SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                   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, 1999

                         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.)

                1325 Airmotive Way, Suite 125, Reno, Nevada 89502
               (Address of Principal Executive Offices) (Zip Code)
       Registrant's Telephone Number, Including Area Code: (775) 323-7122

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


                     Common Stock, Par Value $0.01 Per Share

                   Preferred 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 $.475 on May 24, 2000, such market value is calculated
net of 6,933,700 affiliate shares which equals $ 2,951,525.

Indicate the number of shares outstanding of each of the registrant's classes of
Common Stock, as of the latest  practicable  date. As of May 25, 2000 there were
13,147,437 shares of Common Stock outstanding. 1
<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General:

         Harvard Scientific Corp. ("Company") was incorporated under the laws of
the State of Nevada on January  13,  1987 with the name of Witch  Doctor  Bones,
Inc. On June 17,  1988,  the Company  changed its name to  CareyWard,  Inc.;  on
October 18, 1993, the Company merged Grant City Corporation into itself,  taking
the name Grant City  Corporation  through the merger;  on January 18, 1994,  the
Company  changed  its name to The Male  Edge,  Inc.,  and on May 10,  1994,  the
Company changed its name to Harvard  Scientific  Corp. A 10 for 1 stock split of
the  Company's  Common  Stock was  effective on June 17, 1988; a 1 for 4 reverse
stock split of the Company's Common Stock was effective  November 3, 1994; and a
1 for 10 reverse stock split was effective  February 2, 1998.  Unless  otherwise
indicated, the number of shares referred to in this filing, of which this filing
have been restated to reflect the stock split and reverse stock splits.

         The Company is a  development  stage  biopharmaceutical  company  whose
corporate  objective  is to utilize  medically  researched  and  developed  drug
substances,  determine  the ability of these  substances to be  encapsulated  in
liposomes  and determine the  potential  market for such  products.  The Company
intends to conduct and conclude,  either on its own or with the assistance of an
industry  partner(s),  all clinical testing necessary for regulatory approval of
such  products  from the U.S.  Food and Drug  Administration  ("FDA") or similar
regulatory  agencies in foreign  countries  in order to initiate  marketing  and
establish distribution channels for its products.

Products:

         Thus  far,  the  Company  has  developed  five  products   designed  to
ameliorate  sexual  dysfunction  and  licensed  worldwide a  technology  for the
treatement of Psoriasis:

(1)  An  intrameatal  therapeutic  treatment  for  erectile  dysfunction  ("Male
     Intrameatal  Product")
(2)  A  topical  therapeutic  treatment  for male  erectile  dysfunction  ("Male
     Topical  Product")  (3) A topical  therapeutic  treatment for female sexual
     dysfunction ("Female Topical Product").

(4)  An orally  administered  form of liposomal,  lyophilized  Apomorphine  ("LL
     Apomorphine")  for the treatment of male erectile  dysfunction  ("Male Oral
     Product"), and

(5)  An orally  administered  LL Apomorphine  for the treatment of female sexual
     dysfunction ("Female Oral Product").

(6)  Exclusive  worldwide  license for  manufacture and marketing of lyophilized
     liposomal PGE-1 topically applied compound for the treatment of Psoriasis.

         PGE1 and Alprostadil, the active ingredients in the Company's products,
have  already been  approved by the FDA. In each of the  Company's  products,  a
substance  (Prostaglandin E1 ("PGE1") in the case of the Male Intrameatal,  Male
Topical and Female Topical Products, and Apomorphine in the case of the Male and
Female  Oral  Products  is  encapsulated  in  liposomes  and  then   lyophilized
(freeze-dried).  This process provides the product with stability,  a shelf life
recently  proven  to be at least 12  months  at room  temperature.  LLPGE1 is an
oxygenated,  unsaturated cyclic fatty acid that occurs naturally in all cells of
the body. For over 20 years, the FDA has approved PGE1 for therapeutic use as an
intravenous  infusion in newborn babies with congenital heart defects.  PGE1 has
also been  approved by the FDA in the past three  years,  for the  treatment  of
erectile  dysfunction,  as an injection and as an intra-urethrally  administered
pellet.

         In the case of the Male Intrameatal  Product,  the lyophilized material
is reconstituted  through the use of a non-irritating  dilute  detergent,  which
lyse the  liposomes,  releasing  the PGE1 into  solution.  This solution is then
applied via the urethral meatus (the opening at the end of the urethral tract at
the tip of the  penis).  In the  case of the Male  Intrameatal  and the Male and
Female Topical Products, the agent is freeze dried and encapsulated in liposomes
and later reconstituted to form an aqueous solution suspended in a cream base, a
small  amount of which is  administered  locally to the male's  penis  glands or
female's external vaginal area. In the case of the Male and Female Oral Products
LL Apomorphine is delivered orally.

         PGE1 applied  intra-urethrally  is absorbed  across the urethral mucosa
into the corpus  spongiosum.  Some of the dose  enters the  corpora  cavernosum,
while some of the dose goes into pelvic  venous  circulation.  The  half-life of
PGE1  varies from 30 seconds to 10 minutes,  and  intra-urethrally  administered

                                        2
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product is barely discernible in the circulation.  PGE1 causes the smooth muscle
in the penile corpora to relax and dilates the penile arteries.  This results in
the rapid  filling of the corpora with blood,  which causes the  compression  of
corporal  sinusoids  against  the tunica  albuginea,  impeding  venous  outflow.
Topically applied PGE1 has similar effects.  The result is the development of an
erection. LL Apomorphine works by stimulating  erection-inducing  centers in the
brain while it is slowly  released  across the wall of the small  intestine that
the Company's product, LL Apomorphine, makes possible.

Patents and Other Intellectual Property:

         On January 6, 1994, the Company acquired  intellectual  property rights
relating to prostaglandin microsphere delivery from Bio-Sphere Technology,  Inc.
("BTI").  On February  13,  1996,  the  Company  received  an  assignment  of an
application  from the U.S. Patent Office for a patent  identified as Application
Serial No. 08/573408, filed December 15, 1995, for an invention "PGE1 Containing
Lyophilized  Liposomes  For  Use  In The  Treatment  of  Erectile  Dysfunction",
referred to as "LLPGE1".

          On February 17, 1998,  The U.S.  Patent  Office  approved and assigned
Patent  No.   5,718,917  to  the  Company  for  an  invention  "PGE1  Containing
Lyophilized  Liposomes  For  Use  In The  Treatment  of  Erectile  Dysfunction,"
refereed to as LLPGE1.  In June 1998,  the Company  filed an  application  for a
Patent in numerous regions and countries (Australia,  Brazil, Canada, China, the
Czech Republic,  Eurasia,  Europe, Hungary,  Iceland, Israel, Japan, Mexico, New
Zealand, Norway, Poland, Korea, Singapore, Slovakia, Turkey and the Ukraine). In
addition,  in June 1998,  the Company  submitted  an  application  with the U.S.
Patent and Trademark  Office,  for its  development of a new method for treating
male  erectile  dysfunction  via the  intrameatal  administration  of an aqueous
("liquid") solution containing two vasodilators, PGE1 and Papaverine.

         On  October 8,  1999,  the  Company  effectively  received a  worldwide
license to manufacture  and market certain  intellectual  property of Bio Sphere
Technology,  Inc. for the treatment of Psoriasis  with special  lotions which do
not have detergent or surfactaut  properties  allowing for sustained  release of
active  PGE-1 to the  dermins  of the  skin.  This is not a  patented  or patent
pending technology and is therefore based upon the know how and trade secrets of
Bios Sphere Technology, Inc. and its principal, Dr. Jackie See.

         On April 4, 2000,  The U.S.  Patent Office issued to the Company Patent
No.  6,046,240  for an invention  providing a method for treating  female sexual
dysfunction or a method for female sexual  enhancement with the administrtion to
the vagina of a topical cream with the PGE1 compound.

            There can be no assurance  that these  patents and licenses  will be
effective to protect the Company's  products covered  duplication by others.  In
addition,  there can be no assurance that the Company will be able to afford the
expense of any  litigation  that may be  necessary  to enforce its rights  under
these patents and licenses or other patents and licenses the Company may obtain.
Although  the Company  believes  that its  products do not and will not infringe
upon the patents or violate  the  proprietary  rights of others,  it is possible
that such  infringement  or  violation  has or may occur.  In the event that the
Company's  products are  determined to infringe upon the patents or  proprietary
rights of others, the Company could be required to modify its products or obtain
a  license  for  the  manufacture  and/or  sale of the  products,  or  could  be
prohibited from selling the products. There can be no assurance that, in such an
event,  the Company would be able to do so in a timely manner,  upon  acceptable
terms and  conditions,  or at all,  and the  failure to do any of the  foregoing
could have a material adverse effect upon the Company. There can be no assurance
that the Company will have the financial or other resources necessary to enforce
or defend a patent  infringement or proprietary  rights violation action. If the
Company's products are deemed to infringe upon the patents or proprietary rights
of others,  the Company could,  under certain  circumstances,  become liable for
damages, which could also have a material adverse effect on the Company.

         The   Company   also   relies   substantially   upon  its   proprietary
technologies,   utilizing   non-disclosure   agreements   with  its   employees,
consultants  and  customers  to  establish  and protect the ideas,  concepts and
documentation of its proprietary technology and know-how. Such methods, however,
may not afford  complete  protection,  and there can be no assurance  that third
parties will not  independently  develop such  know-how or obtain  access to the
Company's  know-how,  ideas,  concepts  and  documentation,  which  could have a
material adverse effect on the Company.

Liquidity:

         Since  inception,  the  Company  has  generated  limited  revenues  and
incurred  significant  losses,  including  losses of  $57,183,  $2,545,531,  and
$5,816,241  for the  fiscal  years  ended  December  31,  1999,  1998 and  1997,
respectively.  Losses are  continuing  through the date of this filing,  and the
Company  anticipates that it will continue to incur such losses until such time,
if ever,  as the Company  generates  sufficient  levels of revenues from product
sales to offset its operating  costs.  The Company  believes that  generation of
such revenues is dependent  upon  licensing,  entering  into joint  ventures the
Company's  ability to obtain FDA and/or  foreign  jurisdiction  approval for the
marketing of its products.  However,  there can be no assurance the Company will
be able to operate profitably.

                                       3
<PAGE>

         The Company has  incurred  research and  development  costs of $46,079,
$1,035,638,  and $1,374,675 for the years ended December 31, 1999, 1998 and 1997
respectively.

Future:

         In  1999  The  Company,  due  to a  lack  of  funding  and  changes  in
management,  placed on hold its application  activities with the FDA. During the
year 2000 the Company intends to reorganize and review its business strategy for
obtaining   necessary   regulatory   approvals   from  the  FDA  and/or  foreign
jurisdictions for the marketing of its products.

         The  Company  will  continue  to qualify  products  in  development  to
determine  safety,  effectiveness,  market  potential,  and  time  and  cost  to
commercialization.    In   addition,   the   Company   is   reviewing   existing
pharmacological agents of other pharmaceutical companies that could be made more
effective by utilizing  the Company's  delivery  system  technology.  As of this
date, the Company is concentrating its personnel and financing resources for the
five sexual dysfunction products and the psoriasis treatment product.

         The Company through its recently acquired Signetics.  Net division will
continue the  development of an ovulation  monitoring  device and plans to bring
this to market  initially in Canada  within the next 12 months.  Signetics.  Net
will also plans to review other developed technologies for commercialization.

                                   The Market

The Market for Male Sexual Dysfunction

         According to the Consensus Report of the American Medical  Association,
ten to twenty  percent  of adult men in the United  States  suffer  from  sexual
dysfunction.  The market for  treatments  for Male sexual  dysfunction,  such as
LLPGE1 products, is expected to grow over the next few years, as more men become
comfortable with the fact that sexual dysfunction is treatable. The aging of the
male  population  as the  so-called  "Baby  Boomers"  enter  middle  age is also
expected to expand the market,  since the incidences of Male sexual  dysfunction
is likely to increase with a man's age.

The Market for Female Sexual Dysfunction:

         A sizable  market  already  exists with female sexual  dysfunction,  as
suggested by the widespread  interest in Pfizer's intentions to test its pill on
women in  Europe.  The  Company  believes  that this  market is likely to expand
rapidly  as  effective  therapeutic  drugs  are  introduced  for this  disorder.
Approximately 10 million women in the United States,  between the ages of 50 and
74, reported a lack of lubrication on 229 million sexual intercourse  occasions.
Women experience  sexual  dysfunction as discomfort  during sexual  intercourse,
dryness,  increased  time for  arousal,  diminished  ability to reach  orgasm or
diminished  clitoral  sensation.  Women  are more  likely to  experience  sexual
difficulties if they are older and if they have medical  conditions  relating to
vascular problems.

The Market for Psoriasis

         Approximately  three million  people in the United States are afflicted
by Psoriasis and the disease  consumes  about two billion  dollars  allocated to
health care each year. According to the National Psoriasis Foundation, there are
approximately  2.4 million patient visits annually to dermatologist by Psoriasis
patients,  with each  dermatologist  seeing an average of 28 patients per month.
The majority of the patients  receive a topical  steroid  therapy,  however most
patients  develop a tolerance to the cortical  steroid lotions and there is lack
of long term control of their Psoriasis.  A topically  applied product utilizing
PGE-1  with a  capture  rate  of 5% of  the  U.S.  market  would  generate  over
$100,000,000 in sales potential.

                                   Competition

Competition for  Male Sexual Dysfunction Product

The market for treatment of sexual  dysfunction  is emerging and evolving and is
characterized  by a number of entrants.  The Company  faces  competition  from a
number of existing and potential  competitors.  Prostaglandin  E-1 ("PGE1") is a
naturally occurring  vasodilator  originally approved by the FDA for intravenous
infusion in neonates. In 1995, PGE1 was approved by the FDA for use in Pharmacia
& Upjohn  Inc.'s  Caverject,  which is  administered  by needle  injection  as a
treatment for male erectile  dysfunction.  The FDA approved PGE1 again by needle

                                       4
<PAGE>

administration  via Edex(R),  a Schwartz-Pharma  product.  Senetek also produces
PGE1 in  injectable  formulations.  Upjohn's  product  has  received  regulatory
approval worldwide,  Schwarz-Pharma's  product is approved for use in the United
States and Europe,  and Senetek's  product has received FDA approval for sale in
the United States.

         The product most similar to the Company's Male  Intrameatal  Product is
produced  by Vivus,  Inc.,  and was  approved by the FDA in  November  1996.  It
consists of a pellet  containing  PGE1 that is released into the urethra via the
specialized MUSE(R) device designed specifically for this purpose. This product,
like injectable PGE1, has the potential for side effects,  including  dizziness,
prolonged erection, priapism, headache,  nervousness, drop in blood pressure and
pain at application.

         Macrochem and NexMed are currently  undertaking Phase I clinical trials
of a topical  solution  containing  PGE1.  These products would compete directly
with the Company's  Male Topical  Product,  which has not yet commenced  Phase I
clinical trials.

         There are tablet  formulations of the Male sexual dysfunction  products
(phentolamine and sildenafil) currently being evaluated for New Drug Application
("NDA") approval by the Food and Drug  Administration  ("FDA").  NDA's for these
oral products have recently been  submitted to the FDA. The tablet  formulations
have  potential  benefits  for  patients  who suffer from mild to moderate  Male
sexual dysfunction problems. However, clinical trials have shown that they cause
various  side  effects due to systemic  vasodilatation,  which must be overcome.
Pfizer,  developer of Viagra(R),  and Zonagen(R)  are the two known  competitors
that are developing  tablet  formulations.  Viagra(R) was approved by the FDA in
March 1998.  Zonagen(R)  has not yet been  approved  by the FDA.  The Company is
developing its own oral formulation of liposomal,  lyophilized  Apomorphine ("LL
Apomorphine")  to compete with these oral drugs  through its Male Oral  Product.
Apormorphine  has been used without life threatening side effects since 1869 but
can be associated with significant nausea and vomiting.

         Other  forms of  competition  are penile  implants  and  vacuum  pumps.
However,  the Company anticipates that the market for these devices will decline
with the increasing  awareness of various drug formulations which provide a more
natural erection.

Competition for Female Sexual Dysfunction Product:

         A product for the treatment of Female sexual  dysfunction is fairly new
to the market.  Pfizer Inc. has submitted an IND to assess  Viagra(R) in Phase I
trials  for the  treatment  of  female  sexual  dysfunction.  No data  has  been
generated  to  suggest  efficiency  or  inefficiency.  Many of the  Male  sexual
dysfunction  products noted above are competitive,  or potentially  competitive,
with the Company's  Male sexual  dysfunction  Products,  and may be adaptable as
Female sexual dysfunction Products. It is the Company's belief that there are no
other companies with female sexual dysfunction products in development.

Competition for Psoriasis Product:

There  are a  large  number  of  companies  that  market  topical  steroids  for
Psoriasis,  however,  these  therapies are associated  with  potential  systemic
toxicities of steroid dependence and their effects are transient.

         Several  companies  produce  vitamin D analogs which,  while  producing
little toxicity, have low therapeutic benefit.

         A relatively new product,  Tazorac,  is a Vitamin A analog manufactured
by Allergan.  Annual sales are in the $100 million  range and  increasing.  This
product is very effective,  has little system  toxicity,  but has local toxicity
such as burning and/or pain in 10-30% of patients.

         Oral   drugs   include   potent   immunosuppressive   agents   such  as
methotrexate,  etretinate and  cyclosporine.  These products are limited by high
cost, toxicities  associated with systemic  immunosuppressive and development of
tolerance.

         Finally,   exposure  to  ultraviolet   light  and  medium  wave  length
ultraviolet  B radiation  are effective but may enhance the risk of skin cancer.
All therapies  combined produce a market with  approximately two billion dollars
in sales annually in the United States alone.

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<PAGE>

         A number of treatments  for  Psoriasis  are partially  effective and as
reviewed by Gerald J. Krueger M.D. in the New England Journal of Medicine,  June
24, 1993, they are divided into three categories.

         One:  Topically  applied  agents  such as cortical  steroids,  lotions,
anthrolin and vitamin D analogs.

         Two:  Exposure to  ultraviolet  light or artificial  medium wave length
ultraviolet B radiation (UVB) or photoaugmented  long wave length  ultraviolet A
radiation (PUVA).

         Three:  Orally  administered drug such as methotrexate,  etretinate and
cyclosporine. PUV treatments are expensive, approximately $2,600 per year, while
methotrexate is less expensive,  approximately $1,400 per year.  Frequently such
treatments  become  ineffective  with  continued  use  and  require  cycling  or
rotation.

         In summary,  using  currently  available  therapies:  1) the  topically
applied lotions become ineffective as tolerance develops, 2) the light therapies
are very expensive and become  ineffective  over time, and 3) the oral agents as
mentioned above can induce cancer,  have serious liver toxicity and are reserved
for disease that is severe.

         Based upon third party opinion,  the Company's  liposomal  PGE-1 lotion
for use as a treatment  for  psoriasis  will be effective  and safe.  PGE-1 is a
known effective agent for treating inflammation and immune system abnormalities.

General

         Although  the Company is not aware of any  additional  technologies  or
products that are functionally  similar to those of the Company  currently under
development,  there can be no assurance that such  technologies or products will
not be developed or that other  companies  with the expertise or resources  that
would encourage them to attempt to develop or market competing products will not
develop new products directly  competitive with the Company's products.  Some of
the  Company's  competitors  and  potential  competitors  have  well-established
reputations   for   success   in  the   development,   sale   and   service   of
biopharmaceuticals   and  have  substantially   greater  financial,   technical,
personnel  and other  resources  than the  Company,  enabling  them to undertake
clinical testing of products,  obtain  regulatory  approvals and manufacture and
market pharmaceutical  products in response to competitors seeking to market new
products and enter into new markets. In addition, there can be no assurance that
the Company can complete  clinical  testing of its products,  obtain  regulatory
approvals and commence  commercial-scale  manufacturing in a timely manner to be
effectively competitive.

                          Production and Manufacturing

General:

         The Company does not own or lease any  manufacturing  facilities,  does
not manufacture the products or any of their ingredients,  and will purchase all
ingredients from unaffiliated  suppliers,  including FDA validated  suppliers of
LLPGE1. The Company does not now have any contracts with manufacturers, although
it is in the  process  of  negotiating  such  contracts.  Although  the  Company
believes  that there are adequate  suppliers  and  manufacturers  sufficient  to
satisfy  the  Company's   requirements,   the  terms  on  which   suppliers  and
manufacturers  will be available  could have a material effect on the success of
the Company.

Dependence on Third-Party Research:

         The Company  plans to continue to utilize  third parties to conduct the
necessary clinical trials, and, therefore,  will be substantially dependent upon
third-party researchers and others, over whom the Company will not have absolute
control,  to satisfactorily  complete  scientific studies performed on behalf of
the Company.  There can be no assurance that third parties will be able to carry
out these studies in the proper  manner,  within the time frame,  and within the
cost  estimates  currently  relied  upon by  management.  In the event  that the
studies were carried out incorrectly or improperly, or were not completed within
the time frame currently contemplated,  or exceeded current cost parameters, the
Company's business could be materially adversely affected.

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                                    Marketing

         The  commercial   success  of  the  Company's   products  will  require
acceptance by urologists,  gynecologists,  dermatologists,  family practitioners
with a  significant  elderly  female  and/or  male  clientele,  medical  doctors
practicing  as sex  therapists  and  the  medical  community  as a  whole.  Such
acceptance  will depend in large part on the results of the clinical  trials and
the conclusion by these  physicians that the Company's  products furnish a safe,
cost-effective and acceptable method of treatment. Accordingly, achieving market
acceptance of the Company's products will require substantial  marketing efforts
and expenditure of significant  funds to educate doctors,  pharmacists,  and the
public about what the Company  believes are their  advantages  and benefits.  To
that end, the Company will soon begin  negotiations with potential  distributors
for major international pharmaceutical companies in the United States, European,
South  American and Asian  markets.  As is  customary  in the  biopharmaceutical
industry  operating  in  these  markets,  the  Company  anticipates  that  these
distribution agreements if reached, as to which there can be no assurance,  will
provide for the  distributor to pay to the Company  up-front  licensing fees and
milestone  payments.  In addition,  the distributor  will be responsible for the
costs of registration and/or FDA or regulatory  approval and validations.  Based
on market  studies  undertaken  by the Company,  it expects that sales of LLPGE1
products,  both in the United States and internationally,  may generate material
revenues  to the Company by the end of 2001,  or possibly  sooner with regard to
the Male and Female Topical Products.

                                    Employees

         The  Company  had no full time  employees  at  December  31,  1999.  On
December 22, 1999, the CEO and Chairman of the Board, Irwin Miller, resigned all
of his positions with the Company. On January 13, 2000, Stuart Brame was elected
as president.  He has agreed to work at no salary.  The Company will be required
to retain other qualified  personnel,  for whose services the Company will be in
competition  with  other  employers,  many of which have  significantly  greater
resources  than the Company.  There can be no assurance that the Company will be
able to hire or retain such other qualified personnel.

                                    Insurance

Officers and Directors:

         The Company currently has no Directors and Officers insurance.

Product Liability:

         The Company  currently  has no product  liability  insurance.  Upon the
commencement  FDA trials the Company  will seek to obtain a policy with  minimum
coverage of $1,000,000,  with increases to such required  levels of insurance as
its products are commercialized.  There can be no assurance,  however,  that the
Company will be able to obtain, maintain or increase its insurance on acceptable
terms or at reasonable  costs,  or that such  insurance will provide the Company
with adequate coverage against potential liabilities.

Business Interruption Insurance:

         The Company does not currently maintain business interruption insurance
coverage.

                              Government Regulation

         The  Company  is  subject to various  FDA  regulations  and/or  foreign
regulatory   bodies   which   govern  or  influence   the   research,   testing,
manufacturing,  safety,  labeling,  storage,  record keeping and advertising and
promotion of pharmaceutical products and medical devices.

         The  Company  received  a  warning  letter  from the FDA in May of 1999
regarding  numerous  procedural  failures on the part of the Company  and/or its
agents in the processing of IND number 50502. The then current management of the
Company responded with a letter of explanation.  The FDA is still  investigating
the circumstances  surrounding an allegedly falsified 135 patient study included
in an article (for publication  allegedly  authored by Dr. See and Dr. Crenshaw)
referred to in several locations of IND application  number 50,502.  The Company
is  providing  full  cooperation  to the  FDA for  acts  committed  by  previous
management regarding this IDN application which the Company cancelled in 1998.

                                       7
<PAGE>

         The Company believes it is in substantial  compliance with all material
federal and state laws and regulations. There can be no assurance, however, that
the Company will be able, for financial and other reasons, to continue to comply
with applicable  laws,  rules and  regulations.  Failure or delay by the Company
and/or its designated  agents to comply with FDA regulations or other applicable
regulatory  requirements could subject the Company to civil remedies,  including
fines,  suspensions,  delays of approvals,  injunctions,  recalls or seizures of
products, operating restrictions, as well as potential criminal sanctions, which
could have a material adverse effect on the Company.

         The Company's research, development, clinical trials, manufacturing and
marketing of its  products,  are subject to extensive,  rigorous and  frequently
changing  regulatory review process by the FDA and other regulatory  agencies in
the U.S. and various foreign countries. The process of obtaining and maintaining
required  regulatory  approvals  is  lengthy,   expensive  and  uncertain.   FDA
procedures  for  approval of  pharmaceuticals  and  biologics  involve  clinical
testing which occurs in three phases to  demonstrate  the safety and efficacy of
the  product.  Phase I clinical  trials  consist  of testing  for the safety and
tolerance  of the  product  with a small  group of  subjects  and may also yield
preliminary  information  about  the  effectiveness  and  dosage  levels  of the
product. Phase II clinical trials involve testing for efficacy, determination of
optimal dosage,  and identification of possible side effects in a larger patient
group.  Phase III clinical trials consist of additional testing for efficacy and
safety with an expanded patient group.  Upon successful  completion of Phase III
testing, a New Drug Application ("NDA") can be filed. Approval requires a review
of detailed data resulting  from the clinical  studies,  the  composition of the
drug, the labeling that will be used,  information on manufacturing methods, and
samples of the products.  After the FDA completes its review of the application,
a panel of medical experts typically  reviews the product,  and the applicant is
required  to  answer  questions  regarding  its  safety  and  efficacy.  At  the
recommendation  of the panel,  an NDA may be granted and the product may then be
marketed.  After  the  product  has  been  approved  for  marketing,   Phase  IV
post-marketing  surveillance  studies may be required to provide additional data
to the FDA for longer term follow-up concerns.

         There can be no assurance that FDA or other  regulatory  clearance will
not take  longer  than  currently  anticipated  because of delays,  problems  or
unforeseen  safety  difficulties  or  that  regulatory  clearance  will  ever be
granted,  although the Company believes that FDA and other regulatory  clearance
ultimately  will be  forthcoming.  Failure to obtain FDA  approval for a product
would  prevent the Company from  marketing  that  product in the United  States,
which would have a material adverse effect on the Company's business,  financial
condition and results of operations.  Even if regulatory approval is obtained, a
marketed  pharmaceutical  product and its manufacturer are subject to continuing
regulatory review, and discovery of previously unknown problems or amendments to
existing  statutes or regulations or the adoption of new statutes or regulations
could  result  in  restrictions  on  such  product  or  manufacturer,  including
withdrawal of the product from the market.

         At present,  the Company  plans to  distribute  its products to various
countries and regions world wide, and management believes that such distribution
may generate  material royalty revenues by 2002.  However,  such distribution of
the  Company's  products  outside  the  United  States  will also be  subject to
extensive government regulation.  These regulations,  including the requirements
for  approvals  or  clearance to market,  and the time  required for  regulatory
review and the sanctions  imposed for violations,  vary from country to country.
There can be no assurance that the Company will obtain  regulatory  approvals in
such  countries  or that it will not be required to incur  significant  costs in
obtaining or maintaining  its foreign  regulatory  approvals.  Failure to obtain
necessary  regulatory  approvals,  the restriction,  suspension or revocation of
existing  approvals or any other failure to comply with regulatory  requirements
with respect to a Company  products  would  prevent the Company  from  marketing
their products in such foreign country or countries, which could have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.

         The manufacturing  processes of the Company's  products will be subject
to certain  regulatory  guidelines.  The FDA establishes these guidelines as GMP
(Good Manufacturing Practice). All pharmaceutical  manufacturers must conform to
these guidelines. The FDA inspects these facilities on a regular basis and notes
any deficiencies. The facility must correct such deficiencies within a specified
period of time.

         Any new pharmaceutical  facility must go through a strict inspection by
the FDA, in a full audit,  and then adhere to the  guidelines.  Any facility not
adhering to these guidelines is subject to FDA regulatory action.

                                       8
<PAGE>

                           Collaborative Arrangements

         The   Company   operates   as  a  "virtual   company"   and  relies  on
subcontracting  and  collaborative  arrangements  for much of its  research  and
development, manufacturing, clinical trial and marketing operations. The Company
intends to  continue  to seek and enter  into  collaborative  arrangements  with
pharmaceutical consulting, manufacturing and distribution concerns to eventually
manufacture and distribute its products.

                          Other Financing Arrangements

On January 13, 2000,  the Company  entered into an option  agreement with Optima
Financial as part of a financial consulting agreement to provide  reorganization
consulting services. The option provides for the acquisition of 2,000,000 shares
of common  stock of the  Company  at a price of $.07 per share for a term of one
year. As of May 25, 2000,  Optima Financial has exercised 950,000 shares of this
option  providing  interim  funding for the Company  during  reorganization  and
management change.

ITEM 2.  DESCRIPTION OF PROPERTY

         The Registrant had no office lease commitments at December 31, 1999:

         The  Registrant  does not own any real  estate,  nor is the  Registrant
engaged in the business of investing in real estate or real estate mortgages.

ITEM 3.  LEGAL PROCEEDINGS

Legal Proceedings Resolved:

(a)  Enza Vitiello  Baldari v. David E. Jordan v. Harvard  Scientific,  Case No.
     99-6451,  District Court Southern Florida;  this case was settled in March,
     2000 for  125,000  shares of common  stock in the  Company  subject  to the
     return of certificates for 1,000,000  shares of stock previously  issued to
     the  direction  of David E.  Jordan.  Shares  will be issued at the rate of
     15,000 per month, with the Company having the option to pay $1.25 per share
     to pick up any of the remaining options through September, 2000.

(b)  Eric N. Savage v. Harvard Scientific Corporation, Case No. A381022 filed on
     November 10, 1997,  Superior  Court,  Clark County,  Nevada;  settled on or
     about May 10, 2000 for 65,000  shares of common stock in the  Company.  The
     company has retained certain option rights to reacquire these shares should
     the price of its common justify the same to the company.

Legal Proceedings Unresolved:

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) On November 3, 1995, BTI entered into an agreement with a European marketer,
Pharma Maehle  ("Pharma"),  whereby Pharma was to establish the European  market
for the Company's erectile dysfunction product (only the Intraureathral 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 20, 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 council.  The agreement
was to be  accomplished  within 10 working days from January 13, 1997,  and when


                                       9
<PAGE>

that did not  occur,  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 it
has  rightfully  terminated  the  agreement  with  Pharma,  which  has  been and
continues  to be in breach of the  agreement  in any event.  The validity of the
agreement is currently in dispute.

On February 19, 1998, the Company  renewed it's previous  notices of termination
and  renoticed  the  termination  of the licensing  agreement  with Pharma,  and
demanded binding  arbitration  under Nevada law of the existing disputes between
the  parties  pursuant  to the  terms of the  licensing  agreement.  Pharma  has
retained  Nevada counsel and  arbitration  is being  pursued.  There has been no
activity on this case of any consequence during 1999.

         (b) Investors Capital  Enterprises,  Inc. v. Harvard  Scientific Corp.,
and Does 1--50,  Case No: BC209049,  filed April 20, 1999 in Superior Court, Los
Angeles  County,  State of  California.  Investor's  Capital  Enterprises,  Inc.
alleges that it was due a fee of 87,500  shares  (post-split)  of the  Company's
Common Stock in exchange for arranging certain financing.  The complaint alleges
that  it did  arrange  certain  financing  through  DJ  Ltd.  Investors  Capital
Enterprises  claims  that  such  an  investment  qualifies  for  its  commission
agreement  and that it advised  the  Company  in  writing  on July 1, 1996.  The
complaint  alleges  that the market  value of 87,500  shares on May 15, 1996 was
$2,100,000. The Company believes that there is no extant obligation and that the
complaint is without  merit,  and intends to vigorously  defend  against it. The
Company notes that  litigation  regarding the DJ Ltd.  investment was previously
resolved,  and that it has no record of  receiving  any  notice  from  Investors
Capital  Enterprises,  Inc. since then. The Company further notes that Investors
Capital Enterprises,  Inc. is represented by the same law firm representing Eric
Savage,  who is currently in litigation  with the Company and who has threatened
to instigate  additional  litigation  against the Company  until his  settlement
demands are met,  which the Company  views his current  demands as  unreasonable
(see above).  The Company is  considering  its rights and  remedies  against the
appropriate  parties who may be  attempting  to  tortuously  interfere  with the
Company's business.

(c)  Hardesty;  Ltd. V Harvard  Scientific Corp. et al, Case CV99-05715 filed on
October 22, 1999, in the Second Judicial District Court, Washoe County, State of
Nevada.  Hardesty,  Ltd challenges it rendered legal services and advanced costs
for Defendant from December 1997 through December 1998 in excess of $10,000.

(d)  RK Company v. Harvard  Scientific  Corp. dba Vibragen  Inc.,  Case No. 99 C
4261,  United States  District  Court,  Northern  District of Illinois,  Eastern
Division. Plaintiff alleges securities fraud perpetrated by Defendant and/or its
agents to induce Plaintiff to invest and hold securities in Harvard Scientific.

NOTE 11 - UNCERTAINTY - GOING CONCERN

The financial  statements of the Company have been prepared assuming 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  from other  sources.  It is  uncertain  whether the
Promissory  Notes  due  from  the  former  Officer/Director  Mr.  Waite  will be
collectd.

NOTE 12 - SUBSEQUENT EVENTS

(a)  On  April 7,  1999,  the  Company  secured  a  Financial  Public  Relations
     Agreement with I.W. Miller Group, Inc. The agreement provides for marketing
     and advertising of the Company to  professionals,  business analysis of the
     Company, public relations and long-term financial planning. In exchange for
     this,  1,000,000 shares of common stock, of which 50% of the stock received
     is issued pursuant to the exemption from registration under Section 4(2) of
     the Securities Act of 1933 ("Restricted"),  have been issued to I.W. Miller
     Group, Inc.

                                       10
<PAGE>

(b)  On May 14, 1999, the Company agreed to resolve the Promissory  Note payable
     of $2,492,099 by Dr. See to the Company,  plus accrued interest of $135,592
     through March 31, 1999, or $147,221  through may 14, 1999, the date of this
     agreement,  as follows:  (i) Dr. See will use his 790,139  shares issued in
     connection  with the  Promissory  Note  transaction  to the  benefit of the
     Company whether by  contributing  the proceeds from the sale of such shares
     or by paying certain of the Company's  obligations  with such shares.  (ii)
     Dr.  See  agrees to use an  additional  300,000  shares - i.e.,  the entire
     balance of the shares owned by him - to the benefit of the  Company.  Thus,
     all of Dr. See's  1,090,139  shares have been obligated in this manner.  To
     date, Dr. See has transferred 330,000 shares to pay a Company obligation as
     well as the  proceeds  from  the  sale of  another  100,000  shares.  (iii)
     Bio-Sphere  Technology,  Inc.,  in behalf of Dr.  See,  agrees to grant the
     Company an exclusive license of its proprietary invention and trade secrets
     regarding the use of liposomes bearing prostaglandin's for the treatment of
     psoriasis.  (iv) Dr. See  waives  arrearages  in fees under his  consulting
     agreement.

(c)  The company has cancelled plans to change the name to Vibragen, Inc.

(d)  On April 29, 1999,  Irwin Miller  accepted the position of Chief  Executive
     Officer of the Company.  The terms of Mr. Miller's  employment are still to
     be negotiated.

(e)  In April 1999,  the Company  completed the required  lease  payments on the
     lease of  equipment  used in the  process of sizing  Liposomes  used by the
     Company  in the  delivery  of the  Prostaglandin  E-1,  and  now  owns  the
     equipment  free and clear.  The total lease amount of $32,893 was paid over
     24 months.  The Company  recorded the lease as a capital  lease  amortizing
     payments over the life of the lease. The lease has been paid in full with a
     $1  buyout  charge to  acquire  the  equipment.  The  Company  now owns the
     equipment free and clear of any debts or liens.

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

         No matters were submitted  during the fourth quarter of the fiscal year
covered by this report to a vote of security holders through the solicitation of
proxies or otherwise.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The  Common  Stock of the  Company  began  trading on the system of the
National  Association  of  Securities  Dealers,  Inc.  (NASD)  known  as the OTC
Electronic  Bulletin  Board  under the symbol  "HVSF" in June 1995.  It has been
trading under the symbol "VGEN" since April 1999.

         The Company's authorized stock consists of 110,000,000 shares, $.01 par
value per share, 100,000,000 of which are shares of Common Stock, and 10,000,000
of which are Preferred Stock.

         The following table sets forth the range of high and low bid quotations
for the Company's Common Stock for each quarterly period indicated,  as reported
by brokers and dealers  making a market in the capital  stock.  Such  quotations
reflect inter-dealer prices without retail markup,  markdown or commission,  and
do not necessarily represent actual transactions:

                              Common Stock

                       Quarter Ended  High Bid     Low Bid

           ---------------------------------------------------
                      March 31, 2000        $.94         $.78
                   December 31, 1999        $.16         $.11
                  September 30, 1999        $.17         $.14
                       June 30, 1999        $.81         $.75
                      March 31, 1999                     $.63
                                           $1.56

                   December 31, 1998                     $.94
                                           $4.78

                  September 30, 1998       $8.31        $6.19
                       June 30, 1998       $9.75        $3.67
                      March 31, 1998       $9.40        $3.00
                   December 31, 1997      $14.10        $2.90
                  September 30, 1997      $22.50        $9.40
                       June 30, 1997      $61.90       $12.50
                      March 31, 1997      $81.30       $25.00
                   December 31, 1996      $26.20        $8.70


                                       11
<PAGE>

         The approximate  number of record holders of the  Registrant's  capital
stock as of May 15, 2000 was 217.  Effective  through  February  28,  1999,  the
transfer  agent and  registrar  for the  Common  Stock was Olde  Monmouth  Stock
Transfer Co.,  Atlantic  Highlands,  New Jersey.  Effective  March 1, 1999,  the
Company changed transfer agents to Nevada Agency and Trust & Co., Reno, Nevada.

Dividends:

The  Registrant  has never paid cash  dividends on its Common Stock and does not
intend to do so in the foreseeable  future. The Registrant  currently intends to
retain its earnings, if any, for the operation and expansion of its business.

Preferred Stock:

         The Board of Directors of the Company has authority to establish series
of the 10,000,000  unissued  shares of Preferred Stock by fixing and determining
the designations, preferences, limitations and relative rights, including voting
rights,  of the shares of any series so established to the same extent that such
designations,  preferences,  limitations  and relative rights could be stated if
fully set forth in the Articles of Incorporation.  The Company believes that the
flexibility  provided  through  this "blank  check"  Preferred  Stock allows the
Company  to address  potential  future  financing  needs by  creating  series of
Preferred  Stock  that may be  customized  to meet the  needs of any  particular
transaction and to market conditions.

         If any series of Preferred  Stock  authorized by the Board provides for
dividends, such dividends, when and as declared by the Board of Directors out of
any  funds  legally  available  therefor,  may  be  cumulative  and  may  have a
preference  over  the  Common  Stock as to the  payment  of such  dividends.  In
addition,  if any series of Preferred Stock authorized by the Board so provides,
in the event of any  dissolution,  liquidation  or  winding  up of the  Company,
whether  voluntary or  involuntary,  the holders of each such series of the then
outstanding   Preferred  Stock  may  be  entitled  to  receive,   prior  to  the
distribution  of any  assets  or  funds  to  the  holders  of  Common  Stock,  a
liquidation preference established by the Board of Directors,  together with all
accumulated  and unpaid  dividends.  Depending upon the  consideration  paid for
Preferred  Stock,  the  liquidation  preference  of  Preferred  Stock  and other
matters,  the issuance of Preferred Stock could therefore  result in a reduction
in the assets  available for  distribution to the holders of Common Stock in the
event of  liquidation  of the  Company.  Holders of Common Stock do not have any
preemptive  rights to acquire  Preferred  Stock or any other  securities  of the
Company.
                                       12
<PAGE>


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

         Item 2. Management's Discussion Analysis and Plan of Operation


The discussion  contained in this Item 2 is "forward  looking",  as that term is
identified in, or contemplated by, Section 27A of the Securities Act and Section
21E of the Exchange Act. Accordingly,  actual results may materially differ from
projections.  Additional  information concerning factors that could cause actual
results to differ materially is readily available in this section.

OVERVIEW:
--------

Harvard Scientific Corp. is a biopharmaceutical  drug development  company.  The
Company's corporate  objective is to utilize medically  researched and developed
drug substances, determine the ability of these substances to be encapsulated in
liposomes and to determine the potential  market for such products.  The Company
intends to conduct and conclude,  either on its own or with the assistance of an
industry  partner(s),  all clinical testing necessary for regulatory approval of
such products from the U.S. Food and Drug Administration  ("FDA") and/or similar
regulatory  agencies in foreign  countries  in order to initiate  marketing  and
establish  distribution  channels  for its  products.  The Company is  currently
focused on three of its four products, each of which uses the Company's patented
formula  of  lyophilized   liposomal   Prostaglandin   E1  ("LLPGE1"):   (i)  an
intraurethrally  administered  treatment  for male erectile  dysfunction  ("Male
Intraurethral  Product"),  and (ii) a topically applied cream treatment for male
sexual  disorder  ("Male  Topical  Product"),  and  (iii)  a  topically  applied
treatment for female sexual arousal disorder  ("FSAD") in both a gel-base and an
aqueous solution spray ("Female Topical Product").

The Company also has acquired the rights for an oral delivery  treatment whereby
lyophilized  liposomal  delivery of Apomorphine  will be developed to treat male
sexual disorder.  A capsule that contains lyophilized  liposomal  Apomorphine is
taken orally by the patient. The capsule is designed to pass through the stomach
(acidic  pH)  without  degradation  or  uptake  of the drug  and into the  small
intestine  (basic pH) whereby the capsule is dissolved and  Apomorphine  is then
gradually  released from the liposome.  The Company believes this will alleviate
the  undesired  side effects of nausea and  vomiting  normally  associated  with
Apomorphine.

The Company plans to license each of these products to pharmaceutical  companies
for marketing and worldwide distribution upon approval by the U.S. Food and Drug
Administration  and/or  other  foreign  regulatory  agencies.  The  Company  has
previously attempted discussions with several globally recognized pharmaceutical
companies  regarding licensing of its LLPGE1 products for male and female sexual
disorder  treatment.  During the 3rd quarter of 1998,  the Company  entered into
Letter(s) of Intent  ("LOI") with two such  companies.  These LOI's did not work
for the Company  resulting  in backward  momentum  for the Company  during 1999,
resulting in the  resignation of the Thomas Waite  management and Director group
in  early  1999,  the  installation  of the  Ira  Miller  management  group  and


                                       13
<PAGE>

resignation  thereof on December 22, 1999.  Upon  resignation  of the Ira Miller
management  group in December of 1999, the Company was faced with  responding to
several large lawsuits without any source of funds,  over $2,000,000 of accounts
payable  and a share  price of under  $.10 per  share.  The  remaining  Board of
Directors  began to prepare  the  company  for  filing of Chapter XI  Bankruptcy
Reorganization   while  continuing   discussions  with  possible  financing  and
reorganization  groups. On or about January 13, 2000,  negotiations  resulted in
the Company  entering  into an  agreement  with Stuart Brame and David Nelson of
Optima  Financial  to acquire  for stock a company or  companies  with a minimum
independent  evaluation of  $4,000,000.  Stuart Brame was elected  President and
Director,  with Optima  Financial  being  retained  by the Company as  exclusive
financial consultants to the Company to assist in reorganization, the settlement
of debts  and  outstanding  litigation  and  facilitating  new  funding  for the
Company.  Funds were advanced by Optima  Financial to satisfy certain  immediate
obligations of the Company including the funds to overturn a $2,500,000  default
judgment in the RK Company case and the  maintenance  of patent  filings for the
female patent which  subsequently  issued on February 26, 2000, with publication
occurring on April 6, 2000.

The transaction  with Stuart Brame along with David Nelson and Optima  Financial
has proceeded as planned with funds  advanced to the Company for the purchase of
shares pursuant to an option with Optima  Financial to acquire  2,000,000 shares
of the Company's  common stock to provide much needed  interim  funding.  Stuart
Brame  acting as  President,  along  with the  consulting  assistance  of Optima
Financial  has provided  the  leadership  to turn the Company  around with a new
positive direction. As part of the transaction entered into on January 13, 2000,
the Company has agreed to acquire for convertible  preferred stock and/or common
stock at a price .33 per  share  all of the  common  stock in  Signetics.net,  a
Nevada  corporation  with  diagnostic  technology  relating to the  detection of
ovulation within the human female.  Signetics.net  with the existing  technology
for an ovulation  detection meter has been independently  evaluated by Newcomb &
Company,  a NASD Broker/Dealer at between 4.3M and 6.5M based upon substantially
discounted  pro  forma  income  statements.  Signetics.net,  as a  wholly  owned
subsidiary will continue with the final  development of the ovulation  detection
device under the  direction  of Dr. Rick Millis as  President.  Dr.  Millis is a
Professor of BioPhysics at Howard University,  Washington, D.C., well published,
known in his field and has over 15 years of involvement  with the development of
the subject ovulation  detection device.  Signetics.net  intends to begin formal
trial testing of the ovulation  detection  device in a Canadian based  fertility
clinic  simultaneously  with an application for pre marketing approval in Canada
within  the next 120 days as a Class 1  medical  device,  non  evasive,  with no
chance of harm to the user.  Completion of trial  testing and Canadian  approval
for pre marketing is anticipated  within six - nine months.  Upon  completion of
Canadian testing and receipt of pre marketing approval, Signetics.net will apply
for FDA approval with the filing of a form 510-K,  along with additional testing
should  the  same  be  required.   The  Canadian   pre-market  approval  process
application follows the same format as the FDA 510-K application program.

Referencing the male and female sexual disorder products, the Company believes a
sizable market  already exits for both male and female sexual  disorder and that
this market will  continue to expand as  effective  products  are  approved  for
treatment.  With the recent  issuance  and  publication  of the  Female  Topical
Product patent (patent information set out below) for the treatment of FSAD, the
Company  is  quite  confident  of  developing  licensing  and/or  joint  venture
production  and marketing  agreements to generate  substantial  revenues for the
Company.  Licensing  and/or joint venture  agreements will not be limited to the
FDA controlled US market but will be pursued in selected  international  markets
where the Company  maintains  patent  protection.  In conjunction with potential
licensing,   the  Company  will  be  reviewing  with  patent  counsel   possible
infringement by other companies of its recently published Female Topical Product
Patent, # 6,046,240.

The market for treating  female sexual arousal  disorder  ("FSAD") is relatively
new when compared to the male sexual disorder treatment market. In fact, certain
world-renowned  authorities  and some market  analysts are  suggesting  that the
market for FSAD will surely  equal,  if not surpass,  the market for male sexual
disorder.  Independent studies by Dr. Irwin Goldstein, a Professor and Urologist
at Boston  University  School of  Medicine  and  formerly  a  Consultant  to the
Company, found that approximately 10-million women in the United States, between
the ages of 50 and 74,  reported a lack of  lubrication  on  229-million  sexual
intercourse  occasions  and 58.5 percent of the 260 female  partners of impotent
men he surveyed  were affected  with some form of sexual  disorder.  The Company
believes its patented Female Topical  Product (in which LLPGE1 is  reconstituted
into either a gel  formulation  or an aqueous  solution  (liquid) spray and then
applied  topically to the female's vaginal area) will provide a solution to this
problem by  enhancing  blood flow  within the  clitoral  and  vaginal  tissue to
stimulate nerve endings for increased  sensitivity in the female sex organs. The
Company  believes this should  facilitate  lubrication,  thus  enabling  greater
satisfaction and possibly sexual orgasm for the female.

The Company is moving forward with  implementation  of its protocols for gaining
regulatory approvals.  During September 1998, toxicity studies were completed on
female  rabbits and the results  showed no toxicity and no redness or irritation
at any dose or with the gel itself when observed  visually each day.  Therefore,


                                       14
<PAGE>

there was no gross (clinical)  toxicity in the LLPGE1 gel base used. The results
also showed the virtual  microscopic absence of inflammation at the highest dose
administered.  In fact, microscopic  inflammation was significantly less at each
escalating dose, including 1.5 mg, than when the rabbits were only given placebo
gel,  suggesting  that the  application  process itself for 14 consecutive  days
caused very minor microscopic but not clinically apparent inflammation which was
reduced  by the  increased  blood  flow  into the area  induced  by the  LLPGE1.
Additionally,   very  minor   microscopic   inflammation  at  the  highest  dose
administered  was reduced by the  increased  blood flow into the area induced by
the LLPGE1.  The Company is currently  interviewing  drug trial consulting firms
for  preparation  and submition of its application for an IND in connection with
the Female Topical Product to the U.S. Food and Drug Administration in 2000.

The Company's Male Topical Product is a local treatment and will be administered
directly to the end of the penis  (glands) as a lotion or as a liquid spray.  It
is very similar in composition  to the Company's new treatment  product for FSAD
and compliments the aqueous solution Male Intraurethral Product.

The  Company   previously   contracted  with  Dr.  Goldstein  as  its  Principal
Investigator  in trials  involving the use of the Company's  patented LLPGE1 for
the treatment of both male and female sexual  disorder  products.  On August 27,
1998, the Company submitted an Investigational  New Drug Application  ("IND") to
the U.S. Food and Drug  Administration for Lyophilized  Liposomal  Prostaglandin
E1, as an  intraurethrally  delivered  treatment  for male sexual  disorder.  On
August 28, 1998, the FDA assigned IND Number 56,840 to the Company. Simultaneous
to  receiving  the new IND,  the Company  withdrew  IND Number  50,502  which is
currently  under  investigation  by the FDA for an allegedly false patient study
submitted  to the  FDA  by  prior  management.  Mr.  Goldstein  is no  longer  a
consultant to the Company.  On May 18, 2000, the Company received an FDA Warning
Letter  regarding  IND # 50502  and an  investigation  into an  allegedly  false
patient study  submitted to the FDA. The Company will be reviewing with the drug
trial  consulting  firm selected the FDA issue of the allegedly  falsified study
submitted by prior management in 1997. Simultaneous with the warning letter from
the FDA, the Company  received a private request for  information  regarding the
FDA matter from the SEC.  No action has been taken at this time.  The Company is
aware that prior officers and Directors are under investigation by the FDA.

The Company's core technology is covered by the following  issued  patents:  (1)
U.S.  Patent Number  5,718,917  issued to the Company on February 17, 1998 "PGE1
CONTAINING   LYOPHILIZED   LIPOSOMES  FOR  USE  IN  THE  TREATMENT  OF  ERECTILE
DYSFUNCTION".  (2) U.S.  Patent  Number  6,046,240  published  on April 4, 2000.
TOPICAL  APPLICATION OF PGE-1 IN  LYOPHILIZED  LIPOSOMES FOR TREATMENT OF SEXUAL
DYSFUNCTION IN THE FEMALE.  PGE-1 is the active drug agent used in the Company's
Male  Intraurethral,  Male Topical and Female Topical Products.  There can be no
assurance  that any of the Company's  products will be  commercially  successful
even if they are  scientifically  successful and gain FDA and/or other than U.S.
regulatory agency approval, none of which is assured.

The  Company  is  currently  reorganizing  with the  settlement  of  outstanding
litigation,  accounts  payable,  developing a new management team along with new
financing plans, product licensing strategies and acquisitions. Over the next 12
months,  the Company's  primary focus will be to  strategically  implement a new
management  team and business plan as it pertains to furthering the  development
of both male and female treatment  products for sexual disorders and to secure a
globally  recognized  pharmaceutical  company  as a  licensing  partner  for its
products or secure  private  placement  financing  for the Company.  The Company
anticipates  it will:  1)  submit  its IND for its FSAD  product  to the FDA and
commence  clinical  trials under this IND as allowed by the FDA, 2) proceed with
phase II/III  clinical trials and product  validation of its Male  Intraurethral
Product to conform to the regulatory process of the FDA, 3) petition the FDA for
an IND for its Male Topical  Product as soon as possible  and initiate  clinical
trials when the FDA  approves the right to do so, 4) continue  development  with
the Male and Female Oral Products,  5) continue  monitoring patent  applications
6)complete  testing of the  Signetics.net  ovulation  detection meter along with
obtaining pre market approval in Canada to begin production and commercial sales
7) seek to identify other companies and universities  with similar  technologies
for acquisition or joint venture and 8) and formulating  strategic alliances for
joint venture arrangements,  licensing and distribution agreements, research and
development  agreements and other  collaborative  arrangements  to assist in the
development, marketing and distribution of the Company's products.

It is the  belief of the  Company  that if an  agreement  with a major  industry
partner can be secured,  the possibility  exists that the regulatory process for
its products could be expedited.  This should  enhance the Company's  ability to
bring its  products to market more  quickly,  thus  enabling the Company to make
fuller use of the  remaining  life of its  patent  for  LLPGE1  which was issued
February 17, 1998 and its newly  issued FSAD  Patent.  Without the benefit of an
industry  partner,  the Company  believes an 24 to 36 month  time-line to obtain
regulatory  approval of the Male  Intraurethral  Product and the newly  patented

                                       15
<PAGE>

FSAD  product is probable,  but there can be no assurance  that the product will
receive FDA  approval in that time span,  if ever.  The Company will also pursue
licensing outside of the United States for both the Male and Female products.

In addition the Company  intends to prepare its  previously  developed home AIDS
TEST kit for marketing through its subsidiary,  SIGNETICS.NET.  It is the intent
to establish a product  identity  trademark for home  diagnostic  products to be
licensed for marketing along with the ovulation  detection  device.  An Internet
web site will be established  to promote and sell these  products  direct to the
consumer.  The Company may also add a line of holistic  supplements and vitamins
under this trademark for Internet marketing.

The Company's  future success is dependent upon its ability to raise  additional
funds to complete the commercialization  process for its Female and Male Topical
Products,  Male  Intraurethral  Product and its other  products  either  through
strategic agreements (i.e. licensing,  distribution or joint venture) or through
private  placements  or public  issuance of the Company's  common stock.  In the
past,  the Company has relied upon the  private  purchase of its  securities  by
accredited investors to raise such funds and may have to rely upon this practice
in the future. There can be no guarantee that investors who have been interested
in purchasing  the Company's  securities in the past will be interested in doing
so in the future,  or that  alternative  investors will be found, or that public
financing or collaborative  arrangements will be available on terms satisfactory
to the Company.

The Company does not expect to purchase or sell any  significant  equipment over
the next ninety days.

Stuart Brame currently serves without salary and received  2,000,000 shares as a
signing bonus. Optima Financial will serve without payment of monthly consulting
fees and has received 2,000,000 shares for its services. An additional 1,000,000
shares was issued to Alexander  H.  Walker,  Jr. for his services as Chairman of
the Board,  1,000,000  shares was issued to Curtis Orgill for his services as an
officer  and  director  and  500,000  shares  were issued to Gordon Cole for his
services as a director.

Results of  Operations  for the three  months  ending June 30, 1999 and June 30,
1998

         During both quarters ending  September 30, 1999 and September 30, 1998,
the Company had no net sales, and,  accordingly,  had no cost of sales for those
quarters.  During that time,  the Company has remained  focused on 1) completing
the required  regulatory review process for its Male Intraurethral  product,  2)
introducing the new male and the new female sexual dysfunction products,  and 3)
forming  alliances  for  securing a joint  venture or licensing  agreement.  The
Company  intends to focus on promotions of their products only after  completing
the regulatory review process.

         During  second   quarter   ending   September   30,  1998,   General  &
Administrative  expenses  exceeded  the  period  ending  September  30,  1999 by
$718,740.  In 1998, the Company was operating out of 3 offices with a management
team of about 7 employees, none of which exists during the first quarter 1999.

         Management does not anticipate that General and Administrative expenses
will  escalate to the level it was in 1998.  As the Company  obtains  additional
investment  capital and expands its operations,  management  intends on hiring a
lean staff to continue its operations.  Careful  consideration  will be given to
the  necessity  of opening  another  office.  It is the  Company's  intention to
minimize General and Administrative  expenses and to focus on applying monies to
the  development  of it's  products.  The Company also  continues to incur legal
expenses in connection with litigation in which the Company is involved.

         Research & Development costs for the third quarter ending 1998 exceeded
the third quarter 1999 by $352,443. During 1998, the Company was incurring large
research  consulting  fees and was in the middle of clinical trials for the Male
Intraurethral  product.  In  addition,  they were  beginning  tests for the FSAD
(female sexual arousal disorder) product. As a result of lack of financing, very
little  activity in clinical  trials and Research & Development  has taken place
during the third quarter 1999.

         Should the Company  secure  additional  financing,  it is expected  the
Company  will  proceed  with  clinical  trials  on the Male  sexual  dysfunction
products and the female sexual arousal disorder products.

         Dividend income and interest income have decreased significantly due to
the lack of funds  earning  interest  and due to the  write-off  of the interest
accrued on the Financing Agreement  Promissory Notes with Dr. See and Mr. Waite.
There was a decrease in Loss on Disposition of Assets of in the first quarter of
$5,698 in 1999 vs. 1998, a result of closing the Irvine,  California  office and
disposing of certain assets from downsizing the office to another location.

         During the first  quarter  1998,  the Company  entered into a financing
agreement with Jackie R. See, a director and a controlling  stockholder  of, and

                                       16
<PAGE>

consultant  to,  the  Company,  and Thomas E.  Waite,  former  President,  Chief
Executive  Officer,  Chairman  of  the  Board  of  Directors  and a  controlling
stockholder  of the Company,  whereby such  investors  (a)  purchased an initial
tranche of 1,580,278 shares of the Company's Common Stock (the "Initial Shares")
for an aggregate  purchase price of $5,000,000.  Promissory Notes were due March
31, 1999 in the principal amount of $2,492,098.61,  bearing interest at the rate
of 1% above prime and secured by the shares purchased.  These notes plus accrued
interest  are in default,  and thereby  the  Company  has  reserved  100% of the
balance due as a result of the uncertainty of collectability. At March 31, 1999,
the Company reported total assets of $23,828. This compares with total assets at
March 31,  1998 of  $6,868,118.  The  reasons  for this  decrease in assets is a
result of 1) a  decrease  in cash of  $737,518,  2) a 100%  decrease  in prepaid
expenses  of  approximately  $20,000,  3) a 100%  decrease  in Due from  Related
Parties of $892,819,  4) the reserve established for the possible  uncollectable
Promissory  Notes  plus  accrued  interest  of  $4,943,742   bringing  the  note
receivable  balance to zero at March 31,  1999,  5) an increase in  inventory of
$18,000, 6) the Company has depreciated it's Equipment and organizational  costs
down by  $63,521,  and 7)  intangible  assets of $154,004 at March 31, 1998 have
been  written  down to zero at December  31,  1998 to reflect the current  value
until such time a market value can be established.

         The Company's total current  liabilities for the period ending June 30,
1999  decreased by  $2.431.261  over the total current  liabilities  at June 30,
1998.

         The Company  issued a total of 15,000 shares of common stock during the
first  quarter  1999,  as compared to  1,893,884  shares  during the same period
ending 1998.  This difference is mostly  attributed to the Debentures  converted
during January 1998 (103,606),  securing two additional  financing  arrangements
(1,780,278),   plus  shares  issued  to  new  directors  (10,000).  The  Company
anticipates  that it will continue the practice of issuing  shares of its common
stock as compensation for services rendered to the Company.

Liquidity and Capital Resources
-------------------------------

         To  complete  the  regulatory  process  for its  products,  the Company
estimates it will need as much as $12-million  for the Female  Topical  Product,
potentially  $10-million for the Male Topical Product and as much as $12-million
for the Male Intraurethral  Product. For the next six months,  expected costs to
be incurred for research & development  is $1,983,000,  which includes  clinical
trials on the Male Intraurethral  Product as well as the Male and Female Topical
products.  Up to an additional  $20-million may be required to complete  testing
and bring to market the Company's additional products.  However,  regulatory and
testing  costs per product for these  additional  products  are  projected to be
lower due to data generated by the CMC,  animal and clinical data related to the
Male Intraurethral Product.

         The Company expects to obtain capital funds either from the issuance of
common stock or debt.  Management is working  extensively on obtaining financing
for the  Company.  It is expected  that  external  sources  will be available to
provide  these  funds,  but there can be no  guarantees  of such  funding.  . If
additional  capital  is not  secured,  there is  considerable  doubt  about  the
Company's ability to continue as a going concern.

Results of Operations:
----------------------

For the Year Ended December 31, 1998

         During the period  ending  December  31,  1998,  the Company had no net
sales, and, accordingly, had no cost of sales. During that time, the Company has
remained focused on 1) completing the required regulatory review process for its
Male  Intraurethral  product,  2)  introducing  the new male and the new  female
sexual  dysfunction  products,  and 3) forming  alliances  for  securing a joint
venture or licensing  agreement.  The Company  intends to focus on promotions of
their products only after completing the regulatory review process.

         During  September 1998, the Company settled a lawsuit with  Springrange
Investment  Group and was able to book as ordinary income, a forgiveness of debt
amount of $968,901.  For the twelve months ending December 31, 1998, General and
Administrative Expenses decreased slightly by approximately $91,000 over 1997, a
direct  result  of  identifying  a core  management  team in  November  1997 and
strategically  eliminating unnecessary costs. Research and Development decreased
by  approximately  $340,000  as a result of  securing  key  manufactures  in the
industry.  Depreciation and Amortization  decreased by approximately $240,000 in
1998 over 1997 as a result of the  debenture  issuance  cost which  became fully
depreciated in March 1998.  Overall,  the Total Operating Expenses resulted in a
decrease of  approximately  $670,000 in 1998 over 1997; a positive affect of the
cost-saving measures implemented beginning November 1997.

                                       17
<PAGE>

         As discussed  above,  dividend income and interest expense were greater
in 1997 by  $39,943  and  $1,362,045,  respectively,  a direct  result of the 6%
Convertible  Debenture.  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. At the time of issuance (March 1997), the Company
accounted for the 20% discount to market of  $1,250,000  as additional  interest
expense and paid-in-capital. The balance of the deferred issuance cost on the 6%
Debenture of $156,250 was amortized within the first quarter of 1998.

         On February 3, 1998 (as amended),  the Company entered into a financing
agreement with Jackie R. See, a director and a controlling  stockholder  of, and
consultant  to,  the  Company,  and Thomas E.  Waite,  former  President,  Chief
Executive  Officer,  Chairman  of  the  Board  of  Directors  and a  controlling
stockholder  of the Company,  whereby such  investors  (a)  purchased an initial
tranche of 1,580,278 shares of the Company's Common Stock (the "Initial Shares")
for an aggregate  purchase  price of  $5,000,000,  and (b) may purchase up to an
aggregate  of  592,604  additional  shares of the  Company's  Common  Stock (the
"Additional Shares"), upon certain terms and conditions, at an aggregate maximum
additional  purchase price of $5,000,000.  The initial funding of $5,000,000 was
effected on  February 3, 1998 by the  delivery to the Company by each of Dr. See
and Mr. Waite of a check for $7,901.39 and  Promissory  Notes due March 31, 1999
in the principal  amount of  $2,492,098.61,  bearing  interest at the rate of 1%
above  prime and secured by the shares  purchased.  At December  31,  1998,  the
Company reported total assets of $5,943,925.  This compares with total assets at
December 31, 1997 of $2,227,677.  The primary reason for this increase in assets
is a result of the two  promissory  notes,  totaling  $4,850,058 at December 31,
1998 and a decrease in cash of  $859,769.  Interest  Income  accrued for 1998 on
these two notes totaled $165,861.

         The Company's  total current  liabilities  for the year ending December
31, 1998 decreased by $2,552,260 over the total current  liabilities at December
31, 1997. The difference is primarily due to a settlement  agreement resolved in
September  1998,   eliminating  the  $2,800,000  principal  balance  of  the  6%
Convertible Debentures (see Part I, Notes to the Financial Statements,).

         The Company  issued a total of 3,577,057  shares of common stock during
the twelve months ending December 31, 1998,  mostly attributed to the Debentures
converted during January 1998  (1,036,064),  securing four additional  financing
arrangements (2,638,278), shares issued to new directors (10,000), shares issued
for services and fees  (107,500)  shares issued in legal  settlements  (55,390).
270,200  shares were returned to the  Company's  treasury as a result of a legal
settlement.  The  Company  anticipates  that it will  continue  the  practice of
issuing shares of its common stock as compensation for services  rendered to the
Company.

Liquidity and Capital Resources
-------------------------------

         The Company's major financial  transaction for 1997 incurred during the
first quarter was the issuance of $5,000,000  aggregate  principal  amount of 6%
Convertible  Debentures  on  March  21,  1997,  resulting  in a net  receipt  of
$4,375,000 by the Company for its general  operating  account.  During 1997, the
majority of the cash used in the Company's  operations came from the issuance of
the 6%  Convertible  Debentures.  During the first quarter of 1998,  the Company
managed to secure two additional financing  arrangements:  (1) the Company's two
principal stockholders,  Thomas E. Waite, President and Chief Executive Officer,
and Jackie R. See, M.D., F.A.C.C., Director of Research and Development, entered
into the  Financing  Agreement  pursuant  to which on February 3, 1998 they each
made payments of $7,901.39 and gave a promissory note of $2,492,098.61 due March
31, 1999,  with a right to purchase an  additional  $5,000,000  of the Company's
Common  Stock  together,  and (2) O.  Lee  Tawes  III,  a person  otherwise  not
affiliated with the Company,  purchased  200,000 shares of the Company's  Common
Stock for $600,000,  with the right to receive additional shares of Common Stock
of the  Company  if the price  per  share is below  $6.00  when the  shares  are
registered  with the U.S.  Securities  and Exchange  Commission.  (The Company's
Registration Statement filed on July 20, 1998 became effective on July 28, 1998,
and the closing  bid price on that day was $6.62 per  share).  During the second
quarter of 1998,  two additional  investors,  under the same terms as Mr. Tawes,
purchased  shares  of  Common  Stock of the  Company:  1)  Ronald  E.  Patterson
purchased 83,333 shares for $249,999,  also with the right to receive additional
shares of Common Stock of the Company if the price per share is below $6.00, and
2) RK Company purchased  150,000 shares for $450,000,  with the right to receive
additional shares of Common Stock of the Company if the price per share is below
$6.00.  Total monies raised in the second quarter of 1998 were $699,999.  During
the third quarter of 1998,  three  additional  investments  were made, under the
same terms as described above,  whereby they purchased shares of Common Stock of
the Company for cash:  1) RK Company  purchased  16,667  shares for $50,000,  2)
Elisabeth and Samuel Valenzisi purchased 8,000 shares for $24,000, and 3) O. Lee
Tawes  purchased  600,000  shares  for  $1,800,000,  in  lieu  of  a  litigation
settlement (see Part I, Notes to the Financial Statements, Note #10 (j) and (k),
and Note 11. Total monies raised in the Third  quarter of 1998 were  $1,874,000.
During the fourth quarter of 1998, Thomas E. Waite put $300,000 into the Company
reducing his promissory note by the same.

                                       18
<PAGE>

         To  complete  the  regulatory  process  for its  products,  the Company
estimates it will need as much as $12-million  for the Female  Topical  Product,
potentially  $10-million for the Male Topical Product and as much as $12-million
for the Male Intraurethral  Product. For the next six months,  expected costs to
be incurred for research & development  is $1,983,000,  which includes  clinical
trials on the Male Intraurethral  Product as well as the Male and Female Topical
products.  Up to an additional  $20-million may be required to complete  testing
and bring to market the Company's additional products.  However,  regulatory and
testing  costs per product for these  additional  products  are  projected to be
lower due to data generated by the CMC,  animal and clinical data related to the
Male Intraurethral Product.

         The Company expects to obtain capital funds either from the issuance of
common stock or debt. It is expected that external  sources will be available to
provide these funds, but there can be no guarantees of such funding.

ITEM 7.    FINANCIAL STATEMENTS

                                       19
<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, 1999, December 31, 1998 and December 31, 1997,
and the related statements of operations,  stockholders'  equity, and cash flows
for the years 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.

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,  1999,  December 31, 1998 and December 31, 1997 and the results of
its  operations  and its cash flows for the years 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 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.

                                               By: /s/ Ronald D. Simpkins
                                               --------------------------
                                                       Ronald D. Simpkins


Reno, Nevada
May 24, 2000


                                      F-1


<PAGE>


<TABLE>
<CAPTION>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                                  BALANCE SHEET

                                     ASSETS

                                                                     December 31,   December 31,   December 31,
                                                                         1999          1998            1997
                                                                      (Audited)      (Audited)       (Audited)
Current Assets:

<S>                                                                  <C>            <C>            <C>
     Cash and cash equivalents                                       $     1,610    $    13,430    $   873,199
     Prepaid  expenses                                                      --           37,173         35,382
     Note & Interest Receivable (Note 6, 8 & 9)                        2,751,493      4,850,058         57,711
     Reserve for receivables (Note 6, 8 & 9)                          (2,751,493)    (4,850,058)          --
     Accounts Receivable - Employees                                        --           12,997           --
     Accounts Receivable - Other                                            --              300           --
     Due From Related Parties  (Note 6)                                     --             --          852,305
     Deferred debt issue costs (Note 10)                                    --             --          156,250
     Product Inventory                                                      --           18,000           --
                                                                     -----------    -----------    -----------
        Total Current Assets                                               1,610         81,900      1,974,847
                                                                     -----------    -----------    -----------
Equipment and Leasehold Improvements:
     at cost, less accumulated depreciation of $35,461
     at December 31, 1998, $11,930 at December 31, 1997
     (Notes 2 & 3)                                                          --            9,838         50,704
                                                                     -----------    -----------    -----------
Intangible Assets:
     Intellectual Property, net of accumulated amortization
        of $4,147 at December 31, 1997 (Note 4)                             --             --          156,848
     Organizational cost, net of accumulated amortization of
        $175,550 at December 31, 1999 and 1998, $140,686 at
        December 31, 1997 respectively                                      --             --           34,864
                                                                     -----------    -----------    -----------
                                                                            --             --          191,712
                                                                     -----------    -----------    -----------
Other Assets:
     Deposits                                                                300          1,510         10,414
                                                                     -----------    -----------    -----------

        TOTAL ASSETS                                                 $     1,910    $    93,248    $ 2,227,677
                                                                     ===========    ===========    ===========
</TABLE>




    The accompanying notes are an integral part of these financial statements

                                      F-2
<PAGE>

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

                            BALANCE SHEET (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                    December 31,     December 31,     December 31,
                                                                       1999             1998             1997
                                                                     (Audited)        (Audited)        (Audited)
                                                                   -------------    -------------    -------------
<S>                                                                <C>              <C>              <C>
Current Liabilities:
    Accounts payable                                               $     349,753    $     350,859    $      26,370
    Accrued expenses (Note 5)                                               --             63,662          131,694
    Obligation under capital lease - current (Note 3)                       --              8,263           16,979
    Debentures payable - Convertible (Note 10)                              --               --          2,800,000
                                                                   -------------    -------------    -------------
       Total Current Liabilities                                         349,753          422,784        2,975,043
                                                                   -------------    -------------    -------------
Long-Term Liabilities:
    Obligation under capital lease - non-current (Note 3)                   --               --              6,317
                                                                   -------------    -------------    -------------

Stockholders' Equity:
    Common Stock, $.001 par value;                                   100,000,000                            shares
       authorized;  6,153,737, 5,988,746 and 3,344,137
       shares  issued and  outstanding  at December 31,
       1999, December 31, 1998 and December 31, 1997                      61,537           59,887           33,441
    Preferred Stock, 10,000,000 shares authorized, none
       issued and outstanding                                               --               --               --
    Additional paid-in capital                                        12,841,840       12,804,614        8,694,904
    Deficit accumulated during the development stage                 (13,251,220)     (13,194,037)      (9,482,028)
                                                                   -------------    -------------    -------------
       Total Stockholders' Equity                                       (347,843)        (329,536)        (753,683)
                                                                   -------------    -------------    -------------
       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $       1,910    $      93,248    $   2,227,677
                                                                   =============    =============    =============
</TABLE>

    The accompanying Notes are an integral part of these financial statements
                                      F-3
<PAGE>

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

                            STATEMENTS OF OPERATIONS

                                                                                                            1/13/87
                                                                                                          (Inception)
                                                         December 31,    December 31,    December 31,          to
                                                             1999            1998            1997           12/31/99
                                                          (Audited)       (Audited)        (Audited)      (Unaudited)
                                                         ------------    ------------    ------------    ------------
<S>                                                      <C>             <C>             <C>             <C>
Net Sales                                                $       --      $       --      $       --      $    187,387
Cost of  Sales                                                   --              --              --           221,557

      Gross Profit                                               --              --              --           (34,170)
                                                         ------------    ------------    ------------    ------------

Operating Expenses:

    General and administrative expenses                        80,385       2,204,248       2,295,337       6,620,840
    Research and development                                   46,079       1,035,638       1,374,675       2,885,276
    Depreciation and amortization                                --           275,080         515,213         910,927
                                                         ------------    ------------    ------------    ------------

      Total Operating Expenses                                126,464       3,514,966       4,185,225      10,417,043
                                                         ------------    ------------    ------------    ------------

      Loss from Operations                                   (126,464)     (3,514,966)     (4,185,225)    (10,451,213)
                                                         ------------    ------------    ------------    ------------

Other Income (Expense):

    Settlements                                                  --           (70,354)       (220,816)       (785,983)
    Foregiveness of Debt                                       79,057         968,901            --         1,047,958
    Interest Income                                                62           5,875           1,168           7,500
    Dividend Income                                              --            11,510          51,453          62,963
    Interest Expense                                             --          (100,776)     (1,462,821)     (2,085,909)
    Loss on disposition of Assets or Securitie       s         (9,838)     (1,012,198)           --        (1,046,536)
                                                         ------------    ------------    ------------    ------------

      Total Other Income and Expense                           69,281        (197,042)     (1,631,016)     (2,800,007)
                                                         ------------    ------------    ------------    ------------

Net Loss                                                 $    (57,183)   $ (3,712,008)   $ (5,816,241)   $(13,251,220)
                                                         ============    ============    ============    ============

Loss per Common Share                                    $      (0.01)   $      (0.69)   $      (0.36)   $      (2.44)
                                                         ============    ============    ============    ============

Weighted Average Shares Outstanding                         6,071,225       5,363,250      16,352,816       5,435,701
                                                         ============    ============    ============    ============
</TABLE>

   The accompanying Notes are an integral part of these financial statements.
                                      F-4
<PAGE>

<TABLE>
<CAPTION>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)


                       STATEMENTS OF STOCKHOLDERS' EQUITY
            FOR THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                         TO DECEMBER 31, 1999 (AUDITED)


                                                                                   Deficit
                                                 Restated           Additional       From
                                               Common Stock           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>
                                      F-5
<TABLE>
<CAPTION>
                       STATEMENTS OF STOCKHOLDERS' EQUITY
            FOR THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                         TO DECEMBER 31, 1999 (AUDITED)


                                                                                         Deficit
                                                       Restated            Additional      From
                                                      Common Stock          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                                 15,886,000       15,886      537,100         --         552,986

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

Issuance of shares in conversion of debt          4,272,244        4,272    2,394,222         --       2,398,494
</TABLE>

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

                                      F-6
<PAGE>

<TABLE>
<CAPTION>
                       STATEMENTS OF STOCKHOLDERS' EQUITY
            FOR THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                         TO DECEMBER 31, 1999 (AUDITED)

                                                                                                     Deficit
                                                       Restated                      Additional        From
                                                     Common Stock                      Paid-in       Inception
                                                       Shares             Amount       Capital         To Date           Total
                                                      ----------        ----------    ----------      ----------       ----------
<S>                                                     <C>                 <C>           <C>            <C>         <C>
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)                   --              --           410,015        --               410,015

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

Net (loss) for the year ended
   December 31, 1997                                         --              --              --       (5,816,241)     (5,816,241)
                                                      ----------        ----------    ----------      ----------      ----------

Balance at year end December 31, 1997                  33,441,373    $     33,441    $  8,694,904   $ (9,482,027)   $   (753,682)

Issuance of shares in conversion of debt                1,036,064           1,036         260,882        --               261,918

February 2, 1998, adjustment of shares to
   effect a one-for-ten reverse split                 (31,029,693)           --              --          --                 --

Issuance of shares for a commitment to a
   financing agreement                                  1,580,278          15,803       4,984,197        --             5,000,000

Issuance of shares for fees and services                  117,500           1,175         324,809        --               325,984

Issuance of shares for cash                             1,058,000          10,580       3,163,418        --             3,173,998

Net reversal of Reeivable due from related
   parties reflecting the sale of stock Rule 16(b)           --              --           (17,197)       --               (17,197)

Shares returned to Treasury - legal settlement           (270,200)         (2,702)           --          --                (2,702)

Issuance of shares for legal settlement                    55,390             554          59,799        --                60,353

Inventory contributed                                        --              --            18,000        --                18,000

Reserve for promissory note receivable                       --              --        (4,684,198)       --            (4,684,198)

Net (loss) for the Year ended
   December 31, 1998                                         --              --              --       (3,712,010)     (3,712,010)
                                                      ----------        ----------    ----------      ----------      ----------

Balance at year end December 31, 1998                   5,988,712    $     59,887    $ 12,804,614   $(13,194,037)   $   (329,536)
</TABLE>

   The accompanying Notes are an integral part of these financial statements.
                                      F-7

<PAGE>


<TABLE>
<CAPTION>
                       STATEMENTS OF STOCKHOLDERS' EQUITY
            FOR THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                         TO DECEMBER 31, 1999 (AUDITED)

                                                                                                         Deficit
                                                           Restated                      Additional        From
                                                        Common Stock                      Paid-in       Inception
                                                           Shares             Amount       Capital        To Date         Total
                                                        ------------    ------------  ------------   ------------    ------------
<S>                                                     <C>                 <C>           <C>            <C>         <C>
Issuance of Shares for fees
   and services                                              165,025          1,650         15,226           --            16,876

Reduction of Note receivable                                    --             --           22,000           --            22,000

Net (loss) for the Year ended
   December 31, 1999                                            --             --             --          (57,183)        (57,183)
                                                        ------------    ------------  ------------   ------------    ------------

Balance at year end December 31, 1999                   $  6,153,737   $     61,537   $ 12,841,840   $(13,251,220)   $   (347,843)
                                                        ============   ============   ============   ============    ============
</TABLE>
    The accompanying Notes are an integral part of these financial statements.


                                      F-8
<PAGE>

<TABLE>
<CAPTION>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS

                                                             Year ended                              1/13/87
                                                             December 31                          (Inception)
                                                     --------------------------------------           to
                                                       1999            1998            1997        12/31/99
                                                     (Audited)       (Audited)      (Audited)    (Unaudited)

                                                     -----------    -----------    -----------    -----------
Reconciliation of Net Loss to Net Cash
   Used in Operating Activities:

<S>                                                  <C>            <C>            <C>            <C>
Net Loss                                             $   (57,183)   $(3,712,008    $(5,816,241)   $(14,220,121)
                                                     -----------    -----------    -----------    -----------

Adjustments to Reconcile Net Loss to
   Net Cash Provided by (Used in)
   Operating Activities:

   Book value of assets sold                                --             --             --            6,483
   Loss on disposition of securities or asset              9,838      1,012,199           --        1,022,037
   Forgiveness of debt                                   (79,057)      (968,901)          --       (1,047,958)
   Depreciation and amortization                            --          118,830         46,464        285,928
   Amortization of Debt Issuance cost                       --          156,250        468,750        625,000
   Issuance of stock for director's fees                    --             --             --             --
      and employment services                               --           40,100        560,399      1,289,875
   Issuance of stock for consulting & legal fees            --          283,181           --          283,181
   Issuance of stock for Property Rights                    --             --            2,000          2,000
   Issuance of stock in legal settlement                    --           60,354        301,041        856,208
   Discount on Convertible Debentures                       --             --        1,250,000      1,750,000
   Interest Expense converted to Stock                      --           11,917         86,878         98,795

   (Increase) decrease in assets:
     Prepaid expenses                                     37,173           --            1,565         37,173
     Deposits/Retainers                                    1,210          7,112        (45,496)       (37,474)
     Other Assets                                         31,297        (13,297)          --           18,000
   Increase (decrease) in liabilities:
     Accounts payable                                     77,951        345,830        (31,597)       428,808
     Accrued expenses                                    (63,662)       (89,373)       124,091         (8,616)
     Due to/from related parties                            --          514,040       (394,600)       310,300
                                                     -----------    -----------    -----------    -----------
             Total Adjustments                            14,750      1,478,242      2,369,495      5,919,740
                                                     -----------    -----------    -----------    -----------

Net Cash Provided (Used) by Operating Act            $   (42,433)   $(2,233,768)   $(3,446,746)   $ (8,300,381)
                                                     -----------    -----------    -----------    -----------

Cash Flows from Investing Activities:

   Cash from sale (purchase) of equipment                   --             --          (53,217)       (78,114)
   Cash from sale (purchase) of Intellectual Righs          --             --         (150,000)      (150,000)
   Capitalized organization costs                           --             --             --         (150,924)
                                                     -----------    -----------    -----------    -----------

     Net Cash Used in Investing Activities                  --             --         (203,217)      (379,038)
                                                     -----------    -----------    -----------    -----------

Cash Flows from Financing Activities:
   Proceeds from issuance of capital stock,
     net of offering costs                                38,876      3,173,999        125,000      4,584,821
   Proceeds from debt converted to capital stock            --             --             --          250,000
   Proceeds from debt                                       --             --           23,295        438,739
   Proceeds from debentures, net of costs                   --             --        4,375,000      5,343,901
   Principal payments on debt                             (8,263)    (1,800,000)          --       (1,936,432)
                                                     -----------    -----------    -----------    -----------

     Net Cash Provided by Financing

         Activities                                       30,613      1,373,999      4,523,295      8,681,029
                                                     -----------    -----------    -----------    -----------

Net Increase (Decrease) in Cash                          (11,820)      (859,769)       873,332          1,610

Cash at beginning of period                               13,430        873,199           (133)          --
                                                     -----------    -----------    -----------    -----------

Cash at end of period                                $     1,610    $    13,430    $   873,199    $     1,610
                                                     ===========    ===========    ===========    ===========
</TABLE>
   The accompanying Notes are an integral part of these financial statements.

                                       F-9
<PAGE>


<PAGE>


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           Based on Audited Financial Statements at December 31, 1999,
                     December 31, 1998 and December 31, 1997


NOTE 1 - NATURE OF BUSINESS AND ORGANIZATION

Nature of Business:

Harvard Scientific Corp. (the "Company") is a biopharmaceutical drug development
company  specializing  in  sexual  dysfunction  for both  male and  female.  The
Company's corporate  objective is to utilize medically  researched and developed
drug substances, determine the ability of these substances to be encapsulated in
liposomes and to determine the potential  market for such products.  The Company
intends to conduct all clinical  testing  necessary for  regulatory  approval of
such  products  from the U.S.  Food and Drug  Administration  ("FDA") or similar
regulatory  agencies in foreign  countries  in order to initiate  marketing  and
establish distribution channels for its products.

Thus far, the Company's  intention is to develop the following products designed
to ameliorate sexual dysfunction:

     1. An Intraureathral  therapeutic  treatment for male erectile  dysfunction
     ("Male Intraureathral Product") 2. A topical therapeutic treatment for male
     erectile  dysfunction  ("Male  Topical  Product") 3. A topical  therapeutic
     treatment for female sexual dysfunction ("Female Topical Product"),  and 4.
     An orally administered form of liposomal,  lyophilized  Apomorphine for the
     treatment of male erectile dys-

            function ("Male Oral Product")

The  Company  is a  development  stage  enterprise  as  defined  by FASB No.  7,
"Accounting and Reporting by Development Stage Enterprises".

The Company plans to focus on LLPGE1 for the treatment of sexual dysfunction and
bring the products to the  marketplace.  In May 29, 1998,  the Company  received
approval  from  the FDA of the  Phase I study  and  authorization  of  Phase  II
clinical trials for the Male Intraureathral Product. Protocols for this Phase II
study  are  complete.   Furthermore,   the  Company   intends  to  file  an  IND
(Investigational  new Drug)  application with the FDA for Female Topical Product
for the treatment of female sexual dysfunction.

On February 17, 1998, the U.S.  Patent Office  approved and assigned  patent No.
5,718,917 to the Company for an invention "PGE1 Containing Lyophilized Liposomes
For Use In The  Treatment of Erectile  Dysfunction,"  referred to as LLPGE1.  In
June 1998, the Company filed an application for a patent in numerous regions and
countries  (Australia,  Brazil,  Canada,  China,  the Czech  Republic,  Eurasia,
Europe, Hungary,  Iceland,  Israel, Japan, Mexico, New Zealand,  Norway, Poland,
Korea,  Singapore,  Slovak,  Turkey and the Ukraine). In addition, in June 1998,
the Company  submitted an application  with the US Patent and Trademark  Office,
for its  development of a new method for treating male erectile  dysfunction via
the Intraureathral  administration of an  aqueous("liquid")  solution containing
two vasodilators, PGE1 and Papaverine.

On November 15, 1999,  notice was received from the U.S.  Patent Office that the
patent  application  for methods For the Treatment of Female Sexual  Dysfunction
was allowed pursuant to Notice of Allowances Case No. 34437.

Organization:

The  Company was  incorporated  under the laws of the State of Nevada on January
13, 1987.  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 to  facilitate  marketing of its  products in a manner which is  consistent

                                      F-10
<PAGE>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           Based on Audited Financial Statements at December 31, 1999,
                     December 31, 1998 and December 31, 1997

with enhancing its corporate image and further increasing shareholder value. All
figures in this  Report give  effect to  previous  stock  splits and the reverse
stock splits, and previously stated number of shares are appropriately restated.
The Company has 100,000,000 shares of Common Stock authorized.  In addition,  on
July 9, 1998, the shareholders of the Company  authorized  10,000,000  shares of
"blank check" Preferred Stock, none are outstanding on December 31, 1999.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organizational Costs:

Organization  costs  are  being  amortized  over a  five-year  period  using the
straight-line  method. At December 31, 1999, the Organizational Costs were fully
amortized.

Inventory:

Inventory is valued at the lower of cost or market.

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.

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.

Earnings per share:

The earnings per share calculations were based on the weighted average number of
shares outstanding during the period.

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.

                                      F-11
<PAGE>

NOTE 3 - EQUIPMENT & LEASEHOLD IMPROVEMENTS

Equipment and building improvements consists of the following:

<TABLE>
<CAPTION>

                                                   December 31, 1998      December 31, 1997
                                                   -----------------      -----------------

<S>                                                 <C>                      <C>
    Equipment & Leasehold Improvements              $       45,299           $       62,634
         Less: Accumulated  depreciation                    35,461                   11,930
                                                     -------------            -------------

                        Total                       $        9,838           $       50,704
                                                    ==============           ==============
</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 E1. 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.

The  Company  had  incurred  leasehold  improvements  to the  Irvine  office  of
approximately $4,300 in 1997, amortized over the life of the lease. In May 1998,
the Company  terminated the Irvine lease and moved the research and  development
office  from  Irvine to Costa  Mesa,  California.  The  balance  of  unamortized
improvements of approximately $2,755 was written off.

During the fourth  quarter of 1998 and the first  quarter of 1999,  the  Company
closed three  offices  (Florida,  Arizona and  California)  with all  operations
maintained out of a Reno,  Nevada office.  The office equipment in these offices
were donated to charitable organizations.

NOTE 4 - INTELLECTUAL PROPERTIES

On January 7, 1994,  the Company  exchanged  285,600 shares of common stock with
BTI for the intellectual rights to patent, develop,  manufacture, and market the
LLPGE1 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.

On November 16, 1995, the Company  exchanged 613,850 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 LLPGE1
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 33,500  shares of common  stock,
ceased product development in connection with a settlement accrued in 1995.
                                      F-12
<PAGE>

                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           Based on Audited Financial Statements at December 31, 1999,
                     December 31, 1998 and December 31, 1997

During 1997, the Company entered into three additional significant  transactions
with BTI for the  acquisition of intellectual  rights,  and for the provision of
technological, management, fundraising and marketing assistance. In addition, in
1996,  the Company  incurred costs payable to BTI for  consultation  and rent of
$133,157 and for research and development $50,378 of the LLPGE1 product.  During
1997,  BTI chose to  convert  the  accounts  payable  balance of  $333,535  as a
contribution to additional-paid-in-capital.

On November 20, 1997,  the Company  agreed to exchange  200,000 shares of common
stock,  which has been issued,  to BTI for the  Intellectual  Property Rights to
Prostaglandin E1 Lyophilized Liposomes for the use of treatment of Psoriasis. In
addition,  the Company is to pay BTI $150,000.  BTI was to receive a 3% override
on royalties of the  Psoriasis  product.  On June 11, 1998,  BTI and the Company
agreed  that BTI would  transfer  an  irrevocable  royalty-free  license  to all
intellectual property,  intangibles,  patents, trade secrets,  trademarks, trade
names and goodwill relating to BTI that exists or is in development, relating to
male  and/or  female  sexual  dysfunction,  for the  return of the  intellectual
property related to the Psoriasis product that BTI previously had transferred to
the Company and the granting to BTI registration right (effective July 28, 1998)
as to all shares of the Company's  common stock held by BTI on July 20th,  1998.
In addition,  all royalty  agreements with respect to products other than sexual
dysfunction  have  been  terminated.   In  addition,  the  Company  forgave  the
indebtedness of BTI of $892,819.  The debt forgiveness is treated as part of the
cost of the intellectual properties received from BTI.

In  December  1998,  the  Company had a balance in  Intellectual  Properties  of
$1,053,814, with accumulated depreciation of $53,196 for a net of $1,000,619. On
December  31,  1998,  Intellectual  Properties  was  written  down to zero,  the
determined market value at that time.

NOTE 5 - ACCRUED EXPENSES

Accrued expenses consist of the following:

                                               (Audited)           (Audited)
                                         December 31, 1998     December 31, 1997
                                         -----------------     -----------------

Interest on notes and debentures             $      0           $131,694
Accrued payroll & payroll taxes                63,662                  0
                                             --------           --------


                             Total           $ 63,662           $131,694
                                             ========           ========


Also see Note 10 for interest on debentures.

NOTE 6 - 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.
                                      F-13
<PAGE>


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           Based on Audited Financial Statements at December 31, 1999,
                     December 31, 1998 and December 31, 1997


2.   During  1997,  the  Company  incurred a payable of  $150,000 to BTI for the
     Intellectual  Property Rights to Prostaglandin E1 Lyophilized Liposomes for
     the use of treatment of  Psoriasis.  On June 11, 1998,  BTI and the Company
     agreed that BTI would transfer an irrevocable  royalty-free  license to all
     its intellectual property relating to sexual dysfunction, for the return of
     the  intellectual  property  related to the Psoriasis and other  non-sexual
     dysfunction products that BTI previously had transferred.  In addition, the
     Company forgave BTI's  indebtedness of $895,819,  which was treated as part
     of the basis of the intellectual properties. See Note 4.

3.   During 1996, BTI advanced  20,000 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.  The $500,000
     was part of the forgiven debt of $895,819 described above.

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 January 1998, BTI 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.  This amount
     was also part of the forgiven debt of $895,819 described above.

5.   During the year 1997, BTI chose to convert the accounts  payable balance of
     $333,535 as a contribution to additional-paid-in-capital.

6.   BTI owned approximately 10% and 22% of the Company's shares on December 31,
     1998,  December 31, 1997,  respectively.  Dr.  Jackie See a Director of the
     Company and a controlling person of BTI. Dr. Jackie See owned approximately
     35% of the Common Stock of the Company on December 31, 1998,  including the
     shares  owned by BTI and  shares  that Dr.  See has the  right to  purchase
     (296,302 shares)(see Note 8).

7.   In November  1997,  the Company  issued  400,000  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.

8.   The Company has entered into a financing  agreement dated January 13, 1998,
     as amended on February 3, 1998,  between Dr. Jackie R. See, Thomas E. Waite
     and the  Company  for the  funding of the  Company up to  $10,000,000.  Dr.
     Jackie R. See and Mr. Thomas E. Waite were Directors of the Company. Thomas
     E. Waite was 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.  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 (July 28, 1998), the shares can
     be sold in accordance  with the  Securities  Act of 1933,  subject to state
     securities laws. See Note 8 and Note 9.

9.   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.
                                      F-14
<PAGE>


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           Based on Audited Financial Statements at December 31, 1999,
                     December 31, 1998 and December 31, 1997


     During 1998, the Company issued a total of 1,590,278 shares of Common Stock
     to  directors  of the  Company.  10,000 of these  shares were booked at the
     price of the most recent sale of the stock for cash to  shareholders of the
     registration  statement  held  effective  July 28,  1998.  The  balance  of
     1,580,278 was issued in conjunction  with the Waite and See Agreement,  see
     Notes 8 and 9.

     During 1998, the Company  approved and issued 10,000 shares of Common Stock
     (restricted)  to an employee of the Company for prior and current  services
     rendered.  In addition,  during 1998 the Company  issued  97,500  shares of
     Common Stock for services performed by outside consultants.  270,200 shares
     of Common  Stock were  returned to the Company  treasury as part of a legal
     settlement with prior affiliates of the Company (see Note 10). These shares
     were recorded at the lesser of 1) the value of the Common Stock on the date
     issued or 2) the most recent sale of the stock for cash to  shareholders of
     the registration statement held effective July 28, 1998.

     During the first quarter 1999,  the Company  issued 15,000 shares of Common
     Stock  to an  employee  of  Company,  in  accordance  with  her  employment
     agreement and considered additional  compensation fully earned in 1998. The
     stock is  restricted as defined in Rule 155 under  Securities  Act of 1933.
     The employee is no longer with the Company.  The  transaction was valued at
     the low bid price on the day of the transfer, or $16,875.

     Also see discussions  regarding  intellectual  properties and agreements in
     Notes 4 and 8.

NOTE 7 - INCOME TAXES

     The Company has federal net  operating  loss  carryforwards  for  financial
     statement purposes of approximately $14,000,000 at December 31, 1999, which
     will  be  used  to  offset  future  earnings  of  the  Company.   The  loss
     carryforwards  will expire during the years ending 2002 through 2013 if not
     used.

NOTE 8 - CONTRACTS & AGREEMENTS

1.   Certain  contracts and agreements with the Company have been placed on hold
     until  financing  arrangements  have been  made.  These  contracts  include
     certain  employment  contracts and other agreements between the Company and
     parties expected to perform services for the Company.

2.   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,  bearing  interest at the rate of 1% above prime and secured
     by the  shares  purchased  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
                                      F-15
<PAGE>


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           Based on Audited Financial Statements at December 31, 1999,
                     December 31, 1998 and December 31, 1997

     split  effective  February 2, 1998).  Dr.  Jackie R. See and Mr.  Thomas E.
     Waite were Directors of the Company. Thomas E. Waite was 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 with  registration  rights effective
     July 28, 1998. A fairness opinion has been obtained in connection with this
     Financing  Agreement  from HD Brous & Co.,  Inc., a New York Stock Exchange
     member firm located in Phoenix, Arizona.

     The  promissory  notes  began  to  accrue  interest  at 8% on the  date the
     registration statement (for these shares) became effective (July 28, 1998).
     At December 31, 1998,  the Company had accrued  interest  from both Dr. See
     and Mr. Waite of $165,861.  During the 4th quarter of 1998,  Mr. Waite made
     payments  towards his note balance of $300,000.  At December 31, 1998,  the
     principal  balance  due on these two  promissory  notes is  $4,684,197.  At
     December 31, 1998,  the full balance of principle and interest was reserved
     as  a  contra  asset  account  to  the  receivable  balance  with  interest
     receivable balance of $165,861 written off against interest income.

     On March 31,  1999,  the  Promissory  Notes due from Dr.  Jackie R. See and
     Thomas E. Waite were due and payable.

     On May 14, 1999,  the Company  agreed to resolve the Promisory Note payable
     of $2,492,099 by Dr. See to the Company,  plus accrued interest of $147,221
     through May 14, 1999, the date of this agreement,  as follows:  (i) Dr. See
     will use his 790,139 shares issued in connection  with the Promissory  Note
     transaction  to the  benefit of the  Company  whether by  contributing  the
     proceeds from the sale of such shares or by paying certain of the Company's
     obligations  with such  shares  (ii) Dr.  See  agrees to use an  additional
     300,000  shares - i.e.,  the entire balance of the shares owned by him - to
     the benefit of the Company.  Thus, all of Dr. See's  1,090,139  shares have
     been  obligated in this manner.  To date, Dr. See has  transferred  990,139
     shares to pay Company  obligations as well as the proceeds from the sale of
     another 100,000 shares. (iii) Bio-Sphere Technology, Inc., in behalf of Dr.
     See,  agrees to grant the Company an exclusive  license of its  proprietary
     invention  and  trade  secrets  regarding  the  use  of  liposomes  bearing
     prostaglandin's  for the  treatment  of  psoriasis.  (iv)  Dr.  See  waives
     arrearages in fees under his consulting agreement.

     Mr. Waite has not been relieved from his obligation to pay in full the note
     and interest balance due the Company ( See Note 9).

3.   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 50,000 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.  On
     December 1, 1998, the consulting  agreement  expired and was not renewed by
     the Company. The Company recorded the shares at par value.

4.   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  E1  for  the
     treatment of male erectile  dysfunction.  The Company agreed to pay Hofmann
     $15,000 per month plus 10,000  shares of  (restricted)  Common  Stock.  The
     stock was recorded at par value.  On May 29, 1998,  the Company  terminated
     his agreement.
                                      F-16
<PAGE>


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           Based on Audited Financial Statements at December 31, 1999,
                     December 31, 1998 and December 31, 1997


5.   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.  Effective July 1, 1998, the Company agreed to pay Goldstein
     $7,000 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  LLPGE1  product  to the  marketplace.  Effective  January  1, 1999 the
     agreement with Dr. Irwin Goldstein was terminated.

6.   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 expired January 15, 1998 and was not renewed.

7.   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 100,000  shares
     prorated over a three-year  period.  In 1997,  Walker received $231,678 and
     was issued  105,200  shares of Common Stock.  The shares  transferred  were
     recorded at par value.

8.   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 40,000 shares of the Company's Common Stock (with registration
     rights). All prior agreements with Miller have been terminated. In November
     1997,  the shares  transferred  were recorded at $537,500,  the fair market
     value of the shares on the date the shares  were  transferred.  The Company
     did not renew this agreement with Miller.

9.   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 10,000  shares of  (restricted)
     Common Stock of the Company.  The agreement expired on December 9, 1998 and
     was not renewed. The Company recorded the shares at par value.

10.  On February 23, 1998, the Company  entered into a financing  agreement with
     an independent  investor  ("Investor"),  under which the Investor  provided
     financing  of $600,000 to the  Company in  exchange  for 200,000  shares of
     Common Stock of the Company.  The agreement states that if on the effective
     date of the Registration Statement,  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  of the  company's  Common  Stock on the
     effective  date and (b) 200,000.  In February  1998,  the Company  received
     $600,000  and  issued  200,000  shares to the  Investor.  The  Registration
     Statement was effective July 28, 1998 and the closing bid price on that day
     was $6.62.

11.  On June 11, 1998,  the Company  authorized the issuance of 30,000 shares of
     Common Stock to a consultant of the Company, Medhat Gorgy, as a part of his
     consultant agreement dated June 10, 1998. Of such shares,  25,000 shares of
     Common Stock are entitled to  registration  rights under the Securities Act
     of 1933.  The 5,000 shares  without  registration  rights plus 3,000 shares
     with  registration  rights  were  issued on June 11,  1998.  The balance of
                                      F-17
<PAGE>


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           Based on Audited Financial Statements at December 31, 1999,
                     December 31, 1998 and December 31, 1997


     22,000 shares is issuable  monthly in lots of 2,000 shares each. The shares
     issued and  issuable to Mr. Gorgy are  effected  pursuant to the  exemption
     from  registration  under Section 4(2) of the  Securities  Act of 1933. The
     8,000  shares  issued  through June 30, 1998 were valued at the closing bid
     price on the day the shares were issued.  The  Registration  Statement  was
     effective July 28, 1998 and the closing bid price on that day was $6.62.

12.  On June 19,  1998,  the Company  entered  into a financing  agreement  with
     Ronald E.  Patterson,  under  which Mr.  Patterson  provided  financing  of
     $249,999 to the Company in exchange  for 83,333  shares of Common  Stock of
     the Company. If, on the effective date of the Registration  Statement,  the
     closing bid price of the Company's stock is less than $6.00 per share,  Mr.
     Patterson  is  to  receive  additional  shares  calculated  by  taking  the
     difference between (a) 249,999 divided by one-half the closing bid price of
     the  company's  Common  Stock on the  effective  date and (b)  83,333.  The
     Registration  Statement  was  effective  July 28,  1998 and the closing bid
     price on that day was $6.62.

13.  On June 29, 1998 the Company entered into financing  agreements with the RK
     Company,  under which The RK Company provided a total financing of $450,000
     to the  Company  in  exchange  for  150,000  shares of Common  Stock of the
     Company.  If, on the  effective  date of the  Registration  Statement,  the
     closing bid price of the Company's stock is less than $6.00 per share,  the
     RK  Company  is to  receive  additional  shares  calculated  by taking  the
     difference  between (a) 50,000 divided by one-half the closing bid price of
     the  company's  Common  Stock on the  effective  date and (b)  16,667.  The
     Registration  Statement  was  effective  July 28,  1998 and the closing bid
     price on that day was $6.62.

14.  On July 1, 1998, the Company  entered into a settlement  agreement  between
     GensiaSicor  Pharmaceuticals,  Inc. and agreed to transfer 20,000 shares of
     Common  Stock of the  Company in  exchange  for the  release of all claims,
     demands, etc. arising from a manufacturing  agreement with the Company. The
     shares were transferred on July 8, 1998 and valued at $3.00,  which was the
     lesser of 1) the  closing  stock price on the date  transferred  or 2) cash
     received in exchange for stock from investors  included in the registration
     statement effective July 28, 1998.

15.  On July 1, 1998, the Company entered into financing  agreements with the RK
     Company,  under which the RK Company  provided  financing of $50,000 to the
     Company in exchange for 16,667  shares of Common Stock of the Company.  If,
     on the effective date of this Registration Statement, the closing bid price
     of the Company's stock was less than $6.00 per share, the RK Company was to
     receive  additional shares calculated by taking the difference  between (a)
     50,000  divided by one-half the closing bid price of the  company's  Common
     Stock on the effective date and (b) 16,667. The Registration  Statement was
     effective July 28, 1998 and the closing bid price on that day was $6.62.

16.  On July 7, 1998,  the  Company  entered  into a  financing  agreement  with
     Elisabeth & Samuel Valenzisi, under which Mr. and Mrs. Valenzisi provided a
     total  financing  of $24,000 to the Company in exchange for 8,000 shares of
     Common Stock of the Company. If, on the effective date of this Registration
     Statement, the closing bid price of the Company's stock was less than $6.00
     per  share,  Mr.  &  Mrs.  Valenzisi  were  to  receive  additional  shares
     calculated by taking the difference  between (a) 24,000 divided by one-half
     the closing bid price of the company's  Common Stock on the effective  date
     and (b) 8,000. The  Registration  Statement was effective July 28, 1998 and
     the closing bid price on that day was $6.62.

                                      F-18
<PAGE>


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           Based on Audited Financial Statements at December 31, 1999,
                     December 31, 1998 and December 31, 1997


17.  The Company  entered into a consulting  agreement  with Francis C. Pizzulli
     effective  June 1, 1998,  whereby Mr.  Pizzulli is to perform legal advice,
     service  and legal  consulting  and to  retain  legal  counsel  to serve as
     counsel of record in litigation and arbitration  matters to the Company, in
     exchange for a fee of $10,000 per month plus 45,000 shares of the Company's
     Common Stock as a signing bonus. The shares issued have registration rights
     and have been included in the  Registration  Statement  filed with the U.S.
     Securities and Exchange Commission on July 20, 1998, which became effective
     on July 28, 1998.

18.  On July 20, 1998, the Company's  filed a registration  statement  under the
     Securities Act of 1933,  registering  4,166,133 shares of its Common Stock,
     and was declared effective on July 28th, 1998. The closing bid price of the
     stock on that day was $6.62.

19.  Since  January  1999,  the  Chief  Financial  Officer  of the  Company  has
     maintained the Company's  operations out of his Reno, Nevada office.  Prior
     to that time, the Company had the following office lease commitments:

    (a)  In June 1998, the Company moved its research & development offices from
         Irvine,  California to Costa Mesa,  California  where they occupied 930
         square feet.  Rent was $900 monthly  beginning  June 15, 1998  expiring
         June 14, 1999. During January 1999, the Company  negotiated out of this
         lease  closing  this  office.  All  research  and  development  will be
         performed out of a designated laboratory still to be determined.

    (b)  On July 20, 1998 the Company moved the administrative headquarters from
         Reno, Nevada to Scottsdale,Arizona where the accounting operations were
         maintained. They occupied 144 square feet and paid rent of $610 monthly
         expiring August 31, 1999.  During January 1999, the Company  negotiated
         out of this lease,  moving all  administrative  functions  to the Reno,
         Nevada office.

    (c) In December  1998,  the Company  closed its  headquarters  in Lake Mary,
        Florida.


NOTE 9 - 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) Investors Capital Enterprises, Inc. v. Harvard Scientific Corp. and Does
        1-50 Case No:  BC209049,  filed April 20, 1999 in  Superior  Court,  Los
        Angeles County , State of California.  Investor's  Capital  Enterprises,
        Inc. alleges that it was due a fee of 87,500 shares  (post-split) of the
        Company's Common Stock in exchange for arranging certain financing.  The
        complaint  alleges that it did arrange certain financing through DJ Ltd.
        Investors Capital  Enterprises claims that such an investment  qualifies
        for its commission  agreement and that it advised the Company in writing
        on July 1, 1996.  The complaint  alleges that the market value of 87,500
        shares on May 15, 1996 was $2,100,000.

        During September 1999, the court ordered this Case to proceed to binding
        arbitration.  However, to date, Investors Capital Enterprises,  Inc. has
        not initiated the arbitration.

    (b) On March 8,  1999,  an action  entitled  Thomas  Waite,  Plaintiff,  vs.
        Harvard Scientific Corp., a Nevada  Corporation,  and Dr. Jackie R. See,
        Defendants,  was filed by Mr. Waite, former President,  CEO and Chairman
        of the  Board.  The case  was  filed  in the  Circuit  Court of the 18th
        Judicial  District  in  and  for  Seminole  county,  Florida,  Case  No.
        99-508-CA-15-K.  The  action  alleges  that Mr.  Waite was  fraudulently
        induced to enter into the February 1998 financing  agreement approved by
        the stockholders in May of 1998. In addition, Mr. Waite seeks rescission
        of such loan agreement in the amount of  $2,492,098.61  and repayment of
                                      F-19
<PAGE>


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           Based on Audited Financial Statements at December 31, 1999,
                     December 31, 1998 and December 31, 1997


        $300,000  loaned under the agreement and consequent  cancellation of the
        transaction  that resulted in 790,139 shares issued to Waite in February
        1998.  On April 6,  1999,  the  Company  and Dr.  See  filed a notice of
        removal  of the  action  tot he United  States  District  Court,  Middle
        District of Florida,  Orlando Division, as Case No.  99-409-CIV-ORL-22B.
        On September 3, 1999 the Judge dismissed the Case without  prejudice and
        directed to the clerk to close the file.

    (c) Harvard Scientific Corp. v. Thomas E. Waite, Case No. CV-N-99-00245-ECR,
        was filed on April 30, 1999 in the United States  District Court for the
        District of Nevada,  Reno.  The complaint  alleges breach of contract of
        fiduciary duty and unjust  enrichment  claims in connection  with former
        CEO,  President  and  Director,  Thomas  E.  Waite's  non-payment  of  a
        promissory  note due to the  Company on March 31,  1999 in the amount of
        $2,492,098.61. The complaint also alleges a claim under section 16(b) of
        the  Securities  Exchange Act of 1934, as amended,  in  connection  with
        profits  alleged to be over  $700,000 on sales of Company stock in 1997.
        The Company is awaiting a response from Waite to the  complaint,  and to
        the  motion  to  transfer  the  action  Waite  has filed in the state of
        Florida to be consolidated  with this case filed in the federal court in
        Reno, Nevada (see above).

    (d) On  November  3, 1995,  BTI entered  into an  agreement  with a European
        marketer, Pharma Maehle ("Pharma"),  whereby Pharma was to establish the
        European market for the Company's erectile dysfunction product (only the
        Intraureathral  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 20, 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, and when that did not occur,  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 it has rightfully  terminated the agreement with Pharma,  which
        has been and  continues  to be in breach of the  agreement in any event.
        The validity of the agreement is currently in dispute.

         On February 19, 1998,  the Company  renewed  it's  previous  notices of
        termination  and renoticed the  termination  of the licensing  agreement
        with Pharma.  The Company demanded binding  arbitration under Nevada law
        of the existing  disputes  between the parties  pursuant to the terms of
        the  licensing  agreement.  It appears that Pharma  Maehle has abandoned
        arbitration.

    (e) Hardesty,  Ltd., vs. Harvard Scientific Corp. et al, Case No. CV99-05715
        filed on October 22, 1999, in the Second Judicial District Court, Washoe
        County,  State of Nevada.  Hardesty,  Ltd.  Challenges it rendered legal
        services and advanced  costs for  Defendant  from  December 1997 through
        December 1998 in excess of $10,000.
                                      F-20
<PAGE>


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           Based on Audited Financial Statements at December 31, 1999,
                     December 31, 1998 and December 31, 1997


    (f) RK Company vs.  Harvard  Scientific  Corp.,  Case No. 99 C 4261,  United
        States District Court, Northern District of Illinois,  Eastern Division.
        Plaintiff  alleges  massive  fraud  perpetrated  by  Defendant to induce
        Plaintiff to invest and hold securities in Harvard Scientific.

    (g) Pyramid Laboratories vs. Harvard Scientific Corp.,Case No. 811584 in the
        Superior  Court of the State of  California,  County of Orange,  Central
        Justice   Center:   Pyramid   Laboratories   is  seeking   approximately
        $128,000.00 in damages from Harvard for services  allegedly  provided to
        Harvard. This amount is disputed by Harvard.  Harvard asserts that there
        should  be  an  offset  of  this   amount  due  to  actions  of  Pyramid
        Laboratories.  This  matter is set for  trial on May 30,  2000 in Orange
        County Superior Court.

    (h) Medhat Gorgy vs. Harvard  Scientific  Corp.,  Case No. CV99-04662 in the
        Second Judicial District Court of Washoe County, Nevada. Medhat Gorgy, a
        principal  of  Pyramid  Laboratories,  has filed  suit  against  Harvard
        claiming damages for services alledgedly provided to Harvard. The amount
        sought is disputed by Harvard. The Company seeks an offset of the amount
        due to actions of Medhat Gorgy and seeks damages against Medhat Gorgy in
        a counterclaim.  The Company seeks damages against Pyramid Laboratory as
        a third party defendant to this action.

NOTE 10 - 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.  In
addition, at the time of issuance, the Company accounted for the 20% discount to
market of $1,000,000 as additional interest expense and paid-in-capital.

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 31, 1998. On January 6, 1998,
the investor served a conversion notice for the sum of $250,000 of the principal
amount plus $11,917 of interest expense, for the issuance of 1,036,064 shares of
Common Stock on January 15,  1998.  Springrange  had  submitted  two  additional
conversion notices: 1) January 28, 1998 for the conversion of $250,000 principle
plus  interest,  and 2) on  January  29,  1998 for the  conversion  of  $250,000
principle plus interest. The Company did not honor these requests.

On September 23, 1998, the Company came to an agreement with Springrange and the
courts  approved  the terms of the  settlement  agreement.  The  Company  issued
600,000  shares of its  Common  Stock to a third  party who  purchased  them for
$1,800,000,  and, in turn,  paid  $1,800,000 to  Springrange  for full and final
settlement of all claims.
                                      F-21
<PAGE>


                            HARVARD SCIENTIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
           Based on Audited Financial Statements at December 31, 1999,
                     December 31, 1998 and December 31, 1997


On September 23, 1998,  $2,450,000 of the Debenture plus $75,661 interest on the
Debenture had been converted into 385,831 shares of the Company's  Common Stock.
The Company  recorded the  transfer of 600,000  shares of Common Stock valued at
$1,800,000,  eliminating the debt balance of $2,550,000 plus accrued interest of
$218,901,with  the net of $968,901  booked to forgiveness of debt and treated as
ordinary income.

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  from other  sources.  Collectability  is
uncertain  on the  Promissory  Note due from the  former  Officer/Director,  Mr.
Waite. If additional  capital is not secured,  there is considerable doubt about
the Company's ability to continue as a going concern.

NOTE 12 - SUBSEQUENT EVENTS

          Eric N. Savage v. Harvard  Scientific  Corp.,  Dr.  Jackie See, Does I
through X, Case No.  A381022  filed on November 10, 1997 in the District  Court,
Clark County,  Nevada. Eric N. Savage ("Savage"),  a former employee and officer
of Harvard,  alleges that pursuant to an oral representation made in March 1994,
that he was entitled to receive 150,000 shares  (restated to reflect the current
stock splits and reverse stock  splits),  which were not authorized for issuance
to him until July 1994.  Savage also alleges that the Company agreed to backdate
the  issuance  of the  150,000  shares  to Savage  to the date  March  17,  1994
employment  contract,  which contract made no mention of any share compensation.
Savage  further  alleges  that the  defendants  restricted  and delayed him from
selling shares causing him financial losses in excess of $1,250,000.

On May 18, 2000 an  agreement  was reached  whereby  Harvard  will issue  75,000
shares of stock to Savage.

          Harvard   Scientific   Corporation  vs.  David  E  Jordan,   Case  No.
98-2031-CA-16-P  filed in the circuit  court of the 18th  Judicial  Circuit,  in
Seminole  County,  Florida,  filed on or about October 1, 1998.  David E. Jordan
("Jordan")  was a  consultant  to the  Company.  On May 15,  1997,  the Board of
Directors considered a resolution engaging Jordan for his services. At that time
the Company  discussed a  compensation  of $15,000 per month plus 100,000 shares
(restated to reflect the 1 for 10 reverse split  effective  February 2, 1998) of
the  Company's  Common  Stock.  A Consulting  Agreement  was never  consummated.
Despite  the  fact  that  no  agreement  was  consummated,   stock  certificates
evidencing  100,000  shares  of the  Company's  Common  Stock  were  issued  and
delivered  to Jordan on June 6, 1997.  On or about June 17,  1997,  the  Company
cancelled  the 100,000  shares  issued and  delivered to Jordan.  In April 1997,
prior to the  issuance  date of the 100,000  shares,  Jordan  marketed  and sold
portions  of these  shares.  Jordan  also  presented  himself as an agent of the
Company in the sale of these  shares  when,  indeed,  he had never  received the
authority  to do so. This case was settled and  dismissed by a Court Order dated
April 17, 2000.  The  settlement  agreement  requires  Harvard to issue  125,000
shares to David Jordan or his nominees.
                                      F-22
<PAGE>


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

         Ronald  D.  Simpkins,  independent  certified  public  accountant,  has
audited the financial statements of the Company for the years ended December 31,
1999,  December 31, 1998 and December 31, 1997, included in this filing. In June
1998, the Board of Directors  approved Ronald D. Simpkins to audit the Company's
financial statements.

PART III

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

During the year 1999 up  through  March of 2000,  the  directors  and  executive
officers of the Company,  their ages,  positions and offices in the Company, the
dates of their initial election or appointment as director or executive officer,
and the expiration of the terms as directors were as follows:
<TABLE>
<CAPTION>


<S>                                  <C>              <C>                                       <C>
-----------------------------------------------------------------------------------------------------------------------
                                                                                              Period Served as Director
Name                                 Age              Position (1)                              or Executive Officer
-----------------------------------------------------------------------------------------------------------------------
   Irwin Miller                      66               Director,Chairman,and                     4/29/99 - 12/22/99
                                                      Chief Executive Officer
-----------------------------------------------------------------------------------------------------------------------
   Martin J. Holloran                67               Director  (3)                             2/10/98 - 3/4/99
-----------------------------------------------------------------------------------------------------------------------
   Barbara L. Krilich                38               Secretary and Chief                       12/12/97 - 1/12/99
                                                      Operating Officer
-----------------------------------------------------------------------------------------------------------------------
   Curtis A. Orgill                  49               Director, Treasurer, and                  Officer since
                                                      Chief Financial Officer                   12/12/97; Director
                                                      (2) (3)                                   since 2/10/98
-----------------------------------------------------------------------------------------------------------------------
   Jackie R. See, M.D. (4)           57               Director  (5)                             1/6/94 - 7/12/99
-----------------------------------------------------------------------------------------------------------------------
   Thomas E. Waite                   36               Chief  Executive Officer,                 11/14/97 - 3/4/99
                                                      President and Director (5)
-----------------------------------------------------------------------------------------------------------------------
   Alexander H. Walker, Jr.          74               Director and Chairman of                  Since 1/13/2000
                                                      the Board
-----------------------------------------------------------------------------------------------------------------------
   Stuart  V. Brame                  53               Director, President, and                  Since 1/13/2000
                                                      Chief Executive Officer
                                                      (2) (3)(4)
-----------------------------------------------------------------------------------------------------------------------
   Gordon W. Cole                    63               Director (3)                              Since March 3, 1999
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  The Company's  directors are elected at the annual meeting of  stockholders
     and hold office until their  successors  are elected and qualified or until
     the director resigns.  The Company's officers are appointed annually and as
     needed by the Board of Directors and serve at the pleasure of the Board.

(2)  These Directors are members of the  Compensation  Committee.  Mr. Orgill is
     Chairman of this committee.

(3)  These Directors are members on the Audit Committee.  Mr. Orgill is Chairman
     of this committee.

(4)  These Directors are members of the Company's Executive Committee.

                                       20

<PAGE>


Business Experience:

Jackie R. See,  M.D.,  F.A.C.C.,  was a Director of the Company.  He resigned in
July of 1999. Dr. See is a cardiologist and the principal inventor and author of
the patent of microsphere technology  "PGE1-EDT".  He received his M.D. from the
University  of  California,  College  of  Medicine  (Irvine)  in 1968.  Dr.  See
completed  his  Residency  in  Internal  Medicine  at  the  Huntington  Memorial
Hospital,  Pasadena,  California in 1973.  After serving as a Medical Officer on
active duty in the U.S. Navy Medical Corps. He went on to do research fellowship
work in  cardiology  at Peter Bent  Brigham  Hospital,  Harvard  Medical  School
(Boston).  He was an Associate  Director of the  Foundation  for  Cardiovascular
Research (1968-1984) and has been a Fellow of the American College of Cardiology
since 1980. Dr. See is licensed to practice medicine in the States of California
and Nevada and is Board Certified by the American Board of Internal Medicine. He
is the author or co-author of more than 60 research articles for various medical
publications.

Thomas E. Waite,  was a Director  and Chairman of the Board,  President  and the
Chief Executive  Officer of the Company at December 31, 1998. Mr. Waite resigned
all his  positions  with  the  Company  on March 4,  1999.  Much of Mr.  Waite's
experience  has been  specialized  in  investment  banking,  corporate  finance,
mergers and acquisitions, and public relations for publicly traded biotechnology
and medical device companies.  Just prior to joining the Company,  Mr. Waite was
President of his  consulting  firm,  Thomas E. Waite & Associates,  Inc.,  which
began in late  1992,  where he and his  associates  began  researching  the most
effective,  risk  adverse  way  for  establishing  enterprises  in  the  rapidly
expanding and highly lucrative  riverboat  gaming industry.  As a result of this
research,  in 1993, Mr. Waite  organized a successful  riverboat  gaming company
called Wild Card Enterprises, Inc., of which he was also President. From 1988 to
mid 1994,  Mr.  Waite was a Series-7  licensed  registered  representative.  His
consulting  experience  began in 1990 at First  Montauk  Securities.  In 1991 he
became Director of Investment  Banking and Corporate  Finance at Collner Higgins
and Andersen,  a securities firm that specializes in trading. In 1993, Mr. Waite
resigned his position with Collner Higgins and Andersen.

                                       21

<PAGE>


Martin J.  Holloran was a Director of the  Company.  Mr.  Holloran  resigned his
position as Director on March 4, 1999. Mr. Holloran is currently retired.  Prior
to  retirement,  Mr.  Holloran had over forty years of  experience  in sales and
marketing,  which  includes over  twenty-five  years with  Prudential  Insurance
Company.  He earned many  awards  over his career for both sales and  management
abilities.  Mr.  Holloran  was a winner of 24  National  Leadership  awards  for
Prudential,  a two time  winner of its Academy of Honor and a two time winner of
the  Citation  award  given to the top 10%  producers  in  Prudential  Insurance
Company. Mr. Holloran also received the Distinguished Professional Service Award
for New  England  and  continues  to be very  active as a Teacher  of  Christian
Doctrine and a coach of children's athletics.

Curtis A. Orgill, CPA, is the Company's Treasurer,  Director and Chief Financial
Officer.  Mr. Orgill is a Certified  Public  Accountant with current licenses in
the states of Nevada and Utah. In 1974,  Mr. Orgill  joined  Deloitte  Haskins &
Sells (currently  Deloitte & Touche),  in Salt Lake City. He later helped open a
new office  for  Deloitte  & Touche in Reno,  Nevada,  serving as the Senior Tax
Partner  in the State of Nevada.  He left  Deloitte & Touche in 1993 to join the
regional CPA firm of Bartig,  Basler & Ray, CPA's Inc. Mr. Orgill is involved in
international  accounting,  corporate tax planning and tax compliance as well as
structuring  acquisitions  for  corporations.  Mr.  Orgill  is a  member  of the
American  Institute  of  Certified  Public  Accountants,  the Nevada  Society of
Certified  Public  Accountants  and the Utah  Association  of  Certified  Public
Accountants.

Barbara L. Berry,  CPA, was the Company's  Secretary and Chief Operating Officer
until she resigned on January 12, 1999.  Mrs. Berry has been a Certified  Public
Accountant  in Arizona  since 1984.  She  recently  served as Director and Chief
Financial Officer of Health Care Centers of America,  Inc. from November 1996 to
April  1997.  Immediately  prior to that she was  employed  by Evans  Withycombe
Residential,  Inc. (currently Equity Residential Inc.), a Real Estate Investment
Trust (REIT),  in Phoenix,  Arizona,  which she joined in 1994.  Initially  Mrs.
Berry  worked  in  developing  multi-family  units in  Phoenix,  Arizona,  later
transferring   into  the   acquisition   division   responsible   for  acquiring
multi-family  properties in Southern  California.  From 1992 to 1994,  she was a
Regional  Manager  in Phoenix  Arizona  for SCG  Residential,  a  subsidiary  of
Security  Capital Group, a REIT listed on the New York Stock Exchange.  Prior to
joining  SCG, Ms.  Krilich  spent over 10 years in  accounting  and finance with
various firms, including Peat Marwick & Mitchell (currently KPMG). Mrs. Berry is
a member of the  American  Institute  of Certified  Public  Accountants  and the
Arizona Society of Certified Public Accountants.

                                       22

<PAGE>


Gordon W. Cole is a Director  of the  Company  and has been such since  March 3,
1999. Mr. Cole is currently  working for Bartig,  Basler and Ray as a Consultant
and accountant. The prior 20 years, Mr. Cole was self-employed as an accountant,
a tax preparer  and  consultant.  Additional  professional  experience  included
positions as Controller with Montgomery  Ward, Cook United (discount store chain
based  in  Cleveland,  Ohio),  and a  major  national  geotechnical  firm.  This
experience  is  augmented  by 5 years as a  programmer  analyst  with Ticor,  an
aerospace  contractor in Southern California.  Additional  experience was gained
with his 2 1/2  years  at a  national  CPA  firm  and over 2 years in the  trust
department at Wells Fargo Bank.  Mr. Cole received a BS degree at the University
of California, Berkeley, and an MBA at the University of Southern California. He
has had  extensive  training  in  programming  and  systems  analysis at the IBM
Institute, in both San Francisco and Los Angeles, California.

Alexander H. Walker,  Jr. is Chairman of the Board and a Director of the Company
as of January 13,  2000.  Mr.  Walker has been a  practicing  since 1956 with an
emphasis on trial and  transactional  work in the area of corporate  securities.
From 1955 to 1956,  he served  as the  Attorney  in Charge of the Salt Lake City
branch office of the SEC.  Prior to that he served as the advising  attorney for
the SEC division of  corporate  finance in  Washington,  D.C. He maintains a law
office in Salt Lake City and is a member of the state bars of  Pennsylvania  and
Utah. He is an owner of Nevada Agency and Trust Company and serves as a Director
on other public and private companies from time to time.

Stuart V.  Brame is Chief  Executive  Officer,  President  and  Director  of the
Company as of January 13, 2000. Mr. Brame is from British Columbia,  Canada hand
has  extensive  experience in the areas of corporate  development  and financial
restructuring.  He has served as a Director  and  Officer  of both  private  and
public  companies  and was  instrumental  in  raising  money for the  purpose of
advancing  those  companies  and  advising  them on all aspects of their  future
growth.  Mr. Brame has developed  international  private and corporate  networks
which can assist the Company in its long term positioning.

                                       23

<PAGE>


ITEM 10.  EXECUTIVE COMPENSATION.


          The following table sets forth information about  compensation paid or
          accrued by the Company during the years ended December 31, 1998,  1997
          and 1996 to the Company's officers and directors:

                                       24
<PAGE>

<TABLE>
<CAPTION>

Summary Compensation Table

-------------------------------------------------------------------------------------------------
Name and                                                                          Other
Principal Position      Year   Salary/Consulting/Director Fees        Bonus       Compensation
-------------------------------------------------------------------------------------------------
                                   (a)        (b) STOCK   (a) +  (b)
                                   CASH       GRANTS (1)    TOTAL
-------------------------------------------------------------------------------------------------

<S>                     <C>    <C>         <C>           <C>            <C>         <C>
Jackie R. See (2)       1999   None        None          None           None        None
Was a Director          1998   $138,462    $ 3,753,161   $   138,462    None        None
                        1997   $199,662    $10,088,450   $10,288,112    None        None
-------------------------------------------------------------------------------------------------

Ian Hicks (3)           1999    None       None          None           None        None
Was  CEO,  President &  1998    None       $   10,281    $   10,281     None        None
Director                1997    $46,000    $1,671,750    $1,717,750     None        None
-------------------------------------------------------------------------------------------------
Don Steffens (4)        1999    None       None          None           None        None
Was  CEO,  President &  1998    None       $   46,677    $   46,677     None        None
Director                1997    $155,135   $3,608,750    $3,763,885     $100,000    None
-------------------------------------------------------------------------------------------------
Alexander H.            1999    None       None          None           None        None
Walker(5)               1998    None       $   47,000    $   47,000     None        None
Chairman of the Board & 1997    $150,000   $2,892,724    $3,042,724     $75,000     None
and Director
-------------------------------------------------------------------------------------------------
Lorenz Hoffman (6)      1999    None       None          None           None        None
Was COO                 1998    $ 60,000   None          $ 60,000       None        None
                        1997    $140,150   $59,600       $199,750       None        None
-------------------------------------------------------------------------------------------------

Thomas E. Waite (7)     1999    None       None          None           None        None
was President & CEO     1998    $221,538   $3,753,161    $  221,538     None        None
                        1997    $28,462    $4,000,000    $4,028,462     None        None
-------------------------------------------------------------------------------------------------
Curtis A. Orgill (8)    1999    None       None          None           None        None
                        1998    $110,770   $345,000      $455,770       None        None
                        1997    $  9,231   None          None           None        None
-------------------------------------------------------------------------------------------------

Barbara L. Berry (9)    1999    None       None          None           None        None
                        1998    $110,770   $345,000      $450,770       None        None
                        1997    $  9,231   None          None           None        None
-------------------------------------------------------------------------------------------------

Martin J. Holloran      1999    None       None          None           None        None
(10)                    1998    $6,000     $25,600       $31,600        None        None
                        1997    None       None          None           None        None
-------------------------------------------------------------------------------------------------

Colonel Robert T.       1999    None       None          None           None        None
Hayden  (11)            1998    $6,000     $25,600       $31,600        None        None
                        1997    None       None          None           None        None
-------------------------------------------------------------------------------------------------
</TABLE>

                                       25
<PAGE>



(1)  The  transfer of shares  issued to  directors  and  officers is  restricted
     pursuant to applicable  securities laws,  although some recipients may have
     registration  rights in respect of their  shares.  The dollar  value of all
     share grants  reflected in this Summary  Compensation  Table as of the date
     involved  are  calculated  in  accordance  with  item  402(b)(2)(iv)(A)  of
     Regulation  S-B, which requires the dollar value of any award of restricted
     stock to be  calculated  by  multiplying  the closing  market  price of the
     registrant's  unrestricted  stock on the date of  grant  by the  number  of
     shares awarded, even if that amount could not than be realized.

(2)  Dr. See is not an employee,  and all  compensation  paid to him was for his
     consulting services. His consultant agreement, which was entered into as of
     April 1, 1996 and  terminated on March 30, 1999,  called for the Company to
     pay  him a  consulting  fee of  $12,500  per  month.  In  addition,  he was
     reimbursed for all reasonable and necessary  business  expenses incurred in
     the discharge of his consulting duties.

     On March 18, 1997,  Dr. See received  35,000  shares of Common Stock of the
     Company for services  performed  for the Company.  The dollar value of such
     shares was $2,340,450. On June 10, 1997, Dr. See received 400,000 shares of
     Common Stock of the Company for  services  performed  for the Company.  The
     dollar value of such shares was $7,748,000. Of these shares, 100,000 shares
     were  transferred  into the Anita Wassgren See Trust (Anita Wassgren See is
     Dr. See's wife).

(3)  During 1995, Mr. Hicks was not an employee of the Company. Mr. Hicks became
     President in June 1996. He ceased being an employee or otherwise affiliated
     with the Company as of May 14, 1997. On March 18, 1997,  Mr. Hicks received
     25,000  shares of Common Stock of the Company for services  performed.  The
     dollar  value of such stock was  $1,671,750.  In  addition,  on October 14,
     1998,  Mr.  Hicks  received  3,500 shares of Common Stock of the Company in
     settlement of a legal  proceeding.  The dollar value of such stock based on
     the closing price on the date of issue was $10,281.

(4)  Mr.  Steffens was not an employee of the Company  during 1995, and he moved
     from the positions of CFO, Secretary and Treasurer of the Company, to which
     he was  appointed in 1996,  to the positions of President and CEO as of May
     15,1997.  Mr.  Steffens  resigned from these positions on November 14, 1997
     and is no  longer  affiliated  with  the  Company.  On June 10,  1997,  Mr.
     Steffens received 100,000 shares of the Company's Common Stock for services
     performed for the Company.  The dollar value of such stock was  $1,937,000.
     On March 18, 1997, Mr.  Steffens  received 25,000 shares of Common Stock of
     the  Company for  services  performed.  The dollar  value of such stock was
     $1,671,750.  In addition, on October 14, 1998, Mr. Steffens received 15,890
     shares of Common Stock of the Company in settlement of a legal  proceeding.
     The dollar  value of such stock based on the  closing  price on the date of
     issue was $46,677.

(5)  The Company  entered into two  agreements on March 19, 1997, and on May 15,
     1997,  with Alexander H. Walker,  Jr.  ("Walker"),  currently the Company's
     Chairman  of the Board and a Director.  The  agreements  provided  that Mr.
     Walker was retained as General Counsel for all legal matters of the Company
     and was to prepare or supervise the  preparation of Securities and Exchange
     Commission filings,  contracts and agreements. The agreements provided that
     Walker  would  receive  $15,000 per month over 36 months plus up to 100,000
     shares of Common Stock. In 1997,  Walker  received  $231,678 and was issued
     105,200 shares of Common Stock.  In December  1997, the Company  terminated
     all agreements with Walker.

     On April 12, 1996,  Mr.  Walker  received  18,000  shares of the  Company's
     Common  Stock for  services  performed.  The dollar value of such stock was
     $1,170,000.  On March 18, 1997, Mr. Walker  received 18,000 shares of stock
     for services performed.  The dollar value of such stock was $1,203,660.  On
     June 10, 1997, Mr. Walker  received  87,200 shares of stock for current and
     future  services  to be  performed.  The  dollar  value of such  stock  was
     $1,689,064.  In addition,  on October 14, 1998, Mr. Walker  received 16,000
     shares of Common Stock of the Company in settlement of a legal  proceeding.
     The dollar  value of such stock based on the  closing  price on the date of
     issue was $47,000.

(6)  Dr. Lorenz Hofmann Ph.D. was not an employee of the Company during 1995 and
     1996. In August 1997, the Company entered into a consulting  agreement with
     Dr. Hofmann  whereby Dr.  Hofmann was to receive  $15,000 per month for his
     services,  plus 10,000  shares of the  Company's  Common Stock for services
     performed  in 1997.  These  shares  were  issued on January  26,  1998 with
     respect  to  services  performed  in 1997  for a dollar  value of  $59,600.
     Effective May 29, 1998,  the Company  terminated  all  agreements  with Dr.
     Hofmann.

                                       26

<PAGE>


(7)  Thomas E. Waite became  President,  Director and Chief Executive Officer on
     November 14, 1997 and was issued  400,000  shares of the  Company's  Common
     Stock to induce him to work for the issuer and provide an incentive for his
     performance.  Mr. Waite had a 1-year  employment  contract with the Company
     effective  January 5, 1998  authorizing a salary of $20,000 per month.  Mr.
     Waite's employment  contract was not renewed,  and effective March 4, 1999,
     Mr. Waite resigned all his positions with the Company.  Prior to that time,
     Mr.  Waite was not an employee of the Company.  In 1995,  Thomas E. Waite &
     Associates, a company owned by Mr. Waite, was a consultant to the Company.

     On November 14, 1997,  Mr. Waite was issued 400,000 shares of the Company's
     Common  Stock to  enable  him to devote  his  entire  business  time to the
     affairs of the Company. The dollar value of such shares was $4,000,000. See
     Item 1. "Description of Business- Other Financing Arrangements"  concerning
     the Financing  Agreement  between Dr. Jackie R. See and Thomas E. Waite and
     the Company dated January 13, 1998 and amended  February 3, 1998,  pursuant
     which Dr. See and Mr. Waite have the right to invest up to  $10,000,000  in
     the Company and pursuant to which they  invested  $5,000,000 on February 3,
     1998 in promissory  notes and cash and received  1,580,028 shares of Common
     Stock  therefor.  Such stock is valued at the closing bid price of $9.50 on
     February 3, 1998 for a total value of $7,506,321.  For stock  issuance's to
     Thomas E. Waite & Associates  prior to Mr. Waite becoming an employee,  See
     "Legal Proceedings No. 1."

(8)  Curtis A. Orgill became  Treasurer and Chief Financial  Officer on December
     12, 1997. On February 10, 1998 Mr. Orgill became a Director and Chairman of
     the Compensation Committee and the Audit Committee. On January 26,1998, Mr.
     Orgill was issued 50,000 shares  (restricted) of the Company's Common Stock
     to induce  him to work for the  issuer and  provide  an  incentive  for his
     successful  performance.  . The  dollar  value of such  stock  based on the
     closing  price on the date of issue was  $345,000.  Mr. Orgill had a 1-year
     contract with the Company effective  November 17, 1997 authorizing a salary
     of $10,000 per month.  This contract was renewed on November 17, 1998 for 1
     year.  Prior to November  17, 1997,  Mr.  Orgill was not an employee of the
     Company nor was he affiliated in any way with the Company.

(9)  Barbara L. Berry became  Secretary and Chief  Operating  Officer ("COO") on
     December 12, 1997. On July 28, 1998, Mrs. Berry's title changed from COO to
     Chief Accounting Officer. On January 26,1998,  Mrs. Berry was issued 50,000
     shares (restricted) of the Company's Common Stock to induce her to work for
     the issuer and provide an incentive for her  performance.  The dollar value
     of such stock based on the closing price on the date of issue was $345,000.
     Mrs. Berry had a 1-year  contract with the Company  effective  November 17,
     1997  authorizing a salary of $10,000 per month.  This contract was renewed
     on November 17, 1998 for 1 year. On January 12, 1999,  Mrs.  Berry resigned
     her positions with the Company.  Prior to November 17, 1997, Mrs. Berry was
     a consultant  for the Company  beginning  October 15,  1997.  Prior to that
     time,  Mrs. Berry was not an employee of the Company nor was she affiliated
     in any way with the Company.

(10) Martin J. Holloran became a Director and a member of the Audit Committee on
     February 10, 1998.  On February  18,  1998,  Mr.  Holloran was issued 5,000
     shares of the  Company's  Common  Stock for an  incentive  for  becoming  a
     Director  and a member of the Audit  Committee.  The  dollar  value of such
     stock  based on the  closing  price on the date of issue  was  $25,600.  In
     addition,  it was agreed that Mr.  Holloran was to receive $2,000 for every
     Board of Director  meeting he attended.  At December 31, 1998,  the Company
     had paid him $6,000 for the year and owed him an additional $4,000 for past
     meetings attended. Mr. Holloran resigned and no londer is a director.

(11) Colonel  Martin  T.  Hayden  became a  Director  and a member  of the Audit
     Committee and Compensation  Committee on February 10, 1998. On February 18,
     1998, Col. Hayden was issued 5,000 shares of the Company's Common Stock for
     an incentive  for  becoming a Director and a member of the Audit  Committee
     and  Compensation  Committee.  The dollar  value of such stock based on the

                                       27

<PAGE>

     closing price on the date of issue was $25,600. In addition,  it was agreed
     that Col. Hayden was to receive $2,000 for every Board of Director  meeting
     he attended.  At December 31, 1998, the Company had paid him $6,000 for the
     year and owed him an  additional  $6,000  for past  meetings  attended.  In
     December of 1998, Col. Hayden passed away.

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


All shares  included in the  following  table and in this  section  reflect sets
forth information concerning ownership of the Company's Common Stock by (i) each
Director and Executive  Officer of the Company,  (ii) all Directors and Officers
as a group and (iii) each person known to the Company to be the beneficial owner
of more than 5% of the Company's Common Stock as of December 31, 1999:
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
                                                                                              Percentage of
                                                                     Amount and               Outstanding Shares
                                 Name and Address                    Nature of Beneficial     of Common Stock
    Title of Class               of Beneficial Owner                 Ownership (1)            as of 12/31/99(1)
-------------------------- ----------------------------------------- ------------------------ -----------------------
<S>                              <C>                                 <C>                        <C>
    Common Stock                 Curtis Orgill (6)                      50,000                   <1%
                                 1325 Airmotive Way
                                 Suite 125
                                 Reno, NV  89502
-------------------------- ----------------------------------------- ------------------------ -----------------------
    Common Stock                 All Directors and                      50,000                   <1%
                                 Officers as a Group
-------------------------- ----------------------------------------- ------------------------ -----------------------
    Common Stock                 Thomas  Waite                       1,140,139                    9%
                                 54 Carter Road
                                 Lake May, FL  32746
-------------------------- ----------------------------------------- ------------------------ -----------------------
</TABLE>

(1)      The  percentage  calculation  for each  person or group,  reflects  the
         addition to the number of shares  beneficially  owned by such person or
         group and to the  aggregate  outstanding  shares,  the number of shares
         that the person or group  involved  has the right to acquire  within 60
         days.
(2)      Mr.  Orgill was  appointed  Treasurer  and Chief  Financial  Officer on
         December 12, 1997. On February 10, 1998,  Mr. Orgill was appointed as a
         Director to the Company.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.


During  1999,  the Company  issued no shares of Common Stock to current or prior
Officers and Directors of the Company, relatives of those Officers and Directors
and other  related  parties.  Prior to 1999,  the Company  had issued  shares as
follows:

                                       28

<PAGE>


<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------
                           Relationship to       Current                                       No. of
Name                       the Company       Status/relationship    Reference  Date Issued    Shares Issued    Dollar Value **
--------------------------------------------------------------------------------------------------------------------------
<S>                        <C>                    <C>                  <C>        <C>             <C>             <C>
Colonel Robert T. Hayden   Director               Prior                (1)        2/18/98         5,000           $    25,650
----------------------------------------------------------------------------------------------------------------------------
Ian Hicks                  Officer & Director     Prior                (1)        3/18/97   (6)  25,000           $ 1,671,750
Ian Hicks                  Officer & Director     Prior                (1)       10/14/98   (6)   3,500           $
Total                                                                                            28,500
----------------------------------------------------------------------------------------------------------------------------
Martin J. Holloran         Director               Prior                (1)        2/18/98         5,000           $    25,650
----------------------------------------------------------------------------------------------------------------------------
Barbara L. Berry           Officer                Prior                (1)        1/26/98        50,000           $   298,000
----------------------------------------------------------------------------------------------------------------------------
Curtis A. Orgill           Officer & Director     Current              (1)        1/26/98        50,000           $   298,000
----------------------------------------------------------------------------------------------------------------------------
Dr. Jackie R. See, M.D.    Director               Current              (1)        3/18/97        35,000           $ 2,340,450

Dr. Jackie R. See, M.D.    Director               Current              (1)        6/10/97       400,000           $ 7,748,000

Dr. Jackie R. See, M.D.    Director               Current              (2)        2/3/98        790,139           $ 7,506,321

Dr. Darryl See, M.D.       Consultant             Dr. Jackie See's     (1)        11/14/97       50,000           $   500,000
                                                  Son
Dr. Darryl See, M.D.       Consultant             Dr. Jackie See's     (1)        1/26/98       200,000           $ 1,192,000
                                                  Son
Daniel L. See              N/A                    Dr. Jackie See's     (1)        6/11/97         1,000
                                                  Son

David J. See               N/A                    Dr. Jackie See's     (1)        3/2/98          5,000
                                                  Son

Charles Dayton See         N/A                    Relative to Dr.      (1)        6/11/97         1,000
                                                  Jackie See
Anita Wassgren Trust       N/A                    Dr.Jackie See's      (1)        6/26/98       100,000
                                                  Wife
Total                                                                                       $ 1,582,139
----------------------------------------------------------------------------------------------------------------------------
Don Steffens               Officer & Director     Prior                (1)        3/18/97   (6)  25,000           $ 1,671,750

Don Steffens               Officer &  Director    Prior                (1)        6/10/97   (6  100,000           $ 1,937,000

Don Steffens               Officer & Director     Prior                (1)        10/14/98  (6)  15,890           $

Total                                                                                           140,890           $ 3,608,750
----------------------------------------------------------------------------------------------------------------------------
Thomas E. Waite            Officer & Director     Prior                (3)        12/18/96       56,875           $ 1,279,688

Thomas E. Waite            Officer &  Director    Prior                (4)        11/14/97      400,000           $ 4,000,000

Thomas E. Waite            Officer & Director     Prior                (2)        2/3/98        790,139           $ 7,506,321

Total                                                                                         1,247,014           $12,786,008
----------------------------------------------------------------------------------------------------------------------------
Alexander H. Walker, Jr.   Officer & Director     Prior                (5)        4/12/96        18,000           $ 1,170,000

Alexander H. Walker, Jr.   Officer & Director     Prior                (5)        3/18/97        18,000           $ 1,203,660

Alexander H. Walker, Jr.   Officer & Director     Prior                (5)        6/10/97        87,200           $ 1,689,064

Alexander H. Walker, Jr.   Officer & Director     Prior                (5)        10/14/98       16,000           $

Alexander H. Walker, III   N/A                    Walker JR's Son      (6)        7/5/96          2,000           $    65,000

Alexander H. Walker, III   N/A                    Walker JR's Son      (6)        3/18/97         2,000           $   133,740

J.T. Cardinalli            N/A                    Walker JR's          (6)        7/5/96          2,000           $    65,000
                                                  Son-in-law
J.T. Cardinalli            N/A                    Walker JR's          (6)        3/18/97         2,000           $   133,740
                                                  Son-in-law
Total                                                                                           147,200           $ 4,460,204
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*- 100,000  shares were issued in the name of Anita  Wassgren  See Trust.  Anita
Wassgren See is Dr.  Jackie See's wife.
** The dollar value of all share grants are  calculated in accordance  with item
402(b)(2)(iv)(A) of Regulation S-B, which requires the dollar value of any award
of restricted  stock to be calculated by multiplying the closing market price of
the registrant's unrestricted stock on the date of grant by the number of shares
awarded even if the amount could not than be realized.  The Company has recorded
the above stock transaction at varying prices, depending on the date issued.

(1)      The shares were issued for  compensation  for services  performed as an
         Officer  or  Director  of the  Company,  or  services  performed  as an
         independent consultant to the Company.
(2)      The  Company has secured a Financing  Agreement  (See  "Description  of
         Business") with Dr. Jackie See and Thomas E. Waite,  then the President
         and Chief Executive  Officer (the  "Investors"),  whereby the investors
         (a) purchased an initial  tranche of 1,580,278  shares of the Company's
         Common Stock for an aggregate purchase price of $5,000,000, and (b) may
         purchase  up to an  aggregate  of  592,605  additional  shares  of  the
         Company's  Common  Stock,  upon  certain  terms and  conditions,  at an
         aggregate maximum additional purchase price of $5,000,000.  The initial
         funding of $5,000,000  was effected on February 3, 1998 by the delivery
         to the company by each investor of a check for $7,901.39 and Promissory
         Notes due  March 31,  1999 in the  principal  amount of  $2,492,098.61,
         bearing  interest  at the rate of 1% above  prime  and  secured  by the
         shares purchased.
(3)      In December  1996, the Company issued 56,875 shares of its Common Stock
         as part of a settlement agreement in the litigation between the Company
         and Thomas Waite & Associates described herein.

                                       29

<PAGE>


(4)      In November 1997, the Company hired Thomas E Waite as the President and
         Chairman of the Board and issued to him 400,000 shares of the Company's
         Common  Stock to induce  him to work for the  Company  and  provide  an
         incentive for his performance as President and Chief Executive Officer.
         On March  4,  1999,  Mr.  Waite  resigned  all his  positions  with the
         Company.
(5)      On April 12, 1996,  the Company issued 18,000 shares of Common Stock to
         Alexander H. Walker, Jr. in connection with legal services rendered and
         to be  rendered to the  Company,  pursuant  to a  consulting  agreement
         signed in March 1996.  During 1997,  the Company  issued to Mr.  Walker
         105,200  shares  of  Common  Stock.   In  December  1997,  the  Company
         terminated  all agreements  with Mr.  Walker.  In settlement of a legal
         dispute,  Mr.  Walker  returned  120,200  shares of Common Stock to the
         Company  treasury and the Company  issued Mr.  Walker  16,000 shares of
         Common Stock (unrestricted) of the Company on October 14, 1998.
(6)      Shares were returned to the Company's treasury on 10/14/98,  as part of
         a   litigation   settlement   agreement,   and  on  October  14,  1998,
         unrestricted   shares  were  reissued  as  a  part  of  the  settlement
         agreement.

         In April 1996,  the Company  entered into a royalty  agreement with Dr.
See to pay Dr.  See 2% of net  revenues  from the sale  any  sexual  dysfunction
products the Company  currently  has or may produce  utilizing  the LLPGE1 under
Patent  Application  No.  08/573408  pursuant to which patent No.  5,718,917 was
issued on February 17, 1998.

         The Company may continue the practice of issuing shares of Common Stock
in lieu of cash payment in the future if it determines  that such issuance is in
the best  interests of the Company and is consistent  with the  Company's  other
agreements.

         The foregoing arrangements and relationships may give rise to conflicts
of interest with respect to future  interpretation of the agreements between the
Company and its  affiliates  or with respect to future  transaction  between the
Company and its affiliates.  There can be no assurance those future transactions
between the Company and any affiliates will be advantageous to the Company.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

The  following  is a table  of the  exhibits  filed by the  Registrant  with its
Registration Statement on Form SB-2.

Number   Description
------   -----------
3.1      Articles of  Incorporation  of Registrant,  including all amendments to
         April 30, 1996. *
3.2      Amendment to Articles of Incorporation of Registrant,  amended June 18,
         1996***
3.3      Amendment to Articles of Incorporation  of Registrant,  amended July 9,
         1996 ***
3.4      Amendment to Articles of Incorporation of Registrant,  amended July 13,
         1998 ***
3.5      Certificate  of  Change in  Number  of  Authorized  Shares of Class and
         Series, filed February 2, 1998 ***
3.6      By-Laws of Registrant, as amended to date. *
4.1      Form of 6% Debenture (See Annex I to Item 10.2). **
5.1      Opinion  of  Hardesty,  Bader  &  Ryan,  Attorneys  at  Law,  including
         consent.***
6.1      Consent of Ronald D. Simpkins, CPA ***
6.1.1    Consent of W. Dale McGhie, CPA ***
6.2      Consent of David R. Baker, Esq.***
6.3      Consent of H.D. Brous & Co., Inc.***
10.1     Consulting Agreement,  dated April 19, 1996, between the Registrant and
         Dr. Jackie R. See.**

                                       30

<PAGE>


10.1a    Financing Agreement,  dated January 13, 1998 between the Registrant and
         Dr. Jackie R. See and Thomas E. Waite.****
10.5     Amendment to  Financing  Agreement  dated  February 3, 1998 between the
         Registrant and Dr. Jackie R. See and Thomas E.
         Waite.****
10.6     H.D.  Brous Opinion as to Financing  Agreement  dated  February 5, 1998
         between Dr. Jackie R. See and Thomas E. Waite. *****
10.7     Assignment of Patent Application No. 08/573408,  filed 12/15/95, for an
         invention  entitled  PGE1  Containing  Lyophilized  Liposomes  for  the
         Treatment of Erectile Dysfunction.**
10.12    Consulting  Agreement,  dated June 10, 1998, between the Registrant and
         Medhat Gorgy. ***

================================================================================
   *     Incorporated by reference from the Registrant's  Registration Statement
         on Form 10-SB filed on April 30, 1996.

  **     Incorporated by reference from the Registrant's  Registration Statement
         on Form SB-2,  filed on April 21, 1997, and Amendments Nos. 1, 2, 3 and
         4 thereto, which became effective on August 14, 1997.

 ***     Filed with this Registration Statement.

****     Incorporated by reference to Form 8-K filed on January 26, 1998.

*****    Incorporated by reference to Schedule 14A (Proxy Statement Information)
         filed on May 22, 1998, definitive on June 5,1998.

                                       31

<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/Alexander H. Walker, Jr.
                         -----------------------------------------------
                         Alexander H. Walker, Jr., Chairman of the Board


         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.

<TABLE>
<CAPTION>

      Name                                        Title                                  Date
      ----                                        -----                                  ----
<S>                                       <C>                                     <C>
/s/Stuart Brame                           President, and Chief Executive             May 26, 2000
-------------------------                 Officer
Stuart Brame

/s/Gordon W. Cole                         Director                                   May 26, 2000
-------------------------
Gordon W. Cole

/s/Curtis A. Orgill                       Director, Treasurer, and                   May 26, 2000
--------------------------                Chief Financial Officer
Curtis A. Orgill
</TABLE>

                                       32