=============================================================================
                      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, 1997

[ ]     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 tele,phone 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)

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:  ______

As of March 26, 1998, 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 on NASDAQ) was
approximately $4,982,190.

Portions of the Registrant's definitive Proxy Statement for its June 29,
1998 Annual Meeting of Shareholders (which has not been filed as of the
date of this filing) are incorporated by reference into Part III.

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<PAGE>

                                PART I
Item 1.  Business.
-------  ---------

GENERAL

HemaCare Corporation, founded in 1978, provides blood products and services
to healthcare institutions. HemaCare was the first publicly traded company
in the $2 billion U.S. blood industry to be licensed by the Food and Drug
Administration and accredited by the American Association of Blood Banks.

The healthcare institution customers which comprise the U.S. blood industry
are faced with increasing cost containment pressures and are continuously
looking for new ways of providing cost-effective health services. In
response, these institutions are consolidating hospitals under common
corporate umbrellas or into affiliated purchasing or operational groups.
The consolidated entities rely on their combined purchasing power to
solicit the lowest competitive bids for their purchases, and increasingly,
choose to outsource various hospital functions to decrease costs and
improve patient services.

HemaCare provides apheresis platelet and whole blood component products,
therapeutic apheresis and donor testing services to some of the leading
healthcare institutions in Southern California. The Company is meeting the
challenges of cost containment and consolidation by continuing its 20-year
strategy of providing customized solutions to its customers' blood products
and services needs. As a part of this strategy, the Company has developed a
blood management outsourcing model for hospitals which want the convenience
and efficiencies of an in-house blood program without the associated
regulatory and management burdens and related financial risks.

In 1997, HemaCare established a scientific advisory board which provides
input and counsel to the Company's board of directors and management on
technical and regulatory matters as well as participating in an annual
meeting reviewing medical and scientific developments in the blood services
industry. Chaired by HemaCare's medical director, Joshua Levy, MD, the
advisory board is comprised of nationally known experts in the fields of
blood banking, apheresis technology and regulatory compliance. The second
annual meeting of the advisory board, which is scheduled for May 1998, will
address new apheresis technologies, medical advancements in blood banking
and regulatory changes on the horizon.

The Company's corporate headquarters are located in Sherman Oaks,
California, north of downtown Los Angeles. operations are conducted from
this location and from blood donor centers located on the University of
Southern California Health Sciences Campus near downtown Los Angeles and in
the San Gabriel Valley, east of Los Angeles. In December 1995, the Company
commenced operations in St. Louis, Missouri, with a satellite location near
Belleville, Illinois. These operations were sold in August 1997.

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".

BLOOD MANAGEMENT PROGRAMS

General
-------
HemaCare introduced its "Blood Management Program" or "BMP" model in late
1995 with the Gateway Community Blood Program ("Gateway") in St. Louis,
Missouri. In 1996, two Southern California BMPs were established with the
University of Southern California, in February 1996, and with Citrus Valley
Health Partners, in October 1996.

A HemaCare Blood Management Program is an arrangement in which a hospital
outsources its blood procurement and donor center management functions to
HemaCare. 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. A Blood Management Program aligns

                                  2
<PAGE>

the interests of the Company and its hospital customer, providing the
customer with a "partner" in achieving its financial and patient service
goals. The BMP model continues to evolve in response to changes in customer
demand and marketplace dynamics.

Although each BMP is customized to meet the specific needs of the
individual customer, HemaCare's primary responsibilities in a BMP
arrangement are to procure and deliver the blood products and services
required by the BMP hospital and to operate the BMP blood donor center. Red
blood cells are the principal blood product required by most hospitals.
Beginning in the fourth quarter of 1996 and continuing throughout 1997, the
price of red blood cells purchased by the Company steadily increased and
their availability decreased. In 1997, the volume of red blood cells units
available for sale through the American Association of Blood Banks'
National Blood Exchange decreased by 11%, and HemaCare's cost to purchase a
unit of red blood cells increased more than 10%. The terms of HemaCare's
BMP agreements, combined with competitive factors in the blood products
marketplace, have prevented the Company from recovering the increased costs
from its customers.

The increase in the cost of red blood cells, combined with their lack of
availability, have caused HemaCare to reevaluate its existing Blood
Management Program model. It is likely that future HemaCare BMP
arrangements will be focused less on providing all of a hospital's blood
products needs and more on providing specialized donation services,
apheresis based products and services, and other technology-based blood
therapies.

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 (the "USC Hospitals") for the three-
year period ending in March 1999. An integral part of the program is a
blood donation center located on the USC Health Sciences Campus. The center
is staffed, operated and managed by the Company which is also responsible
for regulatory compliance. Pathologists on the USC medical faculty provide
medical services for the USC Blood Center.

Citrus Valley
-------------

Under the terms of the Citrus Valley Health Partners ("Citrus Valley") BMP,
the Company is the exclusive provider of blood services to a three-hospital
network in the Los Angeles metropolitan area. These hospitals, Queen of the
Valley Medical Center, Foothill Presbyterian Hospital and Inter-Community
Medical Center (the "Citrus Valley Hospitals"), serve a community of
720,000 in the San Gabriel Valley. The Citrus Valley blood donation center,
which opened in August 1997, is located in a community-based center
convenient to all three hospitals. The center is staffed, operated and
managed by the Company which is also responsible for regulatory compliance.
Although the structure of the Citrus Valley BMP is similar to the USC
program, the mix of products and services used by the Citrus Valley
Hospitals is more heavily weighted toward red blood cells. In addition, the
Citrus Valley BMP includes a fee structure which provides financial
incentives to HemaCare and the Citrus Valley Hospitals for the efficient
utilization of blood resources. The Citrus Valley BMP is in the second year
of a three-year agreement ending September 30, 1999.

Gateway
-------

Gateway was established by the Company as a regional BMP in the St. Louis,
Missouri metropolitan area at the request of a number of local hospitals,
including St. Louis University Medical Center, the Barnes-Jewish-Christian
hospital system and the Unity Medical Groups. These hospitals expressed
their need for an additional vendor of blood products and services in the
region. Although Gateway was successful in building donor and community
support for its fixed site collections and mobile blood drives with local
businesses, schools, churches and civic organizations, it was unable to
compete with the price reductions introduced by its principal competitor,
the American Red Cross ("ARC"). Immediately following the opening of
Gateway, the ARC decreased its price for red cells by more than 10%. This
price decrease materially impacted Gateway's ability to market its products
and services profitably, and Gateway was sold in August 1997.

                                 3

<PAGE>

BLOOD PRODUCTS

General
-------

The Company provides a full range of blood products to hospital customers,
including BMP customers, in southern California. These products include
single donor apheresis platelet products ("apheresis platelets" or
"platelets") and whole-blood components ("components") such as red blood
cells and fresh frozen plasma.

Currently, the Company produces most of the platelet products it sells from
donations made at its Sherman Oaks location. However, platelets are also
collected at the USC Donor Center and platelet collections are expected to
commence at the Citrus Valley Donor Center in the second quarter of 1998.

In February 1996, component manufacturing commenced at the Sherman Oaks,
California location. The Company collects whole blood at the USC Blood
Donor Center, the Citrus Valley Blood Donor Center and on mobile blood
drives. Southern California component sales in 1997 and 1996 consisted of
both purchased products (imported from other licensed blood centers) and
products manufactured by the Company. Prior to 1996, Southern California
sales of components consisted entirely of products purchased from third-
party providers. Substantially all Gateway sales of component and apheresis
products in 1997 and 1996 consisted of produced products.

Single Donor Apheresis Platelets
--------------------------------

The Company collects single donor platelets, using automated blood
separation technology, at its Sherman Oaks, California location and at the
USC Blood Donor Center. Apheresis platelet collections are expected to
commence at the Citrus Valley Blood Donor Center in the second quarter of
1998. All centers are operated under the Company's Food and Drug
Administration establishment license. (See "Government Regulation".)

HemaCare's platelet donors must pass the Company's stringent donor
screening standards. After collection, the platelets are tested, labeled
and delivered to hospital customers. Temperature control and constant
movement (using a rotator) maintain the platelets' viability for five days.
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. When necessary to meet its customers'
needs, the Company also purchases platelet products for resale.  Such
platelet suppliers are FDA licensed and accredited by the American
Association of Blood Banks ("AABB").  Approximately 6% of platelets sold by
the Company in 1997 were purchased from outside suppliers.

Platelet apheresis technology involves the use of a cell separator operated
by a trained nurse-specialist.  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 every two weeks, up to 24 times per
year, since donating platelets does not deplete donors of red blood cells.

In order to attract and retain qualified donors at its Sherman Oaks,
California location, the Company reimburses these donors for their time and
commitment.  The cash reimbursement is variable, based on the number and
frequency of donations, and includes a bonus program.  The Company recruits
non-cash compensated donors for its BMP donor centers.  Unless extended,
the law enabling HemaCare to compensate platelet donors will expire in
December 2001. The Company is evaluating a number of available options
regarding the expiration of the extension.

Component Blood Products
------------------------

HemaCare provides component blood products such as red blood cells, fresh
frozen plasma and cryoprecipitate to its BMP and other customers. In 1997,
component blood products sold included both purchased products and products
collected and manufactured by the Company under its FDA license. 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.

                                    4
<PAGE>

Donations are tested and component products are manufactured at the Sherman
Oaks facility. The component products are sold primarily to the USC
Hospitals and Citrus Valley Hospitals under the terms of the BMP agreements
with these hospitals. Component products manufactured by Gateway were sold
to hospitals in the St. Louis metropolitan area and adjacent communities.
From 1991 through 1995, all component products sold were purchased under
contractual relationships with blood centers located throughout the U.S.
All such suppliers are FDA licensed and accredited by the AABB.

BLOOD SERVICES

General
-------

Since its inception, the Company has performed more than 33,500 therapeutic
apheresis procedures in the treatment of more than 27 diseases.
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.  The Company customarily
bills the hospital directly for its therapeutic services.  Therapeutic
treatments are administered using mobile units operated at the patient's
bedside or in a hospital outpatient setting. The mobile therapeutics
equipment is self-contained and 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, under the supervision of a specially trained physician.

Joshua Levy, M.D., a shareholder, founder and medical director of the
Company, 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 5% ($584,000) of the Company's total revenues for 1997.
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 their patients.

Federal self-referral laws and related regulations could restrict the
Company's ability to provide therapeutic services to Dr. Levy's patients
who are covered by Medicare or MediCal (approximately 50% of Dr. Levy's
therapeutics patients). These regulations are complex, and in 1996, the
Company requested a clarification of their application to its business. In
early 1997, the Company's legal counsel was informed that new regulations
were under discussion, and the Company's request for clarification could
not be answered at that time. In January 1998, the proposed new regulations
were issued for comment. Since the proposed regulations do not specifically
address therapeutic apheresis services, the Company has requested a
revision of these regulations to provide a clear exemption for these
services. The comment period for the proposed regulations ends in May 1998,
and the new regulations will be issued sometime after that date. 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 (approximately $292,000 in 1997).  (See
"Government Regulation")

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

Conventional Plasma Exchange and Cell Depletion
-----------------------------------------------

The primary blood services provided by the Company, accounting for 88% of
therapeutics procedures in 1997, 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 individual treatments involve the removal of two to four liters of
abnormal plasma or certain cellular components.  Replacement fluids, most

                                     5
<PAGE>

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, and as a result, albumin
is in short supply and its price more than doubled during 1997. 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, lupus nephritis,
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 selectively
remove immune complexes.  Currently, there are only two manufacturers of
apheresis columns approved by the FDA for two specific applications. As
additional research demonstrates the efficacy of new applications, the
Company anticipates additional business will result.

Autologous 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 programs. In 1997, the
Company provided only 3 full-service stem cell procedures to two community
hospitals. The Company believes that increasing pressure from physicians
and patients will, 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.

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 late 1994, the
Company determined that ongoing Immupath research and development
activities could no longer be funded internally, and 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.

                                 6
<PAGE>

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 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 the 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
18%, 16% and 13% of the Company's revenues in 1997, 1996 and 1995,
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' net income. The Citrus Valley Health Partners Hospitals accounted
for approximately 13% of the Company's total 1997 sales. Loss of the Citrus
Valley Health Partners sales would not have a significant adverse effect on
the Company's net income.

COMPETITION

General
-------
The Company competes on the basis of its responsiveness to customer needs
and the price and quality of the services and products it supplies.
However, many blood providers, including the American Red Cross ("ARC"),
have greater financial, technical and personnel resources than the Company,
and additional companies may enter the field, increasing competition.  In
addition, some teaching and other hospitals have in-house blood banking and
therapeutic apheresis service capabilities which do not compete directly
with the Company, but do reduce the market for its services.

In many instances, the Company competes against the ARC in providing its
products and services to healthcare institutions. To date, the ARC has
aggressively responded to competition from the Company, and management
believes that such competition will continue. In St. Louis, prior to the
opening of Gateway, 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 may improve 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, it BMP outsourcing program. Management is reevaluating and
revising its BMP model to focus on providing specialized donation services,
apheresis based products and services, and other technology based blood
therapies, as well as considering a number of opportunities to implement
customized outsourcing programs in a variety of healthcare settings.

                                  7
<PAGE>

The Company believes that its strategy of offering blood product and
service programs tailored to the requirements of individual customers will
favorably differentiate it from other suppliers of blood products and
services and that outsourcing programs may provide opportunities for
expansion of the Company's businesses. However, there can be no assurance
that the Company's future outsourcing programs will be well received by
hospital customers or 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 of the Company's therapeutic blood services business include
the ARC, Coral Therapeutics, a Georgia-based company, and a number of small
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, 1998, the Company had approximately 49 full-time and 28 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 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.

In the last quarter of 1996, the Company began experiencing increased
difficulty in obtaining red blood cell products from suppliers, and the
cost of products that were obtained increased. This trend has continued in
1997.

                                    8
<PAGE>

Industry data indicates that HemaCare's experience reflects a
nationwide shortage of red blood cell products. Whole blood donations
collected at the Company's BMP donor centers provided approximately 16% of
the red blood cell products sold by the Company in 1997. Although this
percentage is expected to increase in 1998, 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.  Platelet and whole blood donors at the USC Blood Center and Citrus
Valley Blood Donor Center 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. As a result, albumin is in short supply and its price to
HemaCare has more than doubled IN 1997.

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
American Association of Blood Banks ("AABB"). 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 blood products business is operated under an FDA
Establishment License, a State of California Biologics License and AABB
accreditation. The Company primarily relies on its licensed and accredited
laboratory to perform 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.  The laboratory is staffed by state licensed, medical
technologists and laboratory technicians.

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 regarding 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.

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

                                    9
<PAGE>

MediCal. It is estimated that revenues from these patients represented
approximately 2.5% of the Company's 1997 revenues ($292,000). 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. Upon inquiry in early 1997, the Company's legal
counsel was informed by HCFA that new regulations were under discussion,
and the Company's request for clarification could not be answered at that
time because of the uncertainty of the situation. In January 1998, the
proposed new regulations were issued for comment. However, 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 ends in May 1998, and the new regulations will be issued
sometime after that date. 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.

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.

The state laws of California 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 should
not be 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

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.

Antigen - Any substance which is foreign to the recipient and triggers the
body's immune mechanism resulting in the production of specific antibodies.

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.

                                   10
<PAGE>

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.  The lease has been
extended for a rolling four-month period. Either the Company or the
landlord may terminate the lease upon four months written notice.  The
Company is currently seeking to either renew the lease on its existing
facility on terms favorable to the Company or negotiate a lease for another
facility.

The USC Blood Donor Center occupies a 1,600 square foot facility located in
Los Angeles, California, under a lease that terminates in February 1999.
The Citrus Valley Blood Donor Center occupies a 2,300 square foot facility
located in Covina, California. 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 also leases approximately 17,000 square feet of space in
Valencia, California. This space, which was leased for the research and
development operations that were discontinued in November 1995, is
subleased through July 1998 when the Company's lease expires.

Item 3.  Legal Proceedings.
-------  ------------------

On March 11, 1994, the Company was served with a lawsuit filed by a former
employee against the Company and its wholly owned subsidiary, HBI, in the
Superior Court of the State of California, related to the termination of
this employee and seeking relief in the amount of $550,000. The lawsuit was
settled in October 1997.  Although the terms of the settlement are
confidential, they did not have a material effect on the Company's 1997
operating results or financial position.

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.

                                   11
<PAGE>


                                PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters.
-------  ----------------------------------------------------------------------

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

The Company's Common Stock is traded in the NASDAQ Small-Cap Issues market
under the symbol HEMA.  The following table sets forth the range of high
and low closing bid prices of the Common Stock, as reported by NASDAQ, for
the quarters ended March 31, June 30, September 30 and December 31, 1997
and 1996.  These prices reflect inter-dealer quotations, without retail
markups, markdowns or commissions, and do not necessarily represent actual
transactions.

<TABLE>
<CAPTION>
                          1997                1996
Quarter ended       High       Low       High       Low
-------------       -----     ------    ------     ------
<S>                 <C>       <C>       <C>        <C>

March 31            $3.13     $2.03     $4.25      $2.94
June 30             $2.50     $1.06     $6.00      $3.13
September 30        $1.56     $0.75     $3.75      $1.88
December 31         $0.97     $0.38     $3.69      $2.63
</TABLE>

No cash dividends had been paid as of March 1, 1998.  The Company does not
anticipate paying cash dividends in the foreseeable future.  As of March 1,
1998, there were approximately 324 holders of record of the Company's
Common Stock.

On February 23, 1998, the new minimum bid price requirements contained in
NASD Marketplace Rule 4310(c)(04) (the "Rule") became effective. The Rule
requires, among other things, that issuers listed on Nasdaq maintain a
minimum bid price of one dollar. On February 27, 1998, Nasdaq notified the
Company that it is not in compliance with the minimum bid price
requirement. The Company has until May 28, 1998 to regain compliance with
the Rule. Compliance may be achieved if the Company's common stock trades
at or above the minimum requirement of one dollar for at least 10
consecutive trade days. If the Company is unable to achieve compliance by
May 28, 1998, Nasdaq has informed the Company that it will issue a
delisting letter that will identify the review procedures available to the
Company at that time. The Company is presently assessing the options
available to achieve compliance with the Rule. However, there can be no
assurance that the Company will be successful in retaining its Nasdaq
listing.

                                   12
<PAGE>

Item 6.  Selected Financial Data.
-------  -------------------------

<TABLE>
<CAPTION>

                                              Year Ended December 31,
                                       (In Thousands, except Per Share Data)
                                   1997       1996      1995      1994      1993
                                  ------     -------   ------    -------   ------
<S>                               <C>        <C>       <C>       <C>       <C>
Revenues........................  $11,101    $10,921   $10,783   $10,847   $11,556
Operating profit................    1,907      1,234     2,559     2,963     3,307
Income (loss) from continuing
 operations.....................       37     (1,090)      480       676       763
Discontinued Operations:
Loss from discontinued
 operations.....................        -          -      (902)   (2,964)   (3,309)
Gain (loss) on disposal
 of discontinued operations.....      293        600    (3,114)        -         -
Net income (loss)...............      330       (490)   (3,536)   (2,288)   (2,546)

Basic Per Share Amounts:
-------------------------
Income (loss) from continuing
 operations.....................  $  0.01    $ (0.17)  $  0.08   $  0.13   $  0.17
Income (loss) from discontinued
 operations.....................     0.04       0.09     (0.70)    (0.59)    (0.72)
Net income (loss)...............     0.05      (0.08)    (0.62)    (0.45)    (0.55)

Diluted Per Share Amounts:
---------------------------
Income (loss) from continuing
 operations.....................     0.01      (0.17)     0.08      0.13      0.16
Income (loss) from discontinued
 operations.....................     0.04       0.09     (0.69)    (0.57)    (0.68)
Net income (loss)...............     0.05      (0.08)    (0.61)    (0.44)    (0.52)

Total assets....................  $ 4,384    $ 4,776   $ 4,456   $ 6,289   $ 6,717
Long-term debt and capital lease
 obligations, net of current
 portion........................      209        503       649       287       432
Shareholders' equity............    2,402      2,023     1,226     3,900     4,585

</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 late 1995 and in 1996, the Company initiated three blood management
programs. The Gateway Community Blood Program ("Gateway") opened in St.
Louis, Missouri, in December 1995. The University of  Southern California
("USC") Blood Management Program commenced in February 1996 and the Citrus
Valley Health Partners ("Citrus Valley") Blood Management Program commenced
in October 1996. These programs are collectively referred to as the "Blood
Management Programs" or "BMPs" in the following discussions.

REVENUES

Total revenues increased 2% ($180,000) in 1997, compared to an increase of
1% ($138,000) in 1996. The 1997 increase was due primarily to higher Blood
Management Program and Regional Blood Services revenue, offset by lower
Regional Blood Products revenue. The 1996 revenue increase was due to
higher Blood Management Program revenue, offset by lower Regional Blood
Products and Services revenues. The decreases in Regional Blood Products
revenue in 1997 and 1996 were due primarily to the conversion of two
significant customers to Blood Management Program arrangements. In
addition, the volume of blood products sold to non-BMP customers and the
prices for these products decreased in 1997 and 1996.

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

Blood Management Program revenue increased to $4.1 million in 1997 from
$2.7 million in 1996. Blood Management Programs revenues were insignificant
in 1995. The increases in Blood Management Program revenues in 1997 and
1996 reflect the commencement of the Gateway, USC and Citrus Valley BMPs.

                               13
<PAGE>

The USC and Citrus Valley BMPs converted existing Regional Blood Products
and Services revenue to a BMP revenue. Gateway was a new operation for the
Company. Despite significant increases in collections and sales, Gateway's
operations failed to achieve profitability and were sold in August 1997.

Regional Operations
-------------------

Blood Products

Blood products (apheresis platelet and whole blood component) revenues
decreased 41% ($1,789,000) in 1997 and 37% ($2,526,000) in 1996. The 1997
and 1996 revenue decreases were due primarily to the conversion of the USC
and Citrus Valley business to blood management programs. In addition, the
volume and sales prices of apheresis platelets sold to non-BMP customers
decreased in both 1997 and 1996. In 1997, the sales volume and prices of
whole-blood components sold to non-BMP customers also decreased.

The Company believes that the 1997 and 1996 decreases in apheresis platelet
sales resulted from unfair ARC pricing practices. In August 1997, the ARC
modified these practices in a way which the Company believes may ultimately
improve its ability to obtain and retain apheresis platelet customers.
Future growth of the Company's apheresis platelet product sales is largely
dependent upon regaining and retaining the customers it lost in 1997 and
1996. Although demand for component products is expected to remain strong,
sales of component products are limited by the Company's ability to produce
or purchase red blood cells at an economic price.

Blood Services

Regional Blood Services revenue increased by 15% ($581,000) in 1997 and
decreased by 1% ($53,000) in 1996. The 1997 revenue increase resulted from
higher Southern California therapeutic apheresis and donor testing revenue.
The 1996 revenue decrease resulted from lower Southern California and
Georgia therapeutic apheresis revenue, largely offset by increased donor
testing revenue. The decrease in Georgia apheresis therapeutic revenues
resulted from the closure of this operation in July 1996.

In 1997, the volume of Southern California therapeutic apheresis procedures
increased 11% and the price per procedure increased 8%. The price increase
resulted from higher albumin charges, partially offset by lower average
basic, procedure fees. The cost to the Company for albumin, a replacement
fluid used in most therapeutic procedures, more than doubled in 1997. A
portion of this increase was passed through to customers as higher albumin
charges. In 1996, a 2% increase in the volume of Southern California
therapeutic apheresis procedures was offset by 1% price decrease.

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.

In 1997 and 1996, 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 and 1996 were partially offset by
decreases in the average price per unit tested. As the number of providers
of donor testing services increases, competition for testing business will
increase and prices are likely to continue to decrease.

OPERATING PROFIT

Operating profit as a percentage of revenue ("operating profit margin")
increased 6% in 1997 and decreased 12% in 1996. Both changes resulted
primarily from Blood Management Program operating losses. The operating
profit margin from stabilized operations was 25% in 1997 and 26% in 1996
and 1995. Increased costs to acquire red blood cells and an increase in the
price of albumin had an adverse impact on the 1997 stabilized operating
profit margin.
                                  14
<PAGE>


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

The loss from Blood Management Program operations was $210,000, $963,000
and $290,000 in 1997, 1996 and  1995, respectively. Of these amounts,
$316,000 in 1997, $1,106,000 in 1996 and $234,000 in 1995 related to
Gateway's operations which were sold in August 1997. The profitability of
the Southern California BMPs was adversely affected in 1997 and 1996 by
losses incurred at the blood donor centers.  In 1997, USC Donor Center
single donor platelet and whole blood collections increased significantly,
but these gains were offset by the cost of starting up the Citrus Valley
Donor Center.  In addition, 1997 BMP operating profit was reduced by
increases in the cost of acquiring red blood cells.

Regional Operations
-------------------

Blood Products

The operating profit margin on blood product sales increased to 27% in
1997, from 22% in 1996, and 23% in 1995. The 1997 increase was due
primarily to a change in the mix of products sold, partially offset by
lower apheresis platelet operating profit margins. The 1996 decrease
resulted from lower operating profit margins on apheresis platelets,
partially offset by a change in product mix.

The percentage of Regional Operations Blood Products revenue from
components, principally red blood cells, decreased to 53% in 1997, from 78%
in 1996, and 79% in 1995. The operating profit margin on red blood cells is
substantially lower than that of other blood products sold by the Company.
The 1997 and 1996 decreases in Regional Operations sales of red blood cells
resulted from the conversion of red blood cell customers to BMP
arrangements.

The 1997 and 1996 decreases in the apheresis platelet operating profit
margin resulted from decreases in the average sales price (3% in 1997 and
4% in 1996), partially offset by lower production costs.

Blood Services

The gross profit margin for the blood services remained stable between 1997
and 1995. In 1997, a small decrease in the operating profit margin for Los
Angeles therapeutic services was offset by elimination of losses from the
Company's Georgia therapeutic services operation which was closed in July
1996. 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. However, the price increase did not entirely
offset the increased albumin cost.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses decreased 14% ($326,000) in 1997 and
increased 12% ($246,000) in 1996. In both years, corporate spending
controls, including staffing reductions, were in effect, but in 1996, the
positive effect of these controls was more than offset by increased legal
fees, an increase in regulatory personnel costs and the addition of a
business development department.

DISCONTINUED OPERATIONS

From 1990 through 1995, the Company, thorough its wholly-owned subsidiary
HemaBiologics, Inc., conducted research and development activities relating
to Immupath, an anti-HIV hyperimmune plasma product. In late 1994, the
Company determined that ongoing Immupath research and development
activities could no longer be funded internally, and 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.

                                 15
<PAGE>

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 six patients
receiving Immupath treatments. In the fourth quarter of 1997, the Company
reviewed and revised its estimated costs of 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 CAPTIAL RESOURCES

At December 31, 1997, the Company had cash and short-term investments of
$1.6 million. The Company's $700,000 line of credit with a commercial bank
is in effect until April 30, 1998. Under the terms of the credit line
agreement, the Company may borrow up to 70% of eligible accounts
receivable, up to a maximum of $700,000 and must maintain certain ratios.
The Company was in compliance with all covenants of its borrowing agreement
at December 31, 1997. At December 31, 1997, there were no borrowings
outstanding on the line of credit, and the Company has requested its bank
to renew the credit agreement.

The Company's common stock is listed on the Nasdaq Small Cap Market
("Nasdaq"). In August 1997, Nasdaq adopted NASD Marketplace Rule
4310(c)(04) (the "Rule") to strengthen both the quantitative and
qualitative listing requirements for issuers. The Rule, which became
effective February 23, 1998, requires among other things, that issuers
listed on the Nasdaq SmallCap Market maintain a minimum bid price of $1 and
net tangible assets, as defined, of at least $2 million. The minimum bid
price of the Company's stock as of March 27, 1998 was less than $1.00 and
its net tangible assets at December 31, 1997 were $2.4 million. On February
27, 1998, Nasdaq notified the Company that it is not in compliance with the
minimum bid price requirement. The Company has until May 28, 1998 to regain
compliance with the Rule. Compliance may be achieved if the Company's
common stock trades at or above the minimum requirement of one dollar for
at least 10 consecutive trade days. If the Company is unable to achieve
compliance by May 28, 1998, Nasdaq has informed the Company that it will
issue a delisting letter which will identify the review procedures
available to the Company at that time. The Company is presently assessing
the options available to achieve compliance with the Rule. In the event
that the Company's common stock is no longer listed on the Nasdaq SmallCap
Market or a national securities exchange, the liquidity of the Company's
common stock would be adversely affected and the Company's ability to raise
capital may be impaired.

The Company's blood products and services businesses, other than blood
donor center operations established for the Blood Management Programs, 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 as evaluation, the Company sold Gateway's unprofitable St. Louis-
based operations in August 1997.

At December 31, 1997, the blood donor center ("Center") activities of the
Blood Management Programs were the Company's only operations which were not
generating operating profits. Center operations are expected to continue to
be unprofitable until a higher level of Center blood collections can be
achieved. The operating losses of the Centers reduce the overall
profitability of the USC and Citrus Valley BMP arrangements to the Company.
The Company has implemented plans to achieve a profitable level of
collections and sales for these Centers. Although these plans have
decreased the USC and Citrus Valley Center losses, there can be no
assurance that the USC and Citrus Valley Centers will be able to achieve
and maintain a profitable level of collections. In addition, a high
percentage of the products sold to the Citrus Valley BMP are red blood
cells. Despite an 8% increase in the Citrus Valley price for red blood
cells which was effective October 1, 1997, increases in the cost the
Company must pay to acquire or produce red blood cells has reduced the
operating profit margin on these sales.

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 2.5% ($292,000) of the Company's 1997 revenues. These
regulations are complex, and the Company requested a clarification of their
application to its business from Health Care Financing Administration
("HCFA"), in early 1996. To date, the Company has not received a response
to this request. Upon inquiry in early 1997, the Company's legal counsel

                               16
<PAGE>

was informed by HCFA that new regulations were under discussion, and the
Company's request for clarification could not be answered at that time
because of the uncertainty of the situation. In January 1998, the proposed
new regulations were issued for comment. However, 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 ends in
May 1998, and the new regulations will be issued sometime after that date.
If the new regulations do not provide an exemption for therapeutic
apheresis services, the Company could lose the revenue from its services to
Dr. Levy's Medicare and MediCal patients.

Management is evaluating opportunities to develop and implement new
outsourcing models and these models, including its Blood Management
Program. These opportunities include a revision and extension of the
existing USC Blood Management Agreement that expires in March 1999. Because
of the increase in the cost of acquiring red blood cells, it is likely that
future HemaCare outsourcing arrangements will be focused 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 or that it will be able to obtain the
funds necessary to finance such programs.

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 the Blood Management Program Centers, (ii) the remaining costs
of its discontinued operations and (iii) other working capital
requirements, including capital and operating lease commitments.

YEAR 2000 DISCLOSURE

Company software is designed to function following the millenium. The
Company does not believe that year 2000 compliance poses a risk to its
continuing operations.

                                 17
<PAGE>

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 its Blood Management Programs, to retain existing
customers, to improve the profitability of the Company's other operations,
to expand its operations, to comply with the covenants under its bank line
of credit and to effectively compete against the ARC and other competitors.
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-3-14.

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.

                                  18
<PAGE>

                               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--incorporated by reference to
                   Exhibit 3.2 to Form 10-K of the Registrant for the year
                   ended December 31, 1992.

            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    Warrant Agreement between the Registrant and Huss Kealy
                   Sinclair dated May 7, 1993--incorporated by reference to
                   Registration Statement on Form S-3 of the Registrant (File
                   No. 33-44869).

            4.3    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.

            4.4    Offshore Securities Subscription Agreement between the
                   Registrant and Tesoma Overseas, Inc., dated April 8, 1994--
                   incorporated by reference to Exhibit 4.1 to Form 10-Q of the
                   Registrant for the quarter ended March 31, 1994.

                                        19
<PAGE>

            4.5    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.

            4.6    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.

            4.7    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.

            4.8    Form of Warrant Agreement between the Registrant and Tesoma
                   Overseas, Inc. dated February 9, 1995--incorporated by
                   reference to Exhibit 4.8 to Form 10-K of the Registrant for
                   the year ended December 31, 1994.

            4.9    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.

            4.10   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.

            4.11   Amended Certificate of Determination, dated March 18. 1998.

            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    Lease dated July 10, 1986 between the Registrant and Addison
                   Place Partners--incorporated by reference to Registration
                   Statement on Form S-18 of the Registrant (File No. 33-8513-
                   LA).

           10.4    Amendment No. 1 to Lease between the Registrant and Addison
                   Place Partners dated March 30, 1993--incorporated by
                   reference to Exhibit 10.3 to Form 10-K of the Registrant
                   for the year ended December 31, 1994.

           10.5    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.

           10.6    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.

           10.7    Revolving Credit Agreement between the Registrant and Bank
                   Leumi Le-Israel, B.M., dated April 30, 1997 and related
                   security agreements--incorporated by reference to Exhibit
                   10.1 to Form 10-Q of the Registrant for the quarter ended
                   June 30, 1997.

           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.

                                          20
<PAGE>

           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 subisidary of the Registrant, and Joshua Levy
                   dated January 30, 1998.

           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   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.

           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 March 5, 1998, the Company filed a Report on Form 8-K dated March
        5, 1998.  The Company reported under Item 2 that the Company entered
        into a Rights Agreement with its transfer agent, U.S. Stock Transfer
        Corporation.

                                       21
<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 27, 1998                       \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 27th day of March, 1998.


Signature                                Title


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


\s\  Hal I. Lieberman                    President, Chief Executive Officer
---------------------------              (Principal Executive Officer)
Hal I. Lieberman

\s\ Sharon C.  Kaiser                    Sr. Vice President, Finance, Chief
---------------------------              Financial Officer (Principal
Sharon C.  Kaiser                        Financial and Accounting Officer)


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


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


                                 22
<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, 1997 and
December 31, 1996............................................      F-3

For the years ended December 31, 1997, 1996 and 1995:

     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,
1997 and 1996, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the three years in the
period ended December 31, 1997. 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, 1997 and 1996, and
the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1997 in conformity with generally
accepted accounting principles.



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



Los Angeles, California
February 12, 1998

                                  F-2
<PAGE>

Part I.  Financial Information
Item 1.  Financial Statements


                                      HEMACARE CORPORATION
                                  CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                December 31,      December 31,
                                                   1997                1996
                                                -------------     ------------
<S>                                             <C>               <C>
                ASSETS

Current assets:
  Cash and cash equivalents.................... $  1,249,000      $  1,136,000
  Marketable securities........................      363,000           415,000
  Accounts receivable, net of allowance for
   doubtful accounts - $81,000 (1997) and
   $47,000 (1996)..............................    1,561,000         1,722,000
  Product inventories..........................       63,000            74,000
  Supplies.....................................      341,000           306,000
  Prepaid expenses.............................      123,000           146,000
  Note receivable from related party - current.       24,000            15,000
                                                -------------     -------------
           Total current assets................    3,724,000         3,814,000

Plant and equipment, net of accumulated
  depreciation and amortization of
  $1,690,000 (1997) and $1,875,000 (1996)......      585,000           823,000
Note receivable from related party -
  non-current..................................       65,000            88,000
Other assets...................................       10,000            51,000
                                                -------------     -------------
                                                $  4,384,000      $  4,776,000
                                                =============     =============
  LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable............................. $    659,000      $    909,000
  Accrued blood purchases......................            -           175,000
  Accrued payroll and payroll taxes............      493,000           335,000
  Other accrued expenses.......................      366,000           284,000
  Current obligations under capital leases.....      140,000           241,000
  Reserve for discontinued operations..........      115,000           306,000
                                                -------------     -------------
           Total current liabilities...........    1,773,000         2,250,000

Obligations under capital leases, net
  of current portion...........................      209,000           503,000
Commitments and contingencies..................
Shareholders' equity:
  Common stock, without par value-20,000,000
    shares authorized, 7,190,710 issued and
    outstanding in 1997 and 7,177,515 in 1996..   13,515,000        13,466,000
  Accumulated deficit..........................  (11,113,000)      (11,443,000)
                                                -------------     -------------
           Total shareholders' equity..........    2,402,000         2,023,000
                                                -------------     -------------
                                                $  4,384,000      $  4,776,000
                                                =============     =============

</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,
                                          1997           1996           1995
                                      ------------   ------------   ------------
<S>                                   <C>            <C>            <C>
Revenues:
  Blood management programs.........  $  4,105,000   $  2,717,000   $         -
  Regional operations
    Blood products..................     2,589,000      4,378,000     6,904,000
    Blood services..................     4,407,000      3,826,000     3,879,000
                                      -------------  -------------  ------------
    Total revenue...................    11,101,000     10,921,000    10,783,000

Operating costs and expenses:
  Blood management programs.........     4,315,000      3,680,000       290,000
  Regional operations
    Blood products..................     1,879,000      3,402,000     5,291,000
    Blood services..................     3,000,000      2,605,000     2,643,000
                                      -------------  -------------  ------------
    Total operating costs and
      expenses......................     9,194,000      9,687,000     8,224,000
                                      -------------  ------------   ------------
    Operating profit................     1,907,000      1,234,000     2,559,000

General and administrative expense..     1,998,000      2,324,000     2,078,000

Gain on sale of Gateway Community
  Blood Program.....................       128,000              -             -
                                      -------------  -------------  ------------
Income (loss) from continuing
  operations before income taxes....        37,000     (1,090,000)      480,000
Provision for income taxes..........             -              -             -
                                      -------------  -------------  ------------
Income (loss) from continuing
  operations........................        37,000     (1,090,000)      480,000

Discontinued operations:
  Gain (loss) from disposal of
    discontinued operations.........       293,000        600,000    (3,114,000)
  Loss from discontinued operations.             -              -      (902,000)
                                      -------------  -------------  ------------
    Net income (loss)...............  $    330,000   $   (490,000)  $(3,536,000)
                                      =============  =============  ============
Basic per share amounts:
  Income (loss) from continuing
    operations......................  $       0.01   $      (0.17)  $      0.08
  Income (loss) from discontinued
    operations......................          0.04           0.09         (0.70)
                                      -------------  -------------  ------------
    Net income (loss)...............  $       0.05   $      (0.08)  $     (0.62)
                                      =============  =============  ============

Diluted per share amounts:
  Income (loss) from continuing
    operations......................  $       0.01   $      (0.17)  $      0.08
  Income (loss) from discontinued
    operations......................          0.04           0.09         (0.69)
                                      -------------  -------------  ------------
    Net income (loss)...............  $       0.05   $      (0.08)  $     (0.61)
                                      =============  =============  ============

</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, 1997, 1996 AND 1995

<TABLE>
<CAPTION>

                                               Common Stock         Accumulated
                                           Shares         Amount      Deficit          Total
                                         ------------  ------------  -------------   ----------
<S>                                      <C>           <C>           <C>             <C>

Balances at December 31, 1994..........  5,366,381     $11,317,000   $ (7,417,000)   $ 3,900,000

Exercise of stock options and warrants.    528,083         796,000              -        796,000
Compensation expense related to the
 issuance of common stock options
 at a price below market...............          -          12,000              -         12,000
Issuance of common stock for employee
 401(k) and incentive bonus plans......     16,821          54,000              -         54,000
Net Income/(loss)......................          -               -     (3,536,000)    (3,536,000)
                                         ----------    ------------  -------------   ------------
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
                                         ==========    ============  =============   ============

</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,
                                                      1997           1996          1995
                                                   ------------   ------------  -------------
<S>                                                <C>            <C>           <C>
Cash flows from operating activities:
 Net Income (loss)...............................  $  330,000     $  (490,000)  $(3,536,000)
 Adjustments to reconcile net income (loss)
  to net cash provided by (used in) operating
  activities:
    Write-off of assets from discontinued
     operations..................................           -               -     2,079,000
    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)       29,000
    Depreciation and amortization................     187,000         359,000       498,000
    Issuance of common stock and options for
     compensation................................      50,000          44,000        67,000

 Changes in operating assets and liabilities:
    Increase (decrease) in accounts receivable...     196,000         (70,000)      (49,000)
    Increase(decrease) in inventories, supplies
     and prepaid expenses........................      (1,000)         59,000       (34,000)
    Decrease (increase) in other assets, net.....      41,000          28,000       (92,000)
    Increase (decrease) in accounts payable,
     accrued expenses and deferred revenue.......    (185,000)        267,000      (240,000)
    Proceeds from (expenditures for) discontinued
     operations..................................       8,000         (30,000)      936,000
                                                   -----------    ------------  ------------
    Net cash provided by (used in) operating
     activities..................................     240,000        (458,000)     (342,000)

Cash flows from investing activities:
 (Increase) decrease in note receivable from
   related party.................................      14,000           6,000       (18,000)
 (Increase) decrease in marketable securities....     (52,000)       (415,000)      295,000
 (Purchase) disposition of plant and equipment,
   net...........................................      46,000         (32,000)     (181,000)
                                                   -----------    ------------  ------------
  Net cash provided by (used in) investing
   activities....................................       8,000        (441,000)       96,000

Cash flows from financing activities:
 Net proceeds from issuance of common stock......           -       1,243,000       796,000
 Principal payments on line of credit and
   capital leases................................    (135,000)       (205,000)     (339,000)
                                                   -----------    ------------  ------------
 Net cash (used in) provided by  financing
   activities....................................    (135,000)      1,038,000       457,000
                                                   -----------    ------------  ------------

 Increase in cash and cash equivalents...........     113,000         139,000       211,000
 Cash and cash equivalents at beginning of
   period........................................   1,136,000         997,000       786,000
                                                   -----------    ------------  ------------
 Cash and cash equivalents at end of period......   1,249,000     $ 1,136,000   $   997,000
                                                   ===========    ============  ============

Supplemental disclosure:
 Interest paid...................................  $   51,000     $    78,000   $    47,000
                                                   ===========    ============  ============
Items not impacting cash flow:
 Increase in capital lease obligations...........  $   38,000     $    92,000   $   487,000
                                                   ===========    ============  ============

</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 healthcare
institutions.

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 11.)

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

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.

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.  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 the
sale 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 blood components that are manufactured or
purchased and distributed by the Company.  Accounts receivables are
reviewed periodically for collectibility.

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

                                 F-7
<PAGE>

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 length of the lease, ranging from
three to ten 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.

Other Assets: As of December 31, 1997 other assets consisted primarily
of deposits. At December 31, 1996, other assets consisted primarily of
deposits and organizational costs of Gateway which were being
amortized using the straight-line method, over a period of five years.
The organizational costs were written off when Gateway's operations
were sold in August 1997.

Income Taxes: Income taxes are computed under the provisions of 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" which was issued in March 1997, effective fiscal
for years ending after December 15, 1997. 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.

The following table reconciles the number of shares used in the
computations of basic and diluted earning (loss) per share:

<TABLE>
<CAPTION>

                                                        December 31,
                                              1997           1996           1995
                                           -----------    -----------   -----------
<S>                                        <C>            <C>           <C>

Weighted average common shares used to
 compute basic earnings (loss) per share   7,189,000      6,350,000      5,693,000
Effective of dilutive securities:
  Options                                     11,000              -        122,000
  Warrants                                     5,000              -         29,000
                                           ----------     ----------     ----------
Weighted average common shares and
 equivalents used to compute
 diluted earnings (loss) per share         7,205,000      6,350,000      5,844,000
                                           ==========     ==========     ==========
</TABLE>

Warrants and options to purchase 1,289,800, 995,800 and 1,034,800
shares of common stock outstanding at December 31, 1997, 1996 and
1995, 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 1996 and 1995 amounts have been reclassified
to conform with 1997 presentations.

                                     F-8
<PAGE>


Note 3 - Plant and Equipment
----------------------------

	Plant and equipment consists of the following:


                                            December 31,
                                         1997           1996
                                     ------------   ------------
Furniture, fixtures and equipment    $ 2,089,000    $ 2,497,000
Leasehold improvements                   186,000        201,000
                                     ------------   ------------
                                       2,275,000      2,698,000
Less accumulated depreciation and
  amortization                        (1,690,000)    (1,875,000)
                                     ------------   ------------
                                     $   585,000    $   823,000
                                     ============   ============

Equipment with a cost of $740,000 in 1997 and $1,097,000 in 1996 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 4 - Line of Credit
-----------------------

The Company maintains a line of credit with a commercial bank secured
by its accounts receivable, inventory and equipment.  The credit line
is in effect through April 30, 1998.  Under the terms of the credit
line agreement, as amended, the Company may borrow up to 70% of
eligible accounts receivable, up to a maximum of $700,000 and must
maintain certain ratios. The Company was in compliance with all
covenants of its borrowing agreement, as amended, at December 31,
1997.  Interest on credit line borrowings is at the lender's prime
rate (8.50% at December 31, 1997) plus one-half of a percentage point.
As of December 31, 1997 and 1996, and during the years then ended,
there were no balances outstanding under the line of credit.

Note 5 - 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 1998 to 2003, are as follows:

Year Ending December 31,

1998                            $ 157,000
1999                              118,000
2000                               54,000
2001                               26,000
2002                               21,000
Thereafter                         25,000
                                ----------
Total minimum lease payments      401,000
Less:  Amount representing
       interest                    52,000
                                ----------
Present value of minimum lease
  payments                      $ 349,000
                                ==========

                                F-9
<PAGE>

Future minimum rentals under operating leases, which expire in 1998
through 2003, are as follows:

Year ending December 31,
1998                       $ 382,000
1999                          88,000
2000                          49,000
2001                          39,000
2002                          39,000
Thereafter                    32,000
                           ----------
                           $ 629,000
                           ==========

Total rent expense under all operating leases was $600,000, $664,000
and $561,000 for the years ended December 31, 1997, 1996 and 1995,
respectively.

Note 6 - Income Taxes
----------------------

There is no current or deferred income tax expense for the three years
ended December 31, 1997. The Company utilized net operating loss
carryforwards in 1997 and incurred losses in 1996 and 1995.

The approximate tax effects of temporary differences which gave rise
to significant deferred tax assets and liabilities at December 31,
1997 and 1996, are as follows:

                                      1997          1996
                                   -----------   ------------

Current:
Accrued expenses and other         $   318,000   $   249,000

Noncurrent:
Depreciation and amortization          290,000       415,000
Deferred research and
 development expenses                  210,000       160,000
Other                                   93,000       (99,000)
Net operating loss carryforwards     3,124,000     2,484,000
Tax credit carryforwards               881,000       963,000
                                   ------------  ------------
Total deferred assets                4,916,000     4,172,000
Valuation allowance                 (4,916,000)   (4,172,000)
                                   ------------  ------------
                                   $        --   $        --
                                   ============  ============

At December 31, 1997 and 1996, the Company had net operating loss
carryforwards available for federal income tax purposes of $8,509,000,
expiring from 2004 to 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 5.8%; 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.

                                   F-10
<PAGE>


The Company also had net operating loss carryforwards available for
state income tax purposes of approximately $3,839,000 at December 31,
1997 expiring from 1998 to 2000.

At December 31, 1997, the Company had federal income tax credit
carryforwards of approximately $573,000 expiring from 1998 to 2010,
and state tax credit carryforwards of approximately $308,000 which are
not subject to expiration.

Note 7 - Shareholders' Equity
------------------------------

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 accounts for these
plans and recognizes compensation expense in accordance with APB
Opinion No. 25. Under the provisions of this opinion, the Company
recognized $8,000 and $5,000 of compensation expense in 1997 and 1996,
respectively. Had compensation expense for these plans been recognized
in accordance with SFAS 123 "Accounting for Stock-Based Compensation",
the Company's net income (loss) and net income (loss) per share would
have been as follows:


                                          Years ended December 31,
                                   --------------------------------------
                                      1997        1996        1995
                                   -----------  -----------   -----------
Net income (loss):
     As reported                   $ 330,000    $ (490,000)   $(3,536,000)
     Pro forma                        83,000      (622,000)    (3,579,000)

Basic net income (loss) per share:
     As reported                   $    0.05    $    (0.08)   $     (0.63)
     Pro forma                          0.01         (0.10)         (0.61)

Diluted net income (loss) per
share:
     As reported                   $    0.05    $    (0.08)   $     (0.61)
     Pro forma                          0.01         (0.10)         (0.61)


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,
                                    -------------------------------------
                                        1997          1996         1995
                                    -----------   ----------   ----------

Weighted average risk free
 interest rate                       5.00%         5.75%        6.50%
Expected volatility                    68%           60%          52%
Weighted average fair value
 of options and warrants            $0.73         $1.53        $1.16

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 750,000 shares may be granted
under the terms of the 1996 Plan, of which 372,500 were granted during
1997.  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 be exercisable at a rate of at least
20% per year.

The 1986 Plan expired in July 1996.  At December 31, 1997, 128,300
options were outstanding under this plan.

                                     F-11
<PAGE>

A one-time grant of options typically is made to each non-employee
director at the time of joining the Board, and additional options may
be granted to non-employee directors at other times.  The table below
summarizes transactions in the Plans and weighted average exercise
prices ("Price") during 1997, 1996 and 1995.

<TABLE>
<CAPTION>
                                     1997                  1996                 1995
                             --------------------   -------------------  -----------------
                              Shares      Price      Shares     Price     Shares     Price
                             --------   ---------   ---------  --------  --------  -------
<S>                          <C>        <C>         <C>        <C>       <C>
Outstanding at beginning
  of year                    185,800    $ 4.01      395,800    $ 3.12    581,083   $ 3.60
Granted                      372,500      1.74       63,000      3.41     37,800     2.23
Exercised                          0         -       53,750      1.99     28,083     1.83
Canceled                      62,500      2.78      219,250      2.59    195,000     4.55
                             -------    ------      -------    ------    -------   ------
Outstanding at end of year   495,800      2.36      185,800      4.01    395,800     3.12
                             =======    ======      =======    ======    =======   ======
Exercisable at end of year   184,550    $ 3.05      140,300    $ 4.12    339,967   $ 2.85
                             =======    ======      =======    ======    =======   ======

</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, 1997:

<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               182,500   9.9 years    $1.35     50,000    $0.95
$1.75 to $2.43               125,000   9.5 years     2.00      2,500     2.00
$2.44 to $4.99               149,800   7.2 years     3.12     93,550     3.23
$5.00 to $6.13                38,500   10 months     5.39     38,500     5.39
                             -------                ------   -------    -----
                             495,800                $2.36    184,550    $3.05
                             =======                =====    =======    =====
</TABLE>

At December 31, 1997, 1996 and 1995, the Company had a total of
810,000, 810,000 and 790,000 warrants to purchase common stock
outstanding, respectively. Of the outstanding warrants, 790,000 were
exercisable in 1997, 1996 and 1995.

In connection with stock sales in 1993 and 1994, the Company issued
warrants to finders to purchase 90,000 shares of the Company's stock
at prices ranging from $1.45 and $6.50, expiring between May 1998 and
July 2000. In 1995 the Company issued an additional 250,000 warrants
to purchasers of the stock sold in 1994. These warrants are
exercisable at a price of $3.50 per share through December 1998. Up to
12,500 additional finder warrants may be issued at $3.50 per share,
depending on the number of the fourth group of 250,000 warrants which
are exercised.

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.

At December 31, 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. At December 31, 1995, 50,000 warrants issued for
consulting services were outstanding. These warrants, all of which
were exercisable, had exercise prices between $2.63 and $3.69 and
expired between June 1999 and June 2002.

Note 8 -  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 1997, 1996 and 1995, the
Company elected to match 50 percent of the of each participants
contribution, up to 5% of the participants annual salary, with

                            F-12
<PAGE>

HemaCare common stock. Matching contributions were suspended effective
January 1, 1998 on the advise of the Plan Administrator, based on the
decrease in the market price of the Company's stock in 1997.

During 1997, 1996 and 1995, HemaCare issued 13,195 shares ($41,000),
12,480 shares ($44,000) and 16,821 shares ($55,000) of common stock as
matching contributions for the 1996, 1995 and 1994 plan years,
respectively.  HemaCare plans to issue approximately 90,410 shares
($42,000) in 1998 as matching contributions for the 1997 plan year.

Note 9 - Commitments and Contingencies
---------------------------------------

On March 11, 1994, the Company was served with a lawsuit filed by a
former employee against the Company and its wholly owned subsidiary,
HBI, in the Superior Court of the State of California, related to the
termination of this employee and seeking relief in the amount of
$550,000. The lawsuit was settled in October 1997.  Although the
terms of the settlement are confidential, they did not have a
material effect on the Company's 1997 operating results or financial
position.

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. The
Company intends to vigorously defend this claim, and its ultimate
resolution is not expected to have a material impact on the Company's
financial condition or its results of operations.

Note 10 - Segment and Related Party Information
-----------------------------------------------

The Company operates within one industry, blood services and products.
Sales of products and services to two unaffiliated hospital groups
accounted for $2,044,000 (18%) and $1,473,000 (13%) of the Company's
revenues in 1997. In 1996 and 1995, sales to one unaffiliated hospital
group accounted for $1,769,000 (16%) and $1425,000 (13%) of the
Company's revenues, respectively.

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 11 - 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.  In connection with this decision, the
Company wrote off the remaining book value of HBI's assets
($2,079,000) and provided a reserve for estimated operating losses
($1,035,000) from the November 30, 1995 measurement date through
December 1996, the expected date of substantial completion of
disposal.  The loss on the disposition of HBI's operations has been
accounted for as a discontinued operation.

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

                                 F-13
<PAGE>

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-14
<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 February 12, 1998.  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 audits 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
February 12, 1998
                                 S-1
<PAGE>

                         HEMACARE CORPORATION
            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS


            For The Years Ended December 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>


                                               Additions
                                        ------------------------
                          Balance at    Charged to    Charged to                 Balance
                          beginning     costs and       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                  $ 47,000      $ 35,000      $    --      $  1,000     $ 81,000

Year ended December
31, 1996 - Allowance
for  uncollectible
accounts                  $ 94,000      $(25,000)(1)  $    --      $ 22,000     $ 47,000

Year ended December
31, 1995 - Allowance
for  uncollectible
accounts                  $141,000      $ 29,000      $    --      $ 76,000     $ 94,000

</TABLE>

(1)  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-K 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--incorporated by reference to Exhibit
        3.2 to Form 10-K of the Registrant for the year ended December
        31, 1992.......................................................

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    Warrant Agreement between the Registrant and Huss Kealy
       Sinclair dated May 7, 1993--incorporated by reference to
       Registration Statement on Form S-3 of the Registrant (File No.
       33-44869).......................................................

4.3	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.......................................................

4.4	Offshore Securities Subscription Agreement between the
        Registrant and Tesoma Overseas, Inc., dated April 8, 1994--
        incorporated by reference to Exhibit  4.1 to Form 10-Q of
        the Registrant for the quarter ended March 31, 1994............

4.5	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...........................................

4.6	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...................................

4.7	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..............................................

<PAGE>


4.8	Form of Warrant Agreement between the Registrant and Tesoma
        Overseas, Inc. dated February 9, 1995--incorporated by
        reference to Exhibit 4.8 to Form 10-K of the Registrant
        for the year ended December 31, 1994...........................

4.9  	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
        Decmeber 31, 1996..............................................

4.10	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..................................................

4.11    Amended Certificate of Determination, dated March 18, 1998.....  Filed herewith
                                                                         electronically

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

10.3	Lease dated July 10, 1986 between the Registrant and Addison
        Place Partners--incorporated by reference to Registration
        Statement on Form S-18 of the Registrant (File No. 33-8513-LA).

10.4	Amendment No. 1 to  Lease between the Registrant and Addison
        Place Partners dated March 30, 1993--incorporated by reference
        to Exhibit 10.3 to Form 10-K of the Registrant for the year
        ended December 31, 1994........................................

10.5	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........................................

10.6	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...............................

10.7	Revolving Credit Agreement between the Registrant and Bank
        Leumi Le-Israel, B.M., dated April 30, 1997 and related
        security agreements--incorporated by reference to Exhibit
        10.1 to Form 10-Q of the Registrant for the quarter ended
        June 30, 1997..................................................

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....

<PAGE>

10.10	Loan Reimbursement Agreement between HemaBiologics, Inc., a
        wholly owned subsidiary of the Registrant, and Joshua Levy
        dated January 30, 1998.........................................  Filed herewith
                                                                         electronically

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

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

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
</TABLE>
<PAGE>