CONFORMED COPY
                                UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D. C.  20549

                                FORM  10-QSB


  (Mark One)

  [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
  EXCHANGE ACT OF 1934
                      For the quarterly period ended:   September 30, 1997

  [  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934
                           For the transition period from _____ to _____

                                Commission file number:    0-25726


                            SEPRAGEN CORPORATION
      (Exact name of small business issuer as specified in its charter)

            California                                   68-0073366
  (State or other jurisdiction of                     (I.R.S. Employer
  incorporation or organization)                    Identification No.)

              30689 Huntwood Avenue, Hayward, California  94544
                  (Address of principal executive offices)

  Issuer's telephone number (including area code):  (510) 476-0650 

  Former name, former address and former fiscal year if changed since last
  report 

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

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

                                                       October 31,1997

                                Class A Common Stock          2,155,254
                                Class B Common Stock            701,177
                                Class E Common Stock          1,203,719

      THIS REPORT INCLUDES A TOTAL OF 9 PAGES.  THERE ARE NO EXHIBITS.
<PAGE>
  PART I  -  FINANCIAL INFORMATION
  Item  1.  -  Financial Statements

                            SEPRAGEN CORPORATION
                          CONDENSED BALANCE SHEETS

                                   ASSETS
                                   September 30, 1997   December 31, 1996
                                          (unaudited)
   Current Assets:
     Cash and cash equivalents        $       160,357       $    217,057 

     Accounts receivable, less
     allowance for doubtful
     accounts of $12,000 as of
     September 30, 1997 and
     $10,296 as of December 31,
     1996                                     129,126            183,805 
     Inventories                              451,103            474,892 
     Deferred costs of bridge
       notes                                   18,000                  - 
     Prepaid expenses and other                10,502             12,633 
          Total current assets                769,088            888,387 

     Furniture and equipment, net             304,872            388,201 

        Intangible assets                     112,130            130,837 

                                            1,186,090          1,407,425 

               LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

   Current Liabilities:
     Accounts payable                         650,521           196,686 
     Accrued liabilities                       41,961            67,665 
     Customer deposits                        285,709                 - 

     Accrued payroll and benefits             117,147           110,967 
     Notes payable                            100,000                 - 
     Notes payable to shareholders            125,000                 - 
     Bridge notes payable                     225,000                 - 
     Total current liabilities              1,545,338           375,318 

   Class E common stock, no par value -
     1,600,000 shares authorized;
     1,203,719 and 1,209,894 shares
     issued and outstanding at                      -                 - 
     September 30, 1997 and December
     31, 1996, respectively; redeemable
     at $.01 per share


   Shareholders' equity (deficit):
     Preferred stock, no par value -
       5,000,000 shares authorized;
       none issued or outstanding at
       September 30, 1997 and December
       31, 1996, respectively
                                                    -                 - 
     Class A common stock, no par value
       - 20,000,000 shares authorized;
       2,155,254 and 2,149,155 shares
       issued and outstanding at
       September 30, 1997 and December
       31, 1996, respectively               8,848,075         8,812,701 
     Class B common stock, no par value
       - 2,600,000 shares authorized;
       701,177 and 707,276 shares
       issued and outstanding at
       September 30, 1997 and December
       31, 1996, respectively               4,065,618         4,100,992 

      
   Accumulated deficit                    (13,272,941)      (22,881,586)
   Total shareholders' equity (deficit)      (359,248)        1,032,107 
                                            1,186,090         1,407,425 

  The accompanying notes are an integral part of these condensed financial
  statements.
<PAGE>
                            SEPRAGEN CORPORATION
                     CONDENSED STATEMENTS OF OPERATIONS
                                 (Unaudited)

                                    Three Months              Nine Months
                             Ended September 30,      Ended September 30,
                                 1997      1996         1997        1996 


   Revenues:
   Net 
      Sales                 $ 188,264 $ 142,375    $ 731,977  $ 1,005,156 
                                                                          


   Costs and expenses:

   Cost of goods sold         112,317   104,456      412,274     742,386 
   Selling, general and
       administrative         311,791   563,917    1,115,059   1,789,267 
   Research and development   435,115   669,821    1,164,425     157,881 

   Total costs and expenses   581,989 1,103,488    2,197,154   3,696,922 


      Loss from operations   (393,725) (961,113)  (1,465,177) (2,690,922)

   Other income                32,804     9,954       72,804          -- 
   Interest income, net            25        --        1,018      80,505 

      Net loss               (360,896) (951,159)  (1,391,355) (2,610,417)

   Net loss per common and 
    common equivalent share     $(.13)    $(.33)       $(.49)      $(.91)

   Weighted average shares
    outstanding              2,856,431 2,856,431    2,856,431   2,856,431

  The accompanying notes are an integral part of these condensed financial
  statements.
<PAGE>
                            SEPRAGEN CORPORATION
                     CONDENSED STATEMENTS OF CASH FLOWS
                                 (Unaudited)

                                                   Nine Months Ended 
                                                     September 30,
                                                      1997           1996 

   Cash flows from operating activities:
     Net Loss                                 $ (1,391,355)  $ (2,610,417)
     Adjustments to reconcile net loss to
     net cash used in operating activities:
        Depreciation                                83,329         65,085 
        Amortization of patent cost                 18,707             -- 
        Changes in assets and liabilities:
           Accounts receivable                      54,679        (26,790)
           Inventories                              23,789        225,310 

           Prepaid expenses and other                2,131         45,397 
           Accounts payable                        453,835       (161,613)
           Accrued liabilities                     (25,704)      (143,319)
           Accrued payroll and benefits              6,180          7,578 
           Interest payable                             --         (4,285)

           Customer deposits                       285,709             -- 
      Net cash used in operating activities       (488,700)    (2,603,054)

   Cash flows from investing activities:
     Acquisition of furniture and equipment             --       (230,122)
     Acquisitions of marketable securities              --       (549,514)
     Proceeds from sale of marketable
        securities                                      --      4,150,122 

   Net cash provided by investing activities            --      3,370,486 
   Cash flows from financing activities:                                  
     Proceeds from issuance of notes payable
     to shareholders                               125,000             -- 
     Proceeds from issuance of notes payable       100,000             -- 
                                                                          
     Proceeds from issuance of bridge notes
     payable                                       225,000             -- 
     Deferred costs of bridge notes                (18,000)            -- 

        Net cash provided by financing
        activities                                 432,000             -- 
     Net increase (decrease) in cash               (56,700)       767,432 
   Cash and cash equivalents at the
   beginning of the period                         217,057         23,364 
   Cash and cash equivalents at the end of
   the period                                  $   160,357   $    790,796 

  The accompanying notes are an integral part of these condensed financial
  statements.
<PAGE>

                            SEPRAGEN CORPORATION

                   NOTES TO CONDENSED FINANCIAL STATEMENTS
                 NINE MONTH PERIOD ENDED SEPTEMBER 30, 1997
                                 (Unaudited)

  Note 1 - Basis of Presentation

       These condensed financial statements have been presented on a going
  concern basis.  Sepragen (the "Company") has incurred recurring losses
  and cash flow deficiencies from operations that raise substantial doubt
  about its ability to continue as a going concern.  As of September 30,
  1997, the Company had an accumulated deficit of $13,272,941.

       The Company will be required to conduct significant research,
  development and testing activities which, together with expenses to be
  incurred for manufacturing, the establishment of a large marketing and
  distribution presence and other general and administrative expenses, are
  expected to result in operating losses for the next  few years. 
  Accordingly, there can be no assurance that the Company will ever
  achieve profitable operations.  The Company will have to obtain
  additional financing to support its operating needs beyond December 31,
  1997.  The Company is currently pursuing alternative funding sources to
  meet its cash flow needs, including private debt and equity financing. 
  Management intends to use such funding to further its marketing efforts
  and expand sales.  It is uncertain, however, whether the Company will be 
  successful in such pursuits.  No adjustments have been made to the
  accompanying condensed financial statements for this uncertainty.


  Note 2 - Interim Financial Reporting

       The accompanying unaudited interim financial statements have been
  prepared pursuant to the rules and regulations for reporting on Form 10-
  QSB.  Accordingly, certain information and footnotes required by
  generally accepted accounting principles have been condensed or omitted. 
  These interim statements should be read in conjunction with the
  financial statements and the notes thereto, included in the Sepragen
  Corporation's (the "Company's") Annual Report on Form 10-KSB for the
  year ended December 31, 1996.

       The December 31, 1996 balance sheet was derived from audited
  financial statements, but does not include all disclosures required by
  generally accepted accounting principles.  The unaudited interim
  condensed financial statements have been prepared on the same basis as
  the audited annual financial statements, and in the opinion of
  management, contain all adjustments (consisting of only normal recurring
  adjustments) necessary to present fairly the financial information set
  forth therein, in accordance with generally accepted accounting
  principles.  The Company's quarterly results may be subject to
  fluctuations.  As a result, the Company believes its results of
  operations for the interim period are not necessarily indicative of the
  results expected for any future period.


  Note 3 - Net Loss Per Share.

       Net loss per common and common equivalent share is computed using
  the weighted average number of common shares and common equivalent
  shares outstanding during each period.  Restricted shares issued as
  Class E common shares and contingent options are considered contingently
  issuable and, accordingly, are excluded from the weighted average number
  of common and common equivalent shares outstanding.  For the periods
  ended September 30, 1997 and 1996 common equivalent shares relating to
  options have been excluded as they are anti-dilutive.


  Note 4 - Inventory.

       Inventories consist of the following:
                           9/30/97           12/31/96
       Raw Materials      $404,026           $294,424
       Finished             47,077            180,468
       Goods              $451,103           $474,892
<PAGE>
                            SEPRAGEN CORPORATION

                   NOTES TO CONDENSED FINANCIAL STATEMENTS
                 NINE MONTH PERIOD ENDED SEPTEMBER 30, 1997
                                 (Unaudited)


  Note 5 - Other Income

       Other income represents an insurance recovery in excess of net book
  value of lost demonstration equipment and a refund for tenant
  improvements, from the landlord.


  Note 6 - Related Party Transactions

       In May 1997, the Company borrowed $100,000 from a shareholder of
  the Company, payable with interest at 9.5% per annum and is due April
  10, 1998.

       In June 1997, the Company borrowed $25,000 from a shareholder of
  the Company, payable with interest at 9.5% per annum and is due December
  18, 1997.


  Note 7 - Notes Payable

       In June 1997, the Company issued a note payable of $100,000 to an
  unrelated party.  The note bears interest of 9.5% per annum and is due
  on June 18, 1998.


  Note 8 - Bridge Notes Payable

       In September 1997, the Company commenced bridge financing of 55
  bridge units.  Each unit consists of a bridge note in the face amount of
  $10,000 which bears interest at an annual rate of 10% and warrants to
  purchase 5,000 shares of Class A Common Stock at $1.25 per share.  The
  bridge notes are repayable upon the earlier of six months from issuance
  or completion of any subsequent offering of equity securities with at
  least $1,000,000 in gross proceeds.  As of September 30, 1997, $225,000
  of  offering proceeds were received from the bridge financing.  Debt
  issuance costs related to these notes of $18,000 were deferred as other
  current assets and are being amortized over the term of the notes.


  Item 2 .  Management's Discussion and Analysis.

  First nine months of 1997 compared to first nine months of 1996.

       Net sales decreased by $273,000 or 27% from the first nine months
  of 1996.  The decrease in sales is due primarily to the shipment of two
  large QuantaSep's, computer controlled liquid chromatography systems, in
  the first quarter of 1996.

       Gross Margin increased by $57,000 or 22% from the first three
  quarters of the prior year, and as percent of sales, increased from 26%
  to 44%.  The increase in gross margin is primarily due to product mix.

       Selling, general and administrative expenses decreased by $674,000
  from $1,789,000 to $1,115,000 in the first nine months of 1997.  The
  decrease was primarily due to the reduction in head count in sales and
  marketing as well as the scaling back of advertising and promotion,
  travel and facility expenses, net of an increase in professional fees
  and costs for securities compliance matters and financing activities.

       Research and development expenses decreased by $494,000 from
  $1,164,000 in the first nine months of 1996 to $670,000 in the first
  nine months of 1997.  The decrease was mainly due to the reduction in
  the cost of software development for the QuantaSep product, product
  development and reduction in head count.



  Third quarter 1997 compared to third quarter 1996.

       Net sales increased by $46,000 or 32% from the third quarter of
  1996.  The increase was due to increased shipment of the QuantaSep
  products.

       Gross margin increased by $38,000 or 100% in the third quarter of
  1997 compared to the same period in 1996, and as a percent of sales,
  increased by 13% from 27% to 40%.  The increase was due to reserve for
  slow moving and obsolete inventory which was recorded in the third
  quarter of 1996, with no corresponding increase in the reserve in 1997.

       Selling, general and administrative expenses decreased by $252,000
  from $564,000 in the third quarter of 1996 to $312,000 in the third
  quarter of 1997.  The decrease was primarily due to the reduction in
  head count, advertising, travel and professional fees.

       Research and development expenses decreased by $277,000 from
  $435,000 in the third quarter of 1996 to $158,000 in the third quarter
  of 1997.  The decrease was mainly due to the reduction of software
  expenses and reduction of head count.

  Inflation.

       The Company believes that the impact of inflation on its operations
  since its inception has not been material.

  Liquidity and Capital Resources:

       The Company had a negative working capital of $776,000 on September
  30, 1997 and positive working capital of $513,000 on December 31, 1996. 
  The decrease in the working capital of $1,289,000 reflects the use of
  net cash in operating activities.  Since the 1995 IPO, the Company has
  funded its working capital requirements substantially from the net cash
  proceeds from the IPO.

       The Company had borrowings of $125,000 from shareholders and
  $100,000 from a third party, outstanding as of September 30, 1997, to
  provide working capital for the Company.   

       In September 1997, the Company commenced bridge financing of 55
  bridge units.  Each unit consists of a bridge note in the face amount of
  $10,000 which bears interest at an annual rate of 10% and warrants to
  purchase 5,000 shares of Class A Common Stock at $1.25 per share.  The
  bridge notes are repayable upon the earlier of six months from issuance
  or completion of any subsequent offering of equity, securities with at
  least $1,000,000 in gross proceeds.  As of September 30, 1997, $225,000
  of offering proceeds were received from the bridge financing.  Debt
  issuance costs related to these notes of $18,000 were deferred as other
  current assets and are being amortized over the term of the notes.  

       During 1997, the Company is committed to pay approximately $245,000
  as compensation for its current executive officers.  The Company expects
  to hire additional executive officers as the need arises.

       Based on the Company's current operating plan, the Company believes
  that it will only be able to fund the Company's operations through
  December 31, 1997.  Accordingly, the Company will have to obtain
  additional financing to support its operations.  The Company is
  currently attempting to secure additional financing through either the
  sale of additional equity securities of the Company or some form of debt
  financing.  There can be no assurance that the Company will be able to
  secure financing on reasonable terms at all.

       The IPO Units, Class A Common Stock and Class A and Class B
  warrants were listed on Nasdaq SmallCap Market until August 15, 1997. 
  The Company's financial statements indicate it did not meet the asset
  requirements for continued listing of securities on Nasdaq SmallCap
  Market as of December 31, 1996 or the net asset and capital surplus
  requirements for continued listing as of June 30, 1997.   The continued
  listing criteria for Nasdaq SmallCap Market generally include a minimum
  of $2,000,000 in total assets, $1,000,000 in capital surplus, a minimum
  bid price of $1.00 per share of common stock and 100,000 shares in the
  public float.  In addition, the common stock must have at least two
  registered and active market makers and must be held by at least 300
  holders and the market value of its public float must be at least
  $200,000.  On August 15, 1997, Sepragen received a notification of
  delisting from Nasdaq, effective the same day.  Since August 16, 1997,
  the IPO Units, Class A Common Stock and the warrants have been trading
  in the over-the-counter market.  As a result, an investor will likely
  find it more difficult to dispose of or to obtain accurate quotations as
  to the value of the company's securities.  It is also likely the
  Company's securities will also be less liquid with a resulting negative
  effect on the value of such securities and the ability of the Company to
  raise additional capital.

       The IPO Units, Class A Common Stock and the Class A and Class B
  warrants will currently remain listed on the Pacific Exchange ("PSE")
  Tier II.  However, the Company does not meet the criteria for continued
  listing of securities on the PSE.  The continued listing criteria for
  PSE generally include a minimum of $500,000 in net tangible assets, at
  least $2,000,000 in net worth, a minimum bid price of $1.00 per share of
  common stock, 300,000 shares in the public float and at least 250 public
  beneficial holders.   On May 21, 1997, PSE notified the Company of its
  initiation of delisting proceedings.  The Company submitted a detailed
  plan to meet the listing requirements.  PSE has advised the Company of
  its decision to extend the time period to satisfy the listing
  requirements to December 2, 1997.  The Company intends to increase its
  assets by selling additional equity securities of the Company or some
  form of debt financing.  There can be no assurance that the Company's
  plan will be accepted by the PSE or that the Company will be successful
  in obtaining additional funds.  The Company is also exploring
  alternatives available to the Company, including the possible sale of
  certain intellectual property or technology to obtain working capital. 
  There is no assurance that such alternatives will be feasible or
  successful in increasing working capital or improving the Company's
  financial position.

       The Company's financing and cash requirements may vary materially
  from those now planned because of changes in the focus and direction of
  research and development programs, relationships with strategic
  partners, competitive advances, technological change, changes in the
  Company's marketing strategy and other factors, many of which will be
  beyond the Company's control.

       The Company currently has no credit facility with a bank or other
  financial institution.  Historically, the Company and certain of its
  customers have jointly borne a substantial portion of developmental
  expenses on projects with such customers through purchase price advances
  or joint development projects with each party sharing some of the costs
  of development.  There can be no assurance that such sharing of expenses
  will continue.  The Company continues its efforts to increase sales of
  its existing products and to complete development and initiate marketing
  of its products and processes now under development.

       The Company is seeking to enter into strategic alliances with
  corporate partners in the industries comprising its primary target
  markets (biopharmaceutical, food, dairy and environmental management). 
  The Company's ability to develop and market its Sepralaca process for
  whey separation and other potential food and environmental products and
  processes will be substantially dependent upon its ability to negotiate
  partnerships, joint ventures or alliances with established companies in
  each market.  In particular, the Company will be reliant on such joint
  venture partners or allied companies for both market introduction,
  operational assistance and financial assistance.  The Company believes
  that development, manufacturing and market introduction of products in
  these industries, will cost millions of dollars and require operational
  capabilities in excess of those currently available to the Company.  No
  assurance can be given, however, that the terms of any such alliance
  will be successfully negotiated or that any such alliance will be
  successful.  The Company hopes to enter into alliances that will provide
  funding to the Company for the development of new applications of its
  Radial Flow Chromatography (RFC) technology in return for agreements to
  purchase its equipment and royalty bearing licenses to the developed
  applications.

  Other Events:

       In September of 1997, the Company announced that the board of
  directors filled the two vacancies existing on the board of directors by
  electing two new members to the Company's board of directors, bringing
  the total number of members to five.  The new members are Kris Venkat,
  Ph. D., D. SC. and Henry N. Edmunds, Ph. D.

       Dr. Venkat has been Chairman and Chief Executive officer of Phyton,
  Inc., a privately held company engaged in commercializing plant cell
  culture technology since 1992.  From 1976 through 1990, Dr. Venkat
  served in various management positions with H. J. Heinz Company
  including corporate director of science and technology from 1986 to
  1990.  Dr. Venkat currently serves on the Board of Directors of Phyton,
  Inc., Androx Corporation, Biotechnology Trading Company, Biotechnology
  Consortium of India Limited and Krystos Group.  Dr. Venkat also serves
  on the faculty of the department of chemical and biochemical engineering
  at Rutgers University.  Dr. Venkat has a M.S. degree and Ph. D. in
  Biochemical Engineering from Rutgers University.

       Dr. Edmunds has served as Vice President of corporate development
  and Chief Financial Officer of SangStat Medical Corporation, a Menlo
  Park, California based company, since 1992.  From 1985 until 1992, Dr.
  Edmunds was Director of Business Development and business manager for
  Genencor, Inc., a South San Francisco, California biotechnology company. 
  Dr. Edmunds received his Ph. D. in Biochemistry from the University of
  California, Berkeley and his M.B.A. from the Stanford School of
  Business.

  Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the
  Private Securities Litigation Reform Act of 1995.

       This report contains or incorporates by reference forward-looking
  statements within the meaning of the Private Securities Litigation
  Reform Act of 1995.  Where any such forward-looking statement includes a
  statement of the assumptions or bases underlying such forward-looking
  statement, the Company cautions that, while such assumptions or bases
  are believed to be reasonable and are made in good faith, assumed facts
  or bases almost always vary from the actual results, and the differences
  between assumed facts or bases and actual results can be material,
  depending upon the circumstances.  Where, in any forward-looking
  statement, the Company or its management expresses an expectation or
  belief as to future results, such expectation or belief is expressed in
  good faith and is believed to have a reasonable basis, but there can be
  no assurance that the statement of expectation or belief will result or
  be achieved or accomplished.  The words "believe," "estimate,"
  "anticipate," and similar expressions may identify forward-looking
  statements.

       Taking into account the foregoing, the following are identified as
  some but not all of the important factors that could cause actual
  results to differ materially from those expressed in any forward-looking
  statement made by, or on behalf of the Company:

       Inability to Secure Additional Capital.  The Company has incurred
  operating losses each fiscal year since its inception.  The Company must
  secure additional financing through either the sale of additional
  securities or debt financing to continue operations past January 1,
  1998.  Although the Company is attempting to secure such financing,
  there can be no assurance that such financing will be available to the
  Company on reasonable terms.  If the Company is unable to secure such
  capital, it will not meet the net asset and capital and surplus levels
  required for continued listing of its securities on the Pacific Exchange
  Tier II, or getting re-listed on the Nasdaq SmallCap Market..

       Competition.  In both its biopharmaceutical industry market and in
  the market for its process systems for food, beverage, dairy and
  environmental industries, the Company faces intense competition from
  better capitalized competitors.

       Dependence on Joint Ventures and Strategic Partnerships.  The
  Company's entry into the food, dairy and beverage market for its process
  systems will be substantially dependent upon its ability to enter into
  strategic partnerships, joint ventures or similar collaborative alliance
  with established companies in each market.  As of the date of this
  report, no such alliances have been finalized and there can be no
  assurance that the terms of any such alliance will produce profits for
  the Company.

                                 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.

                                SEPRAGEN CORPORATION

  DATE: November 15, 1997       By: /s/Vinit Saxena                        
                                                
                                     Vinit Saxena
                                     Chief Executive Officer, President
                                     and Principal Financial and Chief
                                     Accounting Officer