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



(Mark one)

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

              For the fiscal year ended December 31, 2000

  / /   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)

           California                            95-3280412
-----------------------------                  -------------------
(State or other jurisdiction of               (I.R.S. Employer I.D.
incorporation or organization)                 Number: 95-3280412)

4954 Van Nuys Boulevard
Sherman Oaks, California                              91403
(Address of principal executive offices)            (Zip Code)

                                  ---------------

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

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

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

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

As of March 27, 2001, 7,468,827 shares of Common Stock of the registrant were
issued and outstanding.  The aggregate market value of the Common Stock held
by non-affiliates of the registrant on that date (based upon the closing
price of the Common Stock as reported by the OTC Bulletin Board) was
approximately, $8,210,072.

Portions of the registrant's definitive Proxy Statement for its June 13, 2001
Annual Meeting of Shareholders (which has not been filed as of the date of
this filing) are incorporated by reference into Part III. Such proxy shall
be filed with the Securities and Exchange Commission not later than 120 days
after the registrant's fiscal year ended December 31, 2000.

=============================================================================
<PAGE>
                               TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S>                                                                 <C>
                                                                     Page
                                                                    Number
                                                                    ------
PART I.

Item 1.	Business
            -  General............................................    1
            -  Our Lines of Business..............................    1
            -  Our Business Growth Strategies.....................    2
            -  Blood Products Operations..........................    3
               - Facts about Blood................................    3
               - Blood Collections and Component Utilization in
                 the United States................................    4
               - Apheresis Blood Component Collection.............    5
               - Apheresis Single Donor Platelets.................    6
               - Platelet Collections and Transfusions in the U.S.    7
               - The U.S. Blood Industry - U.S. Blood Centers.....    7
               - Blood Economics..................................    8
               - Universal Leukoreduction.........................   10
               - Recruiting Blood Donors - Volunteer Donor
                 Programs.........................................   10
                 - Whole Blood Collection Programs................   10
                 - Apheresis Platelet Donor Programs..............   11
               - Recruiting Blood Donors - Compensated Apheresis
                 Donor Program....................................   12
                 - History........................................   12
                 - Our Paid Platelet Donor Operations in Southern
                   California.....................................   13
                   - Program Design and Safety Record.............   13
                   - Program Cost Effectiveness...................   14
                   - California Legislative Authorization.........   14
             -  Our Blood Management Programs.....................   15
                - Dartmouth-Hitchcock Medical Center..............   16
                - Long Beach Memorial Medical Center..............   16
                - Presbyterian Intercommunity Hospital............   16
                - St. Vincent Hospital at Worcester Medical
                  Center..........................................   17
                - University of California, Irvine Medical Center.   18
                - University of  North Carolina...................   18
                - University of Southern California...............   18
                - Children's Memorial Hospital of Chicago.........   18
                - Other Smaller BMP Operations....................   19
             - Our Regional Blood Product Operations..............   19
                - Los Angeles, CA.................................   19
                - Portland, ME....................................   19
             - Regional Blood Services Operations.................   20
               - General..........................................   20
               - Therapeutic Apheresis - Description..............   20
               - Plasma Exchange and Cell Depletion...............   20
               - Immunoadsorption.................................   21
               - Stem Cell Collection.............................   21
               - Photopheresis....................................   21
               - Discontinued Operations..........................   21
             - Sales to Major Customers...........................   22
             - Competition........................................   22
               - General..........................................   22
               - Blood Products and BMPS..........................   22
               - Therapeutic Services.............................   23
               - Litigation with the Blood Services Unit of the
                 American Red Cross...............................   23
             - Marketing..........................................   23
             - Human Resources....................................   23
             - Supplies...........................................   24
             - Government Regulation and Blood Safety.............   24
             - Blood Products and Blood Management Program
               Operations.........................................   24
             - Laboratory Operations..............................   25
             - Sherman Oaks Paid Apheresis Platelet Donor Program.   26
             - Other Matters......................................   26
             - Professional and Product Liability Insurance.......   26
             - Glossary...........................................   26
             - Risk Factors.......................................   27
             Item 2.  Properties..................................   28
             Item 3.  Legal Proceedings...........................   29
                - Litigation with the Blood Services Unit of the
                  American Red Cross..............................   29
             Item 4.  Submission of Matters to a Vote of Security
             Holder...............................................   29

                                     PART II

             Item 5.  Market for Registrant's Common Equity and
              Related Stockholder Matters.........................   29
             Item 6.  Selected Financial Data.....................   30
             Item 7.  Management's Discussion and Analysis of
              Financial Condition and Results of Operations.......   31
             Item 8.  Financial Statements and Supplementary Data.   36
             Item 9.  Changes and Disagreements with Accountants
              on Accounting and Financial Disclosures.............   36

                                     PART III

             Item 10.  Directors and Executive Officers of the
               Registrant.........................................   36
             Item 11.  Executive Compensation.....................   36
             Item 12.  Security Ownership of Certain Beneficial
              Owners and Management...............................   36
             Item 13.  Certain Relationships and Related
              Transactions........................................   37

                                     PART IV

             Item 14.  Exhibits, Financial Statement Schedules
              and Reports on Form 10-K.............................  37
             Index to Consolidated Financial Statements and
              Schedules............................................  F-1

</TABLE>
<PAGE>

                                PART I
Item 1.  Business.

General
-------

HemaCare Corporation collects, processes and distributes blood products
to hospitals in the United States.  Additionally, we provide blood
related services ("therapeutic apheresis" or "TA"), on a mobile basis,
to patients with a variety of disorders.  Therapeutic apheresis is
usually provided in the hospital setting under contractual arrangements
with the hospital as an outside purchased service.

We have provided blood products and therapeutic services in Southern
California since 1979.  In 1998, we expanded our operations to eleven
states in the eastern United States.  We market our products and services
as HemaCare Corporation ("HemaCare") in California and Coral Blood
Services, Inc. ("Coral") in other states.  Coral is a wholly owned
subsidiary of HemaCare.

In the United States most blood is provided by the private sector
rather than government agencies.  Approximately 94 privately organized
blood centers, generally operating in limited geographic regions
usually as a regional monopoly, supply hospitals with more than 90% of
their blood requirements.  The remaining blood supply is collected by
hospitals themselves.  Although blood centers are generally organized as
not-for-profit, tax-exempt organizations, all are operated as
businesses and all charge fees for blood products.  These fees, or
blood product sales prices, are set at levels designed to recover the
costs of blood center operations.

We believe we are the only investor owned and taxable organization
operating as a blood supplier with significant operations in the U.S.

Our blood products and related services supplement those offered by
regional blood centers.  Our programs specialize in selected blood
components and generally charge hospitals fees for blood products that
are competitive with or lower than those charged by regional blood
centers.  Additionally, our programs offer hospitals a level of service
and terms of sale that are superior to those offered by most blood
centers.

In recent years most areas of the U.S. have consistently
experienced blood product shortages. We believe our
services offer hospitals an effective tool to address these shortages
and present a significant opportunity for growth of the Company and
expansion of our activities throughout the United States.

Product safety is of paramount concern when dealing with blood.  The U.S.
Food and Drug Administration ("FDA") is the agency principally
responsible for regulation of the blood product industry in the U.S.
All of our blood product operations are either licensed or registered
with the FDA and are regularly inspected by FDA personnel.
Additionally, our operations are licensed, regulated, and inspected by
various state agencies.  We consider our regulatory record and our
relationships with the FDA and the various state regulatory agencies to
be good.

The American Association of Blood Banks ("AABB") is the blood industry
sponsored organization charged with maintaining and improving science,
safety, quality and education relating to blood.  We are an AABB
institutional member and our operations are accredited by the AABB.

The Joint Commission for Accreditation of Healthcare Organizations
("JCAHO") is the private sector accreditation organization for hospitals
and medical centers.  Our hospital based blood product programs and our
therapeutic operations are operated in a manner to assure accreditation
of these activities in hospitals that contract with us for services.

Our Lines of Business
---------------------

We essentially have three lines of business or modes of operation: 1)
regional blood product operations; 2) regional therapeutic services;
and 3) blood management programs or BMPs. We operate regional programs
for both products and therapeutic services in Southern California and
Portland, Maine.  We operate regional programs for therapeutic services
in Greater New York and Connecticut.  We operate BMPs in Southern
California, Massachusetts, New Hampshire and North Carolina.  Recently
we have been engaged to begin a new BMP program in Chicago involving
both blood products and therapeutic services, which is scheduled to begin
operations in June 2001.

Our regional blood product operations collect and distribute blood
products to all hospitals in a region with which we can establish
customer relationships.  These operations seek to compete directly
with local blood centers by offering better product prices and
customer service.  While we provide most types of blood products,
our operations specialize in the collection of single donor platelets,
a blood component that stops bleeding and is in chronic short supply
in the United States. Generally, we can provide a client hospital with
all of its single donor platelet needs and significant portions of its
needs for other blood products.

Our regional therapeutic apheresis operations provide hospitals in a
regional area with specially trained nurses and specialized equipment
on a mobile basis to treat patients with a variety of health disorders.
Since the number of patients requiring these treatments is relatively
small, most hospitals find that using a mobile specialty provider like
us for these services is more effective from both a clinical and cost
perspective than maintaining an in-hospital capability.

Our BMP programs provide some or all of needed blood products and
therapeutic services under a multiyear contractual arrangement with a
single hospital.  These programs involve taking over an existing
hospital based program under an outsourcing agreement or starting a new
hospital based blood collection program.  Usually we use space on
the hospital's campus to operate a blood collection center.
Additionally, we develop a donor-recruiting program that capitalizes on
the hospital's community reputation in attracting blood donors to the
donor center and arranging blood collection drives at various locations
in the community.

Our blood management programs benefit hospital clients in several ways:

-  The hospital has a dedicated blood supplier that supplements the
   local regional blood center and generally offers greater
   reliability for product deliveries and service than can be
   obtained from a regional blood center that often must ration
   scarce blood supplies.

-  The hospital realizes an overall reduction in blood procurement
   costs and better inventory management to prevent costly blood
   product outdates.

-  The hospital's regulatory responsibilities for blood are
   transferred to an organization that is expert in FDA compliance.

-  Our on campus donor room programs perform autologous (blood
   self-donation by a patient usually before surgery) and directed
   blood collections for patients' friends and families in a
   convenient location without additional costs to the patient or
   other donors.

-  Our community blood drives complement the hospital's public
   and community relations programs by increasing the visibility of
   the hospital and the importance of its mission in the local
   community.

-  If the hospital selects us as a therapeutic services provider
   (and all BMPs we have established to date have), the hospital
   gains access to nurses and physicians with significant expertise
   in addition to cost savings in providing these services.

-  If the hospital and its medical staff are involved in research
   projects relating to blood, our technical staff assist in these
   efforts.

Our Business Growth Strategy
----------------------------

-  Our national expansion strategy is to establish new blood management
   programs with major hospitals in markets where we do not have a local
   presence.  We believe we can accomplish this by capitalizing on our
   existing client base, our record for cost effectiveness and our
   record for safety and quality.

-  After meeting our primary client hospital program objectives in each
   of these new markets, we intend to expand our business by offering
   blood products and/or additional blood management programs to other
   hospitals in these new geographic areas.

-  In each new market where we gain a local presence, we can generally
   leverage that presence by immediately offering our mobile therapeutic
   apheresis services to other hospitals and physicians in the area.

-  We also believe we can increase utilization of TA services in all our
   markets by conducting educational seminars for physicians to inform
   them of the benefits of TA relative to other modes of patient treatment.
   Our experience suggests that such educational efforts result in
   increases of TA applications in medically appropriate circumstances.

We believe our business growth strategy will be successful since our
programs directly address three major areas of concern to hospitals:
1) adequacy of blood supplies and 2) the cost of such blood supplies
and 3) regulatory compliance. All of our blood management programs
directly address the problem of increasing the blood supply by
capitalizing on the connection of the client hospital (and its
patients needing blood transfusions) to the local community.
Our blood product programs are generally capable of providing
blood products to hospitals at lower costs than regional blood
centers.

Additionally, we believe that our mobile TA programs will grow
significantly as a result of our expanded national presence.
Our mobile programs provide services at a hospital only when
patients in need of TA services are being treated.  Therefore,
they represent a high quality, cost-effective solution to providing
this service to most hospitals in the U.S.

However, there is no assurance that our national growth strategy
will be successful.  In particular, we compete with major
blood centers (such as, the American Red Cross) that have
significantly greater financial resources and organizational
depth than the Company.  Further such organizations have, in
many instances, established a history of close relationships
with their hospital clients through both formal and informal
working arrangements that may preclude our cost-effective
programs from being acceptable to hospitals.

Blood Products Operations
-------------------------

Facts About Blood

Most adults have about 10 units (1 unit = 1 pint) of blood in their
bodies.  Blood consists of both cellular and liquid components.  The
cellular portion, which constitutes approximately 45% of blood volume,
is composed of red blood cells, white blood cells and platelets.  The
liquid portion, which constitutes the remaining 55% of blood volume, is
composed of plasma and soluble proteins.

The practice of modern medicine depends on the availability of a safe
and adequate blood supply and upon the capability of treating a medical
deficiency in one or more blood components by transfusion.

A summary of major blood components and their therapeutic applications
follows:

<TABLE>
<CAPTION>

Component        Shelf Life                   Function and Medical Applications
---------------  ----------      ----------------------------------------------------
<S>              <C>             <C>

Red Blood Cells  42 days         Carries oxygen to the body's tissues.  Transfused to
                                 replace losses due to surgery or trauma.

Platelets        5 days          Facilitates blood clotting and vascular integrity.
                                 Transfused to replace platelets lost in massive bleeding
                                 or inactivated in aggressive cancer treatments.  Due to
                                 small volume of platelets in the average person's blood
                                 stream, between 6 and 10 units of platelets collected
                                 from whole blood are pooled to generate a therapeutic
                                 dosage for transfusion.

Plasma           Frozen:         Liquid portion of blood.  Transports red blood cells and other
                 1 to 5          cellular components and contains several factors useful in
                 years           treating diseases. Transfused to replace fluid losses and treat
                 Thawed:         specific disease applications. Most often plasma is sold
                 24 hours        to fractionators that manufacture it into products used to
                                 treat many disease.

Cryoprecipitate  Frozen:         Treatment of Hemophilia, Factor VIII deficiency, and
                 1 year          von Willebrand's disease, fibrinogen.

White Blood
Cells            N\A             Produced by the body's immune system to fight infection and
                                 disease.  Most often discarded and not transfused.
                                 Transfusion of white blood cells or leukocytes can result in
                                 adverse reactions in patients with impaired immune systems.
</TABLE>


Most blood product collections consist of single units of whole blood.
The actual collection process is simple and completely safe for the
donor.  Typically, a donation takes about 30-40 minutes consisting of a
pre-donation screening interview to review the donor's health status
and eligibility to donate, an 8-10 minute collection process and a
short rest period after donation.

After collection, whole blood units are generally processed in a
laboratory, separated into the various components, tested and then
distributed to hospitals for transfusion.

While significant research efforts have been made to develop artificial
or synthetic substitutes for human blood component transfusions, such
efforts offer no near term solution to the transfusion needs of most
patients.

Blood Collections and Component Utilization in the United States
----------------------------------------------------------------

The National Blood Resource Data Bank ("NBRDB"), an affiliate of the AABB,
published a study compiling blood collections and transfusions in the
United States in 1997 and comparing such data to a similar study in
1994.  The data included in that study is summarized below:

<PAGE>

Blood Product Collections and Transfusions in the United States in 1997
(000s)

<TABLE>
<CAPTION>
                       Blood
                      Centers   Hospitals   Total Supply    1994 Totals    Change 94-97
                      -------   ---------   ------------    -----------    ------------
<S>                   <C>       <C>         <C>             <C>            <C>

Whole Blood
Collections:

  Allogenic           11,031       710      11,741          12,067         ( 3%)
  Autologous/
   Directed              518       329         847           1,345         (37%)
    Total Whole
     Blood            11,549     1,039      12,588          13,412         ( 6%)


Whole Blood and
 Red Blood Cell
 Transfusions:

  Allogenic                                 11,018          10,300           7%
  Autologous\
   Directed                                    501             587         (15%)
    Total Whole
     Blood and Red
     Blood Cells                            11,519          10,888           6%

Transfusions of
 Other Components
 Derived From
 Whole Blood:

 Platelet Concen-
  trates (pooled
  platelets)                                 3,396           3,582          (5.2%)

  Fresh Frozen
   Plasma                                    3,320           2,621          14.4%
    Cryoprecipate                              816             713          13.2%

</TABLE>

The NBDRB is in the process of completing a compilation of U.S. blood
collections and utilization for 1999.  Preliminary data from the 1999
study indicate that U.S. blood product transfusions continue to increase
significantly, most significantly red blood cell transfusions are
increasing at annual rates approaching 4% annually.

The apparent excess of red blood cell collections over transfusions
depicted in the table above for 1997 actually depicts a very tight
supply \ demand situation bordering on a supply crisis.  Human blood
comes in types (A, B, AB, and O) and each of these types have either
positive or negative RH factors. Other than blood type O-, which is the
blood type of about 7% of the population and can be transfused to
anyone, there are significant limitations on the types of blood that
can be safely transfused to a patient in need.

New medical treatments, the aging of the U.S. population and population
growth all are contributing to significant increases in the number of
blood component transfusions.  However, the percentage of the U.S.
population that donates blood is decreasing.  As a result, in recent
years most areas of the U.S. have experienced blood shortages.  These
shortages result in blood supplies being rationed and cause hospitals
to postpone or cancel procedures requiring transfusions.

Apheresis Blood Component Collections
-------------------------------------

Modern blood collection technology (the "apheresis process") permits
the separation of various blood components during the actual donation
process. These automated technologies separate blood into its various
components through the use of centrifugal force and filters at the
donation site.  They permit the collection of only the desired
component of a donor's blood and return the other components to the
donor's blood stream.

HemaCare was founded as a company that specializes in the apheresis process.
Our blood product operations specialize in the collection and distribution
of apheresis platelets.  While we do provide pooled platelets (which are
manufactured components derived from six to ten whole blood donations)
to one of our BMP clients at the request of its medical staff, we do
not market pooled platelets.  Our focus on single donor platelets contrasts
sharply with other blood centers in the U.S., which generally produce and
distribute both platelets derived from whole blood (pooled platelets)
and single donor platelets.

Apheresis technology has been widely used to collect plasma for more
than 40 years.  Apheresis technology has been used to collect platelets
for more than 20 years.  Apheresis technology to collect two units of
red blood cells from a single donation was licensed by the FDA in 1998.
Apheresis technology can also be used to collect therapeutic doses of
two or more selected components from the same donation.

Apheresis blood component collection is considerably more complex than
whole blood collection and involves materially longer donation times.
The differences are summarized as follows:

<TABLE>
<CAPTION>

Component Collected       Procedure Time           Insertion Device(s)
-------------------       --------------        -------------------------
<S>                       <C>                   <C>
Whole blood               8-10 minutes          Single arm, single needle
Red Blood Cells           35-45 minutes         Single arm, single needle
Plasma - Apheresis        35-45 minutes         Single arm, single needle
Platelets - Apheresis     60-150 minutes        Two arms, two needles or
                                                single arm, single needle
</TABLE>

The human body replaces lost or donated blood components at different
rates, in particular the body replaces red blood cells at much
slower rates than either plasma or platelets.  To protect the health of
blood donors the AABB and the FDA have established guidelines that
govern how often blood components can be collected from the same
individual.  These guidelines are summarized below:

<TABLE>
<CAPTION>

Blood Component              Minimum Donation Interval \ Maximum
                                  Number of Collections
------------------           ------------------------------------
<S>                          <C>
Whole Blood                  8 weeks (56 days)

Red Blood Cells (apheresis
 collection-two units)       16 weeks (112 days)

Plasma (apheresis
 collection)                 48 hours \ twice a week

Platelets (apheresis
 collection)                 48 hours \ twice a week \ 24 times a year

</TABLE>

The automated apheresis collection process is considerably more
expensive than whole blood collection and processing.  Apheresis
equipment is costly and requires a specialized kit (collection
software) for each donation.  Additionally, the longer donation times
involve increased labor costs.  Finally, recruiting donors for the
longer donation periods is considerably more difficult than recruiting
whole blood donors.

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

A single apheresis platelet donation can yield between one and three
therapeutic transfusion dosages, depending on the platelet content of a
donor's blood.  The use of platelets derived from whole blood to
achieve the same therapeutic effect would require combining or pooling
the platelets obtained from between 6 and 30 individual whole blood
donations of different donors.

Every transfusion involves certain risks to the patient.  These risks
include a slight chance of infectious disease transmission and the
chance that the patient will have an adverse reaction to the transfused
material.  The lower number of donors involved with a transfusion of
apheresis or single donor platelets materially reduces these risks.

Additionally, patients receiving multiple platelet transfusions from
different donors often become refractory or resistant to the
therapeutic effect of the transfusions.  Utilization of single
donor platelets reduces the instances of patient refractory reactions.

As a result of the health benefits associated with single donor
platelets they are generally preferred by physicians over transfusions
of pooled platelets derived from whole blood, particularly in the case
of patients receiving multiple transfusions.  However, U.S. hospitals
continue to use significant numbers of pooled platelets to meet
transfusion needs.

We believe that are there two principal reasons for this:

First and most importantly is the extended time involved in the actual
process of apheresis platelet donation.  Most potential donors are
discouraged by the prospect of having multiple needles in their arms
and lying still for donation periods that range as long as 2 1/2 hours.
Most employers and schools where blood drives are conducted and
volunteer donors are recruited are unwilling to support extended time
off the job or out of class that apheresis platelet donation involves.

The second reason is economic. Because pooled platelets are a byproduct of
whole blood, they can be produced readily and at little cost by any
blood center with significant whole blood collections.  Thus the
revenue generated by blood centers from sales of pooled platelets
represents a significant source of operating profits that can be easily
obtained without additional recruiting efforts or increased cost of
equipment and supplies.  This source of operating income is lost if single
donor platelets are utilized.

Many blood centers therefore encourage hospitals to use pooled
platelets and minimize use of single donor platelets through their
product pricing strategies.  These strategies employ premium prices for
single donor platelets (relative to their costs of production) while
offering relative bargain prices for pooled platelets.

In several areas of the U.S., these pricing strategies have resulted in
hospital transfusion practices that heavily utilize pooled platelets and
rarely use single donor platelets on the basis of the hospitals' cost \
benefit considerations.  However these hospital made cost \ benefit
decisions are heavily influenced by the pricing practices of blood
centers.

The following table summarizes platelet collections and utilization
data compiled by the NBDRC.  Each single donor platelet unit has been
converted to six effective units in order to compare the utilization of
single donor and pooled platelets.

Platelet Collections and Transfusions in the U.S.
-----------------------------------------------
<TABLE>
<CAPTION>


                                    1997                     1994            Change
                             --------------------    --------------------   ---------
                             Units (000s)     %      Units (000s)     %     1994-1997
                             -------------  -----    -------------  -----   ---------
<S>                          <C>            <C>      <C>            <C>     <C>

Collections:
------------
Single Donor Platelets          981                     820                   20%
Equivalency Factor               6x                      6x
Single Donor (effective
 units)                       5,886          54%      4,920           46%      20%
Pooled Platelets              4,991          46%      5,741           54%     (13%)
Total Platelets
 Available                   10,877         100%     10,661          100%      2%

Transfusions:
-------------
Single Donor (effective
 units)                       5,640          62%      4,284           54%      32%
Pooled Platelets              3,396          38%      3,582           46%      (5%)
Total Platelet
 Transfusions                 9,036         100%      7,866          100%      15%

</TABLE>
<PAGE>

Platelet utilization is significantly affected by aggressive cancer
therapies that inactivate platelets and pose risks of causing internal
bleeding.  Platelet utilization has increased significantly faster than
the utilization of other blood products for many years and medical
trends indicate this pattern may continue.

Our blood product operations specialize in the collection and
distribution of apheresis platelets.  While we do provide pooled
platelets to one of our BMP clients at the request of its medical
staff, we do not market pooled platelets. Our focus on single donor
platelets contrasts sharply with other blood centers in the U.S., which
generally produce and distribute both platelets derived from whole
blood (pooled platelets) and single donor platelets.

The U.S. Blood Industry -- U.S. Blood Centers
-----------------------------------------

In the United States more than 90% of whole blood products and 85% of
single donor platelets are collected by privately organized blood centers.
The remainder is collected by the hospitals directly.

A summary of collections by the fifteen largest U.S. blood centers, as
published by the AABB, in 1999 follows:

<TABLE>
<CAPTION>

                                                         Percentage of
                                                         Total U.S. Blood
                                   States of            Center Collections
 Organization                      Operation                 in 1998
---------------------         --------------------      -----------------
<S>                           <C>                       <C>
American National Red Cross   National                        48.0%
United Blood Services
(Blood Systems, Inc.)         12 States                        5.9%
New York Blood Center         New York, New Jersey             2.9%
Gulf Coast Regional
 Blood Bank                   Texas                            1.8%
Central Florida Blood Bank    Florida                          1.5%
Carter BloodCare              Texas                            1.5%
Puget Sound Blood Center      Washington                       1.4%
LifeSource Blood Services     Illinois                         1.4%
Florida Blood Services        Florida                          1.4%
Community Blood Centers
 of South Florida, Inc.       Florida                          1.3%
Oklahoma Blood Institute      Okalahoma                        1.2%
Central Blood Bank            Pennsylvania                     1.1%
Blood Center of Southeastern
 Wisconsin                    Wisconsin                        1.1%
Sacramento Blood Center       California                       1.1%
Central Indiana Blood Center  Indiana                          1.1%
Other Regional Blood Centers
 (79 centers each
 representing 1% or less of
 total collections)                                           27.0%

 </TABLE>


Other than the American Red Cross (ARC), which operates nationally,
most U.S. blood centers operate in limited geographic regions of the U.S.
Often a single blood center (either the ARC or another blood center)
is the only practical source of blood products to hospitals in a
particular city or county.

Most blood centers in the U.S. are focused on collections of whole blood
products and distribution of red blood cells, pooled platelets and
plasma products that can be manufactured from whole blood collections.
HemaCare's operations, in contrast, have historically focused on
collections of single donor platelets.  We estimate that our total
blood product collections rank the company as the 46th largest blood
producer in the U.S.  However, if ranked on the basis of single donor
platelet collections, we would rank 4th behind the ARC, United Blood
Services and the New York Blood Center.

A summary of our blood product collections for the last three years
follows:

<TABLE>
<CAPTION>
                             2000          1999          1998
                          ----------    ----------    ----------
<S>                       <C>           <C>           <C>
California:
-----------
  Single donor platelets  15,700        10,900         8,900
  Whole blood collections 14,100         3,200         3,000
                          -------       -------       -------
                          29,800        14,100        11,900

Eastern United States:
----------------------
  Single donor platelets   7,200         6,800         1,100
  Whole blood collections  2,500         2,300           400
                          -------       -------       -------
                           9,700         9,100         1,500
                          -------       -------       -------

Total collections         39,500        23,200        13,400
                          =======       =======       =======
</TABLE>

Blood Economics
---------------

Most U.S. blood centers are organized as not-for-profit, tax-exempt
entities.  However, all blood centers finance their activities by
charging fees to hospitals for the products they utilize.  These fees
are generally set at levels designed to enable the blood center to
recover its overall costs of operation based on its business plans,
capital needs, market position, expected blood product collections, and
blood component demand.

The costs of collecting, processing and testing blood have risen
significantly in recent years.  These cost increases are related to new
and improved testing procedures to assure that blood is free of
infectious disease, increased regulatory requirements related to blood
safety, and increased costs associated with recruiting blood donors.

Generally, blood product prices (particularly prices of red blood
cells) have not kept pace with blood center cost increases.  As a
result, many U.S. blood centers have suffered losses in the last few
years and the industry has appealed to the Health Care Financing
Administration (HCFA) and others for price adjustments.

In 2000 HCFA implemented a prospective pricing payment system to
reimburse hospitals for outpatient services.  HCFA established
reimbursement rates for hospital transfusion procedures and separate
rates for blood products transfused to patients in an outpatient
setting.  The blood product reimbursement rates established by HCFA
were based on blood prices of major blood centers, particularly the
ARC, as they were reported to HCFA.

The national reimbursement rates are adjusted for variations in wage
and cost of living indices in different parts of the U.S.  A summary of
the selected blood product reimbursement rates in different geographic
as established by HCFA for 2001 is presented below:

<TABLE>
<CAPTION>

                    National                                   Portland
Blood Product          Rate     Los Angeles  New York  Chicago    (ME)
-----------------   --------   -----------  --------  -------- ---------
<S>                 <C>        <C>          <C>       <C>      <C>

Red Blood Cells     $101       $114         $130      $107     $100
Red Blood Cells
 (Leukoreduced)      140        157          180       148      138
Pooled Platelets      49         54           62        51       48
Pooled Platelets
 (Leukoreduced)       58         65           75        61       57
Fresh Frozen
 Plasma               82         92          105        86       81
Cryoprecipitate       35         39           44        37       34
Apheresis Platelets
 (single donor)     $481       $539         $615      $508     $473

</TABLE>

It is important to note that the above HCFA reimbursement rates are
effective only for transfusions to Medicare patients in outpatient
settings.  The vast majority of transfusions are performed for patients
who are inpatients in hospitals.  HCFA reimbursement for blood products
transfused to hospital inpatients are included in the diagnosis related
group (DRG) payments that are based on a patient's illness and the
average costs of hospitalization for such illnesses.  While the AABB
and others have advocated changes to the hospital inpatient
reimbursement for blood products, DRG payments to hospitals presently
are unaffected by transfusions of blood products.

With the exception of red blood cells (those which are not
leukoreduced), our existing prices for all blood products are
significantly lower in all areas of the U.S. than the HCFA reimbursement
rates reflected above and we operate profitably at these lower price
levels.  We believe that the reimbursement rates established by HCFA
will, over time, effectively become an industry benchmark for blood
product pricing and reimbursement across the U.S.  Therefore, as HCFA
pricing standards are adopted we believe the outlook for future growth
and profitability of the Company is improved.  However, there is no
assurance that HCFA pricing will be widely adopted and no assurance
that profits will improve as a result of HCFA's actions.

At present, blood prices in areas of the U.S. where the Company
operates differ widely from the HCFA regional rates reflected above.
We believe that these pricing variations result from a variety of
factors unrelated to the blood center costs of operation but rather
based on the competitive market position and business objectives of
various blood centers, particularly the American Red Cross.

We have filed suit against the blood services unit of the ARC for
anticompetitive and illegal tactics relating to blood product pricing
and other terms of blood sales.  Generally, our suit alleges that the
ARC prices its products significantly below its costs in selected areas
of the U.S. (notably California) to eliminate competitors and increase
its market share.  In other areas of the U.S. the ARC requires hospitals,
in effect, to purchase blood products exclusively from the ARC as a
condition of reasonable pricing.  Our lawsuit alleges that these exclusive
agreements are designed to assure that the ARC remains the dominant or
only blood provider in these areas.  (See Legal Proceedings.)

We believe we have a lower overall cost structure than the ARC and most
regional blood centers in the U.S. despite the fact that as a for-profit,
investor owned company we are subject to taxes and do not have access
to tax exempt debt securities or charitable contributions to finance
our operations.  As a cost-effective organization, we believe that we
can compete very effectively in a blood product market where prices are
set fairly in relation to the costs of operation.

Universal Leukoreduction
------------------------

The blood industry has recently begun a conversion process to
universally leukoreduce all cellular blood products at the time they
are collected or manufactured (pre-storage leukoreduction). The
leukoreduction process removes the white blood cells or leukocytes from
blood and platelets before they are transfused.  Leukocytes in
transfused blood can cause adverse patient reactions and repeated
transfusions can result in diminished transfusion effectiveness.

Historically, only portions of blood component transfusions were
leukoreduced and the process was often performed in the hospital
setting immediately prior to transfusion rather than at the time the
blood product was collected.

The Department of Health and Human Services ("HHS") Advisory Committee
on Blood Safety and Availability ("BSAC") in January 2001 recommended
that universal pre-storage leukoreduction be implemented as soon as
feasible.  BSAC's recommendation was conditioned on an implementation
process that does not diminish blood supplies and also that HHS
establish adequate funding for the effort. It is expected that the FDA
will soon mandate that all blood products distributed be leukoreduced.

Based on ARC pricing practices and HCFA reimbursement rate
differences it is estimated that universal pre-storage leukoreduction
will raise national blood center revenues for blood sales by as much as
$500 million annually.

We have produced only leukoreduced apheresis platelets for several
years.  With the implementation of universal leukoreduction for red
blood cells (and the anticipated price increases) we anticipate that
whole blood collections will become a product line that will provide
attractive margins.  However, there can be no assurance that price
increases will materialize.

Recruiting Blood Donors - Volunteer Donor Programs
--------------------------------------------------

Whole Blood Donor Collection Programs

We believe that the low participation rate in blood donation, while
partially due to societal factors, is largely due to economics.
Specifically, artificially low blood prices have caused blood
collection agencies to focus their efforts primarily in settings where
potential donors can be accessed easily, conveniently, and economically
from the standpoint of the blood center.

As a result a disproportionate amount of the U.S. blood supply is
collected outside of major urban areas (in areas where labor costs are
lower) and in settings where large numbers of donors at a single location
improve economies of scale (high schools, very large commercial employers
with significant formalized community service programs, and government
agencies).  Such collection practices bypass the largest portion of the
U.S. population and the greatest number of potential donors.

We believe that more than adequate whole blood supplies can be
collected in the U.S. if blood donation is made convenient for
the donor.  We believe that developing trends in blood product pricing
will support expanded whole blood collection efforts in donor
convenient settings that are significantly smaller than those used
in recent years.

We directly approach employers, churches, and community organizations
and educational institutions and request their participation in a
community blood drive for a specific hospital and its patients.
Once a sponsor organization has agreed to hold a blood drive our
staff (and often the staff of the sponsor) attempt to advertise
and generate enthusiasm for giving blood in the potential donor
group by explaining the critical need for blood and the health
benefits to those needing transfusions.  Additionally we offer
prizes, t-shirts and other tokens of recognition for participation.
Finally we follow up individually (often telephonically) with donors
who donate and request their participation in additional donations at
our donor sites.

In addition to our recruiting efforts, our collection staff is
selected on the basis of their interpersonal skills (in addition
to technical skills). A key factor to retaining donors is making
the actual donation a friendly and pleasant process. Thus, a donor
friendly collection staff is essential to the long-term
effectiveness of initial recruiting efforts by securing repeat
donations.

We believe that our donor recruiting processes are largely similar to
techniques employed by other blood centers and differ only in the size
of the potential donor groups targeted and the use of hospital name to
contract donors rather than the blood collection organization.
We actively seek to arrange blood drives with organizations that
do not meet the minimum size criteria set by other blood centers.
While we sacrifice some economies of scale conducting blood drives
in this manner, we believe our overall lower cost structure enables us to
conduct blood drives economically in smaller settings.

While the Company has developed what we believe are cost effective
strategies to recruit volunteer blood donors, there can be no
assurance that such strategies will in fact result in sufficient
blood product collections to meet client hospital needs or to assure
profitability.

Recruiting Blood Donors - Apheresis Platelet Donor Programs
                          (uncompensated donors)

While the apheresis technology to collect single donor platelets was
perfected in the late 1970's and the vast majority of informed
physicians prefer single donor platelets to pooled platelets
manufactured from whole blood, it was not until 1994, more than 18
years after the apheresis technology was available, that single donor
platelets constituted more than 50% of U.S. platelet transfusions.  In
1997 single donor platelets constituted 54% of platelets available and
62% of platelet transfusions.

This medically preferred product is in chronic short supply.

Relative to whole blood donations, apheresis platelet donation is an
arduous process.  Apheresis platelet donation times range from 60-150
minutes (vs. an average 8-10 minutes for whole blood) and are most
efficiently performed in a blood center with large automated collection
units that are not easily transportable.  Adding pre-donation interview
and screening time and post-donation rest periods, an apheresis platelet
donation can take approximately three and one-half hours excluding the
time involved in commuting to the donor center.

Most apheresis platelet donors are recruited by blood centers from the
most dedicated and committed subset of whole blood donors. On average
such dedicated donors donate platelets between 4 and 6 times a year. We
calculate that the U.S. apheresis platelet supply is provided by between
0.06% and 0.09% of the U.S. population.

Our programs that directly recruit apheresis platelet donors involve
significant donor education efforts, mobile platelet collection drives
(we believe we are one of very few blood centers that collects single
donor platelets outside of the donor center environment), and tele-
recruiting programs.  Additionally, our programs involve providing a
friendly, collegial environment for our donors while they donate, movies
and other entertainment while donating, and donor appreciation events
and other elements that make the donation process and participation
in our programs a friendly environment that encourages repeat donations.

Our programs have been successful in recruiting sufficient apheresis
platelet donors to meet our client hospital needs in Maine, New
Hampshire and North Carolina.  However, our apheresis platelet donor
programs focused on uncompensated apheresis donors in both New York
City and Southern California (major urban areas) have been largely
unsuccessful in meeting collection goals or in meeting income objectives.

Our newest blood management program for Children's Memorial Hospital
in Chicago (scheduled to begin operations in June 2001) will be a
major test of the effectiveness of our volunteer apheresis platelet
collection techniques in a major city environment.  We believe that
this program will meet its collection goals since most hospitals
for children generate levels of community support much greater than
that obtained by other types of hospitals or blood centers.  However,
there can be no assurance that the Company's efforts to recruit
sufficient volunteer apheresis platelet donors in an urban area such
as Chicago will be sufficient to meet the needs of the client hospital.

Recruiting Blood Donors - Compensated Apheresis Donor Program
--------------------------------------------------------------

History

Modern transfusion medicine and large-scale blood collection activities
developed during World War II("WWII").  During the WWII years, and
for many years thereafter, blood donation was widely viewed as a civic and
patriotic responsibility by most U.S. citizens.  As with many societal
trends, blood donation rates have changed considerably over the years.
Since WWII the percentage of the U.S. population that donates blood has
dropped precipitously.

During the 1950's and 1960's many U.S. blood centers adopted practices of
paying blood donors for blood donations. Because prices of blood
products were low, many of these blood centers focused their recruiting
efforts on segments of the population that were economically destitute
and would donate blood for minimal compensation.  Very often paid blood
donors in these periods were recruited from populations accurately
described in academic and scientific studies of the time as
"derelicts".

In the U.S., and throughout the world, economically disadvantaged
populations have higher rates of hepatitis and other diseases that can
be transmitted through blood transfusions.  Because no effective
screening tests for transfusion-transmitted diseases were available or
employed at the time, utilization of paid donors from economically
disadvantaged or "derelict" populations resulted in disproportionate
levels of hepatitis infections in transfusion recipients in the 1950's
and 1960's.

As a result, in the 1970's the FDA mandated that blood products be
labeled as being obtained from either a paid or volunteer (unpaid)
donor.  A paid donor, as defined by the FDA, is one that receives
direct compensation from the blood collection agency that is or can be
readily converted to cash.  For example, donors who are paid by their
employers for the time they spend donating or awarded other forms of
incentives such as additional paid time off work are considered as
unpaid volunteers under the FDA definition.  Whereas, donors who receive
tickets to sporting events that can be resold are considered paid.

The FDA labeling requirements resulted in the elimination of virtually
all programs that paid whole blood donors in cash. This in turn
significantly reduced the large scale recruiting of blood donors from
economically disadvantaged populations and significantly reduced the
incidence of transfusion-transmitted hepatitis.

Since the 1970's the U.S. has relied on an "all volunteer" donor pool
for whole blood collections and most blood centers have adopted the
philosophy that donor altruism is an essential element of blood safety.
However, most blood donors who donate in employer sponsored blood
drives are paid for the time they donate and employer sponsored
programs that offer additional paid time off work in consideration for
blood donations are a very effective donor recruiting tool used widely
in the U.S. Additionally, many other forms of incentives, not involving
the direct payment of cash, are utilized by the blood industry to
attract blood donors.

When the apheresis technology was introduced for platelet collection in
the 1970's the National Institute of Health both conducted and sponsored
through grants programs that directly paid apheresis platelet donors
for the extended time involved in apheresis platelet donation. Unlike
the paid donor programs of the 1950's and 1960's, however, these modern
programs targeted healthy populations and required blood donors to
undergo health status prescreening and infectious disease testing prior
to donation.

Scientific studies comparing the relative safety of blood obtained from
volunteers (whose health status and blood is not tested before
donation) with blood from paid donor programs (which require such
testing) have consistently demonstrated that these modern programs are
safer than volunteer collection systems. However, because of extremely
effective laboratory testing techniques, the current volunteer system
is still very safe.

Despite their demonstrated safety records and their effectiveness in
collecting apheresis platelets, most paid platelet donor programs have
been eliminated for philosophic reasons, i.e. the desire to have an
"all volunteer" blood supply. Today there are only three major
programs in the United States that directly pay platelet donors.  These
are operated by the Mayo Clinic, the University of Iowa and at
HemaCare's operation in Sherman Oaks, California.

As can been seen from the national platelet transfusion statistics,
reliance on volunteer donors has never produced sufficient number of
single donor platelets to meet the nation's needs despite physician
preferences for these superior products.  Indeed it was not until 1994
that single donor platelet transfusions exceeded 50% of U.S. platelet
transfusions.

Our Paid Platelet Donor Operations in Southern California
----------------------------------------------------------

Program Design and Safety Record

We introduced single donor platelets to the Southern California market
using paid donors in 1979.  At the time other blood centers operating
in the area (principally the ARC) did not routinely offer this product
and only provided pooled platelets.

Our donor recruiting and retention program involves paying donors
between $50 and $75 for each platelet donation depending on how many
times they have donated (this amounts to approximately $15 per hour).
Additionally, we pay bonuses for cumulative donation milestones as an
incentive to donors who remain active in the program.  Donors receive
$500 upon their 100th donation and smaller bonus amounts for each 25th
donation.  Our payment programs have been successful in attracting and
retaining desirable donors.

Prior to being selected for the program, each donor receives a physical
examination by a physician, has their blood tested for infectious
disease and other characteristics, and is presented an educational
program on the apheresis donation process and the benefits of platelet
donation for patients.  After the initial physical examination there is
a one to two week waiting period, a requirement that all donations be
scheduled (no drop-in donations are allowed) and all donors are paid in
the form of a check.  Additionally, each donor in the program repeats
the physician-conducted physical examination annually.

In addition to our program's unique donor selection and screening
procedures, we interview and prescreen all donors before every donation
and test each donation for infectious disease in accordance with FDA
standards and other standard practices for all blood centers and
volunteer (unpaid) donors.

At various points in our history, the blood screening tests we employ
have exceeded the typical industry practices. However, today virtually
all blood centers use the same laboratory tests we do to assure blood
safety.  The donor deferral practices we follow (which temporarily
defer donations from donors who are taking medications or have the flu
etc., in addition to permanently prohibiting donors with infectious
disease risk factors) are among the strictest in the nation and exceed
those used by most other blood centers or required by the FDA.

The safety results of our program have been impressive.  In our entire
history (which involves the production of more than 120,000 platelet
products) we have never experienced an instance where a patient has
been infected with either Hepatitis or HIV.  Further, we have
experienced no problems in our donor group.  We have never had an
individual donor, once admitted to our program, subsequently contract
and test positive for either Hepatitis or HIV.

Most blood bankers believe that the safest blood donors are repeat
donors who have been repeatedly tested for infectious disease and
through the blood donation process are consistently reminded about the
importance of maintaining healthy lifestyles and avoiding risk
behaviors.  Because our program encourages repeat donations last year
we produced 14,500 platelet units using fewer than 700 individual
donors.  On average a platelet produced in our program comes from a
donor who has donated (and been tested) more than 35 times. Our
average donor donates more than 15 times each year.

Our program is regularly inspected by the State of California, the FDA
and the AABB and has an exemplary regulatory record.

However, despite our impressive safety record, there can be no assurance
that our program will prevent all cases of infectious disease
transmission from our donors. Such absolute assurance cannot be achieved
in any blood program using technology available today.

Program Cost Effectiveness
---------------------------

We believe that our program is the lowest cost platelet production
operation in the U.S. despite the facts that we incur significant costs
in prescreening donors (a practice not followed by most blood centers),
pay the donors, and operate in a relatively high cost urban
environment.   Our cost effectiveness results from several factors
including the small number of donors in the program (which results in
lower regulatory compliance costs), our unusually effective practices
of scheduling and processing donations, and our ability to select
donors who have high platelet counts in their blood.

We pass on the benefits of cost efficiencies in the form of competitive
single donor platelet prices.  We believe that single donor platelet
prices in Southern California have consistently been among the lowest
in the nation despite the fact that the area is a high cost urban
environment.

California Legislative Authorization
------------------------------------

In 1974 California enacted legislation effectively banning transfusion
of blood products obtained from paid donors by requiring physicians to
determine in each transfusion case that no blood products from unpaid
volunteer donors were available.  This legislation was enacted because
there were no effective laboratory tests for detecting hepatitis or
other infectious diseases at the time. This legislation also predates
the commercialization of the technology to collect apheresis platelets.

Since 1986 our paid donor program has operated under a special
provision of California Law that exempts apheresis platelets from the
1974 law. The exemption contains a sunset provision and must be
continued by the California legislature periodically to remain
effective.  California has extended this exemption in 1986, 1989, 1992,
1994 and 2000. The current exemption is scheduled to expire January 1,
2003.

Our hospital customers and the California Medical Association support
changing the law to make the exemption under which we operate
permanent. However, the American Red Cross and other competitor blood
centers vigorously oppose the existing exemption and any further
extensions thereof.

The American Red Cross and other blood centers maintain that our paid
donor program poses a threat to public health (despite the program's
quality record) and has the potential of undermining efforts to collect
blood from volunteer donors (despite the small group of donors involved).
Aside from these reasons (which in our opinion are unfounded), the ARC
maintains that California should adopt an "all volunteer" donor philosophy.
Further, American Red Cross representatives have advised the legislature
that, unlike all other blood products, there are excess supplies of single
donor platelets in California available from volunteer donors.

By all objective measures our paid donor program has been a public
health success.  In Southern California, unlike many other areas of the
nation, transfusing single donor platelets is regarded as the standard
of care by most hospitals and pooled platelets are not routinely
marketed to hospitals in the area.   Additionally the prices of single
donor platelets have been consistently lower than in other areas of the
U.S.

We estimate that, generally, the supply of single donor platelets has
been adequate to meet more than 95% of Southern California hospital
platelet transfusion needs (in contrast to 60% nationwide). We estimate
that single donor platelet supply needs in Southern California are met
by our production (approximately 30%), production by the ARC in
Southern California (approximately 42%) and by significant numbers of
platelets imported by the ARC from other parts of the U.S. (approximately
28%).

We believe that is no objective public policy reason to legally ban our
California paid donor operation.  Further we believe (and all objective
evidence suggests) that a significant shortage of platelets will
develop if our program is eliminated.  We intend to continue our
efforts to change California law to either further extend or make
permanent the legal authorization to operate our program.  However,
there can be no assurance that we will be successful.

In 2000 our paid donor program produced revenues of $5.6 million or 26%
of our total operating revenues.

In the event that California law is not amended and a new exemption
obtained, we are studying several potential courses of action.  These
include:

- Commencing the manufacture and sale of pooled platelets derived from
  whole blood donations. We presently do not produce pooled platelets
  from whole blood collections in California, however, we believe that
  a significant market for these less preferred products will develop,
  similar to other areas of the U.S., if our paid apheresis platelet
  collection program is eliminated.

- Significantly raising our prices, downsizing the paid donor program,
  and acting as a backup emergency supplier of single donor platelets
  whenever there are shortages in the volunteer supply (which we
  anticipate will be often).

- Exporting our single donor platelet products to areas outside of
  California.

- Exiting the blood products business in California and focusing on
  our continued therapeutic apheresis operations in the state and our
  non-California blood products operations and BMPs.

With the exception of exiting the California blood products market
entirely and concentrating on other areas of the U.S., which we believe we
can do successfully (although the Company would be much smaller than
today), the financial feasibility of the other options discussed above
requires further study.

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

A Blood Management Program ("BMP") is an arrangement in which a
hospital outsources some or all of its blood procurement and donor
center management functions to HemaCare or Coral while retaining the
convenience and efficiencies of an in-house program. A BMP aligns the
interests of the Company and its hospital customer, and provides the
customer with a "partner" in achieving its financial, regulatory
compliance and patient service goals related to blood.

In a BMP arrangement we generally establish and operate a blood
donation center under the name of the sponsoring BMP hospital either on
or nearby the hospital's campus. Typically, we provide all the center
staff and assume responsibility for regulatory compliance. We supply
the BMP customer with blood products from collections at the hospitals'
donation center or from collections at other Company donation sites or
from products purchased by us from other blood centers.

Aside from economic benefits, each BMP client enjoys a blood collection
operation where regulatory compliance matters are managed by an
organization with expertise in such matters.  All our BMP programs are
subject to inspection by the FDA and we seek AABB accreditation for
each such program. The overall regulatory compliance records of the BMP
programs described below is very good.

The following briefly describes each of our major BMP programs.

Dartmouth-Hitchcock Medical Center
----------------------------------

Dartmouth-Hitchcock Medical Center (DHMC) is a 430-bed hospital located
in Lebanon, New Hampshire. DHMC is affiliated with Dartmouth College
and is the teaching hospital for Dartmouth College Medical School. DHMC
is a major research center and serves as the tertiary care center for
New Hampshire and adjacent areas of Vermont.

Under the DHMC BMP arrangement we perform apheresis platelet and plasma
collections, autologous and directed donation collection services,
therapeutic apheresis and stem cell collection services and blood
related research support. In cooperation with DHMC, we are in the
process of adding collections of red blood cells through the recently
approved double red cell apheresis process for both DHMC.

One of the significant benefits of all our BMPs is the ability of the
hospital to implement blood safety standards that the hospital medical
staff believes are appropriate but which are more restrictive than the
minimum standards mandated by the FDA or generally followed by regional
blood centers. DHMC has made several such elections that consist of
stricter donor deferral criteria than required by the FDA and AABB
donor deferral criteria.

DHMC has also elected to utilize only donor-retested plasma for
transfusion.  Because plasma has a long shelf life it can be stored for
periods of time sufficient for a donor to make a repeat donation.
Donor-retested plasma is quarantined after collection until the donor
again successfully donates plasma again after a period of 112 days.

While modern testing methods for both HIV and HCV are excellent, there
remains a slight risk that the blood of donors recently exposed to and
infected with the HIV and HCV viruses within the "window period" (a
short period of time immediately prior to donation and testing) will
not be detected.  The infectious disease testing of the donor's blood
performed at the times of both donations thus minimizing the possibility
that the plasma transfused after the quarantine period is infected with
HIV and HCV viruses.

Coral's BMP arrangement with DHMC began in 1995. The current contract
extends through October 2001.

Long Beach Memorial Medical Center
----------------------------------

Long Beach Memorial Medical Center ("LBMMC").  LBMMC is a 726-bed
major tertiary teaching hospital facility located in Southern Los
Angeles County.  LBMMC is the largest hospital in a four-hospital system
operating in Los Angeles and Orange Counties.

Under our BMP agreement, we have assumed responsibility for managing
LBMMC's pre-existing programs for blood collection and for expanding
those programs to include mobile blood drives in the greater Long Beach
community. Additionally, we are responsible for providing therapeutic
apheresis services to patients requiring this medical treatment.

Under this arrangement we are paid a fee essentially equal to what the
hospital incurred before we outsourced the program.  However, we have
agreed to performance targets that significantly improve the
productivity of collection operations over time and provide incentives
to us to exceed the preset performance targets. The "partnering"
concept underlying our economic arrangement is a sharing of overall
savings generated by our program between LBMMC and HemaCare.

Under this program LBMMC has realized significant economic benefits
relating to blood procurement costs and, additionally, has consistently
been able to meet its blood supply needs.

This BMP program was begun in February 2000 under a three-year
contractual agreement.

Presbyterian Intercommunity Hospital
------------------------------------

Presbyterian Intercommunity Hospital (PIH) is a 339-bed community
medical center located in Whittier, California.

Under a three-year BMP agreement that became effective in May 2000, we
are responsible for management of PIH's pre-existing blood collection
programs, and for expanding those programs to include mobile blood
drives in the greater Whittier and Los Angeles areas. In addition, we
provide the hospital with platelets form our Sherman Oaks facility and
provide therapeutic apheresis services to patients.

Similar to the LBMMC arrangement, at PIH we are paid a fee essentially
equal to what the hospital incurred before we outsourced the program.
Further have agreed to goals that significantly improve the
productivity of collection operations and share the savings the
hospital realizes as a fee adjustment. The "partnering" concept
underlying our economic arrangement is an equal sharing of overall
savings generated by our program between PIH and HemaCare.

St. Vincent Hospital at Worcester Medical Center
------------------------------------------------

St. Vincent's Hospital at Worcester Medical Center ("St. Vincent") is
a 369-bed tertiary and acute care hospital located in Worcester,
Massachusetts, and serving the central part of the state. The hospital
is owned and operated by Tenet Healthcare.

Under the BMP arrangement, St. Vincent has outsourced its entire blood
procurement function and responsibilities for therapeutic apheresis
services to Coral for an annual fixed fee. Under this arrangement we
are responsible for either collecting or purchasing all blood products
required by the hospital as well as performing all therapeutic
apheresis services. The annual fee is subject to adjustment for
significant changes in blood product and TA utilization.

The original arrangement with St. Vincent was begun in March 1998 and
was priced at a level of 80% of the costs incurred by the hospital for
blood products and services in 1997.  As a result of this agreement St.
Vincent has realized significant savings in its overall blood costs
amounting to considerably more than 20% annually.

Overall and over time we have realized a marginally small profit
contribution from our BMP program with St. Vincent.  We have met most
of the hospital's blood needs through blood collections in the Worcester
community and with purchases of blood products from blood centers in
other parts of the U.S. that have excess supplies.

However, our profitability has been severely impaired, and at various
times we have incurred significant losses, due to the fact that we are
periodically required to purchase blood from the American Red Cross in
Massachusetts to meet the immediate and unplanned transfusion needs of
patients in the hospital.

The American Red Cross New England Region maintains a tiered blood
pricing structure in Massachusetts. The highest tier pricing is
reserved for hospitals and organizations that do not have a supply
contract with the ARC. While we have requested a contractual agreement
with the ARC, our requests have been denied.  As a consequence we pay
premium prices for all blood products we are required to purchase from
the ARC.  Many of these prices range from 50% to 400% more that the
prices we receive from St. Vincent and have materially reduced the
profitability of this contract.

Because of our adverse experience with St. Vincent, and a similar
experience with a discontinued BMP in California, we no longer market
BMP programs that transfer responsibility for a hospital's entire blood
budget to the Company.  Rather our BMP programs focus on providing
significant portions of a hospital's blood needs to reduce the
hospital's reliance on local blood centers.

The St. Vincent contract was a three-year arrangement and is currently
due for renewal.  It is currently being renegotiated with hospital
management. Under the proposed revised terms of the contract St.
Vincent should continue to realize significant cost savings by continuing
its relationship with Coral. Further, because of operational changes
and new contractual features, we anticipate that the profitability of
this BMP arrangement will be improved, if renewed.  However there can
be no assurance that the contract will be renewed or renewed under the
contemplated terms.

University of California, Irvine Medical Center
-----------------------------------------------

The University of California, Irvine Medical Center ("UCI") is a 462
bed tertiary facility that serves as the teaching hospital for the
University of California, Irvine Medical School.

Under BMP program we operate a donor center on the UCI hospital campus
and conduct blood drives for the hospital in the surrounding
communities.  The donor center operation provides directed and
autologous donation services to hospital patients, friends and family
and support various research efforts relating to blood.  Additionally
we provide single donor platelets to the hospital that are collected at
our Sherman Oaks facility and serve as the hospital's primary TA
provider.

Under this arrangement UCI has realized significant improvements in the
productivity and cost effectiveness of its blood collection activities
and an overall reduction in its blood procurement costs from outside
blood centers.

This program was begun in 1999 and the BMP agreement is in effect until
February 28, 2002.

University of North Carolina
----------------------------

UNC Hospitals in Chapel Hill, North Carolina ("UNC") is a 660-bed
teaching and tertiary hospital complex operated by the University of
North Carolina in Chapel Hill.  UNC is also an active blood banking
research institution.

Coral has operated a BMP for this hospital since 1997.  Under the
original program we are the primary provider of single donor platelets
for UNC and we operate donor room on the hospital campus and conduct
mobile collection drives the community.  We have expanded our program
for UNC to include plasma collections and, in 2001, a portion of the
therapeutic apheresis services performed at the medical center.

Under this program UNC has realized significant savings in platelet
procurement costs due to lower base platelet prices in our contract as
compared to levels charged by the American Red Cross before we were
engaged. Additionally, our pricing arrangement with UNC shares the
benefits of increased platelet program productivity with UNC.

The Company's current BMP arrangement with UNC extends through January
31, 2002.

University of Southern California
---------------------------------

The University of Southern California ("USC") operates two hospitals
on the campus of USC, Norris Comprehensive Cancer Center and Hospital
and USC University Hospital. Together these hospitals comprise a 340
bed tertiary care and research center.  Tenet HealthCare manages these
hospitals.

Under our BMP program we developed, financed, and now operate, a blood
donation center located on the USC hospitals' campus.  This center
provides research support to hospital physicians, performs autologous
and directed donation services.  Further, we provide a full array of
blood products to USC including platelets collected at our Sherman Oaks
center and other blood products collected on mobile drives or purchased
by us from other blood centers.  Additionally, the Company serves as
the hospitals' primary provider of provides therapeutic apheresis
services and stem cell collections.

We have operated the BMP at USC since 1995. Our current BMP agreement
is in effect until March 2002.

Children's Memorial Hospital of Chicago
---------------------------------------

Children's Memorial Hospital of Chicago (CMH) is a tertiary and
teaching facility affiliated with Northwestern University and dedicated
to the treatment of infants and pediatric patients.

In March, 2001 we entered a BMP with CMH to operate a blood collection
center on the hospital's campus in central Chicago and to provide TA
and stem cell services to patients at the hospital.  This program will
become operational in June 2001.  Our BMP arrangement with CMH is for a
term of three years.

Other Smaller BMP Operations
----------------------------

We provide limited scope blood management program services to hospitals
in New York City; Patterson, New Jersey; and Los Angeles.  These
programs do not involve our establishing a full time presence on the
hospital campus.  Rather we perform blood product collection services
either on the hospital's campus or we simply conduct mobile drives in
the community on behalf of the hospital and provide all products we
collect to the sponsoring hospital.

The programs in New York and New Jersey focus on collecting single
donor platelets, the programs in Los Angeles are focused on collections
of whole blood and are generally supplemented by supplying single donor
platelets from our Sherman Oaks facility.  To date these operations
have made marginal contributions to profits. However, based on trends
in blood product prices and escalating rates of instances of blood
shortages we anticipate that these smaller BMP operations may become a
material part of our operations in future years.

Our Regional Blood Products Operations
--------------------------------------

Los Angeles, California
-----------------------

We have operated as a regional blood center supplying single donor
platelets to more than 100 hospitals in the Greater Los Angeles area
since 1979. Our donor center is located in Sherman Oaks, a suburb
located north of central Los Angeles. This location also has
laboratory, manufacturing and distribution facilities that support our
BMP programs located in Southern California.

While the Sherman Oaks facility specializes in collecting single donor
platelets it is licensed for a full variety of blood products and
serves as the principal processing location for most whole blood
products collected in mobile drives for our California BMP customers.

The Sherman Oaks facility also provides whole blood derived component
products such as red blood cells, fresh frozen plasma and
cryoprecipitate to hospitals other than our BMP customers.  Most of
these products are purchased by the Company.  All purchased product is
obtained from blood centers located in the United States.  All such
suppliers are FDA licensed and accredited by the AABB.

Portland, Maine
---------------

We operate a regional blood center, the "Maine Blood Center," located
in Scarborough a suburb of Portland.  This regional program has evolved
from a BMP program for Maine Medical Center (MMC), a 660-bed hospital
that is the largest teaching and tertiary hospital in the state.

While our operations were originally operated under MMC's licensure as
an outsourcing program, the program has operated under our FDA
registration since 1999 and, is shortly expected to receive FDA
licensure that will permit us to ship blood products across state
lines.

The Portland operation specializes in collecting single donor
platelets, but also collects and is capable of providing a full array
of blood products to hospitals to supplement products supplied by the
American Red Cross, which is the only other blood center operating in
Northern New England.

While our Portland operation has provided blood products to several
hospitals in Maine other than MMC, such sales to date have been minor.
Current ARC contracts with most hospitals in Maine require the
hospitals to purchase blood only from ARC unless it is unable to
deliver product.

The Portland operation's profitability was negatively impacted in 2000
as a result of a significant number of blood product expirations.  While
we were required to continue to collect blood products to obtain FDA
licensure we were unable to sell these products at any price.  Our
sales efforts were unsuccessful, even when prices offered were 50% of
normal with terms requiring payment only if the product was actually
transfused.

With licensure, our Portland operation will be able to supply blood
products to any hospital in the U.S.  While our objectives in Portland
are to be a provider of blood products to hospitals in the Portland
area, until current local market factors change, this operation may
export its excess collections to hospital customers in other markets.

Because sales to hospitals other than MMC were minor in three years
ended December 31, 2000, the Portland operations are included in our
financial statements under the BMP category.

Our Regional Blood Services Operations
--------------------------------------

General

Since its inception, we have performed almost 50,000 therapeutic
apheresis procedures in the treatment of more than 27 diseases
thereby providing us with a substanital and perhaps unparalleled
level of experience.

We provide therapeutic apheresis services to all of our BMP
hospital customers and we offer such services on a regional basis in a
total of 11 states on the east and west coasts of the U.S.
With our major operations being located in Los Angeles, New York and
Connecticut.

Unlike some other therapeutic apheresis providers, we do not require
that patients receiving our therapeutic apheresis services also be
treated by a physician affiliated with the Company. Rather patients
referred to us for TA services remain under the care of the referring
physician or another trained physician at the client hospital.  Our
medical directors serve as a backup resource to the treating physician
if assistance is desired. Additionally, our medical directors conduct
physician training and educational seminars on medical applications of
therapeutic apheresis.

Therapeutic Apheresis - Description
-----------------------------------

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

The Company provides therapeutic services using all currently
recognized treatment methods: 1) plasma exchange and cell depletion, 2)
in-line immunoadsorbant columns, 3) stem cell collection, and 4) photo-
pheresis.

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

The primary blood services provided by the Company, accounting for 90%
of therapeutics procedures in 2000, were plasma exchange and cell
depletion therapy.  These procedures involve removing harmful
substances from a patient's blood, using automated blood separation
equipment.  As the patient's blood flows through the cell separator,
abnormal or excess proteins or components associated with the disease
being treated are selectively removed.  The remaining blood components
are returned to the patient.

Most treatments involve the removal of two to four liters of abnormal
plasma or certain cellular components.  Replacement fluids, most
commonly albumin, are used to maintain the patient's blood volume.

Patients suffering from diseases such as multiple myeloma,
polyneuropathy, leukemia, systemic lupus erythematosus, scleroderma,
hyperviscosity syndrome, thrombocytosis, thrombotic thrombocytopenic
purpura (TTP), 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.

When required, in situations where the hospital requests it, we also
provide albumin to the hospitals utilizing our therapeutic apheresis
services.

Immunoadsorption
----------------

Since 1988, the Company has provided a therapeutic treatment, which
uses an in-line immunoadsorption column to modify patients' immune
response.  During immunoadsorption column therapy, blood is drawn from
one arm of the patient, plasma and blood cells are separated, the
plasma is filtered through the column to remove unwanted circulating
immune complexes and immunoglobulin from the plasma.  The plasma is
then recombined with the red blood cells and returned to the patient's
other arm.

Immunoadsorption column therapy has been approved by the FDA for the
treatment of ITP, an immune-mediated bleeding disorder since December
1997.

In 1999, the FDA approved this procedure for the treatment of moderate
to severe rheumatoid arthritis ("RA").  RA is a potentially crippling
autoimmune disease that is estimated to affect approximately 2.5
million people in the U.S.  In RA, the body's immune system
inappropriately makes antibodies, called rheumatoid factors, that
collect in the joints and surrounding soft tissue causing inflammation
and tissue damage.  Joints, typically those in the hand, become painful
and swollen, lose movement, and become deformed.  Individuals afflicted
with RA not only suffer a significantly reduced quality of life, but
also a shortened life expectancy.

This application may significantly increase the demand for
immunadsorption column procedures. The typical RA patient treatment
involves a series of twelve treatments in a three-month period.
Approximately 50% of the treated patients experience a significant
decrease in symptoms and are able to function without further drug
treatments for a period of approximately one year.

Unlike patients with other disease conditions, therapeutic apheresis
treatment of patients with RA can be safely accomplished outside the
acute hospital setting.  We have established a collaborative
arrangement with the manufacturer of the Immunadsorption column to
establish treatment facilities in physician offices.

Stem Cell Collection
--------------------

Since 1990, we have been providing peripheral blood stem cell
collection services.  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.

Photopheresis
-------------

Photopheresis is a therapeutic technique in which patient's lympho-
cytes (white blood cells) are collected by a blood separation
device.  The lymphocytes are then exposed to ultraviolet A light,
in combination with the drug 8-mexthoxypsoralen.  This drug is a
photosensitizing agent which becomes active when it is exposed to
ultraviolet light.  After this exposure, the lymphocytes are returned
to the patient.  The treated cells stimulate the immune system to
attack the cells which are causing the disease.  The process is
similar to an auto vaccination.

Photopheresis is FDA approved for the treatment of Cutaneous T-Cell
Lymphoma (CTCL).  Research studies are in progress for the approval
of photopheresis in the treatment of heart transplant rejection,
scleroderma and graft vs. host disease.

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

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

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

During the wind down of the research and development operations, the
Company manufactured a supply of Immupath sufficient for the patients
still receiving treatment for a limited period of time. There are
currently two patients receiving Immupath treatments. In the fourth
quarter of 1997, the Company reviewed and revised its estimate of the
remaining costs of discontinued operations, including the costs to
treat remaining patients and the other continuing liabilities of the
discontinued operations, and recognized an additional gain on disposal
of $173,000. The Company does not expect discontinued operations to
have a material impact on its future operating performance and has a
reserve of $76,000 as of December 31, 2000.

Sales to Major Customers
-------------------------

During 2000, no customer accounted for more than 10% of our total
sales.  Sales of products and services to USC/Norris Comprehensive Cancer
Center and Hospital and USC University Hospital (the "USC Hospitals")
comprised 12% and 16% of the Company's revenues in 1999 and 1998,
respectively. Although the USC Hospitals are not under common
ownership, the Company's agreements with these hospitals are
interrelated.

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

General

We compete on the basis of responsiveness to customer needs, value-
based pricing and the high quality of our services and products.  Our
competitors are generally not for profit entities including the
ARC, and regional and community blood banks. Many of these organizations
have greater financial, technical and personnel resources than we do.
Since such competitors are tax exempt, they do not incur costs for many
taxes that are levied on our operations and they have access to low
cost tax-exempt debt to finance their operations.

Blood Products and BMPs

The primary competitor for our single donor platelet and
whole blood component business is the ARC. To a lesser extent we also
compete with other community based blood centers and hospital-based
blood banks.

We have developed several blood product and service programs to respond
to the needs of our customers. These include a depot system where we
assume the risk of platelet products outdating and our BMP outsourcing
programs.  We believe our strategy of offering blood product and
service programs tailored to the requirements of individual customers
favorably differentiates us from other suppliers of blood products and
services and that outsourcing programs provide opportunities for
expansion of the Company's businesses.

We consistently reevaluate and revise our product and BMP outsourcing
programs to meet customer needs and respond to marketplace factors.  At
present we are unaware of any competitors in this field.  However,
there is no assurance that others blood centers or new market
participants will not successfully introduce similar programs that will
compete with those of the Company.

Therapeutic Services

Competitors for our therapeutic blood services business are
primarily regional and community blood banks (principally, the New York
Blood Center and, in New England, the ARC.  Additionally, many larger
hospitals maintain their own in-house apheresis service units.  Also
dialysis companies and local kidney specialists (nephrologists)
occasionally supplement acute dialysis 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.  Our 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.  For larger hospitals
with in-house programs our mobile programs serve as a back-up or supplemental
provider of therapeutic apheresis services.

We have lost several therapeutic services customers in the New
England area to the ARC. The ARC began offering
therapeutic services in New England in 1997 or 1998 and generally
charges higher prices to hospitals than our pricing arrangements.
However, we understand that hospitals utilizing the ARC therapeutic
services in New England receive discounts on other products and
services they purchase from the ARC that economically compel
those hospitals to utilize the ARC for these services.

Litigation with the Blood Services Unit of the American Red Cross
------------------------------------------------------------------

We have filed an antitrust suit against the blood services unit of the
American Red Cross for business practices that we believe capitalize on
its position as the dominant blood supplier in the U.S. and illegally
attempt to prevent or eliminate competition in the blood industry.
These practices have significantly restricted our ability to attract
and retain customers in areas outside of California and, in California,
have severely limited profit margins on existing customers and made many
expansion activities uneconomic (See Item 3. Legal Proceedings).

Marketing
---------

Our marketing programs 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.

We market our products and services as components of custom-
tailored programs developed to meet the needs of specific customers.
The BMP 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.

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

At March 20, 2001, the Company had approximately 224 employees including
106 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 is represented by a labor union.  The
Company considers its relations with its employees to be good.

Supplies
--------

The Company maintains relationships with numerous suppliers who provide
cell separator equipment, disposables, supplies, replacement fluids,
testing services and blood products. Generally, the Company has not
experienced difficulty in obtaining most of its equipment and supplies
from its sources.  However, if there were material changes in the
sources of its supplies, the Company's operations could be adversely
affected.

Since late 1996, the Company has experienced difficulty in obtaining
red blood cell products from suppliers, and the cost of products
obtained has increased. Industry data indicates that HemaCare's
experience reflects a nationwide decrease in the availability of red
blood cell products.

One BMP arrangement includes a fixed price arrangement for blood
products shifting the price risk to the Company.  In this instance,
if the Company is unable to manufacture or purchase red blood cells
at costs that are less than the contract customer price, the Company's
profitability would 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,
California facility thereby enhancing its ability to retain a pool of
qualified repeat platelet donors. Sales of apheresis platelets from paid
donors may be prohibited by California law after December 2002 (See
"Government Regulation" and "Risk Factors"). Platelet and whole
blood donors at the Company's BMP donor centers are not given cash
compensation.

The Company competes somewhat with the ARC and other blood banks in
recruiting its volunteer donors. However, it should be noted that
less than 5% of the U.S. population donates blood.  Thus, donor
recruiting efforts of various blood collectors rarely overlap.  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. As a result of the shortage, the price of
albumin to HemaCare more than doubled.  During 1999 and 2000, the supply
of albumin increased and prices declined.

Government Regulation and Blood Safety
--------------------------------------

Blood Products and Blood Management Program Operations

Safety is of paramount concern when dealing with blood products.  We
have developed extensive procedures and internal quality control
programs to assure that blood products collected and distributed
are safe and of the highest quality.

All hospitals and blood centers that collect blood and distribute blood
for transfusion are subject to extensive regulation by the FDA
and various state licensing authorities.  The FDA regulations are
comprehensive and complex and extend to virtually all aspects of the
industry operations including recruiting and screening blood donors;
processing, testing, labeling, storage and shipping blood products;
recordkeeping; and communications with hospitals customers and donors.
In addition, FDA regulations also extend to the manufacturers of all
critical supplies and equipment used in blood center operations.

An FDA Establishment License allows the license holder to sell licensed
products across state lines. Such licensure is extended to a qualifying
organization; each blood product produced by that organization and every
variation of such product requires separate licensure.

In contrast, an FDA registration permits collection and sales of blood
products only within a state. Most hospitals operate their own blood
collection programs under FDA registration.

We hold an FDA Establishment License for our regional operations in
Sherman Oaks, additionally our USC BMP program is operated under our
establishment licensure.  Most of the products we produce are licensed
for interstate distribution and it is our practice to apply and obtain
such licensure for all products we produce.  While we typically do not
distribute products produced in California outside of the state we view
such licensure as a part of our overall commitment to quality.

Our operation in Portland, Maine was operated under Maine Medical
Center's FDA registration through 1998.  Since 1999 the operation has
been operated under our own FDA registration, and in 1999 we applied for
FDA Establishment Licensure for this location. The FDA has completed
all inspections of this facility and has advised us that the license
will be issued shortly.

Our present blood management programs (other than USC) are operated
under the various hospitals' FDA registrations.  Our new blood
management program in Chicago will be operated initially under our own
FDA registration and, eventually, FDA licensure.

Irrespective of licensed or registered status, the FDA conducts regular
inspections of all facilities collecting blood. With the exception of
one BMP, all our operations have been subjected to an FDA inspection
within the last 12 months.   These inspections are not scheduled in
advance and can range from a few days to two weeks depending on the
FDA's election as to the scope of the review.

In addition to FDA regulations, various states have regulatory agencies
that govern blood product operations.  In California our operations are
inspected for compliance at least annually by state representatives.

Aside from government organizations, the AABB is the private sector,
industry sponsored organization charged with maintaining and improving
science, safety, quality and education relating to blood.  The AABB
publishes extensively on matters pertaining to blood and works closely
with the FDA and other government agencies with respect to developing
regulations governing blood banking.  The AABB also maintains a
voluntary accreditation program for organizations desiring such
accreditation.  Accreditation requires organizations to maintain internal
quality plans and procedures to assure blood safety and requires such
organizations to undergo periodic inspections for compliance. We are an
AABB institutional member and our operations are accredited by the AABB.

We consider our regulatory compliance record with the FDA, the various
states and the AABB to be very good.

Laboratory Operations
---------------------

The Company's laboratory is licensed and accredited to perform various
tests required by the FDA and State of California to ensure the purity,
potency and quality of the blood products that it sells in California.
Prior to June 1999, this lab performed infectious disease testing for
our California based blood collections.  In June 1999 we implemented a
new type of infectious disease test, nucleic acid testing or NAT, which
required that we outsource the testing function.

NAT testing is a newly developed testing protocol that materially
reduces the "window" periods for HIV and Hepatitis C (HCV).  The
"window" period is the period of time, immediately after a person has
been infected with either HIV or HCV, when current testing technology
cannot detect the infection due to the body producing only limited
amounts of antibodies against the virus.

NAT testing is currently under evaluation by the FDA and, while it is
widely expected that the FDA will mandate that all blood be NAT tested,
currently the test is offered only by a limited number of laboratories
participating in the FDA investigational study.

All blood donations tested by outside laboratories are performed on a
contract basis.  These laboratories are FDA licensed and the Company
regularly audits their operations to assure compliance with stated
standards.

Sherman Oaks Paid Apheresis Platelet Donor Program
--------------------------------------------------

Since 1974, 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, have been exempted from this law by a series of
state statutes the latest of which (AB 2714) was passed in 2000. Unless
a new exemption is obtained, the existing exemption will expire under
its sunset provision on December 31, 2002, which could have a material
adverse effect on the Company's revenue and net income. See discussion
under Donor Recruitment - Our Paid Platelet Donor Operations in Southern
California.

Other Matters
-------------

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

Joshua Levy, M.D., the national medical director of the Company and a
shareholder, through his private practice in Sherman Oaks, California,
treats patients who require therapeutic services. Sales by the Company
to hospital customers for therapeutic services provided to Dr. Levy's
patients amounted to approximately 2%, 3%, and 4% of the Company's
total revenues for 2000, 1999 and 1998, respectively.  There are no
agreements between Dr. Levy, or the Company or the Company's hospital
customers that require the hospitals to select HemaCare to provide
therapeutic services to the hospital's 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 hospital
reimbursement, health insurance coverage and managed care 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.  We maintain medical
professional liability insurance in the amount of $2,000,000 for a
single occurrence and $5,000,000 in the aggregate per year in California,
and and $1,000,000 for a single occurrence and $2,000,000 in the
aggregate per year outside of California.  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.

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

Allogeneic - Blood donations that are not directed toward a specific
patient, but are available for any patient in need.

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

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

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

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

Directed Donation - A blood donation designated by the donor for the
benefit of a specific individual (often blood type incompatibilities
prevent transfusion of these products to the intended recipient).

Hepatitis B Virus (HBV) - A virus in the blood serum that causes an
inflammation of the liver and can be transmitted by blood transfusion.

Hepatitis C Virus (HCV) - An RNA virus that causes an inflammation of
the liver and can be transmitted by blood transfusion. Hepatitis
often results in complications that can result in chronic hepatitis
or severe, permanent liver damage.

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.

Immunoglobulin - Proteins produced by cells from the B-lymphocyte
lineage that are responsible for destroying foreign antigen before
it can cause harm.

Lymphocytes - Small white blood cells that are responsible for
carrying out the activities of the immune system.

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.

Risk Factors Affecting the Company
----------------------------------

1.      Government regulation.

The blood industry is one of the most heavily regulated sectors of the
healthcare industry. The regulations are comprehensive and complex, and,
further, are subject to frequent revisions. While we consider our regulatory
compliance history to be good, continued compliance with such regulations
and future modifications thereof, could materialy impair profitability
or require material capital expenditure.

2.	Expanding BMPs.

Our business strategy provides for expansion of our BMP operations
with both new and existing markets.  Such efforts are subject to the
customary risks associated with opening a new BMP including, but not
limited to, developing a donor base, engaging employees, price
considerations and regulatory compliance.  Accordingly, there are
no assurances that future BMPs including the BMP in Chicago,
scheduled to open in June 2001, will be profitable.

3.	Renewal of BMPs.

All of our BMPs are under contract with specific expiration dates.
While we believe that our programs provide improved service
and financial savings, there can be no assurances that our customers
will renew these contracts when they expire.  The non-renewal of such
contracts may have a material adverse affect on our future financial
performance.  One current arrangement, with St. Vincents Hospital, has
expired.  While renewal discussions are underway, there is no assurance
these negotiations will result in continuation of this program.

4.	Blood product procurement.

Our St. Vincent's BMP requires us to provide substantially all of
the hospital's blood needs.  To the extent the hospital's blood
needs exceed our ability to collect product, we purchase product
from other vendors.  The price we pay to other vendors is dependent
on various market conditions and can fluctuate.  There is no
guarantee that we will be able to obtain product at prices that
are less than the price we receive from our customer.

5.	Blood Product Pricing

Our business strategy is partially based upon increased prices for all
blood products except single donor platelets.  Part of the increase
in prices is expected to come from either government mandated
or industry acceptance of universal leukoreduction of red blood cells.
Although this is currently the trend in the industry , there are
no assurances that it will continue in the future.  If prices do
not increase, or if they decline, then we may have difficulty in
expanding beyond our current operations.

6.      Compensated apheresis platelet donor program.

We pay our Sherman Oaks donors for the time they spend donating platelets.
Our ability to compensate donors beyond January 1, 2003, is dependent
upon our obtaining a renewal of the exemption to California law that
generally prohibits that transfusion of blood products from paid donors
(unless product from volunteers is unavailable). If we are unable to
compensate our apheresis platelet donors beyond January 1, 2003, it
will adversely affect our revenues and profitability.  It is likely
that absent a renewal, the Company will cease blood product operations in
Southern California.

7.	Albumin.

We often use albumin while performing TA procedures.  We purchase
albumin on the open market much like a commodity and the price
we pay is subject to significant price fluctuations.  During
1996, there was a shortage of albumin and the price increased
to levels that were equal to or higher than the contract price
we charge our customers.  In the event that albumin prices
increase substantially, it would have the affect of reducing
our margins on TA services.

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 on this space expires October 31, 2002.

The Maine Blood Center occupies a 3,600 square foot donor center in
Scarborough Maine.  The lease expires October 31, 2004.

The Company occupies a 1,278 square foot office space in Yonkers, New
York which expires August 31, 2001.

In connection with each of its blood management programs the company
occupies space on the campus of its client hospitals.  While the
arrangements vary, certain of these facilities are formally subject to
a lease agreement with the sponsoring hospital for periods concurrent
with the blood management program agreement. Other agreements grant the
Company the right to utilize space and facilities on the hospital
premises during the term the Company continues to provide services to
the hospitals without specific lease terms.

Item 3.  Legal Proceedings.

In December 2000, HemaCare filed with the United States District Court
in the Central District of California an antitrust and unfair
competition complaint to recover damages and secure injunctive relief
against the ARC in connection with ARC pricing practices in Southern
California and other areas of the nation where we operate.

Our lawsuit alleges that the ARC as part of a publicly
announced strategy to increase its market share in the U.S. blood
industry has employed below cost and bundled product pricing to eliminate
competition.

Our lawsuit also contains other allegations, which we believe
constitute unfair competition by the ARC.  These include:

-   Threatening hospitals with disruptions in available blood
    supplies if they contract with the Company or make other
    arrangements to obtain blood products.

-   Interfering with our efforts to hold blood drives and recruit
    volunteer blood donors.

-   Allocating blood supplies, in times of severe shortages, to
    prevent sales of blood products by the Company rather than on the
    legitimate needs of hospitals and patients in these areas.

-   Falsely disparaging the quality and safety of our blood products.

In 1995 we filed an earlier antitrust lawsuit against the American Red
Cross for practices in California that compelled Southern California
ARC customers to purchase platelet products from the ARC at prices
higher than those offered by the Company. In June 1997, that suit was
settled on confidential terms.

The Company is also party to various claims, actions and proceedings
incidental to its normal business operations. The Company believes the
outcome of such claims, actions and proceedings, individually and in
the aggregate, will not have a material adverse effect on the business
and financial condition of the Company.

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

None.


                              PART II

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

Market for Common Stock

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

<PAGE>

The following table sets forth the range of high and low closing bid
prices of the Common Stock, as reported by the OTC Bulletin Board, for
the quarters ended March 31, June 30, September 30 and December 31,
2000 and 1999.  These prices reflect inter-dealer quotations, without
retail markups, markdowns or commissions, and do not necessarily
represent actual transactions.

<TABLE>
<CAPTION>
                               2000             1999
Quarter ended             High     Low       High     Low
--------------            -----    ----      -----    ----
<S>                       <C>      <C>       <C>      <C>
March 31                  $3.00    $0.69     $0.70    $0.31
June 30                   $2.25    $1.00     $1.44    $0.63
September 30              $1.94    $1.25     $1.28    $0.81
December 31               $1.81    $1.00     $0.81    $0.63


</TABLE>

No cash dividends have been paid as of March 1, 2001.  The Company does
not anticipate paying cash dividends in the foreseeable future.  As of
March 1, 2001 there were approximately 304 holders of record of the
Company's Common Stock.

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

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


<TABLE>
<CAPTION>

                                                     Years Ended December 31,
                                               (In Thousands, except Per Share Data)
                                         2000       1999        1998       1997       1996
                                       -------    -------     --------    -------    -------
<S>                                    <C>        <C>         <C>         <C>        <C>
Revenues                               $21,512    $19,021     $13,124     $11,101    $10,921
Gross profit                             4,850      4,026       3,122       1,907      1,234
Income (loss) from continuing
  operations                             4,350      1,057         745          37     (1,090)

Loss from discontinued operations            -          -           -           -          -
Gain (loss) on disposal of
  discontinued  operations                   -          -           -         293        600
Provision (benefit) for income
  taxes                                 (2,901)        28          23           -          -
Net income (loss)                      $ 4,350     $1,057     $   745     $   330    $  (490)

Basic per Share Amounts:
------------------------

Income (loss) from continuing
 operations                            $  0.57    $  0.14     $  0.10      $ 0.01    $ (0.17)

Income from discontinued
 operations                                  -          -           -        0.04       0.90
                                       --------   --------    --------    --------   --------

Net income (loss)                      $  0.57    $  0.14     $  0.10     $  0.05    $ (0.08)
                                       ========   ========    ========    ========   ========
Diluted Per Share Amounts:
--------------------------

Income (loss) from continuing
  operations                           $  0.50    $  0.13     $  0.10     $  0.01    $ (0.17)

Income from discontinued
  operations                                 -          -           -        0.04       0.09
                                       --------   --------    --------    --------   --------

Net income (loss)                      $  0.50    $  0.13     $  0.10     $  0.05    $ (0.08)
                                       ========   ========    ========    ========   ========

Total assets                           $11,477    $ 7,574     $ 7,662     $ 4,384    $ 4,776
Long-term debt and capital
 lease obligations, net of
 current portion                            46        541       1,118         209        503
Shareholders' equity                     8,203      4,440       3,291       2,402      2,023

</TABLE>


Item 7.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations.
-------  ------------------------------------------------------------

Our business activities include blood management programs ("Blood
Management Programs" or "BMPs"), regional sales of blood products
("Blood Products") and blood services ("Blood Services").

Our Blood Management Programs enable hospitals to contract out all or a
portion of their blood services activities, which include donor center
management, blood procurement and other blood related activities.
Blood Products include apheresis platelets and whole blood components,
such as red blood cells and plasma products.  Blood Services include
therapeutic apheresis procedures, stem cell collection and donor
testing services.

In October 1998, we acquired existing blood products and service
activities in the eastern United States through our subsidiary Coral
Blood Services, Inc. ("CBS").  The acquisition was accounted for as a
purchase.  These activities are primarily blood management programs
and other blood services provided to hospitals and medical centers.

In June 1999, we started a Blood Management Program with the University
of California at Irvine ("UCI"). In February 2000, we started a Blood
Management Program with Long Beach Memorial Medical Center ("LBMMC")
and in May 2000 opened a Blood Management Program with Presbyterian
Intercommunity Hospital ("PIH").   We now operate eight blood
management programs.  In addition to the new programs opened in 1999
and 2000, we operate programs at the University of Southern California
("USC"), Dartmouth-Hitchcock Medical Center ("DHMC"), St. Vincent
Hospital ("St. Vincent") and the University of North Carolina ("UNC").
Previously, in Portland, ME, we operated a Blood Management Program
for the exclusive benefit of Maine Medical Center. During 2000,
we expanded our operations and provided blood products and services to
other hospitals in the region.  For comparability purposes, we continue
to classify these activities as a Blood Management Program.

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

Year ended December 31, 2000 compared to the Year ended December 31,
1999
--------------------------------------------------------------------

Revenue and Gross Profit Overview
---------------------------------

Revenue for 2000 was $21,512,000 compared to $19,021,000 for 1999.  The
increase of $2,491,000 (13%) is primarily due to the expansion of the BMPs
and increased sales of Blood Products.

Gross profit as a percentage of revenue was 23% ($4,850,000) during
2000, compared to 21% ($4,026,000) in 1999.  The increase reflects
continued improvement in the BMPs and Blood Services partially offset
by higher cost of sales in Blood Products.

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

Revenue for 2000 was $9,727,000 compared to $7,827,000 in 1999.  The
increase of $1,900,000 (24%) is primarily due to the expansion of the
California based BMPs.  The LBMMC BMP opened in February 2000 and the
PIH BMP opened in May 2000.  Additionally, 2000 revenues include twelve
months of revenue from the UCI BMP, which opened in June 1999.  Revenue
from our other BMPs increased 7% as a result of additional products and
services.  Also, during the second half of 2000, we increased the number
of mobile blood drives for our BMP customers.

Gross profit as a percentage of revenue was 16% ($1,560,000) for 2000,
compared to 13% ($1,049,000) in 1999. The increase reflects more
product collections at existing donor sites, improvement in operating
activities and changes in the mix of products and services provided to
BMP customers.  Also, during the second half of 2000, we increased the
number of mobile blood drives for our BMP customers.

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

Blood Products revenue for 2000 was $4,967,000 compared to $4,033,000
for 1999.  The increase of $934,000 (23%) reflects additional sales to
new customers offset by a lower price per unit.  Price competition
(primarily from the ARC) remains intense.

Gross profit as a percentage of revenue was 22% ($1,071,000) for 2000,
compared to 28% ($1,129,000) in 1999. The decrease reflects lower
prices per unit due to the above described price competition.
During 2000, our gross profit decreased as a result of product mix and
lower average number of products collected per donation.

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

Blood Services revenue for 2000 was $6,818,000 compared to $7,161,000
for 1999, a decrease of $343,000 (5%). The total number of therapeutic
apheresis procedures in both years was approximately 6,300. During 2000,
more procedures were directed to our BMP customers and fewer procedures
were directed to our regional customers.  Only the revenue from
procedures performed for our regional customers are included in Blood
Services revenue.  The revenue from therapeutic apheresis procedures
performed for our BMP customers is included with BMP revenues. Additionally,
the cost of albumin, a protein replacement fluid used in certain therapeutic
procedures, and the price we charged our customers, decreased in 2000
compared to 1999.

Gross profit as a percentage of revenue was 33% ($2,219,000) in 2000,
compared to 26% ($1,848,000) in 1999. The increase in gross profit is
a result of better cost controls, improved efficiencies and changes in
the mix of sales from various regions.  The cost controls and
efficiencies resulted from better labor utilization by reducing
overtime and associated payroll expenses.

Gain on Disposition
-------------------

Previously, we operated a blood management program in St. Louis, Missouri
called Gateway.  This program was sold during 1997.  As part of the terms
of the sale we were entitled to receive a payment of $100,000 when the
program received an FDA establishment license.  During the first quarter
of 1999 we received this amount and accounted for this cash receipt as
an additional gain on the sale of Gateway.  During 2000, we did not
experience a similar gain.

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

General and administrative expenses were $3,401,000 for 2000, compared
to $3,041,000 for 1999.  The increase of $360,000 (12%) reflects
additional expenses incurred in connection with our sponsorship of the
California legislative initiative (AB2714) (See Liquidity and Capital
Resources) and expanded marketing efforts.  As a percentage of revenue
general and administrative expenses was 16% of revenue for both years.

Provision for income taxes
--------------------------

Prior to 1997 we incurred operating losses that we used to offset
current income for financial reporting and tax purposes.  Accordingly,
we recognized minimal tax expense.  Prior to December 31, 2000, we
accounted for these accumulated losses by determining their future
benefit, but did not recognize this benefit as an asset since our
ability to use these losses in future periods was uncertain.  During
the fourth quarter of 2000, we determined that it was more likely than not that
we would be able to utilize almost all of the tax benefits
associated with these net operating losses.  We recorded a deferred tax
asset for the expected future tax benefit.  The amount of the tax benefit
as of December 31, 2000 is $3,093,000.  Of this amount $1,239,000 is
recorded as a current asset and $1,854,000 is recorded as a non-current
asset.  In future periods we will report a more normal tax expenses for
financial reporting purposes.  The normalized tax expenses will reduce the
deferred tax assets.  We will continue to use our net operating losses to
offset future taxable income and minimize the amount of taxes we pay to the
federal and state agencies.  This adjustment will not impact our
future cash flows.


Year ended December 31, 1999 compared to the Year ended December 31,
1998
--------------------------------------------------------------------

Revenue and Gross Profit Overview
---------------------------------

Revenue for 1999 was $19,021,000 compared to $13,124,000 for 1998.
This increase of $5,897,000 (45%) was due to revenues generated by CBS,
which began operations in October 1998.  This was partially offset by
slightly lower California revenues from existing business lines.

Gross profit as a percentage of revenue was 21% ($4,026,000) for 1998,
compared to 24% ($3,122,000) in 1999.  The gross profit margins from
CBS were less than the margins from our existing business lines.
Therefore, while overall gross profits increased between years, the
gross profit margin decreased.

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

BMP revenue for 1999 was $7,827,000 compared to $3,592,000 during 1998.
The increase of $4,235,000 (118%) is primarily due to the acquisition
of CBS BMP activities in October 1998 plus the BMP at UCI, which opened
in June 1999.

Gross profit as a percentage of revenue was 13% ($1,049,000) for 1999
compared to 9% ($312,000) in 1998.  The increase in gross profit
dollars is due to CBS and the UCI BMP.  Additionally, the USC BMP
purchased more apheresis platelet products produced by our Sherman Oaks
facility.

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

Blood Products revenue for 1999 was $4,033,000 compared to $3,530,000
for 1998.  The increase of $503,000 (14%) is partially related to the
acquisition of CBS plus an increase in the volume of apheresis platelet
sales in California.  The increase in the amount of platelet units sold
was offset by a decline in the average selling price per platelet.

Gross profit as a percentage of revenue was 28% ($1,129,000) for 1999
compared to 32% ($1,136,000) in 1998.  Competition among apheresis
platelet suppliers intensified during 1999.  In response to the
increased competition, we decreased our platelet prices to certain
customers.


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

Blood Services revenue for 1999 was $7,161,000 compared to $6,002,000
for 1998.  The increase of $1,159,000 (19%) was primarily due to the
acquisition of CBS, which was offset by a decrease in California based
regional blood services.  The total number of therapeutic apheresis
procedures in California was consistent between 1999 (2,772) and 1998
(2,724).  However, in 1999 more procedures were performed for our BMP
customers and fewer procedures were performed for non-BMP customers.
Additionally, during 1998, we obtained an excess supply of albumin.
This albumin purchase was at a favorable price and was sold to non-
hospital customers.  During 1998, we sold $306,000 of albumin.  There
were no sales of albumin to non-hospital customers during 1999.

Gross profit as a percentage of revenue was 26% ($1,848,000) for 1999
compared to 28% ($1,674,000) in the same period in 1998.   The decrease
reflects CBS's lower operating margin.  In order to compete in certain
markets, CBS charges less for therapeutic apheresis procedures than
California based procedures.  California based Blood Services remained
constant at 30% for both years.

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

General and administrative expenses were $3,041,000 for 1999, compared
to $2,354,000 for 1998.  The increase of $687,000 (29%) reflects the
additional overhead costs required to support CBS's activities and
includes increases in personnel, insurance, interest expense on
borrowings used to fund the Coral acquisition and amortization of
goodwill.

Additionally, temporary help and other general and administrative expenses
increased during 1999 associated with integrating the Coral acquisition.
As a percentage of revenue, general and administrative expenses decreased to
16% of revenue in 1999 compared to 18% of revenue in 1998.

Quarterly Financial Data
------------------------

The following table presents unaudited statement of operations data for
each of the eight quarters ended December 31, 2000.  We believe that all
necessary adjustments have been included to fairly present the quarterly
information when read in conjunction with the consolidated financial
statements.  The operating results for any quarter are not necessarily
indicative of the results for any subsequent quarter.

                                    UNAUDITED
                        In thousands except per share data

<TABLE>
<CAPTION>
                                      2000                                       1999
                                 Quarter Ended                              Quarter Ended
                    ---------------------------------------   ---------------------------------------
                    March 31  June 30   Sept. 30   Dec. 31    March 31   June 30   Sept. 30   Dec. 31
                    --------  -------   --------   --------   --------   -------   --------   -------
<S>                 <C>       <C>       <C>        <C>        <C>        <C>       <C>        <C>
Revenues            $ 4,972   $ 5,373   $ 5,377    $ 5,790   $ 4,453    $ 4,994   $ 4,832    $ 4,742
Gross Profit          1,231     1,253     1,136      1,230       834      1,001     1,052      1,139
Pre-tax Income          340       342       317        450       248        210       281        346
Income Tax Provi-
 sion (benefit)          15        16        16     (2,948)        5          9        14          -
Net Income              325       326       301      3,398       243        201       267        346

EPS
  Basic             $  0.04    $ 0.04   $  0.04    $  0.45   $  0.03    $  0.03   $  0.04    $  0.04
  Diluted           $  0.04    $ 0.04   $  0.03    $  0.39   $  0.03    $  0.02   $  0.03    $  0.05

</TABLE>


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

At December 31, 2000, we had cash and cash equivalents and marketable
securities of $2,230,000 and working capital of $5,174,000.  During the
second quarter of 2000, we paid off our term note payable with a
remaining balance of $457,000 using cash and marketable securities.
Since the interest rate on the term note payable exceeded the average
interest rate on our marketable securities, paying off the note should
reduce future net interest expense.

We have two lines of credit with a commercial bank.  The first line of
credit is a working capital line.  We can borrow the lesser of 75% of
eligible accounts receivable or $2.0 million.  Interest is payable
monthly at a rate of prime plus 0.25% (9.75% as of December 31, 2000).
The second line of credit provides $350,000 for equipment purchases.
On an annual basis, we can convert equipment purchase loans into a
long-term, fully amortized note payable.  The note requires monthly
payments including interest equal to the bank's internal cost of funds
plus 3% (9.71% as of December 31, 2000).  These lines of credit are
secured by substantially all of our unencumbered assets and require us
to maintain certain financial covenants.  As of December 31, 2000 we
were in compliance with these covenants and there were no borrowings on
these lines.  In March 2001, we borrowed $117,000 to purchase
equipment.  These lines of credit mature on June 30, 2002.

During the second quarter of 2000, we experienced an increase in our
accounts receivable balances as certain customers delayed payments.  As
of December 31, 1999, accounts receivable were collected in an average
of 59 days.  As of June 30, 2000, accounts receivable were collected in
an average of 71 days.  In response to the slowdown in collections we
instituted certain collection procedures.  These procedures include
requiring stricter adherence to our credit terms, lowering the credit
limits to slow paying customers and more frequent customer contact.  As
a result of these efforts, days sales outstanding were reduced during
the third quarter 2000, to 65 days and down to 63 days by December 31,
2000.  We will continue our adherence to these new procedures.

In July 2000, we announced our intention to repurchase up to 15% of our
outstanding common stock, or up to 1.1 million shares.  Purchases are
made in the open market or in private transactions depending on price
and availability.  We are funding the purchases from cash and cash
equivalents and marketable securities along with profits generated in
the normal course of business.  As of December 31, 2000, we repurchased
432,000 shares at an average price of $1.53 per share.  Between January 1,
2001 and March 27, 2001, we repurchased an additional 223,000 shares at
an average price of $1.13 per share.

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 our Sherman Oaks center's paid
donors, have been exempted from this law by a series of state statutes.
Unless a new exemption is obtained, the existing exemption will expire
under its sunset provision of December 31, 2002. This could have a
material adverse effect on the Company's revenue and net income.
Revenue from paid platelet donors was $5.6 million in 2000.

In February 2000, we sponsored AB 2714 in the California Legislature.
The intent of this bill was to make permanent the provision of
California law allowing payment of apheresis platelet donors.  AB 2714
was overwhelmingly passed by the State Assembly and was submitted to
the State Senate.  The State Senate required significant modifications
to the bill before passage.  Rather than making the exemption
permanent, the Senate extended the current exemption for one additional
year.  The modified bill was enacted into law on September 7, 2000.
Unless a new exemption is obtained, the existing exemption will expire
under its sunset provision on December 31, 2002, which could have a
material adverse effect on our revenue and net income.

We anticipate that positive cash flow from our operations, cash and
investments on hand and borrowing from the bank lines of credit will be
sufficient to provide funding for our needs during the next 12 months,
including (i) expansion of BMP's and regional products and services,
(ii) the remaining costs of discontinued operations, (iii) additional
repurchases of our outstanding common stock and (iv) other working
capital requirements, including capital and operating lease
commitments.

Effective November 2, 1998, our common stock became quoted on the OTC
Bulletin Board.  Prior to that date, our common stock was listed on the
NASDAQ Small Cap Market ("NASDAQ"). Companies listed on the NASDAQ
SmallCap Market are required to maintain a minimum bid price of $1.00,
and our common stock was trading below the minimum price in excess of
the period prescribed by NASDAQ rules.   On October 29, 1998, our stock
was delisted from NASDAQ SmallCap. Although our common stock is quoted
on the OTC Bulletin Board, the NASDAQ delisting may impair the
liquidity of our common stock and our ability to raise capital.  In
order to be listed on the NASDAQ SmallCap, the price of our stock must
reach and maintain a price of $4.00 for a prescribed period.  The Company
meets all of the requirements for exchange listing except for share
price.  The Company intends to maintain all listing requirements.

All of our operations are profitable except for PIH BMP that incurred
certain start-up expenses this year and are expected to be profitable
in the future.  Our cash flow is positive. We periodically evaluate
the profitability and viability of each of our operating units.

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 our 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 our Company) are
forward-looking, such as statements relating to operational and
financing plans, competition, the impact of future price increases for
blood products, the effects of discontinued operations, demand for our
Company's products and services, and the anticipated outcome of litigated
matters. Such forward-looking statements involve important risks and
uncertainties, many of which will be beyond the control of our 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 our Company. These risks and uncertainties
include, but are not limited to, those relating to the ability of our
Company to develop and market profitable outsourcing programs, obtain
additional financing, to maintain profitability in certain Blood
Management Programs centers, to continue its practice of compensating
its donors, to retain existing customers, to improve the profitability
of our Company's other operations, to expand its operations, to renew
and comply with the covenants under its bank lines 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 sections of this 10-K and 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-3-16.

Item 9.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosures.
-------  -----------------------------------------------------------

None.

                              PART III


Item 10.  Directors and Executive Officers of the Registrant.
--------  ---------------------------------------------------

The information required by this Item is set forth under the caption
"Election of Directors" in the Company's definitive Proxy Statement to
be filed with the Securities and Exchange Commission pursuant to Regulation
14A within 120 days after the end of the Company's last fiscal year 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 pursuant to Regulation
14A within 120 days after the end of the Company's last fiscal year 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 pursuant to Regulation
14A within 120 days after the end of the Company's last fiscal year 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 pursuant to Regulation
14A within 120 days after the end of the Company's last fiscal year and is
incorporated herein by this reference as if set forth in full.


                               PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.
--------  ----------------------------------------------------------------

The following are filed as part of this Report:

(a) 1.	Financial Statements

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

    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.

    3.	Exhibits

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

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

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

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

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

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

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

4.3	Warrant Agreement between the Registrant and 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.

4.4     Warrant Agreement between the Registrant and Kibel, Green,
        Inc., dated March 4, 1999--incorporated by reference to
        Exhibit 4.1 to Form 10-Q of the Registrant for the quarter
        ended March 31, 1999.

4.5     Warrant Agreement between the Registrant and Stuart Dinney,
        dated March 4, 1999 -- incorporated by reference to Exhibit
        4.2 to Form 10-Q of the Registrant for the quarter ended
        March 31, 1999.

4.6     Warrant Agreement between the Registrant and Lori Terra-
        Vassalo, dated March 4, 1999 -- incorporated by reference to
        Exhibit 4.8 to Form 10-K of the Registrant for the year ended
        December 31, 1999.

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

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

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

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

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

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

10.3	Office Building Lease dated August 21, 1998 between the
        Registrant and Tar Asset Addison Place, L.P.--incorporated
        by reference to Exhibit 10.1 to Form 10-Q for the quarter
        ended September 30, 1998.

10.4	Revolving Credit Loan and Security Agreement between the
        Registrant and Comerica Bank dated March 1, 2000 --
        incorporated by reference to Exhibit 10.1 to Form 10-Q of
        the Registrant for the quarter ended March 31, 2000.

10.5	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.

10.6	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.

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


10.8	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.

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

10.10	Employment agreement between the Registrant and William D.
        Nicely dated June 1, 2000 --incorporated by reference to
        Form 10-Q for the quarter ended June 30, 2000.

10.11	Services Agreement between the Registrant and Alan C.
        Darlington, dated March 10, 1999 -- incorporated by reference
        to Exhibit 10.1 of Form 10-Q of the Registrant for the
        quarter ended March 31, 1999.

10.12	Employment Agreement between the Registrant and Joshua Levy
	dated March 22, 2000.

11	Computation of earnings (loss) per common equivalent share

21  	Subsidiaries of the Registrant

23	Consent of Arthur Andersen LLP


(b) 	Reports on Form 8-K.

	None.


<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:  April 30, 2001				   \s\ David Fractor
                                                ---------------------------
                                                David Fractor, 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 30th day of April
2001.


          Signature                     Title

\s\  Alan C. Darlington
-----------------------------            Chairman of the Board
Alan C. Darlington			 (Principal Executive Officer)


\s\  William D. Nicely                   Chief Executive Officer and Director
-----------------------------
William D. Nicely


\s\  David Fractor                       Vice President Finance, Chief
-----------------------------            Financial Officer
David Fractor                            (Principal Financial and Accounting
                                         Officer)

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


\s\  Julian L. Steffenhagen              Director
-----------------------------
Julian L. Steffenhagen


\s\  Robert L. Johnson                   Director
-----------------------------
Robert L. Johnson

<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, 2000 and
December 31, 1999...........................................      F-3

For the years ended December 31, 2000, 1999 and 1998:

     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, 2000 and 1999, and the related consolidated statements of
income, shareholders' equity and cash flows for each of the three years
in the period ended December 31, 2000. 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 auditing standards generally
accepted in the United States.  Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated 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, 2000 and 1999,
and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2000 in conformity
with accounting principles generally accepted in the United States.




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



Los Angeles, California
February 23, 2001

                                 F-2

<PAGE>

Part I.  Financial Information
-------------------------------

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


                            HEMACARE CORPORATION AND SUBSIDIARIES
                                  CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

				                 December 31,      December 31,
                                                    2000               1999
                                                -------------     ------------
<S>                                             <C>               <C>
		ASSETS

Current assets:
  Cash and cash equivalents.................... $  1,362,000      $  1,490,000
  Marketable securities........................      868,000           778,000
  Accounts receivable, net of allowance for
   doubtful accounts of $204,000 (2000) and
   $256,000 (1999).............................    3,996,000         3,090,000
  Product inventories and supplies.............      723,000           781,000
  Prepaid expenses.............................      187,000           202,000
  Deferred taxes...............................    1,239,000                 -
                                                -------------     -------------
           Total current assets................    8,375,000         6,341,000

Plant and equipment, net of accumulated
  depreciation and amortization of
  $1,988,000 (2000) and $1,920,000 (1999)......      799,000           719,000
Goodwill, net of amortization of
  $115,000 (2000) and $62,000 (1999)...........      415,000           468,000
Deferred taxes.................................    1,854,000                 -
Other assets...................................       34,000            46,000
                                                -------------     -------------
                                                $  11,477,000      $  7,574,000
                                                =============     =============
  LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable............................. $  2,044,000      $  1,305,000
  Accrued payroll and payroll taxes............      874,000           744,000
  Other accrued expenses.......................      156,000           235,000
  Current obligations under capital leases.....       51,000            63,000
  Current notes payable........................            -           138,000
  Reserve for discontinued operations..........       76,000            81,000
                                                -------------     -------------
           Total current liabilities...........    3,201,000         2,566,000

Obligations under capital leases, net
  of current portion...........................       46,000           188,000
Notes payable, net of current portion..........            -           353,000
Other long-term liabilities....................       27,000            27,000
Commitments and contingencies..................
Shareholders' equity:
  Preferred stock no par value - 5,000,000
   shares authorized, 450,000 issued and
   outstanding in 1999.........................            -            75,000
  Common stock, no par value - 20,000,000
    shares authorized, 7,689,657 issued and
    outstanding in 2000 and 7,475,082 issued
    and outstanding in 1999....................   13,164,000        13,676,000
  Accumulated deficit..........................   (4,961,000)       (9,311,000)
                                                -------------     -------------
           Total shareholders' equity..........    8,203,000         4,440,000
                                                -------------     -------------
                                                $ 11,477,000      $  7,574,000
                                                =============     =============

</TABLE>

	      The accompanying notes are an integral part of these
                        consolidated financial statements.
				     F-3

<PAGE>
                    HEMACARE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>

	                                        Years ended December 31,
                                          2000           1999           1998
                                      ------------   ------------   ------------
<S>                                   <C>            <C>            <C>
Revenues:
  Blood management programs.........  $  9,727,000   $  7,827,000   $ 3,592,000
  Regional operations
    Blood products..................     4,967,000      4,033,000     3,530,000
    Blood services..................     6,818,000      7,161,000     6,002,000
                                      -------------  -------------  ------------
    Total revenue...................    21,512,000     19,021,000    13,124,000

Operating costs and expenses:
  Blood management programs.........     8,167,000      6,778,000     3,280,000
  Regional operations
    Blood products..................     3,896,000      2,904,000     2,394,000
    Blood services..................     4,599,000      5,313,000     4,328,000
                                      -------------  -------------  ------------
    Total operating costs and
      expenses......................    16,662,000     14,995,000    10,002,000


    Gross profit....................     4,850,000      4,026,000     3,122,000

General and administrative expenses.     3,401,000      3,041,000     2,354,000

Gain on sale of Gateway Community
  Blood Program.....................             -        100,000             -
                                      -------------  -------------  ------------
Income from operations before
  income taxes......................     1,449,000      1,085,000       768,000
Provision (benefit) for income
   taxes............................    (2,901,000)        28,000        23,000
                                      -------------  -------------  ------------
Net Income..........................   $ 4,350,000   $  1,057,000   $   745,000
		                       ============= =============  ============

Income per share:
 Basic..............................  $       0.57   $       0.14   $      0.10
                                      =============  =============  ============

 Diluted............................  $       0.50   $       0.13   $      0.10
                                      =============  =============  ============

Weighted average shares outstanding
 - basic............................     7,567,000      7,393,000     7,268,000
                                      =============  =============  ============

Weighted average shares outstanding
 - diluted..........................     8,776,000      8,158,000     7,373,000
                                      =============  =============  ============

</TABLE>

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

<PAGE>
                    HEMACARE CORPORATION AND SUBSIDIARIES
	       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
             FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>

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


Balances at December
 31, 1997...........             -  $      -     7,190,710  $13,515,000   $(11,113,000)   $ 2,402,000

Issuance of common
 stock for employee
 401(k) and
 incentive bonus
 plans..............             -         -        90,410       42,000              -         42,000
Issuance of pre-
 ferred stock.......       450,000    75,000             -            -              -         75,000
Non-cash
 compensation.......             -         -             -       27,000              -         27,000
Net income..........             -         -             -            -        745,000        745,000
		          ---------  --------  -----------   ------------  -------------  ------------
Balances at December
 31, 1998...........       450,000    75,000     7,281,120    13,584,000    (10,368,000)    3,291,000

Issuance of common
 stock for employee
 401(k) and
 incentive bonus
 plans..............                                96,462        44,000              -        44,000
Private placement...            -         -         97,500         9,000              -         9,000
Non-cash
 compensation.......            -         -              -        39,000              -        39,000
Net income..........            -         -              -             -      1,057,000     1,057,000
                          --------  --------   -----------   ------------  -------------   -----------
Balances at December
 31, 1999...........      450,000    75,000      7,475,082    13,676,000     (9,311,000)    4,440,000

Issuance of common
 stock for employee
 401(k) and
 incentive bonus
 plans..............                               115,133        75,000              -        75,000
Preferred stock
 conversion.........     (450,000)  (75,000)       500,000        75,000              -             -
Stock repurchased and
 warrants redeemed..                              (439,558)     (697,000)             -      (697,000)
Stock options and
 warrants exercised.            -         -         39,000        35,000              -        35,000
Net income..........            -         -              -             -      4,350,000     4,350,000
                          --------  --------    -----------  ------------  -------------   -----------
Balances at December
 31, 2000...........            -   $     -      7,689,657   $13,164,000   $ (4,961,000)   $ 8,203,000
                          ========  ========    ===========  ============  =============   ============

</TABLE>

	                           The accompanying notes are an integral part of these
		                              consolidated financial statements.

				                                F-5
<PAGE>   29
                                   HEMACARE CORPORATION AND SUBSIDIARIES
                                    CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>

                                                             Years ended December 31,
                                                      2000            1999          1998
                                                   ------------   ------------  -------------
<S>                                                <C>            <C>           <C>
Cash flows from operating activities:
 Net Income......................................  $ 4,350,000    $ 1,057,000   $   745,000
 Adjustments to reconcile net income
  to net cash provided by operating activities:
    Recognition of deferred tax assets...........   (3,093,000)             -             -
    Depreciation and amortization................      198,000        334,000       175,000
    Gain on sale of assets.......................      (51,000)             -             -
    Issuance of common stock and options for
     compensation................................       75,000         83,000        69,000

 Changes in operating assets and liabilities:
    (Increase) decrease in accounts receivable...     (906,000)       131,000      (415,000)
    Decrease (increase) in inventories, supplies
     and prepaid expenses........................       73,000       (110,000)     (203,000)
    (Increase) decrease in other assets, net.....            -        (10,000)        6,000
    Increase (decrease) in accounts payable,
     accrued expenses, and other liabilities.....      790,000       (467,000)     (213,000)
    (Expenditures for) discontinued
     operations..................................       (5,000)       (28,000)       (6,000)
                                                   ------------   ------------  ------------
    Net cash provided by operating activities....     1,431,000       990,000       158,000

Cash flows from investing activities:
 Purchase of assets, net of cash acquired........            -              -      (555,000)
 Decrease in other assets........................       12,000         19,000        16,000
 Proceeds from sale of plant and equipment.......       17,000              -             -
 (Increase) decrease in marketable securities....      (90,000)      (490,000)       75,000
 (Purchase) of plant and equipment,net...........     (285,000)       (81,000)      (23,000)
                                                   ------------   ------------  ------------
  Net cash (used in) by investing activities.....     (346,000)      (552,000)     (487,000)

Cash flows from financing activities:
 Proceeds from issuance of common stock..........       35,000              -             -
 Repurchase of common stock......................     (697,000)             -             -
 Borrowings from note payable....................            -              -       600,000
 Principal payments on line of credit, net and
   capital leases................................     (551,000)      (320,000)     (148,000)
                                                   ------------   ------------  ------------
 Net cash used in financing activities...........   (1,213,000)      (320,000)      452,000
                                                   ------------   ------------  ------------

 (Decrease) increase in cash and cash
  equivalents....................................     (128,000)       118,000       123,000
 Cash and cash equivalents at beginning of
   period........................................    1,490,000      1,372,000     1,249,000
                                                   ------------   ------------  ------------
 Cash and cash equivalents at end of period......  $ 1,362,000    $ 1,490,000   $ 1,372,000
                                                   ============   ============  ============

Supplemental disclosure:
 Interest paid...................................  $    22,000    $    93,000   $    23,000
                                                   ============   ============  ============

 Income taxes paid...............................  $   133,000    $    39,000   $         -
                                                   ============   ============  ============

Items not impacting cash flow:
 Increase in capital lease obligations...........  $         -    $   401,000   $   629,000
                                                   ============   ============  ============
 Liability for issuance of stock and warrants
  in connection with purchase of assets..........  $         -    $         -   $    22,000
                                                   ============   ============  ============
 Issuance of preferred stock in the purchase
  of assets......................................  $         -    $         -   $    75,000
                                                   ============   ============  ============

 Termination of capital leases...................  $    94,000    $   769,000   $         -
                                                   ============   ============  ============

 Conversion of preferred stock into common stock.  $    75,000    $         -   $         -
                                                   ============   ============  ============
</TABLE>

		     The accompanying notes are an integral part of these
				consolidated financial statements.
                                              F-6


<PAGE>

                          HemaCare Corporation
                Notes to Consolidated Financial Statements

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

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

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

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

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

Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles in the
United States 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 and Cash Equivalents: The Company considers all highly
liquid investments with an original maturity of three months
or less to be cash equivalents.

Marketable Securities:  Marketable securities consists
principally of certificates of deposits with approximate
fair market value.  Substantially all of the Company's
investments are managed by a large financial institution.
The Company accounts for its short term investments in
accordance with Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." The Company classifies its
investments as held-to-maturity which are recorded at cost.
Realized gains and losses are included in interest and other
income and are derived using the specific identification method
for determining the cost of investments sold. Dividend and
interest income is recognized when earned.

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 capital leases is equal to the Company's borrowing rate, and
therefore their carrying value approximates fair value.

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

Inventories and Supplies: Inventories consist of Company-
manufactured platelets and whole blood components as well as
component blood products purchased for resale.  Supplies consist
primarily of medical supplies used to collect and manufacture
products and to provide 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 vehicles are depreciated
using the straight-line method over three to ten years.  Leasehold
improvements are amortized over the lesser of the their useful
life or the length of the lease, ranging from three to five years.
Capital equipment leases are recorded at the lower of the present
value of the minimum lease payments or the fair value of the
equipment at the beginning of the lease term.  The cost of normal
repairs and maintenance are expensed as incurred.

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

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

Per Share Data: Earnings per share-basic is computed by dividing
net income by the weighted average shares outstanding.  Earnings
per share-diluted is computed by dividing net income by the
weighted average number of shares outstanding including the
diluted effect of options, warrants and preferred stock.

Warrants and options to purchase 575,000, 863,800 and 1,443,300
shares of common stock outstanding at December 31, 2000, 1999 and
1998, 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.

Concentration of risk: Sales of products and services to an
unaffiliated hospital group accounted for $2,221,000 (12%) and
$2,051,000 (16%) of the Company's revenues in 1999 and 1998
respectively.  During 2000, no single customer accounted for more
than 10% of the Company's revenues.  At December 31, 2000
and 1999, no customer accounted for over 10% of the Company's
accounts receivable.

Reclassification:  Certain 1999 amounts have been reclassified to
conform to 2000 presentations.

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

In October 1998, the Company purchased, through its wholly owned
subsidiary CBS, certain assets of Coral Therapeutics, Inc.
("Coral") from Coral's secured lender.  Prior to the
acquisition, Coral provided blood services to major university,
teaching and community hospitals in Maine, New Hampshire,
Massachusetts, Connecticut, New York, North Carolina and other
states.  The acquired assets included (i) approximately $1.6
million in accounts receivable, $600,000 of which were over 90
days old, (ii) inventory and supplies with a net book value of
approximately $113,000 (iii) fixed assets with a net book value of
approximately $248,000 and (iv) Coral's rights under its hospital
contracts. Concurrent with the closing of the asset purchase,
HemaCare extended offers of employment to most of Coral's
employees.

The acquisition was accounted for as a purchase, and the
operations of the acquired assets are included in the Company's
consolidated operations for the period from the acquisition date
(October 23, 1998). The acquisition price of the assets was
$950,000 in cash and 450,000 shares of HemaCare's Series B senior
convertible preferred stock.  The Company financed the acquisition
by (i) utilizing existing cash balances, (ii) borrowing $600,000
on its line of credit and (iii) issuing 450,000 shares of HemaCare
Series B senior convertible preferred stock. In addition, warrants for
35,000 shares of HemaCare common stock exercisable at $0.31 per
share, which was the current market price at the time of issuance,
were issued to consultants who assisted in the acquisition.

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

Plant and equipment consists of the following:



                                                    December 31,
                                            ---------------------------
                                              2000            1999
                                            ------------   ------------

Furniture, fixtures and equipment           $ 2,584,000    $ 2,444,000
Leasehold improvements                          203,000        195,000
                                            ------------   ------------
                                              2,787,000      2,639,000
Less accumulated depreciation and
 amortization                                (1,988,000)    (1,920,000)
                                            ------------   ------------
                                            $   799,000    $   719,000
                                            ============   ============


Equipment with a cost of $401,000 in 1999 and $1,369,000 in 1998
was financed by capital leases. In 1999, the Company terminated
certain capital leases with a cost of $931,000. In 2000, there was no
equipment financed by capitalized leases.

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

Line of Credit

As of December 31, 1999, the Company maintained a line of credit
with a commercial bank secured by its accounts receivable,
inventory and equipment.  Under the terms of the agreement, the
Company was able to borrow up to the lesser of $1.2 million or 70%
of eligible accounts receivable at an interest rate of prime plus
0.5% per annum.  The Company was required to maintain certain
financial covenants.  As of December 31, 1999, there were no
balances outstanding under this line of credit and the Company was
in compliance with all covenants of the borrowing agreement.

During 2000, the Company replaced the above line of credit with
two new lines of credit agreements, one relating to working
capital and other for equipment purchases.  Under the terms of the
working capital agreement, the Company may borrow the lesser of
75% of eligible accounts receivable or $2.0 million at an interest
rate of prime plus 0.25% (9.75% as of December 31, 2000).  The
Company has a line of credit of $350,000 for equipment
purchases.  Borrowings on the equipment purchase line of credit
may be converted annually to a fully amortized note payable.
This equipment purchase line of credit bears interest at the rate
of the bank's internal cost of funds plus 3.0% (9.71% as of
December 31, 2000).  Both of these lines of credit mature on
June 30, 2002.  The Company must maintain certain financial ratios
and covenants with these line of credit agreements. As of December
31, 2000, there were no borrowings on either of these lines of
credit and the Company was in compliance with all loan covenants.

Note Payable

In 1998 the Company entered into a term note with a bank, payable
in 48 monthly payments of principal and interest of approximately
$15,000 through February 2003. The note provided for interest at
the prime rate plus one percent. During 2000, the Company paid the
remaining balance on this note.

The Company incurred $18,000, $42,000 and $9,000 of interest
expense in connection with the note payable and line of credit
agreement in 2000, 1999 and 1998, respectively.

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

The Company has entered into several capital leases for equipment.

Future minimum payments are as follows:

Year Ending December 31,

2001                          $ 60,000
2002                            25,000
2003                            19,000
2004                             8,000
                              ---------
Total minimum lease payments   112,000
Less:  Amount representing
        interest               (15,000)
                              ---------
Present value of minimum
 lease payments                 97,000
Less current portion           (51,000)
                              ---------
                              $ 46,000
                              =========

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


Year ending December 31,

2001                      $  335,000
2002                         291,000
2003                          55,000
2004                          45,000
                          ----------
                          $  726,000
                          ==========


Total rent expense under all operating leases was $497,000,
$463,000 and $424,000 for the years ended December 31, 2000, 1999
and 1998, respectively.

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

The Provision (benefit) for income taxes for the years ended December
31, 2000, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                       2000        1999          1998
                   -----------    --------      --------
<S>                <C>            <C>           <C>
Current taxes:
   Federal.......  $    29,000    $   9,000     $  20,000
   State.........       56,000       19,000         3,000
                   ------------   ----------    ----------
                        85,000       28,000        23,000

Deferred taxes:
   Federal.......   (2,633,000)           -             -
   State.........     (353,000)           -             -
                   ------------   ----------    ----------
                    (2,986,000)   $       -     $       -

Provision (bene-
 fit) for income
 taxes...........  $(2,901,000)   $  28,000     $  23,000
                   ============   ==========    ==========

</TABLE>

Differences between the provision (benefit) for income taxes and
income taxes at statutory federal income tax rate for the years
ended December 31, 2000, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>

                                      2000        1999         1998
                                   ----------   ---------   ----------
<S>                                <C>          <C>         <C>
Income tax expense at federal
  statutory rate.................  $   493,000  $ 369,000   $ 261,000
State income taxes, net of
  federal benefit................       87,000     65,000      46,000
Change in valuation allowance....   (3,650,000)  (531,000)    324,000
Permanent differences............      146,000    120,000      32,000
Other............................       23,000      5,000       8,000
                                   ------------ ----------  ----------
Income tax expense (benefit).....  $(2,901,000) $  28,000   $  23,000
                                   ============ ==========  ==========

</TABLE>

The Company has recorded a net deferred tax asset of $3,093,000 at December 31,
2000.  The components of the net deferred tax asset at December 31, 2000 and
1999 are as follows:

<TABLE>
<CAPTION>

                                      2000           1999
                                   -----------     -----------
<S>                                <C>             <C>
Current:
Reserves.......................... $   76,000      $    96,000
Accrued expenses and other........    238,000          262,000
Net operating loss................    925,000                -
Valuation allowance...............          -         (358,000)
                                   ----------      ------------
                                   $1,239,000      $         -
                                   ==========      ============
Noncurrent:
Net operating loss................ $1,176,000      $ 2,572,000
Depreciation and amortization.....    199,000          240,000
Tax credit carryforward...........    866,000          866,000
Other.............................     13,000           14,000
Valuation allowance...............   (400,000)      (3,692,000)
                                   -----------     ------------
                                   $1,854,000      $         -
                                   ===========     ============
</TABLE>

A valuation allowance is recorded if the weight of available
evidence suggests it is more likely that not that some portion or
all of the deferred tax asset will not be recognized. In previous
periods the Company provided a valuation allowance against all of its
deferred tax assets.  A determination was made in the fourth quarter
of 2000 that, based on recent historical and expected future
operating results it is more likely than not that the Company will
be able to realize a significant portion of its deferred tax assets.

At December 31, 2000, the Company had net operating loss
carryforwards available for Federal income and state tax purposes
of $6,100,000 and $400,000, respectively, expiring through 2010.
At December 31, 2000, the Company had federal income tax credit
carryforwards of approximately $500,000 expiring through
2010, and state tax credit carryforwards of approximately $300,000
which are not subject to expiration.

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.


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

Stock Options

In July 1996, the Company's 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 2,000,000 shares may be granted under the terms of the
1996 Plan.  The term of the options granted is determined by the
Company's Board of Directors, but in no event may be longer than
ten years.  The exercise price of options granted generally is
required to be not less than the fair market value of the common
stock on the date of grant. Options granted to employees must vest
at a rate of at least 20% per year. The 1986 Plan expired in July
1996.  At December 31, 2000, there were no options outstanding
under the 1986 Plan.

The table below summarizes transactions in the 1986
Plan and the 1996 Plan (together, the "Plans").


<TABLE>
<CAPTION>
                                       2000               1999                1998
                               ------------------   ----------------   ----------------
                               Shares       Price   Shares    Price    Shares    Price
                               ---------   ------  ---------  ------   --------  ------
<S>                            <C>         <C>     <C>        <C>      <C>       <C>

Outstanding at beginning
  of year....................  1,321,300   $0.89     923,300  $1.12     495,800  $2.36
Granted......................    145,000    1.85     505,000   0.55     535,500   0.67
Exercised....................    (26,500)  (0.63)          -      -           -      -
Canceled.....................    (74,800)  (0.63)   (107,000) (2.38)   (107,500) (3.58)
                               ----------  ------   --------- ------   --------- ------
Outstanding at end of year...  1,365,000   $0.86   1,321,300  $0.89     923,300  $1.12
                               ==========  ======  ========== ======   ========= ======
Exercisable at end of year...    862,000   $0.85     520,800  $1.12     386,300  $1.61
                               ==========  ======  ========== ======   ========= ======

</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, 2000:


<TABLE>
<CAPTION>


                                 Options Outstanding        Options Exercisable
                             ----------------------------   -------------------
Range of  Exercise Price       Shares      Life     Price     Shares    Price
------------------------     ---------   --------   -----    --------  -------
<S>                          <C>         <C>        <C>      <C>      <C>
$0.41 to $0.75               1,025,000   7.7 years  $0.58    652,500  $0.56
$0.76 to $1.50                 215,500   4.0 years   1.31    138,000   1.46
$1.51 to $2.44                 125,000   8.5 years   2.35     72,000   2.32
                             ---------              -----    -------  -----
                             1,365,000              $0.86    862,000  $0.85
                             =========              =====    =======  =====
</TABLE>

The Company grants stock options to employees and others in
accordance with the terms of its Plans.  Warrants are granted upon
the Board of Directors' approval.  The Company has elected to
adopt SFAS 123 "Accounting for Stock-Based Compensation" for
disclosure purposes only and applies the provisions of APB Opinion
No. 25. The Company recognized $39,000 and $27,000 of compensation
expense related to consulting options in 1999 and 1998,
respectively. No compensation expense was recognized during 2000.
Had compensation expense for all options granted been recognized
in accordance with SFAS 123, the Company's net income and net
income per share would have been as follows:


<TABLE>
<CAPTION>
                                        Years ended December 31,
                                    2000          1999        1998
                                 -----------  -----------  ----------
<S>                              <C>          <C>          <C>
Pro forma net income...........  $4,184,000    $ 870,000    $ 617,000
Pro forma basic net income
 per share.....................  $    0.55     $    0.12    $    0.08
Pro forma diluted net income
 per share.....................  $    0.48     $    0.11    $    0.08

</TABLE>

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:

<PAGE>


<TABLE>
<CAPTION>

                                       Years ended December 31,
                                    2000         1999         1998
                                ------------  -----------  -----------
<S>                             <C>           <C>          <C>
Expected life.................  3 Years        3 Years     3 Years
Expected volatility...........    60%            80%         75%
Interest rate.................   6.2%           5.5%        5.5%
Dividend yield................    0 %            0 %         0 %

</TABLE>

Warrants
--------

At December 31, 2000, 1999 and 1998, the Company had a total of
540,000, 600,000 and 520,000 warrants to purchase common stock
outstanding, at weighted average exercise prices of $4.54, $4.17
and  $4.89, respectively. Of the outstanding warrants, 540,000,
540,000 and 500,000 were exercisable at weighted average exercise
prices of $4.54, $4.54 and $4.96 in 2000, 1999 and 1998,
respectively.

At December 31, 2000, 1999 and 1998 50,000, 50,000 and 70,000
warrants for consulting services were outstanding, respectively.
The warrants outstanding at December 31, 2000, were exercisable
with exercise prices between $3.13 and $3.69 and expire through
June 2002.

In 1993, the Company issued warrants to purchase 400,000 shares of
stock at $5.50 per share in connection with an acquisition of a
license. (See Note 12.) These options expire in February
2003.

During 2000, 12,500 warrants previously issued for consulting
services were exercised with an average price of $1.33 per share.
No warrants were exercised in 1999 or 1998.

Preferred Stock
---------------

In October 1998 as part of the purchase price of the acquisition
of Coral (see Note 3), 450,000 shares of no par value Senior
Convertible Series B preferred stock ("Series B Preferred") were
issued to the seller. The Series B Preferred was convertible into
500,000 shares of HemaCare common stock, at the option of the
holder at any time after one year from the date of issuance.  In
December 2000, the holder of the Series B Preferred converted all
of the preferred stock into 500,000 share of HemaCare common
stock.

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

HemaCare's Employee Salary Deferral Plan qualifies under Section
401(k) of the Internal Revenue Service Code (the "401(k) Plan").
Eligible employees may contribute up to 12 percent of their pre-
tax salaries, subject to certain limitations.  HemaCare may elect
to match a portion of the employees' contribution. In 2000, 1999
and 1998, the Company elected to match 50 percent of each
participant's contribution, up to 5% of the participants' annual
salary, with HemaCare common stock.

During 2000, 1999 and 1998, HemaCare issued 114,275 ($75,000),
96,462 shares ($44,000) and 90,410 shares ($42,000) of common
stock as matching contributions for the 1999, 1998 and 1997 plan
years, respectively.  Subsequent to December 31, 2000, the Company
approved the issuance of approximately 98,578 shares ($99,000) in
2001 as matching contributions for the 2000 plan year.

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

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 series of state statutes, which, would have expired on December
31, 2001.

In February 2000, AB 2714, sponsored by the Company, was
introduced in the California Legislature.  The intent of this
bill was to make permanent the provision of California law
allowing payment of apheresis platelet donors.  AB 2714 was
passed by the State Assembly and was submitted to the State
Senate.  The State Senate required significant modifications to
the bill before passage.  Rather than making the exemption
permanent, the Senate extended the current exemption for one
additional year.  The modified bill was enacted into law on
September 7, 2000.  Unless a new exemption is obtained, the
existing exemption will expire under its sunset provision on
December 31, 2002, which could have a material adverse effect on
the Company's revenue and net income. During 2000, 1999 and 1998
revenues from apheresis platelets were $5,593,000, $4,764,000 and
$4,067,000, respectively.

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.

Healthcare 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.

The Company entered into a long-term commitment with a vendor to
purchase kits used to produce blood products from blood donors
and to provide blood services to patients.  Under the terms of
the agreement, the Company is obligated to purchase $9.7 million
of kits at established prices through May 2003.

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

Business Segments

The Company operates in three business segments as follows:
-   Blood Management Programs ("BMP"); Outsource programs which
    provide all or a major portion of the blood banking functions
    to a hospital.

-   Blood Products; Apheresis and whole blood derived products.

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

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

<TABLE>
<CAPTION>

                                    BMP       Blood Products   Blood Services
                                -----------   --------------   --------------
<S>                             <C>           <C>              <C>
2000
----
Depreciation and amortization   $  52,000     $ 13,000         $  26,000
Expenditures for fixed assets     119,000       35,000            31,000

1999
----
Depreciation and amortization   $ 142,000     $ 29,000         $ 114,000
Expenditures for fixed assets      11,000        3,000             3,000

1998
----
Depreciation and amortization   $  56,000     $ 18,000         $  52,000
Expenditures for fixed assets     484,000        4,000           338,000

</TABLE>


Management evaluates segment performance based primarily on
operating income. Other revenue and expenses are not allocated to
the segments. The accounting policies of the segments are the
same as those described in the significant accounting policies.

Related Party Loan
------------------

In 1995 and 1994, the Company made a series of personal loans to
Dr. Joshua Levy, then an officer and director of the Company
totaling $98,000.  The proceeds of these loans were used to
refinance existing debt that was collateralized by HemaCare stock
owned by Dr. Levy.  In January 1996, these individual notes were
consolidated into a promissory note, collateralized by HemaCare
stock owned by Dr. Levy, which accrued interest at a rate equal to
the rate paid by the Company under its line of credit. The Company
received installment payments in accordance with the terms of this
note of $15,000 in January 1996 and January 1997. Effective July
31, 1997, the Company entered into an agreement with Dr. Levy that
superceded the 1996 note. Under the terms of this agreement, the
Company agreed to forgive the remaining balance of Dr. Levy's
note, including interest accrued at a 10% annual rate, over a
five-year period so long as Dr. Levy remains employed by the
Company.  As of December 31, 2000, the balance remaining on this
note receivable was $35,000.

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

In November 1995, the Company discontinued the operations of HBI,
including the research and development of Immupath and the
associated specialty plasma business.

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 two patients receiving Immupath treatments.
The Company has a reserve of $76,000 at December 31, 2000, for costs
relating to the two patients receiving Immupath treatments. The
Company does not expect discontinued operations to have a material
impact on future operating results.

<PAGE>

          Report of Independent Public Accountants on
                 Financial Statement Schedule



To the Shareholders and Board of Directors of HemaCare
Corporation:


We have audited in accordance with auditing standards, generally
accepted in the United States, 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 23, 2001.  Our audit was made for the purpose of forming an
opinion on those statements taken as a whole.  The schedule listed
in the index of consolidated financial statements is the
responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic consolidated
financial statements.  This schedule has been subjected to the
auditing procedures applied in the audit of the basic consolidated
financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth
therein in relation to the basic consolidated financial statements
taken as a whole.



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




Los Angeles, California
February 23, 2001

                                S-1
<PAGE>

                             HEMACARE CORPORATION
               SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS


             For The Years Ended December 31, 2000, 1999 and 1998



<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,
2000 - Allowance for
uncollectible accounts        $ 256,000     $(21,000)                  $  31,000    $ 204,000


Year ended December 31,
1999 - Allowance for
uncollectible accounts        $ 596,000     $     --     $(183,000)(1) $ 157,000    $ 256,000

Year ended December 31,
1998 - Allowance for
uncollectible accounts        $  81,000     $     --     $ 515,000 (2) $      --    $ 596,000

</TABLE>

1)   Represents goodwill adjustment of acquired receivables.
2)   Represents allowance for doubtful accounts of acquired assets
     at date of acquisition.


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

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

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

 4.3    Warrant Agreement between the Registrant and 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....................................

 4.4    Warrant Agreement between the Registrant and Kibel, Green,
        Inc., dated March 4, 1999--incorporated by reference to
        Exhibit 4.1 to Form 10-Q of the Registrant for the quarter
        ended March 31, 1999.......................................

 4.5    Warrant Agreement between the Registrant and Stuart Dinney,
        dated March 4, 1999--incorporated by reference to Exhibit
        4.2 to Form 10-Q of the Registrant for the quarter ended
        March 31, 1999.............................................


<PAGE>  43

 4.6    Warrant Agreement between the Registrant and Lori Terra-
        Vasslo, dated March 4, 1999 -- incorporated by reference
        to Exhibit 4.8 to Form 10-K of the Registrant for the
        year ended December 31, 1999...............................


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

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

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

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


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

10.2	1996 Stock Incentive Plan 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    Office Building Lease dated August 21, 1998 between the
        Registrant and Tar Addison Place, LP--incorporated by
        reference to Exhibit 10.1 to  Form 10-Q of the Registrant
        for the quarter ended September 30, 1998...................

10.4    Revolving Credit Loan and Security Agreement between the
        Registrant and Comerica Bank dated March 1, 2000 -- incorp-
        orated by reference to Exhibit 10.1 to Form 10-Q for the
        quarter ended March 31, 2000.......8.......................

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

<PAGE>  44

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

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

10.8    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 ......................

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

10.10   Employment Agreement between the Registrant and William
        D. Nicely, dated June 1, 2000 -- incorporated by reference
        to Form 10-Q for the quarter ended June 30, 2000............

10.11   Services Agreement between the Registrant and Alan C.
        Darlington, dated March 10, 1999--incorporated by reference
        to Exhibit 10.1 of Form 10-Q of the Registrant for the
        quarter ended March 31, 1999................................

10.12   Employment Agreement between the Registrant and Joshua Levy
        dated March 22, 2000........................................Filed herewith
                                                                    Electronically
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

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