HemaCare Corp. (fka HEMA)

[morcash]

FORM 8-K Summary

Costs Associated with Exit

On November 2, 2007, HemaCare BioScience, Inc., (“HemaBio”) the wholly owned Florida-based research products subsidiary of HemaCare Corporation, (the “Company”) received letters of resignation from Mr. Joseph Mauro, Company President, and Mr. Valentin Adia, Vice President of Business Development.

third quarter of 2007, HemaBio produced a net loss of approximately $300,000, and was projected to record a net loss of $125,000 in the month of October 2007. The Board of Directors of HemaBio, in consultation with, and with the approval of, the Board of Directors of the Company, determined HemaBio’s business could not operate without senior management, and that the pathway to future profitability was unclear. Therefore, the Board of Directors of HemaBio decided that it was in the best interest of HemaBio’s creditors to close all operations of HemaBio, effective November 5, 2007.

shall be reported in discontinued operations in the fourth quarter of 2007. The most significant closure related cost would be the obligations, if any, of HemaBio to Mr. Mauro and Mr. Adia under their employment agreements.

Management estimates that the Company will report a loss from discontinued operations in the fourth quarter of 2007 of up to $1,000,000 related to the closure of HemaBio. Included in this estimate are i) approximately $600,000 in severance expenses to Joseph Mauro and Valentin Adia, ii) approximately $150,000 in operating losses from October 1, 2007 through the date of closure, iii) approximately $150,000 increase in allowance for bad debt as a result of customers refusal to pay existing receivables of HemaBio as a result of the termination of contractual obligations, and iv) approximately $100,000 in miscellaneous closure related expenses, including attorney’s fees. Management’s estimate is preliminary and is subject to change as the closure process proceeds. The estimated loss in the 4th quarter does not reflect any obligation relief that HemaBio might obtain through insolvency proceedings.

Item 2.06 Material Impairments

As a result of the decision to close HemaBio, management has determined that the fair value of goodwill is zero, and that the Company will recognize a goodwill impairment loss in the third quarter of 2007 equal to the total value of goodwill created as a result of the acquisition of HemaBio, or $4,259,000.