==============================================================================

		      SECURITIES AND EXCHANGE COMMISSION
			   Washington, D.C.  20549
				  FORM 10-K

(Mark one)
 /X/   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 

For fiscal year ended December 31, 1998

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

For the transition period from _______________ to ______________

Commission file number 0-15223    

			     HEMACARE CORPORATION
	    (Exact name of registrant as specified in its charter)

State or other jurisdiction of                          I.R.S. Employer I.D.
incorporation or organization: California               Number:  95-3280412
			       -----------                       ----------  
4954 Van Nuys Boulevard
Sherman Oaks, California                                     91403
(Address of principal executive offices)                  (Zip Code)
				
			      -----------------

Registrant's telephone number, including area code: (818) 986-3883

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock 
							 (without par value)
Rights to Purchase Preferred Stock

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for such shorter period that the 
Registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days:   YES  X  NO ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 
405 of Regulation S-K is not contained herein, and will not be contained, to 
the best of the Registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K or any 
amendment to this Form 10-K:   X     

As of March 26, 1999, 7,281,120 shares of Common Stock of the Registrant 
were issued and outstanding.  The aggregate market value of the Common Stock 
held by non-affiliates of the Registrant on that date (based upon the 
closing price of the Common Stock as reported by NASDAQ National Market
System was approximately $4,578,970.

Portions of the Registrant's definitive Proxy Statement for its June 17,
1999 Annual Meeting of Shareholders (which has not been filed as of the date 
of this filing) are incorporated by reference into Part III.  Such proxy
statement shall be filed with the Securities and Exchange Commission not
later than 120 days after the registrant's fiscal year ended December 31,
1998.

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<PAGE>

				 PART I

ITEM 1.  BUSINESS.

General
-------

HemaCare Corporation and its wholly owned subsidiary Coral Blood Services,
Inc. offer a full range of blood services and products to hospitals and 
medical centers. HemaCare is the first publicly traded company to be 
licensed by the Food and Drug Administration, which regulates the blood 
industry, and accredited by the American Association Blood Banks. The 
Company has been providing blood services and products in Southern 
California since 1978. In October 1998, Coral Blood Services, Inc. was 
formed to acquire blood products and services operations in the eastern 
United States. The Company now has operations in 12 states.

During the last decade, hospitals, which spend more than $4 billion annually 
on blood products and services, have experienced increasing cost containment 
pressures. As a result, these institutions are continuously looking for ways 
of providing more cost-effective health services. HemaCare has responded to 
this need by developing customized blood services programs designed to meet 
the specific requirements of each individual hospital customer.
 
The Company's customers include university teaching hospitals, medical 
centers and regional hospitals located in California, Connecticut, 
Massachusetts, Maine, New Hampshire, New Jersey, New York, North Carolina, 
Rhode Island, Tennessee and West Virginia. Products and services are provided
to these customers under contractual agreements, and in some cases, under
interim arrangements while contractual agreements are being negotiated.
Each customer selects the products and services provided by the Company
which best meet its needs,including:

- Product procurement. (Apheresis platelets and plasma and whole blood 
  derived components.)
- Therapeutic apheresis. (Plasma exchange, cell depletion and 
  immunadsorption procedures.)
- Stem cell collection and cryopreservation.
- Interoperative autologous transfusion.
- Donor center management.
- Donor sample testing.
- Blood management consulting.
- Research and clinical trial protocols.

Several of the Company's customers have elected to outsource some or all of 
their blood services to the Company in a blood management program 
arrangement. 

The Company's corporate headquarters are located in Sherman Oaks, 
California, north of downtown Los Angeles. This location also serves as the 
regional office for Southern California operations. Other regional offices 
are located in Portland, Maine, Yonkers, New York and Chapel Hill, North 
Carolina. 

The HemaCare scientific advisory board, established in 1997, provides input 
and counsel to the Company's board of directors and management on technical 
and regulatory matters as well as participating in periodic management 
meetings. Chaired by Joshua Levy, MD, the advisory board is comprised of 
nationally recognized experts in the fields of blood banking, apheresis 
technology and application, and regulatory compliance.

Certain medical terms included in the following discussions are further 
explained in a glossary located at the end of this Item 1. HemaCare 
Corporation and its wholly owned subsidiaries are collectively referred to 
herein as "HemaCare" or the "Company", and Coral Blood Services, Inc. is 
referred to as "CBS".

Blood Management Programs
-------------------------

A HemaCare Blood Management Program ("BMP")is an arrangement in which a 
hospital outsources some or all of its blood procurement and donor center 
management functions to HemaCare while retaining the convenience and 
efficiencies of an in-house program.

HemaCare supplies the BMP customer with blood products from collections at 
the customer's donation center or from collections at other HemaCare 
donation sites or products purchased by HemaCare from outside suppliers. 
HemaCare establishes and operates a blood donation center under the name of 
the sponsoring BMP hospital. Typically, the center is staffed, operated and 
managed by the Company which is also responsible for regulatory compliance. 
A Blood Management Program aligns the interests of the Company and its 
hospital customer, providing the customer with a "partner" in achieving its 
financial, regulatory compliance and patient service goals. The BMP model 
continues to evolve in response to the changing needs of the Company's 
customers.

Dartmouth-Hitchcock Medical Center

Mary Hitchcock Memorial Hospital at Dartmouth-Hitchcock Medical Center ("DHMC")
outsources its apheresis platelet and plasma collections, autologous and 
directed donation collection services, therapeutic apheresis and stem cell 
collection services and blood related research in a BMP arrangement. Located 
in Lebanon, New Hampshire, DHMC, a 430 bed hospital, is affiliated with 
Dartmouth College and is the teaching hospital for Dartmouth College Medical 
School. DHMAC, a major research center, serves as the tertiary care center
for New Hampshire and adjacent areas of Vermont. The Company collects apheresis
products for the hospital and provides autologous and directed donations
services and conducts a donor-retested plasma program. Therapeutic apheresis
and stem cell collection services are provided in the hospital-based donor
room or at the patient's bedside, as directed by the responsible physician.
The Company's current BMP agreement with DHMC extends through October 2001.

Maine Medical Center

Located in Portland, Maine, the Maine Medical Center ("MMC"), a 600 bed 
teritiary care, teaching hospital, is the largest medical center in northern
New England. In 1994, MMC elected to outsource its apheresis platelet
collections and, in 1997, added therapeutic apheresis functions and stem
cell collections to its BMP arrangement. The Company provides substantially
all of the apheresis platelets used by MMC from products collected at its
donor facility in Portland and on mobile platelet drives conducted in the
greater Portland area. Mobile therapeutic apheresis and stem cell collection
services are provided to MMC's patients and physicians by specially trained
registered nurses. In addition, the Company offers low density lipoprotein
("LDL") therapeutic services to patients with extremely high blood
cholesterol levels which are resistant to dietary and drug treatments.  

St. Vincent Hospital

Located in Worcester, Massachusetts, St. Vincent Hospital ("St. Vincent") 
is a 330 bed tertiary and acute care hospital serving central Massachusetts. 
In March 1998, St. Vincent outsourced its entire blood procurement and donor 
room function on an exclusive basis. Services provided by the Company to
St. Vincent include procurement of blood products, whole blood and apheresis
platelet collections, autologous and directed donations services and
therapeutic apheresis services. An integral part of these services is the
operation of a donor room located in St. Vincent hospital. This facility
provides a convenient location for patients and their families to donate
blood.

University of North Carolina

The University of North Carolina's BMP arrangement designates the Company as 
the primary provider of apheresis products to the UNC Hospitals in Chapel 
Hill, North Carolina ("UNC"). The Company also provides apheresis platelet 
plasma products to UNC. The Company collects these products in its hospital-
based donor room and on mobile blood drives. The 660 bed UNC facility is the 
teaching hospital for the University of North Carolina School of Medicine 
and is an active blood-banking research institution.

University of Southern California 

The University of Southern California ("USC") BMP agreement established
HemaCare as the primary provider of blood products and services to the 
patients and physicians of USC/Norris Comprehensive Cancer Center and 
Hospital and USC University Hospital. Together these hospitals comprise
a 340 bed tertiary care and research center. An integral part of the USC 
program is a blood donation center located on the USC Health Sciences 
Campus. In addition, the Company provides mobile therapeutic apheresis and 
stem cell collection services to USC. The BMP agreement, which was recently 
renewed, is in effect until  March 2002.

Citrus Valley Health System

In October 1996, Citrus Valley Health Partners named HemaCare as the 
exclusive provider of blood services to its three-hospital network in the 
Los Angeles metropolitan area. This program proved to be uneconomic, and in 
July 1998 was terminated.

Blood Products
--------------

General

The Company sells single donor apheresis platelet products ("apheresis
platelets" or "platelets"), apheresis plasma and whole blood derived 
components ("components") such as red blood cells and fresh frozen plasma to 
more than 25 hospital customers. 

Blood products are collected at each of the BMP donor centers. These 
products are generally sold to the BMP hospital. Components are manufactured 
at the Sherman Oaks facility and at St. Vincent Hospital. 

Single Donor Apheresis Platelets

The Company collects single donor platelets, using automated blood 
separation technology, at its Sherman Oaks, California location, each of the 
BMP locations and at two sponsoring hospitals in the metropolitan New York 
area. 

Platelets are sold to hospitals for transfusion into cancer patients 
undergoing chemotherapy, patients undergoing major surgery such as open 
heart surgery or transplant procedures, and trauma or other conditions 
associated with massive blood loss. 

Platelet apheresis technology involves the use of a cell separator operated 
by a trained clinician.  The procedure removes blood from a donor through a 
needle in one arm, pumping the blood through the cell separator where the 
desired platelet component is retained and returning the blood, including 
the red cells, to the donor. The procedure typically requires one to three 
hours and may be done up to 24 times per year, since donating platelets does 
not deplete donors of red blood cells. Temperature control and constant 
movement (using a rotator) maintain the platelets' viability for five days. 
When necessary to meet its customers' needs, the Company also purchases 
platelet products for resale.  Such platelet suppliers are Food and Drug 
Administration ("FDA") licensed and accredited by the American Association 
of Blood Banks ("AABB").  Approximately 4% of platelets sold by the Company 
in 1998 were purchased from outside suppliers.

In order to attract and retain qualified donors at its Sherman Oaks, 
California location, the Company reimburses these donors for their time and 
commitment. As a result, the Company has developed a select group of repeat 
donors who are tested regularly in connection with their frequent donations. 
Cash reimbursement to donors is variable, based on the number and frequency 
of donations, and includes a bonus program. Most southern California 
platelets products are obtained from paid donations made at the Company's 
Sherman Oaks location. Unless extended, the law enabling HemaCare to 
sell apheresis platelets obtained from compensated donors in California
will expire in December 2001, which could have a material adverse affect on
the Company's revenue and net income. The Company is evaluating a number of
alternatives with regard to continuing its California based apheresis
platelet business after the year 2001. The Company also recruits non-cash
compensated donors for its BMP donor centers and hospital sponsored
collection programs.

Platelet donors who are compensated must pass the Company's stringent donor 
screening standards which include a pre-donation and annual physical 
examination by a physician. Volunteer and compensated donors are subject to 
a prescreening interview before each donation, and all platelet donations 
are subject to infectious disease testing.  After each collection, the
platelets are tested, labeled and delivered to hospital customers.

Component Blood Products

HemaCare provides whole blood derived component products such as red blood 
cells, fresh frozen plasma and cryoprecipitate to its BMP and other 
customers. These component blood products included both purchased products 
and products collected and manufactured by the Company under its FDA license 
and under the registration of BMP customers. The Company began collecting 
whole blood donations and manufacturing component products primarily for 
sale to its BMP customers in December 1995. Whole blood donors must pass 
stringent FDA and AABB endorsed screening standards. Donations are tested at 
FDA licensed laboratories, including the Company's Sherman Oaks laboratory, 
and component products are manufactured at the Sherman Oaks and St. Vincent 
Hospital facilities. In 1998, the component products were sold primarily to 
the USC Hospitals, Citrus Valley Hospitals and St. Vincent Hospital, under 
the terms of the BMP agreements with these hospitals. In 1997 and 1996, a 
significant volume of component sales were made to non-BMP customers in 
California. Most of these component products were purchased. All purchased 
components sold are acquired under contractual relationships with blood 
centers located in the U.S. All such suppliers are FDA licensed and 
accredited by the AABB.

Blood Services
--------------

General

The Company provides therapeutic apheresis, interoperative autologous
transfusion and donor testing services. Since its inception, the Company has 
performed more than 36,900 therapeutic apheresis procedures in the treatment 
of more than 27 diseases. The Company now provides these services in 11 
states on the east and west coasts.

Therapeutic Apheresis 

Therapeutic apheresis ("therapeutics" or "therapeutic services") is a
technique for removing harmful components from a patient's blood and is used 
in the treatment of autoimmune diseases and other disorders. Therapeutic 
services are provided upon the request of a hospital which has received an 
order from a patient's physician.  Therapeutic treatments are 
administered using mobile units operated at the patient's bedside or in a 
hospital outpatient setting. The mobile therapeutics equipment includes a
state-of-the-art blood cell separator and the disposables and supplies
needed to perform the procedure.  Treatments are administered by trained,
nurse-specialists, acting in accordance with documented operating procedures
and quality assurance protocols based on guidelines developed by the AABB
and the Joint Commission on Accreditation of Hospital Organizations ("JCAHO"),
under the supervision of a specially trained physician.

The Company provides therapeutic services using all currently recognized 
treatment methods: 1) plasma exchange and cell depletion, 2) in-line
immunoadsorbant columns, and 3) stem cell rescue and cryopreservation. 

Plasma Exchange and Cell Depletion

The primary blood services provided by the Company, accounting for 88% of 
therapeutics procedures in 1998, were conventional plasma exchange and 
cell depletion therapy.  These procedures involve removing harmful 
substances from a patient's blood, using automated blood separation 
equipment.  As the patient's blood flows through the cell separator, 
abnormal or excess proteins or components associated with the disease 
being treated are selectively removed.  The remaining blood components 
are returned to the patient.  

Most treatments involve the removal of two to four liters of abnormal plasma
or certain cellular components.  Replacement fluids, most commonly albumin,
are used to maintain the patient's blood volume. In late 1996, a shortage of
albumin arose when a major U.S. manufacturer was required by regulatory
agencies to temporarily cease operations. This manufacturer has not yet
fully resumed operation. As a result, the price of albumin more than doubled
during 1997, and demand for albumin continues to exceed the supply. Although
HemaCare has increased the price charged to its customers for albumin, the
Company has not been able to recover the full amount of the cost increase.

Patients suffering from diseases such as multiple myeloma, HIV-
polyneuropathy, leukemia, systemic lupus erythematosus, scleroderma,
hyperviscosity syndrome, thrombocytosis, myasthenia gravis and Guillain-Barre
syndrome may benefit from therapeutic apheresis treatments.  A patient may
require from four to twenty treatments over a period of time ranging from a
few days to several months.  Each treatment may last from two to four hours.

Immunoadsorption

Since 1988, the Company has provided a second-generation therapeutic
treatment which uses an in-line immunoadsorption column to modify the immune
response.  Recently, the FDA approved this procedure for the treatment of
moderate to severe rhemuatoid arthritis ("RA"). This application may
significantly increase the demand for immunasdsorption column procedures.
It is anticipated that additional research will demonstrate the efficacy of
further of immunadsorption therapy in additional applications.

Stem Cell Rescue and Cryopreservation

Since 1990, the Company has been providing peripheral stem cell 
collection services in California.  In this application, stem cells 
(those cells which mature into all the different cellular components of 
blood) are collected from a cancer patient using apheresis technology.  
The patient then receives a series of intensive chemotherapy treatments 
followed by reinfusion of the patient's own stem cells. In 1994, the 
Company added cryopreservation (processing, freezing and short-term 
storage of stem cells) to stem cell collection to provide a full-service 
program.  This program consists of mobile, peripheral stem cell 
collection for certain cancer patients, followed by cryopreservation of 
the stem cells prior to reinfusion into the treated patient. The addition 
of cryopreservation capability enables the Company to provide a full-
service stem cell program to community hospitals which may choose not to 
establish their own in-house capabilities in the early development of 
this technology.

The Company's cryopreservation service capacity is currently under-
utilized because of the reluctance of third party payors to reimburse 
community hospital customers for this procedure. The procedure is 
generally reimbursed only to larger hospitals with established in-house 
programs. The Company believes that increasing pressure from physicians 
and patients may, in the future, result in greater acceptance of the 
procedure for reimbursement by third party payors to community hospitals 
and that the Company will be well positioned to perform the service with 
its experienced and qualified personnel.

Joshua Levy, M.D., a shareholder, founder and medical director of the 
Company, through his private practice, treats patients who require 
therapeutic services. The Company's ability to provide these services
may be limited by Federal self-referral laws and regulations.
(See "Government Regulation.")
		      
Interoperative Autologous Transfusion

Interoperative autologous transfusions ("IAT") services offer an alternative 
to allogeneic transfusion, providing important benefits to the patient. The 
Company offers IAT services primarily in California and West Virginia.

An IAT procedure involves recovery of blood lost during surgery, cleaning of 
this blood and reinfusion of the recovered blood into the surgery patient. 
IAT may eliminate the risk of alloimmunizaton, hepatitis and AIDS from 
transfused blood. 

The Company provides IAT services using standard operating procedures 
designed to insure strict adherence to the highest quality standards. 
HemaCare's IAT procedures are based on guidelines developed by the AABB and 
the JCAHO and comply with the requirements of applicable federal and state 
regulatory agencies.

Discontinued Operations

From 1990 through 1995, the Company, through its wholly-owned subsidiary
HemaBiologics, Inc., conducted research and development activities relating 
to Immupath, an anti-HIV hyperimmune plasma product. In November 1995, the 
Company's Board of Directors decided to terminate the research and 
development activities. As a result of this decision, the Company 
established a $1 million reserve for losses during the disposal period, 
including $600,000 for a contingent liability related to a dispute with 
Medicorp, Inc. ("Medicorp"), a licensor of the research product. In July 
1996, the Medicorp dispute was settled without any payment by the Company. 
As a result, the Company recognized a $600,000 gain on disposal of 
discontinued operations in the third quarter of 1996. 

In June 1996, the Company agreed to sell most of its research and 
development assets, including its FDA plasma licenses and a plasma 
collection center for which the Company received cash and a promissory note, 
collateralized by certain of the assets sold. The note was repaid in March 
1997, resulting in a gain of $120,000 on disposal of discontinued operations 
in the first quarter of 1997. 

During the wind down of the research and development operations, the Company 
manufactured a supply of Immupath sufficient for the patients still 
receiving treatment for a limited period of time. There are currently two 
patients receiving Immupath treatments. In the fourth quarter of 1997, the 
Company reviewed and revised its estimate of the remaining costs of 
discontinued operations, including the costs to treat remaining patients and 
the other continuing liabilities of the discontinued operations, and 
recognized an additional gain on disposal of $173,000. The Company does not 
expect discontinued operations to have a material impact on its future 
operating performance.

Sales to Major Customers

Sales of products and services to USC/Norris Comprehensive Cancer Center and 
Hospital and USC University Hospital (the "USC Hospitals") comprised 16%, 
18% and 16% of the Company's revenues in 1998, 1997 and 1996, respectively. 
Although the USC Hospitals are not under common ownership, the Company's 
agreements with these hospitals are interrelated. Loss of sales to the USC 
Hospitals could have a material, adverse impact on the Company's net income. 
The Citrus Valley Health Partners Hospitals accounted for approximately 13% 
of the Company's total 1997 sales. 

Competition
------------

General

The Company competes on the basis of its responsiveness to customer needs,
value-based pricing and the high quality of its services and products.  The 
Company's competitors are generally not for profit entities including the 
American Red Cross ("ARC"), and regional and community blood banks. Many of 
these competitors have greater financial, technical and personnel resources 
than the Company, and additional companies may enter the field, increasing 
competition.  In addition, some larger hospitals have in-house blood 
collection and therapeutic apheresis service capabilities which do not 
compete directly with the Company, but do reduce the market for its 
services.

To date, the ARC has aggressively responded to competition from the Company, 
and management believes that such competition will continue. An example is 
the Company's experience in St. Louis. Prior to the opening of Gateway, a
blood management program initiated by the Company in late 1995, the ARC
provided virtually all blood products to hospitals in the greater St. Louis
area. Immediately following the opening of Gateway, the ARC decreased its
price for red blood cells in excess of 10%. This price decrease materially
impacted Gateway's ability to market its products and services profitably,
and Gateway was subsequently sold in August 1997.

In Southern California, the Los Angeles Region Blood Service of the American 
Red Cross (the "Los Angeles ARC") employed pricing practices which the 
Company alleged were in violation of antitrust laws. These pricing practices 
may have compelled Los Angeles ARC customers to purchase certain blood 
products from the ARC at higher prices than those offered by the Company, 
unfairly limiting the Company's ability to market its products in this 
region. In December 1995, the Company filed an antitrust and unfair 
competition complaint against the ARC with the United States District Court 
in the Central District of California to recover damages and secure 
injunctive relief. In June 1997, this suit was settled. Although the terms 
of the settlement are confidential, the Company believes that the settlement 
has improved its ability to obtain and retain blood product customers.

The Company has developed several blood product and service programs in 
response to the needs of its customers. These include a depot system and, 
most recently, its BMP outsourcing program.  The Company believes that its 
strategy of offering blood product and service programs tailored to the 
requirements of individual customers favorably differentiates it from other 
suppliers of blood products and services and that outsourcing programs 
provide opportunities for expansion of the Company's businesses. Management 
consistently reevaluates and revises its outsourcing programs to meet 
competitive demand. However, there can be no assurance that the Company's 
future outsourcing programs will be well received by hospital customers or 
be profitable, or that others will not successfully introduce similar 
programs that will compete with those of the Company. In addition, further 
growth may require that the Company obtain additional financing or partner 
with other blood product and service providers. Accordingly, there can be no 
assurance that the Company will be successful in marketing revised 
outsourcing programs or that, if successful, it will be able to obtain the 
funds necessary to finance such programs.

Blood Products

The primary competitor for the Company's single donor platelet and whole-
blood component business is the ARC. Community and hospital-based blood 
banks also compete with HemaCare to a lesser extent. Key competitive factors 
in the industry include price, responsive service and quality of product.

Blood Services

Competitors for the Company's therapeutic blood services business are
primarily regional and community blood banks and local kidney specialists 
(nephrologists) who supplement hemodialysis services with therapeutic 
apheresis services. In addition, some of the diseases that are treated by 
therapeutic apheresis can also be treated by other medical therapies.  Since 
therapeutic apheresis treatment requests are often sporadic and 
unpredictable, most community hospitals cannot afford to equip, staff and 
maintain an apheresis unit.  The Company's mobile service enables such 
hospitals to offer state-of-the-art therapeutic apheresis services to their 
patients on an "as needed" basis without incurring the fixed costs 
associated with providing these services from in-house resources.

Marketing
---------

HemaCare markets its products and services as components of custom-tailored
programs developed to meet the needs of specific customers. The Blood 
Management Program is the most recent application of this marketing 
strategy. The Company uses a depot system for distributing its blood 
products to BMP and other large volume customers which enhances convenience 
and product availability. The depot system provides the customer with an on-
site inventory of blood products stocked by the Company under a standing 
order. Other marketing tools include a combination of medical education, 
technical and tradeshow presentations, advertising and promotional programs, 
in-person sales and other marketing programs directed to selected 
physicians, hospitals and donor groups. 

Human Resources
---------------

At March 1, 1999, the Company had approximately 81 full-time and 76 part-
time employees.  Most of the Company's professional and management personnel 
possess prior experience in hospitals, medical service companies or blood 
banks.

None of the Company's employees are represented by a labor union.  The 
Company considers its relations with its employees to be good.

Supplies
---------

The Company maintains relationships with numerous suppliers who provide cell
separator equipment, disposables, supplies, replacement fluids, testing 
services and purchased blood products. Generally, the Company has 
experienced little difficulty in obtaining most of its equipment and 
supplies from its sources.  However, if there were material changes in the 
sources of its supplies, the Company's operations could be adversely 
affected. 

Since late 1996, the Company has experienced difficulty in obtaining red 
blood cell products from suppliers, and the cost of products obtained has 
increased. Industry data indicates that HemaCare's experience reflects a 
nationwide decrease in the availability of red blood cell products.
According to the National Blood Data Resource Center, collections of whole
blood units decreased 6% between 1994 and 1997, while blood transfusions
increases slightly.  Whole blood donations collected at the Company's BMP
donor centers provided approximately 15% of the red blood cell products sold
by the Company in 1998. Although this percentage is expected to increase in
1999, the Company will continue to rely heavily on purchased red blood cells
for the foreseeable future. If the Company is unable to manufacture or to
purchase red blood cells at a price that exceeds its contract prices to
customers, the Company's profitability will be adversely affected. 

The Company relies on blood donors to provide the platelets and whole blood 
required to produce the blood products manufactured and sold by the Company. 
The Company, unlike the ARC and most community blood banks, compensates 
platelet donors who donate at its Sherman Oaks facility thereby enhancing 
its ability to retain a pool of repeatedly tested platelet donors. Sales of 
apheresis platelets from paid donors may be prohibited by California law 
after December 2001. (See Government Regulation). Platelet and whole blood 
donors at the Company's BMP donor centers are not compensated. The Company 
competes directly with the American Red Cross and other blood banks in 
recruiting its volunteer donors. The growth of the Company's manufactured 
blood products business is dependent on the Company's ability to attract, 
screen and retain qualified compensated and non-compensated donors.

Albumin is the most commonly used replacement fluid in therapeutic apheresis 
procedures. In late 1996, a shortage of albumin arose when a major U.S. 
manufacturer was required by regulatory agencies to temporarily cease 
operations. This manufacturer has not yet fully resumed its operations, and 
albumin continues to be in short supply. As a result of the shortage, the 
price of albumin to HemaCare has more than doubled.

Government Regulation
----------------------

Providers of blood products and services are regulated by the FDA and state
licensing authorities, as well as being subject to accreditation by the 
AABB. An FDA Establishment License allows the license holder to sell 
licensed products across state lines. In contrast, an FDA registration 
permits sales of blood products only within a state.

Most of the products produced at the Company's Sherman Oaks location are 
licensed for interstate distribution under the Company's Food and Drug 
Administration Establishment license. In 1998, the Maine center operated 
under the FDA registration of Maine Medical Center. Effective January 1999, 
the Maine center is authorized to distribute products intrastate under its own 
FDA registration. Other east coast centers operate under the FDA 
registration of the sponsoring hospital, and accordingly, may only 
distribute products collected as directed by the sponsoring hospital. It is 
the Company's intention to extend its FDA licensure to certain CBS 
locations.

In response to the potential dangers of blood borne infections such as 
hepatitis and HIV, the FDA now requires that blood products be manufactured 
in accordance with Current Good Manufacturing Practices ("cGMPs") which have 
long been applied to the manufacturing of pharmaceuticals. HemaCare has 
maintained a near perfect regulatory record for 20 years. This record, along 
with its licenses and accreditations, are critical to the Company's ability 
to attract and retain customers who want to decrease their regulatory 
compliance burden by outsourcing all or a portion of their blood-related 
activities.

The Company's licensed and accredited laboratory performs the 
various tests required by the FDA and State of California to ensure the 
purity, potency and quality of the blood products that it sells in 
California. This laboratory is staffed by state licensed medical 
technologists and laboratory technicians. Testing for products collected in
other locations is outsourced to FDA licensed laboratories under contract 
arrangements. The Company carefully qualifies its outsource vendors and 
regularly audits their operations to assure compliance with stated 
standards.

Since 1976, California law has prohibited the infusion of blood products 
into patients if the donors of those products were paid unless, in the 
opinion of the recipient's physician, blood from a non-paid donor was not 
immediately available. Apheresis platelet products obtained from paid 
donors, including the Company's Sherman Oaks center's paid donors, are 
exempted from this law by a state statute passed in late 1994 which contains 
a "sunset" provision. Unless a new exemption is obtained, the existing 
exemption will expire under its sunset provision on December 31, 2001,
which could have a material adverse affect on the Company's revenue and
net income. The Company is evaluating a number of available options with
regard to the expiration of the extension.

State and federal laws set forth antikickback and self-referral prohibitions 
and otherwise regulate financial relationships between blood banks and 
hospitals, physicians and other persons who refer business to them.  While 
the Company believes its present operations comply with applicable 
regulations, there can be no assurance that future legislation or rule 
making, or the interpretation of existing laws and regulations will not 
prohibit or adversely impact the delivery by HemaCare of its services and 
products. 

Joshua Levy, M.D., medical director of the Company and a shareholder, through
his private practice, treats patients who require therapeutic services.  Sales
by the Company to unaffiliated hospital customers for therapeutic services
provided to Dr. Levy's patients amounted to approximately 4% ($589,000), 5%
($584,000) and 6% ($675,000) of the Company's total revenues for 1998, 1997
and 1996, respectively.  There are no agreements between Dr. Levy, or the
Company, and the Company's hospital customers that require the hospitals to
select HemaCare to provide therapeutic services to the hospital's patients.

Amendments to the Federal self-referral laws and related regulations which
became effective in 1995 could restrict the Company's ability to provide 
therapeutic services to Dr. Levy's patients who are covered by Medicare or 
MediCal. It is estimated that revenues from these patients represented 
approximately 2% ($295,000)of the Company's 1998 revenues. These regulations 
are complex, and in early 1996, the Company requested a clarification of 
their application to its business from Health Care Financing Administration 
("HCFA"). To date, the Company has not received a response to this request. 
However, in January 1998, proposed new regulations were issued for comment. 
The proposed regulations do not specifically address therapeutic apheresis 
services, and the Company has requested a revision of these regulations to 
provide a clear exemption for these services. The comment period for the 
proposed regulations ended in May 1998, but the new regulations have not yet 
been issued. If the new regulations do not provide an exemption for 
therapeutic apheresis services, the Company could lose the future revenue 
from its services for Dr. Levy's Medicare and MediCal patients.

Health care reform is continuously under consideration by lawmakers, and it 
is not certain as to what changes may be made in the future regarding health 
care policies.  However, policies regarding reimbursement, universal health 
insurance and managed competition may materially impact the Company's 
operations.

Professional and Product Liability Insurance
--------------------------------------------

The nature of the Company's business is such that it may be subject to 
substantial liabilities for personal injury.  There can be no assurance that 
potential insurance claims will not exceed present coverage or that 
additional insurance coverage would be available at affordable premium 
costs.  If such insurance were ineffective or inadequate for any reason, the 
Company could be exposed to significant liabilities.  HemaCare has medical 
professional liability insurance in the amount of $2,000,000 for a single 
occurrence and $5,000,000 in the aggregate per year.

California law and the laws of virtually all other states classify the 
provision and use of whole blood, plasma and blood products for the purpose 
of injections and transfusions into human beings as a service rather than 
the sale of a product.  Therefore, the Company does not believe it is 
subject to product liability claims as a result of injuries arising out of 
the therapeutic infusion of its blood products and does not intend to obtain 
product liability insurance at this time.

Glossary
---------

Albumin - A protein based fluid derived from human plasma, commonly used to
replace the plasma removed in a plasma exchange or cell depletion therapeutic
apheresis procedure.

Antibodies - Protective substances, protein in nature, circulating in body
fluids as the result of exposure to a specific antigen.  Chemically active 
against that antigen only.

Autoimmune Diseases - Those diseases in which the patient's immune system
has become overly active to the point where it produces antibodies which are 
directed against its own tissues or cells.

Autologous - A blood product obtained from a patient and subsequently
reinfused into that patient. 

Components - The products manufactured from whole blood donations, including
red blood cells, fresh frozen plasma and cryoprecipitate.

Cryopreservation - The process of freezing tissues or cells, usually in
protective fluids, and storage at extremely low temperatures in a frozen 
state (e.g., -70 degrees C or colder).

Human Immunodeficiency Virus (HIV) - The infectious agent of the disease
commonly referred to as Acquired Immune Deficiency Syndrome (AIDS).

Immunoadsorbant Column - A device through which plasma is passed in order to
separate or remove certain harmful components such as immune complexes.

Plasma - The liquid portion of whole blood; composed of a mixture of soluble
proteins including antibodies, minerals and nutrients.

Platelets - One of the cellular components of blood involved in the blood
clotting process.

Platelet Apheresis - The process of removing blood from a donor, separating
it into its various components and retaining the concentrated platelets 
which will then be transfused into a patient deficient in platelets.  The 
remaining blood components are returned to the donor.

Stem Cells - Cells which originate in the bone marrow and mature into the
different cellular components of blood. Frequently transfused into certain 
cancer patients in order to facilitate regeneration of blood components 
after bone marrow has been purposely destroyed by chemotherapy or radiation.

Therapeutic Apheresis - The application of apheresis technology to the
clinical treatment of autoimmune diseases and blood cell disorders by 
removing selected, abnormal components or cells and returning all other 
components.

ITEM 2.  PROPERTIES.

The Company occupies a 12,000-square foot facility in Sherman Oaks, 
California, where it maintains its corporate office and operates a platelet 
apheresis center, a blood bank laboratory, a manufacturing facility for 
whole blood components and a distribution center. On  August 1, 1998, the 
lease on this space was extended for a four-year period ending October 31, 
2002.

The USC Blood Donor Center occupies a 1,600 square foot facility located in 
Los Angeles, California, under a lease with a rolling one year term. The 
Citrus Valley Blood Donor Center, which was closed in July 1998, occupied a 
2,300 square foot facility located in Covina, California. The Company is 
currently seeking to sublease this space. Under its terms, the Citrus Valley 
Center lease expires in April 2003, however, HemaCare may terminate this 
lease any time after April 2000, under certain circumstances.

The Company assumed several existing leases in connection with the October 
23, 1998 purchase of the assets of Coral Therapeutics, Inc. The 
Company now occupies a 2,121 square foot donor center facility in South 
Portland, Maine and a 1,278 square foot office space in Yonkers, New York.  
The Maine lease expires September 30, 1999  and the New York lease expires 
August 31, 2001. The St. Vincent BMP Donor Center occupies a 879 square foot 
facility located in St. Vincent Hospital in Worcester, Massachusetts under 
the terms of the related BMP agreement. The UNC Blood Donor Center is 
located in a 1,200 square foot facility in the UNC Hospitals. The lease on 
this space term is concurrent with the term of the BMP agreement.

ITEM 3.  LEGAL PROCEEDINGS.

In December 1995, the HemaCare filed an antitrust and unfair competition 
complaint to recover damages and secure injunctive relief against the 
American Red Cross ("ARC") in connection with ARC pricing practices in 
Southern California. The Company believed that these pricing practices may 
have compelled Southern California ARC customers to purchase certain blood 
products from the ARC at prices higher than those offered by the Company. In 
June 1997, this suit was settled. Although the terms of the settlement are 
confidential, the Company believes that the settlement may ultimately 
improve its ability to obtain and retain blood product customers.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

			       PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER 
	 MATTERS

Market for Common Stock
-----------------------

Effective November 2, 1998, the Company's common stock is quoted on the OTC 
Bulletin Board under the symbol HEMA. Prior to that date, the Company's 
common stock was listed on the Nasdaq Small Cap Market ("Nasdaq") under the 
same symbol.

The following table sets forth the range of high and low closing bid prices 
of the Common Stock, as reported by Nasdaq and the Nasdaq market system, for 
the quarters ended March 31, June 30, September 30 and December 31, 1998 and 
1997.  These prices reflect inter-dealer quotations, without retail markups, 
markdowns or commissions, and do not necessarily represent actual 
transactions.

<TABLE>
<CAPTION>
 
			   1998                1997
Quarter ended         High      Low       High      Low
--------------        ----      ----      ----      ----
<S>                   <C>       <C>       <C>       <C>

March 31              $0.78     $0.38     $3.13     $2.03

June 30               $0.88     $0.38     $2.50     $1.06

September 30          $0.53     $0.28     $1.56     $0.75

December 31           $0.81     $0.13     $0.97     $0.38

</TABLE>

No cash dividends had been paid as of March 1, 1999.  The Company does not 
anticipate paying cash dividends in the foreseeable future.  As of March 1, 
1999, there were approximately 334 holders of record of the Company's Common 
Stock.

On October 22, 1998, the Company issued 450,000 shares of its Series B
Senior Convertible Preferred Stock ("Series B Preferred Shares") to Comdisco,
Inc. ("Comdisco") in connection with the acquisition from Comdisco of assets
of Coral Therapeutics, Inc. ("Coral").  The Series B Preferred Shares are
convertible into 500,000 shares of HemaCare Common Stock, at the option of
the holder, one year after issuance without payment of further consideration.
In addition, and as part of the asset purchase, HemaCare (i) has entered into
non-competition agreements with certain former managers of Coral pursuant to
which the Company expects to issue 60,000 common shares and warrants to
purchase 90,000 shares of Common stock at an exercise price per share of
$0.90 per share, and (ii) expects to issue warrants for 35,000 shares of common
stock at an exercise price of $0.31 per share to consultants who assisted in
the acquisition.  The warrants to be issued will expire in October 2003.  The
Company has relied Section 4(2) of the Securities Act of 1933, as amended,
and/or Regulation D, thereunder, in connection with the issuance of these
securities.

ITEM 6.  SELECTED FINANCIAL DATA. 

The following selected financial data should be read in conjunction with,
the other information and financial statements, including the notes thereto,
appearing elsewhere herein.

<TABLE>
<CAPTION>

					      Year Ended December 31,
				       (In Thousands, except Per Share Data)    
				   1998       1997      1996      1995      1994
				  ------     -------   ------    -------   ------
<S>                               <C>        <C>       <C>       <C>       <C>
Revenues........................  $13,124    $11,101   $10,921   $10,783   $10,847   
Operating profit................    3,122      1,907     1,234     2,559     2,963
Income (loss) from continuing
 operations.....................      745         37    (1,090)      480       676    
Discontinued Operations:
Loss from discontinued 
 operations.....................        -          -         -      (902)   (2,964)   
Gain (loss) on disposal 
 of discontinued operations.....        -        293       600    (3,114)        -     
Net income (loss)...............      745        330      (490)   (3,536)   (2,288)   

Basic Per Share Amounts:
-------------------------
Income (loss) from continuing
 operations.....................  $  0.10    $  0.01   $ (0.17)  $  0.08   $  0.13   
Income (loss) from discontinued
 operations.....................        -       0.04      0.09     (0.70)    (0.59)  
Net income (loss)...............     0.10       0.05     (0.08)    (0.62)    (0.45)   

Diluted Per Share Amounts:
---------------------------
Income (loss) from continuing
 operations.....................     0.10       0.01     (0.17)     0.08      0.13    
Income (loss) from discontinued
 operations.....................        -       0.04      0.09     (0.69)    (0.57)   
Net income (loss)...............     0.10       0.05     (0.08)    (0.61)    (0.44)   

Total assets....................  $ 7,662    $ 4,384   $ 4,776   $ 4,456   $ 6,289    
Long-term debt and capital lease 
 obligations, net of current    
 portion........................    1,118        209        503       649       287   
Shareholders' equity............    3,291      2,402      2,023     1,226     3,900    

</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
	 RESULTS OF OPERATIONS.

All comparisons within the following discussions are to the previous year.

In October 1998, the Company, through its subsidiary Coral Blood Services, 
Inc. ("CBS"), acquired existing blood products and services operations in 
the eastern United States. These operations are primarily comprised of blood 
management programs and other blood services provided to hospitals and 
medical centers. Presently, CBS is providing services to its customers under 
interim arrangements, while negotiating new contractual agreements.

The Company operates five blood management programs. The University of 
Southern California ("USC") program, initiated in 1996, and four east coast
programs which were operated by Coral Therapeutics, Inc. prior to October
1998. The east coast programs are Dartmouth-Hitchcock Medical Center 
("DHMC"), Maine Medical Center ("MMC"), St. Vincent Hospital ("St. Vincent") 
and University of North Carolina ("UNC"). 

In late 1995, the Company initiated the Gateway Community Blood Program 
("Gateway") located in St. Louis, Missouri, and  in October 1996 the Citrus 
Valley Health Partners ("Citrus Valley") Blood Management Program located 
in southern California, commenced. Both the Gateway and Citrus Valley BMPs 
failed to meet the Company's profitability criteria. Gateway was sold in 
August 1997, and the Citrus Valley contract was terminated in July 1998.

The above programs are collectively referred to as the "Blood Management 
Programs" or "BMPs" in the following discussions.

Revenues
--------

Total revenues increased 18% ($2,023,000) in 1998, compared to an increase of 
2% ($180,000) in 1997. The 1998 increase was due to higher Regional Blood 
Services ($1,595,000) and Blood Products ($941,000) revenue, partially offset 
by a decrease in Blood Management Program revenue. The acquisition of CBS 
contributed $1,366,000 of this increase. The 1997 increase was due primarily 
to higher Blood Management Program and Regional Blood Services revenue, 
offset by lower Regional Blood Products revenue. 

Blood Management Programs

Blood Management Program revenue decreased by $513,000 in 1998 and increased
by $1,388,000 in 1997. The 1998 decrease was due primarily to the 
disposition of Gateway ($587,000) and termination of the Citrus 
Valley contract ($703,000), partially offset by the addition of the 
CBS BMPs in ($771,000). The increase in 1997 Blood Management 
Program revenue was related to Citrus Valley, which commenced in the third 
quarter of 1996. Both Gateway and Citrus Valley were terminated because they 
failed to meet the Company's profitability criteria.

Regional Operations

Blood Products
Blood products (apheresis and whole blood component) revenues increased 36%
($941,000) in 1998 after decreasing 41% ($1,789,000) in 1997. The 1998 increase 
resulted from an increase in the volume of apheresis platelet sales, 
partially offset by a small decrease in the sales price of these products, 
and a decrease in the volume of whole blood components sold. The decrease in 
1997 revenue was due primarily to the conversion of the Citrus Valley 
business to a blood management program. In addition, the volume and sales 
prices of apheresis platelets and whole blood components sold to other 
customers decreased in 1997. 

Blood Services
Regional Blood Services revenue increased by 36% ($1,595,000) in 1998 and 15%
($581,000) in 1997. The 1998 increase resulted from sales of albumin, the 
addition of CBS's operations ($565,000) and a higher volume of southern 
California therapeutic procedures. In 1997, revenue increased due to a higher 
volumes of southern California therapeutic apheresis procedures and donor 
testing. 

Albumin, a protein replacement fluid, has been in short supply since 
regulatory agencies required the shut down of a major manufacturing facility 
in late 1996. In 1998, the Company was able to purchase albumin at favorable 
prices and sell a portion of this albumin to non-hospital customers. The 
volume of southern California therapeutic apheresis procedures increased 8% 
in 1998 and 11% in 1997. Revenue per procedure increased 1% in 1998 and 8% in 
1997. The 1997 price increase resulted from passing through a portion of the 
increased cost of albumin. 

The choice of therapeutic apheresis rather than an alternative treatment for 
a particular diagnosis often depends on general acceptance by the medical 
community and the willingness of third-party payors to reimburse hospitals 
for the cost of this treatment. Although HemaCare enjoys a large share of the 
southern California therapeutics market, the Company reduced its basic 
therapeutic procedure fees to retain a number of its high volume customers in 
1997. There was no change in the basic fee in 1998.

The volume of donor tests remained constant in 1998, while the average price 
per unit tested increased 7%. In 1997, the Company expanded its outside donor 
testing services, more than tripling the number of units tested for customers 
in 1996. The increases in testing volume in 1997 were partially offset by 
decreases in the average price per unit tested. 

Operating Profit 
----------------

Operating profit as a percentage of revenue ("operating profit margin")
increased 7% in 1998 and 6% in 1997. Both increases resulted primarily from 
improved performance of Blood Management Programs and decreased sales of low 
profit margin whole blood components. 

Blood Management Programs

Blood Management Programs generated profit of $312,000 in 1998 compared to
losses of $210,000 and $963,000 in 1997 and 1996, respectively. The 1998 
operating profit resulted from improved performance of the USC program and 
elimination of operating losses from Gateway and Citrus Valley. Operating 
profit from the USC program increased in 1998 due both to more efficient 
donor center operations and a lower cost of apheresis products produced by 
the Sherman Oaks operation and sold to the USC hospitals. Of the losses, 
$316,000 in 1997 and $1,106,000 in 1996 were related to Gateway's operations 
which were sold in August 1997. In addition, the Citrus Valley BMP, which 
failed to achieve profitability, was terminated in July 1998. In October 
1998, CBS took over operation of four existing BMP's. These operations 
contributed to operating profit in the fourth quarter of 1998.

Regional Operations

Blood Products
The operating profit margin on blood product sales increased to 32% in 1998, 
from 27% in 1997 and 22% in 1996. Both increases were due primarily due to a 
higher profit margin on apheresis platelet sales and decreased sales of low 
margin whole blood component products. Apheresis platelet profit margin 
increased in 1998 and 1997 as a result of lower per unit production costs, 
partially offset by lower per unit sales prices. 

In late 1996, the price of red blood cells began to increase and their 
availability and profit margin decreased. As a result, Regional Blood 
Products revenue from components, principally red blood cells, as a 
percentage of total Regional Blood Products revenue, decreased to 8% in 1998, 
from 17% in 1997 and 36% in 1996. A portion of the 1997 decrease in Regional 
Operations sales of components also resulted from the conversion of Citrus 
Valley sales to a BMP arrangement.

Blood Services
The gross profit margin for the blood services decreased by 4% in 1998 and 2% 
in 1997. The 1998 decrease was due to the mix of services provided. In 
particular, the gross profit margin on albumin is typically lower than on 
therapeutic apheresis services. In 1997, the decrease was due to increased 
cost of albumin used in therapeutic procedures. The average price per
therapeutic procedure increased in 1997 in response to an increase in the
cost of albumin, a replacement fluid used in most therapeutic procedures. 

General and Administrative Expenses
-----------------------------------

General and administrative expenses increased 18% ($356,000) in 1998 and
decreased 14% ($326,000) in 1997. The 1998 increase was due to severance 
payments, compensation cost associated with forgiveness of a related-party 
loan, higher CEO compensation and higher legal, director and consulting 
fees. In addition, 1997 general and administrative expenses were reduced by 
a $71,000 recovery of previously expensed legal fees related to the 
Company's lawsuit against the American Red Cross, which was settled in June 
1997.

Discontinued Operations
-----------------------

From 1990 through 1995, the Company, through its wholly-owned subsidiary 
HemaBiologics, Inc., conducted research and development activities relating 
to Immupath, an anti-HIV hyperimmune plasma product. In November 1995, the 
Company's Board of Directors decided to terminate the research and 
development activities. As a result of this decision, the Company 
established a $1 million reserve for losses during the disposal period, 
including $600,000 for a contingent liability related to a dispute with 
Medicorp, Inc. ("Medicorp"), a licensor of the research product. In July 
1996, the Medicorp dispute was settled without any payment by the Company. 
As a result, the Company recognized a $600,000 gain. 

In June 1996, the Company agreed to sell most of its research and 
development assets, including its FDA plasma licenses and a plasma 
collection center for which the Company received cash and a promissory note, 
collateralized by certain of the assets sold. The note was repaid in March 
1997, resulting in a gain of $120,000 on disposal of discontinued operations 
in the first quarter of 1997. 

During the wind down of the research and development operations, the Company 
manufactured a supply of Immupath sufficient for the patients still 
receiving treatment for a limited period of time, and all remaining HIV 
positive plasma was disposed of in 1997. There are currently two patients 
receiving Immupath treatments. In the fourth quarter of 1997, the Company 
reviewed and revised its estimated costs of discontinued operations, 
including on-going cost of patient treatment and other continuing 
liabilities related to discontinued operations, and recognized an additional 
gain of $173,000. The Company does not expect the discontinued operations to 
have a material impact on its future operating performance.

Liquidity and Capital Resources
-------------------------------

At December 31, 1998, the Company had cash and short-term investments of
$1,660,000 and $600,000 of short-term debt outstanding with the commercial 
bank. In February 1999, the commercial bank increased the Company's line of 
credit borrowing limit to $1.2 million and converted the $600,000 of debt 
to a four year term loan due in 2003, at an interest rate of prime plus 1%. 
Under the terms of the credit line agreement, which is in effect until May 
31, 1999, the Company may borrow up to 70% of eligible accounts receivable, 
up to a maximum of $1.2 million and must maintain certain ratios. The credit 
line bears interest at prime plus 0.5%. The Company was in compliance with 
all covenants of its borrowing agreement at December 31, 1998, and is the 
process of renewing the credit agreement.

Effective November 2, 1998, the Company's common stock is quoted on the OTC 
Bulletin Board. Prior to that date, the Company's common stock was listed on 
the Nasdaq Small Cap Market ("Nasdaq"). Issuers listed on the Nasdaq SmallCap 
Market are required to maintain a minimum bid price of $1.00, and the 
Company's common stock has been trading below the minimum price for some 
time. Despite requests to Nasdaq for an exception to the minimum bid price 
listing requirement, on October 29, 1998, the Company was informed that its 
stock would be delisted from the Nasdaq SmallCap market effective  the end of 
that day. Although the Company's common stock is quoted on the OTC Bulletin 
Board, the liquidity of the Company's common stock and the Company's ability 
to raise capital may be impaired by the Nasdaq delisting.

The Company's blood products and services businesses, other than certain 
blood donor center operations established for the Blood Management Programs
("Centers"), are profitable and cash flow positive. The Company periodically
evaluates the profitability and viability of each of its operating units. As
the result of such an evaluation, the Company sold Gateway's unprofitable St. 
Louis-based operations in August 1997 and terminated the Citrus Valley BMP 
in July 1998.

The Company is providing services to most of its east coast customers under
interim arrangements, while contractual agreements are negotiated and
finalized.  The Company believes that contractual agreements will be
satisfactorily concluded with most of these customers.  However, there can
be no assurance that satisfactory contracts can be negotiated with all
major customers, and the loss of one or more major customers could have an
adverse effect on the Company's revenue and operating profit.

Since 1976, California law has prohibited the infusion of blood products 
into patients if the donors of those products were paid unless, in the 
opinion of the recipient's physician, blood from a non-paid donor was not 
immediately available. Apheresis platelet products obtained from paid 
donors, including the Company's Sherman Oaks center's paid donors, are 
exempted from this law by a state statute passed in late 1994 which contains 
a "sunset" provision. Unless a new exemption is obtained, the existing 
exemption will expire under its sunset provision on December 31, 2001, in 
the event the existing exemption is not extended. The Company is evaluating 
a number of alternatives with regard to continuing its California based 
apheresis platelet business after the year 2001. However, there can be no 
assurance that these initiatives will be successful. Should the Company be 
unable to continue to sell apheresis platelets collected from paid donors, 
the Company's revenue and operating profit could be materially adversely 
effected.

Joshua Levy, M.D., medical director of the Company and a shareholder, treats
patients through his private practice, who require therapeutic services.
Amendments to the Federal self-referral laws and related regulations which
became effective in 1995 could restrict the Company's ability to provide 
therapeutic services to Dr. Levy's patients who are covered by Medicare or 
MediCal. It is estimated that revenues from these patients represented 
approximately 2% ($295,000), 2.6% ($292,000) and 3%($337,000) of the Company's
1998, 1997 and 1996 revenues, respectively. New regulations which have been
proposed but not yet issued may provide an exemption for therapeutic
apheresis services. If the new regulations do not provide an exemption for
therapeutic apheresis services, the Company could lose the revenue from its
services for Dr. Levy's Medicare and MediCal patients. (See "Government
Regulation.")

Management is evaluating opportunities to develop and implement new 
outsourcing models, including its Blood Management Program. Because of the 
increase in the cost of acquiring red blood cells and their decreasing 
availability, it is likely that future HemaCare outsourcing arrangements 
will either involve fixed price supply contracts for these products or will 
focus on providing specialized donation services, apheresis based products 
and services, and other technology based blood therapies. However, 
development and introduction of a revised Blood Management Program model or 
other outsourcing programs may require that the Company obtain additional 
financing or partner with other blood product and service providers. There 
can be no assurance that the Company will be successful in developing and 
marketing its outsourcing programs, that it will be able to obtain the funds 
necessary to finance such programs, that it will be able to obtain a supply
of red blood cells at an economic price or that required partnering
relationships can be developed. 

The Company anticipates that positive cash flow from its operations and its 
cash and investments on hand will be sufficient to provide funding for its 
needs during the next 12 months, including (i) anticipated operating 
deficits of certain Centers, (ii) the remaining costs of its discontinued
operations and (iii) other working capital requirements, including capital
and operating lease commitments.

Year 2000 Disclosure
--------------------

The Company has developed and is implementing a comprehensive program to 
address year 2000 issues. The program considers the effect of the Year 2000 
on the Company's internal systems, customers, products and services, 
production systems, and suppliers and other critical business partners. 
Implementation of the Company's plan is substantially complete, and the 
Company believes that all identified potential Year 2000 issues have been 
effectively resolved. The cost to identify and resolve Year 2000 issues was 
not material to the Company's financial results and has been expensed as 
incurred. Management does not believe that the there will be a significant 
disruption to the Company's business due to Year 2000 issues. However, the 
Company has begun contingency planning to address any situations which may 
arise in which the planning of the Company or third parties prove to be 
inadequate, and where practical alternatives are available. There can be no 
assurance that the Company's Year 2000 program or the programs of critical
business partners will be successful, and failure could have a material
adverse affect on the Company's business and results of operations.

Factors Affecting Forward-Looking Information
---------------------------------------------

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
from liability for forward-looking statements. Certain information included 
in this Form 10-K and other materials filed or to be filed by the Company 
with the Securities and Exchange Commission (as well as information included 
in oral statements or other written statements made or to be made by or on 
behalf of the Company) are forward-looking, such as statements relating to 
operational and financing plans, competition, the effects of discontinued 
operations, demand for the Company's products and services, and the 
anticipated outcome of contingent claims against the Company. Such forward-
looking statements involve important risks and uncertainties, many of which 
will be beyond the control of the Company. These risks and uncertainties 
could significantly affect anticipated results in the future, both short-term 
and long-term, and accordingly, such results may differ from those expressed 
in forward-looking statements made by or on behalf of the Company. These 
risks and uncertainties include, but are not limited to, those relating to 
the ability of the Company to develop and market profitable outsourcing 
programs, obtain additional financing, to achieve profitability in certain
Blood Management Centers, to continue its paid donor business, to retain
existing customers, to improve the profitability of the Company's other
operations, to successfully negotiate contracts with its east coast customers,
to expand its operations, to renew and comply with the covenants under its
bank line of credit, to effectively compete against the ARC and other
competitors, and the effects of the Year 2000. Each of these risks and
uncertainties as well as others are discussed in greater detail in the
preceding paragraphs of this Management's Discussion and Analysis of
Financial Condition and Results of Operations.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The Index to Financial Statements and Schedules appears on page F-1, the 
Report of Independent Public Accountants appears on F-2, and the Consolidated 
Financial Statements and Notes to Consolidated Financial Statements appear on 
pages F-3-F-16.  

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
	 FINANCIAL DISCLOSURES.

None.

				PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information required by this Item is set forth under the caption 
"Election of Directors" in the Company's definitive Proxy Statement to be 
filed with the Securities and Exchange Commission and is incorporated herein 
by this reference as if set forth in full.

ITEM 11.  EXECUTIVE COMPENSATION.

The information required by this Item is set forth under the caption 
"Executive Compensation" in the Company's definitive Proxy Statement to be 
filed with the Securities and Exchange Commission and is incorporated herein 
by this reference as if set forth in full.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information required by this Item is set forth under the caption
"Principal Shareholders" in the Company's definitive Proxy Statement to be 
filed with the Securities and Exchange Commission and is incorporated herein 
by this reference as if set forth in full.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information required by this Item is set forth under the caption "Certain
Transactions" in the Company's definitive Proxy Statement to be filed with 
the Securities and Exchange Commission and is incorporated herein by this 
reference as if set forth in full.


			       PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

The following are filed as part of this Report:

(a) 1.  Financial Statements

    An index to Financial Statements and Schedules appears on page F-1.

(a) 2.  Financial Statement Schedules

    The following financial statement schedule is filed herewith:

    Schedule II - Valuation and Qualifying Accounts

    All other schedules for which provision is made in the applicable 
    accounting regulations of the Securities and Exchange Commission 
    are not required under related instructions or are inapplicable, 
    and therefore have been omitted.

(a) 3.  Exhibits 

    The following exhibits listed are filed or incorporated by reference as
    part of this Report.

     2.1  Amended and Restated Asset Purchase Agreement between the 
	  Registrant, HemaBiologics, Inc. (a wholly owned subsidiary of the 
	  Registrant) and Atopix Pharmaceuticals Corporation, dated June 26, 
	  1996 incorporated by reference to Exhibit 2.1 to Form 10-Q of the 
	  Registrant for the quarter ended June 30, 1996.

     2.2  Asset Purchase Agreement between the Registrant, Gateway Community 
	  Blood Program and Haemonetics Corporation, dated August 1, 1997--
	  incorporated by reference to Exhibit 2.1 to Form 10-Q of the 
	  Registrant for the quarter ended September 30, 1997.

     3.1  Restated Articles of Incorporation of the Registrant--incorporated 
	  by reference to Exhibit 3.1 to Form 10-K of the Registrant for the 
	  year ended December 31, 1995.

     3.2  Bylaws of the Registrant, as amended--incorporated by reference to 
	  Exhibit 3.1 to Form 10-Q of the Registrant for the quarter ended 
	  March 31, 1998.

     4.1  Warrant Agreement between the Registrant and Medicorp Inc. dated 
	  February 17, 1993--incorporated by reference to Exhibit 4 to the 
	  Current Report on Form 8-K of the Registrant dated February 17, 
	  1993.

     4.2  Form of Warrant Agreement between the Registrant and each of the 
	  following consultants: British Far East Holdings, Ltd., Joseph T. 
	  McDonald and E. Keene Wolcott dated September 30, 1994--
	  incorporated by reference to Exhibit 4.1 to Form 10-Q of the 
	  Registrant for the quarter ended September 30, 1994.

     4.3  Warrant Agreement between the Registrant and Torrey Pines 
	  Securities, Inc., dated April 8, 1994--incorporated by reference 
	  to Exhibit 4.2 to Form 10-Q of the Registrant for the quarter 
	  ended March 31, 1994.

     4.4  Amendment to Warrant Agreement between the Registrant and Torrey 
	  Pines Securities dated April 3, 1995--incorporated by reference to 
	  Exhibit 4.1 to Form 10-Q of the Registrant for the quarter ended 
	  March 31, 1995.

     4.5  Warrant Agreement between the Registrant and M.A. Levy and 
	  Associates dated March 1, 1995--incorporated by reference to 
	  Exhibit 4.7 to Form 10-K of the Registrant for the year ended 
	  December 31, 1994.

     4.6  Warrant Agreement between the Registrant and Joseph T. McDonald 
	  dated November 1, 1996--incorporated by reference to Exhibit 4.9 
	  to Form 10-K of the Registrant for the year ended December 31, 
	  1996.

     4.7  Rights Agreement between the Registrant and U.S. Stock Transfer 
	  Corporation dated March 3, 1998--incorporated by reference to 
	  Exhibit 4 to Form 8-K of the Registrant dated March 5, 1998.

     4.8  Amended Certificate of Determination, dated March 18. 1998--
	  incorporated by reference to Exhibit 4.8 of Form 10-K of the
	  Registrant for the year ended December 31, 1997.

     4.9  Certificate of Determination of the Registrant's Series B Senior 
	  Convertible Preferred Stock between the Registrant and Comdisco 
	  Health Care Group dated October 23, 1998--incorporated by 
	  reference to Exhibit 4.1 of Form 8-K of the Registrant dated 
	  November 5, 1998. 

     4.10 Registration Rights of Shareholders' incorporated by reference to 
	  Exhibit 4.9 to the Current Report on Form 8-K of the Registrant 
	  dated August 19, 1996. 

    10.1  1986 Employee Stock Option Plan, as amended and restated through 
	  October 1994--incorporated by reference to Exhibit 10.4 to Form 
	  10-Q of the Registrant for the quarter ended September 30, 1994.

    10.2  1996 Stock Incentive Plan, as amended, of the Registrant-- 
	  incorporated by reference to Exhibit 4.1 to Form 10-Q of the 
	  Registrant for the quarter ended September 30, 1996.

    10.3  Office Building Lease dated August 21, 1998 between the Registrant 
	  and Tar Asset Addison Place, L.P.--incorporated by reference to 
	  Form 10-Q for the quarter ended September 30, 1998.

    10.4  Employment Agreement between Harold I. Lieberman and the 
	  Registrant, dated September 19, 1988-- incorporated by reference 
	  to Exhibit 10.4 to Form 10-K of the Registrant for the year ended 
	  December 31, 1994. 
  
    10.5  Amendment to Employment Agreement between the Registrant and 
	  Harold I. Lieberman, dated September 19, 1989--incorporated by 
	  reference to Exhibit 10.5 to Form 10-K of the Registrant for the 
	  year ended December 31, 1994.

    10.6  Revolving Credit Agreement between the Registrant and Bank Leumi 
	  USA, dated February 5, 1999 and related Promissory Note.

    10.7  Promissory Note between the Registrant and Bank Leumi USA, dated 
	  February 5, 1999

    10.8  Promissory Note to HemaBiologics, Inc., a wholly owned subsidiary 
	  of the Registrant, from Joshua Levy dated January 1, 1996 -- 
	  incorporated by reference to Exhibit 10.10 to Form 10-K of the 
	  Registrant for the year ended December 31, 1995.

    10.9  Pledge Agreement between HemaBiologics, Inc., a wholly owned 
	  subsidiary of the Registrant, and Joshua Levy dated January 1, 
	  1996 -- incorporated by reference to Exhibit 10.11 to Form 10-K of 
	  the Registrant for the year ended December 31, 1995. 

    10.10 Loan Reimbursement Agreement between HemaBiologics, Inc., a wholly 
	  owned subsidiary of the Registrant, and Joshua Levy dated January 
	  30, 1998--incorporated by reference to Exhibit 10.10 to Form 10-K
	  of the Registrant for the year ended December 31, 1997.

    10.11 Settlement Agreement between the Registrant and Medicorp, Inc. -- 
	  incorporated by reference to Exhibit 10.1 to the Current Report on 
	  Form 8-K of the Registrant dated July 19, 1996.

    10.12 Foreclosure Sale Agreement between the Registrant and Comdisco 
	  Health Care Group, Inc dated October 23, 1998--incorporated by 
	  reference to Exhibit 2.1 of Form 8-K of the Registrant dated 
	  November 5, 1998.

    10.13 Employment agreement between the Registrant and William D. Nicely 
	  dated May 27, 1998--incorporated by reference to Form 10-Q for the 
	  quarter ended June 30, 1998.

    11    Computation of earnings (loss) per common equivalent share. 
								      
    21    Subsidiaries of the Registrant

    23    Consent of Arthur Andersen LLP

    27    Financial Data Schedule

(b) Reports on Form 8-K.

    On November 5, 1998, the Company filed a Report on Form 8-K dated 
    October 22, 1998.  The Company reported under Item 2 that the Company 
    acquired the assets of Coral Therapeutics, Inc. for Coral's secured 
    lender.

    On December 30, 1998, the Company filed an amended Report on Form 8-K/A 
    dated October 22, 1998.  The Company reported under Item 7 the 
    financial statements of Coral Therapeutics and pro forma financial 
    information of HemaCare Corporation and Coral Therapeutics, Inc. 

<PAGE>

			       SIGNATURES


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


					   HEMACARE CORPORATION      
      

Dated:  March 31, 1999                     \s\ Sharon C.  Kaiser        
					   ----------------------------
					   Sharon C.  Kaiser,
					   Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this 
report has been signed below by the following persons on behalf of the 
Registrant in the capacities indicated on the 31st day of March, 1999.


	    Signature                        Title


\s\  Alan C. Darlington              Alan C. Darlington
--------------------------           Chairman of the Board



\s\  William D. Nicely               William D. Nicely
--------------------------           Chief Executive Officer and 
				     Director
				     (Principal Executive Officer)
					 
\s\ Sharon C.  Kaiser                Sharon C.  Kaiser
--------------------------           Vice President, Finance, Chief 
				     Financial Officer
				     (Principal Financial and Accounting
				     Officer)


\s\ Charles R. Schwab, Jr.           Charles R. Schwab, Jr.
--------------------------           Director

\s\  Jay Steffenhagen                Jay Steffenhagen
--------------------------           Director


<PAGE>

	Index to Consolidated Financial Statements and Schedules
			Item 14(a)(1) and (2)

   
							       Sequential
								  Page
								 Number
							       ----------

Report of Independent Public Accountants......................     F-2

Consolidated balance sheets at December 31, 1998
 and December 31, 1997........................................     F-3

For the years ended December 31, 1998, 1997 and 1996:

    Consolidated statements of operations.....................     F-4

    Consolidated statements of shareholders' equity...........     F-5

    Consolidated statements of cash flows.....................     F-6

    Notes to consolidated financial statements................     F-7

Report of Independent Public Accountants on Financial
 Statement Schedule...........................................     S-1

Schedule II - Valuation and Qualifying Accounts...............     S-2

All other schedules are not submitted because either they are not applicable, 
not required or because the information required is included in the 
Consolidated Financial Statements, including the notes thereto.

				   F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Shareholders and Board of Directors of HemaCare Corporation:

We have audited the accompanying consolidated balance sheets of HemaCare 
Corporation (a California corporation) and subsidiaries as of December 31, 
1998 and 1997, and the related consolidated statements of operations, 
shareholders' equity and cash flows for each of the three years in the period 
ended December 31, 1998. These consolidated financial statements are the 
responsibility of the Company's management.  Our responsibility is to express 
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
 An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation.  We believe that our audits provide a 
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of HemaCare 
Corporation and subsidiaries as of December 31, 1998 and 1997, and the 
results of their operations and their cash flows for each of the three years 
in the period ended December 31, 1998 in conformity with generally accepted 
accounting principles.



										
				 /s/ Arthur Andersen LLP     
			       ----------------------------
				ARTHUR ANDERSEN LLP



Los Angeles, California
March 25, 1999

				     F-2

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
								
				      HEMACARE CORPORATION
				  CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
								
						December 31,      December 31,
						   1998                1997
						-------------     ------------
<S>                                             <C>               <C>
		ASSETS

Current assets:
  Cash and cash equivalents.................... $  1,372,000      $  1,249,000
  Marketable securities........................      288,000           363,000  
  Accounts receivable, net of allowance for
   doubtful accounts - $596,000 (1998) and
   $81,000 (1997)..............................    3,038,000         1,561,000
  Product inventories..........................       87,000            63,000
  Supplies.....................................      604,000           341,000 
  Prepaid expenses.............................      160,000           123,000 
  Note receivable from related party - current.       24,000            24,000
						-------------     -------------   
	   Total current assets................    5,573,000         3,724,000
			   
Plant and equipment, net of accumulated
  depreciation and amortization of 
  $1,869,000 (1998) and $1,690,000 (1997)......    1,289,000           585,000 
Goodwill, net of accumulated amortization of
  $11,000......................................      742,000                 -
Note receivable from related party -
  non-current..................................       49,000            65,000
Other assets...................................        9,000            10,000
						-------------     -------------
						$  7,662,000      $  4,384,000
						=============     =============
  LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable............................. $  1,414,000      $    659,000 
  Accrued payroll and payroll taxes............      802,000           493,000
  Accrued professional fees....................      173,000           130,000
  Other accrued expenses.......................      418,000           236,000
  Current obligations under capital leases.....      203,000           140,000
  Current notes payable........................      109,000                 -
  Reserve for discontinued operations..........      110,000           115,000
						-------------     -------------
	   Total current liabilities...........    3,229,000         1,773,000 
								
Obligations under capital leases, net                                                       
  of current portion...........................      627,000           209,000 
Notes payable, net of current portion..........      491,000                 -
Other long-term liabilities....................       24,000                 -
Commitments and contingencies..................
Shareholders' equity:
  Preferred stock no par value - 5,000,000
   shares authorized, 450,000 issued and
   outstanding in 1998.........................       75,000                 -
  Common stock, without par value - 20,000,000
    shares authorized, 7,281,120 issued and
    outstanding in 1998 and 7,190,710 in 1997..   13,584,000        13,515,000
  Accumulated deficit..........................  (10,368,000)      (11,113,000)
						-------------     -------------
	   Total shareholders' equity..........    3,291,000         2,402,000
						-------------     -------------
						$  7,662,000      $  4,384,000
						=============     =============

</TABLE>

	      The accompanying notes are an integral part of these
			consolidated balance sheets.
				     F-3

<PAGE>
			      HEMACARE CORPORATION
		      CONSOLIDATED STATEMENTS OF OPERATIONS
    
<TABLE>
<CAPTION>

						Years ended December 31,
					  1998           1997           1996
				      ------------   ------------   ------------
<S>                                   <C>            <C>            <C>
Revenues:                            
  Blood management programs.........  $  3,592,000   $  4,105,000   $ 2,717,000 
  Regional operations                                     
    Blood products..................     3,530,000      2,589,000     4,378,000
    Blood services..................     6,002,000      4,407,000     3,826,000
				      -------------  -------------  ------------
    Total revenue...................    13,124,000     11,101,000    10,921,000 
							    
Operating costs and expenses:
  Blood management programs.........     3,280,000      4,315,000     3,680,000 
  Regional operations                                
    Blood products..................     2,394,000      1,879,000     3,402,000 
    Blood services..................     4,328,000      3,000,000     2,605,000
				      -------------  -------------  ------------
    Total operating costs and
      expenses......................    10,002,000      9,194,000     9,687,000
				      -------------  ------------   ------------
    Operating profit................     3,122,000      1,907,000     1,234,000 
					   
General and administrative expense..     2,354,000      1,998,000     2,324,000 
							 
Gain on sale of Gateway Community
  Blood Program.....................             -        128,000             -
				      -------------  -------------  ------------
Income (loss) from continuing
  operations before income taxes....       768,000         37,000    (1,090,000)
Provision for income taxes..........       (23,000)             -             -
				      -------------  -------------  ------------
Income (loss) from continuing
  operations........................       745,000         37,000    (1,090,000)
						
Discontinued operations:
  Gain from disposal of discontinued
  operations........................             -        293,000       600,000
				      -------------  -------------  ------------
    Net income (loss)...............  $    745,000   $    330,000   $  (490,000)
				      =============  =============  ============
Basic and diluted per share amounts:
  Income (loss) from continuing
    operations......................  $       0.10   $       0.01   $     (0.17)
  Income from discontinued
    operations......................             -           0.04          0.09 
				      -------------  -------------  ------------
    Net income (loss)...............  $       0.10   $       0.05   $     (0.08)
				      =============  =============  ============

Weighted average shares outstanding
 - basic............................     7,268,000      7,189,000     6,350,000
				      =============  =============  ============

Weighted average shares oustanding
 - dilutive.........................     7,373,000      7,205,000     6,350,000
				      =============  =============  ============

</TABLE>                       
					 
	    The accompanying notes are an integral part of these
		    consolidated financial statements.  
				   F-4  

<PAGE>
			    HEMACARE CORPORATION
	       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
	     FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
				       
<TABLE>
<CAPTION>
       
			Preferred Stock         Common Stock         Accumulated
		      Shares     Amount      Shares       Amount        Deficit        Total
		     --------  ----------  ----------  ------------  -------------   -----------
<S>                  <C>       <C>         <C>         <C>           <C>             <C>

Balances at
 December 31, 1995..       -   $     -     5,911,285   $12,179,000   $(10,953,000)   $ 1,226,000

Exercise of stock
 options and
 warrants...........       -         -        53,750       107,000              -        107,000
Issuance of common
 stock, net.........       -         -     1,200,000     1,136,000              -      1,136,000
Issuance of common
 stock for employee
 401(k) and
 incentive bonus
 plans..............       -         -       12,480         44,000              -         44,000
Net income/(loss)...       -         -            -              -       (490,000)      (490,000)
		     -------   --------  ----------    ------------  -------------   ------------
Balances at December
 31, 1996...........       -         -    7,177,515     13,466,000    (11,443,000)     2,023,000

Issuance of common
 stock for employee
 401(k) and
 incentive bonus
 plans..............       -         -       13,195        41,000               -         41,000
Non-cash
 compensation.......       -         -           -          8,000               -          8,000
Net income/(loss)...       -         -           -              -         330,000        330,000
		     -------   --------  ----------    ------------  -------------   ------------
Balances at December
 31, 1997...........       -         -    7,190,710     13,515,000    (11,113,000)   $ 2,402,000

Issuance of common
 stock for employee
 401(k) and
 incentive bonus
 plans..............       -         -       90,410         42,000              -         42,000
Issuance of pre-
 ferred stock....... 450,000    75,000            -              -              -         75,000
Non-cash
 compensation.......       -         -            -         27,000              -         27,000
Net income/(loss)...       -         -            -              -        745,000        745,000
		     -------   --------  -----------   ------------  -------------   ------------
Balances at December
 31, 1998........... 450,000   $75,000    7,281,120    $13,584,000   $(10,368,000)   $ 3,291,000
		     =======   ========  ===========   ============  =============   ============
</TABLE>
									
	    The accompanying notes are an integral part of these
		    consolidated financial statements.
				   F-5                           
<PAGE>
			     HEMACARE CORPORATION
		     CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
						   
							 Years ended December 31,
						      1998            1997         1996
						   ------------   ------------  -------------
<S>                                                <C>            <C>           <C>
Cash flows from operating activities:   
 Net Income (loss)...............................  $   745,000    $   330,000   $  (490,000)
 Adjustments to reconcile net income (loss)
  to net cash provided by (used in) operating
  activities:
    Gain on disposal of discontinued operations..            -       (293,000)     (600,000)
    Gain on sale of Gateway Community Blood
     Program.....................................            -       (128,000)            -
    Provision (benefit) for losses on accounts
     receivable..................................            -         35,000       (25,000)
    Depreciation and amortization................      175,000        187,000       359,000
    Issuance of preferred stock, common stock
     and options for compensation................       69,000         50,000        44,000

 Changes in operating assets and liabilities:
    Increase (decrease) in accounts receivable...     (415,000)       196,000       (70,000)
    Increase(decrease) in inventories, supplies  
     and prepaid expenses........................     (203,000)        (1,000)       59,000 
    Increase (decrease) in other assets, net.....        6,000         41,000        28,000 
    Increase (decrease) in accounts payable,
     accrued expenses and other liabilities......     (213,000)      (185,000)      267,000 
    Proceeds from (expenditures for) discontinued
     operations..................................       (6,000)         8,000       (30,000)
						   ------------   ------------  ------------
    Net cash provided by (used in) operating
     activities..................................      158,000        240,000      (458,000)
					       
Cash flows from investing activities:
 Purchase of assets, net of cash acquired........     (555,000)             -             -
 (Increase) decrease in note receivable from
   related party.................................       16,000         14,000         6,000 
 (Increase) decrease in marketable securities....       75,000        (52,000)     (415,000)
 (Purchase) disposition of plant and equipment,
   net...........................................      (23,000)        46,000       (32,000)
						   ------------   ------------  ------------
  Net cash provided by (used in) investing
   activities....................................     (487,000)         8,000      (441,000)
						       
Cash flows from financing activities:
 Net proceeds from issuance of common stock......            -              -     1,243,000
 Net borrowings on line of credit................      600,000              -             -
 Principal payments on line of credit, net, and                                           
   capital leases................................     (148,000)      (135,000)     (205,000)
						   ------------   ------------  ------------
 Net cash (used in) provided by financing
   activities....................................      452,000       (135,000)    1,038,000
						   ------------   ------------  ------------

 Increase in cash and cash equivalents...........      123,000        113,000       139,000 
 Cash and cash equivalents at beginning of           
   period........................................    1,249,000      1,136,000       997,000
						   ------------   ------------  ------------
 Cash and cash equivalents at end of period......    1,372,000    $ 1,249,000   $ 1,136,000
						   ============   ============  ============

Supplemental disclosure:
 Interest paid...................................  $    23,000    $    51,000   $    78,000
						   ============   ============  ============
 Income taxes paid...............................  $         -    $         -   $         -
						   ============   ============  ============

Items not impacting cash flow:
 Increase in capital lease obligations...........  $   629,000    $    38,000   $    92,000
						   ============   ============  ============
 Liability for issuance of stock and warrants
  with the purchase of assets....................  $    22,000    $         -   $         -
						   ============   ============  ============

 Issuance of preferred stock in the purchase
  of assets......................................  $    75,000    $         -   $         -
						   ============   ============  ============
</TABLE>

		     The accompanying notes are an integral part of these
				consolidated financial statements.
					     F-6     
<PAGE>
 
			   HEMACARE CORPORATION 
		  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Organization
---------------------

HemaCare Corporation was incorporated in California in 1978 for 
the purpose of providing blood products and blood services to 
hospitals and medical centers.

Coral Blood Service, Inc., a wholly owned subsidiary of the 
Company was formed in October 1998, for the purpose of purchasing 
substantially all of the assets of a company which had been in the 
business of supplying blood products and services to hospitals 
primarily in the Eastern United States. (See Note 3.)

In September 1995, the Company formed Gateway Community Blood 
Program, Inc. ("Gateway"), a wholly owned subsidiary incorporated 
in Missouri, to provide blood products and services in Missouri 
and Illinois.  In August 1997, Gateway"s operations were sold.

In 1992, the Company acquired Georgia Hemapheresis Services 
("GHS"), a company it had previously managed. GHS was closed in 
July 1996.

From 1990 to November 1995, the Company, through its wholly-owned 
subsidiary HemaBiologics, Inc. ("HBI"), conducted research and 
development of Immupath, an anti-HIV hyperimmune plasma-based 
product intended to be used in the treatment of Acquired Immune 
Deficiency Syndrome ("AIDS").  In November of 1995, the Company's 
Board of Directors decided to discontinue the operations of HBI. 
(See Note 12.)

HemaCare Corporation and its wholly owned subsidiaries are 
referred to as "HemaCare" or the "Company" in the accompanying 
consolidated financial statements and notes to consolidated 
financial statements.

Note 2 - Summary of Accounting Policies
---------------------------------------

Principles of Consolidation: The accompanying consolidated 
financial statements include the accounts of the Company and its 
wholly owned subsidiaries.  All significant intercompany balances 
and transactions have been eliminated in consolidation.

Use of Estimates: The preparation of financial statements in 
conformity with generally accepted accounting principles requires 
management to make estimates and assumptions that affect the 
reported amounts of assets and liabilities and disclosure of 
contingent assets and liabilities at the date of the financial 
statements.  Estimates also affect the reported amounts of revenue 
and expenses during the reporting period.  Actual results could 
differ from those estimates. 

Cash, Cash Equivalents and Marketable Securities: The Company 
considers all highly liquid investments with an original maturity 
of three months or less to be cash equivalents.  Marketable 
securities consist of U.S. government treasury bills and 
certificates of deposit held at financial institutions.

Financial Instruments: Cash and cash equivalents, marketable 
securities, accounts receivable and accounts payable are carried 
at cost which approximates fair value.  The interest rate applied 
to notes receivable and capital leases is equal to the Company's 
borrowing rate, and therefore their carrying value approximates 
fair value. 

Revenues and Accounts Receivable: Revenues are recognized upon 
acceptance of the of blood products or the performance of blood 
services.  Blood services revenues consist primarily of mobile 
therapeutics sales, while blood product revenues consist primarily 
of sales of single donor platelets and whole blood components that 
are manufactured or purchased and distributed by the Company.  
Accounts receivables are reviewed periodically for collectability. 

				F-7
<PAGE>

Inventories and Supplies: Inventories consist of Company-
manufactured platelets and whole blood components as well as 
component blood products purchased for resale.  Supplies consist 
primarily of medical supplies for collecting and manufacturing 
products and providing therapeutic services. Inventories are 
accounted for on a first-in, first-out basis.

Plant and Equipment: Plant and equipment is stated at original 
cost.  Furniture, fixtures, equipment and automobiles are 
depreciated using the straight-line method over three to seven 
years.  Leasehold improvements are amortized over the lesser of 
the their useful life or the length of the lease, ranging from 
three to five years.  Capital equipment leases are recorded at the 
lower of the present value of the minimum lease payments or the 
fair value of the equipment at the beginning of the lease term.  
The cost of normal repairs and maintenance are expensed as 
incurred.

Goodwill: Goodwill is being amortized on a straight-line basis 
over ten years. It is the Company's policy to periodically 
evaluate goodwill for recoverability. In the event of a permanent 
impairment, the goodwill balance would be reduced to net 
realizable value, and the write down would be charge to expense.

Income Taxes: Income taxes are computed under the provisions of 
Statement of Financial Accounting Standards ("SFAS") No. 109, 
"Accounting for Income Taxes".  SFAS 109 is an asset and liability 
approach that requires the recognition of deferred tax assets and 
liabilities for the expected future tax consequences of events 
that have been recognized in the Company's financial statements or 
tax returns.  In estimating future tax consequences, SFAS 109 
generally considers all expected future events other than 
enactments of changes in the tax law or rates.

Per Share Data: Per share data is computed in accordance with SFAS 
128 "Earnings Per Share". The Company adopted SFAS No. 128 
effective December 31, 1997 and restated prior years' per share 
data in accordance with the requirements of SFAS 128. 

Warrants and options to purchase 1,443,300, 1,289,800, and 995,800 
shares of common stock outstanding at December 31, 1998, 1997 and 
1996, respectively, were not included in the computation of 
diluted earnings per share because the exercise price of the 
warrants and options was greater than the average  market price of 
the common stock.

Reclassification: Certain 1997 and 1996 amounts have been 
reclassified to conform to 1998 presentations.  
Recent Accounting Pronouncement:  In June 1997, the Financial 
Accounting Standards Board issued SFAS No. 131, "Disclosures About 
Segments of An Enterprise and Related Information."  SFAS 131, 
which is effective for years beginning after December 15, 1997, 
revises the requirements for segment disclosures.  The Company 
adopted this standard in the fourth quarter of 1998.

Note 3 - Acquisition
--------------------

In October 1998, the Company purchased, through its wholly owned 
subsidiary CBS, substantially all of the assets of Coral 
Therapeutics, Inc. ("Coral") from Coral's secured lender.  Prior 
to the acquisition, Coral provided blood services to major 
university, teaching and community hospitals in Maine, New 
Hampshire, Massachusetts, Connecticut, New York, North Carolina 
and other states.  The acquired assets, included (i) approximately 
$1.6 million in accounts receivable, $600,000 of which were over 
90 days old, (ii) inventory and supplies with a net book value of 
approximately $113,000 (iii) fixed assets with a net book value of 
approximately $248,000 and (iv) Coral's rights under its hospital 
contracts.  HemaCare is in the process of completing the 
negotiation of separate agreements with the hospitals previously 
served by Coral and is providing services to hospitals that have 
not signed a new agreement under interim arrangements. Concurrent 
with the closing of the asset purchase, HemaCare extended offers 
of employment to most of  Coral's employees. HemaCare expects to 
satisfy certain liabilities of Coral to its ex-employees and to 
make payments necessary to maintain essential business 
relationships totaling approximately $1.5 million.

			     F-8
<PAGE>

The acquisition was accounted for as a purchase, and the 
operations of the acquired assets are included in the Company's 
consolidated operations for the period from the acquisition date 
(October 23, 1998) through December 31, 1998. The acquisition 
price of the assets was $950,000 in cash and 450,000 shares of 
HemaCare's Series B senior convertible preferred stock.  The 
Company financed the acquisition by (i) utilizing existing cash 
balances, (ii) borrowing $600,000 on its line of credit and (iii) 
issuing 450,000 shares of HemaCare Series B senior convertible 
preferred stock. In addition, HemaCare has entered into or expects 
to enter into non-competition agreements with certain former 
managers of Coral pursuant to which HemaCare will make (i) cash 
payments, (ii) issue 60,000 shares of HemaCare common stock and 
(iii) issue warrants to purchase 90,000 shares of HemaCare common 
stock with an exercise price of $.90 per share, expiring in 
October, 2003. In addition, warrants for 35,000 shares of HemaCare 
common stock exercisable at $0.31 per share will be issued to 
consultants who assisted in the acquisition. These warrants will 
expire October 2003 and are in the process of being issued.

The purchase price has been allocated to assets and liabilities based
on preliminary estimates and fair value as of the of the acquisition.
The final allocation of the purchase price will be determined when all
liabilities are settled.  Based on the allocation of the purchase price
over the assets acquired and liabilities incurred, the Company recorded
goodwill of $753,000, which is being amortized on a straight line basis
over ten years.

The following unaudited pro forma combined condensed results of
operations have been prepared as if the acquisition has occurred 
at the beginning of the period presented. They do not purport to 
be indicative of the results of results of operations which would 
have occurred if the acquisiton had been effected on the dates 
indicated, nor do they purport to be indicative of future results 
of operations.

				    Year Ended December 31,
				      1998            1997
(Unaudited)                         -----------   ------------
Revenue..........................   $18,582,000   $ 16,968,000
				    ===========   ============
Income before extraordinary 
 items...........................   $   179,000   $(1,851,000)
				    ===========   ============

Net income.......................   $   179,000   $(1,851,000)
				    ===========   ============
Basic and diluted earnings 
per share........................   $      0.02   $     (0.26)
				    ===========   ============

Note 4 - Plant and Equipment    
----------------------------

Plant and equipment consists of the following:

					     December 31,
					  1998          1997
				      ------------   ------------

Furniture, fixtures and equipment.... $ 2,969,000    $ 2,089,000
Leasehold improvements...............     189,000        186,000
				      ------------   ------------
					3,158,000      2,275,000
Less accumulated depreciation and 
amortization.........................  (1,869,000)    (1,690,000)
				      ------------   ------------
				      $ 1,289,000    $   585,000
				      ============   ============

Equipment with a cost of $1,369,000 in 1998 and $740,000 in 1997 was
financed by capital leases. In 1997, the Company disposed of 
equipment and leasehold improvements with a cost of $347,000, 
including $188,000 financed by capital leases, in connection with 
the sale of Gateway's operations.

Note 5 - Line of Credit and Note Payable
-----------------------------------------

Line of Credit

The Company maintains a line of credit with a commercial bank
secured by its accounts receivable, inventory and equipment. In 
February 1999, the commercial bank increased the Company's line of 
credit borrowing limit to $1.2 million, from $700,000, and 
converted the $600,000 balance then outstanding on the line of 
credit to a four-year term loan. Under the terms of the credit 
line agreement, which is in effect until June 1, 1999, the Company 
may borrow up to 70% of eligible accounts receivable, up to a 
maximum of $1.2 million, at an interest rate of prime plus 0.5%,
and must maintain certain ratios. The

			    F-9
<PAGE>

Company was in compliance with all covenants of its borrowing
agreement at December 31, 1998, and the Company is in the process
of renewing its credit agreement.  As of December 31, 1997, 
and during the year then ended, there were no balances outstanding 
under the line of credit.

Note Payable

The Company has a term note with a bank, payable in 48 monthly
payments of principal and interest of approximately $15,000 
through February 2003. The note bears interest at the prime rate 
plus one percent (8.75% at December 31, 1998). Minimum future 
payments under the note at December 31, 1998 are as follow:

Year ending December 31,
		     
1999             $109,000
2000              140,000
2001              155,000
2002              168,000
2003               28,000
		 --------
		 $600,000
		 ========

The Company incurred $9,000 of interest expense in connections 
with the note payable and line of credit agreements in 1998. No 
interest expense was incurred in connection with the line of 
credit agreement in 1997 or 1996.

Note 6 - Leases
----------------

The Company has entered into several capital leases for equipment.  
Future minimum, capital lease payments, which expire at various 
times during the period from 1999 to 2004, are as follows:

Year Ending December 31,

1999                       $ 265,000
2000                         196,000
2001                         168,000
2002                         163,000
2003                         128,000
Thereafter                     4,000
			   ----------
Total minimum lease
 payments                    924,000
Less:  Amount representing 
interest                     (94,000)
			   ----------
Present value of minimum
 lease payments              830,000
Less current portion        (203,000)
			   ----------
			   $ 627,000
			   ==========

			   F-10
<PAGE>

The Company leases its facilities and certain equipment under 
operating leases which expire through the year 2003. Future 
minimum rentals under operating leases are as follows:

Year ending December 31,

1999                    $   436,000 
2000                        362,000 
2001                        348,000 
2002                        283,000 
2003                         21,000
Thereafter                        -
			-----------
			$ 1,450,000

Total rent expense under all operating leases was $424,000,
$600,000, and $664,000 for the years ended December 31, 1998, 1997 
and 1996, respectively.

Note 7 - Income Taxes
---------------------

The provision for income taxes for the year ended December 31, 
1998, which was primarily due to the effect of the alternative 
minimum tax. The provision which is all current, consists of 
$20,000 of federal income tax expense and $3,000 of state income 
tax expense.

There was no current or deferred income tax provision for 1997 and 
1996. The Company utilized net operating loss carryforwards 
("NOL") in 1997 and incurred losses in 1996. A reconciliation of 
income tax expense at the statutory rate to income tax recognized 
follows.
     
				    1998         1997       1996
				 ----------   ----------  ---------

Income tax expense at statutory 
rate............................ $ 261,000    $ 13,000    $(371,000)
State income taxes, net of 
Federal benefit.................    46,000       2,000      (65,000)
Generation (Utilization) of NOL.  (284,000)    (15,000)     436,000
				 ----------   ---------   ----------
Income tax expense.............. $  23,000    $      -    $       -    
				 ==========   =========   ==========

The approximate tax effects of temporary differences which gave 
rise to significant deferred tax assets and liabilities at 
December 31, 1998 and 1997, are as follows:

				    1998         1997
				 -----------   -----------

Current:
Reserve for doubtful accounts..  $   238,000   $    32,000
Accrued expenses and other.....      323,000       286,000
Noncurrent:
Depreciation and amortization..      220,000       290,000
Deferred research and
 development expenses..........      200,000       210,000  
Other..........................        8,000        93,000  
Net operating loss
 carryforwards.................    2,725,000     3,124,000  
Tax credit carryforwards.......      878,000       881,000
				 ------------  ------------
Total deferred assets..........    4,592,000     4,916,000 
Valuation allowance............   (4,592,000)   (4,916,000)
				 ------------  ------------
				 $         -   $         -
				 ============  ============

			      F-11
<PAGE>

A valuation allowance is recorded if the weight of available 
evidence suggests it is more likely that not that some portion or 
all of the deferred tax asset will not be recognized. There is no 
assurance that the Company will continue to be profitable in 
future periods. Accordingly, a valuation allowance has been 
recorded for the full amount of the deferred tax assets in 1998 
and 1997.

At December 31, 1998, the Company had net operating loss 
carryforwards available for federal income and state tax purposes 
of $7,300,000 and $2,700,000, respectively, expiring through 2010.

Acquisitions of common stock which result in changes in equity 
ownership in the Company could result in an "ownership change" 
within the meaning of Section 382 of the Internal Revenue Code of 
1986, as amended (the "Code"), thereby imposing an annual 
limitation (the "Section 382 Limitation") on the Company's 
ability to utilize its net operating loss carryforwards to reduce 
future taxable income.  In the event of a Section 382 Limitation, 
the Company's utilization of its net operating loss carryforwards 
would be restricted to an annual amount equal to the product of 
the equity value, as defined in the Code, of the Company at the 
time of the applicable ownership change multiplied by the long-
term tax-exempt rate as published monthly by the Internal Revenue 
Service. The expiration dates of the net operating loss 
carryforwards would not be extended, and accordingly, a Section 
382 Limitation could result in the expiration of a portion of 
Company's net operating loss carryforwards.  The long-term, tax-
exempt rate is currently 5.5%; such rate, however, is subject to 
change, and it is impossible to predict whether the equity value 
of the Company and such rate will increase, or decrease, and to 
what extent.

At December 31, 1998, the Company had federal income tax credit 
carryforwards of approximately $562,000 expiring through 2010, and 
state tax credit carryforwards of approximately $316,000 which are 
not subject to expiration.

Note 8 - Shareholders' Equity
-----------------------------

Stock Options


In July 1996, the Board of Directors approved and adopted a new 
stock incentive plan (the "1996 Plan") which provides for grants 
of both stock options and shares of restricted stock.  Prior to 
that date, options were granted under the Company's 1986 Stock 
Option Plan, as amended (the "1986 Plan").  A total of 1,400,000 
shares may be granted under the terms of the 1996 Plan.  The term
of the options granted is determined by Company's Board of 
Directors, but in no event may be longer than ten years.  The 
exercise price of options granted generally is required to be not 
less than the fair market value of the common stock on the date of 
grant. Options granted to employees must vest at a rate of at 
least 20% per year.

The 1986 Plan expired in July 1996.  At December 31, 1998, 65,800 
options were outstanding under this plan.    

A one-time grant of options typically is made to each non-employee 
director at the time of joining the Board, and, beginning in 1999, 
an additional 15,000 options will be granted annually to non-
employee directors.  The table below summarizes transactions in 
the Plans and weighted average exercise prices ("Price") during 
1998, 1997 and 1996.

			       F-12

<PAGE>
<TABLE>
<CAPTION>
				   1998                1997                1996
			    ------------------   -----------------   -----------------
			     Shares     Price    Shares     Price     Shares    Price
			    ---------  -------  ---------  -------   --------  -------
<S>                         <C>        <C>      <C>        <C>       <C>        <C>

Outstanding at beginning 
of year...................  495,800    $2.36    185,800    $4.01     395,800    $3.12 
Granted...................  535,000     0.67    372,500     1.74      63,000     3.41
Exercised.................        -        -          -        -      53,750     1.99
Canceled..................  107,500     3.58     62,500     2.78     219,250     2.59
			    -------    -----    -------    -----     --------   -----
Outstanding at end of
year.....................   923,300     1.12    495,800     2.36     185,800     4.01
			    =======    =====    =======    =====     =======    =====
Exercisable at end of
year.....................   386,300    $1.61    184,550    $3.05     140,300    $4.12
			    =======    =====    =======    =====     =======    =====

</TABLE>

The following table summarizes the range of exercise price, 
weighted average remaining contractual life ("Life") and weighted 
average exercise price ("Price") for all stock options outstanding 
as of December 31, 1998:

<TABLE>
<CAPTION>
				   Options Outstanding           Options Exercisable
			     --------------------------------  -------------------
Range of  Exercise price     Shares      Life        Price      Shares     Price
-------------------------   ---------  ----------  ----------  ---------  --------
<S>                         <C>        <C>         <C>         <C>        <C>

$0.59 to $1.74              792,500    9.2 years   $0.81       288,500    $1.12 
$1.75 to $2.43               20,000    9.5 years    2.00        20,000     2.00  
$2.44 to $4.99              110,800    6.8 years    3.16        77,800     3.31  
			    -------                -----       -------    -----
			    923,300                $1.12       386,300    $1.61 
			    =======                =====       =======    =====
</TABLE>

The Company grants stock options to employees and others in
accordance with the terms of its stock option plans.  Warrants are 
granted upon the Board of Directors' approval.  The Company has 
elected to  adopt SFAS 123 "Accounting for Stock-Based 
Compensation" for disclosure purposes only and applies the 
provisions of APB Opinion No. 25. The Company recognized $27,000, 
$8,000, and $5,000 of compensation expense related to consulting 
options in 1998, 1997 and 1996, respectively. Had compensation 
expense for all options granted been recognized in accordance with 
SFAS 123, the Company's net income (loss) and net income (loss) 
per share would have been as follows:

				   Years ended December 31,
				1998        1997         1996
			      ---------   ---------   ---------
Pro forma net income (loss).. $617,000    $288,000    $(622,000) 
Pro forma basic and diluted
 net income (loss) per
 share....................... $   0.08    $   0.04    $   (0.10)

The above pro forma amounts were calculated by estimating the fair 
value of each option or warrant granted on the date of grant using 
the Black-Scholes option-pricing model as follows:


				  Years ended December 31,
				1998        1997       1996
			     ---------   ---------   ---------
Expected life............... 3 Years      3 Years    3 Years
Expected volatility.........    75%         68%        60%
Dividend yield..............     -           -          -   
Interest rate...............  5.5%        5.0%       5.75%

Warrants

At December 31, 1998, 1997 and 1996, the Company had a total of
520,000, 810,000 and 810,000 warrants to purchase common stock 
outstanding, at weighted average exercise prices of $4.89, $4.54 
and $4.54, respectively. Of the outstanding warrants, 500,000, 
790,000 and 790,000 were exercisable, at weighted average exercise 
prices of $4.96, $4.57 and $4.57, in 1998, 1997 and 1996, 
respectively.

At December 31, 1998, 1997 and 1996, 70,000 warrants for 
consulting services were outstanding. These warrants, of which 
50,000 were exercisable, had exercise prices between $2.63 and 
$3.69 and expire between June 1999 and June 2002. 

In connection with stock sales in 1993 and 1994, the Company 
issued warrants to finders.  Warrants to purchase 50,000 shares of 
the Company's stock are still outstanding at prices ranging from 
$1.45 and $4.00, expiring between April 1999 and July 2000. 

In 1993, the Company issued warrants to purchase 400,000 shares of 
stock at $5.50 per share in connection with the acquisition of the 
Immupath license. (See Note 11, "Discontinued Operations".) These 
options expire in February 2003.

				F-13
<PAGE>

Preferred Stock

In October, 1998 as part of the purchase price of the acquisition 
(see Note 3), 450,000 shares of no par value Senior Convertible 
Series B preferred stock ("Series B Preferred") were issued to the 
seller. The Series B preferred stock is convertible into 500,000 
shares of HemaCare common stock, at the option of the holder at 
any time after one year from the date of issuance. The Series B 
Preferred stock holders are entitled to dividends when declared by 
the Company's Board of Directors and, if dividends are declared on 
the Company's common stock, Series B Preferred stock holders are 
entitled to participate in the common stock dividend on an as 
converted basis. In the event of liquidation, dissolution or wind 
up of the Company, Series B Preferred stock holders are entitled 
to a preferential distribution of $0.90 per share. 

Note 9 -  Employee Salary Deferral Plan
---------------------------------------

HemaCare's Employee Salary Deferral Plan qualifies under Section 
401(k) of the Internal Revenue Service Code (the "401(k) Plan"). 
Eligible employees may contribute up to 12 percent of their pre-
tax salaries, subject to certain limitations.  HemaCare may elect 
to match a portion of the employees' contribution. In 1998, 1997 
and 1996, the Company elected to match 50 percent of the of each 
participants contribution, up to 5% of the participants annual 
salary, with HemaCare common stock. 

During 1998, 1997 and 1996, HemaCare issued 90,410 shares 
($42,000), 13,195 shares ($41,000), and 12,480 shares ($44,000)  
of common stock as matching contributions for the 1997, 1996 and 
1995 plan years, respectively.  HemaCare plans to issue 
approximately 96,462 shares ($44,000) in 1999 as matching 
contributions for the 1998 plan year.

Note 10 - Commitments and Contingencies
---------------------------------------

On March 12, 1997, the Company was notified of a lawsuit filed by 
an investment banking firm retained by the Company in connection 
with the August 1996 private placement of its common stock, 
seeking recovery of damages in the amount of approximately 
$60,000.  In July 1998, this suit was settled on terms favorable 
to the Company.  The effect of the settlement did not have a 
material effect on the Company's financial condition or results 
of operations.

Since 1976, California law has prohibited the infusion of 
blood products into patients if the donors of those 
products were paid unless, in the opinion of the 
recipient's physician, blood from a non-paid donor was not 
immediately available. Apheresis platelet products obtained 
from paid donors, including the Company's Sherman Oaks 
center's paid donors, are exempted from this law by a state 
statute passed in late 1994 which contains a "sunset" 
provision. Unless a new exemption is obtained, the existing 
exemption will expire under its sunset provision on 
December 31, 2001. The Company is evaluating a number of 
available options with regard to the expiration of the 
extension.

State and federal laws set forth antikickback and self-referral prohibitions 
and otherwise regulate financial relationships between blood banks and 
hospitals, physicians and other persons who refer business to them.  While 
the Company believes its present operations comply with applicable 
regulations, there can be no assurance that future legislation or rule 
making, or the interpretation of existing laws and regulations will not 
prohibit or adversely impact the delivery by HemaCare of its services and 
products. 

Health care reform is continuously under consideration by lawmakers, and it 
is not certain as to what changes may be made in the future regarding health 
care policies.  However, policies regarding reimbursement, universal health 
insurance and managed competition may materially impact the Company's 
operations.


Note 11 - Segment and Related Party Information
-----------------------------------------------

Business Segments

The Company operates in three business segments, each of which 
represent a separate business activity. The segments and a 
description of their business activity follows:

- Blood Management Programs ("BMP"). Outsource programs which
  provide all or a major portion of the blood banking functions 
  to a hospital.

- Blood Products. Apheresis and whole blood derived products.

- Blood Services.  Therapeutic apheresis and stem cell
  collection procedures, autologous interoperative transfusion 
  and donor testing.

Management uses more than one measure to measure segment
performance. However, the dominant measurements are 
consistent with the Company's consolidated financial 
statements which present revenue from external customers 
and pretax income for each segment. Supplemental measurement data 
are as follows:

<TABLE>
<CAPTION>
				   BMP      Blood Products  Blood Services
			       -----------  --------------  ---------------
<S>                            <C>          <C>             <C>

1998
-----
Depreciation and amortization  $ 56,000     $18,000         $ 52,000

Expenditures for long-lived
 assets                         484,000       4,000          388,000

1997
----
Depreciation and amortization  $ 74,000     $18,000         $ 54,000

Expenditures for long-lived
 assets                          38,000           -                -

1996
-----
Depreciation and amortization   $105,000    $66,000         $ 94,000

Expenditures for long-lived
 assets                           92,000          -                -


</TABLE>
 
Management evaluates segment performance based primarily on 
operating income. Interest expenses and income, general and 
administrative expense, amortization of goodwill, income 
taxes and non-recurring gains and losses are not allocated 
to the segments. The accounting policies of the segments 
are the same as those described in the significant 
accounting policies

Sales of products and services to an unaffiliated hospital group 
accounted for $2,051,000 (16%) of the Company's revenues in 1998.  
In 1997, Sales to two unaffiliated hospital groups accounted for 
$2,044,000 (18%) and $1,473,000 (13%) of the Company's revenues.  
In 1996, sales to one unaffiliated hospital group accounted for 
$1,769,000 (16%) of the Company's revenues. At December 31, 1998 
and 1997, no customer accounted for over 10% of the Company's 
accounts receivable.

				 F-15
<PAGE>

Related Party Loan

In 1995 and 1994, the Company made a series of personal loans to 
Dr. Joshua Levy, then an officer and director of the Company 
totaling $98,000.  The proceeds of these loans were used to 
refinance existing debt that was collateralized by HemaCare stock 
owned by Dr. Levy.  In January 1996, these individual notes were 
consolidated into a promissory note, collateralized by HemaCare 
stock owned by Dr. Levy, which accrued interest at a rate equal to 
the rate paid by the Company under its line of credit. The Company 
received installment payments in accordance with the terms of this 
note of $15,000 in January 1996 and January 1997. Effective July 
31, 1997, the Company entered into an agreement with Dr. Levy that 
superceded the 1996 note. Under the terms of this agreement, the 
Company agreed to forgive the remaining balance of Dr. Levy's 
note, including interest accrued at a 10% annual rate, over a 
five-year period so long as Dr. Levy remains employed by the 
Company. 

Note 12 - Discontinued Operations
---------------------------------

In November 1995, the Company discontinued the operations of HBI, 
including the research and development of Immupath and the 
associated specialty plasma business. The reserve established for 
estimated HBI operating losses during the period of disposal, 
included a $600,000 contingent liability for the resolution of the 
dispute with Medicorp.  In July 1996, the dispute was settled 
without any payment by the Company, and the Company recognized a 
$600,000 gain on disposal of discontinued operations.  In June 
1996, the Company agreed to sell substantially all the tangible 
assets of the discontinued operations and the FDA source plasma 
licenses.  The sale and transfer of the licenses was contingent 
upon obtaining FDA approval that was received on October 21, 1996.  
The buyer delivered a promissory note, in payment of the purchase 
price for certain tangible assets sold which is collateralized by 
these assets. The note was repaid in March 1997, resulting in a 
gain on disposal of $120,000 in the first quarter of 1997. 

During the wind down of the research and development operations, 
the Company manufactured a supply of Immupath to supply the 
patients still receiving treatment for a limited period of time. 
There are currently six patients receiving Immupath treatments. In 
the fourth quarter of 1997, the Company reviewed and revised its 
estimate of the remaining costs of discontinued operations and 
recognized an additional gain on disposal of $173,000. The Company 
does not expect discontinued operations to have a material impact 
on future operating results.

				  F-16

<PAGE> 


	    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
	


To the Shareholders and Board of Directors of HemaCare Corporation:


We have audited in accordance with generally accepted auditing 
standards, the consolidated financial statements included in HemaCare 
Corporation's annual report to shareholders included in this Form 10-K, 
and have issued our report thereon dated March 25, 1999.  Our audit 
was made for the purpose of forming an opinion on those statements 
taken as a whole.  The schedule listed in the index of consolidated 
financial statements is the responsibility of the Company's management 
and is presented for purposes of complying with the Securities and 
Exchange Commission's rules and is not part of the basic consolidated 
financial statements.  This schedule has been subjected to the auditing 
procedures applied in the audit of the basic consolidated financial 
statements and, in our opinion, fairly states in all material respects 
the financial data required to be set forth therein in relation to the 
basic consolidated financial statements taken as a whole.


			    /s/ Arthur Andersen LLP
			    ------------------------
			    ARTHUR ANDERSEN LLP


Los Angeles, California
March 25, 1999

				    S-1

<PAGE> 
			   HEMACARE CORPORATION
	      SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS


	   For The Years Ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>

					    Additions
				      ----------------------
			Balance at    Charged to    Charged                  Balance
			beginning     costs and     to other                 at end of
Description             of period     expenses      accounts    Write-offs   period
---------------------   ---------    -----------   ----------   ----------   ---------
<S>                     <C>          <C>           <C>          <C>          <C>
Year ended December 
31, 1997 - Allowance 
for  uncollectible 
accounts                $81,000      $     --      $515,000(1)  $     --     $596,000

Year ended December 
31, 1997 - Allowance 
for  uncollectible 
accounts                $47,000      $ 35,000      $     --     $  1,000     $ 81,000 

Year ended December 
31, 1996 - Allowance 
for  uncollectible 
accounts                $94,000      $(25,000)(2)  $     --     $ 22,000     $ 47,000 

</TABLE>

(1)  Represents allowance for doubtful accounts of acquired assets
     at date of acquisition.

(2)  Includes a net reduction in the reserve of $48,000, based on an 
     analysis of the aging of accounts receivable at December 31, 1996.


				       S-2

<PAGE>

			       INDEX TO EXHIBITS

<TABLE>
<CAPTION>
								      Sequential
								      Page Number
								      -----------
<S>   <C>                                                             <C>

 2.1  Amended and Restated Asset Purchase Agreement between the 
      Registrant, HemaBiologics, Inc. (a wholly owned subsidiary
      of the Registrant) and Atopix Pharmaceuticals Corporation,
      dated June 26,1996 incorporated by reference to Exhibit
      2.1 to Form 10-Q of the Registrant for the quarter ended
      June 30, 1996..................................................

 2.2  Asset Purchase Agreement between the Registrant, Gateway
      Community Blood Program and Haemonetics Corporation, dated
      August 1, 1997--incorporated by reference to Exhibit 2.1 to
      Form 10-Q of the Registrant for the quarter ended September
      30, 1997.......................................................

 3.1  Restated Articles of Incorporation of the Registrant--incorp-
      orated by reference to Exhibit 3.1 to Form 10-K of the
      Registrant for the year ended December 31, 1995................

 3.2  Bylaws of the Registrant, as amended--incorporated by
      reference to Exhibit 3.1 to Form 10-Q of the Registrant for
      the quarter ended March 31, 1998...............................

 4.1  Warrant Agreement between the Registrant and Medicorp Inc.
      dated February 17, 1993--incorporated by reference to Exhibit
      4 to the Current Report on Form 8-K of the Registrant dated
      February 17, 1993..............................................

 4.2  Form of Warrant Agreement between the Registrant and each of
      the following consultants: British Far East Holdings, Ltd.,
      Joseph T. McDonald and E. Keene Wolcott dated September 30,
      1994--incorporated by reference to Exhibit 4.1 to Form 10-Q
      of the Registrant for the quarter ended September 30, 1994.....

 4.3  Warrant Agreement between the Registrant and Torrey Pines 
      Securities, Inc., dated April 8, 1994--incorporated by
      reference to Exhibit 4.2 to Form 10-Q of the Registrant for   
      the quarter ended March 31, 1994...............................

 4.4  Amendment to Warrant Agreement between the Registrant and
      Torrey Pines Securities dated April 3, 1995--incorporated by
      reference to Exhibit 4.1 to Form 10-Q of the Registrant for
      the quarter ended March 31, 1995...............................

 4.5  Warrant Agreement between the Registrant and M.A. Levy and 
      Associates dated March 1, 1995--incorporated by reference to 
      Exhibit 4.7 to Form 10-K of the Registrant for the year ended 
      December 31, 1994..............................................

 4.6  Warrant Agreement between the Registrant and Joseph T.
      McDonaldd dated November 1, 1996--incorporated by reference to
      Exhibit 4.9 to Form 10-K of the Registrant for the year ended
      December 31, 1996..............................................

 4.7  Rights Agreement between the Registrant and U.S. Stock Transfer 
      Corporation dated March 3, 1998--incorporated by reference to 
      Exhibit 4 to Form 8-K of the Registrant dated March 5, 1998....

 4.8  Amended Certificate of Determination, dated March 18, 1998--
      incorporated by reference to Exhibit 4.8 of Form 10-K of the
      Registrant for the year ended December 31, 1997................

 4.9  Certificate of Determination of the Registrant's Series B Senior 
      Convertible Preferred Stock between the Registrant and Comdisco 
      Health Care Group dated October 23, 1998--incorporated by 
      reference to Exhibit 4.1 of Form 8-K of the Registrant dated 
      November 5, 1998...............................................

 4.10 Registration Rights of Shareholders'--incorporated by reference
      to Exhibit 4.9 to the Current Report on Form 8-K of the
      Registrant dated August 19, 1996...............................

10.1  1986 Employee Stock Option Plan, as amended and restated
      through October 1994--incorporated by reference to Exhibit
      10.4 to Form 10-Q of the Registrant for the quarter ended
      September 30, 1994.............................................

10.2  1996 Stock Incentive Plan, as amended, of the Registrant--
      incorporated by reference to Exhibit 4.1 to Form 10-Q of the 
      Registrant for the quarter ended September 30, 1996............

10.3  Office Building Lease dated August 21, 1998 between the
      Registrant and Tar Asset Addison Place, L.P.--incorporated
      by reference to Form 10-Q for the quarter ended September 30,
      1998...........................................................

10.4  Employment Agreement between Harold I. Lieberman and the 
      Registrant, dated September 19, 1988-- incorporated by
      reference to Exhibit 10.4 to Form 10-K of the Registrant for
      the year ended December 31, 1994...............................
  
10.5  Amendment to Employment Agreement between the Registrant and 
      Harold I. Lieberman, dated September 19, 1989--incorporated by 
      reference to Exhibit 10.5 to Form 10-K of the Registrant for
      the year ended December 31, 1994...............................

10.6  Revolving Credit Agreement between the Registrant and Bank
      Leumi USA, dated February 5, 1999 and related Promissory
      Note........................................................... Filed herewith
								      electronically

10.7  Promissory Note between the Registrant and Bank Leumi USA,
      dated February 5, 1999......................................... Filed herewith
								      electronically

10.8  Promissory Note to HemaBiologics, Inc., a wholly owned
      subsidiary of the Registrant, from Joshua Levy dated January
      1, 1996 -- incorporated by reference to Exhibit 10.10 to Form
      10-K of the Registrant for the year ended December 31, 1995....

10.9  Pledge Agreement between HemaBiologics, Inc., a wholly owned 
      subsidiary of the Registrant, and Joshua Levy dated January 1, 
      1996 -- incorporated by reference to Exhibit 10.11 to Form
      10-K of the Registrant for the year ended December 31, 1995.... 

10.10 Loan Reimbursement Agreement between HemaBiologics, Inc., a
      wholly owned subsidiary of the Registrant, and Joshua Levy
      dated January 30, 1998--incorporated by reference to Exhibit
      10.10 to Form 10-K of the Registrant for the year ended
      December 31, 1997..............................................

10.11 Settlement Agreement between the Registrant and Medicorp,
      Inc. -- incorporated by reference to Exhibit 10.1 to the
      Current Report on Form 8-K of the Registrant dated July
      19, 1996.......................................................

10.12 Foreclosure Sale Agreement between the Registrant and
      Comdisco Health Care Group, Inc dated October 23, 1998--
      incorporated by reference to Exhibit 2.1 of Form 8-K of
      the Registrant dated November 5, 1998..........................

10.13 Employment agreement between the Registrant and William D.
      Nicely dated May 27, 1998--incorporated by reference to Form
      10-Q for the quarter ended June 30, 1998.......................

11    Computation of earnings (loss) per common equivalent share..... Filed herewith
								      electronically
								      
21    Subsidiaries of the Registrant................................. Filed herewith
								      electronically

23    Consent of Arthur Andersen LLP................................. Filed herewith
								      electronically

27    Financial Data Schedule........................................ Filed herewith
								      electronically



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