U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(MARK ONE)

     [X] QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934

                       For the quarter ended June 30, 1998

     [ ] TRANSITION REPORT UNDER SECTION 13 OR A5(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934 (no fee required)


                         Commission file number 0-23544

                         HUMAN PHEROMONE SCIENCES, INC.
                 (Name of small business issuer in its charter)


          California                                             94-3107202
(State or other jurisdiction of                               (I.R.S. employer
 incorporation or organization)                              Identification No.)


4034 Clipper Court, Fremont, California                             94538
(Address of principal executive offices)                          (Zip code)


                    Issuer's telephone number: (510) 226-6874


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


                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. 10,289,488 shares of Common
Stock as of August 5, 1998.

                                                                 Total Pages: 15
<PAGE>


                         HUMAN PHEROMONE SCIENCES, INC.

                                      INDEX
                                                                            Page
                                                                            ----

PART I
FINANCIAL INFORMATION

    Item 1. Financial Statements

            Condensed Balance Sheets (Unaudited) as of June 30, 1998
            and December 31, 1997..............................................2

            Statements of Operations (Unaudited) for the Three Months and
            Six Months Ended June 30, 1998 and 1997............................3

            Condensed Statements of Cash Flows (Unaudited) for the Six
            Months Ended June 30, 1998 and 1997...............................4

            Notes to Condensed Financial Statements (Unaudited)...............5

    Item 2. Management's Discussion and Analysis

            Management's Discussion and Analysis of Financial Condition
            and Results of Operations.........................................7

PART II
OTHER INFORMATION

    Item 6. Exhibits and Reports on Form 8-K.................................11

SIGNATURES...................................................................12



<PAGE>


                                     PART I
                              FINANCIAL INFORMATION


Item 1.  Financial Statements



<PAGE>


<TABLE>
                                                   HUMAN PHEROMONE SCIENCES, INC.

                                                           Balance Sheets

<CAPTION>
                                                                                                      June 30,        December 31,
                                                                                                        1998              1997
                                                                                                    ------------       ------------
<S>                                                                                                 <C>                <C>         
Assets

Current assets:
  Cash and cash equivalents                                                                         $     70,452       $    248,617
  Accounts receivable, net of allowances of $598,456                                                     854,436          3,084,784
   and $822,813 in 1998 and 1997, respectively
  Inventory                                                                                            3,230,320          3,421,298
  Other current assets                                                                                   106,984            128,817
                                                                                                    ------------       ------------
Total current assets                                                                                   4,262,192          6,883,516

Property and equipment, net                                                                               82,336             99,491
                                                                                                    ------------       ------------

                                                                                                    $  4,344,528       $  6,983,007
                                                                                                    ============       ============


Liabilities and shareholders' equity



  Loan payable, bank                                                                                $    209,296       $    548,000
  Accounts payable                                                                                       822,799            800,648
  Other accrued expenses                                                                               1,052,084          1,205,069
                                                                                                    ------------       ------------
Total current liabilities                                                                              2,084,179          2,553,717

Commitments                                                                                                 --                 --

Shareholders' equity:
  Convertible  preferred  stock,  issuable in series,  no par value, 10,000,000
    shares authorized,  1,433,333 shares issued and outstanding at June 30, 1998
    and December 31, 1997, respectively                                                                2,145,535          2,145,535
  Common stock, no par value,  40,000,000 shares  authorized,  10,289,488 shares
    issued and outstanding at June 30, 1998 and December 31, 1997, respectively                       17,667,024         17,667,024
  Accumulated deficit                                                                                (17,552,210)       (15,383,269)
                                                                                                    ------------       ------------
Total shareholders' equity                                                                             2,260,349          4,429,290
                                                                                                    ------------       ------------

                                                                                                    $  4,344,528       $  6,983,007
                                                                                                    ============       ============

<FN>
See accompanying notes.
</FN>
</TABLE>

<PAGE>


<TABLE>
                                                   HUMAN PHEROMONE SCIENCES, INC.

                                                      Statements of Operations

<CAPTION>
                                                                Three months ended June 30,             Six months ended June 30
                                                              -------------------------------       -------------------------------

                                                              ------------       ------------       ------------       ------------
                                                                  1998               1997               1998                1997
                                                              ------------       ------------       ------------       ------------
<S>                                                           <C>                <C>                <C>                <C>         
Net sales                                                     $  1,905,257       $  3,817,542       $  5,268,418       $  8,913,831
Cost of goods sold                                                 627,074            981,957          1,671,273          1,889,643
                                                              ------------       ------------       ------------       ------------

Gross profit                                                     1,278,183          2,835,585          3,597,145          7,024,188

Expenses:
   Research and development                                        100,316             73,086            182,448            164,856
   Selling, general and administrative                           2,560,547          6,677,523          5,560,142         10,584,801
                                                              ------------       ------------       ------------       ------------

Total expenses                                                   2,660,863          6,750,609          5,742,590         10,749,657
                                                              ------------       ------------       ------------       ------------

Loss from operations                                            (1,382,680)        (3,915,024)        (2,145,445)        (3,725,469)

Interest income                                                        106                491                162             12,471
Interest (expense)                                                 (10,514)           (34,285)           (21,469)           (36,828)
Other (expense)                                                     (2,783)               918             (2,189)             2,392
                                                              ------------       ------------       ------------       ------------

Loss before income taxes                                        (1,395,871)        (3,947,900)        (2,168,941)        (3,747,434)

Income taxes                                                          --               (9,983)              --                  800
                                                              ------------       ------------       ------------       ------------

Net loss                                                      $ (1,395,871)      $ (3,937,917)      $ (2,168,941)      $ (3,748,234)
                                                              ============       ============       ============       ============

Net loss per common share-basic                               $       (.14)      $       (.38)      $       (.21)      $       (.37)
                                                              ============       ============       ============       ============

Net loss per common share-
  assuming dilution                                           $       (.14)      $       (.38)      $       (.21)      $       (.37)
                                                              ============       ============       ============       ============

Weighted average shares used in calculation
  of net loss per share                                         10,289,488         10,284,323         10,289,488         10,252,966
                                                              ============       ============       ============       ============

Weighted average shares and equivalents,
  if dilutive, used in calculation of net loss
  per common share                                              10,289,488         10,284,323         10,289,488         10,252,966
                                                              ============       ============       ============       ============

<FN>
See accompanying notes.
</FN>
</TABLE>

<PAGE>


<TABLE>
                                                  HUMAN PHEROMONE SCIENCES, INC.

                                                      Statements of Cash Flows

<CAPTION>
                                                                                                       Six Months ended June 30,
                                                                                                    -------------------------------
                                                                                                       1998                 1997
                                                                                                    -----------         -----------
<S>                                                                                                 <C>                 <C>         
Cash flows from operating activities
Net loss                                                                                            $(2,168,941)        $(3,748,234)
Adjustments to reconcile net loss to net cash used in operating activities:
  Depreciation and amortization                                                                          29,612              31,695

  Changes in operating assets and liabilities:
    Accounts receivable                                                                               2,230,348           1,433,515
    Inventory                                                                                           190,978          (1,899,981)
    Other current assets                                                                                 21,833             (19,839)
 Accounts payable and accrued liabilities                                                              (130,834)            507,579
                                                                                                    -----------         -----------
Net cash generated by (used in) operating activities                                                    172,996          (3,695,265)

Cash flows from investing activities
Purchase of property and equipment                                                                      (12,457)            (91,928)
                                                                                                    -----------         -----------
Net cash used in investing activities                                                                   (12,457)            (91,928)

Cash flows from financing activities
Proceeds from (repayments of) bank borrowings                                                          (338,704)            292,289
Proceeds from issuance of common stock                                                                     --             1,443,706
                                                                                                    -----------         -----------
Net cash provided by financing activities                                                              (338,704)          1,735,995

Net decrease in cash and cash equivalents                                                              (178,165)         (2,051,198)
Cash and cash equivalents at beginning of the year                                                      248,617           2,059,084
                                                                                                    -----------         -----------
Cash and cash equivalents at end of the period                                                      $    70,452         $     7,886
                                                                                                    ===========         ===========

<FN>
See accompanying notes.
</FN>
</TABLE>


<PAGE>


                         Human Pheromone Sciences, Inc.
                     Notes to Condensed Financial Statements
                                   (unaudited)
                                  June 30, 1998

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

         The accompanying  unaudited  condensed  financial  statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Rule 10-01 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included.  Operating results for the three months and six months ended June
30, 1998 are not necessarily  indicative of the results that may be expected for
the calendar year ending  December 31, 1998. For further  information,  refer to
the financial  statements and footnotes thereto included in the Company's annual
report on Form 10-KSB for the year ended December 31, 1997.

Inventory

         Inventories  are  stated  at the  lower of cost  (first  in - first out
method) or market.  The  inventory at June 30, 1998  consists of finished  goods
inventory valued at $1,220,587, work in process of $259,848 and raw materials of
$1,749,885.  At December 31, 1997, these balances were $1,665,393,  $151,143 and
$1,604,762, respectively.

Net (Loss) Income Per Share

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

<TABLE>
         Basic   net   (loss)   income   per   share  is   computed   using  the
weighted-average  number of common  shares  outstanding.  Diluted net income per
share is  computed  using  the  weighted-average  number of  common  shares  and
dilutive common equivalent shares outstanding during the period. Dilutive common
share  equivalents  consist of employee  stock options using the treasury  stock
method  and  dilutive  convertible  securities  using the  if-converted  method.
Diluted loss per share is computed using the  weighted-average  number of common
shares outstanding during the period. Common stock equivalents are excluded from
the diluted  loss per share  computation  as their effect is  antidilutive.  The
following  table sets forth the  computation for basic and diluted (loss) income
per share:

<CAPTION>
                                                                    Three months ended                     Six months ended
                                                              -------------------------------       ------------------------------- 
                                                                          June 30,                              June 30,
                                                              -------------------------------       ------------------------------- 
                                                                  1998               1997               1998                1997
                                                              ------------       ------------       ------------       ------------ 
<S>                                                           <C>                <C>                <C>                <C>          
Numerator:
Net loss from operations                                      $ (1,395,871)      $ (3,937,917)      $ (2,168,941)      $ (3,748,234)

Denominator:
Denominator for basic earnings per-share-data                   10,289,488         10,284,323         10,289,488         10,252,966
Denominator for diluted earnings per-share data                 10,289,488         10,284,323         10,289,488         10,252,966
Basic net loss per share                                              (.14)              (.38)              (.21)              (.37)
Diluted net loss per share                                            (.14)              (.38)              (.21)              (.37)
</TABLE>
<PAGE>


                         Human Pheromone Sciences, Inc.
                     Notes to Condensed Financial Statements
                                   (unaudited)
                                  June 30, 1998

2. LOAN PAYABLE, BANK

         At June 30,  1998,  the  Company  was not in  compliance  with  certain
balance sheet ratio covenants of its line of credit bank loan with Mid-Peninsula
Bank. The bank has waived  compliance  with these covenants for the period ended
June 30, 1998.


Item 2. Management's Discussion and Analysis

         This report contains  forward-looking  statements within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange  Act  of  1934,  as  amended.  Except  for  the  historical
information contained in this discussion and analysis of financial condition and
results  of  operations,  the  matters  discussed  herein  are  forward  looking
statements.  These forward looking statements include but are not limited to the
Company's  plans for sales  growth and  expansion  into new  channels  of trade,
expectations  of gross  margin,  expenses,  new  product  introduction,  and the
Company's   liquidity  and  capital  needs.  These  matters  involve  risks  and
uncertainties  that could cause  actual  results to differ  materially  from the
statements made. In addition to the risks and  uncertainties  described in "Risk
Factors",  below,  these risks and  uncertainties  may include  consumer trends,
business cycles,  scientific  developments,  changes in governmental  policy and
regulation,  currency  fluctuations,  economic  trends in the United  States and
inflation. These and other factors may cause actual results to differ materially
from those anticipated in forward-looking statements.  Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as
of the date hereof.

Risk Factors

         The  Company's  future  results  may be affected to a greater or lesser
degree by the following factors among others:

         Competition:  The prestige  fragrance  market is volatile and extremely
competitive.  Consumer preferences and demands can shift dramatically reflecting
changes in fashion and current fads. There are numerous  fragrance products that
are better known than the products marketed by the Company.  There are also many
companies  which have  substantially  greater  resources  than  Human  Pheromone
Sciences,  and  which  have  the  ability  to  invest  heavily  in  new  product
development and  introduction.  The Company can expect that its competitors will
attempt to compete with the Company through the introduction of new products and
promotion of existing products.

         In  addition,  the  product  life cycle of  fragrances  is  shortening.
Traditional  fragrance  companies now introduce a new fragrance every one to two
years  compared  to every four to five years as in the past.  This  increase  in
competing  fragrances  makes  it  difficult  for any one  fragrance  to hold the
consumer's  attention on a long-term  basis.  Although the Company  believes the
inclusion  of  human  pheromones  as  a  component  clearly  differentiates  its
products,  other fragrances are competing for space with the Company's  products
at both the store level and in print and media advertising.

         Marketing: The failure to establish and maintain the necessary sales or
distribution  channels  could have a material  adverse  effect on the  Company's
business.  Although  the Company  believes  its  marketing  strategy is the most
cost-effective  way to introduce  its products,  there can be no assurance  that
broader-scale  retail launches will be successful.  The Company cannot guarantee
that retail outlets or catalogs will continue to carry Human  Pheromone  Science
products.  If the current strategy is  unsuccessful,  marketing of the Company's
products  would  require a new  strategy  and may require a  significantly  more
expensive sales effort for which the Company may not have sufficient funds.

         Retail environment: Continued consolidation in the retail trade has led
to the emergence of four major retail players who control the major share of the
market.  Federated  Department Stores, The May Company,



<PAGE>


Dayton  Hudson/Marshall  Fields and Dillard  Department  Stores now comprise the
majority of US upper end department  stores.  This  consolidation  could lead to
price and promotional pressure and increased credit risk for the Company.

         The retail  environment  in better  department  stores is  increasingly
challenging.  Retailers  have  aggressively  cut  inventories  across the board.
Promotional  support in the form of co-op advertising  dollars is being cut back
and  retailers  are  feeling  pressure to become  more  promotional  in order to
compete with price conscious chains appealing to bargain hunters. Fragrances and
cosmetics  are  increasingly  being sold in  secondary  markets such as discount
perfumeries,  drug  chains  and  lower  priced  department  stores.  It  is  not
anticipated  that the  department  store class of trade in the U.S.  will become
more profitable in the near future.

         Seasonality:  Sales in the fragrance  industry are generally  seasonal,
with generally  higher sales in the second half of the calendar year as a result
of increased  demand for fragrance  products in  anticipation  of and during the
Christmas  holiday season.  The  anticipated  seasonality of the Company's sales
could cause a significant variation in its quarterly operating results.

         Patent protection: The Company's ability to compete successfully in the
consumer market place and to attract licensing partners will depend, in part, on
its ability to protect its  proprietary  technology.  There can be no  assurance
that any patent or patent  application  owned or  controlled by the Company will
not  be  challenged,   invalidated  or   circumvented  or  continue  to  provide
commercially  significant  protection of the Company's technology or ensure that
the  Company  may not be  determined  to infringe  valid  patents of others.  In
addition,  the laws of certain  foreign  countries may not protect the Company's
proprietary  rights to the same extent as do the laws of the United  States.  No
assurance can be given that others will not independently  develop substantially
equivalent  proprietary  information  or otherwise  gain access to the Company's
trade  secrets or that the Company  can  meaningfully  protect  its  technology,
proprietary information or trade secrets.

         Although the Company  does not believe  that its products  infringe the
proprietary  rights  of  any  third  parties,  there  can be no  assurance  that
infringement or invalidity claims (or claims for indemnification  resulting from
infringement  claims) will not be asserted  against the Company or that any such
assertions  will  not  materially   adversely  affect  the  Company's  business,
financial  condition or results of operations.  Irrespective  of the validity or
the  successful  assertion of such claims,  the Company could incur  significant
costs with respect to the defense  thereof  which could have a material  adverse
effect on the Company's business, financial condition or results of operations.

         Attraction and retention of key employees: The success of the Company's
future operations  depends in large part on the Company's ability to recruit and
retain key employees and  consultants  with research,  product  development  and
marketing  experience,  as well as other  professionals  who are in considerable
demand.  There  can be no  assurance  that the  Company  will be  successful  in
retaining or recruiting such key personnel.

         Dependence  on third  parties for  manufacturing:  The Company does not
have  facilities to manufacture its products and relies on Pherin to manufacture
its  pheromones and third parties to supply  components  and to blend,  fill and
package its fragrance  products.  The Company  believes that such  manufacturing
services are the most effective  method of producing its products.  The majority
of the fragrance industry uses contract fillers,  and the Company has no current
plans to set up its own filling  facilities.  However, as with any business that
is not  vertically  integrated,  if the  Company  is  unable to obtain or retain
fragrance  suppliers,  component  manufacturers or third party  manufacturing on
acceptable  terms,  it may not be able to obtain  commercial  quantities  of its
products, which would adversely affect results.

Results of Operations

Three  Months ended June 30, 1998 as compared to the Three Months ended June 30,
1997

         Net sales for the second quarter of 1998 were $1,905,257 representing a
decrease  of 50% from sales of  $3,817,542  for the prior  year's  quarter.  The
Company  attributes  the sales  decrease to a sharp decline in department  store
orders  for inner  REALM(R).  During the second  quarter  of 1997,  inner  REALM
accounted  for 28% of the Company's  gross sales volume  compared to 10% for the
same period in 1998. In addition to the decline in department  store inner REALM
orders,  the Company has accepted returns of inner REALM from certain



<PAGE>


retailers  in  order to bring  store  inventories  into  balance  with  retailer
forecasts.  Of the $1.9  million  year-to-year  decrease  in sales,  the Company
attributes  50% to gross sales  decreases  in inner  REALM,  27% to decreases in
REALM  Men(R) and 23% to decreases  in REALM  Women(R).  Sales of REALM Men were
lower in the 1998 quarter due to lower sales of  promotional  sets to Department
store customers.  The Company has decreased the overall  offerings and number of
available  promotional  sets to  Department  stores in order to  increase  gross
margins and encourage sales of regularly priced  products.  The decline in sales
of REALM Women due to decreased set offerings was partially  offset by increased
volumes of sales in regularly priced, in-line products.

         Sales volume  comparisons were also affected by shifts in ordering from
alternative  classes of trade.  During the second  quarter of 1997,  the Company
made initial  shipments to distributors  for sales to secondary  markets.  These
initial  launch order  volumes were not repeated in the second  quarter of 1998;
however, reorder volumes have been consistent with expectations, and distributor
sales continue to expand. Also in 1998,  international  shipments increased with
expansion into selected  European markets for both retail and direct  marketing.
The  Company  plans  to  aggressively  pursue  these  outlets  as  they  offer a
cost-effective method of distribution. Net sales for the quarters ended June 30,
1998 and 1997 were as follows:


--------------------------------------------------------------------------------
Markets                                               1998               1997
--------------------------------------------------------------------------------

U.S. Markets                                       $1,580,844         $3,499,259
International Markets                                 324,413            318,283
                                                   ----------         ----------

Net Sales                                          $1,905,257         $3,817,542


         Gross  margin  declined  in 1998 due to the  decrease  in  inner  REALM
shipments  and due to the change in the overall  makeup of the  Company's  sales
from a heavy  reliance on department  store sales to an increased  presence with
distributor  sales.  In the second  quarter of 1998,  the  Company  reduced  its
reliance on Department  stores by 9% of total net sales.  The Company feels this
shift  will be  beneficial  to the  Company in the long run as the cost of doing
business with Department  stores  continues to escalate,  and by selling through
distributors  the Company can  concentrate on developing  overall  marketing and
consumer  awareness  programs  that benefit both sales of existing  products and
increase consumer knowledge and desire for products containing synthesized human
pheromones.

         Research and  Development  expenses for the first  quarters of 1998 and
1997 were $100,316 and $73,086,  respectively.  These costs principally  reflect
payments and costs under the Company's contract with Pherin Corporation.

         Operating  expenses  decreased  $4,116,976  to $2,560,547 in the second
quarter of 1998 from  $6,677,523 in the second quarter of 1997.  During the 1997
quarter,  the Company incurred  advertising and promotional costs to support the
launch of inner REALM.  Due to the fact that the majority of these  expenditures
were for print advertising  vehicles committed to months in advance, the Company
was unable to change or alter  these  programs  in the short term when sales did
not  materialize  to support  these  levels of  expenditure.  Additionally,  the
Company  subsequently  received   unanticipated   chargebacks  against  accounts
receivable  payments from many of its department  store  customers that were not
authorized  within Company  established  procedures.  The Company  increased its
controls on cooperative advertising expense authorization and communicated these
tightened policies to all employees,  customers and suppliers.  Headcount in the
sales area decreased due to attrition and the  restructuring  of the field sales
force.  The Company  used this  opportunity  to change its focus to  emphasizing
"selling-through" at the retail level from "selling-into" Department stores. The
Company replaced regional managers primarily responsible for making headquarters
calls with field selling staff responsible for in-store activities geared toward
selling directly to the retail consumer.  The Company anticipates this change in
selling  strategy will increase  retail turns and lead to higher volume sales to
its department  store  customers.  Distribution  and general and  administrative
costs  decreased as well as selling and marketing in the second quarter of 1998.
MIS consulting  costs were lower in the 1998 quarter due to the 1997  completion
of automated warehousing and EDI systems installation.

         Interest  income was $106 and $491 for the second  quarters of 1998 and
1997,  respectively.  The Company paid $10,514 in interest expense in the second
quarter of 1998 on balances on its revolving bank line of credit.  This compares
to $34,285 interest expense in the second quarter of 1997.



<PAGE>


Six Months ended June 30, 1998 as compared to the Six Months ended June 30, 1997

         Net sales for the six months ended June 30, 1998 were $5,268,418.  This
was a 41% decrease from net sales of $8,913,831  for the first half of 1997. The
Company  attributes  the  decrease  entirely to declines in re-order  levels for
inner REALM.  Initial launch  quantities  shipped in the first half of 1997 were
not  duplicated  by  reorders  in the first half of 1998.  The  Company's  first
fragrance  offerings:  Realm Women and Realm Men have shown  modest  declines in
reorder quantities  between the two years.  During the first six months of 1997,
the Company made its first  shipments  to a  distributor  servicing  alternative
distribution  channels.  Sales to this class of trade continued to expand in the
first half of 1998. During the first six months of 1998, foreign sales and sales
to  alternative  classes  of  trade  increased  25%  from  the  prior  year  and
constituted and as a percentage of total net sales increased by 16%.


--------------------------------------------------------------------------------
Class of Trade                                        1998               1997
--------------------------------------------------------------------------------

U.S. Markets                                       $4,533,071         $8,251,360
International Markets                                 735,347            662,471
                                                   ----------         ----------

Net Sales                                          $5,268,418         $8,913,831


         Gross margin for the first half of 1998 was 68% compared to 79% for the
same period in 1997.  This  decrease is the result of  decreases in sales of the
Company's  inner REALM  products  to the  department  store class of trade.  The
Company conceived inner REALM as a higher gross margin product than its original
Realm Women and Realm Men's lines in order to increase overall gross margin. The
lower  sales of inner REALM to  department  stores in the first half of 1998 has
had a negative  impact on gross margin for the period when compared  against the
same period in the prior year.

         Research and  Development  expenses for the first half of 1998 and 1997
were  $182,448  and  $164,856,  respectively  and are  principally  comprised of
payments under the Company's contract with Pherin Corporation.

         Selling and  marketing  expenses  decreased  to  $4,239,700  in the six
months ended June 30, 1998 from $9,290,583 in the period ended June 30, 1997. In
1997,  the Company  incurred  expenses to launch its second  women's  fragrance:
inner REALM. In 1998, the Company carefully evaluated  advertising plans to suit
specific  regional and consumer  preferences.  The Company continues to evaluate
advertising spending and the effectiveness of co-operative  advertising programs
and in-store support personnel.  Future cost reductions in this area will result
from the shift in the Company's  overall  business  focus from one of developing
and  distributing  products to developing  and  licensing  products to serve the
needs of partners with established distribution networks. In 1998, the Company's
general and administrative expenses decreased 13% over the prior year period due
to decreases in headcount and spending controls.

         Interest  income  was $162 and  $12,471  for the first half of 1998 and
1997,  respectively.  In 1998,  the Company  paid  $21,469 in  interest  expense
related  to  advances  under its bank line of  credit.  During the first half of
1997, the Company had interest  expense of $36,828.  This higher expense in 1997
was due to larger bank borrowing  balances  incurred  during the launch of inner
REALM.


LIQUIDITY

         At June 30,  1998,  the  Company  had  borrowed  $209,296  against  its
$3,000,000 line of credit. Working capital was $2,178,013. At June 30, 1997, the
Company had net borrowings of $1,943,706 and working capital of $1,741,911.  For
the  first  six  months  of 1998,  operating  activities  generated  net cash of
$172,996.  During  the first  six  months  of 1997,  net cash used in  operating
activities   was   $3,695,265.   Assuming  the  Company's   activities   proceed
substantially as planned,  the Company's line of credit and anticipated revenues
from product sales should be adequate to meet its working capital needs over the
next twelve  months.  Working  capital  requirements  will  primarily be for the
supply of inventory and accounts receivable financing.



<PAGE>


         Additional  working  capital  may  be  required  should  the  Company's
continued  operations fail to generate  anticipated  consumer  response  levels.
Furthermore,  additional  working  capital  may be  required  should the Company
experience a greater than planned success with its product and retail expansion.
Funds would be needed for inventory  build,  accounts  receivable  financing and
staffing purposes. If the Company fails to achieve significant revenues from its
1998  marketing  efforts,  or if  retail  expansion  proves  to be more  capital
intensive than planned, the Company may require additional funding.

         On April 1, 1998, the Company signed a renegotiated loan agreement with
Mid-Peninsula  Bank  of Palo  Alto,  California  (the  "Bank")  providing  for a
continued line of credit. The Company may borrow up to $3,000,000 at an interest
rate equal to the Bank's prime rate plus .75% with borrowings  secured primarily
by the Company's trade receivables and inventory.  The agreement,  which expires
in April, 1999,  contains certain  debt-to-equity and working capital covenants.
There are no charges for any unused portions of the line.



<PAGE>


                                     PART II
                                OTHER INFORMATION

Item 4.  Submission of Matters to Vote of Security Holders

         Registrant  held  its  annual  meeting  of  shareholders  (the  "Annual
Meeting") on May 20, 1998. At the Annual Meeting,  the shareholders voted on two
proposals and elected six directors,  Bernard I. Grosser, MD, William P. Horgan,
Michael D.  Kaufman,  Helen C. Leong,  Robert Marx and Michael V. Stern to serve
until the next annual meeting and their successors are elected. In addition, the
shareholders approved an amendment to the Company's Articles of Incorporation to
change  the  name of the  Company  from  Erox  Corporation  to  Human  Pheromone
Sciences,  Inc. and an amendment to the Non-Employee Directors Stock Option Plan
to increase the number of shares available for issuance by 200,000 shares.

         The number of votes cast for, against or withheld as well as the number
of abstention  and broker  non-votes as to each director and with respect to the
name change and stock option plan proposals are set forth below:

Director:                                       For                    Withheld
---------                                       ---                    --------
Bernard I. Grosser, MD                       9,028,636                  51,440
William P. Horgan                            9,028,335                  51,741
Michael D. Kaufman                           9,028,636                  51,440
Helen C. Leong                               9,028,636                  51,440
Robert Marx                                  9,028,636                  51,440
Michael V. Stern                             9,028,636                  51,440


<TABLE>
<CAPTION>
Proposal:                                      For              Against            Abstained           Broker
---------                                      ---              -------            ---------           ------
                                                                                                      Non-Votes
                                                                                                      ---------
<S>                                         <C>                  <C>                <C>                   <C>
Amend the Company's Articles of
Incorporation to change the name from
Erox Corporation to Human Pheromone         9,030,669            21,271             28,136                0
Sciences, Inc.

Proposal:                                      For              Against            Abstained           Broker
---------                                      ---              -------            ---------           ------
                                                                                                      Non-Votes
Amend the Company's Non-Employee
Directors' Stock Option Plan to
increase the number of shares               5,182,320           182,454             60,600            3,654,702
available for issuance by 200,000
shares.
</TABLE>


Item 6.  Exhibits and Reports on Form 8-K
         (a) Exhibit 27.01-Financial Data Schedule..........................E-13

         (b) During the three months ended June 30, 1998, the Company filed Form
8-K on June 6,  1998  reporting  the  Amendment  to the  Company's  Articles  of
Incorporation  changing the name of the corporation to Human Pheromone Sciences,
Inc. from Erox Corporation.



<PAGE>


                                   SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  had duly  caused  this  Report  to be  signed  on behalf by the
undersigned thereunto duly authorized.


                                            Human Pheromone Sciences, Inc.
                                            Registrant




Date:  August 13, 1998                      /s/ William P. Horgan
                                            ------------------------------------
                                                      William P. Horgan
                                            Chairman and Chief Executive Officer


Date:  August 13, 1998                      /s/ Maxine C. Harmatta
                                            ------------------------------------
                                                      Maxine C. Harmatta
                                            Vice President, Finance and
                                            Administration