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, 2001

[ ]  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.)

              14500 Doolittle Drive, San Leandro, California 94577
              ----------------------------------------------------
                    (Address of principal executive offices)

        (Issuer's telephone number (including area code): (510) 667-1004

         (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:

                                               November 14, 2001
                                               -----------------

                     Class A Common Stock         10,985,731
                     Class B Common Stock            701,177



                     THIS REPORT INCLUDES A TOTAL OF 9 PAGES
<PAGE>

PART I - FINANCIAL INFORMATION
------------------------------
Item 1. - Financial Statements
------------------------------

<TABLE>
<CAPTION>
                              SEPRAGEN CORPORATION
                             CONDENSED BALANCE SHEET
                                   (UNAUDITED)

                                                                                 September 30
                                                                                     2001
                                                                                 ------------
                                     ASSETS
<S>                                                                              <C>
Current Assets:
   Cash and cash equivalents ..................................................  $    296,532
   Accounts receivable, less allowance for doubtful accounts
     of $40,000 ...............................................................       162,230

   Notes Receivable ...........................................................        50,000
   Inventories ................................................................       368,936
   Prepaid expenses and other .................................................        47,286
                                                                                 ------------
     Total current assets .....................................................       924,984

   Furniture and equipment, net ...............................................        92,951
   Intangible assets ..........................................................        24,919
                                                                                 ------------
                                                                                 $  1,042,854
                                                                                 ------------

                 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
   Accounts payable ...........................................................  $    456,734
   Notes Payable, including $165,000 from shareholders ........................       180,000
   Accrued payroll and benefits ...............................................       324,452
   Accrued liabilities ........................................................        46,814
   Interest payable ...........................................................        39,318
   Customer deposit ...........................................................       197,206
                                                                                 ------------
     Total current liabilities ................................................     1,244,524
                                                                                 ------------

   Redeemable Preferred stock, no par value - 5,000,000 shares
     authorized; and  175,439 convertible, preferred issued and ...............       500,000
     outstanding

   Class A common stock, no par value - 20,000,000 shares .....................    13,524,281
     authorized; 10,985,731 shares issued and
     outstanding ..............................................................
   Class B common stock, no par value - 2,600,000 shares authorized;
     701,177 shares issued and outstanding ....................................     4,065,618

   Accumulated deficit ........................................................   (18,291,569)
                                                                                 ------------
   Shareholders' equity  (deficit) ............................................      (201,670)
                                                                                 ------------
                                                                                 $  1,042,854
                                                                                 ============
</TABLE>

               The accompanying notes are an integral part of this
                         condensed financial statement.

                                        2
<PAGE>

<TABLE>
<CAPTION>
                              SEPRAGEN CORPORATION
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                                          Three Months                   Nine Months
                                                                       Ended September 30            Ended September 30
                                                                       2001           2000           2001           2000
                                                                   -----------    -----------    -----------    -----------

<S>                                                                <C>            <C>            <C>            <C>
                           Revenues:

Net Sales ......................................................   $    25,483    $   313,732    $   536,301    $ 1,034,209
                                                                   -----------    -----------    -----------    -----------

                      Costs and expenses:

Cost of goods sold .............................................        14,031        161,748        316,666        598,520
Selling, general and administrative ............................       308,376        346,900        914,374      1,102,828
Research and development .......................................       126,823        166,747        386,446        499,714
Stock compensation expense .....................................             0              0              0              0

    Total costs and expenses ...................................       449,230        675,395      1,617,486      2,201,062
                                                                   -----------    -----------    -----------    -----------

  Loss from operations .........................................      (423,747)      (361,663)    (1,081,185)    (1,166,853)
                                                                   -----------    -----------    -----------    -----------

    Other income ...............................................            --
  Interest income, (expense) net ...............................             0              0              0        (13,375)
                                                                   -----------    -----------    -----------    -----------

  Net loss .....................................................      (423,747)      (361,663)    (1,081,185)    (1,180,228)
                                                                   ===========    ===========    ===========    ===========

    Net loss per common share,
  Basic and diluted ............................................   $      (.04)   $      (.04)   $      (.12)   $      (.16)
                                                                   ===========    ===========    ===========    ===========

Weighted average shares outstanding ............................     9,560,241      8,523,575      8,762,741      7,587,386
</TABLE>


               The accompanying notes are an integral part of this
                         condensed financial statement.

                                        3
<PAGE>

<TABLE>
<CAPTION>
                              SEPRAGEN CORPORATION
                       CONDENSED STATEMENTS OF CASH FLOWS


                                                                                                Nine Months Ended September 30,
                                                                                                      2001           2000
                                                                                                  -----------    -----------

<S>                                                                                               <C>            <C>
Cash flows from operating activities:

   Net Loss ...................................................................................   $(1,081,185)   $(1,180,228)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation ..............................................................................        34,032        110,476
    Amortization ..............................................................................        20,311
    Non cash - stock compensation expense .....................................................             0        160,524
    Changes in assets and liabilities:
     Accounts receivable ......................................................................       290,388        (50,560)
     Inventories ..............................................................................      (103,557)       (53,552)
     Prepaid expenses and other ...............................................................         1,200         (4,378)
     Accounts payable .........................................................................        19,178       (278,666)
     Accrued liabilities ......................................................................       (45,056)       (85,545)
     Accrued payroll and benefits .............................................................       199,965          7,966
     Interest payable .........................................................................             0        (17,754)
     Customer deposits ........................................................................       171,400             --
                                                                                                  -----------    -----------
       Net cash used in operating activities ..................................................      (493,324)    (1,391,717)
                                                                                                  -----------    -----------

Cash flows from investing activities:
    Acquisition of fixed assets ...............................................................       (94,009)       (17,742)
                                                                                                  -----------    -----------
       Net cash used by investing .............................................................       (94,009)       (17,742)

   Proceeds from issuance of common stock .....................................................       691,699      1,369,480
   Proceeds from exercise of warrants .........................................................             0         15,000
   Proceeds from issuance of notes payable ....................................................       135,000              0

   Payment of notes payable to shareholders ...................................................             0       (210,000)
   Payment of notes payable ...................................................................       (25,000)       (40,000)
    Net cash provided by financing activities .................................................       801,699      1,134,480

       Net increase (decrease) in cash ........................................................       214,366       (274,979)
                                                                                                  -----------    -----------

Cash and cash equivalents at the beginning of the
period ........................................................................................        82,166        358,233
                                                                                                  -----------    -----------

Cash and cash equivalents at the end of the period ............................................   $   296,532    $    83,254
                                                                                                  ===========    ===========

Supplemental disclosures of cash information:



    Conversation of Note receivable into Common Stock .........................................   $    50,000
    Conversion of liabilities into Common Stock: ..............................................                  $   175,565
</TABLE>

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

                                        4
<PAGE>

                              SEPRAGEN CORPORATION
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                    SIX MONTH PERIOD ENDED SEPTEMBER 30, 2001

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 going concern. As of September 30, 2001, the Company had an
accumulated deficit of $18,291,569

         The Company will be required to conduct significant research,
development and testing activities which, together with expense to be incurred
for manufacturing, the establishment of large marketing and distribution
presence and other general and administrative expenses, are expected to result
in operating losses for the foreseeable future. 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, 2001. 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 marketing effort 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 in the United States of America have been condensed or
omitted. In the opinion of management, all adjustments consisting of normal
recurring accruals considered necessary for a fair presentation have been
included. Operating results for the nine months ended September 30, 2001 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2001. These interim statements should be read in conjunction with
the financial statements and the notes thereto, included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2000.

Note 3 - Notes Payable

         Between January and September 2001, the Company borrowed an aggregate
of $135.000 of notes payable of which $110,000 was from shareholders of the
Company and $15,000 was from an unrelated party. In September 2001 the Company
paid $25,000 of notes payable to a shareholder.

Note 4 - Class A Common Stock:

         In September 2001, the Company sold 2,990,000 shares of Class A Common
at $0.25 per share to seventeen investors and raised $747,500 in gross proceeds
and $691,699 in net proceeds. The Company also received a $50,000 note
receivable to purchase 200,000 shares of its Class A Common stock at $0.25 per
share.

Note 5- Segment Reporting

         The company has two operating segments based on the nature of the
customer's industry, the biotech and food (dairy) and beverage segments. The
chief operating decision-maker is the Company's Chief Executive Officer who
regularly reviews segment performance. There was no revenue in the nine months
ended September 30, 2001 from the food and beverage segment. Selling, general
and administrative expenses are not allocated to individual segments. There are
no significant assets that are identifiable to a segment.

Note 6 - Loss per Share

         Basic loss per share is calculated using the weighted average number of
common shares outstanding in the period. Diluted loss per share includes
potentially dilutive securities such as outstanding options and warrants, using
the "treasury stock" method and convertible securities using the "if converted"
method. The assumed exercise of 3,367,999 options and warrants and assumed
conversion of 175,439 convertible securities have not been included in the
calculation of diluted loss at September 30, 2001 per share as the effect would
be anti-dilutive.

                                        5
<PAGE>

Item 2.  Management's Discussion and Analysis.

First nine months of 2001 compared to first nine months of 2000.

         The management of the Company has determined that there exists a
significant potential for revenue growth in the biotech sector via sales of its
existing products like columns and QuantaSeps and by addition of new products
though further development of existing patents. Similarly, there are
opportunities for developing a business in selling high value ingredients from
whey, soy, etc. for nutritional purposes. While both present potential for value
generation, the businesses are different and in management's opinion, each needs
to be financed and managed with focus. Significant capital will need to be
invested in each business for the potential to be realized. Management has
engaged the services of an investment banker for this purpose. Management has
also undertaken the task of raising additional interim funds to cover current
operating needs until such capital can be raised and the contemplated ramp up
started. To this end approximately $700,000 has been raised recently which will
enable the Company to ship products against its backlog of approximately
$700.000.

         The results stated below reflect the cash-strapped operating state of
our Company over the last 9 months.

         Our net sales decreased by $498,000 or 48% from $1,034,000 in the first
nine months of 2000 to $536,000 for the comparable period in 2001. The decline
in shipment was primarily due to cash shortage that hampered our ability to ship
orders on hand. With the raising of the interim funds we anticipate that we will
be able to meet our shipment obligations in the fourth quarter.

         Gross profit decreased by $216,000 or 50% from $436,000 in the first
nine months of 2000 to $220,000 for the comparable period in 2001. The decrease
in gross profit was due to lower sales. As a percentage of sales gross profit
decreased by 1% from 42% in the first half of 2000 to 41% for the same period in
2001. The decrease of 1% was mainly due to lower volume resulting in higher
fixed cost.

         Despite increases in rent, and over head, selling, general and
administrative expenses decreased by $189,000 from $1,103,000 in the first nine
months of 2000 to $914,000 for the comparable period in 2000. The decrease is
primarily attributable to selling and marketing expenses such as commission,
travel and advertising.

         Research and development expenses decreased by $113,000 from $500,000
in the first nine months of 2000 to $386,000 in the first nine months of 2001 as
a result of belt tightening.

         Net loss decreased by 8%from $1,180,000 in the first nine months of
2000 to $1,081,000 for the comparable period in 2001. The decrease in loss is
due to lower department expenses partially offset by lower gross profit.


Three months ended September 2001 compared to three months of ended September
30, 2000

         While backlog rose to approximately $700,000, our net sales decreased
by $289,000 or 92% from $314,000 in the third quarter of 2000 to $25,000 for the
third quarter of 2001. The decrease was due to delay in shipments that we
anticipate will be cleared as a result of the interim funds raised.

         Our gross profit decreased by $141,000 from $152,000 in third quarter
of 2000 to $11,000 for the third quarter of 2001. The decrease in gross profit
was mainly due to lower volume.

         Our selling, general and administrative expense decreased by $39,000
from $347,000 in the third quarter of 2000 to $308,000 in the third quarter of
2001. The decrease is primarily due to lower expense in marketing, commission
and travel.

                                        6
<PAGE>

         Our research and development expenses decreased by $40,000 from
$167,000 in the third quarter of 2000 to $127,000 in the third quarter as a
result of belt tightening.

         Our net loss for the third quarter increased by $63,000 or 17% from
$362,000 in the third quarter of 2000 to $424,000 in the third quarter of 2001.
The increase in loss was due to lower sales partially offset by lower expenses.

         Looking forward, on the premise of revitalizing the Company through
recapitalization, management believes that the Company can attract additional
talent to reinvigorate customer interest and upon consummation of the financing
will be positioned to grow.


Inflation.

         We believe that the impact of inflation on its operations since its
inception has not been material.


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

         We used cash of $493,000 and $1,392,000 for operations during the first
nine months of 2001 and 2000, respectively. Cash used in operations in the first
nine months of 2001 was the result of net loss incurred for the nine months of
$1,081,000 offset by net non-cash expense of $54,000, and the net change in
operating assets and liabilities resulting in source of cash of $534,000. Cash
used in operation in the first nine months of 2000 was the result of net loss
incurred for the nine months of 2000 of $1,180,000, offset by net non-cash
expenses of $271,000, and the net change in operating assets and liabilities
resulting in use of cash of $483,000.

         Investing activities used cash of $94,000 in the first nine months of
2001 and $18,000 for the comparable period in 2000.

         Financing activities provided cash of $802,000 and $1,134,000 during
the first nine months of 2001 and 2000, respectively. The cash provided in the
first nine months of 2001 resulted from issuance of convertible notes payable of
$135,000 partially offset by $25,000 retirement of notes payable and net
proceeds of $692,000 from issuance of common stock. The cash provided in the
first nine months of 2000 was due to proceeds from issuance of common stock of
$1,384,000 partially offset by $250,000 retirement of notes payable.

         At September 30, 2001 we had cash and cash equivalents of $297,000 as
compared with $82,000 on December 31, 2000. At September 30, 2001, we had a
working capital deficit of $320,000, as compared to working capital of $60,000
at December 31, 2000. The decrease in cash in the first nine months of 2001 was
a result of the aforementioned increases and decreases in cash from operating,
investing and financing activities noted above.

         Clearly our working capital must increase significantly to fund the
level of manufacturing and marketing required to meet any growth in demand for
our products in the nutritional and biotech industries during the next several
years. Moreover, we require additional funds to market and develop products as
stated earlier.

         Since we do not have credit facilities, most of the required growth
capital would have to come from customers/partners and equity financing. No
assurance can be given, however, that the terms of any contemplated financing or
alliances will be successfully negotiated or that such financing will be
successful in generating the revenue required to make us profitable.

                                        7
<PAGE>

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, we caution 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, we express 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.


                                OTHER INFORMATION
                                -----------------

Item 1.  Legal Proceedings                                        Not Applicable
------   -----------------

Item 2.  Defaults Upon Senior Securities                          Not Applicable
------   -------------------------------

Item 3.  Submission of Matters to a vote of Security Holders      Not Applicable
------   ---------------------------------------------------

Item 4.  Other Information                                        Not Applicable
------   -----------------





                                        8
<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.

                                       SEPRAGEN CORPORATION



DATE: November 14, 2001

                                       By: /s/ VINIT SAXENA
                                           -----------------------
                                           Vinit Saxena
                                           Chief Executive Officer

                                        9