UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-K/A2

      (Mark One)

      [X]             ANNUAL REPORT PURSUANT TO SECTION 13
                 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

      For the fiscal year ended December 31, 2000

                                       OR

      [ ]            TRANSITION REPORT PURSUANT TO SECTION
               13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from ............ to .............

                  Commission file number 0-19410


                                    HMSR Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                   Delaware                              04-3216862
         ------------------------------              ------------------
         State or other jurisdiction of               (I.R.S. Employer
         incorporation or organization               Identification No.)

                140 Locke Drive
           Marlborough, Massachusetts                            01752
     ---------------------------------------                 ------------
     (Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code     (508) 490-9500
                                                   ---------------------
Securities registered pursuant to Section 12(b) of the Act:

    Title of each class          Name of each exchange on which registered
            None                                 None
    --------------------         -----------------------------------------

           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.01 per share
                  ---------------------------------------------
                                (Title of class)


<PAGE>




        Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No
                                             ---   ---
        Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [X]

The aggregate market value of voting stock held by non-affiliates of the
registrant was $7,196,749 on January 16, 2002.
               -------------------------------

Number of shares outstanding of the registrant's class of common stock as of
January 16, 2002: 18,891,897.
                  ----------



<PAGE>


Purpose of Amendment

      HMSR Inc. (the "Company") hereby amends (i) Item 7 of Part II and (ii)
Item 14 of Part IV of its Form 10-K/A Annual Report for the fiscal year ended
December 31, 2000, as filed with the Securities and Exchange Commission on April
10, 2001 (the "10-K/A"), due to the disposal of the Company's red blood
filtration segment in May 2001. The Company has reclassified its financial
statements as of December 31, 1999 and 2000 and for the years ended December 31,
1998, 1999 and 2000, to present the segment as discontinued operations.

                                     PART II

Item 7.   Management's Discussion and Analysis of Financial Condition and
          Results of Operation

Overview

        The Company was established in December 1993 as a wholly-owned
subsidiary of Sepracor. Effective as of January 1, 1994, in exchange for
3,000,000 shares of Common Stock, Sepracor transferred to the Company its
technology relating to the manufacture, use and sale of medical devices for the
separation and purification of blood, blood products and blood components and
its membrane filter design technologies.

        The Company developed and supplied innovative blood filtration
technologies designed to help meet today's increasing demand for a safer, more
reliable blood supply. The Company's blood filtration technologies are designed
to reduce virus-carrying white blood cells (leukocytes) in donated blood to
nominal levels (a process known as "leukoreduction").

        In April 2000, the Company was notified that the American Red Cross (the
"ARC"), the Company's largest customer, was suspending use of the Company's r\LS
System pending the outcome of an investigation of a small number of non-critical
adverse reactions in patients who had received a transfusion of blood filtered
with the r\LS. In September 2000, the Company was notified that the ARC
terminated its supply contract for the r\LS System based on the extended period
of time taken to prove product improvements resolved these reactions. In August
2001, the Company and the ARC signed a termination and release agreement in
connection with the supply contract between the two parties. The agreement
provided for the Company to pay the ARC $600,000 and the release of any and all
claims that either party may have against the other, with certain exceptions.

        In March 2001, the Company signed a termination and release agreement
with Gambro BCT ("Gambro"), effective November 2000, which ended the
distribution and development agreement. In consideration for the Company's
inventory (net book value at December 31, 2000 of $332,000) of products bearing
Gambro's company name, and by way of complete resolution of all issues now
outstanding between the Company and Gambro, Gambro agreed to return 1,011,692
shares of common stock with a fair market value at closing of $332,000.

        The termination of the purchase contract by the ARC and the distribution
and development agreement with Gambro has had an adverse impact on the Company's
ability to generate revenues from the sale of the Company's r\LS product and on
the Company's supply contracts with manufacturers of key components to the r\LS.



                                      -1-
<PAGE>


Recent Developments

        On May 29, 2001, the Company sold substantially all of the Company's
non-cash assets to Whatman Bioscience Inc., a Massachusetts corporation
("Whatman"), a wholly owned subsidiary of Whatman plc, an English corporation
("Whatman plc") pursuant to the terms of an Asset Purchase Agreement executed by
and among the Company, Whatman and Whatman plc, on February 3, 2001 and amended
on April 2, 2001(the "Purchase Agreement"). See Item 1. "Recent Events".

        Under the terms of the Purchase Agreement, Whatman acquired
substantially all of the non-cash assets of the Company for consideration
consisting of (i) a $10 million dollar cash payment, which was paid to the
Company on May 29, 2001, (ii) a reimbursement amount which was finalized in the
third quarter at $6,944,000, effectively covering the net change in cash from
the ongoing operations of the Company's business from November 1, 2000 through
May 29, 2001 (the "Reimbursement Amount"), which was paid to the Company during
the third quarter of 2001, and (iii) potential royalty payments in the amount of
4% on sales by Whatman or its affiliates of filtration products using the
Company's technology. The royalty payments are subject to a maximum, aggregate
amount of $12 million and are subject to certain reductions set forth in that
certain Royalty Agreement, dated as of May 29, 2001, by and among HMSR, Whatman
and Whatman plc, including any damages and certain settlement amounts paid by
Whatman related to HMSR's patent litigation with Pall Corporation.

        In connection with the sale of its non-cash assets, the Company recorded
a gain of approximately $11,963,000, which includes the $6,944,000 reimbursement
amount and is net of the payment of approximately $1,394,000 in costs and
expenses associated with completing the asset sale incurred in the second
quarter of fiscal 2001. An additional $1,106,000 of costs and expenses
associated with completing the asset sale were incurred in the first quarter of
fiscal 2001, with such costs and expenses included in discontinued operations.
The Company expects to incur a minimal tax liability (estimated to be no greater
than $100,000) in connection with the sale, as it believes it has sufficient
federal and state net operating loss carryforwards and tax credits to offset any
gains realized. The net book value of assets sold was $3,587,000. No value was
ascribed to the potential future royalties in recording the gain on this
transaction.

        On June 6, 2001 the Company announced that the stockholders of the
Company had voted in favor of the sale of the non-cash assets to Whatman and
that HemaSure Inc. had changed its name to HMSR Inc. The name change was
approved at the Special Stockholders Meeting on May 21, 2001.

        On November 15, 2001, the Company and PT Acquisition Corp., a
wholly-owned subsidiary of the Company, formed for the purpose of consummating a
merger transaction, entered into a merger agreement (the "Merger Agreement")
with Point Therapeutics, Inc. ("Point"). Pursuant to the terms of the Merger
Agreement, PT Acquisition Corp. would merge with and into Point and Point would
remain as the surviving corporation. Under the terms of the agreement, each
outstanding share of Point's common stock will be converted into the right to
receive 37.377 shares of the common stock of the Company. As a result of the
merger, the respective ownership of the Company's current stockholders and
Point's current stockholders in the Company is anticipated to be approximately
23% and 77%, respectively, subject to downward adjustment for the Company to the
extent the Company's cash and cash equivalent balances at closing are less than
$16.5 million (as of September 30, 2001, the Company's cash and cash equivalent
balances totaled approximately $16.2 million). The transaction is




                                      -2-
<PAGE>


expected to close in the first quarter of 2002, and is subject to approval of
each of the Company's and Point's stockholders and other customary conditions.

        The Company's board of directors considered various strategic business
combinations and other transactions with a view toward further enhancing
stockholder value following consummation of the transactions contemplated by the
Purchase Agreement, which included, among other alternatives, the merger of the
Company with a private or public company or the liquidation or dissolution of
the Company. In the event that the merger does not occur, the Company will
consider other business alternatives, including but not limited to, other
business combinations and a liquidation of the Company's assets. Given that any
proceeds from any such liquidation and any other cash on hand would be first
used to pay the Company's creditors and outstanding payables, and given certain
legal requirements that the Company maintain certain cash on hand for certain
mandated time periods, there is no assurance as to when, if ever, any proceeds
from a liquidation would be distributed to the Company's Stockholders. In
certain instances, if the Merger Agreement is terminated, the Company will pay
Point certain fees.

Results of Continuing Operations

        Due to the sale of substantially all of the Company's non-cash assets to
Whatman, the Company has no continuing operations other than administrative
matters which include costs and expenses to maintain the legal existence of the
company and to investigate various strategic business combinations and other
transactions with a view toward maximizing stockholder value. These costs and
expenses include such items as consulting expenses, general legal costs,
corporate audit and tax fees and general employee costs to assist in the orderly
transition of the Company's business in connection with the transactions
contemplated by a merger.

        Operating expenses were $805,000 in 2000, $657,000 in 1999 and $690,000
in 1998. The increase in 2000 from 1999 is primarily attributable to higher
professional fees incurred in connection with the Company's activities in
identifying strategic business combinations.

        Interest income in 2000, 1999 and 1998 primarily represents interest
earned on available cash and marketable securities balances during those
periods.

        Interest expense decreased in 2000 compared to 1999 due primarily to the
completion of the amortization of deferred financing charges in September 2000
and the repayment of the revolving line of credit in September 2000. The
increase in interest expense in 1999 compared to 1998 is primarily related to
the amortization of deferred financing charges and amounts outstanding on the
Company's line of credit which was outstanding for all of 1999 and only for
approximately three months in 1998.

Results of Discontinuing Operations

        Revenues were $3,219,000 in 2000, $805,000 in 1999 and $25,000 in 1998.
The majority of revenues in 2000, 1999 and 1998 were from the sale of the
Company's leukoreduction systems. Significant costs to produce the product at
low volumes, develop and support product enhancements and the design of process
alternatives, defending the Company's patent postioin and market and sell the
product resulted in substantial losses of $15,297,000, $8,716,000 and
$11,277,000 for the years ended December 31, 2000, 1999 and 1998, respectively.


                                      -3-
<PAGE>


        In February 1998, the Company decided to discontinue the manufacture and
sale of its former leukoreduction filter, the LeukoNet System. In September of
1999, the Company initiated sales in the United States of its next generation
red blood cell leukoreduction system, the r\LS System, which accounts for the
increase in revenues in 1999 from those in 1998 and the increase in revenues in
2000 from those in 1999. In 2000, the ARC represented 50% of total revenues and
Gambro represented 49% of total revenues. In 1999, the ARC represented 66% of
total revenues and Gambro represented 33% of total revenues. In 1998 the ARC
represented 53% of total revenues and another customer represented 10% of total
revenues.

        In September 2000, the Company was notified that the ARC terminated its
supply contract for the r\LS System based on the extended period of time taken
to prove product improvements resolved these reactions. In August 2001, the
Company and the ARC signed a termination and release agreement in connection
with the supply contract between the two parties. The agreement provided for the
Company to pay the ARC $600,000 and the release of any and all claims that
either party may have against the other, with certain exceptions.

        In March 2001, the Company signed a termination and release agreement
with Gambro BCT, effective November 2000, which ended the distribution and
development agreement. In consideration for the Company's inventory (net book
value at December 31, 2000 of $332,000) of products bearing Gambro's company
name, and by way of complete resolution of all issues now outstanding between
the Company and Gambro, Gambro agreed to return 1,011,692 shares of common stock
with a fair market value at closing of $332,000.

        The cost of products sold was $9,095,000 in 2000, $2,408,000 in 1999 and
$657,000 in 1998. Total cost of products sold exceeded total product sales in
all periods due to the high costs associated with new product manufacturing
start up and low volume production. Included in cost of products sold for fiscal
2000 are two charges totaling approximately $2,554,000 for product warranty and
inventory write-down. The first of these charges was a provision for product
warranty of $630,000. This warranty provision relates to the report to the
Company by the ARC of a small number of adverse reactions in patients transfused
with blood filtered with the Company's r\LS filter product as described in the
Overview above. The second charge was for the write-down of inventories of
$1,924,000. The Company's assessment of the future use and value of its existing
inventories, following the Company's only two existing customers decision to
terminate their Supply Agreements with the Company, determined that a write-down
was necessary to state the inventories at the lower of cost or market. The
Company incurred additional charges of $1,305,000 to terminate and amend certain
key contractual supply agreements, with Filtertek and Command as disclosed in
"Liquidity and Capital Resources."

        Research and development expenses were $4,450,000 in 2000, $2,681,000 in
1999 and $3,794,000 in 1998. The increase in 2000 from 1999 is primarily
attributable to costs associated with the formulation and design of process
alternatives to support the then expected increase in demand for the Company's
r\LS System, and the costs associated with investigating and studying potential
causes for the transfusion reactions reported by the ARC. The decrease in 1999
from 1998 is primarily attributable to costs associated with the development of
the Company's next generation red cell filtration system, the r\LS System, for
which a majority of the effort was expended in the 1998 period.

        Legal expenses related to patents were $1,134,000 in 2000, $1,361,000 in
1999 and $3,340,000 in 1998. The expenses in all three periods are primarily
related to costs associated with defending the Company's patent position in its
outstanding litigation with Pall Corporation. In 1998 the Company



                                      -4-
<PAGE>


incurred significant expenses in connection with expert witness and
discovery-related activities associated with its outstanding patent litigation
with Pall. The decrease in 2000 and 1999 from 1998 is due to a reduction in
these costs as well as from cooperation with Gambro in connection with such
costs consistent with the Company's distribution and development agreement with
Gambro. Due to the termination and release agreement signed with Gambro in
March, 2001, there can be no assurance that such costs will remain at the same
level in future periods. Under the terms of the Purchase Agreement entered into
by and among the Company and Whatman, Whatman assumed any and all obligations
and liabilities of the Company related to the Pall Litigation. However, any
damages and certain settlement amounts incurred by Whatman in connection with
the Pall Litigation may be offset by Whatman against any royalties owed by
Whatman to HMSR pursuant to the terms of the Royalty Agreement described above
in "Recent Developments", and thus may reduce the amount of royalties that the
Company may collect under the terms of the Royalty Agreement. See " --
Litigation."

        Selling, general and administrative expenses were $3,386,000 in 2000,
$3,071,000 in 1999 and $3,511,000 in 1998. The increase in 2000 from 1999 is
primarily attributable to higher administrative personnel of $221,000, travel
and related costs of $41,000 and general professional services of $59,000 in
connection with the Company's expected increasing level of sales of its r\LS
System. The decrease in the amount expended in 1999 from 1998 is primarily due
to lower general professional services of $319,000 and costs associated with the
discontinuation of the Leukonet System.

New Accounting Standards

        In June 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as
amended by SFAS No. 137 and SFAS No. 138, which establishes accounting and
reporting standards for derivative instruments and hedging activities. The
standard requires that the Company recognize all derivatives as either assets or
liabilities on the balance sheet and measure those instruments at fair value.
The Company, to date, has not engaged in derivative and hedging activities, and
accordingly does not believe that the adoption of SFAS No. 133 will have a
material impact on its financial statements and related disclosures. The Company
will adopt SFAS No. 133 as amended by SFAS No. 137 and SFAS No. 138 in fiscal
year 2001.

        In December 1999, the Securities and Exchange Commission ("SEC") issued
SAB No. 101, "Revenue Recognition in Financial Statements," as amended by SAB
101A and 101B, which is effective no later than the quarter ended December 31,
2000. SAB No. 101 clarifies the SEC's views regarding the recognition of
revenue. The Company adopted SAB No. 101 in fiscal 2000. The adoption of SAB No.
101 did not have a significant impact on the Company's financial position or
results of operations.

        In March 2000, the FASB issued FASB Interpretation ("FIN") No. 44,
"Accounting for Certain Transactions Involving Stock Compensation -- an
Interpretation of APB Opinion No. 25." FIN No. 44 primarily clarifies (a) the
definition of an employee for purposes of applying APB Opinion No. 25, (b) the
criteria for determining whether a plan qualifies as a noncompensatory plan, (c)
the accounting consequence of various modifications to the terms of previously
fixed stock option awards and (d) the accounting for an exchange of stock
compensation awards in a business combination. The adoption of FIN No. 44 did
not have a significant impact on the Company's financial position or results of
operations.




                                      -5-
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        In September 2000, the FASB issued SFAS No. 140 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities--a replacement of FASB Statement No. 125" ("SFAS 140"). SFAS 140
revises the standards for accounting for securitizations and other transfers of
financial assets and collateral and requires certain disclosures, but it carries
over most of SFAS 125's provisions without reconsideration. This Statement is
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after March 31, 2001. This Statement is effective for
recognition and reclassification of collateral and for disclosures relating to
securitization transactions and collateral for fiscal years ending after
December 15, 2000. The Company is currently analyzing this new standard.

        In July 2001, FASB issued SFAS No. 141, "Business Combinations" and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that all
business combinations be accounted for under the purchase method only,
eliminating the pooling-of-interests method and that certain acquired intangible
assets in a business combination be recognized as assets apart from goodwill.
SFAS No. 142 requires, among other things, the discontinuance of goodwill
amortization, which is replaced with periodic tests of the goodwill's impairment
and that intangible assets other than goodwill be amortized over their useful
lives. In addition, the standard includes provisions for the reclassification of
certain existing recognized intangibles as goodwill, reassessment of the useful
lives of existing recognized intangibles, reclassification of certain
intangibles out of previously reported goodwill and the identification of
reporting units for purposes of assessing potential future impairments of
goodwill. SFAS No. 142 also requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption. SFAS No. 141 is
effective for all business combinations initiated after June 30, 2001 and for
all business combinations accounted for by the purchase method for which the
date of acquisition is after June 30, 2001. The provisions of SFAS No. 142 will
be effective for fiscal years beginning after December 15, 2001, and will thus
be adopted by the Company, as required on January 1, 2002. The Company is
currently assessing but has not yet determined the impact of SFAS No. 141 and
SFAS No. 142 on its financial position and results of operations.

        In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS 144 supercedes FASB Statement
No. 121 (SFAS 121), "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed of." SFAS 144 applies to all long-lived assets
(including discontinued operations) and consequently amends Accounting
Principles Board Opinion No. 30 (APB 30), "Reporting Results of Operations -
Reporting the Effects of Disposal of a Segment of a Business." SFAS 144 is
effective for financial statements issued for fiscal years beginning after
December 15, 2001, and will thus be adopted by the Company, as required, on
January 1, 2002. Management is currently determining what effect, if any, SFAS
144 will have on its financial position and results of operations.In December
1999, the Securities and Exchange Commission ("SEC") issued SAB No. 101,
"Revenue Recognition in Financial Statements," as amended by SAB 101A and 101B,
which is effective no later than the quarter ended December 31, 2000. SAB No.
101 clarifies the SEC's views regarding the recognition of revenue. The Company
adopted SAB No. 101 in fiscal 2000. The adoption of SAB No. 101 did not have a
significant impact on the Company's financial position or results of operations.

Litigation

        The Company is a defendant in a lawsuit brought by Pall Corporation
("Pall") regarding the Company's LeukoNet System, which is no longer made or
sold by the Company. In a complaint filed in November 1996, Pall alleged that
the manufacture, use and/or sale of the LeukoNet System infringed



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<PAGE>


upon two patents held by Pall. Pall dropped its allegations concerning
infringement of one of the patents and alleges only that the LeukoNet System
infringed Pall's U.S. Patent No. 4,952,572 (the "`572 Patent"). Under the terms
of the Purchase Agreement entered into by and among the Company and Whatman,
Whatman assumed any and all obligations and liabilities of the Company related
to the Pall Litigation. However, any damages and certain settlement amounts
incurred by Whatman in connection with the Pall Litigation may be offset by
Whatman against any royalties owed by Whatman to HMSR pursuant to the terms of
the Royalty Agreement described above in "Recent Developments", and thus may
reduce the amount of royalties that the Company may collect under the terms of
the Royalty Agreement.

        With respect to the allegations concerning the `572 Patent, the Company
answered the complaint stating that the LeukoNet System does not infringe any
claim of the asserted patents. Further, the Company counterclaimed for
declaratory judgment of invalidity, noninfringement and unenforceability of the
`572 Patent. Pall amended its complaint to add Lydall, Inc., whose subsidiary
supplied the filter media for the LeukoNet System, as a co-defendant. The
Company filed for summary judgment of non-infringement, and Pall cross-filed for
summary judgement of infringement at the same time. Lydall, Inc. supported the
Company's motion for summary judgment of non-infringement, and filed a motion
for summary judgment that the asserted claims of the `572 patent are invalid as
a matter of law. Discovery has been completed in the action. The Court held a
hearing on the summary judgment motions on April 18, 2000. On September 19,
2001, the Court granted the Company's motion finding that claims 48, 50 and 51
of the `572 patent were not infringed. The Court is now in the process of
determining if any outstanding issues remain to be decided. Pall has contended
that claims 37, 38 and 42 of the `572 patent have been asserted against the
Company. Pall also has moved the Court to reconsider its decision granting
summary judgement in favor of the Company. The Company is opposing Pall's motion
for reconsideration and Pall's contention that additional claims are at issue,
and is awaiting the Court's decision on whether to enter final judgement in
favor of the Company.

        The Company and Gambro, Inc. filed a complaint for declaratory relief
against Pall in the United States District Court of Colorado. The Company and
Gambro seek declaratory relief that the `572 Patent, Pall's U.S. Patent No.
5,451,321 (the "`321 Patent") and Pall's U.S. Patent No.'s 5,229,012, 5,344,561,
5,501,795 and 5,863,436 are invalid and not infringed by the Company's r\LS
System and methods of using the r\LS System. Pall moved to dismiss or transfer
to the Eastern District of New York or, in the alternative, to stay this action.
The Company and Gambro opposed Pall's motion. On July 16, 1999, the United
States District Court of Colorado denied Pall's motion to transfer or, in the
alternative, to stay the action. On September 30, 1999, the Court denied Pall's
motion to dismiss the action. On October 20, 1999, Pall submitted a counterclaim
alleging that the Company's r\LS System infringes its patents that are the
subject of the lawsuit and that the Company and Gambro tortiously interfered and
unfairly competed with Pall's business. The Company and Gambro replied to Pall's
counterclaim and denied Pall's allegations of tortious interference, unfair
competition and patent infringement.

        On July 13, 2000, Pall filed a Complaint in the United States District
Court for the District of Colorado against the Company, Gambro and Gambro AB
alleging that the Company's r\LS system infringes Pall's U.S. Patent No.
6,086,770 (the "`770 Patent"). On August 11, 2000, this action was consolidated
with the earlier declaratory relief action in the United States District Court
for the District of Colorado. The Company, Gambro and Gambro AB answered the
complaint, denied the allegations of infringement and submitted a counterclaim
alleging that Pall's `770 patent is invalid, not infringed



                                      -7-
<PAGE>


and unenforceable. In September 2000, Pall answered the counterclaim and denied
the allegations of noninfringement, invalidity and unenforceability. Discovery
is proceeding.

        On December 15, 2000, Pall filed a complaint against Filtertek, Inc.
("Filtertek") alleging that Filtertek, a manufacturer of the r\LS filter,
infringes the seven above-mentioned Pall patents. Filtertek answered the
complaint on January 31, 2001, denied Pall's allegations of infringement and
asserted that the claims of the Pall patents are invalid and/or unenforceable
and that Pall is estopped from asserting infringement against Filtertek by
reason of Pall's prior conduct with Filtertek. This action has been consolidated
with the other actions pending in Colorado.

        The Company, with Filtertek's support, has moved for summary judgment
that the accused r\LS system does not infringe, either literally or under the
doctrine of equivalents, any of the asserted claims of Pall's `572, `012, `561,
or `796 patents. Pall moved to adjourn the summary judgment motion or to
postpone responding to the motion until the expert reports are filed. The Court
has not ruled on Pall's motion, and Pall has yet to respond to the Company's
summary judgment motion. On October 9, 2001, Pall moved to dismiss the
consolidated Colorado case based upon lack of subject matter jurisdiction. In
its motion, Pall provided the Company with a limited covenant not to sue the
Company for sales of certain prior r/LS systems on certain claims of the
patents-in-suit. Based upon this covenant not to sue, the Company and Pall
jointly moved the Colorado court to dismiss Pall's claims of infringement of the
`321, `561, `795, `012 and `572 patents, with prejudice, and to dismiss the
Company's declaratory judgement claims for lack of subject matter jurisdiction.
The court has granted this motion. Thus, Pall's infringement contentions are now
limited to certain claims of the `436 and `770 patents. On December 3, 2001,
Whatman HemaSure Inc. was joined as a Plaintiff and Counterclaim Defendant in
the consolidated case and proceedings have been stayed until March 15, 2002.

        On December 22, 2000, Gambro AB and Gambro moved to dismiss the
consolidated actions based on a settlement agreement with Pall Corporation. On
January 10, 2001, the Court dismissed the action with respect to all claims
between Pall, Gambro, and Gambro AB.

        On April 23, 1999, Pall filed a complaint against the Company and Gambro
in the Eastern District of New York alleging that the Company's r\LS System
infringes Pall's `572 Patent and that the Company and Gambro tortiously
interfered and unfairly competed with Pall's business. On May 19, 1999, Pall
amended its complaint and added Gambro, Gambro A.B. and Sepracor as defendants.
The Company and Gambro have moved to dismiss, transfer or stay the action and
Pall has opposed the motion. On April 18, 2000, Pall moved, without opposition
from the defendants, to dismiss the action and the Court granted Pall's motion.

        A prior lawsuit brought by Pall in February 1996 has concluded. In June
1999, the United States Court of Appeals for the Federal Circuit determined that
the LeukoNet System did not infringe claim 39 of the `321 Patent and Pall has
not appealed that decision.

        The Company has engaged patent counsel to investigate the pending
litigations. The Company believes, based upon its review of these matters, that
a properly informed court should conclude that the manufacture, use and/or sale
by the Company or its customers of the LeukoNet System and the r\LS System do
not infringe any valid enforceable claim of the Pall patents. However, there can
be no assurance that the Company will prevail in the pending litigations, and an
adverse outcome in a patent



                                      -8-
<PAGE>


infringement action would have a material and adverse effect on the Company's
ability to collect royalties from Whatman under the terms of the Royalty
Agreement.

Liquidity and Capital Resources

        The net decrease in cash and cash equivalents in 2000 was $2,028,000.
This decrease is attributable primarily to net cash used in operating activities
of $405,000, net cash used in discontinued operations of $17,332,000 and net
cash used in investing activities of $5,402,000, offset in part by net cash
provided from financing activities of $21,111,000.

        Net cash used in operating activities is primarily attributable to the
net loss from continuing operations of $926,000 and the reduction of accounts
payable of $209,000. This was offset in part by non-cash operating charges for
financing costs related to warrants of $725,000. Net cash used in investing
activities resulted from the net purchase of available-for-sale marketable
securities. Net cash provided from financing activities relates primarily to the
net proceeds from the issuance of common stock of $26,111,000, the majority of
which is due to the Company's March 2000 private placement financing, offset in
part by a $5,000,000 repayment of the Company's commercial line of credit.

        At September 30, 2001 the Company had approximately $16,200,000 in cash
and cash equivalents. The Company believes that its existing cash and cash
equivalents balances are adequate to meet the Company's needs for the
foreseeable future.

        In March 2000, the Company completed a private placement financing
yielding gross proceeds of $27,975,000 in which institutional and corporate
investors purchased 3,730,000 shares of its common stock at a purchase price of
$7.50 per share. The Company has registered 2,551,320 of such shares for resale.
The Company has used the majority of the net proceeds of such financing, which
aggregated $25,791,000, for working capital, capital equipment and general
corporate purposes.

        In April 2000, the Company was notified that the ARC, the Company's
largest customer, was suspending use of the Company's r\LS System pending the
outcome of an investigation of a small number of non-critical adverse reactions
in patients who had received a transfusion of blood filtered with the r\LS. In
September 2000, the Company was notified that the ARC terminated its supply
contract for the r\LS System after the completion of these studies. The extended
period of time taken to prove product improvements that resolve the reactions
was the basis for the termination. In August 2001, the Company and the ARC
signed a termination and release agreement in connection with the supply
contract between the two parties. The agreement provided for the Company to pay
the ARC $600,000 and the release of any and all claims that either party may
have against the other, with certain exceptions.

        In November 2000, the Company was notified that Gambro intended to
terminate its distribution and development contract with the Company and in
March 2001, signed a termination and release agreement with Gambro, effective
November 2000, which ended the distribution and development agreement. In
consideration for the Company's inventory (net book value at December 31, 2000
of $332,000) of products bearing Gambro's company name, and by way of complete
resolution of all issues now outstanding between the Company and Gambro, Gambro
agreed to return 1,011,692 shares of common stock with a fair market value at
closing of $332,000.




                                      -9-
<PAGE>


        The termination of the purchase contract by the ARC and the distribution
and development agreement with Gambro, has had an adverse impact on both the
Company's supply contracts with manufacturers of key components to the r\LS and
inventories it had built in anticipation of expected increased demand for the
Company's product.

        In September 2000, the Company agreed to pay Filtertek Inc. $525,000 in
connection with an amendment to its manufacturing supply agreement and in
December 2000 the Company agreed to pay Filtertek Inc. an additional $180,000 in
connection with a second amendment to its manufacturing supply agreement. No
commitments have been made to make such payments in the future. The agreement
contains minimum purchase requirements in future years, which if not met could
require the Company to purchase certain production equipment of the supplier as
defined in the agreement.

        In December 2000, the Company agreed to pay Command Medical Products
Inc. $600,000 in connection with the termination of its supply and assembly
agreement and release.

        On May 3, 1999, the Company completed a private placement financing with
Gambro. The stock subscription agreement, which the Company entered into with
Gambro in connection with this financing, provided for an initial investment of
$9,000,000 in exchange for 4,500,000 shares of the Company's Common Stock. The
stock subscription agreement also provided Gambro with an option to purchase
additional shares of the Company's Common Stock for up to an aggregate purchase
price of $3,000,000 at any time between August 3, 1999 and May 3, 2000 with the
price per share of Common Stock to be based upon the market price of the
Company's Common Stock. In October 1999, Gambro exercised this option in full.
In connection with the exercise of this option, Gambro purchased 498,355 shares
at a price of $6.02 per share. The price and number of shares reflects the
average price of HMSR stock in the 30 days prior to the exercise date of October
5, 1999.

        In March 1999, Sepracor purchased an additional 1,333,334 shares in a
private placement of Common Stock of the Company for $1.50 per share and
received warrants to purchase an additional 667,000 shares at a price of $1.50
per share. The financing agreement contains certain registration rights and
warrant exercise provisions.

        In September 1998, the Company completed a $5 million revolving line of
credit arrangement with a commercial bank. In September 2000, the revolving line
of credit expired and the $5 million outstanding balance was repaid by the
Company in accordance with the agreement. The revolving line of credit was being
used to help finance the Company's working capital requirements and for general
corporate purposes. Amounts borrowed under the line bore interest at the bank's
prime lending rate plus 1/2% payable monthly in arrears. For the period ended
December 31, 2000, the Company recorded interest expense related to borrowings
under the line of $322,000.

        Sepracor guaranteed to repay amounts borrowed under the line of credit.
In exchange for the guarantee, the Company granted to Sepracor warrants to
purchase up to 1,700,000 shares of the Company's Common Stock at a price of
$0.69 per share. The warrants will expire in the year 2003 and have certain
registration rights associated with them. The Company placed a value of
$1,938,000 on the 1,700,000 warrants as of the date of the final agreement and
amortized this deferred financing charge on a monthly basis over the term of the
line of credit. The Company amortized $725,000, $1,024,000 and $189,000 of this
deferred finance charge and recorded it as interest expense in the Consolidated
Statements of Operations for the periods ended December 31, 2000, 1999, and 1998
respectively.



                                      -10-
<PAGE>


        In March 1997, the Company exercised its right, under the lease
arrangement of its Marlborough, Massachusetts facility, to have a portion of its
leasehold improvements financed and received $140,000 in connection with this
arrangement. This amount will be repaid in 60 equal monthly installments at a
rate of 12% per annum. As of December 31, 2000, there was a balance of $43,000
remaining to be paid on this note.

        In January 1997, the Company entered into a Restructuring Agreement with
respect to the indebtedness incurred by the Company in connection with its
acquisition of the plasma pharmaceutical business unit of Novo Nordisk. Pursuant
to the Restructuring Agreement, approximately $23,000,000 of indebtedness owed
to Novo Nordisk was restructured by way of issuance by the Company to Novo
Nordisk of a 12% convertible subordinated promissory note for a net amount,
after certain reductions and the forgiveness of a $3,000,000 amount, of
$8,687,000. On January 6, 1998, the Company converted the note, pursuant to its
terms, into shares of Common Stock at a conversion price of $10.50 per share, or
827,375 shares. The holder of the note initially contested the conversion of the
note, however, in March 2001, the holder surrendered the note consistent with
the terms of the Resructuring Agreement.

Future Operating Results

        Due to the sale of substantially all of the Company's non-cash assets to
Whatman, the Company has no continuing operations other than administrative
matters which include costs and expenses to maintain the legal existence of the
company and to investigate various strategic business combinations and other
transactions with a view toward maximizing stockholder value. These costs and
expenses include such items as consulting expenses, general legal costs,
corporate audit and tax fees and general employee costs to assist in the orderly
transition of the Company's business in connection with the transactions
contemplated by a merger.

               On November 15, 2001, the Company and its wholly owned
subsidiary, PT Acquisition Corporation, entered into a merger agreement with
Point. Pursuant to the agreement, PT Acquisition Corporation will merge with
Point Therapeutics, Inc. and Point will be the surviving corporation. In the
event that the merger does not occur, the Company will consider other business
alternatives, including but not limited to, other business combinations and a
liquidation of the Company's assets. Given that any proceeds from any such
liquidation and any other cash on hand would be first used to pay the Company's
creditors and outstanding payables, and given certain legal requirements that
the Company maintain certain cash on hand for certain mandated time periods,
there is no assurance as to when, if ever, any proceeds from a liquidation would
be distributed to the Company's Stockholders. In certain instances, if the
Merger Agreement is terminated, the Company will pay Point certain fees.

        At September 30, 2001 the Company had approximately $16,200,000 in cash
and cash equivalents. The Company believes that its existing cash and cash
equivalents balances are adequate to meet the Company's needs for the
foreseeable future.


                                      -11-
<PAGE>


                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K


       a (1)      Financial Statements HemaSure Inc. Consolidated Financial
                  Statements as of December 31, 2000 and for each of the three
                  years in the period ended December 31, 2000. See pages F-1
                  through F-7, which are included herein.

       a (2)      Financial Statement Schedules All schedules are omitted
                  because they are inapplicable, not required or the information
                  is included in the consolidated financial statements or the
                  notes thereto.

       a (3)      Exhibits

                  The exhibits listed in the Exhibit Index immediately preceding
                  the exhibits are filed as part of this Annual Report on Form
                  10-K.

        (b)       No Current Reports on Form 8-K were filed by the Company
                  during the last quarter of the period covered by this report.

        The following trademarks are mentioned in this Annual Report on Form
10-K: HemaSure r\LS and LeukoNet.




                                      -12-
<PAGE>



                                    HMSR Inc.
                                                                            Page
                                                                            ----
                          Index to Financial Statements
                          -----------------------------

Report of Independent Accountants                                           F-2

Consolidated Balance Sheets at December 31, 2000 and 1999                   F-3

Consolidated Statements of Operations for the Years
Ended December 31, 2000, 1999 and 1998                                      F-4

Consolidated Statements of Stockholders' Equity (Deficit)
for the Years Ended December 31, 2000, 1999 and 1998                        F-5

Consolidated Statements of Cash Flows for the Years
Ended December 31, 2000, 1999 and 1998                                      F-6

Notes to Consolidated Financial Statements                                  F-7




                                      F - 1
<PAGE>




                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of HMSR Inc.(formerly known as HemaSure Inc.):

        In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, of stockholders' equity (deficit)
and of cash flows present fairly, in all material respects, the financial
position of HMSR Inc. (formerly known as HemaSure Inc.) and its subsidiaries at
December 31, 2000 and 1999, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2000, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

        The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note A to the
financial statements, the Company has incurred losses from operations since
inception that raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note A, under the heading "Sale of the non-cash assets of the Company". The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

        As explained in Note Q, on May 29, 2001 the Company sold substantially
all of its non-cash assets.

                                               /s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
March 20, 2001, except as to the information
presented in Note Q which is as of May 29, 2001




                                     F - 2
<PAGE>



HMSR Inc.
Consolidated Balance Sheets

December 31,
(In thousands, except par value amounts)

<TABLE>
<CAPTION>

ASSETS                                                                     2000          1999
                                                                           ----          ----

Current assets:
<S>                                                                     <C>           <C>
        Cash and cash equivalents (Note B)                              $ 3,215       $ 5,243
        Marketable securities (Note B)                                    5,463             -
        Deferred financing costs (Note H)                                     -           725
        Prepaid expenses and other current assets                            41           102
                                                                        -------       -------
        Total current assets                                              8,719         6,070

Other assets                                                                  8            18
Net assets of discontinued operation (Note Q)                             3,391         1,357
                                                                        -------       -------

               Total assets                                            $ 12,118       $ 7,445
                                                                       ========       =======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

        Accounts payable                                                   $ 60         $ 269
        Accrued expenses (Note F)                                           943           949
        Notes payable (Note H)                                                -         5,000
                                                                        -------       -------

        Total current liabilities                                         1,003         6,218

Commitments and contingencies (Notes F and G)

Stockholders' equity: (Notes J and K)
        Preferred stock, $0.01 par value, 1,000 shares
          authorized, no shares issued or outstanding

        Common stock, $0.01 par value, 35,000 shares
          authorized, 19,904 and 15,823 shares issued and
          outstanding at December 31, 2000 and December 31,
          1999 respectively                                                 199           158
        Additional paid-in capital                                      112,311        86,241
        Accumulated deficit                                            (101,395)      (85,172)
                                                                      ---------      --------
        Total stockholders' equity                                       11,115         1,227
                                                                      ---------      --------

                  Total liabilities and stockholders' equity           $ 12,118       $ 7,445
                                                                       ========       =======
</TABLE>



    The accompanying notes are an integral part of the financial statements.

                                     F - 3
<PAGE>


HMSR Inc.
Consolidated Statements of Operations

<TABLE>
<CAPTION>

Year Ended December 31,                                     2000            1999          1998
(In thousands, except per share amounts)                    ------          ----          ----

Operating expenses:
<S>                                                         <C>           <C>           <C>
        General and administrative                          $ 805         $ 657         $ 690
                                                            ------        ------        -----

Loss from continuing operations                              (805)         (657)         (690)

Other income (expense):

        Interest income                                       935           201           169
        Interest expense                                   (1,056)       (1,493)         (372)
                                                           -------       -------         -----

Net loss from continuing operations                          (926)       (1,949)         (893)

Discontinued operations:
Loss from discontinued operations                         (15,297)       (8,716)      (11,277)
                                                          --------       -------      --------

Net loss                                                $ (16,223)    $ (10,665)    $ (12,170)
                                                        ==========    ==========    ==========

Net loss per share - basic and diluted:

Continuing operations                                     $ (0.05)      $ (0.14)      $ (0.10)
Discontinued operations                                   $ (0.80)      $ (0.63)      $ (1.25)
                                                          --------      --------      --------
Net loss per share                                        $ (0.85)      $ (0.77)      $ (1.35)
                                                          ========      ========      ========

Weighted average number of shares of common stock
      Outstanding - basic and diluted                      19,046        13,766         9,025
</TABLE>


    The accompanying notes are an integral part of the financial statements.


                                     F - 4
<PAGE>



HMSR Inc.
Consolidated Statements of Stockholders' Equity (Deficit)

Year ended
December 31, 2000, 1999
and 1998 (In thousands)

<TABLE>
<CAPTION>
                                                                                                           Total
                                                     Additional                                    Stockholders'
                                       Common Stock     Paid-in       Unearned         Accumulated        Equity
                                   Shares    Amount     Capital   Compensation   Other     Deficit      (Deficit)
                                   ------    ------     -------   ------------   -----     -------      ---------

<S>                                 <C>        <C>      <C>            <C>       <C>    <C>             <C>
Balance at December 31, 1997        8,164      $ 82     $60,878        $(89)     $(1)   $(62,337)       $(1,467)

Issuance of common stock to
   employees under stock
   plans                               97         1          89                                              90

Issuance of common stock
   for debt                           827         8       8,679                                           8,687

Issuance of warrants                                      1,938                                           1,938

Unearned compensation                                                    89                                  89
   amortization
                                                                                   1                          1
Other

Net loss                                                                                 (12,170)       (12,170)
                                   ------     -----   ---------     -------- --------  ----------       --------

Balance at December 31, 1998        9,088        91      71,584           -        -     (74,507)        (2,832)


Issuance of common stock to
   employees under stock
   plans                              404         4         813                                             817

Issuance of common stock
    in private placements,
    net of issuance costs of $93    6,331        63      13,844                                          13,907

Net loss                                                                                 (10,665)        (10,665)
                                   ------     -----   ---------     -------- --------  ----------       --------

Balance at December 31, 1999       15,823       158      86,241           -        -     (85,172)         1,227

Issuance of common stock to
   employees under stock
   plans                              351         4         316                                             320

Issuance of common stock
    in private placements,
    net of issuance costs
    of $2,184                       3,730        37      25,754                                          25,791

Net loss                                                                                 (16,223)       (16,223)
                                   ------     -----   ---------     -------- --------  ----------       --------
Balance at December 31, 2000       19,904     $ 199   $ 112,311     $     -  $     -   $(101,395)       $11,115
                                   ======     =====   =========     ======== ========  ==========       ========
</TABLE>


     The accompanying notes are an integral part of the financial statements


                                     F - 5
<PAGE>


HMSR Inc.
Consolidated Statements of Cash Flows
Year ended December 31,
(In thousands)

<TABLE>
<CAPTION>
                                                                    2000         1999          1998
                                                                    ----         ----          ----
Cash flows from operating activities:
<S>                                                               <C>       <C>              <C>
   Net loss from continuing operations                            $(926)    $ (1,949)        $(893)

   Adjustments to reconcile net loss from continuing
    operations to net cash used in operating activities:
      Financing costs related to warrants                           725        1,024           189
      Amortization of deferred compensation                           -            -            89
      Accretion of marketable securities discount                   (61)           -            20
   Changes in operating assets and liabilities:
      Prepaid expenses and other current assets                      61          116           (21)
      Accounts payable                                             (209)          33           171
      Accrued expenses                                               (5)          39           465
      Other assets                                                   10           (6)          (10)
                                                                --------     ---------      --------

   Net cash used in operating activities                           (405)        (743)           10
                                                                --------     ---------      --------

   Cash flows from investing activities:

      Purchases of available for sale marketable securities     (31,402)           -       (20,255)
      Maturities of available for sale marketable
       securities                                                26,000            -        27,117
      Unrealized holding loss of available for sale
       marketable securities                                          -            -             1
                                                                --------     ---------      --------

   Net cash (used in) provided by investing activities           (5,402)           -         6,863
                                                                --------     ---------      --------

   Cash flows from financing activities:

      Net proceeds from issuance of common stock                 26,111       14,724            90
      Borrowing from notes payable arrangements                       -            -         5,000
      Repayment of notes payable                                 (5,000)           -             -
                                                                --------     ---------      --------

   Net cash provided by financing activities                     21,111       14,724         5,090
                                                                --------     ---------      --------
   Net increase in cash and cash equivalents from
    continuing operations                                        15,304       13,981        11,963
   Net cash used in discontinued operations                     (17,332)     (10,565)      (11,410)
                                                                --------     ---------      --------

   Net (decrease) increase in cash and cash equivalents          (2,028)       3,416           553

   Cash and cash equivalents at beginning of period               5,243        1,827         1,274
                                                                --------     ---------      --------

   Cash and cash equivalents at end of period                    $3,215       $5,243        $1,827
                                                                  ======       ======        ======

   Supplemental schedule of cash flow information:

      Cash paid during the year for interest                      $ 372        $ 453         $ 503

   Non-cash investing and financing activities:

      Common stock issued for convertible subordinated note        $  -         $  -       $ 8,687

      Value of warrants issued for guaranteed line of credit       $  -         $  -       $ 1,938
</TABLE>


     The accompanying notes are an integral part of the financial statement.

                                     F - 6
<PAGE>


HMSR Inc.
Notes to Consolidated Financial Statements

A.       THE COMPANY:

Nature of the Business

        HMSR Inc. (the "Company"), formerly HemaSure Inc., is utilizing its
proprietary filtration technologies to develop products to increase the safety
of donated blood and to improve certain blood transfusion procedures. The
Company's current blood filtration product ("r\LS System") is designed for use
by blood centers and hospital blood banks worldwide.

        From the Company's inception through the first quarter of fiscal 1996,
HemaSure had sold non-blood related filter products primarily to Sepracor Inc.
("Sepracor"), a related party, for use in chemical processing applications.
Subsequently and throughout 1997, the Company's revenue was derived from the
commercial sales of its LeukoNet System, a medical device designed for the
removal of contaminating leukocytes from donated blood. In February 1998, the
Company determined to discontinue manufacturing the LeukoNet System and focus on
the completion of development and market introduction of its next generation red
cell filtration product. In May 1999, the Company received 510(k) clearance from
the U.S. Food and Drug Administration ("FDA") to market its r\LS System in the
United States.

        The Company initiated sales of the r\LS System in the United States in
the third quarter 1999. In April 2000, the Company was notified that the
American Red Cross ("ARC"), the Company's largest customer, was suspending use
of the Company's r\LS System pending the outcome of an investigation of a small
number of non-critical adverse reactions in patients who had received a
transfusion of blood filtered with the r\LS. In September 2000, the Company was
notified that the ARC terminated its supply contract for the r\LS System based
on the extended period of time taken to prove product improvements resolved
these reactions. In March 2001, the Company signed a termination and release
agreement with Gambro BCT, effective November 2000, which ended their exclusive
distribution rights of the r\LS.

        The Company is subject to risks common to companies in the medical
technology industry, including, but not limited to, development by the Company
or its competitors of new technological innovations, dependence on key
personnel, protection of proprietary technology, and compliance with regulations
of the FDA and similar foreign regulatory authorities and agencies.

        Since its inception, the Company has suffered recurring losses from
operations and, as of December 31, 2000, had an accumulated deficit of $101.4
million. Other than the Company's r\LS System, all of its planned blood-related
products are in the research and development stage, and certain of these
products that may require pre-clinical and clinical testing prior to submission
of any regulatory application for commercial use.

        The accompanying financial statements have been prepared on a basis
which assumes that the Company will continue as a going concern and which
contemplates the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business. The termination and cancellation
of the Company's distribution and sales agreements respectively and the losses
from operations raise substantial doubt with respect to the Company's ability to
continue as a going concern. Management's plans with regard to these matters
include the sale of the non-cash assets of the Company as described below.
Although management continues to pursue this plan, there is no assurance that
the Company will be successful in obtaining shareholder approval. The financial
statements do not include any adjustments that might result from the outcome of
these uncertainties. See Note Q.

Sale of the non-cash assets of the Company

        On February 3, 2001, the Company agreed to sell substantially all of the
Company's non-cash assets to Whatman Bioscience Inc., a Massachusetts
corporation ("Whatman"), a wholly owned subsidiary of Whatman plc, an English
corporation ("Whatman plc") pursuant to the terms of an Asset Purchase Agreement
("Purchase Agreement") executed by the two companies. See Note Q.


                                     F - 7
<PAGE>


        Following approval and adoption of the Purchase Agreement by the
Stockholders of the Company and the satisfaction or waiver of certain other
conditions, the Company will sell substantially all of its non-cash assets to
Whatman. Under the terms of the Purchase Agreement, the consideration to be
received by the Company for the Asset Sale (the "Consideration") will consist of
(1) $10 million in cash, which will be paid to the Company at the Closing; (2)
an additional payment by Whatman, in cash or common stock of Whatman plc at
Whatman's option, which effectively reimburses the Company for its net operating
costs and expenses incurred in connection with the Company's business during the
period beginning on November 1, 2000 and ending on the Closing Date, which
amount is currently anticipated to be approximately $4 million and is expected
to be paid to the Company in the second quarter of 2001; and (3) a royalty of 4%
on sales by Whatman, Whatman plc or their affiliates of certain filtration
products, including products that utilize the Company's technology, up to a
total royalty of $12 million, subject to certain reductions described in the
Royalty Agreement, which include the offset of certain potential liabilities
associated with the Company's patent litigation with Pall Corporation that
Whatman will assume. Accordingly, the total amount of the Consideration to be
paid by Whatman to the Company will be approximately $13 million to $25 million
in cash or cash and common stock of Whatman plc. See Note Q.

        Under the terms of the Purchase Agreement, Whatman will assume and be
legally responsible for certain liabilities of the Company, and Whatman plc will
guarantee Whatman's obligation to pay the Consideration to the Company. In
addition, in the event that Whatman elects to pay the approximately $4 million
reimbursement portion of the Consideration in shares of Whatman plc's common
stock, the Purchase Agreement provides that Whatman plc will guarantee a minimum
per share price to the Company of $4.3864 with respect to any share of Whatman
plc's common stock resold by the Company within 60 days after such shares are
issued to the Company. The Company currently anticipates that any share of
Whatman plc's common stock issued to the Company will be resold by the Company
within 60 days of the issuance to the Company of such share. See Note Q.

        The Company has the right to terminate the Purchase Agreement under
certain circumstances, including if the Board of Directors determines, upon the
written opinion of the Company's counsel, that the failure to terminate the
Purchase Agreement could be expected to be a breach of, or be inconsistent with,
the fiduciary duties of the Board of Directors under applicable law. In the
event of termination for the foregoing reason, the Company is required to pay
Whatman a fee of $500,000 upon the termination of the Purchase Agreement. See
Note Q.

        The obligations of the Company, Whatman and Whatman plc to consummate
the Asset Sale are subject to a number of customary conditions, including, among
others, approval and adoption of the Purchase Agreement by the affirmative vote
of the holders of a majority of the outstanding Shares entitled to vote thereon.
See Note Q.

        It is currently anticipated that the Closing Date will occur on or as
promptly as practicable following the approval and adoption of the Purchase
Agreement by the Stockholders of the Company and the satisfaction or waiver of
all of the other conditions set forth in the Purchase Agreement. Either party
may terminate the Purchase Agreement if the closing does not occur by May 31,
2001. Accordingly, there can be no assurance as to if or when the Asset Sale
will be consummated. See Note Q.

        Upon closing of the Purchase Agreement with Whatman, the Company is
expected to have approximately $17.5 million in a combination of cash, cash
equivalents, marketable securities and Whatman plc stock (based on current cash
and marketable securities levels, the Company's expected "burn rate" through
closing and the terms of the Purchase Agreement). In that regard, the Company is
in the preliminary stages of considering various strategic business combinations
and other transactions with a view toward further enhancing stockholder value
following the consummation of the sale of its assets and business to Whatman.See
Note Q.

        In the event that the Asset Sale does not occur, the Company will
consider other business alternatives, including but not limited to other
business combinations and a liquidation of the Company's assets. Given that any
proceeds from any such liquidation and any other cash on hand would be first
used to pay the Company's creditors and outstanding payables, and given certain
legal requirements that the Company maintain certain cash on hand for certain
mandated time periods, there is no assurance as to when, if ever, any proceeds
from a liquidation would be distributed to the Company's Stockholders. In
certain instances, if the Purchase Agreement is terminated, the Company will pay
Buyer certain fees. See Note Q.


                                     F - 8
<PAGE>


B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

        The consolidation financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany transactions and
balances have been eliminated. Certain reclassifications have been made to the
prior years consolidated financial statements to conform to current
presentation. These reclassifications have no effect on the Company's financial
position or results of operations.

        Subsequent to December 31, 2000, the Company sold certain assets to
Whatman as described in Note A. Accordingly , the accompanying financial
statements have been reclassified to present the sale of the red blood
filtration business net assets in results of operations as discontinued
operations, see Note Q.

Use of Estimates in the Preparation of Financial Statements

        The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at December 31, 2000 and 1999
and the reported amounts of revenues and expenses during the years ended
December 31, 2000, 1999 and 1998. Actual results could differ from those
estimates.

Cash and Cash Equivalents

        The Company considers all demand deposits, money market instruments and
repurchase agreements to be cash and cash equivalents. Cash equivalents of
$1,221,000 and $4,743,000 and at December 31, 2000 and 1999, respectively,
consist of repurchase agreements with a commercial bank. The carrying amount
approximates fair value because of the short maturity of those instruments.

Marketable Securities

        Management determines the appropriate classification of its investments
in debt and equity securities at the time of purchase. At December 31, 2000, all
marketable securities were classified as available for sale and carried at fair
value, with the unrealized gains and losses, if any, reported as a separate
component of stockholders' equity. The Company held no marketable securities at
December 31, 1999 and 1998.

        The amortized cost of debt securities classified as available for sales
is adjusted for accretion of discounts to maturity. Such accretion is included
in interest income. Realized gains and losses are included in other income or
expense. The cost of securities sold is based on the specific identification
method.

        The fair value of available for sale marketable securities at December
31, 2000 was $5,463,000 and represented Commercial Paper and United State
Government Agency Obligations of $2,488,000 and $ 2,975,000, respectively.

        The Company's policy when applicable is to diversify the investment
portfolio to reduce exposure of principal to credit and investment sector risk.
At December 31, 2000, investments were placed with a variety of high credit
quality financial institutions or other issuers.

Inventories of discontinued operation (See Note Q)

        Inventories are stated at the lower of cost (first-in, first-out) or
market.


                                     F - 9
<PAGE>


Property and Equipment of discontinued operation (See Note Q)

        Property and equipment are stated at cost. Costs of major additions and
betterments are capitalized; maintenance and repairs, which do not improve or
extend the life of the respective assets, are charged to operations. On
disposal, the related cost and accumulated depreciation or amortization is
removed from the accounts and any resulting gain or loss is included in the
results of operations. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets. All laboratory, manufacturing and
office equipment have estimated useful lives of three to 10 years.

Revenue Recognition of discontinued operation (See Note Q)

        Revenues from product sales are recognized as defined by Generally
Accepted Accounting Principles in accordance with SEC Staff Accounting Bulletin
No. 101, when persuasive evidence of the arrangement exist, delivery has
occurred, the price is fixed or determinable, and collectibility is reasonably
assured. Revenue from product sales is recognized either when the goods are
shipped and title and risk of loss have transferred to the customer, or in
instances where title and risk of loss does not transfer to the customer upon
shipment, the Company recognizes revenue upon delivery. The Company accrues for
estimated warranty costs and other allowances when revenue is recognized based
on its experience.

Research and Development of discontinued operation (See Note Q)

        Research and development costs are expensed in the year incurred.

Net Loss Per Share

        The Company follows Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("SFAS 128"), which established standards for computing and
presenting earnings per share ("EPS"). Net loss per common share is based on the
weighted average number of shares of common stock outstanding during each
period. Potential common stock has not been included because the effect would be
antidilutive. The potential common stock of the Company consist of common stock
warrants (see Notes M and H), stock options (see Note K). The Company had
4,920,000, 4,757,000 and 4,214,000 potential common stock shares as of December
31, 2000, 1999, and 1998, respectively.

Income Taxes

        Deferred income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities reflect the estimated future tax
consequences attributable to tax benefit carryforwards and to "temporary
differences" between amounts of assets and liabilities for financial reporting
purposes and such amounts as measured by tax laws. A valuation reserve is
established if it is more likely than not that all or a portion of the deferred
tax asset will not be realized.

        Net operating losses of the Company incurred while operating as a
division of Sepracor are not available for carryforward because the Company's
results for those periods were included in the tax returns of Sepracor.
Additionally, based upon the Internal Revenue Code and changes in company
ownership, utilization of the Company's net operating loss may be subject to an
annual limitation.

Comprehensive Income

        For all periods presented, net income and comprehensive income are the
same due to the realization of all previously unrealized gains and losses in the
statement of operations.

New Accounting Standards

        In June 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as
amended by SFAS No. 137 and SFAS No. 138, which establishes accounting and
reporting standards for derivative instruments and hedging activities. The
standard



                                     F - 10
<PAGE>


requires that the Company recognize all derivatives as either assets or
liabilities on the balance sheet and measure those instruments at fair value.
The Company, to date, has not engaged in derivative and hedging activities, and
accordingly does not believe that the adoption of SFAS No. 133 will have a
material impact on its financial statements and related disclosures. The Company
will adopt SFAS No. 133 as amended by SFAS No. 137 and SFAS No. 138 in fiscal
year 2001.

        In December 1999, the Securities and Exchange Commission ("SEC") issued
SAB No. 101, "Revenue Recognition in Financial Statements," as amended by SAB
101A and 101B, which is effective no later than the quarter ended December 31,
2000. SAB No. 101 clarifies the SEC's views regarding the recognition of
revenue. The Company adopted SAB No. 101 in fiscal 2000. The adoption of SAB No.
101 did not have a significant impact on the Company's financial position or
results of discontinued operations.

        In March 2000, the FASB issued FASB Interpretation ("FIN") No. 44,
"Accounting for Certain Transactions Involving Stock Compensation -- an
Interpretation of APB Opinion No. 25." FIN No. 44 primarily clarifies (a) the
definition of an employee for purposes of applying APB Opinion No. 25, (b) the
criteria for determining whether a plan qualifies as a noncompensatory plan, (c)
the accounting consequence of various modifications to the terms of previously
fixed stock option awards and (d) the accounting for an exchange of stock
compensation awards in a business combination. The adoption of FIN No. 44 did
not have a significant impact on the Company's financial position or results of
operations.

        In September 2000, the FASB issued SFAS No. 140 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities--a replacement of FASB Statement No. 125" ("SFAS 140"). SFAS 140
revises the standards for accounting for securitizations and other transfers of
financial assets and collateral and requires certain disclosures, but it carries
over most of SFAS 125's provisions without reconsideration. This Statement is
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after March 31, 2001. This Statement is effective for
recognition and reclassification of collateral and for disclosures relating to
securitization transactions and collateral for fiscal years ending after
December 15, 2000. The Company is currently analyzing this new standard.

C. ACCOUNTS RECEIVABLE OF DISCONTINUED OPERATION (See Note Q):

        The Company's 2000 and 1999 trade receivables from discontinued
operations primarily represent amounts due for product sales. The allowance for
doubtful accounts was $0 and $5,000 at December 31, 2000 and 1999, respectively.

        The Company performs ongoing credit evaluations of its customers and
generally does not require collateral.

D. INVENTORY OF DISCONTINUED OPERATION (See Note Q):

        Inventory of the discontinued operation consisted of the following at
December 31:

(In thousands)                                       2000            1999
                                                     ----            ----
Raw materials                                     $ 2,200            $393
Work in Progress                                       78             401
Finished goods                                          7              12
                                                  -------          ------
                                                  $ 2,285            $806
                                                  =======            ====


                                     F - 11
<PAGE>


E. PROPERTY AND EQUIPMENT OF DISCONTINUED OPERATION (See Note Q):

        Property and equipment of the discontinued operation consisted of the
following at December 31:


(In thousands)                                            2000             1999
                                                          ----             ----
Laboratory and manufacturing equipment                  $1,430           $1,835
Leased laboratory and manufacturing equipment                -              149
Office equipment                                           704              858
Leasehold improvements                                     858              772
                                                       -------          -------
                                                         2,992            3,614

Accumulated depreciation and amortization               (1,759)          (2,324)
                                                       -------          -------

                                                         1,233            1,290
Construction in progress                                   617              257
                                                       -------          -------

                                                       $ 1,850           $1,547
                                                       =======           ======


                                                               .


        Depreciation and amortization expense of the discontinued operation was
$636,000, $475,000 and $391,000, in 2000, 1999 and 1998, respectively. In 2000,
$425,000 was charged to the loss from discontinued operations related to the
fixed asset write-down of two production units to their net scrap value, as they
will no longer be used in the manufacturing process from the discontinued
operation.

        Accumulated amortization of assets under lease of the discontinued
operation was $106,000 for the period ended December 31, 1999.



F. ACCRUED EXPENSES AND COMMITMENTS AND CONTINGENCIES:

        Accrued expenses consist of the following at December 31:

(In thousands)                                 2000               1999
                                               ----               ----
Employee Compensation                          $ 91               $189
Professional fees                               428                155
Interest on notes payable                         -                 41
Customer refunds                                664                175
Services                                         12                678
Miscellaneous                                   194                282
                                                ---                ---
                                              1,389              1,520

Less accrued expenses of
discontinued operation:                        (446)              (571)
                                              -----              -----

                                                943                949
                                                ===                ===


        In the event of a termination of the Purchase Agreement with Whatman,
the Company is required to pay Whatman a fee of $500,000. See Note Q.

        In January 1997, the Company entered into a Restructuring Agreement with
respect to the indebtedness incurred by the Company in connection with its
acquisition of the plasma pharmaceutical business unit of Novo Nordisk. Pursuant
to the Restructuring Agreement, approximately $23,000,000 of indebtedness owed
to Novo Nordisk was restructured by way of issuance by the Company to Novo
Nordisk of a 12% convertible subordinated



                                     F - 12
<PAGE>


promissory note for a net amount, after certain reductions and the forgiveness
of a $3,000,000 amount, of $8,687,000. On January 6, 1998, the Company converted
the note, pursuant to its terms, into shares of Common Stock at a conversion
price of $10.50 per share, or 827,375 shares. The holder of the note initially
contested the conversion of the note, however, in March 2001, the holder
surrendered the note consistent with the terms of the Resructuring Agreement.

G. LEASE OBLIGATIONS OF DISCONTINUED OPERATION (See Note Q):

        The Company leased certain laboratory, research and office space from
Sepracor through 1995. In 1995, the Company executed a lease for these facility
requirements, which commenced in February 1996 and extends through February
2004. The lease provides for two five-year renewal options. Under the terms of
the lease, the Company is required to pay its allocated share of taxes and
operating costs in addition to the base annual rent.

        The Company leased various laboratory, manufacturing and computer
equipment under noncancelable capital leases. Terms of arrangements with the
leasing company contain bargain purchase provisions at the expiration of the
lease term, which range from 36 months to 42 months. In some instances, the
Company was required to make a deposit of 20% of the original equipment cost,
which earned interest at an annual rate of 4%. As of December 31, 2000, all
lease agreements have expired and there are no amounts outstanding under the
Lease Agreements. Under certain circumstances, Sepracor was the guarantor of
debt incurred to acquire equipment under the leasing facilities. The interest
rate charged on the Company's capital leases ranges from 14% to 21%.

        Future minimum payments of the discontinued operations under all
non-cancelable operating leases in effect at December 31, 2000 are as follows:



     (In thousands)                            Discontinued     Continuing
     Year                                        Operations     Operations
     ----                                            Leases         Leases
                                                     ------         ------

     2001                                              $295          -
     2002                                               306          -
     2003                                               306          -
     2004                                                26          -
     2005 and thereafter                                  -          -
                                                       ----      -----
     Total minimum lease payments                      $933      $   -
                                                       ----      -----

        The total charged to rent expense included in the loss from discontinued
operations for all non-cancelable leases including amounts for building
maintenance, utilities and other operating costs was $872,000, $660,000, and
$833,000, in 2000, 1999, and 1998, respectively.

        In December 1999 the Company entered into an exclusive five-year
manufacturing and supply agreement with a major supplier of a component to the
Company's product. The Company completed two amendments to this agreement in
both September and December 2000 in which it agreed to pay Filtertek a total of
$705,000. No commitments have been made to make such payments in the future. The
agreement contains minimum purchase requirements in future years, which if not
met could require the Company to purchase certain production equipment of the
supplier as defined in the agreement. The supplier, under certain conditions,
will acquire such equipment during fiscal years 2000 and 2001. The agreement
also contains provisions under which the agreement could become non-exclusive
under certain conditions as defined in the agreement and for extensions of the
term of the agreement.


                                     F - 13
<PAGE>


H. NOTES PAYABLE:

        Notes payable consisted of the following at December 31:

(In thousands)                                    2000              1999
                                                  ----              ----
Leasehold improvements financing of                $43           $    73
discontinued operation

Revolving line of                                    -             5,000
credit of continuing                               ---           -------
operation                                           43             5,073

Less current portion                                34             5,030
                                                    --             -----
                                                   $ 9           $    43
                                                   ===           =======

        In March 1997, the Company exercised its right, under the lease, to have
a portion of its leasehold improvements financed and received $140,000 in
connection with this arrangement. This amount will be repaid in 60 equal monthly
installments with an interest rate of 12% per annum.

        In September 1998, the Company completed a $5 million revolving line of
credit arrangement with a commercial bank. In September 2000, the revolving line
of credit expired and was repaid by the Company in accordance with the
agreement. The revolving line of credit was being used to help finance the
Company's working capital requirements and for general corporate purposes.
Amounts borrowed under the line bear interest at the bank's prime lending rate
plus 1/2% payable monthly in arrears. For the year ended December 31, 2000, the
Company recorded interest expense related to borrowings under the line of
$322,000.

        Sepracor guaranteed to repay amounts borrowed under the line of credit.
In exchange for the guarantee, the Company granted to Sepracor warrants to
purchase up to 1,700,000 shares of the Company's common stock at a price of
$0.69 per share. The warrants will expire in the year 2003 and have certain
registration rights associated with them. HemaSure placed a value of $1,938,000
on the 1,700,000 warrants as of the date of the final agreement and amortized
this deferred financing charge on a monthly basis over the term of the line of
credit. For the periods ended December 31, 2000 and 1999 the Company amortized
$725,000 and $1,024,000, respectively, of this deferred finance charge and
recorded it as interest expense in the Statement of Operations.

I. SEGMENT INFORMATION FROM DISCONTINUED OPERATION (See Note Q):

        The discontinued operation of the Company operated in the blood
filtration business.

        Percentage of revenues derived from significant customers from the
discontinued operation is as follows:


Year Ended December 31:                 2000            1999            1998
                                        ----            ----            ----
American Red Cross                       50%             66%             53%
Gambro, Inc.                             49%             33%               -
Other                                      -               -             10%

J. STOCKHOLDERS' EQUITY:

        In March 1999, the Company completed a private placement financing with
Sepracor in which the Company received $2,000,000 in exchange for 1,333,334
shares of the Company's common stock and warrants to purchase an additional
667,000 shares of common stock at $1.50 per share. The warrants will expire in
the year 2004 and have certain registration rights associated with them. In
certain circumstances, the Company is entitled to require Sepracor to exercise
these warrants.

        On May 3, 1999, the Company completed a private placement financing with
Gambro Inc. ("Gambro"). The stock subscription agreement, which the Company
entered into with Gambro in connection with this financing, provided for an
initial investment of $9,000,000 in exchange for 4,500,000 shares of the Company
common stock. The stock subscription agreement also provided Gambro with an
option to purchase additional



                                     F - 14
<PAGE>


shares of the Company's common stock for up to an aggregate purchase price of
$3,000,000 at any time between August 3, 1999 and May 3, 2000 with the price per
share of common stock to be based upon the market price of the Company's common
stock. In October 1999, Gambro exercised this option in full. In connection with
the exercise of this option, Gambro purchased 498,355 shares at a price of $6.02
per share. The price and number of shares reflected the average price of the
Company's stock in the 30 days prior to the exercise date of October 5, 1999. In
March 2001, the Company signed a termination and release agreement with Gambro,
effective November 2000, which ended the distribution and development agreement.
In consideration for the Company's inventory from the discontinued operation
(net book value at December 31, 2000 of $332,000) of products bearing Gambro's
company name, and by way of complete resolution of all issues now outstanding
between the Company and Gambro, Gambro agreed to return 1,011,692 shares of
common stock with a fair market value at closing of $332,000.

        In March 2000, the Company completed a private placement financing
yielding gross proceeds of $27,975,000 in which institutional investors
purchased 3,730,000 shares of its common stock at a purchase price of $7.50 per
share. The Company has registered 2,551,320 of such shares for resale. The
Company has used the majority of the net proceeds of such financing, which
aggregated $25,791,000, for working capital, capital equipment and general
corporate purposes.

K. STOCK OPTION PLANS:

        Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS No. 123"), encourages, but does not require
companies to record compensation cost for stock-based employee compensation
plans at fair value. The Company has chosen to continue to account for
stock-based compensation using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. Accordingly, compensation cost for
stock options is measured as the excess, if any, of the quoted market price of
the Company's stock at the date of the grant over the amount an employee must
pay to acquire the stock.

        The Company has two stock options plans currently in effect under which
future grants may be issued: The 1994 Stock Option Plan, as amended, and the
1994 Director Option Plan, as amended (collectively, the "Plans"). A total of
3,528,400 shares have been authorized for grants of options or shares, of which
410,400 are still available for grant. Stock options granted during 2000 and
1999 generally have a maximum term of ten years and vest ratably over a period
of two to five years.

        A summary of the Company's stock option activity for the years ended
December 31 follows:

<TABLE>
<CAPTION>
                                              Number of Options         Weighted Average
                                                 (In thousands)           Exercise Price
----------------------------------------------------------------------------------------
<S>                     <C> <C>                           <C>                      <C>
Outstanding at December 31, 1997                          2,019                    $3.25
Granted                                                   2,029                    $0.72
Exercised                                                     -                        -
Terminated                                               (1,534)                   $3.06
                                                        -------                    -----

Outstanding at December 31, 1998                          2,514                    $1.31
Granted                                                     302                    $5.27
Exercised                                                  (363)                   $2.02
Terminated                                                  (63)                   $0.94
                                                           ----                    -----

Outstanding at December 31, 1999                          2,390                    $1.72
Granted                                                     357                    $4.62
Exercised                                                  (110)                   $1.45
Terminated                                                  (84)                   $5.22
                                                           ----                    -----

Outstanding at December 31, 2000                          2,553                    $2.03
                                                          =====                    =====
</TABLE>



                                     F - 15
<PAGE>


        The following table summarizes the status of the Company's stock options
at December 31, 2000:

<TABLE>
<CAPTION>
                OPTIONS OUTSTANDING                               OPTIONS EXERCISABLE
------------------------------------------------------   -------------------------------------
                                             Weighted    Weighted       Number        Weighted
                              Number         Average     Average     Exercisable       Average
                          Outstanding As    Remaining    Exercise       As of         Exercise
                            Of 12/31/00    Contractual    Price        12/31/00         Price
Range of Exercise Prices  (In thousands)       Life                  (In thousands)
------------------------  --------------   -----------   --------    --------------   --------
<S>  <C>           <C>         <C>             <C>       <C>            <C>            <C>
     $ .63    -    $ .94       1,490           7.1       $ .64          727            $ .64
     $1.25    -    $1.75         288           7.5      $ 1.27          118            $1.29
     $2.00    -    $2.12         157           5.1      $ 2.04          107            $2.00
     $3.22    -    $4.88          57           6.7      $ 3.77           38            $3.75
     $5.00    -    $5.94         523           9.0      $ 5.30           53            $5.60
    $12.38    -   $16.25          38           5.3      $14.35           34           $14.57
                               -----           ---      ------           --           ------
                               2,553           7.4       $2.03        1,077            $1.65
</TABLE>

        The weighted average grant date fair value for options granted during
2000, 1999 and 1998 was $3.12, $3.57 and $0.49 per option, respectively. The
fair value of these options at date of grant was estimated using the
Black-Scholes model with the following weighted average assumptions for 2000,
1999 and 1998: risk-free interest rate of 5.5%; dividend yields of 0%;
volatility factor of the market price of the Company's common stock of 75%; and
a weighted average expected life of the options of 5.5 years.

        During 1994 and prior to the Company's initial public offering, options
to purchase 482,000 shares of common stock were granted under the Plans at an
exercise price of $2.00 per share. The estimated fair market value on the date
of grant was $4.00 per share. The Company recorded compensation expense from
1994 through 1998, which expense was $89,000 in 1998.

        In 1995, the Company adopted the 1995 Employee Stock Purchase Plan (the
"Stock Purchase Plan"). Under the Stock Purchase Plan, an aggregate of 500,000
shares of common stock may be purchased by employees at 85% of market value on
the first or last day of each six -month offering period, whichever is lower,
through accumulation of payroll deductions ranging from 1% to 10% of
compensation as defined, subject to certain limitations. Options were exercised
to purchase 240,117 shares for a total of $159,000 during the year ended
December 31, 2000 and 41,071 shares for a total of $117,000 during the year
ended December 31, 1999. At December 31, 2000, 51,280 shares of common stock
were reserved for future issuance under the plan.

        Had compensation cost for the Company's stock option plans been
determined based on the fair value at the grant date for awards in 2000, 1999
and 1998 consistent with the provisions of SFAS No. 123, the Company's net loss
and net loss per share would have been reduced to the pro forma amounts
indicated below. The application of SFAS No. 123 to the employee stock purchase
plan would not result in a significant difference from reported net income and
earnings per share.

<TABLE>
<CAPTION>

(In thousands; except per share amounts)                   2000            1999          1998
                                                           ----            ----          ----

<S>                                                   <C>             <C>          <C>
Net loss - as reported                                $(16,223)       $(10,665)    $ (12,170)

Net loss - pro forma                                  $(17,062)       $(11,274)    $ (12,610)

Net loss per share - as reported - basic and           $ (0.85)        $ (0.77)      $ (1.35)
diluted

Net loss per share - pro forma - basic and             $ (0.90)        $ (0.82)      $ (1.40)
diluted
</TABLE>

        The pro forma effect on net income for 2000, 1999 and 1998 is not
representative of the pro forma effect on net income in future years because it
does not take into consideration pro forma compensation expense related to
grants made prior to 1995 or anticipated future option activity.


                                     F - 16
<PAGE>


        In connection with the initial public offering, the Company granted to
the underwriter an option to purchase 217,500 shares of common stock at an
exercise price equal to 150% of the initial public offering price or $10.50 and
subject to adjustment in certain circumstances. The option was exercisable at
any time or from time to time after April 14, 1995 and before April 14, 1999.
The option was not exercised.

L. INCOME TAXES:

        The components of the Company's deferred tax assets and liabilities are
as follows at December 31:

<TABLE>
<CAPTION>

 (In thousands)                                                      2000                1999
                                                                     ----                ----
Deferred taxes:
<S>                                                               <C>                 <C>
           Net operating loss carryforwards                       $35,747             $31,315
           Research and development expense
            capitalization                                          5,180               4,392
           Tax credit carryforwards                                 1,632               1,235
           Inventory reserves                                         803                  20
           Deferred compensation                                      285                 285
           Accrued charges not paid                                   527                 512
           Other                                                        -                   7
           Property and equipment                                     214                   1
                                                                 --------            --------
                                                                   44,388              37,767
Valuation allowance                                               (44,388)            (37,767)
                                                                 --------            --------
Net deferred taxes                                               $      -            $      -
                                                                 ========            ========
</TABLE>


        Due to the uncertainty surrounding the realization of the favorable tax
attributes in future tax returns, the Company has placed a valuation allowance
against its otherwise recognizable net deferred tax assets.

        The Company's statutory and effective tax rates were 34% and 0%,
respectively, for 2000 and 1999. The effective tax rate was 0% due to a net
operating loss and the non-recognition of any net deferred tax asset. At
December 31, 2000, the Company had federal and state tax net operating loss
carryforwards ("NOLs") of approximately $85,000,000 and $73,000,000,
respectively, to offset future regular taxable earnings. The federal and state
NOLs begin to expire in 2009 and 2001. Approximately $7,000,000 of state NOLs
expired in 2000. The Company has federal and state research and development tax
credits of approximately $890,000 and $680,000, respectively, which both begin
to expire in 2009. The Company has a state investment tax credit carryforward of
approximately $50,000, of which approximately $6,900 expired in 2000.

M. AGREEMENTS:

        In January 2000, the Company entered into a non-exclusive agreement with
Command Medical Products, Inc. ("Command"), to (i) act as its manufacturer and
supplier of dry bags used in its r\LS System and (ii) assemble the filters used
in its r\LS System, subject to certain terms and conditions. In December 2000,
the Company agreed to pay Command $600,000 in connection with the termination of
its supply and assembly agreement and release.

        In December 1999, the Company entered into an exclusive five-year
manufacturing and supply agreement with Filtertek, Inc. ("Filtertek"), a major
supplier of a component to the Company's product. The Company completed two
amendments to this agreement in both September and December 2000 in which it
agreed to pay Filtertek a total of $705,000. No commitments have been made to
make such payments in the future. The agreement contains minimum purchase
requirements in future years, which if not met could require the Company to
purchase certain production equipment of the supplier as defined in the
agreement. The supplier, under certain conditions, will acquire such equipment
during fiscal years 2000 and 2001. The agreement also contains provisions under
which the agreement could become non-exclusive under certain conditions as
defined in the agreement and for extensions of the term of the agreement.

        In July 1999, the Company entered into a master purchase agreement with
the ARC that provides for the sale of the r\LS System by the Company to the ARC
on specified terms. In April 2000, the Company was



                                     F - 17
<PAGE>


notified that the ARC, the Company's largest customer, was suspending use of the
Company's r\LS System pending the outcome of an investigation of a small number
of non-critical adverse reactions in patients who had received a transfusion of
blood filtered with the r\LS. In September 2000, the Company was notified that
the ARC terminated its supply contract for the r\LS System based on the extended
period of time taken to prove product improvements resolved these reactions. The
Company and the American Red Cross are currently negotiating a termination of
the purchase contract and a release of any and all claims that either party may
have against the other, with certain exceptions.

        In August 1998, the Company completed an amended and restated Master
Strategic Alliance Agreement with the ARC BioMedical Services, which provides
for, among other things, the development and enhancement of a number of
filtration products, based on the Company's core technology. The agreement has a
term of five years, unless previously terminated, and can be renewed or
extended. In connection with this agreement, the ARC is eligible to receive
warrants to purchase common stock of the Company up to a maximum of 400,000
shares based on certain milestones and at a price of $1.51 per share, as
determined at the date of this agreement. As of December 31, 2000 no warrants
have been issued under this Agreement.

        In 1998, the Company completed a distribution and development agreement,
which was amended in May 1999, with Gambro to act as the Company's exclusive
distributor of the Company's r\LS System worldwide, except for sales to the ARC.
In March 2001, the Company signed a termination and release agreement with
Gambro BCT, effective November 2000, which ended the distribution and
development agreement. In March 2001, the Company signed a termination and
release agreement with Gambro, effective November 2000, which ended the
distribution and development agreement. In consideration for the Company's
inventory (net book value at December 31, 2000 of $332,000) of products bearing
Gambro's company name, and by way of complete resolution of all issues now
outstanding between the Company and Gambro, Gambro agreed to return 1,011,692
shares of common stock with a fair market value at closing of $332,000.

        As of March 2, 2001, Gambro owned 31% of the Company's issued and
outstanding Common Stock. Effective with the return of 1,011,692 shares of
common stock by Gambro in connection with the termination and release of the
supply and development agreement between the Company and Gambro, Gambro will own
27% of the issued and outstanding common stock of the Company.

        Under a Technology Transfer and License Agreement, Sepracor transferred
to the Company all technology owned or controlled by Sepracor, including trade
secrets, patents and patent applications that relates to and is used in
researching developing or manufacturing products in the Company Field as defined
in the agreement. Further, Sepracor granted an exclusive license to the Company
for any improvements to the transferred technology, which were developed, or
otherwise acquired, by Sepracor during the period beginning on the date of the
Technology Transfer and License Agreement and terminating on the earlier of
January 1, 1998 or the acquisition of Sepracor or the Company (the "Effective
Period"). The Company granted to Sepracor an exclusive license to the
transferred technology for the development, manufacture, use or sale of any
products within the field of chiral synthesis, chiral separations and the
development, manufacture, use or sale of chiral drugs and chiral drug
intermediates, as well as a non-exclusive license to the transferred technology
for the development, manufacture, use or sale of any products outside of the
Company Field. All licenses were royalty-free. Sepracor also granted the Company
a right of first refusal to any product, which Sepracor proposed to sell, or
license a third party to sell during the Effective Period, for use within the
Company Field.

        In addition, beginning in April 1998, Sepracor was entitled to certain
rights with respect to the registration under the Securities Act of 1933, as
amended, of a total of 3,000,000 shares of common stock related to the
technology transfer and establishment of the Company in 1993. These rights
provide that Sepracor may require the Company, on two occasions, to register
shares having an aggregate offering price of at least $5,000,000, subject to
certain conditions and limitations.

        In September 1998, the Company obtained a $5 million revolving line of
credit arrangement with a commercial bank. Sepracor guaranteed repayment of
amounts borrowed under the line of credit. In exchange for the guarantee, the
Company granted to Sepracor warrants to purchase up to 1,700,000 shares of the
Company's common stock at a price of $0.69 per share. The warrants will expire
in the year 2003 and have certain



                                     F - 18
<PAGE>


registration rights associated with them. In September 2000, the revolving line
of credit expired and the $5 million outstanding was repaid by the Company in
accordance with the agreement. (See Note H.)

        In March 1999, the Company completed a private placement financing with
Sepracor in which the Company received $2,000,000 in exchange for 1,333,334
shares of the Company's common stock and warrants to purchase an additional
667,000 shares of common stock at $1.50 per share. The warrants will expire in
the year 2004 and have certain registration rights associated with them. In
certain circumstances, the Company is entitled to require Sepracor to exercise
these warrants.

        As of March 2, 2001, Sepracor owned 22% of the Company's issued and
outstanding Common Stock. Effective with the return of 1,011,692 shares of
common stock by Gambro in connection with the termination and release of the
supply and development agreement between the Company and Gambro, Sepracor will
own 23% of the issued and outstanding common stock of the Company.

        In March 2001, the Company signed a termination and release agreement
with Gambro, effective November 2000, which ended the distribution and
development agreement. Gambro cited the termination of the Company's supply
contract with ARC and other recent business conditions as the reasons for
terminating the agreement. In consideration for the Company's inventory (net
book value at December 31, 2000 of $332,000) of products bearing Gambro's
company name, and by way of complete resolution of all issues now outstanding
between the Company and Gambro, Gambro agreed to return 1,011,692 shares of
common stock with a fair market value at closing of $332,000.

N. EMPLOYEES' SAVINGS PLAN:

        The Company has a 401(k) plan for all employees. Under the provisions of
the plan, employees may voluntarily contribute up to 15% of their compensation
subject to statutory limitations. In addition, the Company can make a matching
contribution at its discretion. In 1999 the Company provided approximately
$40,000 of matching contributions. There were no employer contributions to the
plan in 2000.

O. LITIGATION:

        The Company is a defendant in a lawsuit brought by Pall Corporation
("Pall") regarding the Company's LeukoNet System, which is no longer made or
sold by the Company. In a complaint filed in November 1996, Pall alleged that
the manufacture, use and/or sale of the LeukoNet System infringed upon two
patents held by Pall. Pall dropped its allegations concerning infringement of
one of the patents and alleges only that the LeukoNet System infringed Pall's
U.S. Patent No. 4,952,572 (the "`572 Patent").

        With respect to the allegations concerning the `572 Patent, the Company
answered the complaint stating that the LeukoNet System does not infringe any
claim of the asserted patents. Further, the Company counterclaimed for
declaratory judgment of invalidity, noninfringement and unenforceability of the
`572 Patent. Pall amended its complaint to add Lydall, Inc., whose subsidiary
supplied the filter media for the LeukoNet System, as a co-defendant. The
Company filed for summary judgment of non-infringement, and Pall cross-filed for
summary judgement of infringement at the same time. Lydall, Inc. supported the
Company's motion for summary judgment of non-infringement, and filed a motion
for summary judgment that the asserted claims of the `572 patent are invalid as
a matter of law. Discovery has been completed in the action. The Court held a
hearing on the summary judgment motions on April 18, 2000. No decision has been
made on the motions.

        The Company and Gambro BCT, Inc. filed a complaint for declaratory
relief against Pall in the United States District Court of Colorado. The Company
and Gambro BCT seek declaratory relief that the `572 Patent, Pall's U.S. Patent
No. 5,451,321 (the "`321 Patent") and Pall's U.S. Patent No.'s 5,229,012,
5,344,561, 5,501,795 and 5,863,436 are invalid and not infringed by the
Company's r\LS System and methods of using the r\LS System. Pall moved to
dismiss or transfer to the Eastern District of New York or, in the alternative,
to stay this action. The Company and Gambro BCT opposed Pall's motion. On July
16, 1999, the United States District Court of Colorado denied Pall's motion to
transfer or, in the alternative, to stay the action. On September 30, 1999, the
Court denied Pall's motion to dismiss the action. On October 20, 1999, Pall
submitted a counterclaim alleging that the Company's r\LS System infringes its
patents that are the subject of the lawsuit and that the Company and Gambro BCT
tortiously interfered and unfairly competed with Pall's business. The Company
and Gambro BCT replied to Pall's counterclaim and denied Pall's allegations of
tortious interference, unfair competition and patent infringement.

        On July 13, 2000, Pall filed a Complaint in the United States District
Court for the District of Colorado against the Company, Gambro BCT, Inc. and
Gambro AB alleging that the Company's r\LS system infringes Pall's U.S. Patent
No. 6,086,770 (the "`770 Patent"). On August 11, 2000, this action was
consolidated with the earlier declaratory relief action in the United States
District Court for the District of Colorado. The Company,



                                     F - 19
<PAGE>


Gambro BCT, Inc. and Gambro AB answered the complaint, denied the allegations of
infringement and submitted a counterclaim alleging that Pall's `770 patent is
invalid, not infringed and unenforceable. In September 2000, Pall answered the
counterclaim and denied the allegations of noninfringement, invalidity and
unenforceability. Discovery is proceeding.

        On December 15, 2000, Pall filed a complaint against Filtertek, Inc.
("Filtertek") alleging that Filtertek, a manufacturer of the r\LS filter,
infringes the seven above-mentioned Pall patents. Filtertek answered the
complaint on January 31, 2001, denied Pall's allegations of infringement and
asserted that the claims of the Pall patents are invalid and/or unenforceable
and that Pall is estopped from asserting infringement against Filtertek by
reason of Pall's prior conduct with Filtertek. This action has been consolidated
with the other actions pending in Colorado. Discovery is now ongoing.

        On December 22, 2000, Gambro AB and Gambro BCT moved to dismiss the
consolidated actions based on a settlement agreement with Pall Corporation. On
January 10, 2001, the Court dismissed the action with respect to all claims
between Pall, Gambro BCT, and Gambro AB.

        On April 23, 1999, Pall filed a complaint against the Company and Gambro
BCT in the Eastern District of New York alleging that the Company's r\LS System
infringes Pall's `572 Patent and that the Company and Gambro BCT tortiously
interfered and unfairly competed with Pall's business. On May 19, 1999, Pall
amended its complaint and added Gambro, Gambro A.B. and Sepracor as defendants.
The Company and Gambro BCT have moved to dismiss, transfer or stay the action
and Pall has opposed the motion. On April 18, 2000, Pall moved, without
opposition from the defendants, to dismiss the action and the Court granted
Pall's motion.

        A prior lawsuit brought by Pall in February 1996 has concluded. In June
1999, the United States Court of Appeals for the Federal Circuit determined that
the LeukoNet System did not infringe claim 39 of the `321 Patent and Pall has
not appealed that decision.

        The Company has engaged patent counsel to investigate the pending
litigations. The Company believes, based upon its review of these matters, that
a properly informed court should conclude that the manufacture, use and/or sale
by the Company or its customers of the LeukoNet System and the r\LS System do
not infringe any valid enforceable claim of the Pall patents. However, there can
be no assurance that the Company will prevail in the pending litigations, and an
adverse outcome in a patent infringement action would have a material and
adverse effect on the Company's financial condition and future business and
operations, including the possibility of significant damages in the litigations
and an injunction against the sale of the r\LS System if the Company does not
prevail in the litigations.


                                     F - 20
<PAGE>


P. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):
<TABLE>
<CAPTION>

(In thousands, except for share amounts)               Q1 2000    Q2 2000    Q3 2000     Q4 2000
                                                       -------    -------    -------     -------

<S>                                                   <C>        <C>        <C>         <C>
Operating expenses from continuing operations           ($173)     ($445)      ($93)       ($94)
Net income (loss) from continuing operations             (401)      (498)       (67)         14
Loss from discontinued operation                       (2,918)    (2,848)    (4,642)     (4,863)
Net loss                                              $(3,319)   $(3,346)   $(4,709)    $(4,849)
Net loss per share - basic and diluted:
Continuing operations                                  $(0.02)    $(0.03)    $(0.00)      $0.00
Discontinued operation                                 $(0.17)    $(0.14)    $(0.24)     $(0.25)
                                                       -------    -------    -------     -------
Net loss per share basic and diluted                   $(0.19)    $(0.17)    $(0.24)     $(0.25)

Weighted average number of shares of common stock      17,039     19,652     19,704      19,773
      Outstanding - basic and diluted


<CAPTION>
                                                       Q1 1999    Q2 1999    Q3 1999     Q4 1999
                                                       -------    -------    -------     -------
<S>                                                      <C>        <C>        <C>         <C>
Operating expenses from continuing operations            (135)      (182)      (178)       (162)
Net loss from continuing operations                      (509)      (482)      (485)       (473)
Loss from discontinued operation                       (2,409)    (1,991)    (2,058)     (2,258)
Net loss                                             $ (2,918)  $ (2,473)  $ (2,543)   $ (2,731)
Net loss per share - basic and diluted:
Continuing operations                                 $ (0.06)   $ (0.03)   $ (0.03)    $ (0.03)
Discontinued operation                                $ (0.26)   $ (0.14)   $ (0.14)    $ (0.14)
Net loss per share basic and diluted                  $ (0.32)   $ (0.17)   $ (0.17)    $ (0.17)

Weighted average number of shares of common stock       9,221     14,830     15,145      15,782
      Outstanding - basic and diluted
</TABLE>


Q. DISCONTINUED OPERATION:

        On May 29, 2001, the Company sold substantially all of its non-cash
assets to Whatman BioScience Inc., a Massachusetts corporation ("Whatman") and a
subsidiary of Whatman plc, an English corporation ("Whatman plc"), pursuant to
the terms of an Asset Purchase Agreement by and among the Company, Whatman and
Whatman plc, dated as of February 3, 2001 and amended on April 2, 2001 (the
"Purchase Agreement"). All non-cash assets and certain liabilities were
transferred to the purchaser on that date. Accordingly the only continuing
operations of the Company consist of general and administrative expenses to
operate a shell company and to investigate various strategic business
combinations. The Company has reclassified the consolidated financial statements
included herein, for all periods to reflect the sale of the non-cash assets
relating to the red blood filtration business, its only segment, as a
discontinued operation in accordance with Accounting Principles Board ("APB")
Opinion No. 30, and all prior periods have been restated, including the
allocation of expenses between continuing and discontinued operation.

        Net sales and income from the discontinued operation are as follows:


<TABLE>
<CAPTION>
                                              Year ended               Year ended           Year ended
                                       December 31, 2000        December 31, 1999     December 31,1998
                                       -----------------        -----------------     ----------------

<S>                                               <C>                       <C>                 <C>
Revenues from discontinued operation             $3,219                    $805                $25
                                                 -------                   -----               ----

Loss from discontinued operation              $ (15,297)               $ (8,716)         $ (11,277)
                                              ----------               ---------         ----------
</TABLE>


                                     F - 21
<PAGE>


Assets and liabilities of the discontinued operation were as follows:


<TABLE>
<CAPTION>
                                                        December 31, 2000  December 31, 1999
                                                        -----------------  -----------------

<S>                                                               <C>                  <C>
Inventory                                                         $ 2,285              $ 806
Other current assets                                                  264                617
Property and equipment, net                                         1,850              1,547
Other assets                                                           32                 32
Current liabilities                                                (1,031)            (1,602)
Long-term liabilities                                                  (9)               (43)
                                                                  --------           --------

Net assets of discontinued operation                              $ 3,391            $ 1,357
                                                                  ========           ========
</TABLE>


        Under the terms of the Purchase Agreement, Whatman acquired
substantially all of the non-cash assets of the Company for consideration
consisting of (i) a $10 million dollar cash payment, which was paid to the
Company on May 29, 2001, (ii) a reimbursement amount which the Company expects
at May 29, 2001 will be $6,956,000, effectively covering the net change in cash
from the ongoing discontinued operations of the Company's business from November
1, 2000 through May 29, 2001 (the "Reimbursement Amount"), and (iii) a potential
royalty payment in the amount of 4% on sales by Whatman or its affiliates of
filtration products using the Company's technology. The royalty payments are
subject to a maximum, aggregate amount of $12 million dollars and are subject to
certain reductions set forth in that certain Royalty Agreement, dated as of May
29, 2001, by and among the Company, Whatman and Whatman plc, including any
damages and certain settlement amounts paid by Whatman related to the Company's
patent litigation with Pall Corporation, as described below under Note O
"Litigation."

        In connection with the sale of its non-cash assets on May 29, 2001, the
Company has recorded a gain on the date of disposal, of $11,975,000, which
includes the expected $6,956,000 reimbursement amount and is net of the payment
of approximately $1,394,000 in costs and expenses associated with completing the
asset sale incurred in the second quarter of fiscal 2001. An additional
$1,106,000 of costs and expenses associated with completing the asset sale were
incurred in the first quarter of fiscal 2001, with such costs and expenses
included in discontinued operation. The Company expects to incur a minimal tax
liability (estimated to be no greater than $100,000) in connection with the
sale, as it believes it has sufficient federal and state net operating loss
carryforwards and tax credits to offset any gains realized. No value was
ascribed to the potential future royalties in recording the gain on this
transaction. The net book value of assets sold were $3,587,000. As part of the
non-cash asset sale Whatman retained the Company's personnel associated with the
discontinued operation. Accordingly all issued but unvested stock options of the
Company vested on May 29, 2001 and will terminate unless exercised within 90
days thereafter with the exception of certain executive officers who were
retained by the Company.


                                     F - 22
<PAGE>


                                   SIGNATURES


        Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 18th day of
January, 2002.

                                 HMSR INC.


                                 By:    /s/ John F. McGuire, III
                                       -----------------------------------------
                                          John F. McGuire, III
                                          Executive Officer


                                      S - 1
<PAGE>


                                  EXHIBIT INDEX

    The following exhibits are filed as part of this Annual Report on Form 10-K:



    Exhibit No.                                    Description
    -----------                                    -----------

              2.1(6)  Heads of Agreement, dated as of January 31, 1996, between
                      the Company and Novo Nordisk A/S.

              3.1(1)  Certificate of Incorporation of the Company.

             3.2(21)  Certificate of Amendment of Certificate of Incorporation
                      of the Company.

             3.3(23)  Certificate of Amendment of Certificate of Incorporation
                      of the Company.

              3.4(1)  By-Laws of the Company.

              4.1(1)  Specimen Certificate for shares of Common Stock, $.01 par
                      value, of the Company.

              4.2(9)  Registration Rights Agreement, dated January 23, 1997, by
                      and among the Company and Novo Nordisk A/S

             4.3(10)  Registration Rights Agreement, dated as of September 15,
                      1998, between the Company and Sepracor.

             4.4(11)  Warrant Agreement, dated as of September 15, 1998, between
                      the Company and Sepracor.

             4.5(11)  Warrant Certificate, dated as of September 15, 1998,
                      between the Company and Sepracor.

             4.6(13)  Registration Rights Agreement, dated as of March 23, 1999,
                      between the Company and Sepracor.

             4.7(13)  Warrant Agreement, dated as of March 23, 1999, between the
                      Company and Sepracor.

             4.8(13)  Warrant Certificate, dated as of March 23, 1999, between
                      the Company and Sepracor.

             4.9(14)  Stock Subscription Agreement, dated as of May 3, 1999,
                      between the Company and COBE.

            4.10(14)  Stockholder's Agreement, dated as of May 3, 1999, between
                      the Company and COBE.

            10.1(22)  Amended and Restated 1994 Stock Option Plan.

             10.2(9)  1994 Director Option Plan.

             10.3(1)  Form of Technology Transfer and License Agreement between
                      the Company and Sepracor Inc.

             10.4(6)  Lease Agreement for 140 Locke Drive, Marlborough, MA,
                      dated as of November 1995, between the Company and First
                      Marlboro Development Trust.

             10.5(4)  Employment Agreement between the Company and Dr. Hans
                      Heiniger, dated January 10, 1994.

             10.6(7)  Asset Purchase Agreement dated as of May 2, 1996 between
                      the Company,



                                      I - 1
<PAGE>

    Exhibit No.                                    Description
    -----------                                    -----------
                      HemaPharm Inc., HemaSure A/S and Novo Nordisk A/S.

             10.7(8)  Restructuring Agreement, dated January 23, 1997, between
                      the Company, HemaPharm Inc., HemaSure A/S and Novo Nordisk
                      A/S.

             10.8(9)  Convertible Subordinated Note Due December 31, 2001 in the
                      amount of U.S. $11,721,989, issued by the Company to Novo
                      Nordisk A/S, dated January 23, 1997.

             10.9(9)  Amendment to the Company's 1994 Director Option Plan,
                      dated June 25, 1996.

            10.10(9)  Amendment to the Company's 1994 Director Option Plan,
                      effective as of May 16, 1996.

            10.11(9)  Amendment to the Company's 1994 Stock Option Plan, dated
                      June 25, 1996.

            10.12(9)  Amendment to the Company's 1994 Stock Option Plan,
                      effective as of May 16, 1996.

            10.13(9)  Sublease Agreement, between the Company and Novo Nordisk
                      A/S, dated May 2, 1996, for the Premises (Denmark), as
                      amended.

            10.14(9)  Sublease Agreement between the Company and Novo Nordisk
                      A/S, dated May 2, 1996, for the Warehouse (Denmark), as
                      amended.

           10.15(12)  Employment Agreement between the Company and John F.
                      McGuire, dated April 1, 1997.

           10.16(12)  Settlement Agreement, dated September 1997, by and among
                      the Company, HemaSure AB, HemaPharm Inc., Pharmacia &
                      Upjohn Inc. and Pharmacia & Upjohn AB.

           10.17(10)  1995 Employee Stock Purchase Plan, as amended.

           10.18(11)  Revolving Credit and Security Agreement, dated as of
                      September 15, 1998, between the Company and Fleet National
                      Bank.

           10.19(11)  Intellectual Property Security Agreement, dated as of
                      September 15, 1998, between the Company and Fleet National
                      Bank.

           10.20(11)  Promissory Note, dated as of September 15, 1998, made by
                      the Company in favor of Fleet National Bank.

           10.21(11)  Amended and Restated Master Strategic Alliance Agreement
                      between the Company and the ARC.

           10.22(14)  Senior Management Retention Agreement, dated as of
                      December 7, 1998, between the Company and John F. McGuire.

           10.23(14)  Senior Management Retention Agreement, dated as of
                      December 15, 1998, between the Company and James B.
                      Murphy.

           10.24(14)  Senior Management Retention Agreement, dated as of
                      December 22, 1998, between the Company and Peter C.
                      Sutcliffe.

           10.25(13)  Securities Purchase Agreement, dated as of March 23, 1999,
                      between the Company and Sepracor.

           10.26(14)  Amended and Restated Exclusive Distribution Agreement,
                      dated as of May 3, 1999, between the Company and COBE.

           10.27(15)  Master Purchase Agreement, dated as of July 1, 1999,
                      between the Company


                                      I - 2
<PAGE>


    Exhibit No.                                    Description
    -----------                                    -----------
                      and The American National Red Cross.

           10.28(16)  Manufacturing and Supply Agreement, dated as of December
                      22, 1999, between the Company and Filtertek Inc.

           10.29(16)  Supply and Assembly Agreement, dated as of January 31,
                      2000, between the Company and Command Medical Products
                      Inc.

           10.30(16)  Placement Agency Agreement, dated February 3, 2000,
                      between the Company and Warburg Dillon Read LLC.

           10.31(16)  Form of Purchase Agreement, dated March 2, 2000.

           10.32(16)  Schedule of purchasers which purchased shares of common
                      stock pursuant to the Form of Purchase Agreement set forth
                      in 10.42.

           10.33(17)  Indemnification Agreement, dated as of July 13, 2000
                      between the 10.33 (17) Company and Ahlstrom Technical
                      Specialties LLC.

           10.34(18)  Termination of Supply and Assembly Agreement and Release,
                      dated as of December 8, 2000, by and between the Company
                      and Command.

           10.35(18)  Amendment No. 1 to Manufacturing and Supply Agreement,
                      dated as of September 21, 2000, by and between the Company
                      and Filtertek.

           10.36(18)  Amendment No. 2 to Manufacturing and Supply Agreement,
                      dated as of December 15, 2000, by and between the Company
                      and Filtertek.

           10.37(18)  Termination and Release Agreement, dated as of March 5,
                      2001, by and between the Company and Gambro.

           10.38(19)  Asset Purchase Agreement, dated as of February 3, 2001, by
                      and between the Company, Whatman and Whatman plc.

           10.39(20)  Amendment to Asset Purchase Agreement, dated as of April
                      2, 2001, by and between the Company, Whatman and Whatman
                      plc.

           10.40(20)  Royalty Agreement, dated as of May 29, 2001, by and among
                      the Company, Whatman and Whatman plc.

           10.41(23)  Termination and Release, dated as of August 17, 2001, by
                      and between The American National Red Cross, and the
                      Company.

           10.42(23)  Employment Agreement, made effective May 29, 2001, by and
                      between the Company and John F. McGuire.

           10.43(23)  Employment Agreement, made effective May 29, 2001, by and
                      between the Company and James B. Murphy.

           10.44(23)  Employment Agreement, made effective May 29, 2001, by and
                      between the Company and Peter C. Sutcliffe.

           10.45(23)  Consulting Agreement, entered into as of January 1, 2001,
                      by and between the Company and Summit Roundtable.

           21.1(12)   Subsidiaries of the Company.


                                      I - 3
<PAGE>


    Exhibit No.                                    Description
    -----------                                    -----------

           23.1       Consent of PricewaterhouseCoopers  LLP



_____________________


(1)             Incorporated herein by reference to the Company's Registration
                Statement on Form S-1, as amended (File No. 33-75930).

(2)             Incorporated herein by reference to the Company's Annual Report
                on Form 10-K for the year ended December 31, 1994.

(3)             Incorporated herein by reference to the Company's Quarterly
                Report on Form 10-Q for the quarter ended March 31, 1995.

(4)             Incorporated herein by reference to the Company's Registration
                Statement on Form S-1, as amended (File No. 33-95540).

(5)             Incorporated herein by reference to the Company's Quarterly
                Report on Form 10-Q for the quarter ended September 30, 1994.

(6)             Incorporated herein by reference to the Company's Annual Report
                on Form 10-K for the year ended December 31, 1995.

(7)             Incorporated by reference to the Company's Quarterly Report on
                Form 10-Q for the quarter ended March 31, 1996.

(8)             Incorporated by reference to the Company's Current Report on
                Form 8-K filed with the Securities and Exchange Commission on
                February 27, 1997.


(9)             Incorporated by reference to the Company's Annual Report on Form
                10-K for the year ended December 31, 1996.

(10)            Incorporated by reference to the Company's Quarterly Report on
                Form 10-Q for the quarter ended June 30, 1998.

(11)            Incorporated by reference to the Company's Quarterly Report on
                Form 10-Q for the quarter ended September 30, 1998.

(12)            Incorporated by reference to the Company's Annual Report on Form
                10-K for the year ended December 31, 1997.

(13)            Incorporated by reference to the Company's Annual Report on Form
                10-K for the year ended December 31, 1998.

(14)            Incorporated by reference to the Company's Quarterly Report on
                Form 10-Q for the quarter ended March 31, 1999.

(15)            Incorporated by reference to the Company's Quarterly Report on
                Form 10-Q for the quarter ended June 30, 1999.

(16)            Incorporated by reference to the Company's Annual Report on Form
                10-K for the year ended December 31, 1999.

(17)            Incorporated by reference to the Company's Quarterly Report on
                Form 10-Q for the quarter ended June 30, 2000.


                                      I - 4
<PAGE>


(18)            Incorporated by reference to the Company's Annual Report on Form
                10-K for the year ended December 31, 2000.

(19)            Incorporated by reference to the Company's Quarterly Report on
                Form 10-Q for the quarter ended March 31, 2001.

(20)            Incorporated by reference to the Company's Definitive Proxy
                Statement on Schedule 14A filed on April 27, 2001.

(21)            Incorporated by reference to the Company's Quarterly Report on
                Form 10-Q for the quarter ended June 30, 2001.

(22)            Incorporated by reference to the Company's Definitive Proxy
                Statement on Schedule 14A filed on May 24, 1999.

(23)            Incorporated by reference to the Company's Quarterly Report on
                Form 10-Q for the quarter ended Secptember 30, 2001.


                                      I - 3