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, 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:

                                                       August 13, 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

                                               June 30,     December
                                                  1997      31, 1996
                                            (unaudited)
   Current Assets:
        Cash and cash equivalents               $ 6,984    $ 217,057
        Accounts receivable, less
          allowance for doubtful accounts
          of $12,000 as of June 30, 1997        140,415      183,805
          and $10,296 as of December 31,
          1996
        Inventories                             458,566      474,892

        Prepaid expenses and other               22,501       12,633
          Total current assets                  628,466      888,387
        Furniture and equipment, net            332,650      388,201
        Intangible assets                       118,375      130,837
                                              1,079,491    1,407,425

  LIABILITIES AND SHAREHOLDERS' EQUITY


   Current Liabilities:
        Accounts payable                         600,137       196,686
        Accrued liabilities                       22,374        67,665
        Customer deposit                         107,866            --
        Accrued payroll and benefits             122,466       110,967
        Notes payable                            100,000            --

        Notes payable to shareholders            125,000            --
          Total current liabilities            1,077,843       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
        June 30, 1997 and December 31,
        1996, respectively; redeemable
        at $.01 per share                              -             -
   Shareholders' equity:
     Preferred stock, no par value -
        5,000,000 shares authorized; none
        issued or outstanding at June 30,
        1997 and at December 31, 1996                  -             -
     Class A common stock, no par value -
        20,000,000 shares authorized;
        2,155,254 and 2,149,155 shares
        issued and outstanding at June 30,
        1997 and at December 31, 1996          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 June 30, 1997
        and at December 31, 1996               4,065,618     4,100,992
        Accumulated deficit                 (12,912,045)  (11,881,586)
        Total shareholders' equity                 1,648     1,032,107
                                               1,079,491     1,407,425


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

                                   Page 2
<PAGE>

                            SEPRAGEN CORPORATION

                     CONDENSED STATEMENTS OF OPERATIONS
                                 (Unaudited)




                              Three Months                  Six Months
                              Ended June 30,              Ended June 30,
                                  1997       1996        1997         1996
   Revenues:
        Net Sales             $212,804   $230,119    $543,713     $862,781

   Costs and expenses:
        Cost of goods sold     174,484    186,292     299,957      637,930

        Selling, general
         and administrative    317,223    587,499     803,268    1,225,350
        Research and                                                      
          development          259,994    366,472     511,940      729,310
          Total costs and
            expenses           751,701  1,140,263   1,615,165    2,592,590
          Loss from                              
            operations       (538,897)  (910,144) (1,071,452)  (1,729,809)
   Other income                     --         --      40,000           --

   Interest income, net            806     29,635         993       70,551
          Net loss           (538,091)  (880,509) (1,030,459)  (1,659,258)
   Net loss per common and 
     common equivalent          $(.19)     $(.31)      $(.36)       $(.58)
     share

   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
                                 (Unaudited)

                                                   Six Months Ended 
                                                       June 30,
                                                      1997          1996
   Cash flows from operating activities:
        Net Loss                              $(1,030,459)  $(1,659,258)
        Adjustments to reconcile net loss to
          net cash used in operating
          activities:
          Depreciation                              55,551        41,813

          Amortization of patent cost               12,462            --
          Changes in assets and liabilities:
             Accounts receivable                    43,390     (165,566)
             Inventories                            16,326       157,758
             Prepaid expenses and other            (9,868)        42,660
             Accounts payable                      403,451      (19,861)

             Accrued liabilities                  (45,291)     (145,435)
             Accrued payroll and benefits           11,499         8,832
             Interest payable                           --       (4,285)
             Customer deposits                     107,866            --
                Net cash used in operating
                  activities                     (435,073)   (1,743,342)


   Cash flows from investing activities:
        Acquisition of furniture and
          equipment                                     --     (227,711)
        Acquisitions of marketable
          securities                                    --     (140,000)
        Proceeds from sale of marketable                  
          securities                                    --     3,409,613
          Net cash provided by investing                  
            activities                                  --     3,041,902

   Cash flows from financing activities:
        Proceeds from issuance of notes
           payable to shareholders                 125,000            --
        Proceeds from issuance of notes                                 
           payable                                 100,000            --
          Net cash provided by financing                                
            activities                             225,000            --

           Net increase (decrease) in cash       (210,073)     1,298,560

   Cash and cash equivalents at the                                     
     beginning of the period                       217,057        23,364
   Cash and cash equivalents at the end of
     the period                                     $6,984  $  1,321,924


  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, 1997
                                 (Unaudited)


  Note 1 - Basis of Presentation

       These condensed financial statements have been presented on a going
  concern basis.  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, 1997, the
  Company had an accumulated deficit of $12,912,045.

       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.  Accord-
  ingly, 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, 1997.  The
  Company is currently pursuing alternative funding sources to meet its
  cash flow needs, including private debt and equity financing.  Manage-
  ment intends to use such funding to further its marketing efforts and
  expand sales and profitability.  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 uncer-
  tainty.

  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 gener-
  ally 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 manage-
  ment, 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 prin-
  ciples.  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 - Newly Issued Accounting Standards

       In February 1997, the Financial Accounting Standards Board ("FASB")
  issued Statement of Financial Accounting Standards ("SFAS") No. 128,
  "Earnings Per Share" and No. 129, "Disclosure of Information about
  Capital Structure."  SFAS No. 128 establishes standards for computing
  and presenting earnings per share ("EPS"), replacing the presentation of
  primary EPS with a presentation of basic EPS.  SFAS No. 129 consolidates
  the existing disclosure requirements regarding an entity's capital
  structure.  SFAS No. 128 and 129 are effective for financial statements
  issued for periods ending after December 15, 1997, and accordingly
  management has not determined the effect, if any, on the Company's
  financial statements for the three and six months ended June 30, 1997.

       In June 1997, the FASB issued SFAS No. 130, "Reporting Compre-
  hensive Income", and SFAS No. 131, "Disclosures About Segments of an
  Enterprise and Related Information."  SFAS No. 130 established standards
  for reporting and display of comprehensive income and its components. 
  SFAS No. 131 specifies revised guidelines for determining an entity's
  operating segments and the type and level of financial information to be
  disclosed.  SFAS No. 130 and 131 are effective for financial statements
  issued for periods beginning after December 15, 1997, and accordingly,
  management has not determined the effect, if any, on the Company's
  financial statements for the three and six months ended June 30, 1997. 

                                   Page 5
<PAGE>


                            SEPRAGEN CORPORATION

                   NOTES TO CONDENSED FINANCIAL STATEMENTS
                    SIX MONTH PERIOD ENDED JUNE 30, 1997
                                 (Unaudited)


  Note 4 - 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 June 30, 1997 and 1996 common equivalent shares relating to
  options have been excluded as they are anti-dilutive.


  Note 5 - Inventory.

       Inventories consist of the following:

                                         
                        6/30/97     12/31/96
   Raw Materials       $383,481     $294,424
   Finished Goods        75,085      180,468
                       $458,566     $474,892


  Note 6 - Other Income

       Other income represents an insurance recovery in excess of net book
  value of lost demonstration equipment.



  Note 7 - 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 8 - 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.

                                   Page 6
<PAGE>


  Item 2.  Management's Discussion and Analysis.

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

       Net sales decreased by $319,000 or 37% from the first half 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 $19,000 or 8% from the first half of the
  prior year, and as percent of sales, increased from 26% to 45%.  The
  increase in gross margin is primarily due to product mix.

       Selling, general and administrative expenses decreased by $422,000
  from $1,225,000 to $803,000 in the first half 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 $217,000 from
  $729,000 in the first half of 1996 to $512,000 in the first half of
  1997.  The decrease was mainly due to the reduction in the cost of
  software development for the QuantaSep product and reduction in head
  count.

  Second quarter 1997 compared to second quarter 1996.

       Net sales decreased by $17,000 or 8% from the second quarter of
  1996, due to lower shipment of the QuantaSep products.

       Gross margin decreased by $5,500 or 13% from the first half of the
  prior year, and as a percent of sales, decreased by 1% from 19% to 18%. 
  The decrease is due to product mix.

       Selling, general and administrative expenses decreased by $270,000
  from $587,000 in the first half of 1996 to $317,000 in the first half of
  1997.  The decrease was primarily due to the reduction in head count,
  advertising, travel and professional fees.

       Research and development expenses decreased by $106,000 from
  $366,000 in the first half of 1996 to $260,000 in the first half 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 $449,000 on June 30,
  1997 and positive working capital of $513,000 on December 31, 1996.  The
  decrease in the working capital of $962,000 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 third party outstanding as of June 30, 1997, to provide
  working capital for the Company.  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.

                                   Page 7
<PAGE>



       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, 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 or at all.

       While the IPO Units, Class A Common Stock and Class A and Class B
  warrants have been listed on Nasdaq SmallCap Market and the Pacific
  Exchange ("PSE") Tier II, the Company does not meet the criteria for
  continued listing of securities on Nasdaq or the PSE.  These 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.  If an issuer does not meet the $1.00 minimum bid price
  standard, it may, however, remain on Nasdaq if the market value of its
  public float is at least $1,000,000 and the issuer has capital and
  surplus of at least $2,000,000.

       The continued listing criteria for the 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. 
  The Company's financial statements indicate it did not meet the net
  asset requirements for continued listing on Nasdaq SmallCap Market as of
  December 31, 1996 or the net asset and capital surplus requirements for
  continuing listings as of June 30, 1997 of either the Nasdaq SmallCap
  Market or the PSE Tier II.  If the Company remains unable to meet the
  continued listing criteria of Nasdaq and the PSE and is delisted
  therefrom, trading, if any, in the IPO Units, Class A Common Stock and
  the Warrants would thereafter be conducted in the over-the-counter
  market in the so-called "pink sheets" or, if then available, the "OTC
  Bulletin Board Service."  As a result, an investor would likely find it
  more difficult to dispose of, or to obtain accurate quotations as to the
  value of, the Company's securities.  The Company's securities would 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.

       As indicated above, the Company does not currently meet the listing
  requirements for the Nasdaq SmallCap Market or the PSE Tier II.  On June
  13, 1997, Sepragen received a notification of delisting from Nasdaq, 
  effective June 20, 1997.  At Sepragen's request, an oral hearing was
  held on July 31, 1997 at the Nasdaq office in Washington, D. C.  The
  Company presented a detailed plan to meet the listing requirements.  The
  Company is awaiting the outcome of the hearing.  On May 21, 1997, PSE
  notified Sepragen of its initiation of delisting proceedings.  The
  Company submitted a plan for meeting the listing requirements.  PSE has
  advised Sepragen of its decision to extend the time period to satisfy
  the listing requirements to October 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 Nasdaq 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 can be no assurance that such alternatives will be
  feasible or successful in increasing working capital or 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 Sepralac(TM) process for
  whey separation and other potential food and 

                                   Page 8
<PAGE>


  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.

  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,
  1997.  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 or at all.  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
  Nasdaq SmallCap Market and the Pacific Exchange Tier II.

       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:   8/15/97                    By: /s/ Vinit Saxena
                                     Vinit Saxena
                                     Chief Executive Officer, President
                                     and Principal Financial and Chief
                                     Accounting
                                     Officer

                                   Page 9