

     Total                                       $2,504,559           $2,575,252
                                                 ==========           ==========

Inventories  at December  31,  1997 and 1996  include  overhead of $538,236  and
$363,211, respectively.

NOTE 5 - PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Property,  equipment  and leasehold  improvements  at December 31, 1997 and 1996
consisted of the following:

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

Machinery and equipment                                  $1,388,490   $1,387,363
Furniture and fixtures                                      152,209      144,357
Leasehold improvements                                      324,545      324,727
                                                         ----------   ----------
                                                          1,865,244    1,856,447
Less accumulated depreciation and amortization              395,661      205,884
                                                         ----------   ----------

Net property, equipment and leasehold improvements       $1,469,583   $1,650,563
                                                         ==========   ==========

NOTE 6 - ACCRUED LIABILITIES

Accrued liabilities at December 31, 1997 and 1996 consisted of the following:

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

Accrued payroll and related taxes                        $167,315       $113,868
Accrued interest                                           46,446         26,269
Accrued vacation                                           29,050         28,969
Current portion of deferred rent                           23,012         23,012
Accrued legal and professional fees                          --           21,364
Other                                                      15,731         10,617
                                                         --------       --------

     Total                                               $281,554       $224,099
                                                         ========       ========

                                      F-11


<PAGE>


              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 7 - DEFERRED RENT

Upon  execution  of a 10  year  lease  for its  present  facility  in  Glendale,
California  commencing  July 1, 1994,  the Company  was granted 6 months  "free"
rent. Upon the acquisition of Nutek,  Inc.  effective June 20, 1996 discussed in
Note 8, the Company  executed a five year lease with  increasing  minimum rental
amounts on each anniversary date. As required by generally  accepted  accounting
principles,  rent expense is being  recognized by  amortizing  the total minimum
rentals payable under the leases over the terms of the leases on a straight-line
basis.  The deferred rent shown on the balance sheet as of December 31, 1997 and
1996  represents the excess of the total amount charged to rent expense over the
amounts  actually  due and  payable  under the leases as of such date,  of which
$23,012 and $23,012 have been  classified as current and $102,669 and $99,203 as
long term, respectively.

NOTE 8 - ACQUISITIONS

Effective June 20, 1996, the Company  acquired 100% of the outstanding  stock of
Nutek, Inc. ("Nutek"),  a Florida-based company primarily engaged in the design,
manufacture  and marketing of electrical  control  panels for  automation use in
utility and  industrial  applications.  The Company paid $304,000  (inclusive of
acquisition costs) and incurred or assumed an additional $1,593,000 in debt, for
a total  purchase  price  including the  assumption of debt of  $1,897,000.  The
acquisition was accounted for as a purchase. Current assets and liabilities were
recorded at their fair values,  with the remaining  purchase price of $1,525,000
recorded as the value of property and equipment acquired.

In connection  with the  acquisition,  the Company  granted 340,000 common stock
options  exercisable at $1.10 per share to various  consultants and employees of
Nutek (above market on the date of the grant) (see Note 11). Additionally,  loan
costs  of  $91,000  were  incurred  in  connection  with  the  financing  of the
acquisition (see Note 9); the loan costs are being amortized over the three year
term of the credit facility.  Amortization of loan costs was $30,275 and $15,137
for the years ended December 31, 1997 and 1996, respectively.

Effective  June 1, 1996,  the Company  acquired 100% of the  outstanding  common
stock of Logan Medical  Devices,  Inc., a Colorado  corporation  ("LMD") and its
wholly-owned  subsidiary Logan Research Limited of Rochester,  Kent,  England, a
private  United  Kingdom  company  limited  by shares  ("LRL").  LMD and LRL are
primarily   engaged  in  the  design,   manufacture  and  marketing  of  medical
instrumentation internationally.  The Company issued 600,500 options to purchase
its common stock exercisable at $1.10 per share (above market on the issue date)
in exchange  for the  1,201,000  shares  (80.1%) of LMD it did not already  own.
Additionally,  the Company made a $250,000 capital  contribution to LMD, and LMD
issued  $300,000 in notes to the former  stockholders of LRL in payment for 100%
of the outstanding stock of LRL. The total amount paid was $287,000 inclusive of
acquisition  costs,  and including the $300,000 in notes issued by LMD the total
purchase price was $587,000.



                                      F-12

<PAGE>


              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 8 - ACQUISITIONS (Continued)

This acquisition was accounted for as a purchase.  Current assets,  property and
equipment and liabilities were recorded at their fair values, with the remaining
purchase price of $292,000 assigned to goodwill. The goodwill is being amortized
on a straight-line basis over 40 years.  Additionally,  the Company entered into
an employment contract with the President of LMD and LRL (see Note 13).

NOTE 9 - NOTES PAYABLE AND LONG-TERM DEBT

Notes Payable
-------------
In May  1997,  the  Company  entered  in to an  extension  of its line of credit
agreement with a bank, which provides  borrowings of up to $200,000 through June
3, 1998.  Borrowings under this agreement bear interest at the bank's prime rate
plus 2% (10.5% at December 31, 1997) and are collateralized by substantially all
of the Company's assets.  The agreement contains several  restrictive  covenants
common to lines of credit,  including  certain  tangible  net worth and  current
ratio requirements. The balance outstanding at December 31, 1997 was $140,000.

In connection  with the  acquisition of Nutek,  Nutek obtained a working capital
facility  from the  asset-based  lender  for the  lesser  of  $1,000,000  or the
borrowing base (as defined). A total of $535,000 was advanced in connection with
the acquisition; $389,123 and $363,658 were outstanding at December 31, 1997 and
1996,  respectively.  The note bears interest at the large commercial bank prime
rate plus 2.5% (11% and 10.75% at December 31, 1997 and 1996,  respectively) and
matures  June 28,  1999.  Substantially  all of Nutek's  assets  are  pledged as
collateral  for this  loan and for the term  loan  described  below,  which  was
obtained  from  the same  asset-based  lender.  The  related  Loan and  Security
Agreement  contains  numerous   restrictive   covenants  common  to  asset-based
financing,  including  the  requirement  to  maintain  specified  levels of debt
service coverage,  working capital,  tangible net worth, and profitability,  and
restrictions on additional borrowings, the payment of dividends, and limitations
on payments to affiliates including the parent company (see Note 1).
Additionally, the parent company has guaranteed these loans.

Logan Research Limited has a secured overdraft  facility with an English bank of
up to (pound)60,000  (approximately $100,000 at current exchange rates). Amounts
borrowed  under  the  facility  bear  interest  at the  reference  rate  plus 3%
(currently 9%). The facility  expires and must be "reviewed" March 31, 1998. The
facility  is  secured  by  substantially  all of the  assets  of LRL  and by the
residences of two individuals  who are officers and/or  directors of LMD and LRL
and the former stockholders of LRL. Amounts outstanding were $58,334 and $-0- as
of December 31, 1997 and 1996, respectively.



                                      F-13

<PAGE>


              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 9 - NOTES PAYABLE AND LONG-TERM DEBT (Continued)

Long-Term Debt
Long-term debt at December 31, 1997 and 1996 consisted of the following:

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


Nutek, Inc., term loan                                   $601,651       $687,500
Notes payable to former stockholders                       89,174        100,000
Installment loans                                          42,144         66,837
                                                         --------       --------
                                                          732,969        854,337
Less current portion                                      646,736        186,741
                                                         --------       --------

Long-term debt                                           $ 86,233       $667,596
                                                         ========       ========

Nutek's term loan bears  interest at the large  commercial  bank prime rate plus
3.5% (12% and  11.75% at  December  31,  1997 and 1996,  respectively).  Monthly
payments  of $14,623 and $12,500  plus  interest at December  31, 1997 and 1996,
respectively,  are  required  until June 28, 1999,  at which time the  remaining
balance is due. The term loan was received from the same asset-based  lender who
provided  Nutek's working capital  facility--see  description of Nutek's working
capital facility above (see Note 1).

The notes payable to Nutek's former  stockholders  bears interest at 8%. Monthly
interest-only  payments were required until June 30, 1997,  after which time the
principal and interest is payable in 48 equal monthly  installments  aggregating
$2,442. The notes are unsecured.

The  installment  loans bear  interest at rates  ranging from 6.5% to 9.25% (the
commercial  bank prime rate plus .75%) and mature at various times from May 1998
to April  2000.  The loans are  secured by  purchase  money liens on the related
assets.

Long-Term Debt, Related Parties
-------------------------------
Long-term debt, related parties at December 31, 1997 and 1996,  consisted of the
following:

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

Nutek, Inc. - notes payable to family member of employee     $ 44,587   $ 50,000
Logan Medical Devices, Inc.- notes payable to
    officers/employees                                        300,000    300,000
Logan Research Limited - advances from officer                 23,233     24,214
                                                             --------   --------
                                                              367,820    374,214
Less current portion                                          311,496      5,413
                                                             --------   --------

Long-term debt, related parties                              $ 56,324   $368,801
                                                             ========   ========


                                      F-14

<PAGE>


              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 9 - NOTES PAYABLE AND LONG-TERM DEBT (Continued)

The note payable to a family  member of an employee was part of the financing of
the acquisition of Nutek.  The note bears interest at 8%. Monthly  interest-only
payments were required  until June 30, 1997,  after which time the principal and
interest is payable in 48 equal monthly installments of $1,221.
The note is unsecured.

The notes  payable to  officers/employees  of Logan Medical  Devices,  Inc. were
issued to two individuals in payment for 100% of the outstanding  stock of Logan
Research Limited in connection with the acquisition.  These  individuals  became
officers  of Logan  Medical  Devices,  Inc.  upon  acquisition.  The notes  bear
interest at 9%. Quarterly  payments of accrued interest are required  commencing
June 30,  1998.  The notes  are  redeemable  by the  Company  at any time  after
December  28,  1996,  and are callable by the holders at any time after June 28,
1998. The notes are secured by substantially all of the assets of LMD and LRL.

The advances from an officer of LRL are represented by an open advance  account.
Management does not expect to repay the amount in the foreseeable future.

Scheduled maturities of long-term debt are as follows:

                                                      Related
                                     Total            Parties           Others
                                  ----------        ----------        ----------

1998                              $  958,232        $  311,496        $  646,736
1999                                  53,750            12,451            41,299
2000                                  44,107            13,483            30,624
2001                                  21,467             7,157            14,310
2002                                    --                --                --
Thereafter                            23,233            23,233              --
                                  ----------        ----------        ----------

                                  $1,100,789        $  367,820        $  732,969
                                  ==========        ==========        ==========

As explained in Note 1 to the financial statements,  the Company is in violation
of its Loan and  Security  Agreement  with its  asset-based  lender,  due to the
Company's inability to meet certain financial ratio covenants. Provisions of the
loan  agreement  states  that in event of default  or events  that might lead to
default,  the  lender  has the  option to make all notes and loans due and owing
immediately.  As of the date of this  report  no  action  has been  taken by the
lender  in this  regard.  The  notes  and  loans  due to the  lender  have  been
classified  in the financial  statement in accordance  with the provision of the
loan agreement.




                                      F-15

<PAGE>



              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 10 - INCOME TAXES

The income tax  provision  (benefit)  for the years ended  December 31, 1997 and
1996  differs  from the  computed  expected  provision  (benefit) at the federal
statutory rate of 35% for the following reasons:

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

Computed expected income tax provision (benefit) at 35%  $(455,000)   $ 125,000
Non-deductible meals and entertainment                       4,000        8,000
Temporary differences for items deductible from
(includible in) taxable income in future years:
         Stock based compensation expense                     --         43,000
         Depreciation                                       37,000       22,000
         Inventory valuation allowance                      29,000        3,000
         Incomplete contracts                                 --        (29,000)
         Bad debt allowance                                 (9,000)        --
         Other                                                --          1,000
State income taxes, net of federal income tax effect       (56,000)      22,000
Net operating loss carryforward unutilized (utilized)      450,000     (195,000)
Alternative minimum tax                                     (9,800)      10,000
Increase (reduction) to valuation allowance                (55,000)    (292,000)
                                                         ---------    ---------

     Income tax provision (benefit)                      $ (64,800)   $(282,000)
                                                         =========    =========


                                      F-16

<PAGE>
<TABLE>
<CAPTION>


                      POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                         ----------------------------------------------


NOTE 10 - INCOME TAXES (Continued)

The  components  of the deferred tax assets and  liabilities  as of December 31,
1997 and 1996 were as follows:

                                                                       1997               1996
                                                                   -----------        -----------
Deferred tax assets:
Temporary differences:
<S>                                                                <C>                <C>
     Allowance for doubtful accounts                               $     8,000        $    17,000
     Inventory valuation allowance                                      64,000             31,000
     Incomplete contracts                                               25,000             25,000
     Accrued expenses                                                   15,000             15,000
     Stock based compensation                                           48,000             48,000
     Loss on joint venture investment                                   66,000             66,000
     Tax depreciation in excess of book depreciation                      --               10,000
     Net operating loss carryforward                                 1,363,000            926,000
     Less valuation allowance                                       (1,128,000)          (729,000)
                                                                   -----------        -----------

     Long-term deferred tax assets after valuation allowance           461,000            409,000

Deferred tax liability:
Excess of basis of Nutek's property and equipment for financial
     reporting purposes over tax basis                                (461,000)          (464,000)
                                                                   -----------        -----------

     Net long-term deferred tax liability                          $      --          $   (55,000)
                                                                   ===========        ===========
The components of the deferred tax expense were as follows:

                                                                       1997               1996
                                                                   -----------        -----------
     Stock-based compensation expense                              $      --          $   (48,000)
     Allowance for doubtful accounts                                     9,000             (1,000)
     Inventory valuation allowance                                     (33,000)              --
     Incomplete contracts                                                 --              (31,000)
     Other                                                                --              (10,000)
     Depreciation                                                        7,000            (26,000)
     (Unutilization) utilization of net operating
         loss carryforward                                            (437,000)           195,000
     Change in valuation allowance                                     399,000           (433,000)
                                                                   -----------        -----------

                                                                   $   (55,000)       $  (292,000)
                                                                   ===========        ===========


                                              F-17
</TABLE>

<PAGE>


              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 10 - INCOME TAXES (Continued)

As of  December  31,  1997 the  Company  has net  operating  loss  carryforwards
available to offset future taxable income of approximately  $3,400,000  expiring
in 2004 through 2011.

NOTE 11 - STOCKHOLDERS' EQUITY

Issuance of Common Stock
------------------------
On June  24,  1996 the  Company  sold in a  private  placement  1,000,003  units
consisting  of one  share of  common  stock  and one  warrant  to  purchase  the
Company's  common stock at $1.00 per share  (above  market on the date of sale),
receiving net proceeds of $584,000. On September 20, 1996, the Company completed
a private placement consisting of 350,000 shares of common stock and warrants to
purchase  300,000 shares of common stock at $1.50 per share (above market on the
date of sale),  receiving  net proceeds of $300,000.  Additionally,  in 1996 the
Company  received net proceeds of $273,357  from the exercise of an aggregate of
391,067 options and warrants and, accordingly, issued 391,067 shares.

Warrants
--------
In July 1989, the Company issued 1,453,497 warrants to purchase its common stock
at $1.75 per  share as part of units  sold in a public  offering.  Additionally,
there were outstanding 652,501 warrants at an exercise price of $1.75 per share,
which had been originally  issued to the Underwriter.  These 2,105,998  warrants
were  publicly  traded in earlier  years.  The Board of  Directors  approved the
extension  of the  expiration  date of the  warrants  until March 29, 1996 at an
exercise price of $0.60 per share.  In March 1996,  266,900 of the warrants were
exercised, and the remaining 1,839,098 warrants expired March 29, 1996.

On July 11,  1996,  25,000  warrants  issued in 1991 to purchase  the  Company's
common stock at $0.69 per share were exercised.

In  connection  with  the June  24,  1996  private  placement  described  above,
1,000,003  warrants to purchase  the  Company's  common stock at $1.00 per share
were issued,  expiring June 14, 1999. In November  1996,  89,167 of the warrants
were exercised; 910,836 were outstanding at December 31, 1997 and 1996.

In connection with the September 20, 1996 private placement described above, the
Company issued 300,000  warrants to purchase the Company's common stock at $1.50
per share, expiring September 20, 1999.

Additionally,  at  December  31,  1997 and  1996,  there  were  60,000  warrants
outstanding  to purchase the Company's  common stock at $1.70 per share expiring
August 31,  1998,  and 5,000  warrants at $2.00 per share  expiring  November 7,
1998.

In January 1997,  the Company  issued 65,000  warrants to purchase the Company's
common stock at $1.25, to an investment  banker.  The warrants were cancelled in
March 1997, due to non-performance.



                                      F-18

<PAGE>



              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 11 - STOCKHOLDERS' EQUITY (Continued)

Options
-------
On June 29, 1995, the Company granted  options to various  employees to purchase
30,000 shares of common stock at $0.63,  expiring June 28, 2000. In January 1997
and 1996,  10,000 and 5,000 of the options were  cancelled  due to an employee's
departure;  15,000  remain  outstanding.  The Company had also  granted  160,000
options at $0.63 to officers,  directors and key employees on June 29, 1995; the
160,000 options were cancelled May 31, 1996.

On July 1, 1995, the Company granted  employee options to purchase 25,000 shares
at $1.38, expiring June 30, 1998.

On July 10, 1995, the Company  granted  options to a consulting firm to purchase
500,000  shares at $0.70 per share.  The options were cancelled in January 1996,
due to non-performance.

On April 1, 1996, the Company issued to a consultant  options to purchase 10,000
shares at $0.68 per share. The options were exercised October 18, 1996.

On May 30,  1996,  the  Company  issued to a public  relations  firm  options to
purchase  1,000,000  shares at $0.94 per share and  300,000  shares at $1.25 per
share.  The  options  expire  May 29,  2000.  The  Company  believes  the public
relations  firm  has not  performed  under  its  contract  and the  options  are
presently in dispute.

On May 31, 1996, in connection with the acquisition of Nutek, the Company issued
options to purchase 340,000 shares at $1.10 per share to various consultants and
employees of Nutek. The options may be exercised  beginning  January 7, 1998 and
expire May 31, 2000.  In 1997,  35,000  options were  cancelled  due to employee
departures.

On June 1,  1996,  in  connection  with  the  acquisition  of LMD,  the  Company
exchanged  options  to  purchase  600,500  shares  at $1.10  per  share  for the
1,201,000  shares of LMD it did not already own (see Note 8). The options may be
exercised beginning January 7, 1998 and expire May 31, 2000. The 600,500 options
include  123,000  issued to the Chief  Executive  Officer  and a director of the
Company,  20,000  shares each to four  directors and 300,000 to the President of
the Company's subsidiaries LMD and LRL.

Also on June 1, 1996, the Company  issued options to purchase  280,000 shares at
$1.10,  expiring  May 31, 2000,  to the  officers  and  directors of the Company
referred to in the  previous  paragraph,  as follows:  Chief  Executive  Officer
120,000,  40,000  each to four  directors.  Additionally,  the  Company  granted
options to purchase 40,000 shares at $1.10 per share to an unrelated individual.

On July 1, 1996, the Company  granted options to purchase 25,000 shares at $1.38
per share to an employee, expiring June 30, 1999.



                                      F-19


<PAGE>



              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 11 - STOCKHOLDERS' EQUITY (Continued)

On November 22, 1996, the Company granted options to purchase  400,000 shares at
$1.12 per share to a consultant.  The options expire  November 4, 1999. In 1997,
233,000 options were cancelled due to non-performance.

Additionally,  the Company has  outstanding  options granted in 1991 to purchase
50,000 shares at $0.55 per share,  expiring May 28, 2001, to the Chief Executive
Officer and a director of the Company, 50,000 to an owner of record of 6% of the
Company's  outstanding  common  stock,  and 45,000 to a director of the Company.
Also  outstanding at December 31, 1996,  were options  granted to an employee to
purchase 25,000 shares at $1.38, which expired June 30, 1997.

On March 3, 1997, the Company  granted options to purchase 40,000 shares at $.95
per share to a  consultant/director.  The  options  may be  exercised  beginning
January 8, 1998 and expire on January 6, 2002.

On April 30, 1997, the Company granted options to purchase 50,000 shares at $.75
to a consultant. The options may be exercised beginning March 4, 1998 and expire
on November 4, 2000.

The following table  summarizes the activity of options and warrants for the two
years ended December 31, 1997:

<TABLE>
<CAPTION>

                                                                          Weighted
                                                                           Average
                                               Number of                  Exercise         Exercise
                                       Options           Warrants           Price           Amount
                                    -----------        -----------        ---------      -----------

<S>                                   <C>              <C>              <C>            <C>
Outstanding, December 31, 1995          885,000          2,195,998        $   1.44       $ 4,433,197
Granted                               2,995,500          1,300,003        $   1.08         4,640,853
Reduction to exercise price                --                 --          $    --         (2,421,898)
Exercised                               (10,000)          (381,067)       $   0.70          (273,357)
Cancelled                              (665,000)              --          $   0.68          (453,950)
Expired                                    --           (1,839,098)       $   0.60        (1,103,459)
                                    -----------        -----------                       -----------

Outstanding, December 31, 1996        3,205,500          1,275,836        $   1.08         4,821,386

Granted                                  90,000             65,000        $   1.01           156,750
Cancelled                              (278,000)           (65,000)       $   1.13          (387,010)
Expired                                 (25,000)              --          $   1.75           (43,750)
                                    -----------        -----------                       -----------

Outstanding, December 31, 1997        2,992,500          1,275,836        $   1.07       $ 4,547,376
                                    ===========        ===========                       ===========

At  December  31,  1997 and  1996,  the  Company  had a total of  4,268,336  and
4,481,336  options and warrants  outstanding,  respectively,  at exercise prices
ranging from $0.55 to $2.00, with a weighted average remaining  contractual term
of 3.1 years.


                                      F-20
</TABLE>

<PAGE>



              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 11 - STOCKHOLDERS' EQUITY (Continued)

The  Company  filed a  registration  statement  on Form  S-3 on June 7,  1995 to
register  the shares  underlying  3,053,497  warrants  and  170,000  options.  A
post-effective  amendment  was filed  February  26, 1996 to adjust the number of
shares  registered  to equal shares  underlying  2,170,998  warrants and 320,000
options.  A Form S-3 was filed October 15, 1996 to register  1,375,003 shares of
common  stock and the shares  underlying  an  additional  1,875,000  options and
1,365,003 warrants.

Notes Receivable
----------------
During 1990,  the Company  issued  150,000  shares of its common stock for notes
receivable totaling $86,587. The notes were originally due in 1994 with interest
at 10% per  year.  The  notes  were  amended  to be due  with no  interest.  The
underlying shares are collateral for the note and are held by the Company.

NOTE 12 - STOCK-BASED COMPENSATION

During 1996 the Company adopted Statement of Financial  Accounting Standards No.
123,  "Accounting for Stock-Based  Compensation".  The new standard required the
Company  to  adopt  the  "fair  value"   method  with  respect  to   stock-based
compensation  of  consultants  and  other   non-employees.   Options  issued  to
consultants  and other  non-employees  in 1997 did not have a material effect to
the financial statements.  Options issued to consultants and other non-employees
resulted in a charge to  operations of $121,406 in 1996.  Additionally,  $24,358
was capitalized as acquisition costs in 1996.

The Company  did not change its method of  accounting  with  respect to employee
stock options;  the Company  continues to account for these under the "intrinsic
value"  method.  Had the Company  adopted the fair value  method with respect to
options issued to employees as well, an additional  charge to income of $104,249
would have been  required in 1996;  proforma net income would have been $536,163
and earnings  per share would have been $0.07 on both a basic and fully  diluted
basis.

In estimating  the above  expense,  the Company used the Modified  Black-Scholes
American  pricing model. The risk-free  interest rate used was 6.2%;  volatility
was estimated at 71.5%; the expected life was less than one year.


                                      F-21


<PAGE>



              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 13 - COMMITMENTS AND CONTINGENCIES

Operating   Leases  -  The  Company  leases  its  facilities   under   long-term
non-cancelable operating leases. The lease terms provide for increases in future
minimum  rental  payments  based on the Consumer  Price Index,  and an option to
purchase  during the lease term. The lease on the Company's  facility in England
is payable to the pension  trust of the  President of the  Company's LMD and LRL
subsidiaries.  The  lease  on the  Company's  Nutek  facility  is  payable  to a
partnership in which one of the former  stockholders of Nutek and the husband of
a current  employee of the Company's  Nutek  subsidiary has an interest.  Future
minimum lease commitments as of December 31, 1997 are as follows:

Year Ended              Total          Commitments to         Commitments
December 31,         Commitments       Related Parties         To Others
------------      -----------------    ---------------     -----------------

   1998           $         451,269    $        66,254     $         385,015
   1999                     444,735             73,071               371,664
   2000                     427,980             81,268               346,712
   2001                     378,864             42,000               336,864
   2002                     336,864              -                   336,864
Thereafter                  533,368              -                   533,368
                  -----------------    ---------------     -----------------

   Total          $       2,573,080    $       262,593     $       2,310,487
                  =================    ===============     =================

Total rentals under all operating  leases  charged  against  income  amounted to
$474,500  and  $461,500  for  the  years  ended  December  31,  1997  and  1996,
respectively.

Employment  Agreements - The Company is obligated to make certain minimum salary
payments  to the  Chief  Executive  Officer  and other  employee/directors.  All
contracts expire in 1999, as follows:

             Year Ended
            December 31,                    Total
             -----------               ---------------
                1998                   $       421,220
                1999                           233,910
                                       ---------------

               Total                   $       655,130
                                       ===============

Contingencies - The Company is not currently  involved in any legal  proceedings
except for those arising in the ordinary  course of business,  none of which are
expected to have a material impact on the Company's financial  statements in the
event of unfavorable resolution.



                                      F-22

<PAGE>



              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 14 - SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for income  taxes was $1,817 and $-0- during the years ended  December
31,  1997 and  1996,  respectively.  Cash paid for  interest  was  $192,955  and
$119,847 during the years ended December 31, 1997 and 1996, respectively.

During 1996 the Company entered into several non-cash transactions.  The Company
exchanged 600,500 options for 1,201,000 shares of Logan Medical Devices, Inc. it
did not already own in connection  with the acquisition of Logan as discussed in
Note 8. Also in connection with the acquisition, LMD issued $300,000 in notes to
the former  stockholders of LRL in exchange for 100% of the outstanding stock in
LRL. In connection with the acquisition of Nutek, Nutek issued $150,000 in notes
to its former stockholders as part of the purchase price. Additionally,  100,000
stock  options  valued  at  $12,333  were  capitalized  as  part  of  the  Nutek
acquisition, and 97,500 stock options valued at $12,025 were capitalized as part
of the LMD acquisition.

NOTE 15 - INDUSTRY SEGMENT AND EXPORT INFORMATION

Beginning in 1996 with the  acquisitions of Nutek and LMD, the Company  operates
in three  business  segments;  air pollution  monitoring  equipment,  electrical
control panels, and medical  instrumentation.  Following is certain  information
related to each segment for 1997 and 1996:

1997                                                  Electrical
----                                Air Pollution      Control        Medical
                                     Instruments        Panels      Instruments
                                   ---------------   -----------    -----------

Revenues                           $     3,072,600   $ 3,299,687    $   420,480
                                   ===============   ===========    ===========

Income (loss) from operations      $      (906,904)  $  (143,755)   $   (99,497)
                                   ===============   ===========    ===========

Identifiable assets                $     2,334,399   $ 2,608,459    $   565,002
                                   ===============   ===========    ===========

Depreciation and amortization      $        33,128   $   184,170    $    11,727
                                   ===============   ===========    ===========

Capital expenditures               $          --     $     5,417    $     4,421
                                   ===============   ===========    ===========


                                      F-23

<PAGE>


              POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                 ----------------------------------------------


NOTE 15 - INDUSTRY SEGMENT AND EXPORT INFORMATION (Continued)

1996                                                  Electrical
----                                  Air Pollution    Control        Medical
                                       Instruments      Panels      Instruments
                                       -----------    -----------   -----------

Revenues                               $ 5,672,249    $ 2,867,819   $   264,943
                                       ===========    ===========   ===========

Income (loss) from operations          $  (328,590)   $   268,135   $   (11,883)
                                       ===========    ===========   ===========

Identifiable assets                    $ 3,522,922    $ 2,966,639   $   707,382
                                       ===========    ===========   ===========

Depreciation and amortization          $    28,778    $    91,708   $     7,593
                                       ===========    ===========   ===========

Capital expenditures                   $    41,176    $     9,757   $     2,090
                                       ===========    ===========   ===========

In 1997 and 1996,  no customer  accounted  for 10% or more of  consolidated  net
sales.

Export sales for the years ended December 31, 1997 and 1996 were as follows:

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

Europe and United Kingdom                          $1,103,673         $  865,586
Asia and Pacific                                      622,228          1,200,401
Latin America and other                               434,073            607,456
                                                   ----------         ----------

     Total                                         $2,159,974         $2,673,443
                                                   ==========         ==========

NOTE 16 - CONCENTRATION OF CREDIT RISK

Concentrations  of credit risk with  respect to trade  receivables  exist due to
large  balances with a few  customers.  At December 31, 1997 and 1996,  accounts
receivable  balances from two significant  customers were $165,375 and $700,505,
or 25% and 40% of the total accounts receivable balance,  respectively.  Ongoing
credit  evaluations  of  customers'  financial  conditions  are  performed,  and
generally,  no  collateral  is  required.  The Company  maintains  reserves  for
potential  credit  losses,  and such losses in the  aggregate  have not exceeded
management's expectations. Customers are located throughout the world.

The  Company  maintains  all cash in bank  accounts,  which at times may  exceed
federally insured limits.


                                      F-24
<PAGE>

                                   SIGNATURES

     In Accordance  with Section 13 or 15(d) of the  Securities and Exchange Act
of 1934,  the  registrant  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Date:  March 24, 1998              POLLUTION RESEARCH AND CONTROL CORP.
                                              (Registrant)

                                   By:   /s/ Albert E. Gosselin, Jr.
                                       -----------------------------------------
                                   Albert E. Gosselin, Jr., President, Chief
                                   Executive Officer and Chairman of the Board
                                   of Directors

     In  accordance  with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and on the dates indicated.

Date:  March 24, 1998              /s/ Albert E. Gosselin, Jr.
                                   ---------------------------------------------
                                   Albert E. Gosselin, Jr., President, Chief
                                   Executive Officer and Chairman of the Board
                                   of Directors
                                   (Principal Executive Officer)

Date:  March 24, 1998              /s/ Donald R. Ford
                                   ---------------------------------------------
                                   Donald R. Ford, Chief Financial Officer
                                   (Principal Financial and Accounting Officer)

Date:  March 24, 1998              /s/  Barbara L. Gosselin
                                   ---------------------------------------------
                                   Barbara L. Gosselin, Director

Date:  March 24, 1998               /s/ Gary L. Dudley
                                   ---------------------------------------------
                                   Gary L. Dudley, Director

Date:  March 24, 1998              /s/Marcia A. Smith
                                   ---------------------------------------------
                                   Marcia A. Smith, Director

Date:  March 24, 1998              /s/ Craig E. Gosselin
                                   ---------------------------------------------
                                   Craig E. Gosselin, Director

Date:  March 24, 1998              /s/ Barry Soltani
                                   ---------------------------------------------
                                   Barry Soltani, Director


                                       25




<PAGE>

                                  EXHIBIT INDEX

Item
Number                               Description


3.1       Articles of  Incorporation  of A. E. Gosselin  Engineering,  Inc. (now
          "Pollution  Research  and  Control  Corp.")  (Incorporated  herein  by
          reference to Exhibit 3(a) to the Amendment  No. 1 to the  Registration
          Statement  on  Form  10  of  Dasibi  Environmental   Corporation  (now
          "Pollution Research and Control Corp.")

3.2       Certificate  of  Amendment  of  Articles  of  Incorporation  of A.  E.
          Gosselin  Engineering,  Inc.  (now  "Pollution  Research  and  Control
          Corp.")  (Incorporated  herein by  reference  to  Exhibit  3(a) to the
          Amendment  No. 1 to the  Registration  Statement  on Form 10 of Dasibi
          Environmental Corporation (now "Pollution Research and Control Corp.")

3.3       Certificate  of  Amendment  of  Articles  of  Incorporation  of Dasibi
          Environmental    Corp.   (now   "Pollution    Research   and   Control
          Corp.")(Incorporated  herein  by  reference  to  Exhibit  3(a)  to the
          Amendment  No. 1 to the  Registration  Statement  on Form 10 of Dasibi
          Environmental Corporation (now "Pollution Research and Control Corp.")

3.4       By-laws of A. E. Gosselin  Engineering,  Inc. (now "Pollution Research
          and Control Corp.")  (Incorporated herein by reference to Exhibit 3(a)
          to the  Amendment  No. 1 to the  Registration  Statement on Form 10 of
          Dasibi Environmental  Corporation (now "Pollution Research and Control
          Corp.")

4.1       Form of  Warrant  Agreement.  (Incorporated  herein  by  reference  to
          Exhibit  4.1 to the  Registration  Statement  on Form  S-1  (File  No.
          33-26558 of Pollution  Research and Control  Corp.,  dated January 17,
          1989.)

4.2       Form of Unit Purchase  Warrant.  (Incorporated  herein by reference to
          Exhibit  4.2 to the  Registration  Statement  on Form  S-1  (File  No.
          33-26558 of Pollution  Research and Control  Corp.,  dated January 17,
          1989.)

4.3       Form of Stock Purchase Warrant.  (Incorporated  herein by reference to
          Exhibit  4.3 to the  Registration  Statement  on Form  S-1  (File  No.
          33-26558 of Pollution  Research and Control  Corp.,  dated January 17,
          1989.)

10.1      Warrant to Purchase  7,500  shares of Common  Stock  issued to Frost &
          Company P.S. on February 10, 1987.  (Incorporated  herein by reference
          to Exhibit  10.2 to the  Registration  Statement on Form S-1 (File No.
          33-26558) of Pollution  Research and Control Corp.,  dated January 17,
          1989.)

10.2      Employment Agreement,  dated July 31, 1987, between Pollution Research
          and Control Corp. and Albert E. Gosselin,  Jr. (Incorporated herein by
          reference  to Exhibit 10.3 to the  Registration  Statement on Form S-1
          (File No.  33-26558) of Pollution  Research and Control  Corp.,  dated
          January 17, 1989.)

10.3      Employees'  Incentive  Stock  Option  Plan.  (Incorporated  herein  by
          reference  to Exhibit 10.4 to the  Registration  Statement on Form S-1
          (File No.  33-26558) of Pollution  Research and Control  Corp.,  dated
          January 17, 1989.)


                                       E-1

<PAGE>


10.4      Employment  Agreement,  as amended,  dated  August 19,  1989,  between
          Pollution  Research  and Control  Corp.  and Albert E.  Gosslein,  Jr.
          (Incorporated  herein by  reference  to  Exhibit  10-28 to the  Annual
          Report on Form 10-K for the fiscal year ended June 30, 1989.)

10.5      Lease,  dated July 1, 1989,  between  Pollution  Research  and Control
          Corp. and Shahik  Mardeross-ASL.  (Incorporated herein by reference to
          Exhibit  10.30 to the Annual  Report on Form 10-K for the fiscal  year
          ended June 30, 1989.)

10.6      Stock Option Agreement, dated May 28, 1991, between Pollution Research
          and Control Corp. and Lee Sion.  (Incorporated  herein by reference to
          Exhibit 10.14 to the Transition Report on Form 10-K for the transition
          period ended June 30, 1991.)

10.7      Stock Option Agreement, dated May 28, 1991, between Pollution Research
          and Control Corp. and Albert E. Gosselin, Jr., (Incorporated herein by
          reference to Exhibit 10.15 to the  Transition  Report on Form 10-K for
          the transition period ended June 30, 1991.)

10.8      Stock Option Agreement, dated May 28, 1991, between Pollution Research
          and  Control  Corp.  and  Gary  L.  Dudley,  (Incorporated  herein  by
          reference to Exhibit 10.13 to the  Transition  Report on Form 10-K for
          the transition period ended June 30, 1991.)

10.9      Agreement,  dated  November 1, 1991,  between  Pollution  Research and
          Control  Corp.  and KVB,  Inc.  (Incorporated  herein by  reference to
          Exhibit  10.1 to the  Quarterly  Report  on Form  10-Q for the  fiscal
          quarter ended September 30, 1991.)

10.10     Purchase  Agreement,  dated as of December 2, 1991,  between Pollution
          Research and Control Corp.  and CSC  Industries,  Inc. and  affiliated
          companies  Pension Plans Trust.  (Incorporated  herein by reference to
          Exhibit 10.7 to the  Amendment No. 1 to the  Registration  Statment on
          form S-1 (File No.,  33-43124) of Pollution Research and Control Corp.
          dated December 23, 1991.)

10.11     Warrant, dated as of December 2, 1991, issued to CSC Industries,  Inc.
          and affiliated companies Pension Plans Trust.  (Incorporated herein by
          reference to Exhibit 10.8 to the Amendment  No. 1 to the  Registration
          Statement on form S-1 (File No.  33-43124)  of Pollution  Research and
          Control Corp. dated December 23, 1991.)

10.12     Purchase  Agreement,  dated as of December 9, 1991,  between Pollution
          Research  and  Control  Corp.  and Richard M.  Molinsky  (Incorporated
          herein by  reference  to Exhibit  10.9 to the  Amendment  No. 1 to the
          Registration  Statment  on form S-1 (File No. 33- 43124) of  Pollution
          Research and Control Corp. dated December 23, 1991.)

10.13     Warrant,  dated as of December 9, 1991, issued to Richard M. Molinsky.
          (Incorporated  herein by reference to Exhibit  10.10 to the  Amendment
          No. 1 to the Registration  Statment on form S-1 (File No. 33-43124) of
          Pollution Research and Control Corp. dated December 23, 1991.)

10.14     Purchase  Agreement,  dated as of December 11, 1991, between Pollution
          Research and Control Corp. and Global Environment Fund.  (Incorporated
          herein by reference  to Exhibit  10.11 to the  Amendment  No. 1 to the
          Registration  Statment on form S-1 (File No.  33-43124)  of  Pollution
          Research and Control Corp. dated December 23, 1991.)

10.15     Warrant,  dated as of December 11, 1991,  issued to Global  Enviroment
          Fund.  (Incorporated  herein  by  reference  to  Exhibit  10.7  to the
          Amendment  No. 1 to the  Registration  Statement on form S-1 (File No.
          33-43124) of Pollution  Research and Control Corp.  dated December 23,
          1991.)



                                       E-2

<PAGE>



10.16     Purchase  Agreement,  dated as of December 13, 1991, between Pollution
          Research and Control Corp. and Robert A. Tantleff (Incorporated herein
          by  reference  to  Exhibit  10.13  to  the  Amendment  No.  1  to  the
          Registration  Statement  on form S-1 (File No.  33-43124) of Pollution
          Research and Control Corp. dated December 23, 1991.)

10.17     Warrant,  dated as of December 2, 1991,  issued to Robert A. Tantleff.
          (Incorporated  herein by reference to Exhibit  10.14 to the  Amendment
          No. 1 to the Registration Statement on form S-1 (File No. 33-43124) of
          Pollution Research and Control Corp. dated December 23, 1991.)

10.18     Purchase  Agreement,  dated as of December 16, 1991, between Pollution
          Research and Control Corp. and Stanley Baker.  (Incorporated herein by
          reference to Exhibit 10.15 to the Amendment No. 1 to the  Registration
          Statement on form S-1 (File No. 33- 43124) of  Pollution  Research and
          Control Corp. dated December 23, 1991.)

10.19     Warrant,  dated as of  December  16,  1991,  issued to Stanley  Baker.
          (Incorporated  herein by reference to Exhibit  10.16 to the  Amendment
          No. 1 to the Registration  Statment on form S-1 (File No. 33-43124) of
          Pollution Research and Control Corp. dated December 23, 1991.)

10.20     Purchase  Agreement,  dated as of December 16, 1991, between Pollution
          Research and Control Corp.  and Bruce Lynch.  (Incorporated  herein by
          reference to Exhibit 10.17 to the Amendment No. 1 to the  Registration
          Statement on form S-1 (File No. 33- 43124) of  Pollution  Research and
          Control Corp. dated December 23, 1991.)

10.21     Warrant,  dated as of  December  16,  1991,  issued  to  Bruce  Lynch.
          (Incorporated  herein by reference to Exhibit  10.18 to the  Amendment
          No. 1 to the Registration Statement on form S-1 (File No. 33-43124) of
          Pollution Research and Control Corp. dated December 23, 1991.)

10.22     Purchase  Agreement,  dated as of December 16, 1991, between Pollution
          Research and Control Corp. and John Kilmartin. (Incorporated herein by
          reference to Exhibit 10.19 to the Amendment No. 1 to the  Registration
          Statement on form S-1 (File No. 33- 43124) of  Pollution  Research and
          Control Corp. dated December 23, 1991.)

10.23     Warrant,  dated as of December  16,  1991,  issued to John  Kilmartin.
          (Incorporated  herein by reference to Exhibit  10.20 to the  Amendment
          No. 1 to the Registration Statement on form S-1 (File No. 33-43124) of
          Pollution Research and Control Corp. dated December 23, 1991.)

10.24     Consulting  Agreement,   dated  January  3,  1992,  between  Pollution
          Research and Control  Corp.  and Total  Software,  Inc.  (Incorporated
          herein by reference to Exhibit 10.24 to the Annual Report on Form 10-K
          for the fiscal year ended December 31, 1992.)

10.25     Option Agreement,  dated January 3, 1992,  between Pollution  Research
          and Control Corp. and Total  Software,  Inc.  (Incorporated  herein by
          reference to Exhibit  10.25 to the Annual  Report on Form 10-K for the
          fiscal year ended December 31, 1992.)


                                       E-3

<PAGE>


10.26     Option Agreement,  dated March 11, 1992 between Pollution Research and
          Control  Corp.  and  Total  Software,  Inc.  (Incorporated  herein  by
          reference to Exhibit  10.26 to the Annual  Report on Form 10-K for the
          fiscal year eneded December 31, 1992.)

10.27     Agreement, dated March 5, 1992, between Pollution Research and Control
          Corp. and Lee Sion. (Incorporated herein by reference to Exhibit 10.27
          to the Annual  Report on Form 10-K for the fiscal year ended  December
          31, 1992.)

10.28     Option Agreement,  dated June 22, 1992, between Pollution Research and
          Control  Corp.  and  Total  Software,  Inc.  (Incorporated  herein  by
          reference to Exhibit  10.28 to the Annual  Report on Form 10-K for the
          fiscal year ended December 31, 1992.)

10.29     Option Agreement,  dated June 22, 1992, between Pollution Research and
          Control  Corp.  and  Total  Software,  Inc.  (Incorporated  herein  by
          reference to Exhibit  10.29 to the Annual  Report on Form 10-K for the
          fiscal year ended December 31, 1992.)

10.30     Lease  Agreement,  dated June 1, 1992,  between  Dasibi  Environmental
          Group. and Bernard C. Mills, Jr.  (Incorporated herein by reference to
          Exhibit  10.30 to the Annual Report on form 10-KSB for the fiscal year
          ended December 31, 1994.)

10.31     Lease Agreement,  dated January 6, 1994, between Dasibi  Environmental
          Group. and the Prudential Insurance Company of America.  (Incorporated
          herein by  reference  to Exhibit  10.31 to the  Annual  Report on form
          10-KSB for the fiscal year ended December 31, 1994.)

10.32     Agreement,  and  Bill  of  Sale,  dated  February  18,  1994,  between
          Pollution  Research  and  Control  Corp.  and General  Monitors,  Inc.
          (Incorporated  herein by  reference  to  Exhibit  10.32 to the  Annual
          Report on form 10-KSB for the fiscal year ended December 31, 1994.)

10.33     Stipulation of Settlement,  dated  February  1994,  between  Pollution
          Research and Control Corp. and Diversified  Research  Partners Limited
          Partnership. (Incorporated herein by reference to Exhibit 10.33 to the
          Annual  Report on form 10-KSB for the fiscal year ended  December  31,
          1994.)

10.34     Requirements Contract dated March 10, 1994, between Pollution Research
          and Control Corp. and Logan  Research,  Ltd.  (Incorporated  herein by
          reference to Exhibit 10.34 to the Annual Report on form 10-KSB for the
          fiscal year ended December 31, 1994.)

10.35     Lease  Agreement  dated April 15, 1994,  between Dasibi  Environmental
          Corp. and Summit Park Associates. (Incorporated herein by reference to
          Exhibit  10.35 to the Annual Report on form 10-KSB for the fiscal year
          ended December 31, 1994.)

10.36     Amended  Employment  Agreement,  effective  August 31,  1993,  between
          Pollution  Research and Control  Corp.  and Albert E.  Gosselin,  Jr.,
          (Incorporated  herein by  reference  to  Exhibit  10.36 to the  Annual
          Report on form 10-KSB for the fiscal year ended December 31, 1994.)

10.37     Employment Agreement,  dated July 20, 1994, between Pollution Research
          and Control  Corp.  and Cynthia L.  Gosselin  (Incorporated  herein by
          reference to Exhibit 10.37 to the Annual Report on form 10-KSB for the
          fiscal year ended December 31, 1994.)

                                       E-4

<PAGE>

10.38     Final  Judgment  of  Permanent  Injunction  and  Other  Relief  as  to
          Pollution Research and Control Corp. dated July 7, 1994 in Case Number
          1.94CV01425,  the  Securities  and Exchange  Commission  v.  Pollution
          Research and Control Corp.,  Albert E. Gosselin and Cynthia  Gosselin.
          (Incorporated  herein by  reference  to  Exhibit  10.38 to the  Annual
          Report on form 10-KSB for the fiscal year ended December 31, 1994.)

10.39     Final  Judgment  of  Permanent  Injunction  and  Other  Relief  as  to
          Pollution  Research  and  Contorl  Corp.  dated July 13,  1994 in Case
          Number   1.94CV01425,   the  Securities  and  Exchange  Commission  v.
          Pollution  Research and Control Corp.,  Albert E. Gosselin and Cynthia
          Gosselin.  (Incorporated  herein by reference to Exhibit  10.39 to the
          Annual  Report on form 10-KSB for the fiscal year ended  December  31,
          1994.)

10.40     Consent  of Albert E.  Gosselin  dated June 7,  1994,  in Case  Number
          1.94CV01425,  the  Securities  and Exchange  Commission  v.  Pollution
          Research and Control Corp.,  Albert E. Gosselin and Cynthia  Gosselin.
          (Incorporated  herein by  reference  to  Exhibit  10.40 to the  Annual
          Report on form 10-KSB for the fiscal year ended December 31, 1994.)

10.41     Final Judgment of Permanent  Injunction and Other Relief as to Cynthia
          Gosselin,.  dated  July  13,  1994 in  Case  Number  1.94CV01425,  the
          Securities and Exchange  Commission v. Pollution  Research and Control
          Corp., Albert E. Gosselin and Cynthia Gosselin.  (Incorporated  herein
          by reference to Exhibit  10.41 to the Annual Report on form 10-KSB for
          the fiscal year ended December 31, 1994.)

10.42     Consent of Cynthia  L..  Gosselin  dated June 7, 1994,  in Case Number
          1.94CV01425,  the  Securities  and Exchange  Commission  v.  Pollution
          Research and Control Corp.,  Albert E. Gosselin and Cynthia  Gosselin.
          (Incorporated  herein by  reference  to  Exhibit  10.41 to the  Annual
          Report on form 10-KSB for the fiscal year ended December 31, 1994.)

10.43     Warrant  to  Purchase  40,000  Shares  of  Common  Stock of  Pollution
          Research and Control  Corp.,  dated January 22, 1990,  issued to Marty
          Williams.  ((Incorporated  herein by  reference  to Exhibit 4.9 to the
          Registration  Statement  on form S-3  (Registration  No.  33-60035) of
          Pollution Research and Control Corp. dated June 7, 1995.)

10.44     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and Control Corp.,  of Marty  Williams,  dated effective June 6, 1994.
          ((Incorporated herein by reference to Exhibit 4.10 to the Registration
          Statement  on form  S-3  (Registration  No.,  33-60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.45     Warrant  to  Purchase  202,500  Shares  of Common  Stock of  Pollution
          Research  and Control  Corp.,  dated  December 2, 1991,  issued to CSC
          Industries,  Inc. and affiliated  companies.  (Incorporated  herein by
          reference  to Exhibit 4.11 to the  Registration  Statement on form S-3
          (Registration  No.  33-60035) of Pollution  Research and Control Corp.
          dated June 7, 1995.)

10.46     Amendment  Warrant to Purchase Common Stock of Pollution  Research and
          Control  Corp.,  of CSC  Industries,  Inc.  and  affiliated  companies
          Pension  Plans  Trust,  dated  effective  June 6, 1994.  (Incorporated
          herein by reference to Exhibit 4.12 to the  Registration  Statement on
          form S-3 (Registration No. 33-60035) of Pollution Research and Control
          Corp. dated June 7, 1995.)



                                       E-5

<PAGE>


10.47     Warrant  to  Purchase  67,500  Shares  of  Common  Stock of  Pollution
          Research and Control Corp.,  dated December 8, 1991, issued to Richard
          M. Molinsky.  (Incorporated herein by reference to Exhibit 4.13 to the
          Registration  Statement  on form S-3  (Registration  No.  33-60035) of
          Pollution Research and Control Corp. dated June 7, 1995.)

10.48     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and Control  Corp.,  of Richard M. Molinsky,  dated  effective June 6,
          1994.  (Incorporated  herein  by  reference  to  Exhibit  4.14  to the
          Registration  Statement  on form S-3  (Registration  No.  33-60035) of
          Pollution Research and Control Corp. dated June 7, 1995.)

10.49     Warrant  to  Purchase  135,000  Shares  of Common  Stock of  Pollution
          Research  and  Control  Corp.,  dated  December  11,  1991,  issued to
          Kingsley & Co. (formerly Global Environment Fund) (Incorporated herein
          by reference to Exhibit 4.15 to the Registration Statement on form S-3
          (Registration  No.  33-60035) of Pollution  Research and Control Corp.
          dated June 7, 1995.)

10.50     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and Control  Corp.  of  Kingsley & Co.  (formerly  Global  Environment
          Fund), dated effective June 6, 194.  (Incorporated herein by reference
          to  Exhibit   4.16  to  the   Registration   Statement   on  form  S-3
          (Registration  No.  33-60035) of Pollution  Research and Control Corp.
          dated June 7, 1995.)

10.51     Warrant  to  Purchase  67,500  Shares  of  Common  Stock of  Pollution
          Research and Control  Corp.,  dated  December  13, 1991,  issued to A.
          Robert Tantleff.  (Incorporated herein by reference to Exhibit 4.17 to
          the Registration  Statement on form S-3 (Registration No. 33-60035) of
          Pollution Research and Control Corp. dated June 7, 1995.)

10.52     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and Control Corp. of A. Robert Tantleff, dated effective June 6, 1994.
          (Incorporated  herein by reference to Exhibit 4.18 to the Registration
          Statement  on  form  S-3  (Registration  No.  33-60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.53     Warrant  to  Purchase  101,250  Shares  of Common  Stock of  Pollution
          Research and Control Corp., dated December 16, 1991, issued to Stanley
          Becker.  (Incorporated  herein by  reference  to  Exhibit  4.19 to the
          Registration  Statement  on form S-3  (Registration  No.  33-60035) of
          Pollution Research and Control Corp. dated June 7, 1995.)

10.54     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and Control Corp. of Stanley  Becker,  dated  effective  June 6, 1994.
          (Incorporated  herein by reference to Exhibit 4.20 to the Registration
          Statement  on  form  S-3  (Registration  No.  33-60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.55     Warrant  to  Purchase  27,000  Shares  of  Common  Stock of  Pollution
          Research and Control Corp.,  dated  December 16, 1991,  issued to John
          Kilmartin.  (Incorporated  herein by  reference to Exhibit 4.21 to the
          Registration  Statement  on form S-3  (Registration  No.  33-60035) of
          Pollution Research and Control Corp. dated June 7, 1995.)

10.56     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and Control Corp. of John  Kilmartin,  dated  effective  June 6, 1994.
          (Incorporated  herein by reference to Exhibit 4.22 to the Registration
          Statement  on  form  S-3  (Registration  No.  33-60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

                                       E-6

<PAGE>


10.57     Warrant  to  Purchase  74,250  Shares  of  Common  Stock of  Pollution
          Research and Control Corp.,  dated December 16, 1991,  issued to Bruce
          Lynch..  (Incorporated  herein by  reference  to  Exhibit  4.23 to the
          Registration  Statement  on form S-3  (Registration  No.  33-60035) of
          Pollution Research and Control Corp. dated June 7, 1995.)

10.58     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and  Control  Corp.  of Bruce  Lynch,  dated  effective  June 6, 1994.
          (Incorporated  herein by reference to Exhibit 4.24 to the Registration
          Statement  on form S-3  (Registration  No.  33-  60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.59     Warrant  to  Purchase  25,000  Shares  of  Common  Stock of  Pollution
          Research  and Control  Corp.  of Michael  Young,  dated May 24,  1991.
          (Incorporated  herein by reference to Exhibit 4.25 to the Registration
          Statement  on form  S-3  (Regsistration  No.  33-60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.60     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and Control  Corp. of Michael  Young,  dated  effective  June 6, 1994.
          (Incorporated  herein by reference to Exhibit 4.26 to the Registration
          Statement  on form  S-3  (Regsistration  No.  33-60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.61     Warrant  to  Purchase  12,000  Shares  of  Common  Stock of  Pollution
          Research  and Control  Corp.,  dated  December  16,  1991,  of Kennedy
          Capital Management,  dated November 26, 1991.  (Incorporated herein by
          reference  to Exhibit 4.27 to the  Registration  Statement on form S-3
          (Regsistration  No. 33-60035) of Pollution  Research and Control Corp.
          dated June 7, 1995.)

10.62     Amendment to Warrant to purchase  Common  Stock of Pollution  Research
          and Control Corp. of Kennedy Capital  Management  dated effective June
          6, 1994.  (Incorporated  herein by  reference  to Exhibit  4.28 to the
          Registration  Statement on form S-3  (Regsistration  No.  33-60035) of
          Pollution Research and Control Corp. dated June 7, 1995.)

10.63     Pollution Research and Control Corp. Common Stock Purchase Warrant for
          the purchase of 60,000  shares of the Equity  Group Inc.  dated August
          31,  1993.  (Incorporated  herein by  reference to Exhibit 4.29 to the
          Registration  Statement  on Form S-3  (Registration  No.  33-60035) of
          Pollution Research and Control Corp. dated June 7, 1995.)

10.64     Warrant to Purchase 7,500 Shares of Common Stock of Pollution Research
          and  Control  Corp.  of  Stanely   Becker  dated   November  8,  1993.
          (Incorporated  herein by reference to Exhibit 4.30 to the Registration
          Statement  on  Form  S-3  (Registration  No.  33-60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.65     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and Control Corp. of Stanley  Becker,  dated  effective  June 6, 1994.
          (Incorporated  herein by reference to Exhibit 4.31 to the Registration
          Statement  on  Form  S-3  (Registration  No.  33-60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.66     Warrant to Purchase 5,500 Shares of Common Stock of Pollution Research
          and Control Corp. of Bruce Lynch dated November 8, 1993. (Incorporated
          herein by reference to Exhibit 4.32 to the  Registration  Statement on
          Form S-3 (Registration No. 33-60035) of Pollution Research and Control
          Corp. dated June 7, 1995.)

                                       E-7

<PAGE>



10.67     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and  Control  Corp.  of Bruce  Lynch,  dated  effective  June 6, 1994.
          (Incorporated  herein by reference to Exhibit 4.33 to the Registration
          Statement  on Form S-3  (Registration  No.  33-  60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.68     Warrant to Purchase 7,500 Shares of Common Stock of Pollution Research
          and  Control  Corp.  of  Robert   Tantleff  dated  November  8,  1993.
          (Incorporated  herein by reference to Exhibit 4.34 to the Registration
          Statement  on  Form  S-3  (Registration  No.  33-60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.69     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and Control Corp. of Robert  Tantleff,  dated  effective June 6, 1994.
          (Incorporated  herein by reference to Exhibit 4.35 to the Registration
          Statement  on  Form  S-3  (Registration  No.  33-60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.70     Warrant to Purchase 5,000 Shares of Common Stock of Pollution Research
          and  Control  Corp.  of Edward  G.  Lowell  dated  November  8,  1995.
          (Incorporated  herein by reference to Exhibit 4.36 to the Registration
          Statement  on  Form  S-3  (Registration  No.  33-60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.71     Option to Purchase 25,000 Shares of Common Stock of Pollution Research
          and Control Corp. of Randy Foy dated as of July 4, 1994. (Incorporated
          herein by reference to Exhibit 4.37 to the  Registration  Statement on
          Form S-3 (Registration No. 33-60035) of Pollution Research and Control
          Corp. dated June 7, 1995.)

10.72     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and Control Corp. of Frost and Company P.S. dated  effective  February
          9, 1992.  (Incorporated  herein by  reference  to Exhibit  4.38 to the
          Registration  Statement  on Form S-3  (Registration  No.  33-60035) of
          Pollution Research and Control Corp. dated June 7, 1995.)

10.73     Amendment to Warrant to Purchase  Common  Stock of Pollution  Research
          and Control  Corp. of Kial,  Ltd.,  dated  effective  January 9, 1992.
          (Incorporated  herein by reference to Exhibit 4.39 to the Registration
          Statement  on Form S-3  (Registration  No.  33-  60035)  of  Pollution
          Research and Control Corp. dated June 7, 1995.)

10.74     Option to Purchase 40,000 Shares of Common Stock of Pollution Research
          and Control Corp.  of Albert E.  Gosselin,  Jr.,  dated as of June 29,
          1995  (Incorporated  herein  by  reference  to  Exhibit  4.40  to  the
          Post-Effective  Amendment No. 1 to the Registration  Statement on Form
          S-3  (Registration  No.  33-60035) of  Pollution  Research and Control
          Corp., dated January 17, 1996.)

10.75     Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and  Control  Corp.  of Cindy  Gosselin  dated  as of June  29,  1995.
          (Incorporated   herein   by   reference   to   Exhibit   4.41  to  the
          Post-Effective  Amendment No. 1 to the Registration  Statement on Form
          S-3  (Registration  No.  33-60035) of  Pollution  Research and Control
          Corp., dated January 17, 1996.)

10.76     Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and Control Corp.  of Barbara L.  Gosselin  dated as of June 29, 1995.
          (Incorporated   herein   by   reference   to   Exhibit   4.42  to  the
          Post-Effective  Amendment No. 1 to the Registration  Statement on Form
          S-3  (Registration  No.  33-60035) of  Pollution  Research and Control
          Corp., dated January 17, 1996.)

                                       E-8

<PAGE>

10.77     Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and  Control  Corp.  of Gary L.  Dudley  dated  as of June  29,  1995.
          (Incorporated   herein   by   reference   to   Exhibit   4.43  to  the
          Post-Effective  Amendment No. 1 to the Registration  Statement on Form
          S-3  (Registration  No.  33-60035) of  Pollution  Research and Control
          Corp., dated January 17, 1996.)

10.78     Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and  Control  Corp.  of  Marcia  Smith  dated  as of  June  29,  1995.
          (Incorporated   herein   by   reference   to   Exhibit   4.44  to  the
          Post-Effective  Amendment No. 1 to the Registration  Statement on Form
          S-3  (Registration  No.  33-60035) of  Pollution  Research and Control
          Corp., dated January 17, 1996.)

10.79     Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and Control  Corp.  of Craig E.  Gosselin  dated as of June 29,  1995.
          (Incorporated   herein   by   reference   to   Exhibit   4.45  to  the
          Post-Effective  Amendment No. 1 to the Registration  Statement on Form
          S-3  (Registration  No.  33-60035) of  Pollution  Research and Control
          Corp., dated January 17, 1996.)

10.80     Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and  Control  Corp.  of Keith  Gosselin  dated  as of June  29,  1995.
          (Incorporated   herein   by   reference   to   Exhibit   4.46  to  the
          Post-Effective  Amendment No. 1 to the Registration  Statement on Form
          S-3  (Registration  No.  33-60035) of  Pollution  Research and Control
          Corp., dated January 17, 1996.)

10.81     Option to Purchase 10,000 Shares of Common Stock of Pollution Research
          and Control Corp. of Mike Chu dated as of June 29, 1995. (Incorporated
          herein by reference to Exhibit  4.47 to the  Post-Effective  Amendment
          No. 1 to the  Registration  Statement  on Form S-3  (Registration  No.
          33-60035) of Pollution  Research and Control Corp.,  dated January 17,
          1996.)

10.82     Option to Purchase 10,000 Shares of Common Stock of Pollution Research
          and  Control  Corp.  of  Kimberly  Chu  dated  as of  June  29,  1995.
          (Incorporated   herein   by   reference   to   Exhibit   4.48  to  the
          Post-Effective  Amendment No. 1 to the Registration  Statement on Form
          S-3  (Registration  No.  33-60035) of  Pollution  Research and Control
          Corp., dated January 17, 1996.)

10.83     Option to Purchase 5,000 Shares of Common Stock of Pollution  Research
          and  Control  Corp.  of  Tolly  Smith  dated  as  of  June  29,  1995.
          (Incorporated   herein   by   reference   to   Exhibit   4.49  to  the
          Post-Effective  Amendment No. 1 to the Registration  Statement on Form
          S-3  (Registration  No.  33-60035) of  Pollution  Research and Control
          Corp., dated January 17, 1996.)

10.84     Option to Purchase 25,000 Shares of Common Stock of Pollution Research
          and  Control   Corp.   of  Randy  Foy  dated  as  of  June  29,  1995.
          (Incorporated   herein   by   reference   to   Exhibit   4.50  to  the
          Post-Effective  Amendment No. 1 to the Registration  Statement on Form
          S-3  (Registration  No.  33-60035) of  Pollution  Research and Control
          Corp., dated January 17, 1996.)

10.85     Option  to  Purchase  200,000  Shares  of  Common  Stock of  Pollution
          Research and Control Corp. of J. Paul Consulting Group dated effective
          July 18,  1995.  (Incorporated  herein by reference to Exhibit 4.51 to
          the  Post-Effective  Amendment No. 1 to the Registration  Statement on
          Form S-3 (Registration No. 33-60035) of Pollution Research and Control
          Corp., dated January 17, 1996.)


                                       E-9

<PAGE>



10.86     Agreement  dated June 11, 1996,  among Logan  Medical  Devices,  Inc.,
          party of the first part, Ronald Bruce Logan-Sinclair and Howard George
          Vincent Cooke,  parties of the second part, and Pollution Research and
          Control  Corp.,  party of the  third  part.  (Incorporated  herein  by
          reference to Exhibit  10.86 to the Annual Report on Form 10- K for the
          fiscal year ended December 31, 1996.)

10.87     Employment  Agreement  dated  June 11,  1996,  between  Logan  Medical
          Devices,  Inc. and Logan  Research  Ltd., on the one hand,  and Ronald
          Bruce  Logan-Sinclair,  on the  other  hand.  (Incorporated  herein by
          reference to Exhibit  10.87 to the Annual  Report on Form 10-K for the
          fiscal year ended December 31, 1996.)

10.88     Guarantee  dated  effective  June 11, 1996, by Logan Medical  Devices,
          Inc.  in favor of  Namulas  Pension  Trustees  Limited.  (Incorporated
          herein by reference to Exhibit 10.88 to the Annual Report on Form 10-K
          for the fiscal year ended December 31, 1996.)

10.89     Loan and Security Agreement dated June 28, 1996, between Logan Medical
          Devices,  Inc., on the one hand, and Ronald Bruce  Logan-Sinclair  and
          Howard George Vincent Cooke, on the other hand.  (Incorporated  herein
          by  reference to Exhibit  10.89 to the Annual  Report on Form 10-K for
          the fiscal year ended December 31, 1996.)

10.90     Nine Per Cent  Debenture  due June 28,  2,006,  in the face  amount of
          $285,714.29,  bearing  interest  quarterly  commencing  June 30, 1998.
          (Incorporated  herein by  reference  to  Exhibit  10.90 to the  Annual
          Report on Form 10-K for the fiscal year ended December 31, 1996.)

10.91     Option to Purchase 10,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Phil Huss.  Option  Agreement,  datedas of
          April 1, 1996 between  Pollution  Research and Control Corp.  and Phil
          Hull.  (Incorporated  herein  by  reference  to  Exhibit  4.11  to the
          Registration  Statement  on Form S-3  (Registration  No.  33-14133) of
          Pollution Research and Control Corp. dated October 15, 1996.)

10.92     Consulting  Agreement  dated  as of May 30,  1996,  between  Pollution
          Research and Control Corp. and Liviakis Financial Communications, Inc.
          (Incorporated  herein by reference to Exhibit 4.12 to the Registration
          Statement  on  Form  S-3  (Registration  No.  33-14133)  of  Pollution
          Research and Control Corp. dated October 15, 1996.)

10.93     Non-Qualified Stock Option Agreement dated as of May 30, 1996, between
          Pollution   Research  and  Control   Corp.   and  Liviakis   Financial
          Communications, Inc. (Incorporated herein by reference to Exhibit 4.13
          to the Registration  Statement on Form S-3 (Registration No. 33-14133)
          of Pollution Research and Control Corp. dated October 15, 1996.)

10.94     Non-Qualified Stock Option Agreement dated as of May 30, 1996, between
          Pollution Research and Control Corp. and Robert B. Prag. (Incorporated
          herein by reference to Exhibit 4.14 to the  Registration  Statement on
          Form S-3  (Registration  No.  33-  14133) of  Pollution  Research  and
          Control Corp. dated October 15, 1996.)


                                      E-10

<PAGE>



10.95     Amendment to Non-Qualified Stock Option Agreement dated July 31, 1996,
          between  Pollution  Research and Control Corp. and Liviakis  Financial
          Communications, Inc. (Incorporated herein by reference to Exhibit 4.15
          to the Registration  Statement on Form S-3 (Registration No. 33-14133)
          of Pollution Research and Control Corp. dated October 15, 1996.)

10.96     Amendment to Non-Qualified Stock Option Agreement dated July 31, 1996,
          between  Pollution  Research  and  Control  Corp.  and Robert B. Prag.
          (Incorporated  herein by reference to Exhibit 4.16 to the Registration
          Statement  on  Form  S-3  (Registration  No.  33-14133)  of  Pollution
          Research and Control Corp. dated October 15, 1996.)

10.97     Amendment to  Consulting  Agreement  dated 5/30/96  between  Pollution
          Research  and Control  Corp.  and Liviakis  Financial  Communications,
          Inc.,  dated  July 31,  1996.  (Incorporated  herein by  reference  to
          Exhibit 4.17 to the Registration  Statement on Form S-3  (Registration
          No.33-14133) of Pollution Research and Control Corp. dated October 15,
          1996.)


10.98     Second  Amendment  to  Consulting   Agreement  dated  5/30/96  between
          Pollution   Research  and  Control   Corp.   and  Liviakis   Financial
          Communications, Inc. dated as of August 28, 1996. (Incorporated herein
          by reference to Exhibit 4.18 to the Registration Statement on Form S-3
          (Registration  No.  33-14133) of Pollution  Research and Control Corp.
          dated October 15, 1996.)

10.99     Option to Purchase 55,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Aubrey Hornsby;  Option Agreement dated as
          of May 31, 1996,  between  Pollution  Research and Control  Corp.  and
          Aubrey Hornsby.  (Incorporated herein by reference to Exhibit 10.99 to
          the Annual Report on Form 10- K for the fiscal year ended December 31,
          1996.)

10.100    Option to Purchase 40,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Ernestine Taylor; Option Agreement,  dated
          as of May 31,  1996,  between  Pollution  Research  and Control  Corp.
          Ernestine Taylor.  (Incorporated herein by reference to Exhibit 10.100
          to the Annual  Report on Form 10-K for the fiscal year ended  December
          31, 1996.)

10.101    Option to Purchase 30,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Debbie Kendrick;  Option Agreement,  dated
          as of May 31, 1996,  between Pollution  Research and Control Corp. and
          Debbie Kendrick.  (Incorporated  herein by reference to Exhibit 10.101
          to the Annual Report on Form 10- K for the fiscal year ended  December
          31, 1996.)

10.102    Option to Purchase 25,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Roland Fink; Option Agreement, dated as of
          May 31, 1996,  between Pollution Research and Control Corp. and Roland
          Fink.  (Incorporated  herein by  reference  to  Exhibit  10.102 to the
          Annual  Report on Form 10-K for the  fiscal  year ended  December  31,
          1996.)

10.103    Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Charles Conner; Option Agreement, dated as
          of May 31, 1996  between  Pollution  Research  and Control  Corp.  and
          Charles Conner. (Incorporated herein by reference to Exhibit 10.103 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)


                                      E-11

<PAGE>


10.104    Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Patricia Cudd; Option Agreement,  dated as
          of May 31, 1996,  between  Pollution  Research and Control  Corp.  and
          Patricia Cudd.  (Incorporated herein by reference to Exhibit 10.104 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)

10.105    Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Jeffrey Harkey; Option Agreement, dated as
          of May 31, 1996,  between  Pollution  Research and Control  Corp.  and
          Jeffrey Harkey. (Incorporated herein by reference to Exhibit 10.105 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)

10.106    Option to Purchase 10,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to James Bowers;  Option Agreement,  dated as
          of May 31, 1996,  between  Pollution  Research and Control  Corp.  and
          James Bowers.  (Incorporated  herein by reference to Exhibit 10.106 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)

10.107    Option to Purchase 10,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Michael Jones;  Option greement,  dated as
          of May 31, 1996,  between Pollution  Research Corp. and Michael Jones.
          (Incorporated  herein by  reference  to  Exhibit  10.107 to the Annual
          Report on Form 10-K for the fiscal year ended December 31, 1996.)

10.108    Option to Purchase 10,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Charles McQuaig;  Option Agreement,  dated
          as of May 31, 1996,  between Pollution  Research and Control Corp. and
          Charles  McQuaig.(Incorported herein by reference to Exhibit 10.108 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)

10.109    Option to Purchase 10,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Daniel Patanjo; Option Agreement, dated as
          of May 31, 1996,  between  Pollution  Research and Control  Corp.  and
          Daniel Patanjo. (Incorporated herein by reference to Exhibit 10.109 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)

10.110    Option to Purchase 10,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Karen Perry; Option Agreement, dated as of
          May 31, 1996,  between Pollution  Research and Control Corp. and Karen
          Perry.  (Incorporated  herein by  reference  to Exhibit  10.110 to the
          Annual  Report on Form 10-K for the  fiscal  year ended  December  31,
          1996.)

10.111    Option to Purchase 10,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Ricky Sonnier; Option Agreement,  dated as
          of May 31, 1996,  between  Pollution  Research and Control  Corp.  and
          Ricky Sonnier.  (Incorporated herein by reference to Exhibit 10.111 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)

10.112    Option to Purchase 10,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Victor Valerio; Option Agreement, dated as
          of May 31, 1996,  between  Pollution  Research and Control  Corp.  and
          Victor Valerio. (Incorporated herein by reference to Exhibit 10.112 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)


                                      E-12

<PAGE>



10.113    Option to Purchase 5,000 Shares of Common Stock of Pollution  Research
          and Control Corp. issued to Spencer Abrams; Option Agreement, dated as
          of May 31, 1996,  between  Pollution  Research and Control  Corp.  and
          Spencer Abrams. (Incorporated herein by reference to Exhibit 10.113 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)

10.114    Option to Purchase 5,000 Shares of Common Stock of Pollution  Research
          and Control Corp. issued to Dan Busby;  Option Agreement,  dated as of
          May 31, 1996,  between  Pollution  Research and Control Corp.  and Dan
          Busby.  (Incorporated  herein by  reference  to Exhibit  10.114 to the
          Annual  Report on Form 10-K for the  fiscal  year ended  December  31,
          1996.)

10.115    Option to Purchase 5,000 Shares of Common Stock of Pollution  Research
          and Control Corp. issued to Frank Getautas; Option Agreement, dated as
          of May 31, 1996,  between  Pollution  Research and Control  Corp.  and
          Frank Getautas. (Incorporated herein by reference to Exhibit 10.115 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)

10.116    Option to Purchase 5,000 Shares of Common Stock of Pollution  Research
          and Control Corp. issued to Mitzi Narramore;  Option Agreement,  dated
          as of May 31, 1996,  between Pollution  Research and Control Corp. and
          Mitzi Narramore.  (Incorporated  herein by reference to Exhibit 10.116
          to the Annual  Report on Form 10-K for the fiscal year ended  December
          31, 1996.)

10.117    Option  to  Purchase  300,000  Shares  of  Common  Stock of  Pollution
          Research  and  Control  Corp.  issued  to Ron  Logan-Sinclair;  Option
          Agreement,  dated as of June 1, 1996,  between Pollution  Research and
          Control  Corp.  and  Ron  Logan-Sinclair.   (Incorporated   herein  by
          reference to Exhibit 10.117 to the Annual Report on Form 10- K for the
          fiscal year ended December 31, 1996.)

10.118    Option  to  Purchase  123,000  Shares  of  Common  Stock of  Pollution
          Research  and  Control  Corp.  issued to Albert  E.  Gosselin;  Option
          Agreement,  dated as of June 1, 1996,  between Pollution  Research and
          Control  Corp.  and  Albert  E.  Gosselin.   (Incorporated  herein  by
          reference to Exhibit 10.118 to the Annual Report on Form 10- K for the
          fiscal year ended December 31, 1996.)

10.119    Option  to  Purchase  120,000  Shares  of  Common  Stock of  Pollution
          Research  and  Control  Corp.  issued to Albert  E.  Gosselin;  Option
          Agreement,  dated as of June 1, 1996,  between Pollution  Research and
          Control  Corp.  and  Albert  E.  Gosslein.   (Incorporated  herein  by
          reference  to Exhibit 4.19 to the  Registration  Statement on Form S-3
          (Registration  No.  33-14133) of Pollution  Research and Control Corp.
          dated October 15, 1996.)

10.120    Option to Purchase 40,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Gary L. Dudley; Option Agreement, dated as
          of June 1, 1996, between Pollution Research and Control Corp. and Gary
          L.  Dudley.  (Incorporated  herein by reference to Exhibit 4.20 to the
          Registration  Statement  on Form S-3  (Registration  No.  33-14133) of
          Pollution Research and Control Corp.dated October 15, 1996.)


                                      E-13

<PAGE>



10.121    Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Gary L. Dudley; Option Agreement, dated as
          of June 1, 1996, between Pollution Research and Control Corp. and Gary
          L. Dudley.  (Incorporated herein by reference to Exhibit 10.121 to the
          Annual  Report on Form 10-K for the  fiscal  year ended  December  31,
          1996.)

10.122    Option to Purchase 40,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Craig E. Gosselin; Option Agreement, dated
          as of June 1, 1996,  between Pollution  Research and Control Corp. and
          Craig E. Gosselin.  (Incorporated  herein by reference to Exhibit 4.21
          to the Registration  Statement on Form S-3 (Registration No. 33-14133)
          of Pollution Research and Control Corp. dated October 15, 1996.)

10.123    Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Craig E. Gosselin; Option Agreement, dated
          as of June 1, 1996,  between Pollution  Research and Control Corp. and
          Craig E. Gosselin. (Incorporated herein by reference to Exhibit 10.123
          to the Annual Report on Form 10- K for the fiscal year ended  December
          31, 1996.)

10.124    Option to Purchase 40,000 Shares of Common Stock of Pollution Research
          and Control Corp.  issued to Cynthia L.  Gosselin;  Option  Agreement,
          dated as of June 1, 1996, between Pollution Research and Control Corp.
          and Cynthia L. Gosselin.  (Incorporated herein by reference to Exhibit
          4.22 to the  Registration  Statement  on Form  S-3  (Registration  No.
          33-14133) of Pollution  Research and Control  Corp.  dated October 15,
          1996.

10.125    Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and Control  Corp.  issued to Cynthia L.  Gosslin;  Option  Agreement,
          dated as of June 1, 1996, between Pollution Research and Control Corp.
          and Cynthia L. Gosselin.  (Incorporated herein by reference to Exhibit
          10.125 to the Annual  Report on Form 10- K for the  fiscal  year ended
          December 31, 1996.)

10.126    Option to Purchase 40,000 shares of Common Stock of Pollution Research
          and Control Corp. issued to Marcia Smith;  Option Agreement,  dated as
          of June 1, 1996,  between  Pollution  Research and Control  Corp.  and
          Marcia Smith. (Incorporated herein by reference to Exhibit 4.23 to the
          Registration  Statement  on Form S-3  (Registration  No.  33-14133) of
          Pollution Research and Control Corp. dated October 15, 1996.)

10.127    Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Marcia Smith;  Option Agreement,  dated as
          of June 1, 1996,  between  Pollution  Research and Control  Corp.  and
          Marcia Smith.  (Incorporated herehin by reference to Exhibit 10.127 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)

10.128    Option to Purchase 40,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Margaret Jones; Option Agreement, dated as
          of June 1, 1996,  between  Pollution  Research and Control  Corp.  and
          Margaret Jones.  (Incorporated  herein by reference to Exhibit 4.24 to
          the Registration  Statement on Form S-3 (Registration No. 33-14133) of
          Pollution Research and Control Corp. dated October 15, 1996.)



                                      E-14

<PAGE>


10.129    Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Margaret Jones; Option Agreement, dated as
          of June 1, 1996,  between  Pollution  Research and Control  Corp.  and
          Margaret Jones. (Incorporated herein by reference to Exhibit 10.129 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)

10.130    Option to Purchase 37,500 Shares of Common Stock of Pollution Research
          Corp. issued to Lee Sion; Option Agreement,  dated as of June 1, 1996,
          between   Pollution   Research  and  Control   Corp.   and  Lee  Sion.
          (Incorporated  herein by  reference  to  Exhibit  10.130 to the Annual
          Report on Form 10-K for the fiscal year ended December 31, 1996.)

10.131    Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Patricia Cudd; Option Agreement,  dated as
          of June 1, 1996,  between  Pollution  Research and Control  Corp.  and
          Patricia Cudd.  (Incorporated herein by reference to Exhibit 10.131 to
          the Annual Report on Form 10-K for the fiscal year ended  December 31,
          1996.)

10.132    Option to Purchase 20,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Roland Fink; Option Agreement, dated as of
          June 1, 1996,  between Pollution Research and Control Corp. and Roland
          Fink.  (Incorporated  herein by  reference  to  Exhibit  10.132 to the
          Annual  Report on Form 10-K for the  fiscal  year ended  December  31,
          1996.)

10.133    Purchase  Agreement,  dated as of June  14,  1996,  between  Pollution
          Research and Control Corp. and John Ann Hotchkiss; Warrant to Purchase
          291,667 Shares of Common Stock of Pollution Research and Control Corp.
          dated  June 15,  1996,  issued  to John Ann  Hotchkiss.  (Incorporated
          herein by  reference  to  Exhibits  4.25 and 4.26 to the  Registration
          Statement  on  Form  S-3  (Registration  No.  33-14133)  of  Pollution
          Research and Control Corp. dated October 15, 1996.)

10.134    Purchase  Agreement,  dated as of June  14,  1996,  between  Pollution
          Research and Control Corp.  and David  Firestone;  Warrant to Purchase
          166,667 Shares of Common Stock of Pollution Research and Control Corp.
          dated June 15, 1996, issued to David Firestone.  (Incorporated  herein
          by reference to Exhibits 4.27 and 4.28 to the  Registration  Statement
          on Form S-3  (Registration  No.  33-14133) of  Pollution  Research and
          Control Corp. dated October 15, 1996.)


10.135    Purchase  Agreement,  dated as of June  14,  1996,  between  Pollution
          Research and Control  Corp.  and Irawan  Onggara;  Warrant to Purchase
          166,667  Shares of Common  Stock of  Pollution  Research  and  Control
          Corp.,  dated June 15,  1996,  issued to Irawan  Onggara.(Incorporated
          herein by  reference  to  Exhibits  4.29 and 4.30 to the  Registration
          Statement  on  Form  S-3  (Registration  No.  33-14133)  of  Pollution
          Research and Control Corp. dated October 15, 1996.)

10.136    Purchase  Agreement,  dated as of June  14,  1996,  between  Pollution
          Research and Control Corp. and John M. Liviakis;  Warranto to Purchase
          66,667 Shares of Common Stock of Pollution  Research and Control Corp.
          dated June 15, 1996, issued to John M. Liviakis.  (Incorporated herein
          by reference to Exhibits 4.31 and 4.32 to the  Registration  Statement
          on Form S-3  (Registration  No.  33-14133) of  Pollution  Research and
          Control Corp. dated October 15, 1996.)

10.137    Purchase  Agreement,  dated as of June  14,  1996,  between  Pollution
          Research and Control Corp.  and Robert S. London;  Warrant to Purchase
          66,667 Shares of Common Stock of Pollution Research and Control Corp.,
          dated June 15, 1996, issued to Robert S. London.  (Incorporated herein
          by reference to Exhibits 4.33 and 4.34 to the  Registration  Statement
          on Form S-3  (Registration  No.  33-14133) of  Pollution  Research and
          Control Corp. dated October 15, 1996.)

                                      E-15

<PAGE>



10.138    Purchase  Agreement,  dated as of June  14,  1996,  between  Pollution
          Research and Control  Corp.  and Robert B. Prag;  Warranto to Purchase
          66,667 Shares of Common Stock of Pollution Research and Control Corp.,
          dated June 15, 1996, issued to Robert B. Prag. (Incorporated herein by
          reference to Exhibits 4.35 and 4.36 to the  Registration  Statement on
          Form S-3 (Registration No. 33-14133) of Pollution Research and Control
          Corp. dated October 15, 1996.)


10.139    Purchase  Agreement,  dated as of June  14,  1996,  between  Pollution
          Research and Control Corp. and Shawn Cady;  Warrant to Purchase 41,667
          Shares of Common Stock of Pollution  Research and Control Corp., dated
          June 15, 1996, issued to Shawn Cady. (Incorporated herein by reference
          to Exhibits  4.37 and 4.38 to the  Registration  Statement on Form S-3
          (Registration  No.  33-14133) of Pollution  Research and Control Corp.
          dated October 15, 1996.)

10.140    Purchase  Agreement,  dated as of June  14,  1996,  between  Pollution
          Research and Control Corp.  and Donald  Carstens;  Warrant to Purchase
          41,667 Shares of Common Stock of Pollution Research and Control Corp.,
          dated June 15, 1996 issued to Donald Carstens. (Incorporated herein by
          reference to Exhibits 4.39 and 4.40 to the  Registration  Statement on
          Form S-3 (Registration No. 33-14133) of Pollution Research and Control
          Corp. dated October 15, 1996.)

10.141    Purchase  Agreement,  dated as of June  14,  1996,  between  Pollution
          Research  and Control  Corp.  and Ling Nen Chuan;  Warrant to Purchase
          41,667 Shares of Common Stock of Pollution Research and Control Corp.,
          dated June 15, 1996, issued to Ling Nen Chuan. (Incorporated herein by
          reference to Exhibits 4.41 and 4.42 to the  Registration  Statement on
          Form S-3 (Registration No. 33-14133) of Pollution Research and Control
          Corp. dated October 15, 1996.)

10.142    Purchase  Agreement,  dated as of June  14,  1996,  between  Pollution
          Research and Control Corp. and Sanibel Capital Corporation; Warrant to
          Purchase  41,667  Shares of Common  Stock of  Pollution  Research  and
          Control  Corp.  dated  June  15,  1996,   issued  to  Sanibel  Capital
          Corporation.  (Incorporated  herein by reference to Exhibits  4.43 and
          4.44 to the  Registration  Statement  on Form  S-3  (Registration  No.
          33-14133) of Pollution  Research and Control  Corp.  dated October 15,
          1996.)

10.143    Purchase  Agreement,  dated as of June  14,  1996,  between  Pollution
          Research and Control  Corp.  and Donna  Sizemore;  Warrant to Purchase
          8,333 Shares of Common Stock of Pollution  Research and Control Corp.,
          dated June 15, 1996, issued to Donna Sizemore. (Incorporated herein by
          reference to Exhibits 4.45 and 4.46 to the  Registration  Statement on
          Form S-3 (Registration No. 33-14133) of Pollution Research and Control
          Corp. dated October 15, 1996.)

10.144    Option to Purchase 25,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Randy Foy; Option  Agreement,  dated as of
          July 1, 1996,  between Pollution  Research and Control Corp. and Randy
          Foy.  (Incorporated  herein  by  reference  to  Exhibits  4.47  to the
          Registration  Statement  on Form S-3  (Registration  No.  33-14133) of
          Pollution Research and Control Corp. dated October 15, 1996.)


                                      E-16

<PAGE>

10.145    Option to Purchase 40,000 Shares of Common Stock of Pollution Research
          and Control Corp. issued to Paul Richardson;  Option Agreement,  dated
          as of August 6, 1996, between Pollution Research and Control Corp. and
          Paul Richardson.  (Incorporated  herein by reference to Exhibit 10.145
          to the Annual Report on Form 10- K for the fiscal year ended  December
          31, 1996.)

10.146    Letter  Agreement,  dated as of September 20, 1996,  between Pollution
          Research and Control Corp. and Neil C.  Sullivan;  Warrant to Purchase
          300,000 Shares of Common Stock of Pollution Research and Control Corp.
          dated  September 20, 1996,  issued to Neil C. Sullivan.  (Incorporated
          herein by  reference  to  Exhibits  4.48 and 4.49 to the  Registration
          Statement  on  Form  S-3  (Registration  No.  33-14133)  of  Pollution
          Research and Control Corp. dated October 15, 1996.)

10.147    Consulting  Agreement  dated  November  19,  1996,  between  Pollution
          Research and Control Corp. and Fenway  Advisory  Group.  (Incorporated
          herein by  reference  to Exhibit  10.147 to the Annual  Report on Form
          10-K for the fiscal year ended December 31, 1996.)

10.148    Option to Purchase  400,000  Shares of Pollution  Research and Control
          Corp.  issued to Fenway Advisory Group;  Option  Agreement dated as of
          November 19, 1996,  between  Pollution  Research and Control Corp. and
          Fenway  Advisory Group.  (Incorporated  herein by reference to Exhibit
          10.148 to the Annual  Report on Form 10- K for the  fiscal  year ended
          December 31, 1996.)

10.149*   Option to purchase 40,000 Shares of Common Stock of Pollution Research
          and Control Corp. dated as of March 3, 1997 issued to Barry Soltani.

10.150*   Option to purchase 50,000 Shares of Common Stock of Pollution Research
          and  Control  Corp.  dated  as of  April  30,  1997  issued  to  Jorel
          Management.

10.151*   Employment  Agreement,  dated June 9, 1997, between Pollution Research
          and Control Corp. and Marcia Smith.

10.152*   Amended Employment  Agreement dated February 9, 1998 between Pollution
          Research and Control Corp. and Cindy Gosselin.

21*       List of Subsidiaries.


*Filed herewith.










                                      E-17

<PAGE>







                        EXHIBIT 21 - LIST OF SUBSIDIARIES


Dasibi Environmental Corp.
506 Paula Avenue
Glendale, Ca 91201

Nutek Inc.
225 Brent Lane
Pensacola, Fl 32503

Logan Medical Devices, Inc.
506 Paula Avenue
Glendale, Ca 91201





























                                      E-18