SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

               QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) of the
                             SECURITIES ACT OF 1934

                For The Quarterly period ended September 30, 1999
                         Commission File Number 0-28392

                -----------------------------------------------
                            HARVARD SCIENTIFIC CORP.
                              d.b.a. VIBRAGEN, INC.
                -----------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

      Nevada                                        88-0226455
      ------                                        ----------
      (State or Other Jurisdiction of               (IRS 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) 323-0769


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

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

  X   Yes         No
 ---        ----

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

                                    6,153,737
                    NUMBER OF COMMON STOCK SHARES OUTSTANDING
                              on December 10, 1999


Traditional Small Business Disclosure Format (Check One):

  X   Yes       No
 ---      ----


<PAGE>



                            HARVARD SCIENTIFIC CORP.
                                      INDEX

                                     PART 1
                              Financial Information
                             For the Quarter ending
                               September 30, 1999

ITEM 1:
         Balance Sheet - Assets
         Balance Sheet - Liabilities and Stockholders' Equity
         Statement of Operations
         Statement of Stockholder's Equity (4 pages)
         Statement of Cash Flows
         Notes to the Financial Statements (16 pages)

ITEM 2:
Management's Discussion and Analysis or Plan of Operation

                                     PART II
                                Other Information

ITEM 1:
Legal Proceedings

ITEM 2:
Changes in Securities and Use of Proceeds

ITEM 3:
Defaults Upon Senior Securities

ITEM 4:
Submission of Matters to a Vote of Security Holders

ITEM 5:
Other Information

ITEM 6:
Exhibits and Reports on Form 8-K

Signatures


<PAGE>



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

                                  BALANCE SHEET

                                     ASSETS


                                                             September 30,  December 31,
                                                                 1999           1998
                                                             (Unaudited)      (Audited)
                                                             -----------      ---------
<S>                                                            <C>          <C>
Current Assets:
     Cash and cash equivalents                                 $    2,223   $   13,430
     Accounts Receivable - Directors (Note 7 & 9)                               13,297
     Deferred debt issue costs (Note 11) Legal Retainer                         37,174
                                                               ----------   ----------

          Total Current Assets                                      2,223       63,901
                                                               ----------   ----------

Equipment and Leasehold Improvements:
     at cost, less accumulated depreciation of $32,893 and
     $35,461 at September 30, 1999 and December 31, 1998
     (Notes 2 & 3)                                                               9,837
                                                               ----------   ----------

Intangible Assets:
     Intellectual Property, Net of accumulated amortization
        of $35,508 and $4,147 at September 30, 1998 and
        December 31, 1997, respectively (Note 4)                       --           --
     Organizational cost, net of accumulated amortization of
        $175,550 at September 30, 1999 and
        December 31, 1998, respectively                                              .
                                                               ----------   ----------

                                                                1,027,022
                                                               ----------   ----------

Other Assets:
     Deposits                                                         300        1,510
        Product inventory (Note 5)                                 18,000       18,000

          TOTAL ASSETS                                         $   20,523   $   93,248
                                                               ==========   ==========

</TABLE>




    The accompanying Notes are an integral part of these financial statements



<PAGE>



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

                            BALANCE SHEET (CONTINUED)

                       LIABLITIES AND STOCKHOLDERS' EQUITY


                                                                   September 30,      December 31,
                                                                       1999              1998
                                                                     (Unaudited)       (Audited)
                                                                     -----------       ---------

<S>                                                                 <C>             <C>
Current Liabilities:
     Accounts Payable                                               $    331,229    $    350,859
     Accrued expenses (Note 6)                                            57,607          63,661
     Obligation under capital lease - current (Note 3)                     3,256           8,263

        Total Current Liabilities                                        392,092         422,783
                                                                    ------------     ------------


Stockholders' Equity:
     Common Stock, $.01 par value; 100,000,000 shares authorized;
        6,153,737 and 5,988,712  shares  issued and  outstanding
        at  September 30,  1998 and December 31,
        1998, respectively (Note 2)                                       60,037          59,887
      Preferred Stock, 10,000,000 shares authorized, none
           Issued and outstanding at September 30, 1998 (Note 2)
     Additional paid-in capital                                       12,843,340      12,804,615
     Deficit accumulated during the development stage                (13,274,946)    (13,194,037)

        Total Stockholders' Equity                                      (371,569)        329,535)

        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $     20,523    $     93,248
                                                                    ============    ============

</TABLE>





    The accompanying Notes are an integral part of these financial statements



<PAGE>




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

                            STATEMENTS OF OPERATIONS



                                                    Three Months Ended                      Nine Months Ended        1/13/87
                                                                                                                       To
                                                September     September            September       September       (Inception)
                                                30, 1998      30, 1998             30, 1998        30, 1998          9/30/99
                                               (Unaudited)    (Audited)           (Unaudited)      (Audited)       (Unaudited)
                                               -----------    ---------           -----------      ---------       -----------

<S>                                        <C>             <C>                  <C>             <C>             <C>
Net Sales                                 $                    $               $               $                $    187,387
Cost of Sales                                      --              --                   --              --           221,557
                                           ------------    ------------         ------------    ------------    ------------

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

 Operating Expenses:
  General and administrative expenses               204         718,914               67,673       1,770,464       6,721,918
  Research and development                         --           352,443                4,286         862,534       2,834,911
  Depreciation and amortization                    --            29,454                3,655          67,939         723,470
                                           ------------    ------------         ------------    ------------    ------------

      Total Operating Expenses                      204       1,100,841               75,614       2,700,937      10,280,299

       Loss from Operations                        (204)     (1,100,841)             (75,614)     (2,700,937)    (10,314,469)
                                           ------------    ------------         ------------    ------------    ------------
Other Income (Expense):
  Other Income                                     --              --                    525            --               525
  Amortization                                     --              --                   --              --          (156,250)
  Settlements (Note 9)                             --          (165,000)                --          (165,000)        253,271
  Interest Income                                  --            72,528                   53          77,256           7,494
  Dividend Income                                  --             3,782                    9          11,410          62,973
  Interest Expense                                 --           (22,524)                --          (257,026)     (2,085,909)
  Loss on disposition of Fixed Assets or
  Securities                                       --              --                 (5,882)        (11,580)     (1,042,580)
                                           ------------    ------------         ------------    ------------    ------------

      Total Other Income and Expense               --          (111,214)              (5,295)       (344,940)     (2,960,476)
                                           ------------    ------------         ------------    ------------    ------------

Net Loss                                   $       (204)   $ (1,212,055)        $    (80,909)   $ (3,045,877)   $(13,274,945)
                                           ============    ============         ============    ============    ============

Loss per Common Share                                 $         -$(0.21)        $        .01    $      (0.59)   $         --
                                           ============    ============         ============    ============    ============
Weighted Average Shares
  Outstanding (Note 2)                        6,078,737       5,643,101            6,071,225       5,150,154            --
                                           ============    ============         ============    ============    ============


</TABLE>




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



<PAGE>



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

                       STATEMENTS OF STOCKHOLDERS' EQUITY
            FOR THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                        TO SEPTEMBER 30, 1999 (UNAUDITED)


                                            RESTATED            Additional     Deficit
                                          COMMON STOCK            Paid-in        From
                                                                              Inception
                                       Shares        Amount       Capital       To Date        Total
                                       ------        ------       -------       -------        -----
<S>         <C> <C>                 <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>



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


                       STATEMENTS OF STOCKHOLDERS' EQUITY
            FOR THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                        TO SEPTEMBER 30, 1999 (UNAUDITED)

<CAPTION>

                                                                 RESTATED            Additional     Deficit
                                                                COMMON STOCK          Paid-in        From
                                                                                                   Inception
                                                          Shares        Amount        Capital       To Date           Total
                                                          ------        ------        -------       -------           -----
<S>           <C> <C>                                 <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 propert rights                           6,138,500         6,139           --                            6,139
Issuance of shares for cash, net of offering costs       200,000           200        831,100                        831,300
Net (loss) for the year ended December 31, 1995             --            --             --         (676,455)      (676,455)
                                                      ----------   -----------    -----------    -----------    -----------
Balance December 31, 1995                              8,749,125         8,749      1,902,445     (1,226,841)       684,353
Issuance of shares for services                          255,000           255         59,828                         60,083
Issuance of shares in conversion of debt                 310,254           310        249,690                        250,000
Issuance of shares for legal settlement                  568,750           569        494,244                        494,813
Discount on 7% Convertible Debentures                       --            --          500,000                        500,000
Net (loss) for the year ended December 31, 1996             --            --             --       (2,438,945)     (2,438,945)
                                                      ----------   -----------    -----------    -----------    -----------
Balance December 31, 1996                              9,883,129         9,883      3,206,207     (3,665,786)       (449,696)
Issuance of shares for cash, net of offering costs       250,000           250        124,750                        125,000
Issuance of shares for fees and services               1,270,000         1,270           --                            1,270
Discount on 6% Convertible Debentures                       --            --        1,250,000                      1,250,000
Net (loss) for the Quarter ended March 31, 1997             --                           --       (3,140,868)     (3,140,868)
                                                      ----------   -----------    -----------    -----------    -----------
Balance March 31, 1997                                11,403,129   $    11,403    $ 4,580,957    $(6,806,654)   $(2,214,294)
                                                      ----------   -----------    -----------    -----------    -----------
</TABLE>


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




<PAGE>



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

                       STATEMENTS OF STOCKHOLDERS' EQUITY
            FOR THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                        TO SEPTEMBER 30, 1999 (UNAUDITED)


                                                                 RESTATED            Additional     Deficit
                                                                COMMON STOCK          Paid-in        From
                                                                                                   Inception
                                                           Shares        Amount       Capital       To Date            Total
                                                           ------        ------       -------       -------            -----
<S>                                                    <C>          <C>           <C>            <C>            <C>
March 31, 1997 balance forward                         11,403,129   $    11,403   $ 4,580,957    $(6,806,654) $(2,214,294)
Issuance of shares for fees and services                6,172,000         6,172          --                            6,172
Issuance of shares in conversion of debt                  450,000           450       133,300                        133,750
Net (loss) for the Quarter ended June 30, 1997               --            --            --       (1,266,233)    (1,266,233)
                                                       ----------   -----------   -----------    -----------    ------------
Balance June 30, 1997                                  18,025,129   $    18,025   $ 4,714,257    $(8,072,887)   $(3,340,605)
Issuance of shares in conversion of debt                1,446,325         1,446     1,275,133                      1,276,579
Issuance of shares for fees and services                  144,000           144          --                              144
Net (loss) for the Quarter ended September 30, 1997          --            --            --         (180,075)      (180,075)
                                                       ----------   -----------   -----------    -----------    ------------
Balance September 30, 1997                             19,615,454   $    19,615   $ 5,989,390    $(8,252,962)   $(2,243,957)
Issuance of shares in conversion of debt                2,375,919         2,376       985,789                        988,165
Issuance of shares for fees and services                8,300,000         8,300       537,100                        545,400
Issuance of shares in legal settlement                  1,150,000         1,150       439,075                        440,225
Issuance of shares for intellectual property            2,000,000         2,000          --                            2,000
Receivable due from related parties reflecting
the sale of stock Rule 16-b)                                 --         410,016       410,016
Receivable due from related parties                       333,535       333,535
Net (loss) for the Quarter ended December 31, 1997           --            --            --       (1,229,065)     (1,229,065)
                                                       ----------   -----------   -----------    -----------    ------------
Balance at year end December 31, 1997                  33,441,373   $    33,441   $ 8,694,904    $(9,482,027)   $   (753,682)

</TABLE>

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





<PAGE>

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

                       STATEMENTS OF STOCKHOLDERS' EQUITY
            FOR THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                        TO SEPTEMBER 30, 1999 (UNAUDITED)

                                                                 RESTATED               Additional       Deficit
                                                                COMMON STOCK              Paid-in        From
                                                                                                       Inception
                                                           Shares           Amount        Capital       To Date          Total
                                                           ------           ------        -------       -------          -----

<S>                                                      <C>          <C>             <C>            <C>            <C>
Issuance of shares in conversion of debt                 1,036,064           1,036         260,882                       261,918
February 1, 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 services                             10,000             100                                           100
Issuance of shares for cash                                200,000           2,000         598,000                       600,000
Net reversal of Receivable due from related
 parties reflecting the sale of stock Rule
 16(b)                                                                                    (17,197)                       (17,197)
Net (loss) for the Quarter ended March 31, 1998                                                     $ (1,097,930)   $ (1,097,930)
                                                         ---------    ------------    ------------  ------------    ------------
Balance at March 31, 1998                                5,238,022    $     52,380    $ 14,520,786  $(10,579,957)   $  3,993,209
Issuance of shares for fees and services                    10,500             105         124,371                       124,476
Issuance of shares for cash                                233,333           2,334         697,665                       699,999
Net (loss) for the Quarter ended June 30, 1998                --              --              --        (735,893)       (735,893)
                                                         ---------    ------------    ------------  ------------    ------------
Balance at June 30, 1998                                 5,481,855    $     54,819    $ 15,342,822  $(11,315,850)   $  4,081,791
                                                         =========    ============    ============   ===========    ============
Issuance of shares for fees and services                   101,000           1,010         396,990                       398,000
Issuance of shares for cash                                 24,667             247          73,753                        74,000
Issuance of shares for legal settlement                    600,000           6,000       2,762,900                     2,768,900
Inventory                                                   18,000          18,000
Net (loss) for the Quarter ended September 30, 1998           --              --             --       (1,212,055)     (1,212,055)
                                                         ---------    ------------    ------------  ------------    ------------
Balance September 30, 1998                               6,207,522    $     62,076    $ 18,594,465   (12,527,905)   $  6,128,636
                                                         =========    ============    ============   ===========    ============
</TABLE>


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





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

                       STATEMENTS OF STOCKHOLDERS' EQUITY
            FOR THE PERIOD FROM JANUARY 13, 1987 (DATE OF INCEPTION)
                        TO SEPTEMBER 30, 1999 (UNAUDITED)



                                                              RESTATED             Additional     Deficit
                                                            COMMON STOCK            Paid-in        From
                                                                                                 Inception
                                                       Shares         Amount        Capital       To Date          Total
                                                       ------         ------        -------       -------          -----
<S>                                                 <C>               <C>        <C>           <C>               <C>
Adjustment fo Waite & See Agreement                                              (4,684,197)                   (4,684,197)
Shares returned to Treasury Stock                    (270,200)        (2,702)                                      (2,702)
Issue of shares for fees and services                  51,390            513                                          513
Reclassifying of debt forgiveness                                                  (968,901)                     (968,901)
Net (loss) for Quarter ended December 31, 1998                                     (136,752)                     (136,752)
Balance at Year End                                                                               (666,133       (666,133)
Balance at December 31, 1998                        5,988,712         59,887     12,804,615    (13,194,038)      (329,536)
                                                    ---------         ------     ----------    -----------       --------
Issue of shares for service                            15,000            150                                          150
Issue of shares January 11, 1999                           25                        16,725                        16,725
Net (loss) for Quarter ended March 31, 1999                                                        (79,408)       (79,408)
Issue of shares for fees and services                  51,390            513                                          513
Reclassifying of debt forgiveness                                                  (968,901)                     (968,901)
Net (loss) for Quarter ended December 31, 1998                                     (136,752)                     (136,752)
Balance at December 31, 1998                        5,988,712         59,887     12,804,615    (13,194,038)      (329,536)
                                                    ---------         ------     ----------    -----------       --------
Issue of shares for service                            15,000            150                                          150
Issue of shares January 11, 1999                           25                        16,725                        16,725
Net (loss) for Quarter ended March 31, 1999                                                        (79,408)       (79,408)
                                                    ---------         ------     ----------    -----------       --------
Balance at March 31, 1999                           6,003,737         60,037     12,821,340    (13,273,446)      (392,069)
                                                    =========         ======     ==========    ===========       ========
Net (loss) for Quarter ended June 30, 1999                                                          (1,296)        (1,296)
Balance as of June 30, 1999                         6,003,737         60,037     12,821,340    (13,274,742)      (393,365)
Shares issued for service                             150,000
Reduction of note receivable                                                         22,000                        22,000
Net (loss) for quarter ended September 30, 1999                                                       (204)          (204)
                                                    ---------         ------     ----------    -----------       --------
Balance at Quarter ended September 30, 1999         6,153,737         60,037     12,843,340    (13,274,946)      (371,569)
                                                    =========         ======     ==========    ===========       ========
</TABLE>


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



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

                            STATEMENTS OF CASH FLOWS

                                                                  Nine Months Ended         1/13/87
                                                                                         (Inception) to
                                                            September       September      September
                                                             30, 1999       30, 1998       30, 1999
                                                           (Unaudited)     (Unaudited)    (Unaudited)
                                                           -----------     -----------    -----------
<S>                                                      <C>             <C>             <C>
Reconciliation of Net Loss to Net Cash
  Used in Operating Activities:
Net Loss                                                 $    (80,909)   $ (3,045,877)   $(13,077,367)
                                                         ------------    ------------    ------------
Adjustments to Reconcile Net Loss to
  Net Cash Provided by (Used in)
  Operating Activities:
  Book value of assets sold                                     6,182            --            12,665
  Loss on disposition of securities or fixed assets                            13,030          11,580
  Depreciation and amortization                                 3,655          60,859         289,583
  Amortization of Debt Issuance cost                                               --         625,000
  Issuance of stock for director's fees and employment
    services                                                                  327,575       1,289,874
  Issuance of stock for consulting & legal fees                                               283,181
  Issuance of stock for Property Rights                                       375,000           2,000
  Issuance of stock in legal settlement                                       165,000         856,208
  Discount on Convertible Debentures                             --              --         1,750,000
  Interest Expense converted to Stock                                                          98,795
  (Increase) decrease in assets:
    Accounts Receivable                                        13,297                          13,297
    Note & Interest receivable                                                             (4,792,347)
    Prepaid expenses                                             --           (14,145)        (38,684)
    Deposits/Retainers                                          1,210         (34,882)          1,210
    Legal Retainer                                             37,174
    Other assets                                                                               23,877
  Increase (decrease) in liabilities:
    Accounts Payable                                          (24,637)        129,436         326,220
    Accrued expenses                                           (6,054)       (123,625)         48,992
    Due to related parties                                       --              --           252,590
                                                         ------------    ------------    ------------
Total Adjustments                                              30,827         898,248       1,054,041
                                                         ------------    ------------    ------------
Net Cash Used in Operating Activities                         (50,082)   $ (2,147,629)   $(12,023,326)
                                                         ============    ============    ============
Cash Flows from Investing Activities:
  Cash from sale (purchase) of equipment                         --              --           (78,114)
  Cash from sale (purchase) of Intellectual Rights               --              --          (150,000)
  Capitalized organization costs                                 --              --          (150,924)
    Net Cash Used in Investing Activities                        --              --          (379,038)

Cash Flows from Financing Activities:
  Proceeds from issuance of capital stock,
    net of offering costs                                         150       1,373,999       4,546,095
  Proceeds from debt converted to capital stock                  --              --           250,000
  Proceeds from debt, net of costs                               --              --         5,122,936
  Proceeds from debentures, net of costs                         --              --         4,375,000
  Principal payments on debt paid in capital                   38,725          (8,756)     (1,889,444)
                                                         ------------    ------------    ------------
      Net Cash Provided by Financing Activities                38,875       1,365,243      12,404,587
                                                         ------------    ------------    ------------
Net Increase (Decrease) in Cash                               (11,207)       (782,386)           2223
Cash at beginning of period                                    13,430         873,199              --
                                                         ------------    ------------    ------------
                                                                2,223    $     90,813
                                                         ============    ============    ============
Cash at end of period
</TABLE>


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



                            HARVARD SCIENTIFIC CORP
                             (d.b.a. VIBRAGEN INC.)
                         (A DEVELOPMENT STAGE COMPANY)

                       NOTES TO THE FINANCIAL STATEMENTS
   Based on Unaudited Financial Statements at September 30, 1999 and Audited
                   Financial Statements at December 31, 1998

NOTE 1 - NATURE OF BUSINESS AND ORGANIZATION

Nature of Business:
Harvard  Scientific  Corp.,  d.b.a.  as Vibragen,  Inc. (see Note 12 "Subsequent
Events")  (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 dysfunction ("Male Oral Product")

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

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  Allowance,  mailed  November 10, 1999,  Case
#34437.

The Company plans to focus on its LLPGE1 for the treatment of sexual dysfunction
and bring the products to the marketplace. On 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.

                                       1
<PAGE>


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.  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.  At June 30,  1999,  the  Company  has
100,000,000  shares of Common Stock  authorized  with  6,203,737  shares issued,
6,003,737  outstanding (270,200 shares returned to the Company's treasury),  and
as of December 31, 1998, 5,988,737 shares were outstanding. 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 March 31, 1999.

In December  1998, one of the Directors  died. On March 3, 1999,  Gordon W. Cole
was  elected  to the  Board of  Directors.  The  Company's  Board  of  Directors
currently consists of three members.

On January 18, 1999,  Barbara L. Berry  resigned her  positions as Secretary and
Chief  Accounting  Officer of the  Company.  On March 4,  1999,  Thomas E. Waite
resigned his positions as President,  CEO and Chairman of the Board of Directors
of the Company.  On March 4, 1999,  Martin J. Holloran  resigned his position as
Director of the Company. See Note 12, "Subsequent Events".


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organizational Costs:
Organization  costs were  being  amortized  over a  five-year  period  using the
straight-line  method. At December 31, 1998, the Organizational Costs were fully
amortized. Also see the discussion contained in Note 3 & 4.

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

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

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

Earnings per share:
The earnings per share calculations were based on the weighted average number of
shares outstanding during the period:  6,071,225 for the period ending September
30, 1999 and 5,363,250 for the Period ending December 31, 1998.

                                       2
<PAGE>

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.


NOTE 3 - EQUIPMENT & LEASEHOLD IMPROVEMENTS

Equipment and building improvements consists of the following:
<TABLE>
<CAPTION>

                                                      September 30, 1999         December 31, 1998
                                                         (Unaudited)                 (Audited)
                                                         -----------                 ---------

<S>                                                        <C>                        <C>
Equipment & Leasehold Improvements                         $ 32,893                   $ 45,299
Less: accumulated depreciation                              (32,893)                    35,461
Total Net Equipment & Leasehold Improvements          $           0             $        9,838
</TABLE>

In April 1997, the Company  entered into an agreement for the lease of equipment
used in the process of sizing  Liposomes  which the Company uses in the delivery
of the  Prostaglandin  E-1. The total lease amount of $32,893 is to be paid over
24 months. The Company records the lease as a capital lease amortizing  payments
over the life of the lease. See Note 12, "Subsequent Events".

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
was donated to charitable organizations. In December 1998, the Company wrote off
a total of $6,182  from  fixed  assets  representing  the net book  value of the
office equipment  donated to charitable  organizations.  See Note 9 "Contracts &
Agreements".

The  Company  has  reduced  its  need  for  certain   equipment   and  leasehold
improvements because the Company currently does not own manufacturing  equipment
for its product,  except a particle sizer for lipsomes (see Note 12,  Subsequent
Events").  The  products  have  been and will  continue  to be  manufactured  by
third-party manufacturers according to the Company's specifications.


NOTE 4 - INTELLECTUAL PROPERTIES

On January 7, 1994,  the Company  exchanged  285,600 shares of Common Stock with
BTI for the intellectual rights to patent, develop,  manufacture, and market the
LLPGE-1 for the  treatment of male  erectile  dysfunction,  impotency and sexual
enhancement. The Company recorded the transfer of intellectual properties at the
par value of stock  transferred,  which  amounted to $2,856.  BTI's  largest and
controlling  shareholder,  Dr. Jackie See M.D., the inventor of the  Lyophilized
Liposomal LLPGE-1, holds a 2% royalty interest on the sale of products.

                                       3
<PAGE>

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 LLPGE-1
product.   The  Company  recorded  the  transfer  at  the  par  value  of  stock
transferred, which amounted to $6,139.

During 1996, the Company expensed the unamortized  cost of acquiring  technology
relating  to the  development  of an HIV  home  test  kit.  The  Company,  which
originally  acquired the rights in exchange for 33,500  shares of Common  Stock,
ceased product development in connection with a settlement accrued in 1995.

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 $50,378 for research and development 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  rights  (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. See Note 7.

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.  The net asset balance of $1,000,619  was
written  off to the P&L as a loss  on  assets  until  such  time a value  can be
determined for the Intellectual Properties.


NOTE 5 - INVENTORY

In September 1998, the Company received 30 grams of  Prostaglandin  PGE-1 with a
value  of  $600 a gram or  $18,000,  from  Pharmacia-Upjohn  for  future  use in
manufacturing  clinical lots. The Company received this product, free of charge,
in good faith with the possibility of future business cooperation. The inventory
is located at Pyramid Laboratories in Costa Mesa, California.

                                       4
<PAGE>


NOTE 6 - ACCOUNTS PAYABLE & ACCRUED EXPENSES

At December 31, 1998, the accounts payable balance was $350,859.  During the 1st
quarter 1999, it was determined that $116,070 of this amount was deemed forgiven
by the vendor and thereby no longer an obligation of the Company. During the 1st
quarter of 1999, $116,070 was written off to the profit & loss statement.






Accrued expenses consist of the following:

                                     September 30, 1999     December 31, 1998
                                       (Unaudited)              (Audited)

Accrued payroll & payroll taxes       $     57,607           $     63,661


NOTE 7 - RELATED PARTY TRANSACTIONS


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

2.  During  1997,  the  Company  incurred a payable of  $150,000  to BTI for the
    Intellectual  Property Rights to Prostaglandin E-1 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


                                       5
<PAGE>

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

6.  BTI owned approximately 8% and 10% of the Company's shares on March 31, 1999
    and  December  31,  1998,  respectively.  Dr.  Jackie See a Director  of the
    Company and a controlling person of BTI. Dr. Jackie See owned  approximately
    28% and 35% of the  Common  Stock  of the  Company  on  March  31,  1999 and
    December  31,  1998,  respectively,  including  the shares  owned by BTI and
    shares that Dr. See has the right to purchase (296,302 shares)(see Note 9).

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. On March 4, 1999 Mr. Waite
    resigned all his positions with the Company. See Note 10 "Contingencies".

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 is a Director of the Company. Thomas E. Waite was Chairman of
     the  Board,  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.  On March 31,  1999,  the  Promissory  Note  balances  of
     4,684,197 plus accrued  interest of $259,545 were due and payable.  Neither
     Dr. See nor Thomas E. Waite paid their respective  Promissory Note balances
     plus  interest on March 31, 1999 and these notes and interest  balances are
     now  in  default.   See  Note  9   "Contracts   &   Agreements",   Note  10
     "Contingencies" and Note 11 "Subsequent Events".In May of 1999, the Company
     accepted the transfer of  technology  for  treatment of Psoriasis  from Dr.
     Jackie R. See as payment in full of Dr. See's  obligation on the $2,492,099
     Promissory Note plus accrued interest payable by Dr. See to the Company. In
     this  regard,  the  Company  obtained  an  evaluation  of the  intellectual
     property  transferred from Colorado Research  Foundation,  which valued the
     property  at  in  excess  of  $100,000,000.  The  Company  discounted  that
     valuation  to the value of the  promissory  note in  question.  Because the
     asset was acquired  from a related  party,  it is carried on the  Company's
     books at predecessor cost, which is $0.00.

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.

    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 144 under the 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.

                                       6
<PAGE>


NOTE 8 - INCOME TAXES

    The Company  has federal net  operating  loss  carryforwards  for  financial
    statement  purposes of  approximately  $14,000,000  at September  30,. 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 9 - CONTRACTS & AGREEMENTS

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.

1    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. Dr. Jackie R. See was a Director of the
     Company, and Mr. Thomas E. Waite was the President, Chief Executive Officer
     and  Chairman  of the Board of the  Company.  On March 4, 1999,  Mr.  Waite
     resigned all his positions with the Company (see Note 10  "Contingencies").
     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  began to accrue interest at 8% on the date the  registration
    statement (for these shares) became  effective  (July 28, 1998).  During the
    4th quarter of 1998,  Mr.  Waite made  payments  towards his note balance of
    $300,000.  Since,  neither party has made additional  payments towards their
    notes.

    On March 31,  1999,  the  Promissory  Notes  due from Dr.  Jackie R. See and
    Thomas E. Waite for a total of  4,764,308.76  were due and payable.  Neither
    Dr. See nor Thomas E. Waite paid their  respective  Promissory Note balances
    plus  accrued  interest  on March  31,  1999 and these  notes  and  interest
    balances are now in default.  Due to the  uncertainty of collection on these
    notes plus accrued interest, the Company has reserved 100% of the promissory
    note balances and accrued interest receivable due from Mr. Waite and Dr. See
    as a contra asset account to the receivable.  The interest  balance at March
    31, 1999  (accrued  from January 1999 to March 31, 1999) was $93,684 and the
    balance at December  31, 1998 of $165,861  was written off against  interest
    income in the profit & loss  statement in the respective  periods.  At March
    31,  1999,  neither  Mr.  Waite nor Dr.  See has been  relieved  from  their
    obligation  to pay in full the note and  interest  balances due the Company.
    See Note 7 ("Related Party Transactions),  Note 910 Contingencies") and Note
    12 ("Subsequent Events").

                                       7
<PAGE>

2.  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
    LLPGE-1 product to the marketplace.  At March 31, 1999, the Company had paid
    Goldstein $75,000 from the beginning, with a balance of $31,500 still owing.

3.  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. At March 31, 1999, the Company owed Mr. Pizzulli $37,708.

4.  On February 24, 1999, the Company changed transfer agents from Olde Monmouth
    Stock  Transfer  Company  back to  Nevada  Agency & Trust  Company  in Reno,
    Nevada.

5.  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.

6.  During the first quarter 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 currently
          occupy 930 square feet.  Rent is $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 are 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 10 - CONTINGENCIES

The Company is a party in certain  pending or  threatened  legal,  governmental,
administrative,  or judicial  proceedings  that arose in the ordinary  course of


                                       8
<PAGE>

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)    EricN.  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 April 2, 1998,  the Company  filed an answer to Savage's  complaint
          denying all liability.  The Company denies any mention of the issuance
          of shares to Savage in his employment contract.

          Savage filed a motion for partial summary  judgment on August 11, 1998
          alleging that there are no material  facts at issue.  On September 21,
          1998,  the motion was denied.  The matter has been scheduled for trial
          on the May 9, 2000 trial calendar.

   (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)    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


                                       9
<PAGE>


          rescission of such loan agreement in the amount of  $2,492,098.61  and
          repayment  of  $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 to the United States  District
          Court,  Middle  District of  Florida,  Orlando  Division,  as Case No.
          99-409-CIV-ORL-22B.  The Company denies all  allegations  and plans to
          vigorously defend itself against these untrue claims of fraud.

          On or about  September 3, 1999,  the Eighteenth  Judicial  District in
          Seminole  County Florida  dismissed the action  entitled Thomas Waite,
          plaintiff v. Harvard Scientific Corp., a Nevada  corporation,  and Dr.
          Jackie R. See,  defendants.  The action was  dismissed  based upon the
          lack of venue in that court.  The Company's  case against Thomas Waite
          remains outstanding in Washoe County, State of Nevada.

   (d)    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 and breach 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  (see Note 7 & 9). 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).

   (e)    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 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 in dispute.

          On February 19,  1998,  the Company  renewed its  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.   Pharma  has  retained   Nevada  counsel.
          Arbitration is being pursued, and discovery has commenced.

          The Company has  obtained an order  compelling  production  of various
          documents by Pharma  without  objection  after Pharma failed to timely


                                       10
<PAGE>

          respond.  The Company  subsequently  filed a motion to preclude Pharma
          from producing  certain  categories of evidence at the  arbitration on
          the  grounds  that  its  response  to  the   Arbitrator's   order  was
          insufficient.  In the meantime,  Pharma's Nevada counsel has failed to
          execute an arbitration agreement for the Arbitrator,  despite multiple
          requests therefor.  The Company is considering seeking confirmation of
          Pharma de facto  abandonment  of its intent to have  arbitration  of a
          proposed counterclaim for damages.



   (f)    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.

   (g)    Enza Vitiello Baldari v. David E. Jordan v. Harvard Scientific,  Inc.,
          Case No.  99-6451 CIV filed on November 3, 1999,  in the United  State
          District Court, Southern District of Florida.  David E. Jordan alleges
          that  Defendant  issued,  pursuant to an oral  agreement,  one million
          (1,000,000))  shares of Harvard Scientific Corp. stock.  Subsequent to
          the issuance of said shares, plaintiff cancelled these shares claiming
          a loss of confidence in David E. Jordan's services.

   (h)    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  massive fraud  perpetrated  by
          Defendant to induce Plaintiff to invest and hold securities in Harvard
          Scientific.

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

   (a)    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,  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. The Company
          claims  an action  for  damages,  injunctive  relief  and  declaratory
          judgement in excess of $15,000.  On January 7, 1999, the lawsuit filed
          by the  Company  was  voluntarily  dismissed  by the  Company  without
          prejudice, as a result of a venue dispute.


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 Notes due from the former Officer/Director Mr. Waite


                                       11
<PAGE>

and Director Dr. See (see Notes 7, 9 & 10). If additional capital is not secured
within a reasonable time frame,  there is considerable doubt about the Company's
ability to continue as a going concern.


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.

   (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)    On April 26, 1999, the Company  announced it has changed it's changing
          its name to Vibragen,  Inc. The Company  intends to hold a shareholder
          meeting to vote on the official  name change.  The Company  previously
          announced  it will be  holding  this  shareholding  meeting on May 31,
          1999.  This date has  changed and the new date of the meeting is still
          to be announced.  The Company has filed a "d.b.a." (doing business as)
          in Nevada and is  currently  trading  under the new  ticker  symbol of
          "VGEN".

   (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.

                                                           1


<PAGE>



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. (d.b.a. Vibragen, Inc.) 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,  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 which 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   is   attempting   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,  however,  the  Company  is  optimistic  that a
licensing  agreement(s)  and/or a Partner will commit to the Company  before the
end of the second quarter 1999.

         The Company  believes that 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.  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 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 that its 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  as   rapidly  as   possible   with
implementation  of its protocols for gaining U.S.  regulatory  approval.  During
September  1998,  toxicity  studies  were  completed  on female  rabbits and the


                                       1
<PAGE>

results  showed no toxicity and no redness or irritation at any dose or with the
gel  itself  when  observed  visually  each day.  Therefore,  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
preparing to submit its  application  for an IND in  connection  with the Female
Topical Product to the U.S. Food and Drug Administration in 1999.

         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 has named 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.  Dr.  Goldstein
will conduct a Phase I pilot study for publication in parallel with the Phase II
clinical  trials for  treating  male sexual  disorder  under an  Investigational
Review Board ("IRB") at Boston University.

         The Company's core  technology is covered by a U.S.  patent.  On August
18, 1997, the Company  received a Notification  of Allowance for Patent from the
U.S. Patent and Trademark Office for "PGE1 CONTAINING  LYOPHILIZED LIPOSOMES FOR
USE IN THE  TREATMENT  OF ERECTILE  DYSFUNCTION".  This is the active drug agent
used in the  Company's  Male  Intraurethral,  Male  Topical  and Female  Topical
Products. The U.S. Patent and Trademark Office issued Patent Number 5,718,917 to
the Company on February 17, 1998.

         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 other regulatory approval, none of which is assured.

         During  fiscal  years 1994  through 3rd  quarter  1999,  the  Company's
activities consisted primarily of raising capital, identifying a core management
team,  developing a patent  application  for LLPGE1 and the  submission  of this
application  to the U.S.  Patent and  Trademark  Office,  which  resulted in the
issuance of Patent No. 5,718,917,  concluding manufacturing scale up and initial
clinical  trials  and  formulating   both  a   commercialization   and  clinical
development  strategy.  The  Company has  considered  and  evaluated  additional
products  and market  potential  for those  products in order to enhance its own
current  product  portfolio  and intends to continue  this  strategy  for future
corporate development.

         The  Company  believes  that its  strategic  plan will  continue  to be
implemented,  however,  the Company is currently selecting a new management team
to  establish  such  goals.  Since the  resignation  of the  President,  CEO and
Chairman of the Board,  Thomas E. Waite,  and the resignation of Director Martin
Holloran,  on March 4, 1999,  the  Company  is  pleased to have hired Mr.  Irwin
Miller as its new Chief Executive Officer.  Mr. Miller brings more than 30 years
of extensive  Wall Street  experience  and  financial  management  experience of
publicly held  corporations  to the Company.  He will use his  successful  track
record of  highlighted  senior  level  positions  with firms such as Kayser Roth
Hosiery  Company and Cowen & Company to help  establish and implement  goals for
the Company.  He is currently in the process of  establishing  a new  management
team for the  Company.  Since the middle of  November  1997:  (i) the  Company's
International Patent Application, No. PCT/US96/18820  (International Publication
No. W097/2234) for LLPGE1 received a favorable  Preliminary  Examination Report,
from the U.S. Patent and Trademark  Office Examiner acting as the  International
Preliminary Examining Authority,  (ii) a study utilizing gamma radiation instead
of standard 0.2 micron filters to sterilize the chemical  components used in the
Company's   products  proved   successful  in  the  production  of  "GMP"  (Good
Manufacturing  Practice) product, which should lead to substantial cost savings,
(iii)  financing  agreements  of  independent  investors  brought  in a total of
$1,373,999  to the Company  was used  toward  working  capital,  (iv)  stability
studies on LLPGE1 conducted with the collaborative efforts of Pyramid Labs, Inc.
in Costa Mesa,  California  have proven that LLPGE1  remains  stable without any
degradation and chemical  breakdown at room  temperature for at least 12-months.
These  stability  studies are ongoing in order to determine the exact shelf life


                                       2
<PAGE>

for  the  Company's  products  at  room  temperature,  (v) a  topically  applied
treatment  product  (gel-base  and liquid  spray) is being  developed for female
sexual arousal  disorder,  (vi) a topically  applied  treatment product is being
developed for male sexual  disorder,  (vii) the rights were acquired for an oral
delivery  treatment  method for both male and female sexual  disorder  whereby a
capsule of Apomorphine in lyophilized liposomal form will be taken orally by the
patient,  (viii) toxicity studies and dynamic magnetic resonance imaging ("MRI")
studies  have been  completed  by the  Company  for its  female  sexual  arousal
disorder treatment product, (ix) through a settlement agreement, the company has
recaptured a net of 234,810 shares of its common stock (for return to treasury),
which were previously issued to past officers and directors of the Company,  and
(x) a settlement  agreement was reached with Springrange  Investment Group, Ltd.
whereby  the  Company  believes  that  its  shareholders   saved   approximately
$1-million.

         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,  and 6) seek to  identify  other  companies  with  similar
technologies  or  companies  seeking  new  proprietary   products  in  order  to
strengthen  their  own  existing  market  position  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.  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 is probable,  but there can be no assurance that
the product will receive FDA approval in that time span, if ever.

         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.

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.

                                       3
<PAGE>

         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
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.



                                       4
<PAGE>

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.





                                       5
<PAGE>




PART II - OTHER INFORMATION

ITEM NO. 1.  LEGAL PROCEEDINGS.

The  Registrant  has reported,  herein,  legal  proceedings  which have become a
reportable event during the first quarter of 1999 or a reportable event reported
in a prior  filings in which  there has been a material  development  during the
first quarter, as follows:

1.   Legal Proceedings Reportable during Third Quarter 1999:

1.   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.  Investors 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 resolved in 1997, 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.

2.   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 $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 to the  United  States  District
     Court,  Middle  District  of  Florida,   Orlando  Division,   as  Case  No.
     99-409-CIV-ORL-22B.  The  Company  denies  all  allegations  and  plans  to
     vigorously defend itself against these untrue claims of fraud.

     Currently  pending are Waite's motion to amend and the Company's  motion to
     dismiss or to transfer venue to the federal court in Reno, Nevada where the
     Company's action against Waite is pending (see below).

3.   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 and
     breach 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  (see Note 7 & 9). 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).


                                       1
<PAGE>

2.   The following is Information on legal proceedings terminated and considered
     a reportable event during this first quarter of 1999 filing or a reportable
     event  reported  in a prior  filings  in which  there  has been a  material
     development during the third quarter:

(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 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 in dispute.

     On  February  19,  1998,  the  Company  renewed  its  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.  Pharma has retained Nevada  counsel.  Arbitration is
     being pursued, and discovery has commenced.

     The  Company  has  obtained  an  order  compelling  production  of  various
     documents  by  Pharma  without  objection  after  Pharma  failed  to timely
     respond.  The Company  subsequently  filed a motion to preclude Pharma from
     producing certain  categories of evidence at the arbitration on the grounds
     that its  response  to the  Arbitrator's  order  was  insufficient.  In the
     meantime,  Pharma's  Nevada  counsel  has failed to execute an  arbitration
     agreement for the  Arbitrator,  despite  multiple  requests  therefor.  The
     Company is considering seeking  confirmation of Pharma de facto abandonment
     of its intent to have arbitration of a proposed counterclaim for damages.

(b)  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. The Company  claims an action for
     damages,  injunctive relief and declaratory judgement in excess of $15,000.
     On  January 7, 1999,  the  lawsuit  filed by the  Company  was  voluntarily
     dismissed by the Company without prejudice, because of a venue dispute.

ITEM NO. 2.  CHANGES IN SECURITIES.

Any  Changes  regarding  the  securities  of the Company  are  described  in the
Company's  Form 10-KSB  filed April 14, 1999 with the  Securities  and  Exchange

                                       2
<PAGE>


Commission.  Such information is contained in the section  captioned "Market for
Common  Equity and  Related  Stockholder  Matters"  in Part II,  Item 5 and such
description is incorporated herein by this reference.

ITEM NO. 3. DEFAULTS UPON SENIOR SECURITIES.

The  Registrant  hereby  references  the  description of any Default upon Senior
Securities   regarding  the  securities  of  the  Registrant  to  the  financial
information provided in Part I of this Form 10Q-SB.  Reference should be made to
the  disclosure  provided in Part I in the "Notes to the Financial  Statements",
Note 7 (8) "Related  Party  Transactions",  Note 9 (1) "Contracts & Agreements",
Note 10 (c) & (d)  "Contingencies",  and Note  11"Uncertainty  - Going Concern",
which all  reference  the  Financing  Agreement  dated  January 13, 1998 between
Director Dr. Jackie R. See and former CEO & President, Thomas E. Waite, which is
currently in default effective March 31, 1999.

ITEM NO 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters  have been  submitted to a vote of the  security  holders  during the
period covered by this report through the solicitation of proxies or otherwise.

ITEM NO. 5.  OTHER INFORMATION.
None.

ITEM NO. 6.  EXHIBITS AND REPORTS ON FORM 8-K

     1.  Exhibits
         (3)     (i)   Articles of Incorporation , including amendments to April
                       30, 1996,  incorporated  by reference  ***  Amendments to
                       Articles of Incorporation June 18, 1996, July 9, 1996 and
                       July 13, 1998. *
                 (ii)  By-laws - incorporated by reference ***


         (4)     Instruments,  defining the rights of holders,  incl. indentures
                 *, **
         (10)    Material contracts:
                 (i)   Securities   Purchase  Agreement  dated  March  21,  1997
                       between the Registrant and Springrange  Investment Group,
                       Ltd. ****
                 (ii)  Financing  Agreement  between  Thomas E.
                       Waite and Dr. Jackie R. See and the Company- incorporated
                       by  reference  *****
                 (iii)  Employment  Contract  between
                       Thomas  E.  Waite  and  the  Company*
                 (iv)   Consulting
                       Agreement between Dr. Jackie R. See, M.D. and the Company
                       dated  April 21,  1999 - Attached.  (27)  Financial  Data
                       Schedule -Attached

         *       Incorporated  by reference from the  Registrant's  Registration
                 Statement   Form  SB-2  filed  July  20,  1998  with  the  U.S.
                 Securities  and Exchange  Commission,  effective July 28, 1998.
                 "CE"

         **      Incorporated   by  references  from  the   Registrant's   Proxy
                 Statement  14D  filed  with the U.S.  Securities  and  Exchange
                 Commission on June 5, 1998, for the annual shareholder  meeting
                 held July 9, 1998. "CE"

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

         ****    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. "CE"

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

                                       3
<PAGE>

2.       Reports on Form 8-K.

The Registrant filed electronically the Forms 8-K listed below. Such filings are
incorporated herein by reference:

a.       Date of 8K report - April 12, 1999,  filed April 12, 1999 - Item No. 6.
         - Effective March 4, 1999,  Resignation of Registrant's Director Martin
         J. Holloran, and Resignation of Registrant's President, Chairman of the
         Board and Chief Executive Officer, Thomas E. Waite.





                                       4
<PAGE>




                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

Dated:   December 15, 1999


                                           HARVARD SCIENTIFIC CORP
                                                 (Registrant)


Date:    December 15, 1999                 By:/s/Irwin Miller
                                              ------------------
                                              Irwin Miller
                                              CEO & Director