<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                         AMENDMENT NO. 1 TO FORM 10-KSB

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
                             SECURITIES ACT OF 1934

                   For The fiscal year ended December 31, 1997
                         Commission File Number 0-28392

                            HARVARD SCIENTIFIC CORP.
                  --------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

Nevada                                                       88-0226455
------                                                       ----------
(State or Other Jurisdiction of                              (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

                755 Rinehart Road, Suite 100, Lake Mary, FL 32746
               (Address of Principal Executive Offices) (Zip Code)

       Registrant's Telephone Number, Including Area Code: (407) 324-1606

         Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, Par Value $0.01 Per Share
                                (Title of Class)

Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

  X   Yes   ____  No

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

State issuer's revenues for its most recent fiscal year. None
                                                         ----

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the common equity was sold, or the
average bid and asked prices of such common equity, as of such common equity, as
of a specified date within 60 days prior to the date of filing.

Based on the average of the high and low bid and ask prices for the Registrant's
shares of common stock of $7.75 on March 18, 1998, such market value is
calculated net of 3,042,028 affiliate shares which equals $17,019,147.

Indicate the number of shares outstanding of each of the registrant's classes of
Common Stock, as of the latest practicable date. As of March 18, 1998 there were
5,238,047 shares of Common Stock outstanding.

Documents incorporated by reference: The information required by PART III (other
than Item 13. "Exhibits and Reports on Form 8-K", which is included herein) of
this annual report 10K-SB, hereby is incorporated by reference to the proxy or
information statement for the election of directors and other matters, which
will be filed with the Securities Exchange Commission on or before April 30,
1998, or an amendment to this annual report will be filed by such date.

                                     PART II

ITEM 7.    FINANCIAL STATEMENTS

         The independent auditor reports of Ronald D. Simpkins for the balance
sheet at December 31, 1997, and the related statements of operations,
stockholders' equity and cash flows for the year then ending, and the Balance
Sheet at February 28, 1998, and the auditors report on the Supplemental
Schedules V and VI on the Balance Sheet at December 31, 1997, omitted the
signature of Ronald D. Simpkins, which are supplied herewith and were on file
with the Company.

         The independent auditor reports from W. Dale McGhie on the Balance
Sheet for the years ending December 31, 1996 and December 31, 1995 and the
related statements of operations, stockholders' equity and cash flows for the
years then ended, and W. Dale McGhie's report on the Supplemental Schedule V and
VI on the Balance Sheet ending December 31, 1996 were omitted but were on file
with the Company and are included herein.



<PAGE>  



                            HARVARD SCIENTIFIC CORP.
                           (A DEVELOPMENT STAGE CORP.)
                                DECEMBER 31, 1997





        




<PAGE>  

                               RONALD D. SIMPKINS
                           CERTIFIED PUBLIC ACCOUNTANT





                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
     And Shareholders of
Harvard Scientific Corp.

I have audited the balance sheet of Harvard Scientific Corp. (A Development
Stage Company) as of December 31, 1997, and the related statements of
operations, stockholders'equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on the financial statements based on my
audit. The financial statements of the Company for the fiscal years ended
December 31, 1996 and 1995, were audited by other auditors whose report thereon
dated June 2, 1997, expressed an unqualified opinion with an explanatory
paragraph discussing its going-concern assumption.

I have conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audits 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.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Harvard Scientific Corp. as of
December 31, 1997, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.

The accompanying financial statements have been presented assuming that the
Company will continue as a going concern. As discussed in Note 12 to the
financial statements, the Company has suffered recurring losses from operations
that raises substantial doubt about its ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

/s/ Ronald D. Simpkins

Reno, Nevada
March 5, 1998



        


<PAGE>  



                               RONALD D. SIMPKINS
                           CERTIFIED PUBLIC ACCOUNTANT




                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
    And Shareholders of
Harvard Scientific Corp.


I have audited the balance sheet of Harvard Scientific Corp. (A Development
Stage Company) as of February 28, 1998. This financial statement is the
responsibility of the Company's management. My responsibility is to express an
opinion on this financial statement based on my audit.

I have conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audits to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. I
believe that my audit provides a reasonable basis for my opinion.

In my opinion, the balance sheet referred to above present fairly, in all
material respects, the financial position of Harvard Scientific Corp. as of
February 28, 1998, in conformity with generally accepted accounting principles.

The accompanying financial statements have been presented assuming that the
Company will continue as a going concern. As discussed in Note 12 to the
financial statements, the Company has suffered recurring losses from operations
that raises substantial doubt about its ability to continue as a going concern.
The balance sheet does not include any adjustments that might result from the
outcome of this uncertainty.

/s/ Ronald D. Simpkins

Reno, Nevada
March 5, 1998

                                       


<PAGE>


DALE MCGHIE                                                 Town & Country Plaza
CERTIFIED PUBLIC ACCOUNTANT                   1539 Vassar St. Reno, Nevada 89502
                                                               Tel: 702-323-7744
                                                               Fax: 702-323-8288


                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
   and Shareholders of
Harvard Scientific Corp.

I have audited the balance sheet of Harvard Scientific Corp. (A Development
Stage Company) as of December 31, 1996, and 1995, and the related statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on the financial statements based on my audits.

I have conducted my audits in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audits 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.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above, revised as described
in Note 14, present fairly, in all material respects, the financial position of
Harvard Scientific Corp. as of December 31, 1996, and 1995, and the results of
its operations and its cash flows for each of the years in the three-year period
ended December 31, 1996, in conformity with generally accepted accounting
principles.

The accompanying financial statements have been presented assuming that the
company will continue as a going concern. As discussed in Note 11 to the
financial statements, the Company has suffered recurring losses from operations
that raises substantial doubt about its ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

/s/ W. Dale McGhie

W. Dale McGhie, CPA
Reno, Nevada
June 2, 1997





<PAGE>  


<TABLE>

                                         HARVARD SCIENTIFIC CORP.
                                       (A DEVELOPMENT STAGE COMPANY)

                                               BALANCE SHEET

                                                  ASSETS
<CAPTION>
                                                             December 31,    December 31,   December 31,
                                                                1997            1996           1995
                                                              (Audited)       (Audited)       (Audited)
                                                           --------------  --------------  --------------
<S>                                                        <C>             <C>             <C>
Current Assets:
    Cash and cash equivalents                              $     873,199   $           -   $     799,466
    Prepaid  expenses                                             35,382           1,565         425,094
    Accounts Receivable - Directors (Note 7)                      57,711               -               -
    Due From Related Parties  (Note 7)                           852,305               -               -
    Deferred debt issue costs (Note 11)                          156,250               -               -
                                                           --------------  --------------  --------------

       Total Current Assets                                    1,974,847           1,565       1,224,560
                                                           --------------  --------------  --------------

Equipment and Leasehold Improvements:
    at cost, less accumulated depreciation of $11,930
    at December 31, 1997 and $3,491 at December 31,
    1996 and $6,637 at December 31, 1995 (Note 3)                 50,704           5,925          10,861
                                                           --------------  --------------  --------------

Intangible Assets:
    Intellectual Property, net of accumulated amortization
       of $4,147 at December 31, 1997, $1,048 at December
       31, 1996 and $1,771 at December 31, 1995  (Note 4)        156,848           7,948           8,563
    Organizational cost, net of accumulated amortization 
       of $140,686 at December 31, 1997,$105,760 at
       December 31, 1996 and $70,754 at December 31, 1995         34,864          69,789         104,796
                                                           --------------  --------------  --------------

                                                                 191,712          77,737         113,359
                                                           --------------  --------------  --------------

Other Assets:
    Deposits                                                      10,414             300             300




       TOTAL ASSETS                                        $   2,227,677   $      85,527   $   1,349,080
                                                           ==============  ==============  ==============
</TABLE>




    The accompanying Notes are an integral part of these financial statements

                                       

<PAGE>  
<TABLE>
                                         HARVARD SCIENTIFIC CORP.
                                      (A DEVELOPMENT STAGE COMPANY)

                                        BALANCE SHEET (CONTINUED)

                                   LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>

                                                       December 31,  December 31,  December 31,
                                                           1997          1996          1995
                                                         (Audited)     (Audited)     (Audited)
                                                       ------------  ------------  ------------

<S>                                                    <C>           <C>           <C>        
Current Liabilities:
   Accounts payable                                    $    26,370   $    36,625   $   105,791
    Accrued expenses (Note 5 & 11)                         131,694        20,329        84,380
    Bank overdraft                                               -           134             -
    Obligation under capital lease - current (Note 3)       16,979             -             -
    Due to related parties                                       -       190,860       406,881
    Note payable to related parties (Notes 6 and 7)              -        37,275        67,675
    Debentures payable - Convertible (Note 11)           2,800,000             -             -
    Note payable - Convertible (Note 6)                          -       250,000             -
                                                       ------------  ------------  ------------
      Total Current Liabilities                          2,975,043       535,223       664,727
                                                       ------------  ------------  ------------
Long-Term Liabilities:
    Obligation under capital lease - non-current             6,317             -             -
      (Note 3)                                         ------------  ------------  ------------

Stockholders' Equity:
    Common Stock, $.001 par value; 100,000,000 shares
      authorized; 33,441,373, 9,883,129 and 8,749,125
      shares issued and outstanding at December 31, 1997,
      December 31, 1996 and December 31, 1995,
      respectively (Note 1)                                 33,441         9,883         8,749
    Additional paid-in capital                           8,694,904     3,206,207     1,902,445
    Deficit accumulated during the development stage    (9,482,027)   (3,665,786)   (1,226,841)
                                                       ------------  ------------  ------------
      Total Stockholders' Equity                          (753,682)     (449,696)      684,353
                                                       ------------  ------------  ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $ 2,227,677   $    85,527   $ 1,349,080
                                                       ============  ============  ============
</TABLE>




    The accompanying Notes are an integral part of these financial statements

                                     

<PAGE>  
<TABLE>
                                         HARVARD SCIENTIFIC CORP.
                                      (A DEVELOPMENT STAGE COMPANY)

                                        STATEMENTS OF OPERATIONS

<CAPTION>
                                                                                   1/13/87
                                                                                  (Inception)
                                        December 31,  December 31,  December 31,      to
                                           1997          1996          1995        12/31/97
                                         (Audited)     (Audited)     (Audited)    (Unaudited)
                                        ------------  ------------  ------------  ------------

<S>                                     <C>           <C>           <C>           <C>        
Net Sales                               $         -   $   181,000   $         -   $   187,387
Cost of  Sales                                    -       216,870             -       221,557
                                        ------------  ------------  ------------  ------------
     Gross Profit                                 -       (35,870)            -       (34,170)
                                        ------------  ------------  ------------  ------------
Operating Expenses:
   General and administrative expenses    2,295,337     1,244,272       434,320     4,336,207
   Research and development (Note 7)      1,374,675       109,553       194,965     1,803,559
   Depreciation and amortization            515,213        41,472        39,550       635,847
                                        ------------  ------------  ------------  ------------
     Total Operating Expenses             4,185,225     1,395,297       668,835     6,775,613
                                        ------------  ------------  ------------  ------------
     Loss from Operations                (4,185,225)   (1,431,167)     (668,835)   (6,809,783)
                                        ------------  ------------  ------------  ------------
Other Income (Expense):
   Settlements (Note 10)                   (220,816)     (494,813)            -      (715,629)
   Interest Income                            1,168             -             -         1,565
   Dividend Income                           51,453             -             -        51,453
   Interest Expense                      (1,462,821)     (512,964)       (7,620)   (1,985,133)
   Loss on disposition of marketable 
     securities                                   -             -             -       (24,500)
                                        ------------  ------------  ------------  ------------
     Total Other Income and Expense      (1,631,016)   (1,007,777)       (7,620)   (2,672,244)
                                        ------------  ------------  ------------  ------------
Net Loss                                $(5,816,241)  $(2,438,944)  $  (676,455)  $(9,482,027)
                                        ============  ============  ============  ============
Loss per Common Share                   $     (0.36)  $     (0.27)  $     (0.29)  $     (0.56) 
                                        ============  ============  ============  ============

Weighted Average Shares Outstanding 
  (Note 2)                               16,352,816     9,040,685     2,333,703    17,077,159
                                        ============  ============  ============  ============
</TABLE>

   The accompanying Notes are an integral part of these financial statements.

                                     

<PAGE>  
<TABLE>

                                         HARVARD SCIENTIFIC CORP.
                                      (A DEVELOPMENT STAGE COMPANY)


                                    STATEMENTS OF STOCKHOLDERS' EQUITY
                         FOR THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                                     TO DECEMBER 31, 1997 (UNAUDITED)

<CAPTION>
                                                                               
                                                Restated                        Deficit
                                              Common Stock        Additional     From
                                        ------------------------    Paid-in     Inception
                                          Shares       Amount       Capital      To Date       Total
                                        -----------  -----------  -----------  -----------  -----------
<S>                                     <C>          <C>          <C>          <C>          <C>
Issuance of shares for cash on
    January 13, 1987 (inception)           103,000   $      103   $    2,097   $        -   $    2,200

Issuance of shares for cash,
    net of offering costs                   51,000           51       19,223            -       19,274

Issuance of shares for services            146,000          146            -            -          146

Issuance of shares to acquire
    Grant City Corporation                  50,000           50       39,827            -       39,877
                                        -----------  -----------  -----------  -----------  -----------
Balance December 31, 1993                  350,000          350       61,147            -       61,497

Issuance of shares to effect a
    four-for-one split                   1,050,000        1,050       (1,050)           -            -

Issuance of shares for
    intellectual property rights         4,196,000        4,196            -            -        4,196

Issuance of shares for
    corporation property rights            394,000          394       24,231            -       24,625

Issuance of shares for fees
    and services                         1,045,000        1,045       96,893            -       97,938

Issuance of shares for cash,
    net of offering costs                  393,500          393      353,757            -      354,150

Adjustment of shares to effect a
    four-for-one reverse split          (5,571,375)      (5,571)       5,571            -            -

Cumulative (loss) from inception
    to December 31, 1994                         -            -            -     (550,386)    (550,386)
                                        -----------  -----------  -----------  -----------  -----------
Balance December 31, 1994                1,857,125        1,857      540,549     (550,386)      (7,980)

</TABLE>





   The accompanying Notes are an integral part of these financial statements.

                                      

<PAGE>  
<TABLE>

                                         HARVARD SCIENTIFIC CORP.
                                      (A DEVELOPMENT STAGE COMPANY)
<CAPTION>

                                    STATEMENTS OF STOCKHOLDERS' EQUITY
                         FOR THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                                     TO DECEMBER 31, 1997 (UNAUDITED)
                                               Restated                         Deficit
                                              Common Stock        Additional     From
                                        ------------------------    Paid-in     Inception
                                          Shares       Amount       Capital      To Date       Total
                                        -----------  -----------  -----------  -----------  ----------- 
<S>                                     <C>          <C>          <C>          <C>          <C>
December 31, 1994 balance forward        1,857,125        1,857      540,549     (550,386)      (7,980)

Issuance of shares for fees
    and services                           553,500          553      530,796            -      531,349

Issuance of shares at par value for
    intellectual property rights         6,138,500        6,139            -            -        6,139

Issuance of shares for cash,
    net of offering costs                  200,000          200      831,100            -      831,300

Net (loss) for the year ended
    December 31, 1995                            -            -            -     (676,455)    (676,455)
                                        -----------  -----------  -----------  -----------  -----------
Balance December 31, 1995                8,749,125        8,749    1,902,445   (1,226,841)     684,353

Issuance of shares for services            255,000          255       59,828            -       60,083

Issuance of shares in conversion of debt   310,254          310      249,690            -      250,000

Issuance of shares for legal settlement    568,750          569      494,244            -      494,813

Discount on 7% Convertible Debentures            -            -      500,000            -      500,000

Net (loss) for the year ended
    December 31, 1996                            -            -            -   (2,438,945)  (2,438,945)
                                        -----------  -----------  -----------  -----------  -----------
Balance December 31, 1996                9,883,129        9,883    3,206,207   (3,665,786)    (449,696)

Issuance of shares for cash,
    net of offering costs                  250,000          250      124,750            -      125,000

Issuance of shares for fees
    and services                         1,270,000        1,270            -            -        1,270

Discount on 6% Convertible Debentures            -            -    1,250,000            -    1,250,000

Net (loss) for the Quarter ended 
    March 31,1997                                -            -            -   (3,140,868)  (3,140,868)
                                        -----------  -----------  -----------  -----------  -----------
Balance March 31, 1997                  11,403,129   $   11,403   $4,580,957  $(6,806,654) $(2,214,294)
                                        ===========  ===========  ===========  ===========  ===========
</TABLE>


   The accompanying Notes are an integral part of these financial statements.

          

<PAGE>  
<TABLE>

                                         HARVARD SCIENTIFIC CORP.
                                      (A DEVELOPMENT STAGE COMPANY)

<CAPTION>

                                    STATEMENTS OF STOCKHOLDERS' EQUITY
                         FOR THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                                     TO DECEMBER 31, 1997 (UNAUDITED)

                                                 Restated                          Deficit
                                               Common Stock         Additional      From
                                        --------------------------    Paid-in      Inception
                                           Shares        Amount       Capital       To Date        Total
                                        ------------  ------------  ------------  ------------  ------------
<S>                                     <C>           <C>           <C>           <C>           <C>
March 31, 1997 balance forward           11,403,129   $    11,403   $ 4,580,957   $(6,806,654)  $(2,214,294)

Issuance of shares for fees and services  6,172,000         6,172             -             -         6,172

Issuance of shares in conversion of debt    450,000           450       133,300             -       133,750

Net (loss) for the Quarter ended
    June 31, 1997                                 -             -             -    (1,266,233)   (1,266,233)
                                        ------------  ------------  ------------  ------------  ------------
Balance June 30, 1997                    18,025,129      $ 18,025   $ 4,714,257   $(8,072,887)  $(3,340,605)

Issuance of shares in conversion of debt  1,446,325         1,446     1,275,133             -     1,276,579

Issuance of shares for fees and services    144,000           144             -             -           144

Net (loss) for the Quarter ended
    September 30, 1997                            -             -             -      (180,075)     (180,075)
                                        ------------  ------------  ------------  ------------  ------------
Balance September 30, 1997               19,615,454      $ 19,615   $ 5,989,390   $(8,252,962)  $(2,243,957)

Issuance of shares in conversion of debt  2,375,919         2,376       985,789             -       988,165

Issuance of shares for fees and services  8,300,000         8,300       537,100             -       545,400

Issuance of shares in legal settlement    1,150,000         1,150       439,075             -       440,225

Issuance of shares for intellectual 
    property                              2,000,000         2,000             -             -         2,000

Receivable due from related parties
    reflecting the sale of stock Rule 16(b)       -             -       410,016             -       410,016

Receivable due from related parties               -             -       333,535             -       333,535

Net (loss) for the Quarter ended
    December 31, 1997                             -             -             -    (1,229,065)   (1,229,065)
                                        ------------  ------------  ------------  ------------  ------------
Balance at year end December 31, 1997    33,441,373   $    33,441   $ 8,694,904   $(9,482,027)  $  (753,682)
                                        ============  ============  ============  ============  ============
</TABLE>
                                        
   The accompanying Notes are an integral part of these financial statements.
                                       

<PAGE>  
<TABLE>
                                          HARVARD SCIENTIFIC CORP.
                                      (A DEVELOPMENT STAGE COMPANY)

                                         STATEMENTS OF CASH FLOWS
<CAPTION>
                                                                                          
                                                                Year ended                   1/13/87
                                                                December 31                (Inception)
                                                ----------------------------------------       to
                                                     1997          1996          1995       12/31/97
                                                  (Audited)     (Audited)     (Audited)    (Unaudited)
                                                ------------  ------------  ------------  ------------
<S>                                             <C>           <C>           <C>           <C>
Reconciliation of Net Loss to Net Cash
   Used in Operating Activities:

Net Loss                                        $(5,816,241)  $(2,438,944)  $  (676,455)  $(9,482,027)
                                                ------------  ------------  ------------  ------------
Adjustments to Reconcile Net Loss to
   Net Cash Provided by (Used in)
   Operating Activities:

   Book value of assets sold                              -         6,483             -         6,483
   Loss on disposition of marketable securities           -             -             -        24,500
   Depreciation and amortization                     46,464        41,472        39,550       167,098
   Amortization of Debt Issuance cost               468,750             -             -             -
   Issuance of stock for director's fees
     and services                                   560,399       485,129        71,974     1,249,774
   Issuance of stock for Property Rights              2,000             -             -             -
   Issuance of stock in legal settlement            301,041       494,813             -       795,854
   Discount on Convertible Debentures             1,250,000       500,000             -     1,750,000
   Interest Expense converted to Stock               86,878             -             -        86,878
   (Increase) decrease in assets:
     Prepaid expenses                                 1,565        (1,565)       38,281             -
     Deposits/Retainers                             (45,496)            -             -       (45,796)
     Other Assets                                         -             -             -             -
   Increase (decrease) in liabilities:
     Accounts payable                               (31,597)      (69,116)      100,962         5,027
     Accrued expenses                               124,091       (64,051)       82,779       144,419
     Due to related parties                        (394,600)     (216,021)      303,951      (203,740)
                                                ------------  ------------  ------------  ------------
            Total Adjustments                     2,369,496     1,177,144       637,497     3,980,498
                                                ------------  ------------  ------------  ------------
Net Cash Used in Operating Activities:          $(3,446,746)  $(1,261,800)  $   (38,958)  $(5,501,530)
                                                ============  ============  ============  ============
Cash Flows from Investing Activities:
   Cash from sale (purchase) of equipment           (53,217)       (7,400)            -       (78,114)
   Cash from sale (purchase) of Intellectual Right (150,000)            -             -             - 
   Capitalized organization costs                         -             -             -      (150,924)
                                                ------------  ------------  ------------  ------------
    Net Cash Used in Investing Activities:         (203,217)       (7,400)            -      (229,038)
                                                ------------  ------------  ------------  ------------
Cash Flows from Financing Activities:
   Proceeds from issuance of capital stock,
    net of offering costs                           125,000             -       831,300     1,371,946
   Proceeds from debt converted to capital stock          -       250,000             -       250,000
   Proceeds from debt, net of costs                  23,295       251,100        80,719       438,739
   Proceeds from debentures, net of costs         4,375,000             -             -     4,375,000
   Principal payments on debt                             -       (31,500)      (74,319)     (128,169)
                                                ------------  ------------  ------------  ------------
    Net Cash Provided by Financing
        Activities                                4,523,295       469,600       837,700     6,307,516
                                                ------------  ------------  ------------  ------------
Net Increase (Decrease) in Cash                     873,333      (799,600)      798,742       576,949

Cash at beginning of period                            (134)      799,466           724             -
                                                ------------  ------------  ------------  ------------
Cash at end of period                           $   873,199   $      (134)  $   799,466   $   576,949
                                                ============  ============  ============  ============
</TABLE>



   The accompanying Notes are an integral part of these financial statements.

                                       

<PAGE>  


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995


                                                   
NOTE 1 - NATURE OF BUSINESS AND ORGANIZATION

NATURE OF BUSINESS:
Harvard Scientific Corp. (the "Company") is a development stage company. The
Company's primary business operations consist of development, commercialization,
marketing, and distribution of products relating to prostaglandin/microsphere
delivery and the manner in which the product is applied in treating 1) male
sexual dysfunction, impotency and sexual enhancement, and 2) for the treatment
of Psoriasis. The Company has preliminary data available, indicating the
possible benefits of such a therapy for both products. The Company is a
development stage enterprise as defined by FASB No. 7. "Accounting and Reporting
by Development Stage Enterprises".


On February 13, 1996, the Company received an assignment of an application for a
patent entitled "PGE1 Containing Lyophilized Liposomes For Use In The Treatment
of Erectile Dysfunction", and identified as United States Application No.
08/573,408 ("LLPGE-1"). US Patent No. 5,718,917 was issued February 17, 1998.
The assignment was made by the holder of the application, Bio-Sphere Technology,
Inc. ("BTI"), a majority shareholder as of December 31, 1997.

The Company plans to focus on LLPGE-1 Erectile Dysfunction to bring the product
to the marketplace. In May 1996, the Company submitted an Investigational New
Drug ("IND") application to the Federal Food & Drug Administration ("FDA") and
has concluded its Phase I clinical trial. The results of the Phase 1 clinical
trial are under review by the FDA. Upon the FDA's approval of the clinical study
of Phase I, the Company will proceed to a Phase II trial.

On November 20, 1997, the Company received the Intellectual Property Rights to
Prostaglandin E1 Lyophilized ("LLPGE-1") Liposomes for the use of treatment of
Psoriasis from BTI. This is in a special lotion base and delivery system which
is proprietary. The Investigational New Drug Number ("IND" No. 54,669) has been
issued to Harvard Scientific from the FDA Division of Dermatology and Dental
Drug Products for this topically applied skin treatment product for psoriasis
called PsoriClear. A Protocol is currently under development with the FDA for
Phase I trials.

ORGANIZATION:
The Company was incorporated under the laws of the State of Nevada on January
13, 1987, under the name of Witch Doctors Bones, Inc. On August 12, 1987, the
Company qualified a public offering under Rule 504 of Regulation D of the
Securities Act of 1933, as amended, with the Secretary of State of Nevada. On
June 17, 1988, the Company changed its name to Carey Ward, Inc. On October 18,
1993, the Company acquired Grant City Corporation by merger and changed its name
to Grant City Corporation. On January 18, 1994, the Company changed its name to
The Male Edge, Inc. On May 10, 1994, the Company changed its name to Harvard
Scientific Corp.

The Company has 100,000,000 shares of common stock authorized with 33,441,373
shares issued and outstanding as of December 31, 1997, 9,883,129 issued and
outstanding on December 31, 1996 and 8,749,125 shares issued and outstanding on
December 31, 1995. BTI owned approximately 22%, 63% and 78% of the Company's
shares on December 31, 1997, December 31, 1996 and on December 31, 1995,
respectively. Jackie R. See M.D. is Director of the Company, and is a
controlling person of BTI.


                                       

<PAGE>  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995

The Company's recent registration under the Securities Act of 1933, of its
common stock, issuable upon conversion of its 6% convertible debentures, was
declared effective on August 14th, 1997.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATIONAL COSTS:
Organization costs are being amortized over a five-year period using the
straight-line method. Also see the discussion contained in Note 7.

EQUIPMENT:
Equipment is stated at cost. Depreciation is incorporated on a double declining
balance basis over a period of 5 years. Expenditures for maintenance and repairs
are charged to expense as incurred. Upon retirement or disposal of assets, the
cost and accumulated depreciation are eliminated from the accounts and any
resulting gain or loss is included in expense. See Note 3.

USE OF ESTIMATES:
In order to prepare the financial statements in conformity with generally
accepted accounting principles, management must make estimates and assumptions
that affect certain reported accounts and disclosures. Actual results could
differ from these estimates.

INTELLECTUAL PROPERTIES:
The costs of intellectual properties are amortized using the straight-line
method over a period of fifteen years. See Note 4.

EARNINGS PER SHARE:
The earnings per share calculations were based on the weighted average number of
shares outstanding during the period: 16,352,816 for the year ending December
31, 1997, 9,040,685 for the year ending December 31, 1996 and 2,333,703 shares
for the year ending December 31, 1995, and 17,077,159 shares outstanding from
inception to December 31,1997.

During 1997, Company entered into an agreement with a 6% Debenture holders (see
Note 11 & 13), allowing for the conversion of the debenture on demand. At
December 31, 1997, the Company had an outstanding debt balance with the
debenture holders of $2,800,000 plus accrued interest of $131,694. On December
31, 1997, if the debenture holders chose to convert their debenture to common
stock, the converted balance would have calculated to an additional 10,013,843
shares of common stock issued, or a loss per share of $.20. Fully dilutive
earnings per share are not reflected because they are anti-dilutive.

INCOME TAX:
Because of losses sustained since inception, no provision has been made for
income tax.


                                       

<PAGE>  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995


NOTE 3 - EQUIPMENT & LEASEHOLD IMPROVEMENTS

Equipment and building improvements consists of the following:

<TABLE>
<CAPTION>

                                              December 31, 1997    December 31, 1996     December 31, 1995
                                                  (audited)            (audited)             (audited)
                                             ----------------------------------------------------------------
<S>                                                <C>                  <C>                   <C>
Equipment & Leasehold Improvements                 $  2,634             $  9,416              $ 17,498
Less: accumulated depreciation                       11,930                3,491                 6,637
                                             ----------------------------------------------------------------
  Total Net Equipment & Leasehold                  $ 50,704             $  5,925              $ 10,861    
    Improvements                             ----------------------------------------------------------------
</TABLE>

In April 1997, the Company entered into an agreement for the lease of equipment
used in the process of sizing Liposomes which the Company uses in the delivery
of the Prostaglandin E-1. The total lease amount of $32,893 is to be paid over
24 months. The Company records the lease as a capital lease amortizing payments
over the life of the lease.

During December 1996, the Company established its corporate headquarters in
Reno, Nevada. In November 1997, the Company established the world headquarters
in Lake Mary, Florida. The Company has reduced its need for certain equipment
and leasehold improvements because the Company currently does not own
manufacturing equipment for its product. The product has been and will continue
to be manufactured by third-party manufacturers according to the Company's
specifications.


NOTE 4 - INTELLECTUAL PROPERTIES

On January 7, 1994, the Company exchanged 2,856,000 shares of common stock with
BTI for the intellectual rights to patent, develop, manufacture, and market the
LLPGE-1 for the treatment of male erectile dysfunction, impotency and sexual
enhancement. The Company recorded the transfer of intellectual properties at the
par value of stock transferred, which amounted to $2,856. BTI's largest
shareholder, Dr. Jackie See M.D., the inventor of the Lyophilized Liposomal
LLPGE-1, holds a 2% royalty interest on the sale of products.

On November 16, 1995, the Company exchanged 6,138,500 shares of common stock
with BTI for assistance in raising working capital and patent application and
for management assistance and distribution agreements associated with the
LLPGE-1 product. The Company recorded the transfer at the par value of stock
transferred, which amounted to $6,139.

During 1996, the Company expensed the unamortized cost of acquiring technology
relating to the development of an HIV home test kit. The Company, which
originally acquired the rights in exchange for 335,000 shares of common stock,
ceased product development in connection with a settlement accrued in 1995 (Note
10).

On November 20, 1997, the Company agreed to exchange 2,000,000 shares of common
stock plus $150,000 to BTI for the Intellectual Property Rights to Prostaglandin
E1 Lyophilized Liposomes for the use of treatment of Psoriasis (see Note 1). The
Company recorded the transfer at the par value of stock transferred, which
amounted to $2,000, plus $150,000. BTI is to receive a 3% override on royalties.


                                       

<PAGE>  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995


NOTE 5 - ACCRUED EXPENSES

Accrued expenses consist of the following:

<TABLE>
<CAPTION>

                                December 21, 1997    December 31, 1996     December 31, 1995
                                    (Audited)             (Audited)             (Audited)
                                ---------------------------------------------------------------
<S>                             <C>                  <C>                   <C>
Interest on notes and
  debentures                    $     131,694        $        9,649        $            -
Accrued payroll & payroll taxes             -                10,680                33,680
Settlement costs (Note 10)                  -                     -                50,000
Transfer fee                                -                     -                   700
                                ---------------------------------------------------------------

                                $     131,694        $       20,329        $       84,380
                                ---------------------------------------------------------------
</TABLE>

Also see Notes 11 for interest on debentures.

NOTE 6 - NOTES PAYABLE

The Company had the following notes payable:

<TABLE>
<CAPTION>

                                              December 21, 1997  December 31, 1996   December 31, 1995
                                                  (Audited)          (Audited)           (Audited)
                                              ---------------------------------------------------------
<S>                                           <C>                <C>                 <C>
8% note, payable to former director on
demand, unsecured (Note 7)                    $          -       $     37,275        $     62,675   
8% note, payable to related party on demand,
unsecured                                                -                  -               5,000   
7% convertible debentures, convertible at
50% of the market price of the common stock              -            250,000                   -
on the day before the conversion date.        
                                              ---------------------------------------------------------

                                              $          -       $    287,275        $     67,675
                                              ---------------------------------------------------------
</TABLE>

In June 1996, the Company issued $500,000 worth of 7% convertible debentures to
three non-US residents. The debentures were to be converted into shares of
common stock in December 1996, at 50% of the current market value of the stock.
By December 31, 1996, $250,000 of the debentures had been converted to equity. A
total of $500,000 was reflected as a discount and recorded to interest expense
and paid-in-capital in 1996. On June 12, 1997, an additional $125,000 was
converted into 450,000 shares of common stock. On December 26, 1997, the balance
of $125,000 was converted into 1,000,000 shares of common stock. See Note 10.


NOTE 7 - RELATED PARTY TRANSACTIONS

1.  During 1994, 1995 and 1997, the Company entered into three significant
    transactions with related parties for the acquisition of intellectual
    rights, and for the provision of technological, management, fundraising and
    marketing assistance. Note 4 describes the valuation of these transactions.


                                       

<PAGE>  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995


2.  On December 31, 1996, the Company had a payable to BTI of $183,535. The
    payable is related to costs incurred by BTI, on the Company's behalf, for
    consultation and rent, and for research and development of the LLPGE-1
    product. During 1997, the Company incurred an additional payable of $150,000
    to BTI for the Intellectual Property Rights to Prostaglandin E-1 Lyophilized
    Liposomes for the use of treatment of Psoriasis. See Note 4. During the
    year, BTI chose to convert the accounts payable balance of $333,535 as a
    contribution to additional-paid-in-capital.

3.  During 1996, BTI advanced 200,000 of its shares on behalf of the Company
    as a subordinated loan agreement. The shares were loaned and are expected to
    be returned to BTI in 1998. At the time of the advance, the fair market
    value of the shares transferred was $500,000. During 1997, the Company
    advanced to BTI $500,000 in connection with this settlement and expects to
    collect this money when the 200,000 shares are returned to BTI in 1998.

4.  In 1997, BTI, a major stockholder of the Company, received $352,305 from
    the sale of the Company's common stock that was subject to recapture by the
    Company pursuant to Section 16(b) of the Securities Exchange Act of 1934. In
    addition, in 1997, Dr. Jackie See, MD received $57,711 from the sale of the
    Company's common stock that was subject to recapture by the Company pursuant
    to Section 16(b). In 1997, a total of $410,016 was booked as a receivable
    from related parties/directors to reflect this recapture period.

5.  At December 31, 1997, BTI owned approximately 22% of the Company's
    shares. Dr. Jackie See a Director of the Company and a controlling person of
    BTI. Jackie R. See M.D. is a Director of the Company.

6.  In November 1997, the Company issued 4,000,000 shares of common stock to
    Thomas E. Waite, the President and Chairman of the Board, as a signing
    bonus. The transaction was recorded at par value.

7.  As of December 31, 1996, the Company had a note payable with a former
    director (Note 6). The amount of accrued interest associated with the note
    at December 31, 1996 was $6,419. This note was paid in full on May 7th,
    1997.

8.  The Company often pays for services, fees, and salaries by issuing shares
    of common stock. Most of this stock issued for services must be held for
    investment to satisfy the exemption from registration under Section 4(2) of
    the Securities Act of 1933, as amended. Rule 144 under the statute requires
    that such stock be held for a year, before it can be sold in accordance with
    rule 144.

    During 1997, the Company issued a total of 11,902,000 shares of common stock
    (restricted) to officers and directors of the Company for prior and current
    services rendered or signing bonuses. In addition, during 1997 the Company
    issued 4,284,000 shares of common stock (restricted) for services performed
    by outside consultants or scientists, and 500,000 shares of common stock
    (restricted) to an employee of the Company as a signing bonus. These shares
    were recorded at par value.

    All shares owned by Dr. Jackie See and Thomas E. Waite, have registration
    rights. These registration rights have been exercised and upon the
    registration statement becoming effective, although, there is no assurance
    that it will become effective, the shares can be sold in accordance with the
    Securities Act of 1933, subject to state securities.


                                       

<PAGE>  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995


Also see discussions regarding intellectual properties, agreements, and
subsequent events in Notes 4, 9, and 13.


NOTE 8 - INCOME TAXES

The Company has federal net operating loss carryforwards for financial statement
purposes of approximately $7,000,000 at December 31, 1997, which will be used to
offset future earnings of the Company. The loss carryforwards will expire during
the years ending 2002 through 2012 if not used.


NOTE 9 - AGREEMENTS

1.  In conjunction with the agreement of November 16, 1995, between BTI and the
    Company (Note 4), BTI transferred three agreements to the Company related to
    the manufacture, marketing, and distribution of the LLPGE-1 product
    overseas. In 1996, the Company terminated two of these agreements for
    nonperformance and the third agreement was terminated by mutual consent.

2.  On November 3, 1995, BTI entered into an agreement with a European
    licensor, Pharma Maehle ("Pharma"), whereby Pharma was to establish the
    European market for the Company's erectile dysfunction product to develop,
    manufacture, sell, practice and exploit the use of the Company's proprietary
    license technology. In February 1996, an amendment to the agreement was
    signed to reflect the transfer of said agreement from BTI to the Company. On
    March 20, 1996, Section 19.0 (Entire Agreement) was amended to better
    express the intent of the parties. On December 30, 1996, the Company
    notified Pharma in writing that it was terminating the agreement for breach
    of contract and the implied covenant of good faith and fair dealing inherent
    in all contracts by failing to exercise reasonable diligence to exploit the
    technology and patent rights. On January 13, 1997, the Company signed a
    Letter of Understanding with Pharma, whereby the parties would consider
    working out a formal agreement settling their disputes after seeking advice
    from legal counsel. The agreement was to be accomplished within 10 working
    days from January 13, 1997. Unable to do so, the Company again notified
    Pharma of it's intent to terminate any and all agreements with Pharma
    referencing previous termination notices. Pharma contends the various
    notices of termination were withdrawn or ineffective and the agreement is
    enforceable. However, the Company believes they have rightfully terminated
    the agreement with Pharma, who has been and continues to be in breach of the
    agreement in any event. The validity of the agreement is currently in
    dispute. See Note 13.

3.  On April 2, 1997, the Company entered into a consulting agreement with
    David E. Jordan for the provision of financial public relations and other
    services. Under this agreement, Mr. Jordan was entitled to receive 200,000
    shares of Common Stock (which Mr. Jordan and parties related to Mr. Jordan
    received), as well as a monthly fee of $8,000. In addition to the monthly
    fee, he was to receive all agency fees which public relations and/or
    advertising firms receive when preparing material or placing advertising. On
    June 6, 1997, an additional 1,000,000 shares of Common Stock were issued to
    Mr. Jordan and parties related to Mr. Jordan. The Company terminated the
    consulting agreement on June 17, 1997 and cancelled the 1,000,000 shares
    that had been issued to Mr. Jordan and parties related to Mr. Jordan.


                                       


<PAGE>  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995


4.  On December 1, 1997, the Company renegotiated the consulting agreement with
    Martin E. Janis & Company, Inc. ("Janis"), dated December 13, 1996, whereby
    Janis, a public relations agency, is to carry out an extensive financial
    promotional program including public relations for the Company, in exchange
    for 500,000 shares of the Company's (restricted) common stock plus a fee of
    $5,000 a month for a period of one year beginning December 1, 1997. The
    Company recorded the shares at par value.

5.  On August 4, 1997, the Company entered into a consulting agreement with Dr.
    Lorenz M. Hofmann, Ph.D. ("Hofmann"), whereby Hofmann is to lead the
    clinical development program for liposomal Prostaglandin E-1 for the
    treatment of male erectile dysfunction. The Company has agreed to pay
    Hofmann $15,000 per month plus 500,000 shares of (restricted) common stock.
    The stock was recorded at par value.

6.  On August 1, 1997, the Company entered into a consulting agreement with Dr.
    Irwin Goldstein, M.D. ("Goldstein"), whereas the Company has agreed to pay
    Goldstein $10,000 upon signing the agreement and $4,000 per month until
    March 1, 1999. Goldstein is a Professor of Urology and is assisting the
    Company through the required FDA stages in bringing the LLPGE-1 product to
    the marketplace. At December 31, 1997, the Company had paid Goldstein
    $34,000.

7.  On July 15, 1997, the Company entered into a consulting agreement with
    Scopes-Garcia-Carlisle Advertising, Inc. ("Scopes"), whereby Scopes will
    provide professional advertising and marketing, and a public relations
    promotion plan to help promote the Company's sale of it's product(s) and
    stock, in exchange for a fee of $3,000 per month beginning August 15, 1997.
    The agreement expires January 15, 1998.

8.  On March 19, 1997, and again on May 15, 1997, the Company entered into an
    agreement with Alexander H. Walker, Jr. ("Walker"), former General Counsel,
    Director and Officer of the Company. Walker was retained as General Counsel
    as to all legal matters for the Company. In addition, he was to prepare or
    supervise the preparation of Securities and Exchange Commission filings,
    contracts and agreements. Walker was to receive $15,000 per month plus the
    issuance of common stock shares of the Company of up to 1,000,000 shares
    prorated over a three year period. In 1997, Walker received $231,678 and
    issued to himself 1,052,000 shares of common stock. The shares transferred
    were recorded at par value. In December 1997, the Company terminated all
    agreements with Walker requesting all records, documents, agreements, the
    corporate minute book, etc. be turned over to the Company immediately. See
    Note 13.

9.  On November 6, 1997, the Company renegotiated the consulting agreement with
    I.W. Miller & Co. ("Miller") dated September 18, 1997, whereby Miller will
    provide investor relation consulting services for the Company for a one year
    term beginning September 18, 1997 expiring September 17, 1998, in exchange
    for 400,000 shares of the Company's common stock. All prior agreements with
    Miller have been terminated. The shares transferred were recorded at
    $537,500, the fair market value of the shares on the date the shares were
    transferred.

10. On November 17, 1997, the Company amended the consulting agreement with
    Kostech Data Corporation ("Kostech") dated December 31, 1996, whereby
    Kostech will establish and maintain an ongoing Internet based investor
    relations program including the reprint and republish of research material
    on wire service and media, in exchange for 100,000 shares of (restricted)
    common stock of the Company. The agreement expires December 9, 1998. The
    Company recorded the shares at par value.


                                       

<PAGE>  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995


11. The Company has the following office lease commitments at December 31, 1997:

    a.  The Company occupies 5,428 square feet in Irvine, California where the
        Company maintains research & development laboratories. Rent of $6,242 is
        paid monthly the first year beginning April 17, 1997 and increasing to
        $6,514 in the second year expiring April 30, 1999.

    b.  The Company occupies 2992 square feet in Lake Mary, Florida where the
        corporate headquarters and general operations of the Company are
        maintained. Rent of $4,268.58 is paid monthly beginning December 15,
        1997 through December 31, 2000.

    c.  The Company occupies 425 square feet in Reno, Nevada where all
        accounting operations are maintained. Rent of $425 is paid monthly
        beginning December 1, 1997 expiring May 3, 1998.


NOTE 10 - CONTINGENCIES

The Company is a party in certain pending or threatened legal, governmental,
administrative, or judicial proceedings that arose in the ordinary course of
business. The following includes a list of current pending or threatened
proceedings, which are believed not to affect the financial position of the
Company in a material way at this time:

    a.     In a letter dated August 29, 1997, Vivus, Inc. ("Vivus") asserted
           that the Company's product and method for the treatment of male
           erectile dysfunction infringed on a patent held by Vivus. On
           September 16, 1997, the Company responded advising Vivus that they
           did not infringe on such patent, identifying those claim limitations
           which were not present in the Company's product and method. On
           September 19, 1997, Vivus again reiterated its claim of infringement
           against the Company.

           On October 1, 1997, the Company filed a complaint for declaratory
           judgement of non-infringement of the patent, in the United States
           District Court for the District of Nevada. Vivus filed a motion
           asking for dismissal of the Company's declaratory judgement action on
           the basis that there is no infringement and, therefore, no actual
           controversy. Vivus now asserts that its allegation of infringement
           was premature because the Company's use of its product and method for
           treating erectile dysfunction is limited to FDA clinical trials which
           is a non-infringing use under the patent laws. The Company has
           opposed Vivus' motion to dismiss on the basis that it has taken
           concrete steps toward the commercialization of its product and method
           and that Vivus' allegation of infringement is damaging the Company's
           ability to complete FDA clinical trials. A decision on the Vivus'
           motion has not been reached.

    b.     On June 2, 1997, the Company became a defendant in an action filed
           in the Superior Court of the State of California, Los Angeles county,
           initiated by Cletus Cogdill, ("Cogdill") a shareholder of the
           Company. Cogdill alleges that he purchased the Company's common stock
           on March 17, 1994. At that time, Rule 144 under the Securities Act of
           1933 required that such stock be held for two years, before it can be
           sold. The certificate was issued on June 17, 1994. On March 18, 1996,
           Cogdill completed form 144 in an attempt to sell his stock, although,
           according to the certificate date (June 17, 1994), the two years had
           not lapsed. On April 12, 1996 Cogdill completed a revised form 144
           indicating the shares had been acquired in March 1994, and thereby
           should be issued new free-trading certificates. New certificates were
           approved and issued to Cogdill but were apparently lost in the mail.
           Two months later Cogdill sold his stock and due to the reduction in
           market share price during that time, he claims he lost value of
           approximately $45,000.


                                       

<PAGE>  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995


           Cogdill alleges that his stock certificate was improperly dated which
           caused him to improperly complete his Form 144, thereby causing his
           loss. In addition, Cogdill alleges the Company made
           misrepresentations, causing damages of $6,500, plus punitive damages.
           Cogdill had indicated he is willing to settle this matter for $30,000
           and the Company countered his offer at $2,500.

           Although there can be no guarantee that the Company will prevail, the
           Company denies both generally and specifically each and every
           allegation in the complaint. The Company has filed a cross-complaint
           against Cogdill's brokerage firm for indemnity.

    c.     On November 10, 1997, the Company became a defendant in an action
           filed in the District Court, Clark County, Nevada by Eric Savage
           ("Savage"). Savage alleges that the Company restricted Savage from
           selling his common stock in the Company and is seeking damages in
           excess of $1,260,000 plus attorney fees and costs. The Company denies
           liability and believes Savage has acknowledged he was not entitled to
           sell his stock free from restriction at a date earlier than he now
           contends. The Company further believes this matter should be the
           subject of binding arbitration. See Note 13.

The financial statements reflect the manner in which the Company has resolved
certain litigations:

    a.     The Company amicably settled an action with Thomas E. Waite &
           Associates regarding a contract under which Waite was to provide an
           array of business services. The Company issued 568,750 shares of
           common stock in settlement, which accrued in the December 31, 1996
           financial statements at $494,813. On November 14, 1997, Thomas E.
           Waite became the Company's President and Chairman of the Board.

    b.     The Company reached a mutual release regarding a Distribution
           Agreement, which provided for the manufacturing, marketing, and
           distribution of HIV test kits. The mutual release called for a
           $50,000 payment, which accrued during 1995 and was paid in full
           during the first quarter of 1996.

    c.     The D. Weckstein & Co., Inc. ("Weckstein") lawsuit was settled on
           April 23, 1997, with the issuance of 35,000 shares of the Company's
           common stock to Weckstein. The Company filed an action for damages
           due to negligence and breach of contract by D. Weckstein and Co.,
           Inc. and Donald Weckstein. The contract at issue was an agreement to
           obtain financing in exchange for Company stock. The Weckstein
           defendants subsequently filed a lawsuit in New York against the
           Company respecting the same contract, and asked for damages against a
           third party for tortuous interference with the contract.

    d.     On February 6, 1997, Ailouros Ltd., regarding 7% Debenture held by it
           brought an action against the Company. On June 12, 1997, the Company
           reached a mutual settlement with Ailouros Ltd. converting the
           $125,000 principal amount of the 7% Debentures held by it into
           450,000 shares of common stock.


                                       

<PAGE>  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995


    e.     On October 20, 1997, 200,000 shares of the Company's common stock
           plus $10,000 was issued to Neil Armstrong, a former President & CEO
           of the Company, in settlement of a dispute regarding termination of
           employment.

    f.     On October 27,1997, the Company became a defendant in a U.S. District
           Court action initiated by Wood Gundy ("Gundy"), a 7% debenture
           holder. On December 26, 1997, the Company reached an agreement with
           Gundy electing to convert the balance of $125,000 in 7% convertible
           debenture plus accrued interest of $14,384 into 1,000,000 shares of
           common stock of the Company. The Company recorded the shares at the
           fair market value of the common stock on the date of the agreement,
           amounting to $350,000. Approximately $210,600 was expensed to legal
           settlements.

    g.     On March 17, 1997, a former officer of the Company, Rex Morden
           ("Morden"), filed an action against the Company for the failure to
           pay a Promissory Note due on demand. On May 15, 1997, the Company
           reached a settlement with Morden whereby the Company paid Morden
           $43,775.

    h.     On December 3, 1997, the Company agreed to transfer 150,000 shares as
           payment in full of an outstanding debt of $90,225 owed to Pyramid
           Laboratories, Inc. ("Pyramid") by the Company for work performed on
           the PaGE1 project. The Company maintains a good relationship with
           Pyramid whereby Pyramid has agreed to perform a six-month stability
           study for the LLPGE-1 product.


NOTE 11 - CONVERTIBLE DEBENTURES

In March 1997, pursuant to a private placement, the Company (a) sold to one
investor $5,000,000 principal amount of 6% Convertible Debentures (the
"Debentures") due March 30, 1998 and (b) received a commitment from that
investor, subject to various conditions, to purchase additional Debentures in
the aggregate principal amount of up to $10,000,000 in two tranches of
$5,000,000 each, also to be due March 30, 1998. The Debentures are convertible
into shares of common stock at the lesser of the market price on March 21, 1997
or 80% of the market price on the conversion date. Market price is defined as
the average closing bid of the common stock on the five (5) days immediately
preceding March 21, 1997 or the actual conversion date. The Company has the
right to require, by written notice to the holder of this debenture at any time
on or before ten days prior to the maturity date, that the holder of this
debenture exercise its right of conversion with respect to all or that portion
of the principal amount and interest outstanding on the maturity date. See Note
12 and Note 13.

Issuance costs of $625,000 related to the first $5,000,000 principal amount of
6% Convertible Debentures sold in March 1997 were deferred and are being
amortized on a straight-line basis through March 30, 1998. At December 31, 1997,
$2,200,000 of the Debenture plus $63,744 interest on the Debenture had been
converted into 2,822,244 shares of common stock of the Company. The balance due
on the Convertible Debenture at December 31, 1997 is $2,800,000 plus accrued
interest of $131,694. At the time of issuance, the Company accounted for the 20%
discount to market of $1,250,000 as additional interest expense and
paid-in-capital.


                                       

<PAGE>  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995



NOTE 12 - UNCERTAINTY - GOING CONCERN

The financial statements of the Company have been prepared assuming that the
Company will continue as a going concern. The Company's continued existence is
dependent upon its ability to resolve its liquidity problems, principally by
obtaining additional equity capital and through the sale of its products. If
additional capital is not secured, then there is substantial doubt about the
Company's ability to continue as a going concern.

See Note 13 regarding subsequent funding agreements arranged by the Company and
also the subsequent sale of stock by the Company.


NOTE 13 - SUBSEQUENT EVENTS

1.  On January 2, 1998, the Company filed a request for an injunction against
    Nevada Agency & Trust & Co., the Company's transfer agent, to relinquish all
    records of the Company to a newly appointed transfer agent located in Salt
    Lake City, Utah. The Company was granted the injunction and the records were
    transferred to the new transfer agent on January 6, 1998.

2.  On January 6, 1998, the investor who purchased the initial $5,000,000
    principal amount of 6% Convertible Debentures in March 1997, served a
    conversion notice for the sum of $250,000 of the principal amount plus
    $11,917 of interest expense. The conversion at 80% of market price resulted
    in the issuance of 1,036,064 shares of common stock to the investor. The
    debenture balance after this conversion is $2,550,000 plus accrued interest.

    On January 28, 1998, the investor of the 6% Convertible Debenture gave
    notice to the Company to convert into common stock $250,000 of principal
    plus interest calculated at $12,863. The conversion calculated at 80% of the
    market price, calls for the transfer of 525,726 shares of common stock to
    the investor. The Company has not honored this request (see below).

    On January 29, 1998, again the investor of the 6% Convertible Debenture gave
    notice to the Company to convert into common stock $250,000 of principal
    plus interest calculated at $12,904. The conversion calculated at 80% of the
    market price, calls for the transfer of 486,859 shares of common stock to
    the investor. The Company has not honored this request (see below).

    On or about February 3, 1998, The Company filed an action against the 6%
    debenture holder, Springrange Investment Group, Ltd., ("Springrange"),
    arising out of the Securities Purchase Agreement executed on or about March
    21, 1997. The Company alleges that Springrange has breached its
    representations under the agreement by taking a short position and otherwise
    manipulating the price of the Company's common stock. The Company is seeking
    to recover its damages arising from Springrange's breach of contract and
    misrepresentations. The Company will not be honoring any request by
    Springrange to convert the debenture balance into common stock until this
    matter has been resolved. See Note 11.

    On February 18, 1998, Springrange filed a motion to dismiss the Complaint
    and to enjoin the financing transaction entered into between the Company and
    Thomas E. Waite and Dr. Jackie See formally announced publicly on or about
    January 15, 1998 (see below). Springrange also seeks injunctive relief
    requiring the Company to deliver shares of common stock pursuant to notices
    of conversion filed in January 1998 (see above). The Company will oppose the
    motion and requested injunctive relief. A hearing on the motion is scheduled
    in March 1998.


                                       

<PAGE>  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995


3.  Effective February 2, 1998, the Company approved a 1 for 10 reverse stock
    split. Shares outstanding went from 34,477,437 on February 1, 1998 to
    3,447,769 just after the split. The Company is moving forward with a
    strategic plan designed to facilitate marketing of its products in a manner
    which is consistent with enhancing its corporate image and further
    increasing shareholder value.

4.  A financing agreement dated January 13, 1998, as amended on February 3,
    1998 was entered into between Dr. Jackie R. See, Thomas E. Waite and the
    Company for the funding of the Company up to $10,000,000. The agreement as
    so amended, calls for initial funding of $5,000,000 in exchange for
    1,580,278 shares of common stock, with registration rights, calculated at
    $3.164 per share (the average closing bid price per share of the common
    stock for the 10 days ending January 12, 1998, and adjusted for the 1 for 10
    reverse split effective February 2, 1998). This initial funding was effected
    on February 3, 1998 by the delivery of a check for $7,901.39 and Promissory
    Notes to March 31, 1999 in the principal amount of $2,492,098.61 from each
    of Dr. See and Mr. Waite. Subsequent funding is at the discretion of the
    investors and can be purchased in tranches of $500,000 to $2,000,000 up to
    an aggregate of $10,000,000, including the initial funding, prior to April
    1, 1999. The future funding price is $6.328 per share for the next
    $2,500,000 and $12.626 per share for the last $2,500,000 (as adjusted to
    reflect the 1 for 10 reverse stock split effective February 2, 1998). Dr.
    Jackie R. See and Mr. Thomas E. Waite are Directors of the Company. Thomas
    E. Waite is also President and Chief Executive Officer of the Company. On
    February 3, 1998, the Company issued 790,139 shares to each Dr. Jackie See,
    M.D. and Thomas E. Waite in connection with this private placement.

5.  In January 1998, BTI, a major stockholder of the Company, received $40,514
    from the sale of the Company's common stock that was subject recapture by
    the Company pursuant to Section 16(b) of the Securities Exchange Act of
    1934. In January 1998, $40,514 was booked as a receivable from related
    parties to reflect the recapture. See Note 7.

6.  On February 6, 1998, a complaint was filed against the Company in the
    Third Judicial District Court in Salt Lake City, Utah, by Alexander H.
    Walker, Jr. ("Walker"), a former General Council, officer and director of
    the Company. Walker alleges two causes of action: 1) breach of contract by
    the Company with respect to his employment agreement, and 2) false
    representations allegedly made to Walker by the Company. Walker seeks
    damages in the amount of $420,000 for the breach of contract claim and
    unspecified damages for the alleged false representation claim. The time for
    the Company's response to the Complaint has not expired. However, the
    Company denies liability and anticipates the commencement of legal action
    against Walker to recover damages sustained by the Company as a result of
    Walker's failure to perform his responsibilities as general council for the
    Company and breaches of his fiduciary duties owed to the Company. The
    Company will also seek indemnity from Walker for damages it has sustained
    and settlements it has been forced to negotiate in other litigation.

7.  On February 10, 1998, three new members were elected to the Board of
    Directors of the Company. Two of these members will serve as new independent
    Directors of the Company and the third will fill an existing seat vacated by
    the resignation of a previous director. The Company's Board of Directors
    currently consists of five members. Furthermore, the Company established an
    Independent Audit Committee and a Compensation Committee to assist in
    strengthening internal controls.


                                       

<PAGE>  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995


8.  On February 23, 1998, the Company entered into a financing agreement with
    an independent investor ("Investor"), whereby the Investor is to provide
    financing of $600,000 to the Company in exchange for 200,000 shares of
    common stock of the Company. On the date of effectiveness of the
    registration of the 200,000 shares, which is to be accomplished by the
    Company as soon as practicable under the Securities Act of 1933, if the
    closing bid price of the Company's stock is less than $6.00 per share, the
    Investor is to receive additional shares calculated by taking the difference
    between (a) 600,000 divided by one-half the closing bid price on the date of
    registration and (b) 200,000. This difference in share calculation is still
    to be determined and is based on the date the registration statement is
    effective and the closing bid price on such date. In February 1998, the
    Company received $600,000 and issued 200,000 shares to the Investor.

9.  On February 19, 1998, the Company renewed it's previous notices of
    termination and renoticed the termination of the licensing agreement with
    Pharma Maehle ("Pharma") and demanded binding arbitration under Nevada law
    of the existing disputes between the parties pursuant to the terms of the
    licensing agreement. The demand requires a response by Pharma no later than
    March 13, 1998. Should Pharma fail to respond by that date, the Company
    intends to request the Nevada District Court to compel the arbitration. See
    Note 9 regarding Pharma Licensing Agreement.

10. The Company has requested the Court to stay the State Court action pending
    binding arbitration in the action filed against the Company by Eric Savage
    (See note 10). The Company's request for arbitration is pending.

11. Due to the materiality of the subsequent event transactions listed in 3 and
    6 above, the Company is disclosing the audited Balance Sheet at February 28,
    1998, as follows:


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                                  BALANCE SHEET
                                     ASSETS
                                                                    FEBRUARY 28,
                                                                        1998
                                                                     (AUDITED)
                                                                   -------------
  CURRENT ASSETS:
      Cash and cash equivalents (Note 13 item 8)                   $  1,018,291
      Prepaid  expenses                                                  49,148
      Accounts receivable - directors (Note 13 item 4)                5,057,711
      Due From Related Parties  (Note 7 item 3 & 4, and Note 13
      item 5)                                                           892,819
      Deferred debt issue costs (Note 11)                                52,083
                                                                   -------------
          TOTAL CURRENT ASSETS                                        7,070,052
                                                                   -------------
  EQUIPMENT AND LEASEHOLD IMPROVEMENTS:
      at cost, less accumulated depreciation of $14,329                  50,894
                                                                   -------------


                                       

<PAGE>
  
                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           BASED ON AUDITED FINANCIAL STATEMENTS AT DECEMBER 31, 1997,
                     DECEMBER 31, 1996 AND DECEMBER 31, 1995


                        BALANCE SHEET (CONTINUED)
                    LIABILITIES & STOCKHOLDERS' EQUITY



  INTANGIBLE ASSETS:
      Intellectual Property, net of accumulated amortization of
      $6,043                                                            154,952
      Organizational cost, net of accumulated amortization of
      $147,598                                                           27,952
                                                                   -------------
                                                                        182,904
                                                                   -------------
  OTHER ASSETS:
      Deposits                                                           10,514
                                                                   -------------
         TOTAL ASSETS                                              $  7,314,364
                                                                   =============

                                                                        182,904
                                                                   -------------
  OTHER ASSETS:
      Deposits                                                           10,514
                                                                   -------------

         TOTAL ASSETS                                              $  7,311,775
                                                                   =============

  CURRENT LIABILITIES:
     Accounts payable                                              $     13,091
     Accrued expenses                                                   145,782
     Obligation under capital lease - current                            14,376
     Debentures payable - Convertible (Note 11)                       2,550,000
                                                                   -------------
                                               
         TOTAL CURRENT LIABILITIES                                    2,723,249
                                                                   -------------
  LONG-TERM LIABILITIES:
     Obligation under capital lease - non-current                         6,317
                                                                   -------------
                                                  
  STOCKHOLDERS' EQUITY:
     Common Stock, $.01 par value; 100,000,000 shares authorized;
     5,238,022 shares issued and outstanding at February 28, 1998        52,380
     Additional paid-in capital                                      14,578,497
     Deficit accumulated during the development stage               (10,046,079)
                                                                   -------------
                                                     

         TOTAL STOCKHOLDERS' EQUITY                                   4,584,798
                                                                   -------------
                                   

         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $  7,314,364
                                                                   =============


                                       



<PAGE>  

                               RONALD D. SIMPKINS
                           CERTIFIED PUBLIC ACCOUNTANT





                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors
   And Shareholders of
Harvard Scientific Corp.


I have audited the balance sheet of Harvard Scientific Corp. (A Development
Stage Company) as of December 31, 1997, and the related statements of
operations, stockholders' equity, and cash flows for the year then ended, and
have issued my opinion thereon dated March 5, 1998. Such financial statements
and opinion are included in your 1997 Annual Report to Stockholders and are
incorporated therein by reference. My examination also comprehended Supplemental
Schedules V and VI of Harvard Scientific Corp. (A Development Stage Company). In
my opinion, Schedules V and VI, when considered in relation to the basic
financial statements, present fairly in all material respects the information
shown therein.

/s/ Ronald D. Simpkins

Reno, Nevada
March 5, 1998


                                       


<PAGE>

DALE MCGHIE                                                 Town & Country Plaza
CERTIFIED PUBLIC ACCOUNTANT                   1539 Vassar St. Reno, Nevada 89502
                                                              Tel:  702-323-7744
                                                             Fax:  702-323-8288



                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
     and Shareholders of
Harvard Scientific Corp.

I have audited the balance sheet of Harvard Scientific Corp. (A Development
Stage Company) as of December 31, 1996, and the related statements of
operations, stockholders' equity, and cash flows for the year then ended, and
have issued my opinion thereon dated June 2, 1997. Such financial statements and
opinion are included in your 1987 Annual Report to Stockholders and are
incorporated herein by reference. My examination also comprehended Supplemental
Schedules V and VI of Harvard Scientific Corp. (A Development Stage Company). In
my opinion, Schedules V and VI, when considered in relation to the basic
financial statements, present fairly in all material respects the information
shown therein.

/s/ W. Dale McGhie

W. Dale McGhie, CPA
Reno, Nevada
June 2, 1997


<PAGE>  

<TABLE>
                                               HARVARD SCIENTIFIC CORP.
                                            (A DEVELOPMENT STAGE COMPANY)

<CAPTION>
                                              SUPPLEMENTAL DISCLOSURE
   
                                                   SCHEDULE V

                                         PROPERTY, PLANT AND EQUIPMENT
                                  For the Years Ended December 31, 1997 and 1996

                Column A                  Column B       Column C       Column D               Column E
     --------------------------------   -------------  -------------  -------------  ----------------------------
                                         Balance at                                  Other changes
                                         Beginning     Additions at                Reclassifications  Balance at
             CLASSIFICATION               of year          Cost        Retirements    Add (Deduct)   end of year
                                        -------------  -------------  -------------  -------------  -------------

<S>                                     <C>            <C>            <C>            <C>            <C>          
December 31, 1997:

     Furniture and Equipment                   9,416         16,018              -              -         25,434
     Intellectual property                     8,995        152,000              -              -        160,995
     Leasehold and Leasehold improvements          -         37,199              -              -         37,199
                                        -------------  -------------  -------------  -------------  -------------
                  Total                 $     18,411   $    205,217   $          -   $          -   $    223,628
                                        =============  =============  =============  =============  =============



December 31, 1996:

     Furniture and Equipment                  11,682          7,399         (9,665)             -          9,416
     Intellectual property                    10,335              -         (1,340)             -          8,995
     Leasehold and Leasehold improvements      5,816              -         (5,816)             -              -
                                        -------------  -------------  -------------  -------------  -------------
               Total                    $     27,833   $      7,399   $    (16,821)  $          -   $     18,411
                                        =============  =============  =============  =============  =============
</TABLE>


                                       

<PAGE>  

<TABLE>
                                             HARVARD SCIENTIFIC CORP.
                                          (A DEVELOPMENT STAGE COMPANY)

<CAPTION>
                                            SUPPLEMENTAL DISCLOSURE

                                                 SCHEDULE VI
               ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
                                For the Years Ended December 31, 1997 and 1996

                Column A                  Column B       Column C       Column D               Column E
     --------------------------------   -------------  -------------  -------------  ----------------------------
                                         Balance at                                  Other changes
                                         Beginning     Additions at                Reclassifications  Balance at
             CLASSIFICATION               of year          Cost        Retirements    Add (Deduct)   end of year
                                        -------------  -------------  -------------  -------------  -------------

<S>                                     <C>            <C>            <C>            <C>            <C>          
December 31, 1997:

     Furniture and Equipment                   3,491          4,288              -              -          7,779
     Intellectual property                     1,047          3,100              -              -          4,147
     Leasehold and Leasehold improvements          -          4,150              -              -          4,150
                                        -------------  -------------  -------------  -------------  -------------
                  Total                 $      4,538   $     11,539   $          -   $          -   $     16,077 
                                        =============  =============  =============  =============  =============


December 31, 1996:

     Furniture and Equipment                   4,408          3,235         (4,152)             -          3,491
     Intellectual property                     1,771          2,067         (2,791)             -          1,047
     Leasehold and Leasehold improvements      2,228          1,163         (3,391)             -              -
                                        -------------  -------------  -------------  -------------  -------------
                  Total                 $      8,407   $      6,465   $    (10,334)  $          -   $      4,538
                                        =============  =============  =============  =============  =============
</TABLE>


                                       





<PAGE>  


                                   SIGNATURES

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

                                           HARVARD SCIENTIFIC CORP.




                                           By /s/Thomas E. Waite
                                           -----------------------------------
                                              Thomas E. Waite, President & CEO


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


    Name                        Title                              Date
    ----                        -----                              ----


                            Chairman of the Board of Directors,
                            President, and Chief Executive
/s/ Thomas E. Waite         Officer                              April 3, 1998
------------------------
    Thomas E. Waite



/s/ Jackie R. See, M.D.     Director                             April 3, 1998
------------------------
    Jackie R. See, M.D.


                            Director, Treasurer, and
/s/ Curtis A. Orgill        Chief Financial Officer              April 3, 1998
------------------------
    Curtis A. Orgill


                            Secretary and Chief Operating
/s/ Barbara L. Krilich      Officer                              April 3, 1998
------------------------
    Barbara L. Krilich