HARVARD FINANCIAL SERVICES CORP
10-Q, 1999-05-13
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<PAGE>
                           FORM 10-QSB
                SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                                                                  
                  

            Quarterly Report Under Section 13 or 15(d)
              of the Securities Exchange Act of 1934

     
For Quarter Ended:                   Commission File Number:
March 31, 1999                                    033-26344



                 HARVARD FINANCIAL SERVICES CORP.
    Formerly known as Capital Advisors Acquisition Corporation
      (Exact name of registrant as specified in its charter)


      Delaware                            75-2254748
(State of Incorporation)      (I.R.S. Employer Identification No.)

                        1400 Medford Plaza
                     Route 70 & Hartford Road
                    Medford, New Jersey 08055
             (Address of principal executive office)

                Telephone Number:  (609) 953-7985


     Indicate by check mark whether the registrant  (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 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


     The number of shares outstanding of the registrant's common
stock as of the date of the filing of this report:  11,295,806
shares.


<PAGE>
<PAGE>
FORM 10-QSB

                  PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements


                 HARVARD FINANCIAL SERVICES CORP.

                   CONSOLIDATED BALANCE SHEETS


ASSETS
                               March 31,         
                                 1999              December 31,   
                              (Unaudited)             1998
                              -----------         -----------

Cash                          $      3,079        $      8,083
Receivables:   
  Loans receivable, net            145,389             151,662
Deferred income taxes               33,387              33,387


Prepaid expenses                    15,500              15,500

Property and equipment, net          9,317              10,104
                              ------------        ------------
      Total Assets            $    206,672         $   218,736
                              ============        ============














                      See Accompanying Notes
     

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FORM 10-QSB

                 HARVARD FINANCIAL SERVICES CORP.
                   CONSOLIDATED BALANCE SHEETS


LIABILITIES AND STOCKHOLDERS' EQUITY

                                   March 31,      December 31,
                                     1999            1998 
                                  (Unaudited)     
                                   ---------      -----------
Liabilities:

Stockholders loans payable              $273,000       $230,000
Accounts payable and accrued liabilities 118,592        101,254
Holdback to customers                     39,754         39,754
Unearned discounts                        15,796         18,108
Due to related party                     116,812        116,812
                                        --------       --------
                       
     Total Liabilities                   563,954        548,928


Stockholders' Equity:
Common stock, $.0001 par value,
  60,000,000 shares authorized; 
  issued and outstanding 11,295,806        1,130          1,130
Additional paid-in capital               437,399        437,399
Deficit                                 (795,811)      (768,721)
                                        --------       --------
     Total Stockholders' Equity         (357,282)      (330,192)
                                        --------       --------
     Total Liabilities and 
       Stockholders' Equity             $206,672       $218,736
                                        --------       --------







     



                      See Accompanying Notes
<PAGE>
<PAGE>
FORM 10-QSB

                 HARVARD FINANCIAL SERVICES CORP.
                CONSOLIDATED STATEMENTS OF INCOME

The following Consolidated Statements of Income for the 
three-month periods ended March 31, 1999, and March 31, 1998, are
unaudited, but the Company believes that all adjustments (which
consist only of normal recurring accruals) necessary for a fair
presentation of the results of operations for the respective
periods have been included.  Quarterly results of operations are
not necessarily indicative of results for the full year.

                                  Three-Months Ended
                                      March 31,
                                     (Unaudited)
                                1999              1998
                                ----              ----
Revenues

Interest on loans             $      2,944        $ 10,565
Less interest expense              (16,654)         11,500
                              ------------     -----------
                                   (13,710)           (935)
Discount on loans                    2,312             628
Loan fees                              307             928
                              ------------     -----------
     Net revenues                  (11,091)            621

Expenses

Selling                                210             141
General and administrative          15,789          21,496
Provision for credit losses            -            33,759
                              ------------     -----------
     Total expenses                 15,999          55,396
                              ------------     -----------
Loss before income taxes           (27,090)        (54,775)
Income tax (benefit) expense           -            (8,216)
                              ------------      ----------
Net income (loss)             $    (27,090)    $   (46,559)
                              ============      ==========
Net income (loss) per 
  common share                $      (.002)    $     (.003)
                              ------------      ----------
Weighted average common 
  shares outstanding:
     Basic                      11,296,000      14,807,000
                              ============      ==========

                      See Accompanying Notes
<PAGE>
<PAGE>
FORM 10-QSB

                 HARVARD FINANCIAL SERVICES CORP.
              CONSOLIDATED STATEMENTS OF CASH FLOWS
   FOR THE THREE-MONTHS ENDED MARCH 31, 1999 AND MARCH 31, 1998


                                        March 31,      March 31,
                                          1999           1998
                                        ---------      --------- 
Cash flows from operating activities
  Net income (loss)                     $(27,090)      $(46,559)

  Adjustments to reconcile net 
    income (loss) to net cash used 
    in operating activities        

      Provision for credit losses           -            33,759
      Depreciation                           787            786

Changes in operating assets and 
  liabilities

      Decrease in receivable               6,273         51,810
      Decrease/(increase) in 
        deferred income taxes               -            (8,216)
      Increase in accounts payable 
        and accrued liabilities           17,338         16,063
      Decrease in holdback to 
        customers                         -             (43,477)
      Decease in unearned discounts      (2,312)         (6,840)
                                        --------       --------

  Net cash used in operating activities  (5,004)         (2,674)
                                        --------       ---------  
  Net cash used in investing activities     -              -      
                                        --------       ---------
Net cash provided by financing 
  activities                                -              -
                                        --------       ---------  
Net decrease in cash                     (5,004)         (2,674)

Cash, beginning                           8,083           4,166
                                        --------       ---------
Cash, ending                            $ 3,079        $  1,492
                                        ========       =========
                  See Accompanying Notes
<PAGE>
<PAGE>
10-QSB

                 HARVARD FINANCIAL SERVICES CORP.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Operations and Summary of Significant Accounting Policies

     Nature of Operations
     Harvard Financial Services, Corp. (the Company), formerly
known as Capital Advisors Acquisition Corporation, provides tuition
funding to creditworthy students by purchasing preapproved
installment notes from vocational schools and two year colleges. 
These notes were entered into between the schools and their
students.  The terms and conditions of the purchase of these
installment notes are based on contracts with educational
institutions in the Northeastern United States.

     Principles of Consolidation
     The consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary.  Intercompany
transactions and balances have been eliminated in consolidation.

     Use of Estimates
     The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statement and the reported
amounts of revenues and expenses during the period.  Actual results
could differ from those estimates.

     Revenue Recognition
     The Company records interest income and loan discounts ratably
over the term of the loans which run for approximately twelve to
eighty-four months.  Receivables for consumer loans are recorded
when the contract is purchased.  Unearned discount income
represents revenue to be recognized over the term of the loans.

     Statement of Cash Flows
     For purposes of the Statement of Cash Flows, cash refers
solely to demand deposits with banks and cash on hand.

     Depreciation and Amortization
     The Company depreciates and amortizes its property and
equipment for financial statement purposes using the straight-line
method over the estimated useful lives of the property and
equipment (useful lives of leases or lives of leasehold
improvements and leased property under capital leases, whichever is
shorter).  For income tax purposes, the Company uses accelerated
methods of depreciation.

     Income Taxes
     The Company uses Statement of Financial Accounting Standards
No. 109 "Accounting For Income Taxes" (SFAS No. 109) in reporting
deferred income taxes.  SFAS No. 109 requires a company to
recognize deferred tax liabilities and assets for the expected
future income tax consequences of events that have been recognized
in the company's financial statement.  Under this method, deferred
tax assets and liabilities are determined based on temporary
differences between the financial carrying amounts and the tax
bases of assets and liabilities using enacted tax rates in effect
in the years in which the temporary differences are expected to
reverse.

     Earnings Per Share
     Effective December 31, 1997, the Company adopted Statement of
Financial Accounting Standards No. 128, "Earnings per Share", which
required the Company to change the method used to compute earnings
per share ("EPS") and to restate all prior periods presented.  The
presentation of primary and fully diluted EPS has been replaced
with basic and diluted EPS, respectively.  Basic earnings per share
is computed using the weighted average number of common shares
outstanding during the period.  The computation of diluted earnings
per share includes the diluted effect of securities that could be
exercised or converted into common stock.  There were no dilutive
securities outstanding as of March 31, 1998 or March 31, 1997.

     Recent Accounting Pronouncements 
     The Company has adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") 123, "Accounting for
Stock-Based Compensation."  SFAS 123 provides companies with a
choice to follow the provisions of SFAS 123 in determining stock
based compensation expense or to continue with the provisions of
the Accounting Principles Board Opinion ("APB") 25, "Accounting for
Stock Issued to Employees" and provide pro-forma disclosures of the
effects on net income and earnings per share.  The Company has
elected to continue to utilize the provisions of APB 25 to account
for stock-based compensation.  The effect of applying SFAS 123's
fair value method to the Company's stock-based awards results in
net income and earnings per share that are not materially different
from amounts reported.

2.  Property and Equipment

     Property and equipment are recorded at cost.  Depreciation is
provided using the straight line method over the estimated useful
lives of the assets.  Depreciation expense for the three-month
period ending March 31, 1999 was $787. Expenditures for maintenance
and repairs are charged against income as incurred.  When assets
are sold or retired, the cost and accumulated depreciation are
removed from the accounts and any gain or loss is included in income.

     Property and equipment consisted of the following at March 31,
1999:

     Equipment                          $14,788
     Furniture                              941
                                        -------
                                         15,729
     Less accumulated depreciation       (6,412)
                                        -------
     Net property and equipment        $  9,317
                                       ========

Item 2.   Management's Discussion of Financial Condition and Results of
          Operations

Liquidity and Capital Resources

     The Company is currently in the process of pursuing both
equity and debt financing.  As of May 15, 1999, no such financing
has been secured.  If the Company is not successful in this
endeavor, certain liabilities and obligations will continue to be
past due, and the Company will need to seek alternative measures
(i.e. debt restructuring) to allow it to continue operations.  The
Company's ability to properly finance the purchase of installment
notes from its school customers is directly related to results of
the pursuit of external capital.

     During the past several months, the Company has not purchased
any new loans from its school customers, based on the lack of
external financing.  In the meantime, it will continue to service
its existing portfolio of loans.

     There was no material commitment for capital expenditures as
of March 31, 1999.  Inflation was not a significant factor in the
Company's financial statements.

Results of Operations

Revenues
     Net revenues for the three months ended March 31, 1999
decreased $12,000 over the comparable three-month period in fiscal
1998.  This decrease was due to an increase in interest expense of
$5,000 in 1999 caused by an increase in notes payable coupled with
a $7,000 decrease in interest income due to a reduced portfolio size.

Costs and Expenses
     General and administrative costs decreased $6,000 (28%) over
the previous year.  The decrease was attributable to the Company
reducing personnel-related costs in 1999.  Also, provision for
credit losses was reduced significantly ($34,000) in 1999 versus
the three-month period in 1998, as the Company believes that
current reserve levels are adequate.
<PAGE>
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                        PART II - OTHER INFORMATION

Item 1  Legal Proceedings

        In 1997, the Company instituted claims against the New York
Department of education in the amount of $348,000 for refunds of
tuition monies advanced to licensed business schools that went out
of business.  The claims also call for consequential damages,
interest and costs as a result of the failure by the New York
Department of Education to pay the claims.  The Tuition
Reimbursement Fund, created under the Education law, was created
for such instances.  In 1998 the claims were denied and the matter
has been appealed to the Supreme Court of the State, Appellate
Division.  At this time no estimate can be made a to the time or
the amount, if any, of any ultimate recovery.

        The Company is contesting the suit.  At this time, however, no
estimate can be made as to the amount of the damages sought.

Item 2  Changes in Securities

        None

Item 3  Defaults Upon Senior Securities

        None

Item 4  Submission of Matters to a Vote of Security Holders

        None

Item 5  Other Information

        None

Item 6  Exhibits and Reports on Form 8-K
          (a)  Exhibits:  None
          (b)  Reports on Form 8-K:  None

<PAGE>
<PAGE>
                                 SIGNATURES


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


                    HARVARD FINANCIAL SERVICES CORP.
                    (Registrant)


                    By/s/ Louis Kassen
                    ------------------------
                    Louis Kassen
                    President, Director 
                    (Chief Executive Officer and duly authorized signer)


                    By/s/ Kevin J. McAndrew
                    ------------------------
                    Kevin J. McAndrew, C.P.A.
                    Executive Vice President, Director 
                    (Chief Financial Officer and duly authorized signer)


May 13, 1999

<TABLE> <S> <C>
    
<ARTICLE>           5         
<CIK>               0000844893
<NAME>              HARVARD FINANCIAL SERVICES CORP.
<MULTIPLIER>        1
          
<S>                           <C>
<FISCAL-YEAR-END>             DEC-31-1998
<PERIOD-START>                JAN-01-1999
<PERIOD-END>                  MAR-31-1999
<PERIOD-TYPE>                       3-MOS
<CASH>                              3,079
<SECURITIES>                            0
<RECEIVABLES>                     145,389
<ALLOWANCES>                            0
<INVENTORY>                             0
<CURRENT-ASSETS>                  197,355
<PP&E>                             15,729
<DEPRECIATION>                      6,412
<TOTAL-ASSETS>                    206,672
<CURRENT-LIABILITIES>             563,954
<BONDS>                                 0
                   0
                             0
<COMMON>                            1,130
<OTHER-SE>                       (358,412)
<TOTAL-LIABILITY-AND-EQUITY>      206,672
<SALES>                           (11,091)
<TOTAL-REVENUES>                  (11,091)
<CGS>                                   0
<TOTAL-COSTS>                      15,999
<OTHER-EXPENSES>                        0
<LOSS-PROVISION>                        0
<INTEREST-EXPENSE>                      0
<INCOME-PRETAX>                   (27,090)
<INCOME-TAX>                            0
<INCOME-CONTINUING>               (27,090)
<DISCONTINUED>                          0
<EXTRAORDINARY>                         0
<CHANGES>                               0
<NET-INCOME>                      (27,090)
<EPS-PRIMARY>                      (0.002)
<EPS-DILUTED>                      (0.002)

</TABLE>


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