UNITED STATES 
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934



|For the Quarterly Period
 Ended December 31, 2004 | Commission File
 Number 1-11700
|------------------------------------------------- | -------------------------------

|HEMAGEN DIAGNOSTICS, INC.                                               
|------------------------------------------------------------------------
|(Exact name of Small Business Issuer as
       Specified in its Charter)

|Delaware                |  | 04-2869857              
|----------------------- |  | ------------------------
|(State of Organization) |  | (I.R.S. Employer Number)

|9033 Red Branch Road, Columbia, Maryland 21045-2105
|---------------------------------------------------
|(Address of principal executive offices, Zip Code) 

|(443) 367 5500                                  
|------------------------------------------------
|(Issuer's telephone number, including area code)

Check
whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities and Exchange Act of 1934 during the preceding 12 months and (2) has been
subject to such filing requirements for the past 90 days.

Yes  [X]
                                    No  [   ]

As
of December 31, 2004, the issuer had 15,204,351 shares of Common Stock, $.01 par value per
share outstanding.

---

# HEMAGEN DIAGNOSTICS,
INC. AND SUBSIDIARIES

# INDEX

|PART I.
       FINANCIAL INFORMATION | PAGE NUMBER
|------------------------------------ | -----------
|                                     | Item 1.    
|                                     |            
|                                     |            
|                                     |            
|                                     |            
|                                     | Item 2.    
|                                     | Item 3.    

|PART II.
       OTHER INFORMATION
|---------------------------------
|                                 
|                                 
|                                 

|SIGNATURES     |  |  | 17
|-------------- |  |  | --
|CERTIFICATIONS |  |  | 18

2

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PART I  Financial
Information

Item 1.    Financial
Statements

HEMAGEN DIAGNOSTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS(UNAUDITED)

|                                                        | December 31,
2004 | September 30,
2004
|------------------------------------------------------- | ----------------- | ------------------
|ASSETS                                                  |                   |                   
|                                                        |                   |                   
|CURRENT ASSETS:                                         |                   |                   
|Cash and cash equivalents                               |                   |                   
|Accounts receivables, less allowance for                |                   |                   
|doubtful accounts of $96,842 and $102,359 at            |                   |                   
|December 31, 2004 and September 30, 2004,  respectively |                   |                   
|Inventories; net                                        |                   |                   
|Prepaid expenses and other current assets               |                   |                   
|                                                        |                   |                   
|Total current assets                                    |                   |                   
|                                                        |                   |                   
|PROPERTY AND EQUIPMENT; net of accumulated depreciation |                   |                   
|and amortization of $6,997,756 and $6,871,498 at        |                   |                   
|December 31, 2004 and September 30, 2004, respectively  |                   |                   
|                                                        |                   |                   
|OTHER ASSETS                                            |                   |                   
|                                                        |                   |                   
|Total Assets                                            |                   |                   
|                                                        |                   |                   

3

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# Hemagen DIAGNOSTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS(UNAUDITED)

# LIABILITIES AND
STOCKHOLDERS EQUITY

|                                                                  | December 31,
2004 | September 30,
2004
|----------------------------------------------------------------- | ----------------- | ------------------
|CURRENT LIABILITIES:                                              |                   |                   
|Current portion Senior subordinated secured convertible notes due |                   |                   
|April 17, 2005, net of unamortized discount of $2,852 and         |                   |                   
|$5,188 at December 31, 2004 and September 30, 2004,               |                   |                   
|respectively                                                      |                   |                   
|Accounts payable and accrued liabilities                          |                   |                   
|Deferred revenue                                                  |                   |                   
|                                                                  |                   |                   
|Total Current Liabilities                                         |                   |                   
|                                                                  |                   |                   
|Senior subordinated secured convertible notes due September 30,   |                   |                   
|2009, net of unamortized discount of $313,873 and $326,863 at     |                   |                   
|December 31, 2004 and September 30, 2004, respectively            |                   |                   
|                                                                  |                   |                   
|Total liabilities                                                 |                   |                   
|                                                                  |                   |                   
|COMMITMENTS AND CONTINGENGIES                                     |                   |                   
|                                                                  |                   |                   
|STOCKHOLDERS' EQUITY                                              |                   |                   
|Preferred stock, $0.01 par value - 1,000,000 shares authorized;   |                   |                   
|none issued                                                       |                   |                   
|Common stock, $.01 par value - 30,000,000 shares authorized;      |                   |                   
|issued and outstanding:  15,304,351 and 15,294,343 at             |                   |                   
|June 30, 2004 and September 30, 2004, respectively                |                   |                   
|Additional paid-in capital                                        |                   |                   
|Accumulated deficit                                               |                   |                   
|Accumulated other comprehensive loss-                             |                   |                   
|currency translation loss                                         |                   |                   
|Less treasury stock at cost; 100,000 shares at September 30, 2004 |                   |                   
|and September 30, 2003, respectively                              |                   |                   
|                                                                  |                   |                   
|Total Stockholders' Equity                                        |                   |                   
|                                                                  |                   |                   
|Total Liabilities and Stockholders' Equity                        |                   |                   
|                                                                  |                   |                   

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

4

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# HEMAGEN DIAGNOSTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

|                                          | Three Months Ended
|----------------------------------------- | ------------------
|
|Revenues:                                 |                   
|                                          |                   
|Product sales                             |                   
|                                          |                   
|Costs and expenses:                       |                   
|Cost of product sales                     |                   
|Research and development                  |                   
|Selling, general and administrative       |                   
|                                          |                   
|Operating income (loss)                   |                   
|                                          |                   
|Other expenses:                           |                   
|Interest and amortization of debt         |                   
|discount                                  |                   
|Other                                     |                   
|                                          |                   
|Total other expenses                      |                   
|                                          |                   
|Net loss before income taxes              |                   
|                                          |                   
|Income tax expense                        |                   
|                                          |                   
|Net loss                                  |                   
|                                          |                   
|Net loss per share - basic and diluted:   |                   
|                                          |                   
|Weighted average shares used in the       |                   
|calculation of loss per share - basic and |                   
|diluted                                   |                   
|                                          |                   

The accompanying notes are an integral
part of the financial statements

5

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# HEMAGEN DIAGNOSTICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

|                                                     | Three Months Ended
December 31,
|---------------------------------------------------- | -------------------------------
|
|Cash flows from operating activities:                |                                
|Net loss                                             |                                
|Adjustments to reconcile net loss to net             |                                
|cash provided by operating activities:               |                                
|Depreciation and amortization                        |                                
|Amortization of debt discount                        |                                
|Changes in operating assets and liabilities:         |                                
|Accounts and other receivables                       |                                
|Prepaid expenses and other current assets            |                                
|Inventories                                          |                                
|Accounts payable and accrued expenses                |                                
|Deferred revenue                                     |                                
|                                                     |                                
|Net cash (used in) provided by operating activities  |                                
|                                                     |                                
|Cash flows from investing activities:                |                                
|Purchase of property and equipment                   |                                
|                                                     |                                
|Net cash used in investing activities                |                                
|                                                     |                                
|Cash flows from financing activities:                |                                
|Exercise of stock options                            |                                
|                                                     |                                
|Net cash provided by financing activities            |                                
|                                                     |                                
|Effects of foreign exchange rate                     |                                
|                                                     |                                
|Net increase (decrease) in cash and cash equivalents |                                
|                                                     |                                
|Cash and cash equivalents at beginning of period     |                                
|                                                     |                                
|Cash and cash equivalents at end of period           |                                
|                                                     |                                
|Supplemental disclosure of cash flow information:    |                                
|                                                     |                                
|Interest paid                                        |                                
|                                                     |                                

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

6

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# HEMAGEN DIAGNOSTICS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

# NOTE A  BASIS OF
PRESENTATION

The Company has prepared the
accompanying unaudited consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America for interim financial
information and pursuant to the rules and regulations of the Securities and Exchange
Commission instructions to Form 10-QSB and Item 310(b) of regulation S-B. These financial
statements should be read together with the financial statements and notes in the
Companys 2004 Annual Report on Form 10-KSB filed with the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted. The accompanying financial
statements reflect all adjustments and disclosures which, in our opinion, are necessary
for fair presentation. All such adjustments are of a normal recurring nature. The results
of operations for the interim periods are not necessarily indicative of the results of the
entire year.

# NOTE B  RECENT
ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued
SFAS No. 123 (revised 2004), Share-Based Payment.  This statement will provide
investors and other users of financial statements with more complete and neutral
financial information by requiring that the compensation cost relating to share-based
payment transactions be recognized in financial statements.  That cost will be measured
based on the fair value of the equity or liability instruments issued.  This statement
covers a wide range of share-based compensation arrangements including share options,
restricted share plans, performance-based awards, share appreciation rights, and employee
share purchase plans, and replaces FASB SFAS No. 123 Accounting for Stock-Based
Compensation, and supersedes APB Opinion No. 25. Statement 123, as originally issued in
1995, established as preferable a fair-value-based method of accounting for share-based
payment transactions with employees.  However, that statement permitted entities the
option of continuing to apply the guidance in APB No. 25, as long as the footnotes to
financial statements disclosed the pro forma net income under the fair-value-based
method.  The Company will be required to apply SFAS No. 123(R) as of the first interim or
annual reporting period that begins after December 15, 2005.  The Company is evaluating
the impact of the adoption of SFAS No. 123(R), and does not believe the impact will be
significant to the Companys overall results of operations or financial position.

# NOTE C  NET INCOME (LOSS)
PER SHARE

Basic earnings per common share are
computed based upon the weighted average number of common shares outstanding during the
three months ended December 31, 2004 and December 31, 2003. Diluted earnings per common
share are computed based on common shares outstanding plus the effect of dilutive stock
options and other potentially dilutive common stock equivalents consisting of stock
purchase options and convertible debentures. The dilutive effect of stock options and
other potentially dilutive common stock equivalents is determined using the treasury stock
and if-converted method based on the Companys average stock price. Common stock
equivalents totaling 7,738,147 and 5,505,010 at December 31, 2004 and 2003, respectively,
were not included in the computation of diluted net loss per share because to do so would
have been anti-dilutive, given the Companys net loss.

# NOTE D  STOCK BASED
COMPENSATION

At December 31, 2004, options for the
purchase of 2,308,014 shares of common stock with a weighted average exercise price of
$1.20 were outstanding. During the three months ended December 31, 2004 no options were
granted. During the three months ended December 31, 2004, options for the purchase of
10,000 shares of Common Stock were exercised with exercise prices of $0.29 per share while
options for the purchase of 30,000 shares of common stock expired with exercise prices of
$0.64 per share.

7

---

In December 2002, the FASB issued
Statement No. 148 Accounting for Stock-Based Compensation- Transition and
Disclosure, (SFAS 148). SFAS 148 provides for alternative methods of
transition for an entity that voluntarily changes to the fair value based method of
accounting for stock-based employee compensation and certain disclosures about the effects
of stock-based compensation. The fair value method of accounting would require the use of
an option pricing model such as the Black-Scholes option pricing model to determine the
compensation expenses associated with stock-based compensation issued in the current
period.

If the compensation cost for our
compensation plans had been determined consistent with SFAS No.148, our net income and our
net income per common and common share equivalent would have changed to the pro forma
amounts indicated below:

|                                       | Three Months Ended
|-------------------------------------- | ------------------
|
|Net Loss:                              |                   
|As reported                            |                   
|                                       |                   
|Less stock-based compensation expense: |                   
|determined under the fair value method |                   
|for all awards                         |                   
|                                       |                   
|Pro forma net income (loss)            |                   
|                                       |                   
|Net income per common share:           |                   
|Basic and Diluted;                     |                   
|As reported                            |                   
|Pro forma                              |                   

The fair value of each option grant
is estimated on the date of the grant using the Black-Scholes option-pricing model with
the following weighted-average assumptions used for grants in 2004 and 2003; dividend
yield of 0%; expected volatility of 300% and 196% for 2004 and 2003, respectively;
risk-free interest rate of 4% for both periods; and expected terms of 3.0 to 10.0 years.

---

# NOTE E  INVENTORIES

Inventories
at December 31, 2004 and September 30, 2004 consist of the following;

| | December 31,
2004 | September 30,
2004
| | ----------------- | ------------------
| | Raw Materials     |                   
| | Work-in-process   |                   
| | Finished goods    |                   
| |                   |                   
| |                   |                   
| | Less reserves     |                   
| |                   |                   
| | Net inventories   |                   
| |                   |                   

# NOTE F  LINE OF
CREDIT

In September 2002, the Company
obtained a revolving line of credit with a bank for the purpose of financing working
capital needs as required. The line of credit facility provides for borrowing up to
$1,000,000 at an interest rate of Prime Rate plus 3⁄4 % and expires March 31, 2005.
Maximum borrowings under the loan are based on the domestic receivables and inventory of
the Company. At December 31, 2004 there was no outstanding balance on the line of credit
and the effective interest rate on the line of credit was 6%. The Company has never
borrowed on this line of credit.

# NOTE G  EXCHANGE
OFFERING

The Company completed an exchange
offering of $6,065,000 of its senior subordinated secured convertible notes (Old
Notes) due on April 17, 2005 for 5,079,438 shares of its common stock and $4,033,225
of senior subordinated secured convertible notes (New Notes) due on September
30, 2009. At the completion of the exchange offering in December 2004, all but $25,000 of
the Old Notes had been exchanged. The exchange offering was effective as of September 30,
2004, at which time more than 80% of the Old Notes were tendered for exchange. The Company
has accounted for the exchange offering as though the entire amount of $6,065,000 of Old
Notes exchanged were exchanged as of September 30, 2004, since at September 30, 2004 the
Company had the right and the intent to require the remaining Old Notes to be exchanged,
as long as more than 75% of the Notes were tendered.

The shares of common stock issued in
connection with the exchange offering are restricted by the terms of the tender offer from
sale or transfer until after September 30, 2005.

9

---

The New Notes pay interest quarterly
at an annual rate of 8%, are convertible at the option of the holder into shares of the
Companys common stock after September 30, 2005 at $0.75 per share, and mature on
September 30, 2009. The New Notes are secured by a first lien on all real, tangible and
intangible property except for a subordination provided as security interest of the
$25,000 of Old Notes and Security for up to a maximum of $3 million credit facility, real
estate financing used to secure a corporate headquarters subject to limitation and up to
$4.0 million for financing related to strategic acquisitions. The Company has the right to
require conversion of the New Notes at any time after September 30, 2005 if the
Companys common stock has traded at or above $1.25 per share for a consecutive
twenty-day trading period. The Company may also prepay the New Notes at any time at their
full face amount plus any accrued and unpaid interest.

The Company determined the fair value
of the 5,079,438 shares of its common stock on the closing market price, at September 30,
2004, of its common stock of $0.38 to be $1,930,186. The fair value of the New Notes was
determined by management based on a 10% discount rate, resulting in a fair value of the
New Notes of $3,706,362. At December 31, 2004 and September 30, 2004, the unamortized
discount on these notes was $313,873 and $326,863, respectively.

# NOTE H - SENIOR
SUBORDINATED SECURED CONVERTIBLE NOTES

On May 24, 2000, the Company
completed a private placement offering of senior subordinated secured convertible note
units in the face amount of $6,315,000 with net proceeds of $6,025,524. The units
consisted of senior subordinated convertible notes, common stock and detachable warrants.
Each unit was sold for $500,000 and consisted of one $500,000 senior subordinated secured
convertible note, 200,000 detachable warrants to purchase common stock and 93,750 shares
of common stock.

As described in Note G, on September
30, 2004, Senior Subordinated Secured notes payable with a face value of $6,065,000 were
exchanged for shares of the Companys Common Stock and new notes. The face value of
the notes outstanding at December 31, 2004 is $25,000. The unamortized discount on these
notes equals $2,852 and $5,188 at December 21, 2004 and September 30, 2004, respectively.
As of September 30, 2004, this outstanding Note has been classified as a current liability
of the Company.

# NOTE I 
GEOGRAPHICAL INFORMATION

The Company considers its
manufactured kits, tests and instruments as one operating segment, as defined under
Statement of Financial Accounting Standards No. 131 Disclosures about Segments of an
Enterprise and Related Information.

The following table sets forth
revenue for the periods reported and assets by geographic location.

10

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|                   | United*
States | Brazil | Consolidated
|------------------ | -------------- | ------ | ------------
|December 31, 2004: |                |        |             
|Revenues           |                |        | $           
|Long-lived assets  |                |        |             
|                   |                |        |             
|December 31, 2003: |                |       
|Revenues           |                |        | $           
|Long-lived assets  |                |        |             

* Includes export sales to countries
other than Brazil.

# Managements Discussion
and Analysis of Financial Conditionand Results of Operations

Certain statements in this report
that are not historical facts constitute forward-looking statements, within the meaning of
the Private Securities Litigation Reform Act of 1995, and are intended to be covered by
the safe harbors created by that Act. Reliance should not be placed on forward looking
statements because they involve unknown risks, uncertainties and other factors which may
cause actual results, performance or achievements to differ materially from those
expressed or implied. Any forward-looking statement speaks only as of the date made. The
Company undertakes no obligation to update any forward-looking statements to reflect
events or circumstances after the date on which they are made.

Forward-looking statements may be
identified by words such as estimates, anticipates,
projects, plans, expects, intends,
believes, should, and similar expressions and the negative
versions thereof and by the context in which they are used. Statements concerning the
establishments of reserves and adjustments for dated and obsolete products, expected
financial performance, on-going business strategies and possible future action which
Hemagen intends to pursue to achieve strategic objectives constitute forward-looking
information. The sufficiency of such charges, implementation of strategies and the
achievement of financial performance are each subject to numerous conditions,
uncertainties and risk factors. Factors which could cause actual performance to differ
materially from these forward-looking statements, include, without limitation,
managements analysis of Hemagens assets, liabilities and operations, the
failure to sell datesensitive inventory prior to its expiration, competition, new
product development by competitors which could render particular products obsolete, the
inability to develop or acquire and successfully introduce new products or improvements of
existing products, costs and difficulties in complying with laws and regulations
administered by the U.S. Food and Drug Administration and the ability to assimilate
successfully product acquisitions.

11

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# Overview

Hemagen Diagnostics, Inc., is a
biotechnology company that develops, manufactures, and markets more than 150 FDA-cleared
proprietary medical diagnostic test kits used to aid in the diagnosis of certain
autoimmune and infectious diseases, a complete line of Clinical Chemistry Reagents through
its wholly owned subsidiary RAICHEM, the Analyst®, an FDA-cleared Benchtop Clinical
Chemistry System used to measure important constituents in human and animal blood, and the
Endochek, a clinical chemistry analyzer used to measure important constituents in animal
blood. In the United States, the Company sells its products directly to physicians,
veterinarians, clinical laboratories and blood banks and on a private-label basis through
multinational distributors of medical supplies. Internationally, the Company sells its
products primarily through distributors. The Company sells the Analyst® and the
Endochek both directly and through distributors servicing both physicians office
laboratories and veterinarians offices. Hemagens products are used in many of
the largest laboratories, hospitals and blood banks around the world. Hemagen sells its
products to over 1,000 customers worldwide. The Company focuses on markets that offer
significant growth opportunities. The Company was incorporated in 1985 and became publicly
traded in 1993.

Hemagens Corporate offices are
located at 9033 Red Branch Road, Columbia, Maryland 21045 and the telephone number is
(443) 367-5500. Hemagen maintains a website at www.hemagen.com. Investors can obtain
copies of our filings with the Securities and Exchange Commission from this site free of
charge as well as from the Securities and Exchange Commission website at www.sec.gov.

# Critical Accounting
Policies

We have identified certain accounting
policies as critical to our business operations and the understanding of our results of
operations. The impact and any associated risks related to the identified critical
accounting policies on our business operations are discussed in our Annual Report on Form
10-KSB for the fiscal year ended September 30, 2004 filed with the Securities and Exchange
Commission.

# Results of Operations

# The Three Month Period Ended December
31, 2004Compared to the Three Month Period Ended December 31, 2003

Revenues for the three-month period
ended December 31, 2004 increased by approximately $128,000 (8%) to approximately
$1,778,000 from $1,650,000 for the same period ended December 31, 2003. This increase is
primarily attributed to higher sales at the Companys Raichem division of
approximately $137,000.

12

---

Cost of product sales increased by
approximately $162,000 (15%) to $1,273,000 from $1,111,000 for the same period last year.
Cost of product sales as a percentage of sales increased from 67% to 72%. This increase in
cost of sales as a percentage of sales is mainly attributed to higher costs with the
Companys Analyst product line, which resulted from higher material usage in the
current period and, higher period costs with the Companys Virgo Product Line which
had lower sales and production than the previous period.

Research and development expenses
increased 12,000 (25%) to approximately $62,000 from $49,000 mainly due to the timing of
material supply purchases.

The Company is currently working to
complete several research and development programs including:

| |  | Evaluating and developing complimentary products for Hemagens Analyst product line
to distribute to the veterinary market, and
| | - | -------------------------------------------------------------------------------------------------------------------------------

| |  | Continuing to develop additional assays and reagents to fill in its clinical chemistry
reagent product line sold under the RAICHEM label;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------

| |  | Developing new ELISA kits for the autoimmune and infectious disease markets, particularly
with respect to tests for antiphospholipid syndrome and acute phase protein detection;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The Company entered into discussions and is currently negotiating terms with instrument
design and manufacturing companies to redesign and upgrade the Analyst instrument
technology.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Selling, general and administrative
(SG&A) expenses for the three months ended December 31, 2004 were $572,000
which is consistent with the previous period expenses of $573,000.

The operating loss for the current
period was $129,000 as compared to $83,000 loss in the prior period, an increase of
$46,000 from the prior period. This increase is mainly attributed to the increase in cost
of product sales and lower margin reported in the current period.

Other expenses decreased by
approximately $396,000 (81%) to approximately $95,000 in the three months ended December
31, 2004 from $491,000 in the prior period, due to reduced interest expense. Interest
expense for the three months ended December 31, 2004, was $95,000 as compared to $477,000
in the three months ended December 31, 2003, primarily as the result of the exchange
offering completed with an effective date of September 30, 2004 (See Note G). This
reduction in interest expense is mainly related to the reduction of the non-cash interest
expense resulting from the amortization of the debt discount.

13

---

Income tax expense for the quarter
ended December 31, 2004 was $11,000 as compared to no expense for the quarter ended
December 31, 2003. This tax expense resulted from income realized at the Companys
Brazilian subsidiary.

The net loss for the period was
approximately $236,000 for the three months ended December 31, 2004 as compared to a net
loss of approximately $574,000 in the prior period. The decrease in the net loss from the
prior period mainly resulted from lower interest expense associated with the amortization
of discount on the Senior Subordinated Convertible Notes.

# Liquidity and Capital
Resources

At December 31, 2004, Hemagen had
approximately $307,000 of cash, and working capital of approximately $3,209,000. At
September 30, 2003 the Company had $539,000 of cash and working capital of $3,334,000.

In September 2002, the Company
obtained a revolving line of credit with a bank for the purpose of financing working
capital needs as required. The line of credit facility provides for borrowing up to
$1,000,000 at an interest rate of Prime Rate plus 3⁄4 %. To date, the Company has not
borrowed on the line of credit and the effective interest rate on the line of credit is
6%.

Hemagen believes that cash flow from
operations, cash on hand at December 31, 2004, and its credit available under its line of
credit facility will be sufficient to finance its operations and capital expenditures over
the next twelve months.

Effective September 30, 2004, the
Company issued $4,033,225 principal amount of Senior Subordinated Secured Convertible
Notes due September 30, 2009 and 5,079,438 shares of common stock in exchange for
$6,065,000 principal amount of its Senior Subordinated Secured Convertible Notes due April
17, 2005. The new Notes issued are convertible into Common Stock at $0.75 per share at any
time after September 30, 2005 (See Note G).

Net cash used in operating activities
during the three months ended December 31, 2004 was $209,000 as compared to cash generated
of approximately $10,000 during the three months ended December 31, 2003. The cash used by
the change in operating assets and liabilities represented a change of approximately
$185,000 (237%) to approximately $107,000 of cash used in the three month period ended
December 31, 2004 as compared to $78,000 generated in the prior period. The increase in
cash used by the change in operating assets mainly resulted from the reduction of cash
collections from Accounts Receivable in the current period as compared to the prior
period. Cash generated from the reduction in Accounts Receivable generated approximately
$126,000 in the current period as compared to $383,000 in the prior period. The net loss
after adjusting for non-cash items such as depreciation and amortization of discount on
debt, for the three months ended December 31, 2004 used cash of approximately $103,000 as
compared to $68,000 of cash used in the previous period.

14

---

Approximately $7,000 of cash was used
in investing activities in the three months ended December 31, 2004 as compared to $11,000
of cash used for investing activities in the three months ended December 31, 2003. The
cash used in current period is attributed to capital expenditures which is consistent with
the previous period. The Company has capital expenditures planned for fiscal 2005 related
to the purchase and build out of a new corporate manufacturing facility in Maryland. No
commitments for capital expenditures in fiscal 2005 have been made at this time. The
Company has a deposit on a building that it is evaluating at this time, and estimates
these capital expenditures will be between $2.0 to $2.4 million. This purchase is
contingent upon the Company obtaining appropriate financing.

Approximately $3,000 of cash was
generated from financing activities in the three months ended December 31, 2004 as
compared to none in the three months ended December 31, 2003, which was derived from the
exercise of stock options.

# Item 3.    Controls and
Procedures

The Companys Chief Executive
Officer, William P. Hales, and Chief Financial Officer, Deborah F. Ricci, have evaluated
the effectiveness of the design and operation of the Companys disclosure controls
and procedures as of December 31, 2004. Based upon this evaluation, these officers believe
that the Companys disclosure controls and procedures were effective as of December
31, 2004.

Management is aware that there is a
lack of segregation of duties due to the small number of employees within the financial
and administrative functions of the Company. However, management has decided that
considering the employees involved and the control procedures in place, risks associated
with such lack of segregation are insignificant and the potential benefits of adding
employees to clearly segregate duties do not justify the expenses associated with such
increases. Management will continue to evaluate this segregation of duties. In addition,
management is aware that many of the internal controls that are in place at the Company
are undocumented controls. The Company is working to document these controls to be in
compliance with Section 404 of the Sarbanes-Oxley Act of 2002.

There has been no change in the
Companys internal control over financial reporting identified in connection with the
evaluation of internal controls that occurred during the last fiscal quarter that has
materially affected, or is reasonably likely to affect, Hemagens internal control
over financial reporting.

# PART II.       OTHER
INFORMATION

# Item 2.     Changes in
Securities and Small Business Issuer Purchases of Equity Securities.

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In December 2004, the Company issued
$4,023,225 principal amount of Senior Subordinated Secured Convertible Notes due September
30, 2009 and 5,079,438 shares of Common Stock in exchange for $6,065,000 principal amount
of its Senior Subordinated Secured Notes due April 17, 2005. The issue was made
exclusively to existing holders of the Notes due April 17, 2005. No commissions were paid.
The offering was exempt from registration under Section 3(a)(9) of the Securities Act of
1933. This transaction had an effective date of September 30, 2004 (See Note G of
Financial Statements)

The new Notes issued are convertible
into Common Stock at $0.75 per share at any time after September 30, 2005 unless
previously redeemed.

|Period           | (a) Total
Number of
Shares
Purchased | (b)
Average
Price Paid per
Share | (c) Total Number of
Shares Purchased as Part
of Publicly Announced
Plans or Programs | (d) Maximum Number (or
Approximate Dollar Value)
of Shares that May Yet Be
Purchased Under the Plans
or Programs
|---------------- | ------------------------------------ | -------------------------------- | ------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------
|October 15, 2004 |                                      |                                  |                                                                                      | 2,000                                                                                                           
|Total            |                                      |                                  |                                                                                      | 2,000                                                                                                           

|(1) | Represents shares of Companys Common Stock purchased pursuant to the
          Companys Employee Stock Ownership Plan (ESOP) that was established October
          1, 2003 with no expiration. The purpose of the plan is not to repurchase, but
          rather is an employee benefit plan.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | There is no maximum number of shares that may be purchased under the
          Companys Employee Stock Ownership Plan.
|--- | -----------------------------------------------------------------------------------------------------------------------

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

| | (a) | Exhibits
| | --- | --------

| | Exhibit 4 | Form of Senior Subordinated Secured Convertible Promissory Note
| | --------- | ---------------------------------------------------------------

| | Exhibit 31.1 | Certification of Chief Executive Officer pursuant to Rule
                             13a-14(a)
| | ------------ | ------------------------------------------------------------------------------------------------

| | Exhibit 31.2 | Certification of Chief Financial Officer pursuant to Rule
                             13a-14(a)
| | ------------ | ------------------------------------------------------------------------------------------------

| | Exhibit 32.1 | Certification of Chief Executive Officer pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code
| | ------------ | ---------------------------------------------------------------------------------------------------------------------

| | Exhibit 32.2 | Certification of Chief Financial Officer pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code
| | ------------ | ---------------------------------------------------------------------------------------------------------------------

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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 of the undersigned thereunto duly authorized.

|February 14, 2005February 14, 2005 |  | Hemagen Diagnostics, Inc.
(Registrant)BY: /s/William P. Hales
William P. HalesPresident andChief Executive OfficerBY: /s/Deborah F. Ricci
Deborah F. RicciChief Financial Officer
|---------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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