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:   June 30, 1998

  [  ] 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:

                                              August 15,1998
                 Class A Common Stock          2,155,254
                 Class B Common Stock            701,177
                 Class E Common Stock          1,209,894

  THIS REPORT INCLUDES A TOTAL OF 10 PAGES.  THERE ARE NO EXHIBITS.
<PAGE>
  PART I  -  FINANCIAL INFORMATION
  Item  1.  -  Financial Statements

                          SEPRAGEN CORPORATION
                        CONDENSED BALANCE SHEETS

                                ASSETS
                                            June 30, 1998
   Current Assets:
        Cash and cash equivalents                $12,904 
        Accounts receivable, less
          allowance for doubtful accounts
          of $12,000 as of  June 30, 1998        208,256 
        Inventories                              244,162 

        Prepaid expenses and other                62,485 
          Total current assets                   527,807 
        Furniture and equipment, net             220,653 
        Intangible assets                        107,676 
                                                 856,136 

             LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

   Current Liabilities:
        Accounts payable                         923,561 
        Bridge Loans, net of unamortized
          discounts of $5,700                    534,300 
        Customer deposits                         55,800 
        Notes Payable, including $175,000
          from shareholders                      283,000 
        Accrued payroll and benefits             229,179 

        Accrued liabilities                       57,217 
        Interest payable                          64,131 
          Total current liabilities            2,147,188 

   Class E common stock, no par value -
     1,600,000 shares authorized;
     1,209,894 shares issued and
     outstanding at  June 30, 1998    
     redeemable at $.01 per share                      - 

   Shareholders' equity (deficit):
        Preferred stock, no par value -
          5,000,000 shares authorized;
          none issued or outstanding at 
          June 30, 1998                                - 

        Class A common stock, no par value
          - 20,000,000 shares authorized;
          2,155,254 shares issued and 
          outstanding at June 30, 1998         8,848,075 
        Class B common stock, no par value
          - 2,600,000 shares authorized;
          701,177 shares issued and
          outstanding at June 30, 1998         4,065,618 
        Additional paid in capital               110,700 
        Accumulated deficit                  (14,315,445)
        Total shareholders' equity
          (deficit)                           (1,291,052)
                                                  856,136

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

                                 Page 2
<PAGE>
                          SEPRAGEN CORPORATION

                   CONDENSED STATEMENTS OF OPERATIONS

                                Three Months        Six Months
                                Ended June 30       Ended June 30

                               1998       1997      1998         1997
   Revenues:

   Net Sales              $211,471   $212,804  $843,804     $543,713 
   Costs and expenses:

      Cost of goods sold   126,741    174,484   509,827      299,957 
      Selling, general
        & administrative   311,570    317,223   605,516      803,268 

      Research and
       development         191,430    259,994   404,524      511,940 
   Total costs and
    expenses               629,741    751,701 1,519,867    1,615,165 
   Loss from operations   (418,270)  (538,897) (676,063)  (1,071,452)
   Other income                  --         -        --       40,000 
   Interest income,                           
     (expense) net         (20,000)       806  (109,282)         993 
                                              
          Net loss        (438,270)  (538,091) (785,345)  (1,030,459)

   Net loss per common
     share, basic and                         
     diluted                 $(.15)     $(.19)    $(.28)       $(.36)
   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 3
<PAGE>
                          SEPRAGEN CORPORATION

                   CONDENSED STATEMENTS OF CASH FLOWS


                                  Six Months Ended June 30,
                                            1998              1997
   Cash flows from operating
   activities:
        
        Net Loss                   $   (785,345)    $  (1,030,459)
        Adjustments to reconcile
          net loss to net cash 
          used in operating
          activities:
          Depreciation and
            Amortization                138,047            68,013 

          Changes in assets and
            liabilities:
             Accounts receivable        362,612            43,390 
             Inventories                 74,698            16,326 
             Prepaid expenses                   
               and other                     (1)           (9,868)
             Accounts payable           287,307           403,451 
             Accrued liabilities        (35,503)          (45,291)

             Accrued payroll and
               benefits                  84,040            11,499 
             Interest payable            39,282                -- 
             Customer deposits         (254,681)          107,866 
   Net cash used in operating
      activities                        (89,544)         (435,073)

   Cash flows from financing
   activities:
     Proceeds from issuance of
       notes payable to
       shareholders                      50,000           125,000 

        Proceeds from issuance
          of notes payable                8,000           100,000
          Net cash provided by                                    
            financing activities         58,000           225,000
   Net increase (decrease) in  
     cash                               (31,544)         (210,073)
   Cash and cash equivalents at
     the beginning of the period         44,448           217,057
   Cash and cash equivalents at
     the end of the period            $  12,904        $    6,984

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

                                 Page 4
<PAGE>
                          SEPRAGEN CORPORATION

                NOTES TO CONDENSED FINANCIAL STATEMENTS
                  SIX MONTH PERIOD ENDED JUNE 30, 1998


  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 June  30, 1998, the Company had an accumulated
  deficit of $14,315,445.

       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 August 31,1998.  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, 1997.


  Note 3 - Net Loss Per Share.

       The Company has adopted Statement of Financial Accounting
  Standards (SFAS) No. 128, Earning per Share for all periods
  presented.  The adoption of SFAS No. 128 had no impact on
  previously reported loss per share for the three months ended June
  30, 1997.  In accordance with SFAS No. 128, primary earnings (loss)
  per share has been replaced with basic earnings (loss) per share,
  and fully diluted earnings (loss) per share has been replaced with
  diluted earnings (loss) per share which includes potentially
  dilutive securities such as outstanding options and convertible
  securities, using the treasury stock method.  The assumed exercise
  of options and warrants and assumed conversion of convertible
  securities have not been included in the calculation of diluted
  loss per share as the effect would be anti-dilutive.

  Note 4 - The "Year 2000 Problem", dates following December 31, 1999
  and beyond:

                   Many existing computer systems and applications,
  and other devices, use only two digits to identify a year in the
  date field, without considering the impact of the upcoming change
  in the century. Such systems and applications could fail or create
  erroneous results unless corrected. The Company relies on its
  internal financial systems and external systems of business
  enterprises such as customers, suppliers, creditors, and financial
  organizations both domestically and globally, directly and
  indirectly for accurate exchange of data. The Company has evaluated
  such systems and believe the cost of addressing the business
  enterprises such as customers, suppliers, creditors, and financial
  organizations both domestically and globally, directly and
  indirectly for accurate exchange of data. The Company has evaluated
  such systems and believe the cost of addressing the "Year 2000
  Problem" will not have a material adverse affect on the result of
  operations of financial position of the Company. However, even
  though the internal systems of the Company are not materially
  affected by the Year 2000 issue the Company could be affected
  through disruption in the operation of the enterprises with which
  the Company interacts.

                                 Page 5
<PAGE>
  Note 5 - Inventory.

       Inventories consist of the following at June 30, 1998:


   Raw Materials      $198,336
   Finished Goods       45,826
                      $244,162


  Note 6 - Notes Payable

       In May 1997, the Company borrowed $100,000 from a shareholder
  of the Company, payable with interest at 9.5% per annum and was 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 due on 
  March 1, 1999.

       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 due
  on December 31, 1998.

       In March 1998, the Company borrowed $50,000 from a shareholder
  of the Company, payable with interest at 9.5% per annum due on
  March 1, 1999.

       In March 1998, the Company borrowed $8,000 from an unrelated
  party, payable with interest of 9.5% per annum and is due August
  31, 1998.

       The notes payable originally due on April 10, 1998  is now
  past due and subject to collection and additional costs.  Terms for
  repayment and extension are being negotiated. 


  Note 7 -  Bridge Notes Payable

       In November 1997, the Company completed its private placement
  of bridge of 54 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 warrants are immediately exercisable
  and expire five years from the date of issuance.  No warrants have
  been exercised as of June 30, 1998.  The bridge notes are payable
  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 June 30, 1998, $540,000 of offering
  proceeds were received from the bridge financing including $55,000
  from related parties.  Direct debt issuance costs related to these
  notes totaled $35,000.  The aggregated fair value of the warrants
  issued in connection with the financing was $110,700 and is being
  amortized, along with the issuance costs, to operations as
  additional interest expense over the term of the notes.  For the
  six months ended June 30, 1998 the Company amortized $70,000 of
  issuance cost to operations.

                                 Page 6
<PAGE>
  Item 2.  Management's Discussion and Analysis.

  First six months of 1998 compared to first six months of 1997.

       Net sales increased by $300,000 or 55% from $544,000 the first
  half of 1997 to $844,000 in the first half of 1998.  The increase
  in sales is primarily due to the increase of sales of its core
  products, Radial Flow Chromatography (RFC) equipment and a small
  contribution from  revenues from Sepralac evaluation license fees.  
  All the sales increase is attributable to the first quarter of
  1998.   

       Gross Margin increased by $90,000 or 37% from $244,000 in the
  first half of 1997 to $334,000 in the first half of 1998.  The
  increase in gross margin is primarily due to a higher production
  volume and product mix. As a percentage of sales, gross margin
  decreased by 5% from 45% in the first six months of 1997 to 40% in
  the first six months of 1998. 

       Selling, general and administrative expenses decreased by
  $197,000 from $803,000 in the first half of 1997 to $606,000 in the
  first half of 1998. The decrease was primarily due to belt
  tightening measures adopted in mid 1997 in administrative expenses
  coupled with a reduction in head count in sales and marketing,
  scaling back of advertising and promotion and travel expenses.

       Research and development expenses decreased by $107,000 from
  $512,000 in the first six months of 1997 to $405,000 in the first
  six months of  1998.  The decrease was mainly due to the reduction
  in the cost of software development for the QuantaSep product.

       Interest and other expense increased by $108,000 in the first
  half of 1998 compared to the first half of 1997 due to amortization
  of $70,000 of issuance cost and $38,000 interest expense related to
  the bridge loans and notes payable. 


  Second quarter 1998 compared to second quarter 1997.

        Net sales  essentially remained unchanged  at about  $212,000
  in the second quarter of 1998 and 1997.
                 
        Gross margin increased by $45,000 or 115% from $39,000 in the
  second quarter of 1997 to $84,000 in the second quarter of 1998, 
  and as a percent of sales, increased  by 22% from 18% to 40%.  Part
  of the increase in gross margin was due to additional software cost
  associated with the 1997 shipment without incurring corresponding
  costs in 1998. To a lesser extent, the higher margin was
  attributable to product mix which includes a larger amount of
  Sepralac evaluation fee receipt compared to that  received in the
  second quarter of 1997.   
       
        Selling, general and administrative expense decreased by
  $6,000 or less than 1%. The reduction of head count and belt
  tightening that was instituted  at the beginning of the Second
  quarter of 1997 was still in effect in the second quarter of 1998.

        Research and development expenses decreased by $69,000 or 26%
  from $260,000 in the second quarter of 1997 to $191,000 in the
  second quarter of 1998. This decrease was mainly a result of a 
  reduction of software expenses and reduction in head count. 

  Inflation.

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

                                 Page 7
<PAGE>
  Liquidity and Capital Resources:

       The Company use of cash for operations was $89,500 and
  $435,100 during the six months ended June 30, 1998 and 1997,
  respectively. Cash used in operation in the first half of 1998 was
  the result of net loss incurred for the first six months  of
  $785,300, offset by net non-cash expense of $138,000,  the net
  change in operating assets and liabilities resulting in source of
  cash of $557,800. Cash used inoperations in  the first half of 1997
  was the result of the net loss of $$1,030,400, offset by non-cash 
  expenses of $55,500, and change in operating assets and liabilities
  resulting in a source of cash of $539,800.

       Financing activities provided cash of $58,000 during the first
  half ended June 30, 1998. The cash provided resulted from the
  issuance of $58,000 in notes payable.

       At June 30, 1998 the Company had cash and cash equivalents of
  $12,900 and $44,400 on December 31, 1997.  At June 30, 1998, the
  Company had working capital deficit of $1,619,400, as compared to
  working capital deficit of  $902,000 at December 31, 1997.  The
  decrease in cash in the first half of 1998 is a result of the
  aforementioned increase or decrease in cash from operating and
  financing activities noted above. The decrease in working capital
  for the first half is primarily a result of the net loss incurred
  offset by non-cash charges.  

       This negative cash out flow from operations must be reversed
  and working capital increased significantly in order for the
  Company to fund its existing activities and to extend the use of
  its technology to new applications in the food and dairy and
  environmental industries, and to attract the interest of strategic
  partners in one or more of these markets.

       Based on the Company's current operating plan, the Company
  believes that it will only be able to fund the Company's operations
  through August 31, 1998.  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 
  debt financing.

       Additionally, the Company is pursuing several alliances in the
  dairy industry which if consummated successfully could potentially
  contribute to increasing the Company's liquidity through licensing,
  fees, revenue from product sales and royalty income. Sepragen has
  signed evaluation agreements of the Sepralac process with two
  companies. 

       There can be no assurance that the deal will be consummated or
  that the Company will be able to secure financing on reasonable
  terms or at all.

       The IPO Units, Class A Common Stock and Class A and Class B
  warrants were delisted from the Nasdaq SmallCap Market on August
  15, 1997 and Pacific Stock Exchange ("PSE") on July 8, 1998.  The
  Company  did not meet the requirements for continued listing of
  securities on Nasdaq SmallCap Market and Pacific Stock Exchange.
  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 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.

                              Page 8<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, 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 September 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.  The Company has been delisted from the Nasdaq SmallCap
  Market and the Pacific Stock Exchange.  See Item 2 "Management's
  Discussion and Analysis-Liquidity and Capital Resources."

       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.

   
                           OTHER INFORMATION


  Item 1.       Legal Proceedings                                     
                         Not Applicable

  Item 2.       Changes in Securities                                 
                         Not Applicable

  Item 3.       Defaults Upon Senior Securities                       
                         Not Applicable

  Item  4.      Submission of Matters to a vote of Security Holders   
                         Not Applicable

  Item 5.       Other Information                                     
                         Not Applicable

  Item 6.        Reports on Form 8-K                                  
                         No reports filed this quarter


                                 Page 9
<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: August  15, 1998        By:  /s/Vinit Saxena   
                                     Vinit Saxena
                                     Chief Executive Officer,
                                     President and
                                     Principal Financial and Chief
                                     Accounting Officer



                                Page 10