8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 12, 2005

HEMACARE CORPORATION

(Exact name of registrant as specified in its charter)

California	000-15223	95-3280412
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

21101 Oxnard Street, Woodland Hills, CA 91367

(Address of principal executive offices)      (Zip Code)

(Registrant’s telephone number, including area code): 818-226-1968

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On May 12, 2005, HemaCare Corporation issued a press release announcing financial results for the first quarter of 2005.  A copy is attached as Exhibit 99.1 to this report and is incorporated herein by reference.

On May 12, 2005, HemaCare Corporation held an investor conference call discussing the financial results for the first quarter of 2005. A transcript, of the conference call is attached to this report as Exhibit 99.2 and is incorporated herein by reference.

The information in this Current Report on Form 8-K, including the exhibits, will not be treated as “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section.  This information will not be incorporated by reference into a filing under the Securities Act of 1933, or into another filing under the Exchange Act, unless that filing expressly refers to specific information in this report.  The furnishing of the information in this Current Report is not intended to, and does not, constitute a representation that such furnishing is required by Regulation FD or that the information this Current Report contains is material investor information that is not otherwise publicly available.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

Exhibit Number	Description
99.1	Press Release dated May 12, 2005
99.2	Transcript of the conference call conducted by HemaCare Corporation on May 12, 2005

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	May 18, 2005	HEMACARE CORPORATION
		By:	/s/ Robert S. Chilton
			Robert S. Chilton
			Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release dated May 12, 2005
99.2	Transcript of the conference call conducted by HemaCare Corporation on May 12, 2005

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EX-99.1

Exhibit 99.1

NEWS RELEASE

For Immediate Release

Contact:	HemaCare Corporation
	Robert S. Chilton, Executive Vice President and Chief Financial Officer
	877-310-0717
	www.hemacare.com

RELEASE DATE:  May 12, 2005

HEMACARE REPORTS FIRST QUARTER 2005 EARNINGS GROWTH

LOS ANGELES - - - HemaCare Corporation (OTC Bulletin Board: HEMA.OB) today announced first quarter 2005 results of operations.  Revenue for the quarter increased $347,000, or 5.2%, to $7,083,000 compared with $6,736,000 reported for the same period in 2004. Net income for the quarter was $276,000, or $0.03 per share basic and diluted representing a $30,000, or 12.2%, increase in earnings over the $246,000 reported in the first quarter of 2004.  With these results, the Company has reported six consecutive profitable quarters.

The improvement in revenue is due to a $774,000, or 16%, increase in blood products revenue over the first quarter of 2004.  This is primarily the result of increasing sales volumes at the Company’s ongoing centers which generated a $1,292,000, or 29.9%, increase in blood products revenue.  The growth in sales volumes is directly related to higher blood product collections and imports during the quarter compared to the first quarter of 2004.

Revenues from the blood services segment decreased by $427,000, or 22.6%, to $1,464,000 in the first quarter of 2005 from $1,891,000 in the same period of 2004. This decrease was mainly due to a 17.3% decrease in the number of therapeutic apheresis procedures performed through the Company’s ongoing operations during the quarter compared with the same quarter in 2004.

The first quarter 2005 results produced a gross profit of $1,465,000 compared with a gross profit of $1,431,000 for the same period in 2004.  The improvement in gross profit is attributable to a $410,000, or 52.1%, increase in gross profit for the blood products business segment compared with the first quarter of 2004.  This is

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21101 Oxnard Street, Woodland Hills, CA  91367     •      Phone 818.226.1968     •      Fax 818.251.5300

offset by a $376,000, or 58.4%, decrease in gross profit reported in the quarter for the Company’s blood services segment compared with the same period in 2004.  The increase in gross profit for blood products is primarily attributable to higher sales volumes and an increase in the gross profit percentage to 21.3%, compared with 16.2% for the same period in 2004 due to increases in product prices and improved operational efficiencies realized from higher volumes.  Operational efficiencies resulting from higher volumes at the ongoing donor centers is one of the benefits from the current strategy to grow sales volume at existing facilities rather than from opening new donor centers.

Contrasting the performance of the blood products business unit, the blood services segment experienced a decline in the gross profit percentage to 18.3% in the first quarter of 2005, from 34.1% reported during the same period of 2004.  The decline in the gross profit percentage is partially attributable to the entry of a new competitor into the Company’s Southern California market for therapeutic apheresis services which impacted procedure volumes and underlying costs.  Due to increased competition for trained nurses, the Company has increased the compensation offered to attract and retain nurses.  Finally, the Company has also increased the number of staff and related expenses associated with the management of this business unit.

“This quarter represents our sixth consecutive quarter of profitability since the implementation of our restructuring plan,” commented Judi Irving, President and Chief Executive Officer.  “Our blood products business unit continues to show improving sales volumes and gross margins from our ongoing centers.  We were able to maintain profitability despite a decrease in revenue and gross margin in our blood services business segment.  Tremendous acceptance in the marketplace for our customized delivery of blood products and services has been possible through the efforts of our outstanding staff and management team.  We plan to continue to utilize the resources generated by our improved profitability to upgrade and enhance our infrastructure.”

HemaCare will be holding an interactive investor conference call on Thursday, May 12, 2005 at 1:00 PM (Eastern Daylight Time).  Judi Irving, President and CEO, and Robert Chilton, Executive Vice President and CFO, will review the first quarter 2005 financial results. To participate in the call, please call 800-309-8563 and ask to join HemaCare’s first quarter earnings conference call.  A recording will be available two hours following the call through midnight, May 21, 2005 that can be replayed by calling 800-642-1687, ID number 5928560.  A webcast of the conference call will also be available via our website (www.hemacare.com) after May 21, 2005.

ABOUT HEMACARE CORPORATION

Founded in 1978, HemaCare is a provider of blood products and services to the healthcare industry in the U. S.  HemaCare is licensed by the FDA and accredited by the American Association of Blood Banks.  The Company focuses on providing cost effective, high quality solutions to organizations with a need for blood-related products and services.

This press release contains “forward-looking statements” under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.)  Statements herein that are not historical facts are forward-looking statements pursuant to the safe harbor provisions referenced above.  You may also identify forward-looking statements by use of the words

“anticipates,” “expects,” “intends,” “plans” and variations and similar expressions.  Forward-looking statements are inherently subject to risks and uncertainties some of which cannot be predicted or quantified.  Such risks and uncertainties include, without limitation the Company’s need to successfully complete its operating plan to improve profit; the potential loss of the Company’s lines of credit; the potential inability of the Company to meet future capital needs; increasing costs that the Company may not be able to pass on to customers because the market price for blood does not necessarily reflect the costs of collecting and processing it; declining blood donations; the Company’s dependence on reimbursement rates of third party providers; its increasing reliance on outside laboratories; limited access to insurance; the competitive advantage enjoyed by not-for-profit companies; potential changes in the healthcare industry; future technology for blood collection and blood replacement; the need to obtain services of qualified medical professionals; the impact of heavy regulation in the Company’s industry; potential liability for undetected blood pathogens and other product safety and liability concerns; environment risks associated with biohazardous substances; the threat of business interruption due to terrorism and the security measures taken in response to terrorism; the provisions of the Company’s charter documents that might delay or prevent an acquisition or sale of the Company; lack of liquidity and market risk associated with OTC Bulletin Board stocks; volatility in our stock price; potential dilution that could result from future sales of the Company’s common stock; and the other risks and uncertainties discussed from time to time in the documents HemaCare files with the Securities and Exchange Commission.  Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.  Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlined in the forward-looking statements contained herein.  The Company undertakes no obligation to update any of these forward-looking statements to reflect actual results or events or circumstances after the date hereof.

(Financial Table Follows)

HemaCare Corporation

Condensed Consolidated Data

(Unaudited)

Statements of Income

	Three Months Ended March 31,
	2005		2004
Revenues	$	7,083,000	$	6,736,000
Gross Profit	$	1,465,000	$	1,431,000
General and administrative expenses	$	1,189,000	$	1,185,000
Income before income taxes	$	276,000	$	246,000
Provision for income taxes	$	—	$	—
Net income	$	276,000	$	246,000
Basic earnings per share	$	0.03	$	0.03
Diluted earnings per share	$	0.03	$	0.03
Weighted average shares outstanding – basic	8,075,000		7,756,000
Weighted average shares outstanding - diluted	8,805,000		7,947,000

Balance Sheets

	March 31, 2005		December 31, 2004
Assets
Cash and cash equivalents	$	2,051,000	$	2,082,000
Other current assets	4,386,000		4,455,000
Non-current assets	2,690,000		2,807,000
Total assets	$	9,127,000	$	9,344,000
Liabilities and Shareholders’ Equity
Current liabilities	$	3,026,000	$	3,469,000
Long-term liabilities	639,000		708,000
Shareholders’ equity	5,462,000		5,167,000
Total liabilities and shareholders’ equity	$	9,127,000	$	9,344,000

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EX-99.2

Exhibit 99.2

1^st Quarter 2005 Results Conference Call

Bob Chilton

Thank you operator and good afternoon.  My name is Bob Chilton, and I am the Executive Vice President and Chief Financial Officer for HemaCare Corporation.  I would like to welcome everyone to HemaCare’s first quarter 2005 earnings conference call.  With me today is Judi Irving, HemaCare’s President and Chief Executive Officer.

Before we begin our presentation, I would like to remind everyone that during this call there may be forward-looking statements on a number of topics that are based on the Company’s current expectations that are subject to various risks and uncertainties.  Actual results and outcomes could differ materially.  Our press releases and 2005 quarterly report on Form 10-Q, as well as our other SEC filings, identify factors that could affect future results.  Please review these documents for additional information.

And now, I would like to introduce Judi Irving, who will begin with our prepared remarks.

Judi Irving

Thank you, Bob.

Welcome to all of you participating in our conference call today.  We appreciate your interest in our company.

Today we announced HemaCare Corporation’s financial results for the first quarter ended March 31, 2005.  We reported net income of $276,000, which represents our sixth consecutive quarter of profitable results, and a 12.2% improvement over the same period in 2004.  We are especially pleased with this accomplishment considering that a year ago at this time, the Company operated two additional donor centers in Whittier, California, and in Lebanon, New Hampshire, which were both profitable, but are no longer operated by HemaCare.  Additionally, procedure volumes for our blood services operations

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decreased.  Producing double digit growth in earnings over the past year considering these events, clearly demonstrates the underlying improvement in our blood products operations.

Contributing to the substantial improvement in the performance of our blood products business segment, are increasing sales volumes of our platelet, red blood cell and frozen products compared with the same quarter in 2004 in our ongoing centers.

Offsetting these activities is the decline in both revenue and gross profit for our blood services segment compared to a year ago.  Revenue and gross profit declined 22.6% and 58.4%, respectively, compared with the first quarter of 2004. This is partially attributable to the entry of a new competitor into the Company’s Southern California market. We have confidence that our outstanding services staff and management team will mitigate the negative impact of this new competitor.  Also contributing to a decline in gross profit is the continued shortage of trained apheresis nurses.  This situation has prompted the Company to increase the compensation offered to its nursing staff.

Overall, our improved performance reflects our attention to generating increased sales volume at our existing facilities and improving operational efficiencies.  We are also moving forward with our plans to utilize some of the resources generated from our operations toward enhancing our Company’s infrastructure.  We believe these improvements will provide the Company with the tools necessary to continue the progress that has been made in recent quarters.

I would like to now turn the call over to Bob Chilton, who will review the operating results in greater detail.

Bob Chilton

Thank you, Judi.

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As Judi mentioned, HemaCare’s first quarter results produced net income of $276,000, or $.03 per share basic and diluted, compared with $246,000 for the first quarter of 2004, representing a 12.2% improvement in earnings.  The Company’s ongoing blood product operations generated $1,292,000, or 29.9%, more revenue in the most recent quarter compared with the same period in 2004.  This was partially offset by the elimination of $519,000 in blood product revenue generated by the Company during the first quarter of 2004 at donor centers located at Presbyterian Intercommunity Hospital, Dartmouth-Hitchcock Medical Center and in Chapel Hill, North Carolina.  In addition, blood services revenue declined $427,000, or 22.6%, during the first quarter of 2005 compared with the same period in 2004.  This decline is attributable to an overall decrease of 17.3% in the number of therapeutic apheresis procedures performed through our existing operations, and the elimination of $63,000 in revenue generated during the first quarter of 2004 from the donor center located at Dartmouth-Hitchock Medical Center.

Gross profit for the quarter improved $34,000, or 2.4%, compared with the same period in 2004.  This improvement is attributable to the Company’s blood products segment which generated $410,000, or 52.1%, more gross profit during the first quarter of 2005.  This improvement is due to higher gross profit at the Company’s ongoing donor centers of $534,000, or 80.5%, compared to the same quarter in 2004.  Gross profit for our ongoing donor centers improved due to increased sales volume for blood products and an improvement in the gross profit percentage of six percentage points to 21.3% in the first quarter of 2005, from 15.3% for the same quarter of 2004.  The increase in the gross profit percentage is the result of higher product prices and increased operational efficiencies realized from higher volumes.  Offsetting this improved performance is a reduction of $376,000, or 58.4%, in the gross profit generated by the Company’s blood services segment.

General and administrative expenses increased by $4,000, or 0.3%, to $1,189,000 in the first quarter of 2005 from $1,185,000 in the same period of 2004.  In the first quarter of 2005, general and administrative expense represented 16.8% of revenue, which is an improvement over the 17.6% reported in the first quarter of 2004.

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The balance sheet is very strong as of March 31, 2005 with cash and cash equivalents of $2,051,000 which is comparable to $2,082,000 as of the end of 2004.  Working capital increased $343,000 to $3,411,000 from $3,068,000 as of the end of 2004.  The main reason for this improvement is a decrease in the accrued payroll liability as a result of the payment during the quarter of accrued 2004 management bonuses, and the payment of the Company’s matching contribution to the 401(k) plan.  At the same time, operations generated sufficient cash during the quarter to fund these expenditures without any significant decrease in the Company’s cash balances.  Net accounts receivable increased $19,000 to $3,397,000 from $3,378,000 as of December 31, 2004.  There has been no material change in the overall quality of the receivables maintained on the Company’s books.

The Company recently entered into negotiations to extend the term of the Company’s existing credit facility with Comerica Bank.  At this point, management is not aware of any reason why an extension, or a new credit agreement, will not be in place as of the expiration of the current facility on June 30, 2005.  The Company did not utilize any portion of the potential $2,000,000 available through the existing facility as of March 31, 2005.  The Company was in full compliance with all of the financial covenants documented in the current credit facility.  The Company is expected to have sufficient resources to satisfy working capital requirements and finance operations for the next year.

This concludes my prepared remarks.  I would like to now turn the call back over to Judi for some concluding remarks.

Judi Irving

Thank you Bob.

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In closing, although we are proud of our recent accomplishments, we recognize a great deal of hard work remains to be done.  We believe that stable and consistent profits will maximize shareholder value.  That is why we continue to focus on growing revenue, enhancing our profit margins, and making those investments in the Company’s infrastructure necessary to solidify our gains and build for the future.

This concludes our prepared remarks.

We will now open the conference for your questions.  Operator, would you please provide the callers with the necessary instructions.

Operator

Yes. At this time I would like to remind everyone that if you would like to ask a question, press star then the number 1 on your telephone keypad.

We’ll pause for just a moment to compile the Q&A roster…

Your first question comes from Maurice Levy of MA Levy & Associates.

Judi Irving

Hello Maurice.

Maurice Levy

Hi there. How are you doing?

Judi Irving

Good, thank you.

Maurice Levy

So it looks like we had a ho-hummer this quarter, due to the fact that you’re losing business in certain areas. What is your plan to build the business?

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I mean, do you have to have more centers all over the country? What is your plan to do that? I know it’s nice to be profitable six quarters in a row, but the stock is still not performing as a company that has any growth potential.

Can you answer that?

Judi Irving

Sure.

What we’ve been focusing on over the last 2-1/2 years since I’ve come onboard is really returning the company to consistent profitability, which now after the sixth quarter I believe we’ve done very nicely.

We are now well-positioned to look at other opportunities in areas for growth. There are a lot of exciting things going on in our industry right now, both on the products and the services side, and we’re in the process of evaluating those and determining the best course for us to take.

Maurice Levy

Well, I’m glad you’re looking at other avenues. Because it’s been I guess 15 years that I’ve been involved with the company in some way or another, and the shareholders sure are maxed out on patience.

You have done a job creating the profit cycle. But it just feels like the people before (I don’t want to mention names), but the previous two CEOs before you came in, and it seemed like they were milking it like the proverbial cow giving milk. And thank God you’re not doing that.

I just wish you luck and, if anything comes along that could be good for maximizing shareholder value.  I think you’d be the perfect one to do it, Judi. I’m sure you’re not interested in building yourself a Forbes Magazine cover.

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Judi Irving

Well, you never know.

Maurice Levy

Oh, I know.

Keep doing what you’re doing. But if opportunities come along, grab them.

Judi Irving

All right. Well, thank you very much for your support.

Maurice Levy

Okay. And good luck again.

Judi Irving

Thank you.

Operator

Your next question comes from Anders Hallberg of Carnegie.

Anders Hallberg

Yes, hi. I have a question on the cash flow statement.  Could you please tell me how much was the operating cash flow in the quarter and also how much you spent on fixed assets?

Bob Chilton

One moment please.

Anders Hallberg

Thank you…

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Bob Chilton

Okay, cash generated by operating activities for the quarter was $60,000 and expenditures for plant and equipment was $38,000.

Anders Hallberg

Thirty-eight thousand. All right.

And how much was the interest-bearing short-term and long-term debt? Do you have that as well?

Bob Chilton

The interest paid?

Anders Hallberg

No, the interest bearing debt both short and long term. At the end of the quarter please.

Bob Chilton

We have about $876,000 in capital lease obligations that are on the books right now.

Anders Hallberg

Okay.

Bob Chilton

And about $33,000 in notes payable.

Anders Hallberg

So that’s it.

Bob Chilton

That’s it.

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Anders Hallberg

All right.

And how many business days in the quarter? Do you have that? I mean, compared to the first quarter of 2004? Was it the equal amount of business days?

Bob Chilton

Are you talking about the DSO calculation?

Anders Hallberg

No, I’m thinking about the business. I mean, how many business days were there in the quarter compared to 2004?

Bob Chilton

I don’t – if you’re talking about the number of calendar days, we are…

Anders Hallberg

Exactly.

Bob Chilton

We are a 24/7 operation, so I don’t know exactly. I think ‘04 was a leap year, so I believe there was one additional day in 2004 compared with 2005.

Anders Hallberg

Okay, so just one day. All right.

Bob Chilton

I believe so.

Anders Hallberg

Okay.

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Operator

Your next question comes from Eric Duncan of Moloney Securities.

Art Kaufman

Hi. Actually this is Art Kaufman. We’re partners. But (unintelligible) your stock and congratulations on your quarter.

I had a couple of questions. One, pretty simple. I saw that there was about 900,000 shares extra this year over last year’s first quarter, and I think you said that it had to do with your Employee Share Purchase Plan.

Should we be looking for that kind of purchase annually?

Bob Chilton

You are correct that most of the increase in the total outstanding shares was related to both the employee stock purchase plan and individuals who held options exercising those options.

Art Kaufman

Okay.

Bob Chilton

And I can’t give you a prediction on the degree in which employees may choose to continue to take advantage of those programs.  Those are obviously individual decisions. I would imagine, though, if the company continues to do well, that the employees and others who have those opportunities will want to continue to participate in those programs.

Art Kaufman

Okay, great.

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The other question I had is kind of an obvious question as well. The services side of your business has been impacted by PhereSys.  They’re a probably bigger, low cost competitor and they may indeed become difficult to compete against.

It seems there might come a point where you might want to sell your services business. Or is your service business so tied together with your products business that you have to kind of hang in there with the services business while you add nurses and staff and try to compete with even less margin than you have now?

Judi Irving

The two businesses in terms of staff are pretty well separated as far as the people doing the actual services or manufacturing the products. So those are for the most part, especially on the West Coast, very distinct groups of individuals.

Obviously, there are a lot of shared services as far as accounting and administrative-type services.

Operator

Once again I would like to remind everyone, in order to ask a question, press star then the number 1 on your telephone keypad.

Your next question comes from Bill Alcalay, a private investor.

Bill Alcalay

Hello.

Judi Irving

Hello.

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Bill Alcalay

You may have mentioned this earlier in the call, but I have basically two questions. In the annual report, I noticed that you have a new competitor who has hired a number of your personnel.

My question is, has the board and yourself considered either purchasing that company or have they considered purchasing our company? That’s the first question. Can you answer that?

Judi Irving

All right.

Bill Alcalay

What is the name of the company that is competing against us?

Judi Irving

That company name was already mentioned on the call – PhereSys.  As far as the employees go, PhereSys has hired either existing employees that were with us and went directly to them, or former employees of ours that are now working with them.

We have a full complement of staff. I’m very happy with the people that we’ve brought onboard – high level of expertise, just great people. So I’m very pleased about the new folks that we have onboard.

In the normal course of business, we have a number of opportunities that are brought to us for consideration. Every proposal is reviewed and evaluated for its merits, and discussed with the Board. So we’ll continue to do that process.

We’re not going to discuss individual proposals in a forum such as this.

Bill Alcalay

Okay.

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So you are saying that you basically will not discuss whether you want to buy them or they want to buy us.

The second question I had was I believe we had a CEO by the name of Mr. Lieberman. Is he involved in the new company by any chance?

Judi Irving

Yes he is.

Bill Alcalay

Oh, I see.

Judi Irving

In what capacity, I’m not quite clear, but I know he’s associated with the company in some fashion.

Operator

If you would like to ask a question at this time, press star-1.

You have a follow-up question from Anders Hallberg of Carnegie.

Anders Hallberg

Yes, hi.

On the same issue, on the services side, have we seen the full impact of competition and rising costs, or are we expecting further deterioration in the second quarter?

Judi Irving

I’m sorry, could you just repeat that first part of the question? Have we seen what?

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Anders Hallberg

On the services side and competition, have we seen the full impact of that in the first quarter? Or do you think that costs will continue to rise in the second quarter, as well as maybe losing a little bit more business?

Judi Irving

It’s hard to say. I believe that we’ve mitigated most of the impact of that, but that’s a future projection and I’m not in a position to say that right at the moment.

Anders Hallberg

Okay.  But you feel that the lion’s share of the effects have been seen already? Is that your view?

Judi Irving

We did disclosed a significant impact in the first quarter.

Anders Hallberg

Yes.

Judi Irving

And time will tell. We feel that our compensation levels are competitive currently.

Anders Hallberg

Yes.

Judi Irving

So we will be looking at everything that we can do in the future to mitigate the impact.

Anders Hallberg

All right. Thanks.

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Operator

Your next question comes from Marc Minkoff of Wachovia Securities.

Judi Irving

Hello Marc.

Marc Minkoff

Hi Judi, how are you?

Judi Irving

Good, thank you.

Marc Minkoff

Good.  Can you give an update on the stem cell area that’s been discussed in prior conference calls?

Judi Irving

Yes.  There are a couple of things with stem cells. One, there is the money that is available in the state of California for stem cell research. The lion’s share of that is going to be embryonic stem cell research because basically what they’re doing is funding those things that the federal government is not funding.

However, that being said, there is also a tremendous interest in adult stem cells, many of which come from peripheral blood. And we actually do harvest stem cells and we do provide some stem cells either to research or to help patients with some types of disease.

So we do see that that’s a very interesting area of activity and we look at that as a growth opportunity.

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Marc Minkoff

And that – can that be a significant part of future revenue, say over the next couple of years?

Judi Irving

You know, I think it depends upon how well it’s accepted and the breakthroughs that they have.

Based on the amount of research that’s going on and the breakthroughs that are out there, I would think that it could be a significant part of the business, but I don’t know if it would be as soon as two years. It might be a longer period of time than that.

Operator

Your next question comes from Maurice Levy of MA Levy & Associates.

Maurice Levy

Hi again.

I just wanted to ask one question. The gentleman two gentlemen ago discusses the competition in the area, et cetera, and if there is anything that you’ve been working on.  Are you still aware of the Sarbanes-Oxley rules now about full disclosure to shareholders?

Judi Irving

Yes we are.

Maurice Levy

ASAP.

Judi Irving

Yes we are.

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Maurice Levy

Okay. That’s it.

Judi Irving

We are very well advised.

Maurice Levy

Okay. That’s very important.

Judi Irving

I understand that.

Maurice Levy

Okay.

Operator

At this time there are no further questions. Ms. Irving, are there any closing remarks?

Judi Irving

Yes. I would just like to thank everyone for participating today. Thank you.

Operator

Thank you. This concludes the HemaCare Corporation First Quarter 2005 Financial Results conference call. Thank you for your participation. You may now disconnect.

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