SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               AMENDED FORM 10-KSB

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

For the fiscal year ended                             Commission File Number
      December 31, 1996                                     0-28392
-------------------------                             ----------------------

                            HARVARD SCIENTIFIC CORP.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

        Nevada                                            88-0226455
----------------------------                          ----------------------
(State or other jurisdiction                          (I.R.S. Employer
of incorporation)                                     Identification Number)


 100 N. Arlington Ave., Suite 23P, Reno, Nevada                     89501
-----------------------------------------------                   ----------
(Address of principal executive offices)                          (Zip Code)

Registrant's Telephone number, including area code:  (702) 796 1173
                                                     --------------

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

                   Common Stock, Par Value $0.001 Per Share
                   ----------------------------------------
                                (Title of Class)

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

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

State Registrant's revenues for its most recent fiscal year.
$181,000.

State the  aggregate  market  value of the voting  stock held by  non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked prices of such stock as of




<PAGE>



a  specified  date  within  the past 60 days:  Given the  closing  price for the
Registrant's  shares  of $4.875  on April 9,  1997,  such  market  value  equals
approximately $17,074,098.

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a
court.   Yes   X    No

As  of  December  31,  1996,   there  were  9,888,629  shares  of  common  stock
outstanding.

Documents incorporated by reference: No annual report to security holders, proxy
or information  statement or prospectus  filed pursuant to Rule 424(b) or (c) of
the Securities Act of 1933 are incorporated by reference herein.


PART I

--------------------------------------------------------------------------------
ITEM 1.  DESCRIPTION OF BUSINESS
--------------------------------------------------------------------------------

      The Registrant incorporates herein by this reference Part I, Item 1 of the
Form 10-KSB the Registrant filed the Securities and Exchange Commission on April
14, 1997.


--------------------------------------------------------------------------------
ITEM 2.     DESCRIPTION OF PROPERTY
--------------------------------------------------------------------------------

      The Registrant incorporates herein by this reference Part I, Item 2 of the
Form 10-KSB the Registrant filed the Securities and Exchange Commission on April
14, 1997.


--------------------------------------------------------------------------------
ITEM 3.  LEGAL PROCEEDINGS
--------------------------------------------------------------------------------


      The Registrant incorporates herein by this reference Part I, Item 3 of the
Form 10-KSB the Registrant filed the Securities and Exchange Commission on April
14, 1997.







<PAGE>



--------------------------------------------------------------------------------
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
--------------------------------------------------------------------------------


      The Registrant incorporates herein by this reference Part I, Item 4 of the
Form 10-KSB the Registrant filed the Securities and Exchange Commission on April
14, 1997.


PART II

--------------------------------------------------------------------------------
ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
--------------------------------------------------------------------------------

      The  Registrant  incorporates  herein by this reference Part II, Item 5 of
the Form 10-KSB the Registrant  filed the Securities and Exchange  Commission on
April 14, 1997.


--------------------------------------------------------------------------------
ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION OR PLAN OF OPERATION
--------------------------------------------------------------------------------


      The  Registrant  incorporates  herein by this reference Part II, Item 6 of
the Form 10-KSB the Registrant  filed the Securities and Exchange  Commission on
April 14, 1997.


--------------------------------------------------------------------------------
ITEM 7.     FINANCIAL STATEMENTS
--------------------------------------------------------------------------------





                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                         REPORT ON FINANCIAL STATEMENTS
                           DECEMBER 31, 1996 AND 1995














<PAGE>



                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)





                                TABLE OF CONTENTS


                                                                      PAGE  NO.


INDEPENDENT AUDITOR'S  REPORT

      On Financial Statements                                                2

      On Supplemental Schedules                                             17

FINANCIAL STATEMENTS

      Balance Sheets                                                       3-4

      Statements of  Operations                                              5

      Statements of  Stockholders' Equity                                  6-7

      Statements of Cash Flows                                             8-9

      Notes to the Financial Statements                                  10-16

      Schedule V --  Property,  Plant, and Equipment                        18

      Schedule VI - Accumulated Depreciation and Amortization of Property,  19
                       Plant, and Equipment                                 



<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 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.

W. Dale McGhie, CPA
Reno, Nevada
March 20, 1997,
except for Notes 12 and 13 dated June 2, 1997.

<PAGE>



                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                                 BALANCE SHEETS
                           December 31, 1996 and 1995



<TABLE>
<CAPTION>


                                                                    1996         1995
                                                                 ---------   ----------

Current Assets:
<S>                                                              <C>         <C>       
     Cash                                                        $       -   $  799,466
     Prepaid expenses (Note 7)                                       1,565      425,094
                                                                 ---------   ----------
             Total Current Assets                                    1,565    1,224,560
                                                                 ---------   ----------
Equipment and Leasehold Improvements:
     at cost, less accumulated depreciation of
     $3,491 at December 31, 1996 and $6,637 at
     December 31, 1995 (Note 3)                                      5,925       10,861
                                                                 ---------   ----------
Intangible Assets:
     Intellectual property, net of accumulated amortization
             of $1,048 at December 31, 1996 and $1,771 at
             December 31, 1995 (Notes 4 and 7)                       7,948        8,563
     Organizational cost, net of accumulated amortization
             of $105,760 at December 31, 1996, and $70,754 at
             December 31, 1995 (Note 7)                             69,789      104,796
                                                                 ---------   ----------
                                                                    77,737      113,359
                                                                 ---------   ----------
Other Assets:
     Deposits                                                          300          300
                                                                 ---------   ----------

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







   The accompanying Notes are an integral part of these financial statements

                                      

<PAGE>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                                 BALANCE SHEETS
                           December 31, 1996 and 1995



<TABLE>
<CAPTION>


                                                                                1996           1995
                                                                           -----------    -----------

Current Liabilities
<S>                                                                        <C>            <C>        
     Accounts payable (Note 7)                                             $    36,625    $   105,791
     Accrued expenses (Note 5)                                                  20,329         84,380
     Bank Overdraft                                                                134           --
     Due to related parties (Note 7)                                           190,860        406,881
     Note payable to related parties (Notes 6 and 7)                            37,275         67,675
     Note payable -- Convertible (Note 6)                                      250,000           --
                                                                           -----------    -----------
             Total Current Liabilities                                         535,223        664,727
                                                                           -----------    -----------

Contingencies: (Note 10)                                                          --             --


Stockholders' Equity:
     Common  stock, $.001 par value,  100,000,000 authorized; 9,883,129
             and 8,749,125 shares issued and outstanding at December 31,
             1996 and December 31, 1995 respectively (Note 1)                    9,883          8,749
     Additional paid-in capital                                              2,706,207      1,902,445
     Deficit accumulated during the development stage                       (3,165,786)    (1,226,841)
                                                                           -----------    -----------
             Total Stockholders'  Equity                                      (449,696)       684,353
                                                                           -----------    -----------
          
        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $    85,527    $ 1,349,080
                                                                           ===========    ===========
</TABLE>







The accompanying Notes are an integral part of these financial statements

                                      


<PAGE>






                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                            STATEMENTS OF OPERATIONS
               FOR THE YEARS ENDED DECEMBER 31, 1996,1995 AND 1994
            AND THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                              TO DECEMBER 31, 1996

<TABLE>
<CAPTION>

                                                                                                  Inception
                                                                                                     to
                                                                                                  12/31/96
                                                          1996           1995           1994     (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                        1,244,272        434,320        324,699      2,040,870
    Research and development (Notes 7 and 9)            109,553        194,965        124,366        428,884
    Depreciation and amortization (Notes 3 and 7)        41,472         39,550         38,872        120,634
                                                    -----------    -----------    -----------    -----------
        Total Operating Expenses                      1,395,297        668,835        487,937      2,590,388
                                                    ------------   -----------    -----------    -----------
        ( Loss ) from Operations                     (1,431,167)      (668,835)      (487,937)    (2,624,558)
                                                    ------------   -----------    -----------    -----------
Other Income (Expenses)
    Settlements (Note 10)                              (494,813)          --             --         (494,813)
    Interest income                                        --             --             --              397
    Interest expense                                    (12,964)        (7,620)        (1,727)       (22,312)
    Loss on disposition of marketable securities           --             --             --          (24,500)
                                                    -----------    -----------    -----------    -----------
                                                       (507,777)        (7,620)        (1,727)      (541,228)
                                                    -----------    -----------    -----------    -----------
Net Loss                                            $(1,938,944)   $  (676,455)   $  (489,664)    (3,165,786)
                                                    ===========    ===========    ===========    ===========

Loss Per Common Share                               $      0.21    $      0.29    $      0.34
                                                    ===========    ===========    ===========

Weighted Average Shares Outstanding                   9,022,404      2,333,839      1,421,563
                                                    ===========    ===========    ===========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                      

<PAGE>

                            HARVARD SCIENTIFIC CORP.
                         (A DEVELOPMENT STAGE COMPANY)

                       STATEMENTS OF STOCKHOLDER'S EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
            AND THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                              TO DECEMBER 31, 1996

<TABLE>
<CAPTION>

                                                                           Deficit
                                            Restated         Additional     From
                                          Common Stock        Paid-in     Inception
                                       Shares      Amount     Capital      To Date      TOTAL
                                       ------      ------     -------      -------      -----

<S>                                   <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        90,000          90         --                       90

Issuance of shares for services        20,000          20         --                       20

Issuance of shares for services        36,000          36         --                       36

Issuance of shares to acquire
     Grant City Corporation            50,000          50      39,827                  39,877

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
                                    ---------     -------   ---------                --------
Balance carried forward             7,035,000       7,035     181,221                 188,256
                                    ---------     -------   ---------                --------

</TABLE>

   The accompanying notes are an integral part of these financial statements

                                      

<PAGE>


                            HARVARD SCIENTIFIC CORP.
                         (A DEVELOPMENT STAGE COMPANY)

                       STATEMENTS OF STOCKHOLDER'S EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
            AND THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                              TO DECEMBER 31, 1996
<TABLE>
<CAPTION>

                                                                                    Deficit
                                               Restated             Additional       From
                                             Common Stock             Paid-in      Inception
                                         Shares         Amount        Capital       To Date         TOTAL
                                         ------         ------        -------       -------         -----

<S>                                   <C>                <C>          <C>         <C>             <C>    
Balance brought forward               7,035,000          7,035        181,221                     188,256

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)
Issuance of common stock
     for directors' fees and
     services                           553,500            553        530,796          --         531,349
Issuance of common stock
     at par value for
     intellectual property rights     6,138,500          6,139           --            --           6,139
Issuance of common stock
     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 common stock
     for conversion of debentures       310,254            310        249,690          --         250,000
Issuance of common stock
     for services                       255,000            255         59,828          --          60,083
Issuance of common stock
     for legal settlement               568,750            569        494,244          --         494,813
Net loss for the year ended
     December 31, 1996                     --             --             --      (1,938,945)   (1,938,945)
                                     -----------   ------------   ------------  ------------  ------------
Balance December 31, 1996             9,883,129    $     9,883    $ 2,706,207   $(3,165,786)  $  (449,696)
                                     ===========   ============   ============  ============  ============
</TABLE>

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

                                      

<PAGE>


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                            STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
            AND THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                              TO DECEMBER 31, 1996
<TABLE>
<CAPTION>

                                                                                                   Inception
                                                                                                      to
                                                                                                    12/31/96
                                                          1996            1995           1994     (Unaudited)
                                                     ------------    -----------    -----------   ------------
Cash Flows from Operating Activities

<S>                                                  <C>             <C>            <C>           <C>        
     Cash received from customers                    $   181,000     $     --       $     --      $   181,000
     Cash paid to employees                             (237,911)        (8,804)       (93,255)      (339,970)
     Cash paid to suppliers (Note 13)                 (1,151,723)       (30,154)      (158,108)    (1,371,897)
     Cash paid for interest                               (3,167)          --             --           (3,167)
     Cash paid for settlement                            (50,000)          --             --          (50,000)
                                                     ------------    -----------    -----------   ------------
        Net Cash Used in Operating Activities         (1,261,801)       (38,958)      (251,363)    (1,584,034)
                                                     ------------    -----------    -----------   ------------
Cash Flows from Investing Activities:
     Cash from sale (purchase) of equipment               (7,399)          --          (17,498)       (24,897)
     Capitalized organization costs                         --             --         (150,000)      (150,924)
     Purchase of marketable securities                      --             --             --          (24,500)
                                                     ------------    -----------    -----------   ------------
        Net Cash Used in Investing Activities             (7,399)          --         (167,498)      (200,321)
                                                     ------------    -----------    -----------   ------------
Cash Flows from Financing Activities:
     Proceeds from sale of capital stock,                               831,300        354,149      1,246,946
     Proceeds from debt converted to capital stock       250,000           --             --          250,000
     Proceeds from debt, net of costs                    251,100         80,719         83,625        415,444
     Principal payments on debt                          (31,500)       (74,319)       (22,350)      (128,169)
                                                     ------------    -----------    -----------   ------------
        Net Cash Provided by Financing
             Activities                                  469,600        837,700         415,424       537,275
                                                     ------------    -----------    -----------   ------------
Net Increase (Decrease) in Cash                         (799,600)       798,742         (3,437)          (134)


Cash at beginning of year                                799,466            724          4,161           --
                                                     ------------    ----------     ----------    ------------
Cash at end of year                                  $      (134)    $  799,466     $      724    $      (134)
                                                     ============    ==========     ==========    ============
</TABLE>

   The accompanying Notes are an integral part of these financial statements

                                     
<PAGE>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                      STATEMENTS OF CASH FLOWS (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
            AND THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                              TO DECEMBER 31, 1996

<TABLE>
<CAPTION>
                                                                                                  Inception
                                                                                                     to
                                                                                                  12/31/96
                                                        1996            1995           1994      (Unaudited)
                                                    ------------   ------------   ------------   -----------

Reconciliation of Net Loss to Net Cash
     Used in Operating Activities

<S>                                                 <C>            <C>            <C>            <C>         
Net Loss                                            $(1,938,945)   $  (676,455)   $  (489,664)   $(3,165,785)
                                                    ------------   ------------   ------------   ------------
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                       41,472         39,550         38,872        120,634
     Issuance of stock for director's fees
        and services (Note 13)                          485,128         71,974         97,938        689,375
     Issuance of stock in legal settlement              494,813                                      494,813
     (Increase) decrease in assets:                        --
        Prepaid expenses                                 (1,565)        38,281         (4,000)        (1,565)
        Deposits                                                          --             (300)          (300)
     Increase (decrease) in liabilities:
        Accounts payable                                (69,116)       100,962          1,268         36,624
        Accrued expenses                                (64,051)        82,779          1,600         20,328
        Due to related parties                         (216,021)       303,951        102,923        190,860
                                                    ------------   ------------   ------------   -----------
        Total Adjustments                               677,143        637,497        238,301      1,581,752
                                                    ------------   ------------   ------------   -----------

Net Cash (Used) in Operating Activities             $(1,261,802)   $   (38,958)   $  (251,363)   $(1,584,033)
                                                    ============   ============   ============   ============
</TABLE>


   The accompanying Notes are an integral part of these financial statements

                                      





<PAGE>














                            HARVARD SCIENTIFIC CORP.
                         (A DEVELOPMENT STAGE COMPANY)

                         NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 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 way in which the  product is applied in  treating  male sexual
dysfunction. The Company has preliminary data available, indicating the possible
benefits of such a therapy.

On February 13, 1996, the Company received an assignment of an application for a
patent entitled "PGE-1 Containing Lyophilized Liposomes For Use In The Treatment
of  Erectile  Dysfunction"  and  identified  as United  States  Application  No.
08/573,408 ("PGE-1").  The assignment was made by the holder of the application,
Bio-Sphere  Technology,  Inc. ("BTI"), the Company's majority  shareholder.  The
Company plans to focus its  operations on PGE-1 in order to bring the product to
the marketplace.

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 CareyWard, Inc.

On October 18, 1993,  the Company  acquired  Grant City  Corporation  by merger,
changed its name to Grant City  Corporation,  and issued  50,000 shares of stock
carrying  two  classes  of  warrants.  Class A warrants  entitled  the holder to
purchase  stock at $8.00 per share and the Class B warrants  entitled the holder
to purchase stock for $10.00 per share.  The warrants could only be exercised if
a  registration  statement  was filed  with the  United  States  Securities  and
Exchange  Commission  ("SEC") pursuant to the Securities Act of 1933 as amended.
The  warrants  were  redeemable  by  written  notice  of  twenty  (20) days at a
redemption price of $.001 per warrant. During 1996, before the warrants could be
exercised,  the Company  gave the required  notice and redeemed  both classes of
warrants.

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 9,883,129
shares issued and outstanding as of December 31, 1996. The Company had 8,749,124
shares issued and outstanding on December 31, 1995. BTI owned  approximately 63%
and 78% of the  Company's  shares at December  31, 1996 and  December  31, 1995,
respectively.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organizational Costs:
Organization  costs  are  being  amortized  over a  five-year  period  using the
straight line method. See also discussion contained in Note 7.

                                       

<PAGE>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Equipment:
Equipment is stated at cost.  Depreciation  is  incorporated  on a straight line
basis over a period of 5 to 7 years.  Expenditures  for  maintenance and repairs
are charged to expenses as incurred.  Upon retirement or disposal of assets, the
cost and  accumulated  depreciation  are  eliminated  from the  account  and any
resulting gain or loss is included in expense. See Note 3.

Use of Estimates:
In order to prepare financial  statements in conformity with generally  accepted
accounting  principals,  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  calculation  is based on the weighted  average number of
shares  outstanding  during the period:  9,022,404  shares in 1996 and 2,333,839
shares in 1995 .

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


NOTE 3 - EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and building  improvements  at December 31, 1996 and 1995,  consist of
the following:

                                                  1996                 1995
                                                  ----                 ----

Equipment                                   $    9,417           $   11,682
Leasehold Improvements                              -                 5,816
                                                 -----                -----
                                                 9,417               17,498
Less accumulated                                 3,491                6,637
                                                 -----                -----
depreciation

                                            $    5,926          $    10,861
                                            ==========          ===========

The Company relocated to Reno, Nevada, during December, 1996. By relocating, the
Company reduced its need for certain equipment and leasehold  improvements.  The
Company 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.

                                       

<PAGE>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995



NOTE 4- INTELLECTUAL PROPERTIES
On January 7, 1994,  the  Company  exchanged  2,856,000  shares with BTI for the
intellectual  rights to patent,  develop,  manufacture,  and market  PGE-1.  The
Company  recorded the transfer of  intellectual  properties  at the par value of
stock  transferred,  which amounted to $2,856.  BTI's largest  shareholder,  the
originator of PGE-1 holds a 2% royalty interest in the Company's gross proceeds.

On November 16, 1995,  the Company  exchanged  6,138,500  shares of common stock
with  BTI for  assistance  in  raising  working  capital,  patent  application.,
management  assistance and  distribution  agreements  associated  with the PGE-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).

NOTE 5- ACCRUED EXPENSES
Accrued expenses at December 31, 1996 and 1995, consist of the following:

                                                  1996                    1995
                                                  ----                    ----
Settlement costs (Note 10)                 $         -             $    50,000
Payroll                                          9,680                  32,000
Payroll taxes                                    1,000                   1,680
Interest on notes                                9,649                       -
Transfer fees                                        -                     700
                                                 -----                   -----

                                           $    20,329             $    84,380
                                           ===========             ===========

See also Notes 9 and 10.

NOTE 6- NOTES PAYABLE
The Company had the following notes payable at December 31, 1996 and 1995:
                                                       1996               1995
8% note, payable to former director
           on demand, unsecured (Note 7)         $   37,275         $   62,675
8% note, payable to a related party
           on demand, unsecured                           -              5,000
7% convertible debentures, convertible at
           50% of the market price
           of  the stock on the  day before         
           the conversion date                      250,000                  -
                                                    -------            -------


                                                 $  287,275         $   67,675
                                                 ==========         ==========

                                       

<PAGE>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995



NOTE 6 - NOTES PAYABLE (CONTINUED) See also Notes 9 and 10 and 12.


NOTE 7 - RELATED PARTY TRANSACTIONS
During 1994, the Company paid $150,000, to related parties for work performed in
completing a merger (described in Note 1). Of this amount,  $100,000 was paid to
BTI. The remaining  $50,000 was paid to individuals  affiliated  with BTI. These
amounts have been capitalized and are included in organizational costs.

Additional organizational costs of $24,625 were capitalized in 1994. The Company
transferred  246,000  shares to its former  owners and  directors  in return for
corporation  property rights and 148,000 shares to individuals for assistance in
acquiring the rights. These shares were valued at $.0625 per share as determined
by a 1994 appraisal.

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

The  Company has a payable to BTI of $183,535  and  $130,000 as of December  31,
1996 and 1995, respectively.  The payable is related to costs incurred by BTI on
the  Company's  behalf  for  consultation  and  rent,  as well as  research  and
development of the PGE-1 product.

The Company has a note payable to a former  director as of December 31, 1996 and
1995  (Note 6).  The  amount of  accrued  interest  associated  with the note at
year-end in 1996 and 1995 was $6,419 and $8,097, respectively.

The Company often pays for services,  fees, and salaries by issuing stock.  Most
of this stock is issued with a two-year selling  restriction.  After the Company
files its  registration  statement  in 1997,  the  two-year  restriction  may be
lifted.  The shares are valued at a discount of  free-trading  stock,  if market
valuation is  available.  Several  material  transactions  of this type occurred
during  1995 and 1996  during  which time the Company  issued  1,188,754  shares
recorded at $841,432.

See also the discussions  regarding  agreements,  intellectual  properties,  and
subsequent events in Notes 4, 9, and 12.

NOTE 8 - INCOME TAXES
The Company has federal net operating loss carryforwards for financial statement
purposes of approximately $3,200,000 at December 31, 1996, 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.

                                       

<PAGE>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995




NOTE 9 - AGREEMENTS
In  conjunction  with the  agreement of November  16, 1995,  between BTI and the
Company (Note 4), BTI transferred  four agreements to the Company related to the
manufacture,  marketing,  and  distribution of the PGE-1 product  overseas.  The
Company  terminated two of these agreements  during 1996 for  nonperformance.  A
third  agreement  for  distribution  in Korea was  terminated  in 1996 by mutual
agreement.  The  Company is prepared to  terminate a fourth  agreement  with its
European licensor,  Pharma Maehle unless Pharma Maehle can resolve the Company's
concerns (Note 10).

In December 1996,  the Company  entered into an agreement with Martin E. Janis &
Company,  Inc. The agency will create and carry out a financial public relations
program in  exchange  for costs and an option on 50,000  shares of  free-trading
stock, exercisable at $1.25 a share.

NOTE 10 - CONTINGENCIES
The Company has been named as a party in certain  pending or  threatened  legal,
governmental, administrative, or judicial proceedings that arose in the ordinary
course of  business.  These  pending or  threatened  proceedings  may affect the
Company in a material way.

These  financial  statements  reflect the way in which the Company  resolved two
lawsuits:

      a. The Company reached a mutual release regarding a Distribution Agreement
         which provided for the manufacture, 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.

      b. The  Company  amicably  settled  an  action  with  Thomas  E.  Waite  &
         Associates regarding the a contract under which Waite was to provide an
         array of business services.  The Company issued 568,750 shares of stock
         in  settlement  which was  accrued  in these  financial  statements  at
         $494,813.

The ultimate effect of other  proceedings  cannot be estimated at this time. The
Company  has noted  some  possible  irregularities  pertaining  to the June 1996
issuance  of its  convertible  debentures  and has taken  steps to  rectify  the
matter. The Company hopes to resolve two pending claims related to the debenture
issuance  which aim to force a stock  conversion.  These claims were filed after
December 31, 1996, and are discussed in Note 12 as subsequent events.

One  additional   act  may  impact  the  Company  in  the  future   although  no
determination can be made at this time. The Company is prepared to terminate its
licensing agreement with Pharma Maehle, the holder of the Company's distribution
rights in a portion  of its  overseas  market.  The  Company is  negotiating  to
resolve the contract  issues to benefit  business  operations,  but the ultimate
resolution and its impact upon the Company cannot be estimated.

                                       

<PAGE>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995




NOTE 10 - CONTINGENCIES  (CONTINUED)
The Company  experienced  a management  change in December  1996 as it moved its
headquarters  to Reno,  Nevada.  The Company expects no negative impact from the
change.

NOTE 11 - 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 the PGE-1 product.
If additional capital is not secured,  then there is substantial doubt about the
Company's ability to continue as a going concern. See also Note 12 regarding the
Company's plans to issue 6% Convertible Debentures in 1997.

NOTE 12 - SUBSEQUENT EVENTS
During 1997,  the Company  authorized  a transfer of 1,250,000  shares of common
stock to related parties in exchange for services previously rendered.

During  1997,  the Company  became a defendant in a U.S.  District  Court action
initiated  by  Ailouros  Ltd.,  a 7%  debenture  holder.  Ailouros  claims it is
entitled to convert its  debentures  into 263,225  shares of common stock and/or
damages in the amount of  $2,000,000.  The  Company had  previously  initiated a
lawsuit in the Nevada  courts  respecting  the same claim and both  matters were
removed to  Federal  court.  The  Company  is asking  that any shares  issued to
Ailouros be issued pursuant to the requirements of the SEC's Regulation S. It is
too early to estimate the monetary outcome of this litigation.

In February  1997, 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 tortious interference with the contract. The Weckstein plaintiffs seek
damages on their  contract  claim in the amount of $250,000  and  $400,000,  and
damages in excess of $10,000 on an abuse of process  claim.  On April 23,  1997,
the parties  settled  these  lawsuits  with the issuance of 35,000 shares of the
Company's common stock to D. Weckstein & Co., Inc.

In March 1997, pursuant to a private placement, the Company sold to one investor
$5,000,000 principal amount of 6% Convertible  Debentures (the "Debentures") due
March 30, 1988.  The company also received a commitment  from the same 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  will be 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.

As discussed in Note 3, the Company moved its headquarters to Reno,  Nevada,  in
early 1997. The Company still shares  research and  development  facilities with
BTI in Irvine, California.

                                       

<PAGE>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995





NOTE 13 - SUPPLEMENTAL CASH FLOW DISCLOSURES
The Company paid cash to suppliers of goods and services and in 1996,  1995, and
1994 as follows:

                               1996         1995         1994

Professional Fees          $  589,370   $     --     $   41,467
Office & Occupancy             37,787
                                            28,885       33,478
Travel & Entertainmen         114,588
                                            1,269        32,316
R&D/ Costs of Goods Sold      405,359
                                              --         48,740
Miscellaneous                   5,619         --          2,107
                           ----------   ----------   ----------
                                                          
                           $1,151,723   $   30,154   $  158,108
                           ==========   ==========   ==========


The Company issues stock for other than cash in the following amounts:

                                                 1996       1995       1994
      Issuance of stock for director's
         fees, salaries, consultants,
         and rent                              $ 60,083   $531,349   $ 97,938
      Issuance of stock for
         intellectual properties                   --        6,139      4,196
      Issuance of stock for
         organizational costs                      --         --       24,625
      Issuance of stock for legal
          settlement                            494,813       --         --
                                               --------   --------   --------
                                                                     
                                               $554,896   $537,448   $126,759
                                               ========   ========   ========

The Company  expensed  $425,045 in the current year for stock issued in 1995 for
prepaid services.
<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 March 20, 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.



W. Dale McGhie, CPA
Reno, Nevada
March 20, 1997
<PAGE>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                  SCHEDULE V -- PROPERTY, PLANT, AND EQUIPMENT
                 For the Years Ended December 31, 1996 and 1995
<TABLE>
<CAPTION>

 Column A        Column B                Column C                Column D                Column E
                                                                                Other Changes
                                   Balance at       Additions                 Reclassifications   Balance at
         Classification        Beginning of Year     at cost     Retirements    add (deduct)      End of Year
-----------------------------  -----------------  -----------    -----------  -----------------   -----------
December 31, 1996:
<S>                                     <C>          <C>            <C>             <C>             <C>    
      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
                                   =============  ===========     ===========    =============  ============

December 31, 1995:
      Furniture and equipment           $11,682                                     $   --          $11,682
      Intellectual property*              4,196        6,139           --               --           10,335
      Leasehold and leasehold
           improvements                   5,816         --             --               --            5,816
                                   -------------  -----------    -----------     -------------  ------------
                Total                   $21,694      $ 6,139       $   --           $   --          $27,833
                                   =============  ===========    ===========     =============  ============
</TABLE>

                                         
 *Supplemental disclosure

<PAGE>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

       SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
                        OF PROPERTY, PLANT, AND EQUIPMENT
                 For the Years Ended December 31, 1996 and 1995
<TABLE>
<CAPTION>

              Column A                  Column B          Column C            Column D                  Column E

                                                          Additions                         Other Changes
                                       Balance at      Charged to Costs                   Reclassifications    Balance at
          Classification           Beginning of Year     and Expenses        Retirements     add (deduct)      End of Year
------------------------------     -----------------   ----------------    --------------  -----------------   ------------
December 31, 1996:
<S>                                         <C>                <C>             <C>               <C>              <C>   
      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
                                   =================   ================    =============  =================   ============

December 31, 1995:
      Furniture and equipment               $2,072             $2,336         $      -           $      -         $4,408
      Intellectual property*                   728              1,043                -                  -          1,771
      Leasehold and leasehold
           improvements                      1,065              1,163                -                  -          2,228
                                   -----------------   ----------------    -------------  -----------------   ------------
                Total                       $3,865             $4,542         $      -           $      -         $8,407
                                   =================   ================    =============  =================   ============
</TABLE>

                                        
 *Supplemental disclosure




<PAGE>









                         CONSENT OF INDEPENDENT AUDITOR

      I hereby  consent to the reference to my firm under the caption  "Experts"
and to the use of my report on financial statements for the years ended December
31, 1996, 1995, and 1994 dated March 20, 1997,  except for Notes 12 and 13 dated
June 2, 1997, in the Registration Statement (Form SB-2) in which this consent is
included and the related Prospectus of Harvard Scientific Corp.

      I also  consent to the  addition  of  Supplemental  Schedules  V and VI of
Harvard  Scientific Corp. for the years ended December 31, 1996 and 1995 in such
Registration Statement and Prospectus.



                                    -------------------
                                    W. Dale McGhie, CPA


Dated:  July 11, 1997
             Reno, Nevada


<PAGE>



--------------------------------------------------------------------------------
ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURES
--------------------------------------------------------------------------------

      The  Registrant  incorporates  herein by this reference Part II, Item 8 of
the Form 10-KSB the Registrant  filed the Securities and Exchange  Commission on
April  14,  1997,  and the  Amended  Form  8-K the  Registrant  filed  with  the
Securities and Exchange Commission on July 28, 1997.



PART III

--------------------------------------------------------------------------------
ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
            PERSONS, COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
            ACT
--------------------------------------------------------------------------------

      The Registrant  incorporates  herein by this reference Part III, Item 9 of
the Form 10-KSB the Registrant  filed the Securities and Exchange  Commission on
April 14, 1997.


--------------------------------------------------------------------------------
ITEM 10.    EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------

      The Registrant  incorporates herein by this reference Part III, Item 10 of
the Form 10-KSB the Registrant  filed the Securities and Exchange  Commission on
April 14, 1997.


--------------------------------------------------------------------------------
ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT
--------------------------------------------------------------------------------

      The Registrant  incorporates herein by this reference Part III, Item 11 of
the Form 10-KSB the Registrant  filed the Securities and Exchange  Commission on
April 14, 1997.


--------------------------------------------------------------------------------
ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------------------------------

      The Registrant  incorporates herein by this reference Part III, Item 12 of
the Form 10-KSB the Registrant  filed the Securities and Exchange  Commission on
April 14, 1997.


--------------------------------------------------------------------------------
ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------------------------------------------------------

      The  Registrant incorporates herein by this reference Part III, Item 13 of
the Form 10-KSB the Registrant  filed the Securities and Exchange  Commission on
April  14,  1997,  and the  Amended  Form  8-K the  Registrant  filed  with  the
Securities and Exchange  Commission on July 28, 1997, with specific reference to
Exhibit (16) filed with that amended Form 8-K.

<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.

Dated: July 29, 1997.

                                    HARVARD SCIENTIFIC CORP.



                                    By       /s/ Don Steffens
                                        ---------------------
                                          Don Steffens
                                          Secretary