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                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
        (Mark One)
       [ X ]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                                       SECURITIES   EXCHANGE ACT OF 1934

       For the quarterly period ended June 30, 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   0-23776
                               .................................................

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

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

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

                                 (508) 490-9500
            .......................................................
              (Registrant's telephone number, including area code)

                                 Not Applicable
            .......................................................
      (Former name, former address and former fiscal year, if changed since
                                  last report)

         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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

     Common Stock, par value $.01 per share                19,706,003
     --------------------------------------        -----------------------------
                     Class                         Outstanding at August 3, 2000




293675.2

<PAGE>



HemaSure Inc.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                        Page
<S>                                                                                                       <C>
PART I   Financial Information

Item 1.   Financial Statements............................................................................1


       Consolidated Balance Sheets as of June 30, 2000 and December 31, 1999..............................1

       Consolidated Statements of Operations for the Three and Six Month Periods Ended
       June 30, 2000 and 1999.............................................................................2

       Consolidated Statements of Cash Flows for the six month Periods Ended
       June 30, 2000 and 1999.............................................................................3

       Notes to Consolidated Financial Statements.........................................................4

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations............6

Item 3. Quantitative and Qualitative Disclosures About Market Risk........................................9

PART II  Other Information

Item 1.  Legal Proceedings................................................................................9

Item 2.  Changes in Securities and use of Proceeds........................................................10

Item 3.  Defaults Upon Senior Securities..................................................................10

Item 4.  Submission of Matters to a Vote of Security Holders..............................................11

Item 5.  Other Information................................................................................11

Item 6.  Exhibits and Reports on Form 8-K.................................................................11

Signatures................................................................................................S-1
</TABLE>


293675.2

<PAGE>


                         Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements.
                                  HemaSure Inc.
                           Consolidated Balance Sheets
                                   (Unaudited)


( In thousands )                                June 30,            December 31,
                                                 2000                  1999
                                                -------             -----------

ASSETS

Current assets:
  Cash and cash equivalents                       $7,535               $5,243
  Marketable securities                           14,846                    -
  Accounts receivable                                228                  443
  Inventories                                      3,357                  806
  Deferred financing costs                           213                  725
  Prepaid expenses                                   430                  276
                                                     ---                  ---

  Total current assets                            26,609                7,493

Property and equipment, net                        2,197                1,547

Other assets                                          50                   50
                                                      --                   --

  Total assets                                   $28,856               $9,090
                                                 =======               ======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                $1,590               $1,199
  Accrued expenses                                 1,464                1,520
  Notes payable - current portion                  5,032                5,030
  Capital lease obligations - current portion          7                   71
                                                       -                  --
 Total current liabilities                         8,093                7,820

Note payable                                          27                   43
                                                      --                   --

 Total liabilities                                 8,120                7,863
                                                   -----                -----

Stockholders' equity:
  Common stock                                       197                  158
  Additional paid-in capital                     112,376               86,241
  Accumulated deficit                            (91,837)             (85,172)
                                                --------             --------

 Total stockholders' equity                       20,736                1,227

 Total liabilities and stockholders' equity      $28,856               $9,090
                                                ========             ========


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



293675.2
                                       1
<PAGE>


                                  HemaSure Inc.

                      Consolidated Statements of Operations

                   For The Three- and Six-Month Periods Ended

                             June 30, 2000 and 1999

                                  ( Unaudited )
(In thousands, except
per share amounts)

<TABLE>
<CAPTION>
                                                     Three-month periods                       Six-month periods
                                                          Ended June 30,                          Ended June 30,

                                                    2000                1999                2000               1999
                                                    ----                ----                ----               ----

<S>                                                 <C>                   <C>             <C>                   <C>
Revenues                                            $643                  $9              $2,459                $13

Costs and expenses:

  Cost of products sold                            1,217                 448               3,401                783

  Research & development                           1,342                 526               2,804              1,050

  Legal expense related to patents                   257                 352                 409              1,192

  Selling, general and administrative              1,120                 856               2,229              1,705
                                                   -----                 ---               -----              -----

        Total costs and expenses                   3,936               2,182               8,843              4,730
                                                   -----               -----               -----              -----

Loss from operations                              (3,293)             (2,173)             (6,384)            (4,717)

  Interest income                                    327                  48                 460                 59

  Interest expense                                  (380)               (348)               (754)              (733)

  Other Income                                         -                   -                  13                  -
                                                 --------           --------             -------            -------

Net loss                                        $ (3,346)           $ (2,473)           $ (6,665)          $ (5,391)
                                                ========            ========            ========           ========

  Net loss per share  -  basic and
diluted                                         $  (0.17)           $  (0.17)           $  (0.36)          $  (0.45)
                                                ========            ========            ========           ========

Weighted average number of shares of
common stock outstanding - basic and
diluted                                           19,652              14,830              18,346             12,041
</TABLE>

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

293675.2

                                       2
<PAGE>



                                  HemaSure Inc.

                      Consolidated Statements of Cash Flows

                                  ( Unaudited )



(In thousands)                                              Six-month periods
                                                             Ended June 30,

                                                            2000         1999
                                                            ----         ----

Cash flows from operating activities:
  Net loss                                              $ (6,665)     $(5,391)
  Adjustments to reconcile net loss to net cash
   used in operating activities
    Financing costs related to warrants                      512          512
    Depreciation and amortization                            308          228
    Accretion of marketable securities discount              (57)           -
    Provision for Inventories                                480            -
  Changes in operating assets and liabilities:
    Accounts receivable                                      215           (6)
    Inventories                                           (3,031)         (49)
    Prepaid expenses                                        (154)         (32)
    Accounts payable and accrued expenses                    335         (453)
                                                          ------       ------
  Net cash used in operating activities                   (8,057)      (5,191)
                                                         =======      =======

Cash flows from investing activities:
  Purchase of available-for-sale marketable securities   (14,789)           -
  Additions to property and equipment                       (958)        (111)
  Increase in other assets                                     -           (8)
                                                        --------       ------
  Net cash used in investing activities                  (15,747)        (119)
                                                        --------       ------

Cash flows from financing activities:
  Proceeds from issuance of common stock                  26,174       10,974
  Repayments of notes payable                                (14)          11
  Repayments of capital lease obligations                    (64)        (104)
                                                         -------       ------
  Net cash provided from financing activities             26,096       10,881
                                                         -------       ------

Net increase in cash and cash equivalents                  2,292        5,571
Cash and cash equivalents at beginning of period           5,243        1,827
                                                         -------       ------
Cash and cash equivalents at end of period               $ 7,535      $ 7,398
                                                         =======      =======

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


293675.2

                                       3
<PAGE>




                                  HemaSure Inc.
                   Notes To Consolidated Financial Statements

1.     Basis of Presentation

       The  accompanying  financial  statements  are  unaudited  and  have  been
       prepared on a basis  substantially  consistent with the audited financial
       statements.

       Certain  information and footnote  disclosures  normally  included in the
       Company's annual statements have been condensed or omitted. The condensed
       interim financial statements,  in the opinion of management,  reflect all
       adjustments  (including normal recurring  accruals)  necessary for a fair
       statement of the results for the interim  periods ended June 30, 2000 and
       1999.

       The results of  operations  for the interim  periods are not  necessarily
       indicative  of the results of  operations  to be expected  for the fiscal
       year. These interim  financial  statements  should be read in conjunction
       with the audited  financial  statements  for the year ended  December 31,
       1999,  which are contained in the Company's Form 10K (File No.  0-23776),
       filed with the Securities and Exchange Commission on March 30, 2000.

2.       Inventories

Inventories consist of the following:

<TABLE>
<CAPTION>
(In thousands)                                        June 30, 2000    December 31, 1999
                                                      -------------    -----------------

<S>                                                          <C>                    <C>
Raw materials                                                $1,682                 $393
Work in progress                                              1,073                  401
Finished goods                                                  602                   12
                                                             ------                 ----
                                                             $3,357                 $806
                                                             ------                 ----
3.       Property and Equipment

Property and equipment consists of the following:


(In thousands)                                        June 30, 2000    December 31, 1999
                                                      -------------    -----------------
Property and equipment                                       $4,051               $3,614

Less accumulated depreciation and amortization               (2,632)              (2,324)
                                                            -------              -------

                                                              1,419                1,290

Construction in progress                                        778                  257
                                                            -------              -------

                                                            $ 2,197               $1,547
                                                            =======               ======
</TABLE>


293675.2

                                       4
<PAGE>



4.     Equity Financing

In March 2000, the Company completed a private placement 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 intends to use the
net proceeds of  $25,960,000  from the private  placement  for working  capital,
capital equipment and general corporate purposes.

5.     Net loss per share

The net loss per share is based on the weighted  average  number of common stock
outstanding during the period.  Common Share equivalents are not included in the
per share calculation where the effect of their inclusion would be antidilutive.
Common Share  equivalents  of the Company  consist of common stock  warrants and
stock options.  The Company had 4,978,303 and 5,050,028 Common Share equivalents
at June 30, 2000 and 1999, respectively.

6.       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 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, and the action is proceeding. On September 30,
1999,  the Court  denied  Pall's  motion to  dismiss  the action and the case is
proceeding. 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 alleging that The Company,  Gambro,  Inc. and Gambro AB
are infringing  Pall's U.S.  Patent No.  6,086,770.  The Company will submit its
reply to the complaint denying the allegations of infringement.


293675.2

                                       5
<PAGE>



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  Inc.,  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.


Item 2.  Management's Discussion and Analysis of
          Financial Condition and Results of Operations.


Results of Operations

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.

HemaSure develops and supplies 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 June 1995,  the Company  received  clearance  from the United States Food and
Drug  Administration  (the  "FDA") for the  LeukoNet  System,  a medical  device
designed for the removal of contaminating  leukocytes from donated blood. Fiscal
1996 was the first  full year of  commercial  sale of its  LeukoNet  System.  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, the r\LS System.

In May 1999, the Company  received  510(k)  clearance from the 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 of 1999.

In April  2000,  the Company  was  notified  that the  American  Red Cross,  the
Company's  largest  customer,  was suspending use of the r/LS System pending the
outcome of an investigation of a small number of non-critical  adverse



293675.2

                                       6
<PAGE>



reactions in patients who have received a transfusion of blood filtered with the
r/LS System. See "-Liquidity and Capital Resources" below.

All of the Company's  other planned  blood-related  products are in the research
and development  stage,  and certain of these products may require  pre-clinical
and clinical  testing  prior to  submission of any  regulatory  application  for
commercial use. The Company's  success will depend on the commercial  acceptance
of the r\LS  System  and  development  and  commercial  acceptance  of the other
blood-related products.


Three and six months ended June 30, 2000 and 1999

The Company  recorded  revenues of $643,000 for the quarter  ended June 30, 2000
compared to $9,000 in the same period in 1999.  Revenues were $2,459,000 for the
first six months of 2000  compared  to $13,000 for the first six months of 1999.
In 1999,  revenues  represented  a small number of  leukoreduction  systems sold
outside of the United States. In May 1999, the Company received 510(k) clearance
from the FDA to market its r\LS System in the United States,  which accounts for
the  significant  increase in revenues for the three and six month periods ended
June  30,  2000.  Revenues  for all  periods  presented  represent  sales of the
Company's leukocyte filtration products.

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.

Research and development  expenses were $1,342,000 in the second quarter of 2000
compared to $526,000 in the second quarter of 1999,  and were  $2,804,000 in the
six months ended June 30, 2000  compared to  $1,050,000  in the six months ended
June 30, 1999. The increase in both the three and six month periods is primarily
attributable to costs associated with production  capacity  expansion efforts to
support then expected increased demand for the Company's r\LS System.

Legal  expenses  related to patents were $257,000 in the second  quarter of 2000
compared to $352,000 in the second quarter of 1999, and were $409,000 in the six
months ended June 30, 2000  compared to  $1,192,000 in the six months ended June
30, 1999.  The  expenses in both the three and six month  periods are related to
costs associated with defending the Company's patent position in its outstanding
litigation  with Pall  Corporation.  The decrease in 2000 from those expended in
1999 is due to a  reduction  in  these  costs as well as from  cooperation  with
Gambro  BCT  in  connection  with  such  costs  consistent  with  the  Company's
distribution and development agreement with Gambro.

Selling, general and administrative expenses were $1,120,000 in the three months
ended June 30, 2000  compared to  $856,000  in the three  months  ended June 30,
1999, and were $2,229,000 in the first six months of 2000 compared to $1,705,000
in the first six months of 1999. The increase in the three and six month periods
is primarily  attributable to higher sales and marketing  costs  associated with
the Company's increasing level of sales of its r\LS System.

Interest  income  for the  three  and six  month  periods  ended  June 30,  2000
increased compared to the three and six month periods ended June 30, 1999 due to
higher average cash and marketable securities balances available for investment.
Interest  expense  for the three  and six  month  periods  ended  June 30,  2000
increased compared to the three and six month periods ended June 30, 1999 due to
interest  related to a note payable offset,  in part, by a lower average capital
lease obligation balance.



293675.2
                                       7
<PAGE>



New Accounting Standards

In  March  2000,   the   Financial   Accounting   Standard   Board  issued  FASB
Interpretation  No. 44,  "Accounting  for Certain  Transactions  Involving Stock
Compensation  - an  interpretation  of APB Opinion  No. 25" ("FIN  44").  FIN 44
clarifies the application of APB Opinion No. 25 and among other issues clarifies
the  following:  the  definition  of an employee  for  purposes of applying  APB
Opinion No. 25; the  criteria  for  determining  whether a plan  qualifies  as a
noncompensatory plan; the accounting consequence of various modifications to the
terms of previously  fixed stock options or awards;  and the  accounting  for an
exchange  of stock  compensation  awards in a  business  combination.  FIN 44 is
effective July 1, 2000, but certain  conclusions in FIN 44 cover specific events
that occurred  after either  December 15, 1998 or January 12, 2000.  The Company
does not  expect  the  application  of FIN 44 to have a  material  impact on the
Company's financial position or results of operations.

In June 2000, the commission issued SAB 101B which delayed the implementation of
SAB 101 until no later than the quarter  ended  December 31,  2000.  The Company
does not expect the  application of SAB 101 to have a significant  impact on its
financial position or results of operations.

Liquidity and Capital Resources

The net increase in cash and cash  equivalents for the six months ended June 30,
2000  was  $2,292,000.  This  increase  is  attributable  primarily  to net cash
provided from financing  activities of  $26,096,000,  offset in part by net cash
used in  operating  activities  of  $8,057,000  and net cash  used in  investing
activities of $15,747,000.

Net  cash  provided  from  financing  activities  relates  primarily  to the net
proceeds  from the issuance of common stock of  $26,174,000  in the period,  the
majority of which is due to the Company's March 2000 private placement. Net cash
used in  operating  activities  is  primarily  attributable  to the net  loss of
$6,665,000,  inventory of $3,031,000 and prepaid expenses of $154,000.  This was
offset in part by an increase in accounts  payable and accrued expense  balances
of $335,000  and a decrease  in accounts  receivable  of $215,000  and  non-cash
operating   charges  for  financing  costs  related  to  warrants  of  $512,000,
depreciation  and  amortization  of $308,000 and  provision for  inventories  of
$480,000.  Net  cash  used  in  investing  activities  is  due to  purchases  of
available-for-sale  marketable  securities of $14,789,000 and the acquisition of
property and equipment of $958,000 in the period.

In March 2000, the Company completed a private placement 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 intends to use the
net proceeds of  $25,960,000  from the private  placement  for working  capital,
capital equipment and general corporate purposes.

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 have received a transfusion of blood filtered
with the r\LS.  There  have been  approximately  25  reactions  reported  to the
Company  from about 14  patients  out of  approximately  150,000  units of blood
transfused  utilizing the Company's  r\LS  product.  The patients  involved with
these reactions are primarily  hematology or oncology patients who have received
multiple transfusions.  The reaction rate is less than .02 percent, and involves
pain in the back,  head or neck area.  These reactions are not permanent and are
treatable using standard practices. It is uncertain at this time when and if the
American  Red Cross will resume the  purchase  and use of the  Company's  filter
system.  The  outcome  of this  evaluation  and the  resulting  decision  by the
American Red Cross could materially and adversely  affect the future  operations
of the Company.

Due  to the  suspension  of  use  announced  by the  ARC  in  April,  there  are
approximately  160,000 r\LS units that are either held in  quarantine at the ARC
or in the Company's  inventory as of June 30, 2000.  Depending on the outcome of
the  evaluation  being  conducted  by the  Company  and the ARC  related  to the
reported transfusion reactions,  the Company may need to repair, replace or give
the ARC credit for units in its  inventory  and repair or discard the r\LS units
in the Company's inventory.

293675.2

                                       8
<PAGE>



The Company  believes,  based on its current  operating  plan, that its existing
cash and marketable securities balances will be sufficient to fund the Company's
operations  beyond  the  second  quarter  of  2001.  If the  Company's  plans or
assumptions  change,  if the Company's  assumptions prove to be inaccurate or if
the Company  experiences  unanticipated costs or competitive  pressures,  it may
seek to raise additional capital by pursuing strategic  partnerships,  public or
private equity and/or debt financing. If the Company fails to generate such cash
flow  or  obtain  any  such  financing  on  terms  favorable  to it or if  other
unforeseen  circumstances  occur,  the  Company  may be  unable to  continue  to
commercialize  and market the r\LS System or  complete  the  development  of the
Company's  proposed  products  and/or market such products  successfully,  or to
continue the Company's  current  operations as presently  conducted,  if at all,
beyond the second  quarter of 2001.  The Company's  cash  requirements  may vary
materially  from  those  now  planned  because  of  factors  such as  successful
development of products, results of product testing, approval process at the FDA
and similar  foreign  agencies,  commercial  acceptance of its products,  patent
developments and the introduction of competitive products.

Item  3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

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 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, and the action is proceeding. On September 30,
1999,  the Court  denied  Pall's  motion to  dismiss  the action and the case is
proceeding. 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

293675.2

                                       9
<PAGE>


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 alleging that The Company,  Gambro,  Inc. and Gambro AB
are infringing  Pall's U.S.  Patent No.  6,086,770.  The Company will submit its
reply to the complaint denying the allegations of infringement.


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  Inc.,  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.

Item  2.          Changes in Securities and Use of Proceeds

None.


Item  3.          Defaults Upon Senior Securities

None.


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                                       10
<PAGE>



Item  4.          Submission of Matters to a Vote of Security Holders

At the  Company's  Annual  Meeting of  Stockholders  held on June 7,  2000,  the
following proposals were adopted by the vote specified below.

           Proposal                     For             Withheld
           --------                     ---             --------

            Election of Directors

           Timothy J. Barberich         15,793,144      19,580
           John F. McGuire, III         15,793,144      19,580
           David Perez                  15,793,144      19,580
           David S. Barlow              15,793,144      19,580
           Justin E. Doheny             15,793,144      19,580
           Edward C. Wood               15,793,144      19,580
           Frank Corbin                 15,793,144      19,580



Item  5.          Other Information

None.

Item  6. Exhibits and Reports on Form 8-K

                  EXHIBIT INDEX

     a) The  following  exhibits are filed as part of this  Quarterly  Report on
Form 10-Q:

       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(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.

293675.2

                                       11
<PAGE>

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

                  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(9)  1994 Stock Option Plan, as amended.

                  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, 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.

293675.2

                                       12
<PAGE>

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

                 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  American  Red
                           Cross.

                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 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.

293675.2

                                       13
<PAGE>

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

                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 10.31.

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

                21.1(12)   Subsidiaries of the Company.

                  27.1     Financial Data Schedule.


----------------------------------------
(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.


293675.2

                                       14
<PAGE>


(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.

     b)  Reports on Form 8-K

         None.


293675.2

                                       15
<PAGE>




                                   SIGNATURES

Pursuant  to the  requirements  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.



                                        HemaSure Inc.


Date:         August 11, 2000              /s/ John F. McGuire, III
                                               -------------------------
                                               John F. McGuire, III
                                       President and Chief Executive Officer
                                        (Principal Executive Officer)


Date:         August 11, 2000              /s/ James B. Murphy
                                               -------------------------
                                                James B. Murphy
                                          Senior Vice President and
                                           Chief Financial Officer
                                         (Principal Financial Officer)




293675.2