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 June 30, 2005 | 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 August 15, 2005, 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     |  |  | 20
|-------------- |  |  | --
|CERTIFICATIONS |  |  | 21

2

---

PART 1    Financial
Information

Item 1.    Financial
Statements

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

|ASSETS                                              | June 30,
2005 | September 30,
2004
|--------------------------------------------------- | ------------- | ------------------
|CURRENT ASSETS:                                     |               |                   
|                                                    |               |                   
|Cash and cash equivalents                           |               |                   
|Accounts receivables, less allowance for            |               |                   
|doubtful accounts of $96,842 and                    |               |                   
|$102,359 at June 30, 2005 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 $7,186,922 and     |               |                   
|$6,871,498 at June 30, 2005 and September 30, 2004, |               |                   
|respectively                                        |               |                   
|                                                    |               |                   
|OTHER ASSETS                                        |               |                   
|                                                    |               |                   
|Total Assets                                        |               |                   
|                                                    |               |                   

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

3

---

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

|                                                      | June 30,
2005 | September 30,
2004
|----------------------------------------------------- | ------------- | ------------------
|LIABILITIES AND STOCKHOLDERS' EQUITY                  |               |                   
|                                                      |               |                   
|CURRENT LIABILITIES:                                  |               |                   
|Senior subordinated secured convertible               |               |                   
|notes due April 17, 2005, net of                      |               |                   
|unamortized discount of $5,188 at                     |               |                   
|September 30, 2004                                    |               |                   
|Revolving line of credit                              |               |                   
|Note Payable                                          |               |                   
|Accounts payable and accrued liabilities              |               |                   
|Deferred revenue                                      |               |                   
|                                                      |               |                   
|Total Current Liabilities                             |               |                   
|                                                      |               |                   
|Senior subordinated secured convertible               |               |                   
|notes due September 30, 2009, net                     |               |                   
|of unamortized discount of $284,207 and               |               |                   
|$326,863 at June 30, 2005 and                         |               |                   
|September 30, 2004, respectively                      |               |                   
|                                                      |               |                   
|Total Liabilities                                     |               |                   
|                                                      |               |                   
|COMMITMENTS AND CONTINGENCIES                         |               |                   
|                                                      |               |                   
|STOCKHOLDERS' EQUITY                                  |               |                   
|                                                      |               |                   
|Preferred stock, $0.01 par value - 1,000,000 shares   |               |                   
|authorized; none issued                               |               |                   
|Common stock, $0.01 par value - 30,000,000 shares     |               |                   
|authorized; issued and outstanding: 15,304,351 and    |               |                   
|15,294,343 at June 30, 2005 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 June 30, 2005 and September 30, 2004, respectively |               |                   
|                                                      |               |                   
|Total Stockholders' (Deficit) 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 | Nine Months Ended
|------------------------------------------ | ------------------ | -----------------
|
|Revenues:                                  |                    |                  
|                                           |                    |                  
|Product Sales                              |                    |                  
|                                           |                    |                  
|Costs and Expenses                         |                    |                  
|Cost of product sales                      |                    |                  
|Research and development                   |                    |                  
|Selling, general and administrative        |                    |                  
|Other operating expense                    |                    |                  
|                                           |                    |                  
|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                                    |                    |                  
|                                           |                    |                  
|                                           |                    |                  
|Net loss                                   |                    |                  
|Foreign currency translation               |                    |                  
|                                           |                    |                  
|Comprehensive loss                         |                    |                  
|                                           |                    |                  

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)

|                                                                        | Nine Months Ended
June 30,
|----------------------------------------------------------------------- | --------------------------
|
|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                                           |                           
|Loss on disposal of property and equipment                              |                           
|Write off of additional investment in subsidiary and non-compete        |                           
|agreements acquired in conjunction with additional investment           |                           
|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 operating activities                                   |                           
|                                                                        |                           
|Cash flows from investing activities:                                   |                           
|Purchase of property and equipment                                      |                           
|Purchase of additional shares of common stock of Brazilian subsidiary   |                           
|Disposal of property and equipment                                      |                           
|                                                                        |                           
|Net cash used in investing activities                                   |                           
|                                                                        |                           
|Cash flows from financing activities:                                   |                           
|Net borrowings from revolving line of credit                            |                           
|Net proceeds from mortgage financing obtained with purchase of land and |                           
|building                                                                |                           
|Exercise of stock options                                               |                           
|                                                                        |                           
|Net cash used in 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 SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

# NOTE A    BASIS OF
PRESENTATION

Hemagen Diagnostics, Inc.
(Hemagen or 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 the Companys 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 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 and nine months ended June 30, 2005 and June 30, 2004. Diluted earnings per common
share are computed based

7

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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 7,650,647 and 5,309,014 at June 30, 2005 and
2004, 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 June 30, 2005, options for the
purchase of 2,273,014 shares of common stock with a weighted average exercise price of
$1.20 were outstanding. During the nine months ended June 30, 2005, options to purchase
15,000 shares at an exercise price of $0.35 per share were granted. During the nine months
ended June 30, 2005, 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 80,000
shares of common stock with weighted average exercise prices of $0.85 per share expired.

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

8

---

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 2005 and 2004; dividend
yield of 0%; expected volatility of 300% and 196% for 2005 and 2004, 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 June 30, 2005 and
September 30, 2004 consist of the following;

| |  | June 30,
2005 | 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
$500,000 at an interest rate of Prime Rate plus 3⁄4% and expires March 31, 2006.
Originally, this line of credit provided for up to $1,000,000 of borrowing but was reduced
in June 2005 in conjunction with the note payable described in Note G. Maximum borrowings
under the loan are based on the domestic receivables and inventory of the Company. At June
30, 2005, the outstanding balance on the line of credit was $290,000 and the effective
interest rate on the line of credit was 6.75%.

# NOTE G    NOTE PAYABLE

On June 24, 2005, Hemagen
Diagnostics, Inc. obtained financing of $1,935,000 to provide for the purchase of a new
corporate headquarters facility for $800,000 with the remainder to be used for
improvements to the building and relocation and installation of Hemagens existing
equipment in the new building. The commitment for this financing will expire on June 30,
2006. The note payable is secured by a first lien on the property. At September 30, 2005,
the Company had an outstanding balance of $645,000 related to this commitment. During the
construction period, Hemagen will pay interest only on the borrowings outstanding at a
rate equal to the prime rate plus two percentage points. The rate payable by Hemagen at
June 30, 2005 was 8%, per annum. In conjunction with this commitment, Hemagen paid $24,725
in loan origination fees.

Upon the completion of the
construction and relocation project, Hemagen will finance up to approximately $1,135,000
of the project costs over ten years amortized over a twenty year period. The rate on the
long term financing will be the Federal Home Loan Bank of Atlanta five year rate index
plus three and three-quarters percentage points. As of June

9

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30, 2005 this rate was 8.31%. This
rate is adjustable five years after the anniversary of the conversion to long term
financing. Hemagen has a commitment from the U.S. Small Business Administration (SBA) to
finance up to 40% or $886,000 of the total project costs over a long-term basis once the
construction period is completed and certain closing requirements are met. The portion of
the project financed by the SBA will be paid back over twenty years and will bear interest
at the rate determined by the SBA at that time. The current rate on this type of financing
is 5.85%.

In conjunction with the real estate
and construction financing, Hemagen agreed to reduce its existing line of credit facility
from $1,000,000 to $500,000 of availability.

# NOTE H    EXCHANGE
OFFERING

In December 2004, the Company
completed an exchange offering of its senior subordinated secured convertible notes due on
April 17, 2005 (Old Notes) for a total of 5,079,438 shares of its common stock
and $4,033,225 of senior subordinated secured convertible notes due on September 30, 2009
(New Notes). At the completion of the exchange offering, $6,065,000 of Old
Notes, or all but $25,000 of the Old Notes, representing over 99% of the Old Notes, had
been exchanged. The exchange offering was effective as of September 30, 2004, since at
that time more than 80% of the Old Notes had been tendered for exchange. The Company has
accounted for the exchange offering as though the exchange of the entire amount of
$6,065,000 of Old Notes was effective as of September 30, 2004, because at September 30,
2004, the Company had the right and the intent to require the remaining Old Notes to be
exchanged and more than 75% of the Old Notes had been tendered.

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

The New Notes pay interest quarterly
at an annual rate of 8%, are convertible at the option of the holder after September 30,
2005 at $0.75 per share into shares of the Companys common stock and mature on
September 30, 2009. The New Notes are secured by a first lien on all real, tangible and
intangible property except that the terms of the New Notes provide that the following are
subordinated to the security for the New Notes: the $25,000 of Old Notes; up to a maximum
of $3 million credit facility; real estate financing obtained for 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 June 30, 2005 and September 30, 2004, the unamortized discount
on these notes was $284,207 and $326,863, respectively.

10

---

# NOTE I    SENIOR
SUBORDINATED SECURED CONVERTIBLE NOTES

On May 24, 2000, the Company
completed a private placement offering of units consisting of Old Notes, shares of common
stock and detachable warrants to purchase common stock. The Company issued Old Notes in
the face amount of $6,315,000 with net proceeds of $6,025,524. 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 H, on September
30, 2004, Old Notes in the principal amount of $6,065,000 were exchanged for shares of the
Companys Common Stock and New Notes. The principal amount of the Old Notes
outstanding at June 30, 2005 is $25,000. The unamortized discount on the Old Notes was
$5,188 at September 30, 2004. This outstanding Old Note has been classified as a current
liability of the Company.

# NOTE J   
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.

|                  | United*
States | Brazil | Consolidated
|----------------- | -------------- | ------ | ------------
|Nine Months Ended |                |        |             
|June 30, 2005:    |                |       
|Revenues          |                |        |             
|Long-lived assets |                |        |             
|                  |                |        |             
|Nine Months Ended |                |       
|June 30, 2004:    |                |       
|Revenues          |                |        |             
|Long-lived assets |                |        |             

* Includes export sales to countries
other than Brazil.

Item 2.

# Managements Discussion
and Analysis of Financial Condition                                              and
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,

11

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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.

# 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 it
believes 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.

In June 2005, the Company purchased land and a building in Baltimore, Maryland and
financed the purchase and the related build out of the building.  This building will be used as the
Companys main manufacturing facility and corporate headquarters.  The Company purchased this building as a
cost cutting measure and will utilize this facility to permanently reduce the overhead costs of the business.

12

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Critical Accounting
Policies

Hemagen has identified certain
accounting policies as critical to its business operations and the understanding of its
results of operations. The impact and any associated risks related to the identified
critical accounting policies on its business operations are discussed in Hemagens
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 June 30,
2005 Compared to the Three Month Period Ended June 30, 2004

Revenues for the three-month period
ended June 30, 2005 decreased by approximately $345,000 (16%) to approximately $1,787,000
from $2,132,000 for the same period ended June 30, 2004. The decrease in revenues resulted
from lower sales of Analyst products of $230,000 and lower sales at the Companys
Raichem division of $212,000 offset by an increase of revenues from the Virgo autoimmune
and infectious disease product line. The reduction in sales with the Analyst product line
mainly resulted from lower sales of consumable rotors for the human marketplace.

Cost of product sales decreased
approximately $366,000 (23%) to $1,219,000 from $1,585,000 for the same period last year.
Cost of product sales as a percentage of sales decreased to 68% from 72%. The main reason
for the decrease in cost of product sales is due to the lower sales volume in the current
period. This decrease in cost of sales as a percentage of sales is mainly attributed to
improved margins with the Analyst product line as a result of increased production levels
from the previous period. Gross margins for the quarter were 32% as compared to 28% in the
previous period.

Research and development expenses
decreased $6,000 (8%) to approximately $65,000 from $71,000 due to the timing of
expenditures in the current quarter.

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

| |  | Evaluating and developing complementary products for Hemagens Analyst product line
to distribute to the veterinary market, expanding the consumable rotor products to include
a VetSelect and T4 rotor for the veterinary market.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 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 increased by approximately $75,000 (14%) for the quarter
ended June 30, 2005 to $598,000 from $523,000 in the previous period. This increase is
attributable to increased legal and consulting expenses. The largest increase was related
to legal expenses incurred as a result of the Companys purchase of a new building
and the related financing arrangements.

13

---

Other operating expenses in the three
months ended June 30, 2004 were $62,000 as compared to no expense in the current period.
Other operating expenses in the prior period represented the write off of an additional
investment in the Brazilian subsidiary.

The operating loss for the current
period was $94,000 as compared to $109,000 loss in the prior period, a reduction of
$15,000 from the prior period. This reduction is mainly attributed to the better gross
margins on sales in the period and reduced other operating expense off-set by increased
administrative expenses.

Other expenses decreased
approximately $498,000 (83%) to approximately $102,000 in the quarter ended June 30, 2005
from $600,000 in the prior period, due to reduced interest and amortization of debt
discount expense. Interest expense for the three months ended June 30, 2005, was $102,000
as compared to $596,000 in the three months ended June 30, 2004, primarily as the result
of the exchange offering completed with an effective date of September 30, 2004 (See Note
H to Financial Statements). The reduction is mainly related to the reduction in non-cash
interest expense resulting from the amortization of the debt discount. Cash payments of
interest expense decreased from $120,000 in the prior period to $81,000 in the current
period.

Income tax expense for the quarter
ended June 30, 2005 was $17,000 as compared to $5,000 for the quarter ended June 30, 2004.
This tax expense resulted from income realized at the Companys Brazilian subsidiary.

The net loss for the period was
approximately $213,000 for the three months ended June 30, 2005 as compared to a net loss
of approximately $713,000 in the prior period. The decrease in the net loss from the prior
period mainly resulted from lower interest expense associated with the exchange offering.

The Nine Month Period Ended June 30,
2005 Compared to the Nine Month Period Ended June 30, 2004

Revenues for the nine-month period
ended June 30, 2005 decreased by approximately $233,000 (4%) to approximately $5,552,000
from $5,785,000 for the same period ended June 30, 2004. This decrease is primarily
attributed to lower sales with the Companys Analyst product line of $287,000 offset
by increased sales of the Virgo product line at the Companys Brazilian subsidiary.

Cost of product sales increased by
approximately $234,000 (6%) to $4,084,000 from $3,850,000 for the same period last year.
Cost of product sales as a percentage of sales increased from 67% to 74%. This increase in
cost of sales as a percentage of sales is mainly attributed to higher costs with the
Companys Analyst product line, and higher period costs with the Companys Virgo
Product Line. In the first six months of the current period, the Company incurred
manufacturing difficulties and reduced manufacturing levels with the Analyst product line
which led to increased product costs in the current period. Much of these manufacturing
difficulties were resolved in the most recent quarter and efficiencies and margins
improved with the Analyst product line. Increased costs with the Virgo product line
resulted from higher consulting costs and manufacturing inefficiencies in the current
period.

14

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Research and development expenses
increased $25,000 (14%) to approximately $207,000 from $182,000 mainly due to increased
research material supply purchases and consulting expenditures.

The Company is currently working to
complete several research and development projects that are more fully described in the
above comments for the three months ended June 30, 2005.

Selling, general and administrative
(SG&A) expenses for the nine months ended June 30, 2005 were $1,731,000
which is slightly less than the previous period expenses of $1,743,000. This reduction is
attributable to reduced consulting and administrative labor expenses, offset by increased
legal expenses in the current period.

Other operating expenses in the nine
months ended June 30, 2004 were $62,000. Other operating expenses in the prior period
represented the write off of an additional investment in the Brazilian subsidiary.

The operating loss for the nine
months ended June 30, 2005 was $470,000 as compared to a $52,000 operating loss for the
nine month period ended June 30, 2004, an increase in the operating loss of $418,000 from
the prior period. This increase in operating loss is mainly attributed to lower sales
levels and increased cost of product sales as a percentage of sales.

Other expenses decreased
approximately $1,303,000 (82%) to approximately $294,000 in the nine months ended June 30,
2005 from $1,597,000 in the prior period due to reduced interest expense. Interest expense
for the nine months ended June 30, 2005, was $294,000 as compared to $1,583,000 in the
nine months ended June 30, 2004, primarily as the result of the exchange offering
completed with an effective date of September 30, 2004 (See Note H to Financial
Statements). 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. Cash
payments of interest expense decreased from $362,000 in the prior period to $241,000 in
the current period.

Income tax expense for the nine
months ended June 30, 2005 was $33,000 compared to $24,000 for the nine months ended June
30, 2004. This tax expense resulted from income realized at the Companys Brazilian
subsidiary.

The net loss for the period was
approximately $797,000 for the nine months ended June 30, 2005 as compared to a net loss
of approximately $1,673,000 in the prior period. The decrease in the net loss from the
prior period mainly resulted from lower interest expense associated with the non-cash
amortization of discount on the Senior Subordinated Convertible Notes offset by increased
cost of sales.

15

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# Liquidity and Capital
Resources

At June 30, 2005, Hemagen had
approximately $62,000 of cash, and working capital of approximately $1,978,434. At
September 30, 2004, the Company had $539,000 of cash and working capital of $3,334,000.
The reduction in the cash balance is mainly attributed to the cash used in operations. The
reduction of the working capital from September 30, 2005 is attributed to an increase in
the line of credit facility and current notes payable associated with the purchase and
build out of a new facility that is currently financed with a short term construction
loan. The Company has a commitment to finance the building over a long term basis once
construction is completed.

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 currently provides for borrowing up
to $500,000 at an interest rate of Prime Rate plus 3⁄4%.

The line of credit has an effective
interest rate of 6.75% and expires on March 31, 2006. At June 30, 2005, the company had a
balance outstanding of $290,000 on this line of credit and $210,000 in availability.

In June 2005, the Company purchased a
building that will be improved and used as the Companys corporate headquarters and
main manufacturing facility. Hemagen has obtained the necessary financing to pay for this
purchase over a long term basis. Hemagen believes that the cash flow from operations, its
current line of credit facility, and additional financing it has received for the purchase
and build out of its new 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 (New Notes). The New Notes are convertible into Common Stock at $0.75
per share at any time after September 30, 2005 (See Note H to Financial Statements).

# The Nine Month Period
Ended June 30, 2005 Compared to the Nine Month Period Ended June 30, 2004

Net cash used in operating activities
during the nine months ended June 30, 2005 was $559,000 as compared to cash used of
approximately $198,000 during the nine months ended June 30, 2004. The net loss after
adjusting for non-cash items such as depreciation and amortization of discount on debt,
for the nine months ended June 30, 2005 was approximately $465,000 as compared to $48,000
income generated in the previous period. The cash used by the change in operating assets
and liabilities represented a change of approximately $152,000 (62%) to approximately
$94,000 of cash used in the nine month period ended June 30, 2005 as compared to $246,000
used in the prior period. The decrease in cash used by the change in operating assets
mainly resulted from the increase in cash generated from lower inventory levels of
$301,000 and the reduction in cash used for receivables of $74,000, offset by increased
cash used for accounts payable, accrued expenses and prepaid expenses and other assets of
$222,000.

16

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Approximately $833,000 of cash was
used in investing activities in the nine months ended June 30, 2005 as compared to $35,000
of cash used for investing activities in the nine months ended June 30, 2004. The cash
used in the current period is attributed to a building the Company purchased in June 2005
for approximately $820,000 that will be used for a corporate headquarters in Baltimore,
Maryland. The Company has capital expenditures planned for fiscal 2005 related to the
purchase and build out of a new corporate manufacturing facility in Baltimore, Maryland.
No commitments for capital expenditures in fiscal 2005 have been made at this time
although the Company estimates that this expenditure will be in the $900,000 
$1,200,000 range. As explained in Note G to the Financial Statements, the Company has
obtained a commitment for the financing of this project on a long term basis.

Approximately $938,000 of cash was
generated from financing activities in the nine months ended June 30, 2005 as compared to
$3,000 generated in the nine months ended June 30, 2004. This increase in cash generated
in the current period resulted from $645,000 of net proceeds of borrowings related to the
purchase of the Companys new corporate headquarters building and increased borrowing
on the Companys revolving line of credit facility that was mainly used for the
Companys equity contribution in the purchase of the new building.

# 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 June 30, 2005. Based upon this evaluation, these officers believe
that the Companys disclosure controls and procedures were effective as of June 30,
2005.

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. The Company is currently working to appropriately document these
internal controls. The Company is working to document these controls to be in compliance
with Section 404 of the Sarbanes-Oxley Act of 2002 by September 30, 2006.

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.

17

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# PART II.       OTHER
INFORMATION

# Item 2.        Unregistered
Sales of Equity Securities and Use of Proceeds.

|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(1) | (d) Maximum Number (or
Approximate Dollar Value)
of Shares that May Yet Be
Purchased Under the Plans
or Programs (2)
|---------------------- | ------------------------------------ | -------------------------------- | --------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------
|October 15, 2004       |                                      |                                  |                                                                                         | 2,000                                                                                                               
|March 1-31, 2005       |                                      |                                  |                                                                                         | 20,999                                                                                                              
|April 14 - May 6, 2005 |                                      |                                  |                                                                                         | 26,563                                                                                                              
|May 7 - May 31, 2005   |                                      |                                  |                                                                                         | 2,625                                                                                                               
|June 1 - June 30, 2005 |                                      |                                  |                                                                                         | 12,863                                                                                                              
|August 2-5, 2005       |                                      |                                  |                                                                                         | 15,625                                                                                                              
|                       |                                      |                                  |                                                                                         |                                                                                                                     
|Total                  |                                      |                                  |                                                                                         | 80,675                                                                                                              

|(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.
|--- | ------------------------------------------------------------------------------------------------------------------

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

(a)       Exhibits

| | Exhibit 10.55 | Construction Loan Agreement and related Promissory Note between Hemagen
                                    Diagnostics, Inc. and Reagents Applications, Inc. and
Bay National Bank dated                                     June 24, 2005
| | ------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Exhibit 10.60 | Second modification and amendment to Line of Credit Financing Agreement
                                    between Hemagen Diagnostics, Inc. and Reagents
Applications, Inc. and Bay                                     National Bank dated June
24, 2005
| | ------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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.

|August 15, 2005August 15, 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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