10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 1

(Mark one)

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

For the quarterly period ended June 30, 2011

OR

o 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 incorporation or organization)	(I.R.S. Employer Identification No.)
15350 Sherman Way, Suite 350 Van Nuys, California		91406
(Address of principal executive offices)		(Zip Code)

(818) 226-1968

(Registrant’s telephone number, including area code)

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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer ¨ Smaller reporting company  T

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

As of August 5, 2011, 9,712,948 shares of Common Stock of the registrant were issued and outstanding.

Explanatory Note

HemaCare Corporation (the “Company”) is filing this Amendment No. 1 on Form 10-Q/A (the “Form 10-Q/A”) to amend the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, which was originally filed on August 22, 2011 (the “Original Filing”), solely to furnish Interactive Data Files as Exhibits 101 in accordance with Rule 405(a)(2) of Regulation S-T.  In connection therewith, this Form 10-Q/A also amends Part II, Item 6 of the Original Filing and the Exhibit Index thereto.  In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by the Company’s principal executive officer and principal financial officer are filed as exhibits hereto.

This Form 10-Q/A does not reflect events that may have occurred subsequent to the Original Filing and does not modify or update in any way disclosures made in the Original Filing, except as specified above. Accordingly, this Form 10-Q/A should be read in conjunction with the Original Filing and the Company’s other filings made with the Securities and Exchange Commission subsequent to the date of the Original Filing.

2

PART II. OTHER INFORMATION

Item 6. Exhibits

Exhibit No.	Description
2.1*	Asset Purchase Agreement, dated July 11, 2011, among HemaCare Corporation, Coral Blood Services, Inc. and The American National Red Cross, incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed on July 15, 2011.
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, 2002.
3.2	Amended and Restated Bylaws of the Registrant, as amended, incorporated by reference to Exhibit 3.1 to Form 8-K of the Registrant filed on March 28, 2007.
4.1	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.
4.1.1	Amendment and Extension of Rights Agreement dated as of March 3, 1998, between HemaCare Corporation and Computershare Trust Company, N.A., incorporated by reference to Exhibit 99.1 to Registrant’s Current Report on Form 8-K filed on March 24, 2008.
4.2	Form of Common Stock Certificate, incorporated by reference to Exhibit 4.4 to Form S-8 of the Registrant dated July 10, 2006.
10.1	Second Amendment to Credit Agreement, dated July 5, 2011, among Wells Fargo Bank, HemaCare Corporation and Coral Blood Services, Inc., incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on July 8, 2011.
10.2	Second Modification to Promissory Note, dated July 5, 2011, among HemaCare Corporation, Coral Blood Services, Inc. and Wells Fargo Bank, incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed on July 8, 2011.
10.3†	Blood Purchase Agreement, effective as of July 11, 2011, between The American National Red Cross and HemaCare Corporation, incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on July 15, 2011.
31.1	Certification Pursuant to Rule 13a-14(a) Under the Securities Exchange Act.
31.2	Certification Pursuant to Rule 13a-14(a) Under the Securities Exchange Act.
32.1	Certification Pursuant to 18 U.S.C. 1350 and Rule 13a-14(b) Under the Securities Exchange Act of 1934. Previously Filed.
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

* The Asset Purchase Agreement contains a list briefly identifying the contents of all omitted exhibits and schedules.  HemaCare Corporation agrees to furnish to the Securities and Exchange Commission a copy of any omitted exhibit or schedule upon request.

** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

†Certain portions of this agreement have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for an order granting confidential treatment pursuant to Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.

3

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, thereunto duly authorized.

Date	August 31, 2011	Hemacare Corporation
		(Registrant)
		By:	/s/ Peter van der Wal
			Peter van der Wal, Chief Executive Officer
		By:	/s/ Lisa Bacerra
			Lisa Bacerra, Chief Financial Officer

4

EXHIBIT INDEX

Exhibit No.	Description
2.1*	Asset Purchase Agreement, dated July 11, 2011, among HemaCare Corporation, Coral Blood Services, Inc. and The American National Red Cross, incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed on July 15, 2011.
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, 2002.
3.2	Amended and Restated Bylaws of the Registrant, as amended, incorporated by reference to Exhibit 3.1 to Form 8-K of the Registrant filed on March 28, 2007.
4.1	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.
4.1.1	Amendment and Extension of Rights Agreement dated as of March 3, 1998, between HemaCare Corporation and Computershare Trust Company, N.A., incorporated by reference to Exhibit 99.1 to Registrant’s Current Report on Form 8-K filed on March 24, 2008.
4.2	Form of Common Stock Certificate, incorporated by reference to Exhibit 4.4 to Form S-8 of the Registrant dated July 10, 2006.
10.1	Second Amendment to Credit Agreement, dated July 5, 2011, among Wells Fargo Bank, HemaCare Corporation and Coral Blood Services, Inc., incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on July 8, 2011.
10.2	Second Modification to Promissory Note, dated July 5, 2011, among HemaCare Corporation, Coral Blood Services, Inc. and Wells Fargo Bank, incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed on July 8, 2011.
10.3†	Blood Purchase Agreement, effective as of July 11, 2011, between The American National Red Cross and HemaCare Corporation, incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on July 15, 2011.
31.1	Certification Pursuant to Rule 13a-14(a) Under the Securities Exchange Act.
31.2	Certification Pursuant to Rule 13a-14(a) Under the Securities Exchange Act.
32.1	Certification Pursuant to 18 U.S.C. 1350 and Rule 13a-14(b) Under the Securities Exchange Act of 1934. Previously Filed.
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

* The Asset Purchase Agreement contains a list briefly identifying the contents of all omitted exhibits and schedules.  HemaCare Corporation agrees to furnish to the Securities and Exchange Commission a copy of any omitted exhibit or schedule upon request.

** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

†Certain portions of this agreement have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for an order granting confidential treatment pursuant to Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.

5

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Peter van der Wal, certify that:

1.       I have reviewed this Quarterly Report on Form 10-Q/A of HemaCare Corporation;

2.       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in the report;

4.       The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)       Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)       Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.       The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)       All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)       Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 31, 2011

/s/ Peter van der Wal

Peter van der Wal

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Lisa Bacerra, certify that:

1.       I have reviewed this Quarterly Report on Form 10-Q/A of HemaCare Corporation;

2.       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in the report;

4.       The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)       Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)       Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.       The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)       All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)       Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 31, 2011

/s/ Lisa Bacerra

Lisa Bacerra

Chief Financial Officer

(Principal Accounting Officer)

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Condensed Consolidated Balance Sheets (Parentheticals) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Allowance for doubtful accounts (in Dollars)	$ 98,000	$ 91,000
Accumulated depreciation and amortization (in Dollars)	$ 6,725,000	$ 7,704,000
Common stock, par value (in Dollars per share)	$ 0	$ 0
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	9,712,948	9,712,948
Common stock, shares outstanding	9,712,948	9,712,948

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Condensed Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Revenue
Blood services	$ 1,968,000	$ 1,931,000	$ 3,728,000	$ 3,835,000
Therapeutic services	2,270,000	1,947,000	4,418,000	3,724,000
Total revenue	4,238,000	3,878,000	8,146,000	7,559,000
Operating costs and expenses
Blood services	2,113,000	1,949,000	3,860,000	3,716,000
Therapeutic services	1,542,000	1,408,000	3,005,000	2,740,000
Total operating costs and expenses	3,655,000	3,357,000	6,865,000	6,456,000
Gross profit	583,000	521,000	1,281,000	1,103,000
General and administrative expenses	1,212,000	1,131,000	2,395,000	2,668,000
Loss from operations	(629,000)	(610,000)	(1,114,000)	(1,565,000)
Gain from disposal of assets	197,000		197,000
Loss from continuing operations	(432,000)	(610,000)	(917,000)	(1,565,000)
Provision for income taxes		10,000	10,000	10,000
Loss from continuing operations, net of tax	(432,000)	(620,000)	(927,000)	(1,575,000)
Income from discontinued operations, net of tax	180,000	843,000	285,000	1,595,000
Net (loss) income	$ (252,000)	$ 223,000	$ (642,000)	$ 20,000
Basic
Continuing operations (in Dollars per share)	$ (0.04)	$ (0.06)	$ (0.10)	$ (0.16)
Discontinued operations (in Dollars per share)	$ 0.02	$ 0.08	$ 0.03	$ 0.16
Total (in Dollars per share)	$ (0.03)	$ 0.02	$ (0.07)	$ 0.00
Diluted
Continuing operations (in Dollars per share)	$ (0.04)	$ (0.06)	$ (0.10)	$ (0.15)
Discontinued operations (in Dollars per share)	$ 0.02	$ 0.08	$ 0.03	$ 0.16
Total (in Dollars per share)	$ (0.03)	$ 0.02	$ (0.07)	$ 0.00
Weighted average shares outstanding-basic (in Shares)	9,712,948	10,049,148	9,712,948	10,049,339
Weighted average shares outstanding-diluted (in Shares)	9,712,948	10,234,148	9,712,948	10,232,339

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Document And Entity Information	6 Months Ended
	Jun. 30, 2011	Aug. 05, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	HEMACARE CORP /CA/
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		9,712,948
Amendment Flag	false
Entity Central Index Key	0000801748
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2

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Note 7 - Provision for Income Taxes

6 Months Ended

Jun. 30, 2011

Income Tax Disclosure [Text Block]

Note 7—Provision for Income Taxes

The process of preparing the financial statements includes estimating income taxes in each of the jurisdictions that the Company operates. This process involves estimating actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the balance sheet. Under the provisions of ASC 740-10, the Company must utilize 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. Management must assess the likelihood that the deferred tax assets or liabilities will be realized for future periods, and to the extent management believes that realization is not likely, must establish a valuation allowance. To the extent a valuation allowance is created or adjusted in a period, the Company must include an expense, or benefit, within the tax provision in the statements of operations. Significant management judgment is required to determine the provision for income taxes, deferred tax asset and liabilities and any valuation allowance recorded against net deferred tax assets.

Based on management’s analysis of the Company’s recent performance, management determined that there was insufficient evidence of guaranteed future profitability to ensure that the Company would realize any benefit from the deferred tax assets.  Therefore, as of June 30, 2011, the Company continued to record a 100% valuation reserve against all of the deferred tax assets.

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Note 3 - Discontinued Operations

6 Months Ended

Jun. 30, 2011

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note 3 - Discontinued Operations

On July 11, 2011, the Company completed the sale of its red blood cell collection operation assets in California and Maine to The American National Red Cross.  See Note 10 of Notes to Consolidated Financial Statements.  The Assets included automobiles and equipment, finished goods and work-in-process inventory of blood products, a trademark and books and records relating to blood drive sponsors and blood donors.

On November 5, 2007, the Board of Directors of the Company’s wholly owned subsidiary, HemaCare BioScience, Inc. (“HemaBio”), in consultation with, and with the approval of, the Board of Directors of the Company, decided that it was in the best interest of HemaBio’s creditors to close all operations of HemaBio. On December 4, 2007, HemaBio executed an Assignment for Benefit of Creditors, under Florida Statutes Section 727.101 et seq. (“Assignment”), assigning all of its assets to an assignee, who is responsible for taking possession of, protecting, preserving, and liquidating such assets and ultimately distributing the proceeds to creditors of HemaBio according to their priorities as established by Florida law. The assignee continues to fulfill his obligations under the Assignment, but has not concluded his efforts to liquidate all of the assets or complete a final distribution of all proceeds to HemaBio’s creditors.

When the Company acquired HemaBio, two former HemaBio investors, Dr. Lawrence Feldman and Dr. Karen Raben, each held a $250,000 note from HemaBio.  Both of these notes require four equal annual installments of $62,500, plus accrued interest, commencing August 29, 2007, until paid and pay interest at 7% annually, and are secured by all of the assets of HemaBio.

HemaBio failed to pay the first installments due to Drs. Feldman and Raben on August 29, 2007 of $160,000, which included $35,000 in accrued interest.  Under the terms of the promissory notes between HemaBio and Drs. Feldman and Raben, failure to pay any of the scheduled payments when due causes the entire unpaid balance, including unpaid interest, to become immediately due and payable, and causes the stated interest rate on both notes to increase to 10% per annum.  Therefore, since August 29, 2007, HemaBio, now shown as discontinued operations, recognized accrued interest expense on the outstanding balance on both notes at an interest rate of 10%, which totaled $12,000 and $25,000 for the three and six months ended June 30, 2011.

As of June 30, 2011, HemaBio’s default on the notes to Drs. Feldman and Raben remains unresolved.

In accordance with GAAP, the results of operations of HemaBio, along with an estimate of all closure related costs were recorded in 2007.

When the Board of Directors of HemaBio authorized the execution of the Assignment, HemaBio conveyed all of its assets, defined as “all real property, fixtures, goods, stock inventory, equipment, furniture, furnishings, accounts receivable, bank deposits, cash, promissory notes, cash value and proceeds of insurance policies, claims and demands”, to the Assignee.  The Assignee is then responsible for liquidating any non-monetary assets, for the purpose of eventually satisfying any and all creditor claims against HemaBio.  Unlike a federal bankruptcy proceeding, the Florida Assignment process does not stay any legal action the creditors might choose to force HemaBio to pay claims.

Therefore, management concluded that given the liabilities remain outstanding throughout the Assignment, it was appropriate to keep these liabilities on the books of HemaBio as outstanding until such time as the Assignee pays these claims, or the claimants rights to pursue claims expires pursuant to the Florida statute of limitations.

Management analyzed all of the claims submitted to the Assignee, and after reviewing the applicable Florida statute of limitations, management determined that the claimant’s rights to pursue claims would not expire until November 2011 at the earliest. Therefore, management concluded that none of the claims against HemaBio can be removed as of June 30, 2011.

The following is the breakdown of the assets held for sale and liabilities related to assets held for sale for discontinued operations as of June 30, 2011 and December 31, 2010.

	June 30		December 31,
	2011		2010
Assets held for sale
Cash and cash equivalents	$	246,000	$	210,000
Inventory		40,000		40,000
Fixed assets (net of accumulated depreciation  of $1,184,000 on June 30, 2011 and $1,134,000 on December 31, 2010)		163,000		213,000
	$	449,000	$	463,000
Liabilities related to assets held for sale
Accounts payable	$	809,000	$	774,000
Accrued payroll and payroll taxes		603,000		603,000
Accrued interest		242,000		217,000
Notes payable		500,000		500,000
Total liabilities related to assets held for sale	$	2,154,000	$	2,094,000

The following are the components of income from discontinued operations.

	Three Months Ended				Six Months Ended
	June 30		June 30		June 30		June 30
	2011		2010		2011		2010
Revenue	$	2,748,000	$	4,266,000	$	5,826,000	$	8,433,000
Operating expenses		2,501,000		3,352,000		5,411,000		6,711,000
Gross Profit		247,000		914,000		415,000		1,722,000
General and administrative expenses		67,000		71,000		130,000		127,000
Income from discontinued operations		180,000		843,000		285,000		1,595,000
Provision for income tax		-		-		-		-
Income from discontinued operations, net of tax	$	180,000	$	843,000	$	285,000	$	1,595,000

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Note 9 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies Disclosure [Text Block]

Note 9—Commitments and Contingencies

State and federal laws set forth anti-kickback 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 became law in March 2010; however, reconciliation and implementation of the law continues to be 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 is 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.

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Note 10 - Subsequent Events

6 Months Ended

Jun. 30, 2011

Subsequent Events [Text Block]

Note 10—Subsequent Events

In accordance with the provisions of ASC 855-10, management evaluated all material events occurring subsequent to the balance sheet date through the time of filing of this Form 10-Q for events requiring disclosure or recognition in the Company’s consolidated financial statements. Management determined that there were no subsequent events requiring disclosure or recognition in the Company’s consolidated financial statements other than the following.

On July 11, 2011, the Company and its wholly-owned subsidiary, Coral Blood Services, Inc., completed the sale of the Company’s red blood cell collection operation assets in California and Maine to The American National Red Cross pursuant to the terms of an Asset Purchase Agreement entered into by the parties on July 11, 2011.  The assets included automobiles and equipment, finished goods and work-in-process inventory of blood products, a trademark and books and records relating to blood drive sponsors and blood donors.

In consideration for the assets, the buyer agreed to pay to the Company an aggregate of $3,051,000. Of the purchase price, $2,475,000 was paid on the closing date, $51,000 was paid on July 22, 2011, and $250,000 will be paid in three equal monthly installments on the 30th, 60th and 90th days following the closing date.  The remaining balance of $275,000 was paid into a one year escrow to satisfy the Company’s potential indemnification liabilities to the buyer.

As a result of the asset sale, the Company will, in the third quarter, effect a reduction in force of approximately 93 employees in California and Maine, which will result in a third quarter charge of approximately $900,000 in employment related expenses. Additionally, officer bonuses of $124,000 will be paid in the third quarter as a result of the sale.

In connection with the sale of assets, on July 11, 2011 the Company entered into a blood purchase agreement with the American Red Cross, pursuant to which the Company will sell to the American Red Cross on an exclusive basis, a minimum of 7,000 and a maximum of 12,000 units of ISBT labeled single donor platelets per year during the term of the agreement.  The platelets will be sold to the American Red Cross at a fixed price per unit during the first two years of the agreement, and at a price equal to a percentage of the American Red Cross’ National Average Selling Price of platelets over the immediately preceding calendar year for the remainder of the term.  The blood purchase agreement has an initial term expiring on June 30, 2016, and will be extended automatically for additional renewal periods unless either party elects to terminate the agreement upon expiration of the then-current term.

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Note 8 - Business Segments

6 Months Ended

Jun. 30, 2011

Segment Reporting Disclosure [Text Block]

Note 8—Business Segments

HemaCare operates in two business segments as follows:

· Blood Services—Includes sales of red blood cells, apheresis platelets, and other blood products to hospitals and research, cellular therapy and other health related organizations. Revenues from research projects and cellular therapy collections are included in the blood services segment.

· Therapeutic Services—Provides therapeutic apheresis, stem cell collection procedures and other therapeutic services to patients.

There were no intersegment revenues for the three and six month periods ended June 30, 2011.

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Note 1 - Basis of Presentation and General Information

6 Months Ended

Jun. 30, 2011

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1—Basis of Presentation and General Information

BASIS OF PRESENTATION

In the opinion of management, the accompanying (a) condensed consolidated balance sheet as of December 31, 2010, which has been derived from audited financial statements, and (b) the unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2011 and  2010, include all adjustments (consisting of normal recurring accruals) which management considers necessary to present fairly the financial position of the Company as of June 30, 2011 and December 31, 2010, the results of its operations for the three and six months ended June 30, 2011 and 2010, and its cash flows for the six months ended June 30, 2011 and 2010 in conformity with accounting principles generally accepted in the United States (“GAAP”).

These financial statements have been prepared consistently with the accounting policies described in the Company’s Annual Report on Form 10 K for the year ended December 31, 2010, as filed with the Securities and Exchange Commission (“SEC”) on March 23, 2011, which should be read in conjunction with this Quarterly Report on Form 10-Q. The results of operations for the three and six months ended June 30, 2011 are not necessarily indicative of the consolidated results of operations to be expected for the full fiscal year ending December 31, 2011. The above unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP 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.

Revenue and Accounts Receivable: Revenue is recognized upon acceptance of the blood products or the performance of therapeutic services. Occasionally the Company receives advance payment against future delivery of blood products or services. Until the related products or services are delivered, the Company records advance payments as deferred revenue, which appears as a current liability on the balance sheet. Therapeutic services revenue consists primarily of mobile therapeutic procedure fees, while blood services revenue consists primarily of sales of single donor platelets, whole blood components or other blood products collected for use by research and cellular therapy organizations.  Accounts receivable are reviewed periodically for collectability. The Company estimates an allowance for doubtful accounts based on balances owed that are 90 days or more past due from the invoice date, unless evidence exists, such as subsequent cash collections, that specific amounts are collectable. In addition, balances less than 90 days past due are reserved based on the Company’s recent bad debt experience.

Inventories and Supplies: Inventories for continuing operations consist of Company-manufactured platelets. Supplies consist primarily of medical supplies used to collect and manufacture platelets and to provide therapeutic services. Inventories included in assets held for sale consist of whole blood components and other blood products, as well as component blood products purchased for resale. Inventories are stated at the lower of cost or market and are accounted for on a first-in, first-out basis. Management estimates the portion of inventory that might not have future value by analyzing historical sales for the twelve months prior to any balance sheet date. For each inventory type, management establishes an obsolescence reserve equal to the value of inventory quantity in excess of twelve months of historical sales quantity, using the first-in, first-out inventory valuation methodology.  In addition, the Company recorded a reserve of $32,000 as of June 30, 2011 for inventory that will become obsolete as a result of the Company’s sale of its red blood cell collection business assets to the American Red Cross in July 2011.  The Company had no reserve for obsolete inventory as of December 31, 2010.

Financial Instruments:  On January 1, 2009, the Company adopted all of the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) which provides guidance on how to measure assets and liabilities at fair value.  ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The full adoption of ASC 820 did not have a material impact on the Company’s financial statements.

Share-Based Compensation:  Pursuant to ASC Topics 505, Equity and 718, Stock Compensation, an entity shall account for share-based compensation transactions with employees in accordance with the fair-value-based method, that is, the cost of services received from employees in exchange for awards of share-based compensation generally shall be measured based on the grant-date fair value of the equity instruments issued or on the fair value of the liabilities incurred.

The Company’s assessment of the estimated fair value of share-based payments is impacted by the price of the Company’s stock, as well as assumptions regarding a number of complex and subjective variables and the related tax impact. Management calculated fair value based on fair value of the stock at the date of issuance for restricted stock and restricted stock units. Management utilized the Black-Scholes model to estimate the fair value of share-based payments granted. Valuation techniques used for employee share options and similar instruments estimate the fair value of those instruments at a single point in time (for example, at the grant date). The assumptions used in a fair value measurement are based on expectations at the time the measurement is made, and those expectations reflect the information that is available at the time of measurement.

The Black-Scholes valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. This model also requires the input of highly subjective assumptions including:

(a) The expected volatility of the common stock price, which was determined based on historical volatility of the Company’s common stock;

(b) expected dividends, which are not anticipated;

(c) expected life, which is estimated based on the historical exercise behavior of employees;

(d) risk free interest rates; and

(e) expected forfeitures.

In the future, management may elect to use different assumptions under the Black-Scholes valuation model or a different valuation model, which could result in a significantly different impact on earnings.

The Company currently uses the 2006 Equity Incentive Plan (“2006 Plan”), approved by shareholders at the 2006 annual meeting, to grant stock options and other share-based payments. At the March 9, 2011 meeting of the Board of Directors, the non-employee directors were awarded, pursuant to the Company’s director compensation policy, their 2011 annual stock option grants utilizing the closing stock price on March 9, 2011, the date of the meeting. Since this grant was intended as compensation for annual service, and since the vesting policy requires quarterly vesting of non-employee director options, the Company recorded $7,000 and $16,000 of share-based compensation for the non-employee directors for the three and six months ended June 30, 2011 and $16,000 and $36,000 for the three and six months ended June 30, 2010 utilizing the Black-Scholes valuation model.

Income Taxes: The process of preparing the financial statements requires management estimates of income taxes in each of the jurisdictions that the Company operates. This process involves estimating current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the balance sheet. Pursuant to ASC Topic 740, Income Taxes, the Company utilizes 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. Management must assess the likelihood that the deferred tax assets or liabilities will be realized for future periods, and to the extent management believes that realization is not likely, must establish a valuation allowance. To the extent a valuation allowance is created or adjusted in a period, the Company must include an expense or benefit within the tax provision in the statements of operations.

Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. It is possible that a selection of different input variables could produce a materially different estimate of the provision, asset, liability and valuation allowance.

Based on management’s analysis of the Company’s recent performance, management determined that there was insufficient evidence of future profitability to ensure that the Company would be more likely than not to realize any benefit from the deferred tax assets.  Therefore, as of June 30, 2011, the Company continued to record a 100% valuation reserve against all of the deferred tax assets.

Reclassification:  Certain prior year amounts have been reclassified to conform to the current year presentation.  These reclassifications include the accounting for the Company’s red blood cell collection operation as discontinued operations as discussed in Note 3. As a result, the financial results for this operation have been reported as discontinued operations, and the assets and liabilities as held for sale, in the consolidated financial statements as of June 30, 2011.  Since the consolidated financial statements for the three and six months ended June 30, 2010 previously reported these operations as part of continuing operations, the financial results and cash flow statement have been reclassified to reflect the change in the status of the red blood cell portion of the business as discontinued operations.

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2011, FASB issued Accounting Standards Update (“ASU”) 2011-04, Fair Value Measurement (Topic 820): Amendments to achieve common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. The amendments in the ASU change the wording used to describe requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments are effective during interim and annual periods beginning after December 15, 2011. Management does not believe that the adoption of this standard will have a material impact the Company’s financial position, results of operations or cash flows.

CONCENTRATION OF CREDIT RISK

The Company maintains cash balances at various financial institutions. Deposits not exceeding $250,000 for each institution are insured by the Federal Deposit Insurance Corporation. Section 343 of the Dodd-Frank Act amends the Federal Deposit Insurance Act to include noninterest-bearing transaction accounts as a new temporary deposit insurance account category. All funds held in noninterest-bearing transaction accounts will be fully insured, without limit, through December 31, 2012.

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Note 4 - Line of Credit and Notes Payable

6 Months Ended

Jun. 30, 2011

Debt Disclosure [Text Block]

Note 4—Line of Credit and Notes Payable

On December 9, 2009, the Company, together with the Company’s subsidiary, Coral Blood Services, Inc., entered into a Credit Agreement (the “Wells Agreement”), and related security agreements, with Wells Fargo Bank, N.A.   The Wells Agreement provided that the Company could borrow the lesser of 80% of eligible accounts receivable or $5 million, had a maturity date of December 1, 2011, and provided for the monthly payment of interest at a rate of 0.25% above the bank’s prime rate.  The Wells Agreement also granted the bank a first priority security interest in all of the assets of the Company and Coral Blood Services, Inc.

The Company had no outstanding borrowings under the Wells Agreement as of June 30, 2011, except for a letter of credit issued by Wells Fargo as security for lease obligations associated with the Company’s Van Nuys facility.  The Company is required to maintain a letter of credit under the lease, initially in the amount of $815,000 and reducing by 10% each year on August 14, 2009, 2010, 2011 and 2012, and 20% each year on August 14, 2013 and 2014.  At June 30, 2011, the letter of credit was for $660,000.  No amounts have been drawn against the letter of credit.

The Wells Agreement also required that the Company maintain certain financial covenants which the Company had not maintained and was in default at December 31, 2010.

Effective as of January 15, 2011, in consideration of Wells Fargo waiving the Company’s existing defaults under the Wells Agreement, the Company agreed to amend the Wells Agreement to provide that outstanding borrowings, including outstanding advances and letters of credit, shall not at any time exceed the amount of cash collateral in a segregated, blocked deposit account maintained by the Company with Wells Fargo and with respect to which Wells Fargo has been granted a first priority security interest to secure all present and future indebtedness of the Company to Wells Fargo.  Pursuant to this arrangement, the Company has pledged $660,000 in cash to Wells Fargo, and the Company has outstanding letters of credit for an aggregate of $660,000 under the Wells Agreement.

On July 5, 2011, the Company entered into a second amendment to the Wells Agreement, pursuant to which the parties amended the Wells Agreement to (i) reduce outstanding borrowings, including outstanding advances and letters of credit, to $660,000, which is the amount of cash collateral the Company maintains in a segregated, blocked deposit account with Wells Fargo, (ii) provide for Wells Fargo’s release of its security interests on all assets of the Company and Coral Blood Services other than a security interest on the cash collateral the Company maintains in a segregated, blocked deposit account with the bank, and terminated certain ancillary agreements pursuant to which the bank perfected its security interest in certain assets of the Company and Coral Blood Services, and (iii) to modify and delete certain affirmative and negative covenants of the Company and Coral Blood Services.

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Note 5 - Shareholders' Equity

6 Months Ended

Jun. 30, 2011

Stockholders' Equity Note Disclosure [Text Block]

Note 5—Shareholders’ Equity

Pursuant to ASC Topics 505, Equity and 718, Stock Compensation, the cost resulting from all share-based payment transactions must be recognized in the Company’s consolidated financial statements.  For 2011, the Company recognizes compensation expense related to stock options granted to employees based on compensation cost for all share-based payments granted prior to June 30, 2011, based on the grant date fair value estimated in accordance with ASC Topics 505, Equity and 718, Stock Compensation.  For the three and six months ended June 30, 2011, the Company recognized $17,000 and $50,000 in share-based compensation costs, respectively including $7,000 and $16,000 of share-based compensation for non-employee director options. For the three and six months ended June 30, 2010, the Company recognized $24,000 and $83,000 in share-based compensation costs, including $16,000 and $36,000 of share-based compensation for non-employee director options. See Note 1 of Notes to Consolidated Financial Statements.

The following summarizes the activity of the Company’s stock options for the six months ended June 30, 2011:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Number of shares under option:
Outstanding at January 1, 2011		1,569,000		$	1.05			$	66,210
Granted		415,000			0.29				83,000
Exercised		-			-
Cancelled or expired		(119,000	)		1.40				460
Forfeited		(35,000	)		0.52				400
Outstanding at June 30, 2011		1,830,000		$	0.87		6.6	$	148,350
Exercisable at June 30, 2011		1,215,500		$	1.10		5.3	$	71,210

The following summarizes the activity of the Company’s stock options that have not yet vested as of June 30, 2011:

	Shares			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2011		317,000		$	0.53
Granted		415,000			0.25
Vested		(82,500	)		0.42
Forfeited		(35,000	)		0.48
Nonvested at June 30, 2011		614,500		$	0.36

As of June 30, 2011, there was $140,000 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under existing share-based payments. This cost is expected to be recognized over a weighted-average period of 3.2 years. The total measurement fair value of shares vested during the three and six months ended June 30, 2011 was $11,000 and $35,000.

The Black-Scholes option pricing model is used by the Company to determine the weighted average fairvalue of share-based payments. The fair value at date of grant and the assumptions utilized to determine such values are indicated in the following table:

	Three Months Ended June 30, 2011		Six Months Ended June 30, 2011
Weighted average fair value for options exercised During the period		N/A		N/A
Weighted average fair value at date of grant for share-based payments vested during the period	$	0.33	$	0.42
Risk-free interest rates				2.8%
Expected stock price volatility				128.9
Expected dividend yield			$	0
Expected forfeitures		29.5%		29.5%

The Company does not assume a forfeiture rate when assessing value for options held by independent members of the Board of Directors.  Since options issued to independent board members are not forfeited upon separation from the Company, management has determined it is inappropriate to assign a forfeiture rate to these options.

The Company uses the 2006 Plan to encourage ownership in the Company by key personnel whose long-term service is considered essential to the Company’s continued progress, thereby linking these employees directly to stockholder interests through increased stock ownership.  A total of 2,200,000 shares of the Company’s common stock have been reserved for issuance under the 2006 Plan. As of June 30, 2011, the Company had utilized 1,517,835 of the shares reserved under the 2006 Plan, and 682,165 shares remain available.  Awards may be granted to any employee, director or consultant, or those of the Company’s affiliates.

Prior to the 2006 Plan, the Company utilized the 1996 Stock Incentive Plan (“1996 Plan”).  The 1996 Plan expired on July 19, 2006, although options remain outstanding that were originally issued under this plan.

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Note 6- Earnings per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share [Text Block]

Note 6—Earnings per Share

The following table provides the calculation methodology for the numerator and denominator for basic and diluted earnings per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Net (loss) income from continuing operations	$	(432,000	)	$	(620,000	)	$	(927,000	)	$	(1,575,000	)
Weighted average shares outstanding		9,712,948			10,049,148			9,712,948			10,049,339
Net effect of dilutive options		-			185,000			-			183,000
Weighted average diluted shares outstanding		9,712,948			10,234,148			9,712,948			10,232,339
(Loss) income per share from continuing operations - diluted	$	(0.04	)	$	(0.06	)	$	(0.10	)	$	(0.15	)
Net income (loss) from discontinued operations	$	180,000		$	843,000		$	285,000		$	1,595,000
Income (loss) per share from discontinued operations - diluted	$	0.02		$	0.08		$	0.03		$	0.16
Net loss	$	(252,000	)	$	223,000		$	(642,000	)	$	20,000
Loss per share - diluted	$	(0.03	)	$	0.02		$	(0.07	)	$	-

Options outstanding for 1,830,000 shares of common stock for the three and six months ended June 30, 2011 have been excluded from the above calculation because their effect would have been anti-dilutive.

Options outstanding for 970,000 shares of common stock for the three and six months ended June 30, 2010 have been excluded from the above calculation because their effect would have been anti-dilutive.

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Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Net (loss) income	$ (642,000)	$ 20,000
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Income from discontinued operations	(285,000)	(1,595,000)
Provision for bad debts	7,000	6,000
Depreciation and amortization	475,000	570,000
(Gain) loss on disposal of assets	(197,000)	3,000
Share-based compensation	50,000	83,000
Provision for inventory obsolescence	32,000
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	(262,000)	249,000
Decrease (increase) in inventories, supplies and prepaid expenses	94,000	(449,000)
Decrease in other receivables	133,000	34,000
Decrease in other assets	13,000	11,000
Increase in accounts payable, accrued payroll, accrued expenses and deferred rent	415,000	669,000
Net cash used in operating activities	(167,000)	(399,000)
Cash flows from investing activities:
Proceeds from the sale of plant and equipment	219,000	1,000
Purchases of plant and equipment	(305,000)	(230,000)
Net cash used in investing activities	(86,000)	(229,000)
Cash flows from financing activities:
Purchase of treasury stock		(3,000)
Proceeds from the exercise of stock options		6,000
Principal payments on capital leases	(10,000)
Net cash (used in) provided by financing activities	(10,000)	3,000
Net cash used in continuing operations	(263,000)	(625,000)
Cash Flows - Discontinued Operations
Net cash provided by operating activities	344,000	1,615,000
Net cash provided by discontinued operations	344,000	1,615,000
Increase in cash and cash equivalents	81,000	990,000
Cash and cash equivalents at beginning of period	1,848,000	1,222,000
Cash and Cash Equivalents	1,929,000	2,212,000
Cash, cash equivalents - Continuing operations	1,683,000	2,002,000
Cash and cash equivalents - Assets held for sale	246,000	210,000
Supplemental disclosure:
Interest paid	5,000
Income taxes refunded	$ (55,000)	$ (10,000)

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Note 2 - Inventory

6 Months Ended

Jun. 30, 2011

Inventory Disclosure [Text Block]

Note 2—Inventory

Inventories for continuing operations consist of Company-manufactured platelets. Supplies consist primarily of medical supplies used to collect and manufacture platelets and to provide therapeutic services. Inventories for discontinued operations consist of whole blood components and other blood products, as well as component blood products purchased for resale. Inventories are stated at the lower of cost or market and are accounted for on a first-in, first-out basis.

Inventories are comprised of the following as of:

	June 30,			December 31,
	2011			2010
Continuing Operations
Supplies	$	448,000		$	461,000
Blood products		106,000			116,000
Less: obsolescence reserve		(32,000	)		-
Total	$	522,000		$	577,000

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Condensed Consolidated Balance Sheets (USD $)	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 1,683,000	$ 1,638,000
Restricted cash	660,000	660,000
Accounts receivable, net of allowance for doubtful accounts of $98,000 in 2011 and $91,000 in 2010	3,035,000	2,780,000
Product inventories and supplies, net	522,000	577,000
Prepaid expenses	451,000	522,000
Assets held for sale	449,000	463,000
Other receivables	35,000	168,000
Total current assets	6,835,000	6,808,000
Plant and equipment, net of accumulated depreciation and amortization of $6,725,000 in 2011 and $7,704,000 in 2010	2,745,000	2,887,000
Other assets	135,000	148,000
Total assets	9,715,000	9,843,000
Liabilities and Shareholders' Equity
Accounts payable	1,841,000	1,486,000
Accrued payroll and payroll taxes	791,000	636,000
Other accrued expenses	263,000	319,000
Current portion of capital lease	17,000	16,000
Liabilities related to assets held for sale	2,154,000	2,094,000
Total current liabilities	5,066,000	4,551,000
Deferred rent	494,000	533,000
Long term portion of capital lease	66,000	77,000
Shareholders' equity:
Common stock, no par value - 20,000,000 shares authorized, 9,712,948 issued and outstanding in 2011 and 2010	16,338,000	16,289,000
Accumulated deficit	(12,249,000)	(11,607,000)
Total shareholders' equity	4,089,000	4,682,000
Total liabilities and shareholders' equity	$ 9,715,000	$ 9,843,000