10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-K

[Mark One]

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

For the fiscal year endedOctober 31, 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 0-15266

BIO-REFERENCE LABORATORIES, INC.

New Jersey	22-2405059
(State of incorporation)	(I.R.S. Employer
	Identification No.)

481 Edward H. Ross Drive, Elmwood Park, New Jersey  07407

(Address of principal executive offices)

Registrant’s telephone number 201-791-2600

Securities registered pursuant to Section 12(b) of the Act:    None

Securities registered pursuant to Section 12(g) of the Act:	Name of Exchange on Which Registered
Common Stock, $.01 par value	NASDAQ Global Market

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o No x.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.  Yes o No x.

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 x No o.  [not required]

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

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 x
Non-Accelerated filer o	Smaller reporting company o

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.

The aggregate market value of the voting stock of Bio-Reference Laboratories, Inc. (consisting of Common Stock, $.01 par value) held by non-affiliates of the registrant was approximately $704,188,409 based upon the last sale price for the Common Stock on April 30, 2011, the last trading date of the registrant’s most recently completed second quarter, as reported on the NASDAQ Global Market System.

On January 9, 2012, there were 27,949,900 shares of Common Stock issued and outstanding

PART I

Special Note

Throughout this Annual Report on form 10-K, the number of shares and the price per share have been adjusted to reflect the Company’s 2-for-1 stock split effective on April 22, 2010.

Forward Looking Statements

Statements included in this Annual Report on Form 10-K (Annual Report) that are not historical in nature, are intended to be, and are hereby identified as “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, many of which are beyond our ability to control or predict. Forward-looking statements may be identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will” or words of similar meaning and include, but are not limited to, statements about the expected future business and financial performance of Bio-Reference Laboratories, Inc. and its subsidiaries. Statements looking forward in time are included in this report pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks and uncertainties that may cause the Company’s actual results in future periods to be materially different from any future performance suggested herein.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. While many aspects of our business are subject to complex federal, state and local regulations, the accounting for our business is generally straightforward.  Our revenues are primarily comprised of a high volume of relatively low dollar transactions, and about 42% of all our costs consist of employee compensation and benefits.  Revenues are recognized at the time the services are performed and are reported at the estimated net realizable amounts from patients, third-party payors and others for services rendered including prospectively determined adjustments under reimbursement agreements with third-party payors.  These adjustments are accrued on an estimated basis in the period the services are rendered and adjusted in future periods as final settlements are determined.  These estimates are reviewed and adjusted, if warranted, by senior management on a monthly basis.  We believe that our estimates and assumptions are correct.  Several factors could cause actual results to differ materially from those currently anticipated due to a number of factors in addition to those discussed under “Risk Factors” as well as elsewhere herein including:

Loss or suspension of a license or imposition of a fine or penalties under, or future changes in, the law or regulations of CLIA, or those of state laboratory licensing laws;

Failure to comply with HIPAA, which could negatively impact profitability and cash flows;

FDA regulation of Laboratory Developed Tests and clinical laboratories;

Failure to comply with federal and state anti-kickback laws;

Failure to maintain the security of patient-related information;

Failure to comply with the Federal Occupational Safety and Health Administration requirements and the recently passed Needlestick Safety and Prevention Act;

Failure to comply with federal and state laws and regulations related to submission of claims for our services;

Changes in regulation and policies, including increasing downward pressure on health care reimbursement;

Efforts by third-party payors to reduce utilization and reimbursement for clinical testing services;

Failure to timely or accurately bill for our services;

Our failure to integrate newly acquired businesses and the costs related to such integration;

Increased competition, including price competition;

Our ability to attract and retain experienced and qualified personnel;

Our failure to obtain and retain new clients and business partners, or a reduction in tests ordered or specimens submitted by existing clients;

Adverse litigation results; and

Failure to establish, and perform to, appropriate quality standards to assure that the highest level of quality is observed in the performance of our testing services.

Item. 1. - Business

Overview

We are a clinical testing laboratory offering testing, information and related services to physician offices, clinics, hospitals, employers and governmental units.  We believe that we are the fourth largest full-service laboratory in the United States and the largest independent regional laboratory in the Northeastern market. We offer a comprehensive list of laboratory testing services utilized by healthcare providers in the detection, diagnosis, evaluation, monitoring and treatment of diseases.  We primarily focus on esoteric testing, molecular diagnostics, anatomical pathology, genetics, women’s health and correctional health care.

We currently process approximately 6.7 million laboratory test requisitions each year. A requisition form accompanies a patient specimen, indicating the tests to be performed and the party to be invoiced for the tests. We have a network of 98 patient service centers located in the Northeast (primarily in New York metropolitan super-regional area) for collection of patient specimens.  We currently conduct business in most New York State counties, as well as in most of New Jersey and Maryland as well as some parts of Pennsylvania, Delaware and Connecticut. We primarily offer laboratory services to physician offices in these areas with an infrastructure that includes a comprehensive logistical department, extensive phlebotomy services and phlebotomy draw stations scattered around our geographic area.

In addition to our clinical testing operations, we operate a clinical knowledge management service through our PSIMedica business unit.  This system uses customer data from laboratory results, pharmaceutical data, claims data and other data sources to provide administrative and clinical decision support systems that enable our customers to provide quality and efficient healthcare to their populations.

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We also operate a web-based connectivity portal solution for laboratories and physicians through our CareEvolve subsidiary. We use this portal ourselves to provide laboratory ordering and results as well as connectivity to our physician customers.  We also market and license this connectivity solution to other laboratories throughout the country.

We are a New Jersey corporation. We are the successor to Med-Mobile, Inc., a New Jersey corporation that was organized in 1981. Our executive offices are located at 481 Edward H. Ross Drive, Elmwood Park, NJ  07407, and our telephone number is 201-791-2600. In this Form 10-K, we may at times refer to ourselves and our subsidiaries as “we,” “us” or “the Company.”

The Clinical Laboratory Testing Market in the United States

We believe that the U.S. market for clinical laboratory testing generated approximately $61 billion in annual revenue in 2011.  Nearly all laboratory tests are performed by one of three types of laboratories: hospital laboratories, physician office laboratories or independent clinical laboratories. We believe approximately 60% of the clinical laboratory tests done in the United States are currently performed in a hospital laboratory, approximately 35% performed by an independent clinical laboratory and the balance in a physician office or other laboratory.

Commencing with the advent of managed care cost containment in the 1990s, the industry has been impacted by the rapid growth of managed care arrangements, increasingly stringent government regulation and escalating numbers of investigations into fraud and abuse. Among other things, these factors have led to revenue and profit declines for many smaller and mid-sized clinical laboratories, and industry consolidations. As a result, fewer but larger commercial clinical laboratories have emerged with greater economies of scale, more effective compliance with government billing regulation and other laws and a better approach to pricing their services, and these changes have resulted in improved profitability for these larger commercial laboratories.  In addition, new and emerging technologies continue to provide greater testing opportunities for clinical laboratories.

We believe that the clinical laboratory testing industry will continue to experience growth in testing volume due to the following factors:

the aging of the population of the United States;

patient awareness of the value of laboratory tests;

a decrease in the cost of tests;

the development of sophisticated and specialized tests for early detection of disease and disease management;

the diagnosis and monitoring of infectious diseases, such as AIDS and Hepatitis C;

increased recognition of early detection and prevention as a means of reducing healthcare costs;

the emergence of employer-sponsored wellness programs; and

additional research and development in genomics.

In addition, new and emerging technologies continue to provide greater testing opportunities for clinical laboratories.

Business Strengths and Focus

We operate as a national oncology laboratory through our GenPath business unit.  Our expertise in cancer pathology and diagnostics as well as molecular diagnostics has enabled GenPath to grow as a national provider.

Our innovative technology platform for sexually transmitted infections has enabled us to expand from a regional service offering to a national offering with specimens coming from throughout the contiguous 48 states in the area of Women’s Health, through our GenPath business unit.

GeneDx, our wholly owned subsidiary, is our genetics laboratory and is typically recognized as the leading national laboratory for testing of rare and ultra-rare genetic diseases.

We have one of the largest regional marketing staffs of any laboratory in the country, with about 250 managers and sales and service representatives working for us. We have groups dedicated to the Metropolitan regional market, the Oncology market, the Women’s Health market, the Genetic testing market and the Correctional Health market.  We are currently building a new marketing group that will cross over into the genetics and Women’s Health groups to market to physicians who offer pre-natal testing.

We believe that our large marketing staff and strong infrastructure within our designated area can be leveraged to bring new technologies to physicians and healthcare providers. Over the past year, our volume of testing in the area of molecular diagnostics has increased by approximately 35%.

We believe that laboratory data has great value in managing the healthcare of a population, but can only be properly utilized when combined with medical claims and pharmacy data. Our medical information unit, PSIMedica, seeks to combine laboratory data with these other data elements in order to provide actionable analytics designed to help to improve the quality and efficiency of healthcare.

Strategy

We seek to continue our strong growth not only through our marketing organization, new technologies and superior service, but also by providing value-added analytics in conjunction with laboratory results.  Our mission is to be recognized by our clients as the best provider of clinical laboratory testing, information and related services. The principal components of our strategy to achieve our mission are as follows:

capitalize on our position within the clinical market;

lead in providing medical information;

provide the highest quality service; and

pursue strategic growth opportunities, both through development of new testing services and through acquisitions.

Our Testing Services

Our laboratory testing business consists of routine testing and esoteric testing. Routine testing generates approximately 40% and esoteric testing generates approximately 60% of our net revenues.

Routine Testing

Routine tests measure various health parameters, such as the functions of the heart, kidney, liver, thyroid and other organs. Below is an abbreviated list of some commonly ordered routine tests:

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Blood cell counts

Cholesterol levels

HIV-related tests

Pregnancy

Substance abuse

Urinalysis

We perform these tests at our main processing facility in Elmwood Park, New Jersey.  We operate 24 hours a day, 365 days a year. We perform and report most routine tests within 24 hours. Tests results are delivered via driver or electronically.

Esoteric Tests

We also perform esoteric tests that require sophisticated equipment and materials, highly skilled personnel and professional attention.  These tests are ordered less frequently than routine tests.  They are also generally priced higher than routine tests. Esoteric tests are typically related to the following medical fields:

Endocrinology (the study of glands and their hormone secretions)

Genetics (the study of chromosomes, genes and their protein products)

Immunology (the study of the immune system)

Microbiology (the study of microscopic forms of life)

Molecular diagnostics (the study of genetic content for disease information)

Oncology (the study of abnormal cell growth)

Serology (the study of body fluids)

Toxicology (the study of chemicals and drugs and their effects on the body)

We perform cancer cytogenetic testing at our leased facilities in at our main processing facility in Elmwood Park, Smithtown, NY, Clarksburg, MD and Milford, MA and genetic testing at our GeneDx leased facility in Gaithersburg, MD, as well as at our Elmwood Park facility.  We perform cytology testing in Frederick, MD, Milford, MA, Columbus, OH, Houston, TX and at our Elmwood Park facility.

PSIMedica—Medical Information

Our PSIMedica business unit is based on a clinical knowledge management, or CKM, system that uses data derived from various disparate sources to provide both administrative and clinical analysis of a population. The source data consists of enrollment (demographic) data, claims data, pharmacy data, laboratory results data and any other data that may be available. The system uses sophisticated algorithms to cleanse and configure the data to facilitate comprehensive and meaningful analysis. The data is maintained on multiple levels enabling review of data from the global level to the granular transactional detail.  The system includes a base set of queries that provide basic functionality and also provides on-line real-time ad hoc query capability enabling the user to customize analysis to the needs of the user’s organization. In addition to the basic queries provided by the system, PSIMedica Quality Indicators, or PQI,  provide comprehensive, disease-state-oriented queries that disclose the quality and efficiency of the care and service. These indicators have been designed to provide the user with standards and outcome predictors on a medical standards basis.  We are using PSIMedica to market value-added clinical laboratory services to bulk purchasers of clinical laboratory solutions, as well as marketing our PSIMedica programs to businesses such as health plans, integrated delivery networks, disease management companies, insurers, clinical trial companies and other healthcare providers that benefit from the ability of the system to combine both clinical and administrative analysis.

CareEvolve—Connectivity Solutions

Through our CareEvolve subsidiary, we offer a physician-based connectivity solution.  This system provides a complex, sophisticated portal for ordering laboratory services and delivering laboratory results, along with ancillary connectivity services.  The system is designed to be physician-centric and to provide a highly flexible, scalable, comprehensive desktop solution for physicians to manage their day-to-day practice needs, as well as to handle their clinical laboratory ordering and reporting.  This product has been designed to work as a platform with plug and play capability that can easily be used by other laboratories that also need a web-based solution for their physician customers.

Payors and Clients

We provide laboratory services to a range of healthcare providers. A “payor” is the party who pays for the tests while the “client” is the party that refers the tests to us. An organization that has a contract with us, such as a clinic or governmental agency, may be both a payor and a client. Some states, such as New York and New Jersey, prohibit us from billing physician clients.  During fiscal year 2011, no single client accounted for more than 10% of our net revenues.

The following table reflects our estimate of the breakdown of net revenue by type of payor for the fiscal years ended October 31, 2009, 2010, and 2011.

	Fiscal Year Ended October 31,
	2011		2010		2009
Direct Patient Billing	2	%	3	%	4	%
Commercial Insurance	61	%	53	%	49	%
Professional Billing	17	%	20	%	22	%
Medicare	19	%	22	%	23	%
Medicaid	1	%	2	%	2	%
	100	%	100	%	100	%

Physicians who order clinical tests for their patients represent one of the primary sources of our testing volume. Fees invoiced to patients and third parties are based on our fee schedule, which may be subject to limitations imposed by third-party payors. Medicare and Medicaid, or CMS, reimbursements are based on fee schedules set by governmental authorities.

We provide laboratory services to governmental agencies and large employer groups. We believe that we are the largest regional laboratory providing laboratory testing services to correctional facilities in the United States. All of these clients are charged on a contractual basis.

Billing

Billing for laboratory services is extremely complicated. We must bill various payors, such as patients, Medicare, Medicaid, insurance companies and employer groups, all of which have different billing requirements. Compliance with applicable laws and regulations as well as internal compliance procedures adds complexity to this process.

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Our bad debt expense is not the result of credit-related issues, as is the case in most industries. Our bad debt expense is due primarily to missing or incorrect demographic and billing information on our requisitions.  We depend on the healthcare provider to supply us with this information. We perform the tests and report the test results as requested on the requisition regardless of whether the demographic and billing information is correct or even missing altogether. We then attempt to obtain missing and to correct incorrect information. This adds to the complexity, slows the invoicing process and generally increases the aging of our accounts receivable. When all issues are not resolved in a timely manner, the item is written-off to bad debt expense through the allowance for doubtful accounts. Other items such as pricing differences and payor disputes also complicate billing. Adjustments to receivables as a result of these types of matters are accounted for as revenue adjustments and are not written-off to bad debt expense.

Sales and Marketing

We employ full and part-time sales and marketing representatives. With about 250 managers and sales and service representatives working for us, we have groups dedicated to the New York metropolitan regional market, the oncology market, the women’s health market, the genetic testing market and the correctional health market.  We are currently building a new marketing group that will cross over into the genetics and women’s health groups to market to physicians who offer pre-natal testing.

All of our sales and marketing personnel operate in a dual capacity, as both marketing and client support representatives. This ensures that all of our salespersons are intimately involved with the client. We believe that this is extremely helpful in client retention, since it provides a strong connection between our physician clients and us.

Client Service Coordinators

We utilize the services of full and part-time client service coordinators at our Elmwood Park, Clarksburg and Gaithersburg facilities, all of whom are trained in medical and laboratory terminology. This staff is used as an interface with physicians and nurses and supplements the client support provided by our sales force. They also report highly abnormal and life threatening results to the ordering physician immediately via telephone in order to assist speedy medical resolution of patient problems.

Logistical Support

We employ full and part-time couriers. Our couriers pick up patient specimens from and deliver printed reports to physician offices, nursing homes, clinics and correctional facilities.

Acquisitions

In 2006, we acquired GeneDx, a diagnostic genetic testing laboratory providing services to national and international customers. GeneDx specializes in testing for rare, ultra-rare and complex genetic conditions through the use of DNA sequencing. In 2007, we introduced the first commercially available genome-wide oligonucleotide microarray analysis testing useful for the diagnosis of, among other conditions, developmental disorders.  In 2008, we were the first commercial laboratory in the world to offer NextGen (high speed computerized sequencing) to analyze multi-gene conditions.  These innovations have significantly grown GeneDx’s business. The success and growth of GeneDx can be attributed to both the unique nature of our testing and the highly experienced clinicians and researchers who run the business.

On March 2, 2010, we completed the acquisition of Lenetix Medical Screening Laboratory, Inc., a clinical testing laboratory located in Mineola, New York.  The laboratory performs both clinical laboratory diagnostic testing and genetic testing.

On August 5, 2011, we acquired The Genetics Center, Inc., a New York corporation engaged in the clinical laboratory business with its principal place of business in Smithtown, New York

We retained the staffs of these laboratories and continue to operate at the same locations.

Competition

We compete with three types of providers in a highly fragmented and competitive industry: hospital laboratories, physician-office laboratories and other independent clinical laboratories. Our major competitors in the New York metropolitan area are two of the largest national laboratories, Quest Diagnostics (DGX) and Laboratory Corporation of America (LH). Although we are much smaller than these national laboratories, we believe that we compete successfully with them in our region due to our innovative testing services and our level of service.  .We believe our responses to medical consultation are faster and more personalized than those of the national laboratories. Our client service staff deals only with basic technical questions and those that have medical or scientific significance are referred directly to our senior scientists and medical staff.

Quality Assurance

In order to provide accurate and precise clinical information to the physician, it is essential that we maintain a well structured and vigorous quality assurance program. We hold the required Federal and state licenses necessary for the operation of a clinical laboratory at our facilities in New Jersey, New York, Maryland, Massachusetts, Texas and Ohio. We submit to vigorous proficiency tests (or surveys) for all tests that we perform. We are also subject to unannounced inspections from the various state and federal licensing agencies.

Our laboratories are accredited by the College of American Pathologists, or CAP.  This accreditation includes on-site inspections and participation in the CAP (or equivalent) proficiency testing program. CAP is an independent organization of board certified pathologists approved by the Center for Medicare and Medicaid Services (CMS), to inspect clinical laboratories in order to determine compliance with the standards required by the Clinical Laboratory Improvement Amendments of 1988, or CLIA.

We have a Quality Assurance Committee, headed by a Quality Assurance Coordinator and composed of supervisors from all of our departments.  The Committee meets each day to assess and evaluate our laboratory quality.  Based on the information received from the Committee, recommendations are made to correct conditions that have led to errors.  Management, department supervisors and members of the Committee continually monitor laboratory quality.  Depending on the test, two or three levels of quality control materials are run in each analytical assay to enhance precision and accuracy.  Patient population statistics are evaluated each day. Testing of highly abnormal samples is repeated to maximize accuracy.

We believe that all of these procedures are necessary, not only in maintaining Federal and state licensing, but also in assuring a quality product.  We believe that our high standards of quality are an important factor in client retention.

Regulation of Our Clinical Laboratory Operations

The clinical laboratory industry is highly regulated and subjected to significant and changing Federal and state laws and regulations. These laws and regulations affect key aspects of our business, including licensure and operations, billing and payment for laboratory services, sales and marketing interactions with ordering physicians, security and confidentiality of health information, and environmental and occupational safety.  Oversight

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by government officials includes regular inspections and audits.  Failure to comply with applicable requirements, which are sometimes vague or indefinite, may result in substantial fines, criminal penalties, or other enforcement actions, such as suspension or revocation of a clinical laboratory’s license. Changes in regulations often increase the cost of testing or processing claims.  Also, these laws may be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that could require us to make changes in our operations, including in our pricing, billing and/or marketing practices in a manner that could adversely affect operations.  We seek to and believe that we do conduct our business in compliance with all applicable laws and regulations.  Set forth below are highlights of the key regulatory areas applicable to our business.

Reimbursement for Laboratory Services

We typically bill third party payors such as Medicare, Medicaid, Governmental programs and private insurers for our services.  Billing for clinical testing services is very complicated, and our payers often have different coverage, billing and reimbursement requirements, and change those requirements on an ongoing basis.  Also, submissions of our claims are particularly complex because we provide both anatomic pathology services and clinical laboratory tests, which generally are paid using different reimbursement principals.  The clinical laboratory tests are often paid under a clinical laboratory fee schedule, and the anatomic pathology services are often paid under a physician fee schedule. If ordering physician requisitions contain incorrect or incomplete information, we may also be unable to collect reimbursement from payers.  The increased use of electronic ordering reduces, but does not eliminate, the incidence of missing or incorrect information.

In addition, both government and private sector payers have engaged in ongoing efforts in recent years to contain or reduce health care costs, including reimbursement for clinical laboratory services.  The combination of complex billing requirements and ongoing pressure with respect to reimbursement levels, presents substantial challenges to the clinical laboratory business.  Through the March 2010 adoption of the Patient Protection and Affordable Care Act and the companion Healthcare and Education Reconciliation Act in the United States, which is referred to as the “healthcare reform law,” substantial changes are being made to the current system for paying for healthcare in the United States, including programs to extend medical benefits to millions of individuals who currently lack insurance coverage, coupled with measures to cut Medicare spending for most health care services, including clinical laboratories.  The changes contemplated by the healthcare reform law are subject to rule-making and implementation timelines that extend for several years, and this uncertainty limits our ability to forecast changes that may occur in the future.

The U.S. Congress has considered, at least yearly in conjunction with budgetary legislation, changes to one or both of the Medicare fee schedules under which we receive reimbursement, which include the physician fee schedule for anatomical pathology services, and the clinical laboratory fee schedule for our clinical laboratory services. For example, currently there is no copayment or coinsurance required for clinical laboratory services, although there is for our physician services. However, Congress has periodically considered imposing a 20 percent coinsurance on laboratory services. If enacted, this would require us to attempt to collect this amount from patients, although in many cases the costs of collection would exceed the amount actually received.

For most of the tests performed for Medicare beneficiaries or Medicaid recipients, laboratories are required to bill Medicare or Medicaid directly, and to accept Medicare or Medicaid reimbursement as payment in full. Part B of the Medicare program contains fee schedule payment methodologies for clinical laboratory services, and the Medicare approach and reimbursement levels often serve as a benchmark for commercial payers.  Payment under Medicare is generally the lesser of billed charges, the local fee for a geographic area, and a national limitation amount that is set at a percent of the median of all local fee schedule amounts for each laboratory test code.  Each year, subject to federal legislation, fees may be updated for inflation based on the percentage change in the Consumer Price Index, or CPI.  From 2004 through 2008 the clinical laboratory fee schedule remained frozen, with no CPI increases.  Then, for the first time in five years, as of January 1, 2009 laboratories received a 4.5% across the board increase in reimbursements.  For 2010, the clinical laboratory fee schedule was decreased by 1.9 percent. For 2011, under the healthcare reform law, it was decreased by 1.75 percent, the first of a series of such annual reductions effective from 2011 to 2015.

Under the Medicare framework, the national limitation amount for clinical laboratory services had been reduced in a number of instances over the past several years to a present level equal to 74% of the national median of laboratory charges, and a number of proposals for legislation or regulation are under discussion which could have the effect of substantially reducing Medicare reimbursements to clinical laboratories through reduction of the present allowable percentage or through other means.  We are unable to predict the outcome of these discussions. Depending upon the nature of congressional and/or regulatory action, if any, which is taken and the content of legislation, if any, which is adopted, we could experience a significant decrease in revenues from Medicare, which could have a material adverse effect on us.

Also, Medicare and other payers have expressed some concern regarding “billed charges” reporting by large clinical laboratories, in light of the common practice, among major clinical laboratories, of providing discounted pricing to certain clients that order testing services on a “bulk” basis, such as certain physicians, hospitals, and other institutions, resulting in economies of scale and relatively low administrative costs, as compared with the higher fees charged to individual patients and third party payors, including Medicare, who generally require separate bills or claims for each patient encounter and which involve relatively high administrative costs).   If this issue were decided in a manner that required the downward adjustment of billed charges reporting, it could adversely affect the Company.

Clinical Laboratory Improvement Amendments of 1988 (“CLIA”)

CLIA extends Federal licensing requirements to all clinical laboratories (regardless of the location, size or type of laboratory), including those operated by physicians in their offices, based on the complexity of the tests they perform.  CLIA also establishes a stringent proficiency testing program for laboratories and includes substantial sanctions, such as suspension, revocation or limitation of a laboratory’s CLIA certificate (which is necessary to conduct business), cancellation or suspension of the laboratory’s approval to receive Medicare and Medicaid reimbursement, and significant fines and/or criminal penalties.

CLIA, and its implementing regulations, includes quality standards (establishing Federal quality standards for all clinical laboratories); application and user fee requirements; and enforcement procedures.  The quality standard regulations establish varying levels of regulatory scrutiny depending upon the complexity of testing performed.  Under these regulations, a laboratory that performs only one or more of routine “waived” tests may apply for a waiver from most requirements of CLIA.  We believe that most tests performed by physician office laboratories will fall into either the “waived” or the “moderately complex” category.  The latter category applies to simple or automated tests and generally permits existing personnel in physicians’ offices to continue to perform testing under the implementation of systems that insure the integrity and accurate reporting of results, establishment of quality control systems, proficiency testing by approved agencies, and biannual inspection.

Under CLIA, the company remains subject to state and local laboratory regulations.   CLIA provides that a state may adopt laboratory regulations that are more stringent than those under federal law, and some states require additional personnel qualifications, quality control, record maintenance and other requirements.

Our laboratory completed its first CLIA inspection under CLIA guidelines and received its certificate of compliance effective February 7, 1996. It has been reinspected since on a bi-annual basis and found to be in compliance.  We believe the Company is in compliance with all applicable federal and state laboratory requirements.

Compliance Program

The Office of Inspector General has published a Model Compliance Program for the clinical laboratory industry. This is a voluntary program for laboratories to demonstrate to the Federal government that they are responsible providers. We have implemented a comprehensive voluntary compliance program adhering to the standards set forth in the Model Compliance Program. In addition, under the healthcare reform law, the U.S. Department of Health and Human Services, or HHS, will require suppliers, such as the Company, to adopt, as a condition of Medicare participation,

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compliance programs that meet a core set of requirements.  This mandate has not yet been implemented with respect to clinical laboratories, and HHS has not yet provided a time frame for implementation.

Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”)

Both as a health care provider of clinical laboratory services, and in connection with the services we furnish to health plans and others as a business associate though medical information services, we are required to comply with federal and state laws that protect the privacy and security of certain healthcare and personal information.  These include HIPAA, which establishes comprehensive standards with respect to the privacy and security of medical information, including requirements for safeguarding electronic protected health information, and comprehensive standards regarding uses and disclosures of protected health information.  The HIPAA standards create a complex regulatory framework, including penalties for non-compliance, requirements to respond to patient requests to review and amend their medical records, certain limitations regarding the use of patient information, and notification obligations in the event of certain breaches of patient information.   In addition to HIPAA, we are required to abide by various state laws protecting healthcare information, that impose standards that are stricter than those of HIPAA, such as state laws governing sensitive health information regarding HIV status and genetic testing.

HIPAA provides for significant fines as well as substantial criminal penalties for violations of the Act.  The federal Health Information Technology for Economic and Clinical Health, or HITCH, Act, strengthened and expanded HIPAA, including with respect to breach notification obligations, the extension of a number of HIPAA requirements directly to business associates, heightened penalties and enforcement provisions (including requiring HHS to conduct periodic audits to confirm compliance), and the extension of enforcement authority over HIPAA to state attorney generals.

In addition, HIPAA requires health care providers, such as clinical laboratories, and other covered entities, to use certain transaction and code set rules for specified electronic transactions, such as transactions involving claims submissions.  The Company believes it is in compliance in all material respects with the current rules.  With respect to these rules, January 1, 2012 is a compliance date for all HIPAA-covered entities, such as the Company, to conduct electronic claim submissions and related electronic transactions under a new HIPAA transaction standard, called Version 5010.  CMS is requiring this upgrade in connection with another new requirement applicable to the industry, the implementation of new diagnostic code sets to be used in claims submission.  The new diagnostic code sets are called the ICD-10-CM, and are to be implemented on October 1, 2013.  The Company has been aware of these changes for some time, and believes it is prepared to timely adopt the new standards.  However, it is expected that these changes, in particular the adoption of new diagnostic codes — which must be provided to us accurately by referring physicians in order for us to receive payment from payors, such as Medicare — will result in a degree of disruption and confusion, which may adversely affect Company operations, including reimbursement rates.

Laboratory Developed Tests (LDTs)

The federal Food and Drug Administration, or FDA, has regulatory responsibility over, among other areas, instruments, test kits reagents and other medical devices used by clinical laboratories to perform diagnostic testing.  High complexity and CLIA-certified laboratories, such as ours, frequently develop internal testing procedures to provide diagnostic results to customers. These tests are referred to as laboratory developed tests, or LDTs.  The FDA has claimed regulatory authority over all LDTs, but has exercised enforcement discretion with regard to most LDTs offered by high complexity CLIA-certified laboratories, and has not subjected these tests to the panoply of FDA rules and regulations governing medical devices.  However, the FDA has been considering changes in the way laboratories are allowed to offer these LDTs, and during 2010 publicly announced that it will be exercising regulatory authority over LDTS, using a risk-based approach that will direct more resources to tests with the highest risk of injury.  The FDA has not announced a framework or timetable for implementing its announced approach.  Depending upon the manner in which this new regulatory framework is implemented, there may be an adverse affect on Company operations.

Fraud and Abuse Regulations

Since we supply services that are reimbursed by U.S. federally funded programs such as Medicare and Medicaid, therefore our activities are also subject to regulation by CMS and enforcement by the Office of Inspector General, or OIG, within the HHS. A provision of the U.S. Social Security Act known as the “Anti-Kickback Law” prohibits providers and others from directly or indirectly soliciting, receiving, offering or paying any remuneration with the intent of generating referrals or orders for services or items covered by a government health care program. Many states have similar laws. Courts have interpreted this law very broadly, including holding that a violation has occurred if even one purpose of the remuneration is to generate referrals, even if there are other lawful purposes. There are statutory and regulatory exceptions (known as safe harbors) that outline arrangements that are deemed lawful. However, the fact that an arrangement does not fall within a safe harbor does not necessarily render the conduct illegal under the Anti-Kickback Law. In sum, even legitimate business arrangements between the Company and referral sources, such as physicians, could lead to scrutiny by government enforcement agencies, and require extensive company resources to respond to government investigations. Violations of the Anti-Kickback Law may be punished by civil and criminal penalties and/or exclusion from participation in federal health care programs, including Medicare and Medicaid. The healthcare reform law strengthened provisions of the Anti-Kickback Law.

The federal “Stark Law” or “self-referral” prohibition, subject to certain exceptions, prohibits payment under Medicare or Medicaid for certain designated health services, including, among others, clinical laboratory services, where the referring physician has a financial relationships with the entity that furnishes the clinical laboratory service.   The applicable exceptions permitting federal reimbursement generally require written agreements and fair market value payments that do not vary based upon the volume or value of referrals.   Many states have similar self-referral laws that regulate the financial relationships between referring physicians and clinical laboratories, which extend to all referrals, not only referrals for services reimbursed by Medicare or Medicaid.   Another federal law, known as the “Anti-Markup Rule,” and similar state laws, address the practice of an independent clinical laboratory performing and then billing to the ordering physician a component of a diagnostic test, such as diagnostic pathology services, where the ordering physician bills the test to Medicare.  In this circumstance, penalties may apply to the physician if Medicare or other payor is billed at a rate that exceeds the laboratory’s charges to the physician, and the laboratory could be at risk under false claims laws, described below, for causing the submission of a false claim, if it advised the physician to submit claims to payers in violation of these provisions.

The federal False Claims Act, or FCA, is violated by any entity that “presents or causes to be presented” knowingly false claims for payment to the federal government and many states have similar laws that apply to governmental and private payors. In addition, the healthcare reform law amended the FCA to create a cause of action against any person who knowingly makes a false statement material to an obligation to pay money to the government, or knowingly conceals or improperly decreases an obligation to pay or transmit money or property to the government. For the purposes of these recent amendments, an “obligation” includes an overpayment, which is defined broadly to include “any funds that a person receives or retains under Medicare and Medicaid to which the person, after applicable reconciliation, is not entitled . . . .”

The FCA is commonly used to sue those who submit allegedly false Medicare or Medicaid claims, as well as those who induce or assist others to submit a false claim. Courts and government officials have found that “false claims” can result not only from noncompliance with the express requirements of applicable governmental reimbursement programs, such as Medicare and Medicaid, but also from noncompliance with other laws, such as provisions of the Food, Drug and Cosmetic Act, or laws that require quality care in service delivery. In addition, the healthcare reform law amended the Anti-Kickback Law to specify that a claim to federal health care programs that includes items or services resulting from a violation of the Anti-Kickback Law constitute a false claim under the FCA.  The qui tam or whistleblower provisions of the FCA allow private individuals to bring actions on behalf of the government alleging that the government was defrauded, with tremendous potential financial gain to private citizens in the event they prevail. When a private party brings a whistleblower action under the FCA, the defendant is not made aware of the lawsuit until the government starts its own investigation or makes a decision on whether it will intervene. Many states have enacted similar laws that also apply to claims submitted to commercial insurance companies. The bringing of any FCA action could require us to devote resources to investigate and defend the action. Violations of the FCA could result in enormous economic liability. The law provides that all damages are trebled, and each false claim submitted is subject to a penalty of up to $11,000.

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Historically, the clinical laboratory industry has been the focus of major governmental enforcement initiatives, and within the past few years federal and state governments continue to strengthen their enforcement efforts, such as through new laws that increase funding, powers and remedies to pursue suspected cases of fraud and abuse.  We believe we operate lawfully within these statutes; however, we cannot predict if some of our practices may be interpreted as violating these statutes and regulations.

Waste Management, Health and Safety

We are subject to federal and state laws and regulations regarding the protection of the environment, the health and safety of employees, and the handling, transportation and disposal of medical specimens, and infectious and hazardous wastes.  For example, federal regulations require licensure of interstate transporters of medical waste. In New Jersey, we are subject to the Comprehensive Medical Waste Management Act, or CMWMA, which requires us to register as a generator of special medical waste. All of our medical waste is disposed of by a licensed interstate hauler.  The hauler provides a manifest of the disposition of the waste products as well as a certificate of incineration which is retained by us. These records are audited by the State of New Jersey on a yearly basis. We are also subject to the Federal Hazardous Materials Transportation Law, 49 U.S.C. 5101 et seq., and the Hazardous Materials Regulations, or HMR, 49 CFR parts 171-180.   In addition, the federal Occupational Safety and Health Administration, or OSHA, has established extensive requirements relating specifically to workplace programs to protect workers from exposure to blood-borne pathogens, such as HIV and the hepatitis B virus, including work practice controls, protective clothing and equipment, training, vaccinations and other measures designed to minimize hazardous exposures.

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Intellectual Property Rights

The Company relies on a combination of patents, trademarks, copyrights, trade secrets and nondisclosure and non-competition agreements to establish and protect its proprietary technology. The Company has filed and obtained numerous patents and regularly files patent applications, when appropriate, to establish and protect its proprietary technology.  The Company believes, however, that no single patent, technology, trademark, intellectual property asset or license is material to its business as a whole.

Insurance

We maintain professional liability insurance.  We believe that our present insurance coverage is sufficient to cover currently estimated exposures, but we cannot assure that we will not incur liabilities in excess of the policy limits.  In addition, although we believe that we will be able to continue to obtain adequate insurance coverage, we cannot assure that we will be able to do so at acceptable cost.

Employees

At October 31, 2011, we had 2,438 full-time and 717 part-time employees serving in executive positions, as technicians and technologists (including physicians, pathologists and PhDs), in marketing, in logistics and in bookkeeping, clerical and administrative positions. None of our employees are represented by a labor union. We regard relations with our employees as satisfactory.

Available Information

Our Internet website address is www.bioreference.com.  Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act are available free of charge through our website as soon as reasonably practicable after we electronically file with or furnish them to the Securities and Exchange Commission, or SEC, and are available in print to any stockholder who requests a copy.  Additionally, the charters of the standing committees of our board of directors are available on our website under “Board Committee Charters”. Information on our website shall not be deemed incorporated into, or to be a part of, this Annual Report on Form 10-K.

The public may also read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.  You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  Additionally, the SEC maintains a website that contains reports, proxy statements, information statements and other information regarding issuers, including us, that file electronically with the SEC at www.sec.gov.

Item 1A. Risk Factors

You should carefully consider each of the following risk factors and all other information set forth in this report. Any of the following risks could materially and adversely affect our business, financial condition or results of operations. They are not, however, the only risks we face. Additional risks and uncertainties not presently known to us or that we currently believe not to be material may also adversely affect our business, financial condition or results of operations. This report also includes forward-looking statements that involve risks or uncertainties. Our results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face described below and elsewhere. See “Special Note Regarding Forward Looking Statements”.

Our business could be harmed from the loss or suspension of a license or imposition of a fine or penalties under, or future changes in, or interpretations of CLIA or state laboratory licensing laws to which we are subject.

The clinical laboratory testing industry is subject to extensive federal and state regulation, and many of these statutes and regulations have not been interpreted by the courts.  CLIA extends federal licensing requirements to virtually all clinical laboratories (regardless of the location, size or type of laboratory), including those operated by physicians in their offices, by requiring that they be certified by the federal government or by a federally approved accreditation agency.  The sanction for failure to comply with CLIA requirements may be suspension, revocation or limitation of a laboratory’s CLIA certificate, which is necessary to conduct business, as well as significant fines and/or criminal penalties. In addition, we are subject to regulation under state law. State laws may require that laboratories and/or laboratory personnel meet certain qualifications, specify certain quality controls or require maintenance of certain records.

We cannot assure you that applicable statutes and regulations will not be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that would adversely affect our business. Potential sanctions for violation of these statutes and regulations include significant fines and the suspension or loss of various licenses, certificates and authorizations, which could have a material adverse effect on our business. In addition, compliance with future legislation could impose additional requirements on us, which may be costly.

Failure to comply with HIPAA, including regarding the use of new “standard transactions,” may negatively impact our profitability and cash flows.

Pursuant to HIPAA, we must comply with comprehensive privacy and security standards with respect to the use and disclosure of protected health information, as well as standards for electronic transactions, including specified transaction and code set rules.   Under recent HITECH amendments to HIPAA, the law was expanded, including to require certain data breach notification, direct patient access to laboratory records, the extension of certain HIPAA privacy and security standards directly to business associates, and to heighten penalties for noncompliance, and enforcement efforts.   While the Company maintains policies and procedures to comply with HIPAA, HHS has not yet issued final regulations to implement all HITECH requirements, and while the Company believes compliance will increase Company costs, it is difficult to predict precisely the costs involved.

In addition, the HIPAA transaction standards are complex, and subject to differences in interpretation by payors. For instance, some payors may interpret the standards to require us to provide certain types of information, including demographic information not usually provided to us by physicians. As a result of inconsistent application of transaction standards by payors or the our inability to obtain certain billing information not usually

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provided to us by physicians, we could face increased costs and complexity, a temporary disruption in receipts and ongoing reductions in reimbursements and net revenues. In addition, new requirements for additional standard transactions, such as claims attachments, Version 5010 of the HIPAA Transaction Standards and the ICD-10-CM Code Set, could prove technically difficult, time-consuming or expensive to implement. We are working closely with our payors to establish acceptable protocols for claim submission and with our trade association and an industry coalition to present issues and problems as they arise to the appropriate regulators and standards setting organizations.

FDA regulation of Laboratory Developed Tests (“LDTs”) and clinical laboratories may result in significant change, and our business could be adversely impacted if we fail to adapt.

High complexity, CLIA-certified laboratories, such as ours, frequently develop testing procedures to provide diagnostic results to customers.  These tests have been traditionally offered by nearly all complex laboratories for the last few decades.  The FDA, which regulates the development and use of medical devices, has claimed regulatory authority over LDTs, but has exercised enforcement discretion with respect to most LDTSs offered by high complexity laboratories, and not required these laboratories to comply with FDA regulations regarding medical devices.  During 2010, the FDA publicly announced that it has decided to exercise regulatory authority over these LDTs, and that it plans to issue guidance to the industry regarding its regulatory approach. The FDA has indicated that it will use a risk-based approach to regulation and will direct more resources to tests with wider distribution and with the highest risk of injury, but that it will be sensitive to the need to not adversely impact patient care or innovation. The FDA has not announced a framework or timetable for implementing its new regulatory approach. The regulatory approach adopted by the FDA may lead to an increased regulatory burden, including additional costs and delays in introducing new tests. While the ultimate impact of the FDA’s approach is unknown, it may be extensive and may result in significant change. Our failure to adapt to these changes could have a material adverse effect on our business.

Some of our activities may subject us to risks under federal and state laws prohibiting “kickbacks” and other laws designed to prohibit payments for referrals.

Federal and state anti-kickback laws prohibit payment, or offers of payment, in exchange for referrals of products and services for which reimbursement may be made by Medicare or other federal and state healthcare programs.  Some state laws contain similar prohibitions that apply without regard to the payor of reimbursement for the services. Federal and state anti-referral laws, including the Stark Law, prohibit physicians from referring their Medicare or other federally funded healthcare program patients or specimens to healthcare providers with which the physicians or their immediate family members have a financial relationship involving some types of health services. The financial relationships covered by these prohibitions include clinical laboratory services such as those provided by us. Some state laws also contain similar prohibitions that apply without regard to the payor of reimbursement for the services.   Violations of federal anti-kickback and Stark laws may be punished by civil and criminal penalties, and/or exclusion from participation in federal health care programs, including Medicare and Medicaid.  States may impose similar penalties.   In addition, submitting claims to Medicare and Medicaid, or other federal or state payers The U.S. healthcare reform law significantly strengthened provisions of the Federal False Claims Act, Medicare and Medicaid Anti-Kickback provisions, and other health care fraud provisions, leading to the possibility of greatly increased qui tam suits by relators for perceived violations.  There can be no assurance that our activities will not come under the scrutiny of regulators and other government authorities or that our practices will not be found to violate applicable laws, rules and regulations or prompt lawsuits by private citizen “relators” under federal or state false claims laws.

Federal officials responsible for administering and enforcing the healthcare laws and regulations have made a priority of eliminating healthcare fraud, and through a number of legislative measures, including the recent healthcare reform law, federal funding available for combating health care fraud and abuse has increased. While we seek to conduct our business in compliance with all applicable laws and regulations, many of the laws and regulations applicable to our business, particularly those relating to billing and reimbursement of tests and those relating to relationships with physicians, hospitals and patients, contain language that has not been interpreted by courts. We must rely on our interpretation of these laws and regulations based on the advice of our counsel and regulatory or law enforcement authorities may not agree with our interpretation of these laws and regulations and may seek to enforce legal remedies or penalties against us for violations. From time to time we may need to change our operations, particularly pricing or billing practices, in response to changing interpretations of these laws and regulations or regulatory or judicial determinations with respect to these laws and regulations. These occurrences, regardless of their outcome, could damage our reputation and harm important business relationships that we have with healthcare providers, payors and others. Furthermore, if a regulatory or judicial authority finds that we have not complied with applicable laws and regulations, we would be required to refund amounts that were billed and collected in violation of such laws and regulations. In addition, we may voluntarily refund amounts that were alleged to have been billed and collected in violation of applicable laws and regulations. In either case, we could suffer civil and criminal damages, fines and penalties, exclusion from participation in governmental healthcare programs and the loss of licenses, certificates and authorizations necessary to operate our business, as well as incur liabilities from third-party claims, all of which could harm our operating results and financial condition. Moreover, regardless of the outcome, if we or physicians or other third parties with whom we do business are investigated by a regulatory or law enforcement authority we could incur substantial costs, including legal fees, and our management may be required to divert a substantial amount of time to an investigation.

To enhance compliance with applicable health care laws, and mitigate potential liability in the event of noncompliance, regulatory authorities, such as the United States Health and Human Services Department Office of Inspector General (“OIG”), have recommended the adoption and implementation of a comprehensive health care compliance program that generally contains the elements of an effective compliance and ethics program described in Section 8B2.1 of the United States Sentencing Commission Guidelines Manual, and for many years the OIG has made available a model compliance program targeted to the clinical laboratory industry.  While we have adopted U.S. healthcare compliance and ethics programs that generally incorporate the OIG’s recommendations, and train our applicable employees in such compliance, having such a program can be no assurance that we will avoid any compliance issues.

Failure to maintain the security of patient-related information or compliance with security requirements could damage our reputation with customers, cause it to incur substantial additional costs and become subject to litigation.

We receive certain personal and financial information about our clients and their patients. In addition, we depend upon the secure transmission of confidential information over public networks. A compromise in our security systems that results in client or patient personal information being obtained by unauthorized persons or our failure to comply with security requirements for financial transactions could adversely affect our reputation with our clients and others, as well as our results of operations, financial condition and liquidity. It could also result in litigation against us or the imposition of penalties.

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Failure to comply with environmental, health and safety laws and regulations, including the federal Occupational Safety and Health Administration Act, the Needlestick Safety and Prevention Act and the Comprehensive Medical Waste Management Act, could result in fines and penalties and loss of licensure, and have a material adverse effect upon our business.

The clinical laboratory industry is highly regulated and subjected to significant federal and state regulation. This includes inspections and audits by governmental agencies. These agencies may impose fines, criminal penalties, or other enforcement actions to enforce laws and regulations. These penalties can include revocation of a clinical laboratory’s license. Changes in regulations may increase the cost of testing or processing claims.

We are subject to licensing and regulation under federal, state and local laws and regulations relating to the protection of the environment and human health and safety, including laws and regulations relating to the handling, transportation and disposal of medical specimens, infectious and hazardous waste and radioactive materials, as well as regulations relating to the safety and health of laboratory employees. The federal Occupational Safety and Health Administration has established extensive requirements relating to workplace safety for health care employers, including clinical laboratories, whose workers may be exposed to blood-borne pathogens such as HIV and the hepatitis B virus. These requirements, among other things, require work practice controls, protective clothing and equipment, training, medical follow-up, vaccinations and other measures designed to minimize exposure to, and transmission of, blood-borne pathogens. In addition, the Needlestick Safety and Prevention Act requires, among other things, that we include in our safety programs the evaluation and use of engineering controls such as safety needles if found to be effective at reducing the risk of needlestick injuries in the workplace.

Waste management is subject to federal and state regulations governing the transportation and disposal of medical waste including bodily fluids.  Federal regulations require licensure of interstate transporters of medical waste. In New Jersey, we are subject to the Comprehensive Medical Waste Management Act (“CMWMA”), which requires us to register as a generator of special medical waste. All of our medical waste is disposed of by a licensed interstate hauler.  The hauler provides a manifest of the disposition of the waste products as well as a certificate of incineration, which is retained by us. These records are audited by the State of New Jersey on a yearly basis. We are also subject to the Federal Hazardous materials transportation law, 49 U.S.C. 5101 et seq., and the Hazardous Materials Regulations (HMR), 49 CFR parts 171-180. The federal government has classified hazardous medical waste as hazardous materials for the purpose of regulation. These regulations preempt state regulation, which must be “substantively the same,” “the non-federal requirement must conform “in every significant respect to the federal requirement. Editorial and other similar de minimis changes are permitted,” 49 CFR 107.202(d).

Failure to comply with federal, state and local laws and regulations could subject us to denial of the right to conduct business, fines, criminal penalties and/or other enforcement actions, any of which would have a material adverse effect on our business. In addition, compliance with future legislation could impose additional requirements us, which may be costly.

We conduct our clinical laboratory testing business in a heavily regulated industry and changes in regulations or violations of regulations could, directly or indirectly, harm our operating results and financial condition.

The clinical laboratory testing industry is highly regulated and there can be no assurance that the regulatory environment in which we operate will not change significantly and adversely in the future. Areas of the regulatory environment that may affect our ability to conduct business include, without limitation:

federal and state laws applicable to billing and claims payment;

federal and state laboratory anti-mark-up laws;

federal and state anti-kickback laws;

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federal and state false claims laws;

federal and state self-referral and financial inducement laws, including the federal physician anti-self-referral law, or the Stark Law;

coverage and reimbursement levels by Medicare and other governmental payors and private insurers;

federal and state laws governing laboratory licensing and testing, including CLIA;

federal and state laws governing the development, use and distribution of diagnostic medical tests known as laboratory developed tests or “LDTs”;

HIPAA, along with the revisions to HIPPA as a result of the HITECH Act, and analogous state laws;

federal, state and foreign regulation of privacy, security, electronic transactions and identity theft;

federal, state and local laws governing the handling, transportation and disposal of medical and hazardous waste;

Occupational Safety and Health Administration rules and regulations;

changes to laws, regulations and rules as a result of the healthcare reform law; and

changes to other federal, state and local laws, regulations and rules, including tax laws.

These laws and regulations are extremely complex and in many instances, there are no significant regulatory or judicial interpretations of these laws and regulations. Any determination that we have violated these laws or regulations, or the public announcement that we are being investigated for possible violations of these laws or regulations, could harm our operating results and financial condition. In addition, a significant change in any of these laws or regulations may require us to change our business model in order to maintain compliance with these laws or regulations, which could harm our operating results and financial condition.

Failure to comply with complex federal and state laws and regulations related to submission of claims for our services could result in significant monetary damages and penalties and exclusion from the Medicare and Medicaid programs.

We are subject to extensive federal and state laws and regulations relating to the submission of claims for payment for our services, including those that relate to coverage of our services under Medicare, Medicaid and other governmental health care programs, the amounts that may be billed for our services and to whom claims for services may be submitted. Submission of our claims is particularly complex because we provide both anatomic pathology services and clinical laboratory tests, which generally are paid using different reimbursement principles. The clinical laboratory tests are often paid under a clinical laboratory fee schedule, and the anatomic pathology services are often paid under a physician fee schedule. In November 2010, CMS announced that it would require a physician signature on all requisitions for laboratory services reimbursed under the Clinical Laboratory Fee Schedule, a requirement that could be very difficult for all laboratories, including ours, to implement. However, due to concerns raised by the laboratory industry, CMS announced that it intended to reverse this policy and return to the prior rule, under which no physician signature was required on requisitions for tests paid under the clinical laboratory fee schedule. If CMS were to implement the physician signature policy at some point in the future, it could further complicate our billing and documentation process.

Our failure to comply with applicable laws and regulations could result in our inability to receive payment for our services or result in attempts by third-party payors, such as Medicare and Medicaid, to recover payments from us that have already been made. Submission of claims in violation of certain statutory or regulatory requirements can result in penalties, including substantial civil money penalties for each item or service billed to Medicare in violation of the legal requirement, and exclusion from participation in Medicare and Medicaid. Government authorities may also assert that violations of laws and regulations related to submission of claims violate the federal False Claims Act or other laws related to fraud and abuse, including submission of claims for services that were not medically necessary. Violations of the FCA could result in enormous economic liability. The FCA provides that all damages are trebled, and each false claim submitted is subject to a penalty of up to $11,000. We could be adversely affected if it was determined that the services we provided were not medically necessary and not reimbursable, particularly if it were asserted that we contributed to the physician’s referrals of unnecessary services to us. It is also possible that the government could attempt to hold us liable under fraud and abuse laws for improper claims submitted by an entity for services that we performed if we were found to have knowingly participated in the arrangement that resulted in submission of the improper claims.

Changes in regulation and policies, including increasing downward pressure on health care reimbursement, may adversely affect reimbursement for diagnostic services and could have a material adverse impact on our business.

Reimbursement levels for health care services are subject to continuous and often unexpected changes in policies, and we face a variety of efforts by government payors to reduce utilization and reimbursement for diagnostic testing services. Changes in governmental reimbursement may result from statutory and regulatory changes, retroactive rate adjustments, administrative rulings, competitive bidding initiatives, and other policy changes.

In 2010, the U.S. Congress passed legislation relating to health care reform, including the Patient Protection and Affordable Care Act, and the Health Care and Education Affordability Reconciliation Act of 2010, referred to as the healthcare reform law.  The healthcare reform law included two separate reductions in the reimbursement rates for our clinical laboratory services under the clinical laboratory fee schedule.  First, it included a “productive adjustment” (which was 1.2 percent for 2011).  Second, it included an additional 1.75 percent reduction, the first of a series of such annual reductions effective from 2011 to 2015, which would reduce the annual Consumer Price Index-based update that would otherwise determine our reimbursement for clinical laboratory services.  These reimbursement cuts could adversely affect our business.

The U.S. Congress has considered, at least yearly in conjunction with budgetary legislation, changes to one or both of the Medicare fee schedules under which we receive reimbursement, which include the physician fee schedule for anatomical pathology services, and the clinical laboratory fee schedule for our clinical laboratory services. For example, currently there is no copayment or coinsurance required for clinical laboratory services, although there is for our physician services. However, Congress has periodically considered imposing a 20 percent coinsurance on laboratory services. If enacted, this would require us to attempt to collect this amount from patients, although in many cases the costs of collection would exceed the amount actually received.

Our reimbursement for our anatomic pathology services is governed by a complex formula, referred to as the Sustainable Growth Rate, or SGR. As the use of this formula often results in a significant reduction in reimbursement for all physician services, Congress usually acts each year

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to prevent the full amount of such reductions from taking effect. In 2010, Congress acted to prevent reductions in reimbursement through December 31, 2011, and Congress acted again in 2011 to prevent significant reductions for 2012.  If Congress fails to take such action, it could adversely affect our business.  A substantial portion of our anatomic pathology services are billed under a single code (CPT 88305) and our revenue and business may be adversely affected if the reimbursement rate associated with that code is reduced. Even when reimbursement rates are not reduced, policy changes add to our costs by increasing the complexity and volume of administrative requirements. Medicaid reimbursement, which varies by state, is also subject to administrative and billing requirements and budget pressures. Recently, state budget pressures have caused states to consider several policy changes that may impact our financial condition and results of operations, such as delaying payments, reducing reimbursement, restricting coverage eligibility and service coverage, and imposing taxes on our services.

Other legislative changes have been proposed since the passage of the healthcare reform law that could also affect reimbursement for our services. For example, the Budget Control Act of 2011 creates a Joint Select Committee on Deficit Reduction, which is tasked with recommending proposals to reduce spending. In the event that the Joint Committee is unable to achieve a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, or Congress does not pass the Committee’s recommendations without amendment by 16 December 23, 2011, an automatic reduction is triggered. These automatic cuts would also be made to Medicare, and would result in aggregate reductions to Medicare payments to providers of up to 2 percent per fiscal year, starting in 2013.

Healthcare plans have taken steps to control the utilization and reimbursement of healthcare services, including clinical test services.

We also face efforts by non-governmental third-party payors, including healthcare plans, to reduce utilization and reimbursement for clinical testing services.

The healthcare industry has experienced a trend of consolidation among healthcare insurance plans, resulting in fewer but larger insurance plans with significant bargaining power to negotiate fee arrangements with healthcare providers, including clinical testing providers. These healthcare plans, and independent physician associations, may demand that clinical testing providers accept discounted fee structures or assume all or a portion of the financial risk associated with providing testing services to their members through capped payment arrangements. In addition, some healthcare plans have been willing to limit the PPO or POS laboratory network to only a single national laboratory to obtain improved fee-for-service pricing. There are also an increasing number of patients enrolling in consumer driven products and high deductible plans that involve greater patient cost-sharing.

The increased consolidation among healthcare plans also has increased the potential adverse impact of ceasing to be a contracted provider with any such insurer. The healthcare reform law includes provisions, including ones regarding the creation of healthcare exchanges, which may encourage healthcare insurance plans to increase exclusive contracting.

We expect continuing efforts to reduce reimbursements, to impose more stringent cost controls and to reduce utilization of clinical test services. These efforts, including future changes in third-party payor rules, practices and policies, or ceasing to be a contracted provider to a healthcare plan, may have a material adverse effect on our business.

Failure to timely or accurately bill for our services could have a material adverse effect on our business

Billing for clinical testing services is extremely complicated and is subject to extensive and non-uniform rules and administrative requirements. Depending on the billing arrangement and applicable law, we bill various payors, such as patients, insurance companies, Medicare, Medicaid, physicians, hospitals and employer groups. Changes in laws and regulations could increase the complexity and cost of our billing process. Additionally, auditing for compliance with applicable laws and regulations as well as internal compliance policies and procedures adds further cost and complexity to the billing process. Further, our billing systems require significant technology investment and, as a result of marketplace demands, we need to continually invest in our billing systems.

Missing or incorrect information on requisitions adds complexity to and slows the billing process, creates backlogs of unbilled requisitions, and generally increases the aging of accounts receivable and bad debt expense. We believe that much of our bad debt expense in recent years is attributable to the lack of, or inaccurate, billing information. Failure to timely or correctly bill may lead to our not being reimbursed for our services or an increase in the aging of our accounts receivable, which could adversely affect our results of operations and cash flows. Failure to comply with applicable laws relating to billing government healthcare programs could lead to various penalties, including: (1) exclusion from participation in Medicare/Medicaid programs; (2) asset forfeitures; (3) civil and criminal fines and penalties; and (4) the loss of various licenses, certificates and authorizations necessary to operate our business, any of which could have a material adverse effect on our results of operations or cash flows.

There have been times when our accounts receivable have increased at a greater rate than revenue growth and, therefore, have adversely affected our cash flows from operations. We have taken steps to implement systems and processing changes intended to improve billing procedures and related collection results. We believe that we have made progress by reorganizing our accounts receivable and billing functions and that our allowance for doubtful accounts is adequate. However, we cannot assure that our ongoing assessment of accounts receivable will not result in the need for additional provisions. Such additional provisions, if implemented, could have a material adverse effect on our operating results.

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Failure of us, third-party payors or physicians to comply with Version 5010 Transactions or the ICD-10-CM Code Set could adversely impact our reimbursement.

We are within the assessment and inventory phase to adopt Version 5010 Transactions and to adopt the ICD-10-CM Code Set issued by HHS on January 16, 2009. The compliance date for Version 5010 is January 1, 2012; the compliance date for ICD-10-CM Code Set is October 1, 2013. We will continue its assessment of information systems, applications and processes for compliance with these requirements. Clinical laboratories are typically required to submit health care claims with diagnosis codes to third party payors. The diagnosis codes must be obtained from the ordering physician. The failure of us, third party payors or physicians to transition within the required timeframe could have an adverse impact on reimbursement, days sales outstanding and cash collections.

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We may be unable to obtain, maintain or enforce our intellectual property rights and may be subject to intellectual property litigation that could adversely impact our business

We may be unable to obtain or maintain adequate patent or other proprietary rights for our products and services or to successfully enforce our proprietary rights. In addition, we may be subject to intellectual property litigation and we may be found to infringe on the proprietary rights of others, which could force us to do one or more of the following:

cease developing, performing or selling products or services that incorporate the challenged intellectual property;

obtain and pay for licenses from the holder of the infringed intellectual property right;

redesign or reengineer our tests;

change our business processes; or

pay substantial damages, court costs and attorneys’ fees, including potentially increased damages for any infringement held to be willful.

Discontinuation or recalls of existing testing products; failure to develop, or acquire, licenses for new or improved testing technologies; or our clients using new technologies to perform their own tests could adversely affect our business.

From time to time, manufacturers discontinue or recall reagents, test kits or instruments used by us to perform laboratory testing. Such discontinuations or recalls could adversely affect our costs, testing volume and revenue.

The clinical laboratory industry is subject to changing technology and new product introductions. Our success in maintaining a leadership position in genomic and other advanced testing technologies will depend, in part, on its ability to develop, acquire or license new and improved technologies on favorable terms and to obtain appropriate coverage and reimbursement for these technologies. We may not be able to negotiate acceptable licensing arrangements and it cannot be certain that such arrangements will yield commercially successful diagnostic tests. If we are unable to license these testing methods at competitive rates, our research and development costs may increase as a result. In addition, if we are unable to license new or improved technologies to expand our esoteric testing operations, our testing methods may become outdated when compared with our competition and testing volume and revenue may be materially and adversely affected.

In addition, advances in technology may lead to the development of more cost-effective technologies such as point-of-care testing equipment that can be operated by physicians or other healthcare providers in their offices or by patients themselves without requiring the services of freestanding clinical laboratories. Development of such technology and its use by our clients could reduce the demand for its laboratory testing services and negatively impact its revenues.

Currently, most clinical laboratory testing is categorized as “high” or “moderate” complexity, and thereby is subject to extensive and costly regulation under CLIA. The cost of compliance with CLIA makes it impractical for most physicians to operate clinical laboratories in their offices, and other laws limit the ability of physicians to have ownership in a laboratory and to refer tests to such a laboratory. Manufacturers of laboratory equipment and test kits could seek to increase their sales by marketing point-of-care laboratory equipment to physicians and by selling test kits approved for home or physician office use to both physicians and patients. Diagnostic tests approved for home use are automatically deemed to be “waived” tests under CLIA and may be performed in physician office laboratories as well as by patients in their homes with minimal regulatory oversight. Other tests meeting certain FDA criteria also may be classified as “waived” for CLIA purposes. The FDA has regulatory responsibility over instruments, test kits, reagents and other devices used by clinical laboratories and has taken responsibility from the Centers for Disease Control for classifying the complexity of tests for CLIA purposes. Increased approval of “waived” test kits could lead to increased testing by physicians in their offices or by patients at home, which could affect our market for laboratory testing services and negatively impact our revenues.

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Clinicians or patients using our services may sue us, and our insurance may not sufficiently cover all claims brought against us, which will increase our expenses.

The development, marketing, sale and performance of healthcare services expose us to the risk of litigation, including professional negligence. Damages assessed in connection with, and the costs of defending, any legal action could be substantial. We may be faced with litigation claims that exceed our insurance coverage or are not covered under any of our insurance policies. In addition, litigation could have a material adverse effect on our business if it impacts our existing and potential customer relationships, creates adverse public relations, diverts management resources from the operation of the business, or hampers our ability to otherwise conduct our business.

A failure to integrate newly acquired businesses and the costs related to such integration could have a material adverse impact on our net revenues and profitability.

The successful integration of any business that we may acquire entails numerous risks, including, among others:

issues related to revenue recognition and/or cash collections;

loss of key customers or employees;

difficulty in consolidating redundant facilities and infrastructure and in standardizing information and other systems;

failure to maintain quality of services that we and any such acquired companies have historically provided;

coordination of geographically separated facilities and workforces; and

diversion of management’s attention from our day-to-day business.

We cannot assure you that current or future acquisitions, if any, or any related integration efforts will be successful, or that our business will not be adversely affected by any future acquisitions. Even if we are able to successfully integrate the operations of companies or businesses that we may acquire in the future, we may not be able to realize the benefits that we expect to result from such integration, including projected cost savings.

Our operations may be adversely impacted by the effects of extreme weather conditions, natural disasters such as hurricanes and earthquakes, health pandemics, hostilities or acts of terrorism and other criminal activities.

Our operations may be adversely impacted by the effects of extreme weather conditions, natural disasters such as hurricanes and earthquakes, health pandemics, hostilities or acts of terrorism or other criminal activities. Such events may result in a temporary decline in the number of patients who seek clinical testing services or in our employees’ ability to perform their job duties. In addition, such events may temporarily interrupt our ability to transport specimens, to receive materials from our suppliers or otherwise to provide our services.

Increased competition, including price competition, could have a material adverse impact on our net revenues and profitability.

We operate in a business that is characterized by intense competition. Our major competitors in the New York metropolitan area, Quest Diagnostics and Laboratory Corporation of America, are large national laboratories that possess greater name recognition, larger customer bases, significantly greater financial resources and employ substantially more personnel than we do. Many of our competitors have long established relationships. We cannot assurance you that we will be able to compete successfully with such entities in the future.

The clinical laboratory business is intensely competitive both in terms of price and service. Pricing of laboratory testing services is often one of the most significant factors used by health care providers and third-party payors in selecting a laboratory. As a result of the clinical laboratory industry undergoing significant consolidation, larger clinical laboratory providers are able to increase cost efficiencies afforded by large-scale automated testing.

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This consolidation results in greater price competition. We may be unable to increase cost efficiencies sufficiently, if at all, and as a result, our net earnings and cash flows could be negatively impacted by such price competition.  We may also face increased competition from companies that do not comply with existing laws or regulations or otherwise disregard compliance standards in the industry.  Additionally, we may also face changes in fee schedules, competitive bidding for laboratory services or other actions or pressures reducing payment schedules as a result of increased or additional competition.

Additional competition, including price competition, could have a material adverse impact on our net revenues and profitability.

An inability to attract and retain experienced and qualified personnel could adversely affect our business.

The loss of key management personnel or the inability to attract and retain experienced and qualified employees at our clinical laboratories and research centers could adversely affect our business. Our success is dependent in part on the efforts of key members of our management team, including Marc D.  Grodman, M.D., our founder, president and chief executive officer. Success in maintaining our leadership position in genomic and other advanced testing technologies will depend in part on our ability to attract and retain skilled research professionals. In addition, the success of our clinical laboratories also depends on employing and retaining qualified and experienced laboratory professionals, including specialists, who perform clinical laboratory testing services. In the future, if competition for the services of these professionals increases, we may not be able to continue to attract and retain individuals in its markets. Our net revenues and earnings could be adversely affected if a significant number of professionals terminate their relationship with us or become unable or unwilling to continue their employment.

Our outstanding debt may impair our financial and operating flexibility.

As of October 31, 2011, we had approximately $24,529 million of debt outstanding.  Our debt agreements contain various restrictive covenants. These restrictions could limit our ability to use operating cash flow in other areas of our business because we must use a portion of these funds to make principal and interest payments on our debt.

We or our subsidiaries may incur additional indebtedness in the future. Our ability to make principal and interest payments will depend on our ability to generate cash in the future. If we incur additional debt, a greater portion of our cash flows may be needed to satisfy our debt service obligations and if we do not generate sufficient cash to meet our debt service requirements, we may need to seek additional financing. In that case, it may be more difficult, or we may be unable, to obtain financing on terms that are acceptable to us. As a result, we would be more vulnerable to general adverse economic, industry and capital markets conditions as well as the other risks associated with indebtedness

Possible volatility in our stock price could negatively affect us and our stockholders.

The trading price of our common stock on the NASDAQ Global Market has fluctuated significantly in the past. During the period from November 1, 2008 through October 31, 2011, the trading price of our common stock fluctuated from a high of $25.99 per share to a low of $9.78 per share. In the past, we have experienced a drop in stock price following an announcement of disappointing earnings or earnings guidance. Any such announcement in the future could lead to a similar drop in stock price. The price of our common stock could also be subject to wide fluctuations in the future as a result of a number of other factors, including the following:

changes in expectations as to future financial performance or buy/sell recommendations of securities analysts;

our, or a competitor’s, announcement of new products or services, or significant acquisitions, strategic partnerships, joint ventures or capital commitments;

the operating and stock price performance of other comparable companies; and adverse publicity.

In addition, the U.S. securities markets have experienced significant price and volume fluctuations. These fluctuations often have been unrelated to the operating performance of companies in these markets. Broad market and industry factors may lead to volatility in the price of our common stock, regardless of our operating performance. Moreover, our stock has limited trading volume, and this illiquidity may increase the volatility of our stock price.

In the past, following periods of volatility in the market price of an individual company’s securities, securities class action litigation often has been instituted against that company. The institution of similar litigation against us could result in substantial costs and a diversion of management’s attention and resources, which could negatively affect our business, results of operations or financial condition.

Certain provisions of our charter, by-laws and New Jersey law may delay or prevent a change of control of our company.

Our certificate of incorporation, as amended, requires the approval of 80% of our outstanding shares for any merger or consolidation unless the business combination has been approved or authorized by our board of directors. As a New Jersey corporation with a class of securities registered with the SEC, we are governed by certain provisions of the New Jersey Business Corporation Act that also restrict business combinations with shareholders owning 10% or more of our outstanding shares (or other “interested stockholders” as the term is defined by the New Jersey Shareholders’ Protection Act) for a period of five years after such interested shareholder achieves such status unless the business combination is approved by our board of directors prior to the shareholder becoming an interested shareholder. The New Jersey Shareholders’ Protection Act also

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restricts business combinations with an interested shareholder after the five-year period unless the transaction receives the approval of two-thirds of the shares outstanding, exclusive of the shares held by the interested shareholder or the transaction satisfies certain fair price requirements. In addition, with certain limited exceptions, federal regulations prohibit a person or company or a group of persons deemed to be “acting in concert” from, directly or indirectly, acquiring more than 10% (5% if the acquirer is a bank holding company) of any class of our voting stock or obtaining the ability to control in any manner the election of a majority of our directors or otherwise direct the management or policies of our company without prior notice or application to and the approval of the Federal Reserve.

A failure to obtain and retain new clients and business  partners, a loss of existing clients or material contracts, or a reduction in tests ordered or specimens submitted by existing clients, could impact our ability to successfully grow our business.

To offset efforts by payors to reduce the cost and utilization of clinical laboratory services, we need to obtain and retain new clients and business partners. In addition, a reduction in tests ordered or specimens submitted by existing clients, without offsetting growth in our client base, could impact our ability to successfully grow our business and could have a material adverse impact on our net revenues and profitability. We compete primarily on the basis of the quality of testing, reporting and information systems, reputation in the medical community, the pricing of services and ability to employ qualified personnel. Our failure to successfully compete on any of these factors could result in the loss of clients and a reduction in our ability to expand our customer base.

Adverse results in material litigation matters could have a material adverse effect upon our business.

We may become subject in the ordinary course of business to material legal action related to, among other things, intellectual property disputes, professional liability and employee-related matters, as well as inquiries from governmental agencies and Medicare or Medicaid carriers requesting comment on allegations of billing irregularities that are brought to their attention through billing audits or third parties. Legal actions could result in substantial monetary damages as well as damage to our reputation with clients, which could have a material adverse effect upon our business.

Failure in our information technology systems could significantly increase testing turn-around time or billing processes and otherwise disrupt our operations.

Our laboratory operations depend, in part, on the continued performance of our information technology systems. Our information technology systems are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptions. In addition, we are in the process of integrating the information technology systems of our recently acquired subsidiaries, and we may experience system failures or interruptions as a result of this process. Sustained system failures or interruption of our systems in one or more of our laboratory operations could disrupt our ability to process laboratory requisitions, perform testing, provide test results in a timely manner and/or bill the appropriate party. Failure of our information technology systems could adversely affect our business, profitability and financial condition.

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A significant deterioration in the economy could negatively impact testing volumes, cash collections and the availability of credit.

Our operations are dependent upon ongoing demand for diagnostic testing services by patients, physicians, hospitals and others. A significant downturn in the economy could negatively impact the demand for diagnostic testing as well as the ability of patients and other payors to pay for services ordered. In addition, uncertainty in the credit markets could reduce the availability of credit and impact our ability to meet our financing needs in the future.

Failure to establish, and perform to, appropriate quality standards to assure that the highest level of quality is observed in the performance of our testing services and in the design, manufacture and marketing of our products could adversely affect the results of our operations and adversely impact our reputation.

The provision of clinical testing services, including anatomic pathology services, and related services, and the design, manufacture and marketing of diagnostic products involve certain inherent risks. The services that we provide and the products that we design, manufacture and market are intended to provide information for healthcare providers in providing patient care. Therefore, users of our services and products may have a greater sensitivity to errors than the users of services or products that are intended for other purposes.

Manufacturing or design defects, unanticipated use of our products, or inadequate disclosure of risks relating to the use of the products can lead to injury or other adverse events. These events could lead to recalls or safety alerts relating to our products (either voluntary or required by governmental authorities) and could result, in certain cases, in the removal of a product from the market. Any recall could result in significant costs as well as negative publicity that could reduce demand for our products. Personal injuries relating to the use of our products can also result in product liability claims being brought against us. In some circumstances, such adverse events could also cause delays in new product approvals.

Similarly, negligence in performing our services can lead to injury or other adverse events. We may be sued under physician liability or other liability law for acts or omissions by our pathologists, laboratory personnel and hospital employees who are under the supervision of our hospital-based pathologists. We are subject to the attendant risk of substantial damages awards and risk to our reputation.

The failure of our IT systems to keep pace with technological advances may significantly reduce our revenues or increase our expenses.

Public and private initiatives to create healthcare information technology (“HCIT”) standards and to mandate standardized clinical coding systems for the electronic exchange of clinical information, including test orders and test results, could require costly modifications to our existing HCIT systems. While we do not expect HCIT standards to be adopted or implemented without adequate time to comply, if we fail to adopt or delay in implementing HCIT standards, we could lose customers and business opportunities.

Item 1B. Unresolved Staff Comments

None.

Item 2. - Properties

We operate through a regional network of laboratories. The table below summarizes certain information as to our principal facilities as of October 31, 2011.

Location	Purpose	Type of Occupancy
Clarksburg, MD	Pathology Laboratory	Leased
Elmwood Park, NJ	Main Laboratory	Leased
Elmwood Park, NJ	Corporate Headquarters	Leased
Gaithersburg, MD	Genetics Laboratory	Leased
Houston, TX	Pathology Laboratory	Leased
Milford, MA	Oncology Laboratory	Leased
Poughkeepsie, NY	Pathology Laboratory	Leased

We believe that each of these facilities as presently equipped has the production capacity for its currently foreseeable level of operations. We also lease additional space for patient service centers throughout the New York metropolitan area to collect specimens from physician-referred patients for testing at our processing facilities.

Item 3. - Legal Proceedings

At October 31, 2011 and at the date of this Report, we were not involved in any material legal proceedings.

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Item 4. — Removed and Reserved

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PART II

Item 5. - Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our Common Stock is listed for trading on The NASDAQ Global Market System under the symbol “BRLI.”

The following table sets forth the range of high and low closing prices on the NASDAQ Stock Market for our Common Stock for the periods indicated.

Fiscal Year	Prices
2011	High	Low
First Quarter (11/1/2010-1/31/2011)	24.02	20.53
Second Quarter (2/1/2011-4/30/2011)	25.21	20.82
Third Quarter (5/1/2011-7/31/2011)	25.24	19.65
Fourth Quarter (8/1/2011-10/31/2011)	20.77	16.97
2010	High	Low
First Quarter (11/1/2009-1/31/2010)	20.20	15.77
Second Quarter (2/1/2010-4/30/2010)	24.63	18.81
Third Quarter (5/1/2010-7/31/2010)	24.26	20.69
Fourth Quarter (8/1/2010-10/31/2010)	22.79	18.51

On January 4, 2012 the last sale price for the Common Stock on NASDAQ was $16.27 per share.

Stockholders

At January 4, 2012, the number of record owners of the Common Stock was 275. Such number of record owners was determined from our shareholder records and does not include beneficial owners whose shares are held in nominee accounts with brokers, dealers, banks and clearing agencies.

Dividends

We have not paid any dividends on our Common Stock since our inception and, do not contemplate or anticipate paying any dividends in the foreseeable future. Furthermore, our loan agreement with PNC Bank prohibits us from paying any cash dividends or making any cash distributions with respect to shares of our Common Stock.

Recent Sales of Unregistered Securities

On September 26, 2006 we issued 461,894 shares of our Common Stock in connection with the acquisition of the operating assets of GeneDx. These shares were valued for the purpose of this acquisition at $10.825 per share, the average closing price for the Common Stock on NASDAQ on the ten trading days immediately preceding the August 29, 2006 signing of the purchase agreement.  In each of December 2010, December 2009, December 2008 and December 2007, an additional 23,096 shares of our Common Stock were issued to the prior owners of GeneDx, as a result of GeneDx achieving certain operating results during the four annual measuring periods following the closing of the acquisition. A restrictive legend was placed on the certificates for the 461,894 shares and each of the share installments and stop transfer instructions were issued against the shares. The sellers represented that they were acquiring the stock for investment and not with a view to distribution. The shares were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933 in accordance with Section 4(2) of the Securities Act of 1933 on the basis that the transaction did not involve a public offering.

Issuer Purchases of Equity Securities

On November 11, 2011 (effective October 31, 2011) the Board of Directors authorized a repurchase of up to 1,000,000 shares of the Company’s Common Stock over the period ending October 31, 2012.  As of January 9, 2012, 105,450 shares had been repurchased under this authorization.

Performance Graph

We have presented below the cumulative total return to our stockholders during the period from November 1, 2006, through October 31, 2011 in comparison to the cumulative return on the S&P 500 Index and a customized peer group of nine companies during that same period.  Our peer group consisted of nine companies which are: Bioclinica, Inc., Genoptix, Inc. (included through October 31, 2010 as it was acquired by Novartis AG on March 8, 2011), Laboratory Corporation of America Holdings, MEDTOX Scientific, Inc., NeoGenomics, Inc., Orchid Cellmark Inc., Psychemedics Corporation, Quest Diagnostics Incorporated and Response Genetics, Inc. The results assume that $100 (with reinvestment of all dividends) was invested in our common stock, in the peer group, and in the index on October 31, 2006 and its relative performance tracked through October 31, 2011. The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock. The performance graph set forth below shall not be deemed incorporated by reference into any filing by us under the Securities Act of 1933 or the Securities Exchange Act of 1934 except to the extent that we specifically incorporate such information by reference, and shall not otherwise be deemed filed under such Acts.

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Item 6. -  Selected Financial Data

The following is a summary of our historical consolidated financial data for the periods ended and at the dates indicated below.  You are encouraged to read this information together with our audited consolidated financial statements and the related footnotes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report.

The historical consolidated financial data for the years ended October 31, 2011, 2010, and 2009 and as of October 31, 2011 and 2010 has been derived from our audited consolidated financial statements, which are included elsewhere in this Annual Report.  The historical consolidated financial data for the years ended October 31, 2008 and 2007 and as of October 31, 2009, 2008, and 2007 has been derived from our audited consolidated financial statements, which are not included in this Annual Report.

We believe that the comparability of our financial results between the periods presented in the table below is significantly impacted factors which are more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and the notes thereto included elsewhere in this Annual Report.

	Fiscal Years Ended October 31,
	2011			2010			2009			2008			2007
	[In Thousands Except Per Share Data]
Operating Data:
Net Revenues	$	558,642		$	458,024		$	362,654		$	301,071		$	250,431
Cost of Services	287,853			232,252			183,524			153,831			124,029
Gross Profit	270,789			225,772			179,130			147,240			126,402
General and Administrative Expenses	211,015			177,394			140,808			118,683			101,345
Income From Operations	59,774			48,378			38,322			28,557			25,057
Other Expenses [Income] - Net	(5,072		)	1,415			(267		)	1,866			2,150
Provision for Income Tax Expense	28,487			20,582			16,739			11,074			8,950
Net Income	$	36,359		$	26,381		$	21,850		$	15,617		$	13,957
Net Income Per Share - Basic	$	1.30		$	0.95		$	0.79		$	0.57		$	0.51
Net Income Per Share - Diluted	$	1.29		$	0.94		$	0.78		$	0.56		$	0.51
Other Data:
Net Cash - Operating Activities	$	30,946		$	14,305		$	24,366		$	18,876		$	5,897
Net Cash - Investing Activities	(15,542		)	$	(18,411	)	$	(10,807	)	$	(9,901	)	$	(7,774	)
Net Cash - Financing Activities	(11,170		)	$	(5,790	)	$	(9,260	)	$	(8,176	)	$	4,820
	As of October 31,
	2011			2010			2009			2008			2007
Balance Sheet Data:
Total Assets	$	283,259		$	244,131		$	197,390		$	171,311		$	154,574
Total Long-Term Liabilities	$	10,978		$	8,405		$	8,378		$	8,781		$	9,557
Total Liabilities	$	93,492		$	91,743		$	72,867		$	69,771		$	69,307
Working Capital	$	124,266		$	89,459		$	75,984		$	58,561		$	48,747
Shareholder’s Equity	$	189,767		$	152,388		$	124,523		$	101,540		$	85,267

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

You are encouraged to read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and related footnotes included at the end of this Annual Report.  This discussion and analysis contains forward-looking statements that involve risks and uncertainties.  See “Risk Factors” included elsewhere in this Annual Report for a discussion of some of the important factors that could cause actual results to differ materially from those described or implied by the forward-looking statements contained in the following discussion and analysis.  See “Special Note Regarding Forward-Looking Statements” included elsewhere in this Annual Report.

All amounts are presented in thousands, except share and per share amounts and per patient data.

Overview

We are a national clinical diagnostic laboratory located in northeastern New Jersey. We are a national laboratory in certain focused areas of laboratory testing and a full service laboratory in the New York super-region. We have developed a national reputation for our expertise in certain focused areas of clinical testing. GenPath, the name by which we are known for our cancer and oncology services, is recognized for the superior hematopathology services it provides throughout the country. Our Women’s Health initiative, through which we provide dedicated services for obstetrics and gynecology practices, including a unique, technically advanced multiplex process for identifying sexually transmitted infections, is also offered as GenPath.  Our regional footprint lays within the New York City metropolitan area and the surrounding areas of New Jersey and southern New York State as well eastern Pennsylvania and some areas of western Connecticut; we also provide services further into New York State, Pennsylvania, Delaware and Maryland. As a

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regional provider, we are a full-service laboratory that primarily services physician office practices; our drivers pick up samples and deliver reports and supplies, we provide sophisticated technical support, phlebotomy services or patient service centers where appropriate, and electronic communication services in many cases.  Physicians outside of our regional footprint send samples to our laboratory in order to take advantage of the expertise that we are able to provide in blood-based cancer pathology and associated diagnostics or to take advantage of the superior service, support and technologically advanced testing we offer in our Women’s Health initiative. Our correctional healthcare services are used throughout the country at prisons and jails. The focused markets we serve on a national basis outside of our regional footprint do not require many of the logistical and other ancillary support services required within the region. Even within our regional footprint, we provide the same services that we provide on a national basis as well as some regional focused diagnostic services, such as histology and pathology support services, substance abuse testing, fertility testing, hemostasis testing, women’s health testing, and molecular diagnostics that are unavailable from many of the smaller regional competitors; testing in some of these areas may be provided outside of physician offices.

Over the last few years, there have been fundamental changes in the laboratory services industry. In the 1990s, the industry was negatively impacted by the growth of managed care, increased government regulation, and investigations into fraud and abuse. These factors led to revenue and profit declines and industry consolidations, especially among commercial laboratories. There are currently only three US publicly traded full service laboratories operating in the U.S. While that means that the two national mega-laboratories and Bio-Reference Laboratories are the only remaining publicly traded full service commercial laboratories, there are numerous hospital outreach programs and smaller reference laboratories that compete for the commercial clinical laboratory business scattered throughout the country. Clinical laboratories have had to improve efficiency, leverage economies of scale, comply with government regulations and other laws and develop more profitable approaches to pricing. Moreover, there has been a proliferation of technology advancements in clinical diagnostics over the last decade that has created significant opportunities for new testing and growth.

As a full service clinical laboratory, we are constantly looking for new technologies and new methodologies that will help us to grow. Since the turn of the century, our size alone has made us attractive to companies that are driving the advances in technology. We represent a significant opportunity for these companies to market their products with a nationally recognized specialty provider in our focused areas of specialty or in one of the major population centers of the world—the New York Metropolitan area. We have had several successful strategic relationships with such technology opportunities. In addition to new technology opportunities, we have an extremely seasoned and talented management staff that has been able to identify emerging laboratory markets that are under-served or under-utilized. We have recently developed programs for cardiology, histology and women’s health to go along with our existing hemostasis, hematopathology and correctional healthcare initiatives which have already been established and in which we have been increasing our market share for the past several years. We are currently preparing to launch a comprehensive pre-natal program to leverage our presence in the women’s health environment and we will continue to vigilantly seek focused diagnostic marketing opportunities where we can provide information, technology, service or support that expand and grow our clinical laboratory.

During the fourth quarter of fiscal 2006, the Company acquired the operating assets of GeneDx, a leading DNA sequencing laboratory.  As molecular testing in general becomes a more significant element in the diagnostic testing industry, the Company believes that genetic testing will become an essential diagnostic tool of the future.  GeneDx was started by two geneticists from the National Institute of Health (“NIH”) in 2000.  Over the next six years, based on the reputation and expertise of the founders and the outstanding team they built around themselves, along with a very focused and dedicated understanding of the science of genetics, GeneDx became known as one of the premier genetic testing laboratories for the diagnosis of rare genetic diseases.  The Company believed that the promise of genetic testing is in the diagnosis of the genetic variants of common diseases.  It has been the Company’s intention to leverage the expertise and reputation of GeneDx in order to take a leadership role in the expanding area of genetic testing.  The Company is seeking cutting edge methods of testing that will be commercially viable diagnostic tools for the advancement of genetic testing. In 2007, GeneDx introduced GenomeDx, a then new test based on CGH Array technology, a high-speed, chip-based technology that has allowed GeneDx to move to the forefront of an emerging technology platform. In 2008, GeneDx became the first commercial laboratory in the world to offer next generation (NextGen) sequencing (high-speed computer-based whole genome sequencing) and has since built up a comprehensive suite of cardiac arrhythmia panels, as well as other multi-gene testing panels, that have enhanced its reputation as a technology and service leader in the area of genetic testing.  The Company is already expanding the menu of tests offered and employing marketing techniques that were extremely successful in building GenPath, our oncology laboratory.  In addition to scientists and technicians to manage testing, GeneDx employs 13 genetic counselors and 129 geneticists to help patients and referring physicians and geneticists understand the meaning of the test results.

On March 2, 2010, the Company completed the purchase of Lenetix Medical Screening Laboratory, Inc. (“Lenetix”) from Lenetix and its sole stockholder.  These assets were utilized in Lenetix’s operation of a clinical testing laboratory located in Mineola, New York.  The laboratory performs both clinical laboratory diagnostic testing and genetic testing.

On August 5, 2011, the Company acquired all of the authorized, issued and outstanding shares of The Genetics Center, Inc. (“GCI”), a New York corporation engaged in the clinical laboratory business with principal place of business in Smithtown, New York.

While we recognize that we are a clinical laboratory that processes samples, we also understand that we are an information company that needs to effectively communicate the results of our efforts back to healthcare providers. Laboratory results play a major role in the implementation of physician healthcare. Laboratory results are used to diagnose, monitor and classify health concerns. In many cases, laboratory results represent the confirming data in diagnosing complicated health issues. Since laboratory results play such an important role in routine physician care, we have developed informatics solutions that leverage our role in healthcare. We needed to build a web-based solution to quickly, accurately, conveniently and competitively collect ordering information and deliver results, so we built an internal solution that we call CareEvolve. That solution has been essential to our own operations. We license the technology to other laboratories throughout the country that they utilize to more effectively compete against the national laboratories. These other laboratories licensing our technology are typically not our competitors since they are outside our regional footprint.

We have also created our PSIMedica business unit that has developed a Clinical Knowledge Management (CKM) System that takes data from enrollment, claims, pharmacy, laboratory results and any other available electronic source to provide both administrative and clinical analysis of a population. The system uses proprietary algorithms to cleanse and configure the data and transfer the resulting information into a healthcare data repository. Using advanced cube technology methodologies, the data can be analyzed from a myriad of views and from highly granular transactional detail to global trended overview. Events such as the Katrina disaster in Louisiana and general pressures from the government have made development of an electronic medical record system and Pay-for Performance reimbursement priority goals in the healthcare industry. A large portion of an individual’s medical record consists of laboratory data and a key performance indicator in any Pay-for-Performance initiative is laboratory result data. Our CKM system is a mature, full functioning solution that will allow us to play a role in these important national initiatives.

To date, neither our PSIMedica business unit nor CareEvolve has produced significant revenues.

Results of Operations

Fiscal Year 2011 Compared to Fiscal Year 2010

NET REVENUES:

Net revenues for the year ended October 31, 2011 were $558,642 as compared to $458,024 for the year ended October 31, 2010; this represents a 22% increase in net revenues. This increase is due to a 20% increase in patients serviced and a 2% increase in net revenue per patient. Our laboratory operations had net revenues of $454,308 in fiscal 2010 and $554,281 in fiscal 2011.

The number of patients serviced during the year ended October 31, 2011 was 6,739, which was 20% greater when compared to the prior fiscal year.  Net revenue per patient for the year ended October 31, 2011 was $82.25 compared to net revenue per patient for the year ended October 31, 2010 of $81.03, an increase of $1.22 or 2% as a result of increases in esoteric testing.

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During the fiscal year ended October 31, 2011, we increased our sales force by approximately 19% in the specialty testing services that we market nationally. This increase occurred in two phases: one in January 2011 and one in July of the same year. We believe that this increase in sales personnel accounted for a majority of the 20% increase in our patient volume. This allowed us to expand or increase our presence in sixteen states and we expect this trend to continue.

While there is always uncertainty as to the sustainability of such growth in the future, we believe that our historical performance of 20% compound annual growth rate for the past 17 years, the current demand for our services and our continued corporate focus on strategic growth, together with our expertise in the industry, should enable us to sustain continued strong growth in the near term.  Going beyond that, however, the Company’s revenues and patient counts could be adversely affected by a number of factors including, but not limited to an extended downturn in general or healthcare economic conditions, an unexpected reduction in reimbursement rates, increased market penetration by our competitors, or a substantial adverse change in federal regulatory requirements governing our industry as well as a failure to continue the sizeable annual percentage increase in base business from significantly higher levels after 17 years of sustained growth.

COST OF SERVICES:

Cost of Services for the year ended October 31, 2011 was $287,853 as compared to $232, 252 for the year ended October 31, 2010, an increase of 24% as compared to a 22% increase in net revenues.  The Company’s reagents and laboratory supplies expense increased by 29% due to the higher cost of specialty testing reagents.  Our vehicle operating expenses also increased by 25% due to the higher cost of fuel.  Our medical equipment repair costs increased by 44% year over year due to higher equipment utilization rate.  We expect these trends to continue.

GROSS PROFIT:

Gross profit on net revenues increased to $270,789 for the year ended October 31, 2011 from $225,772 for the year ended October 31, 2010; an increase of $45,017 (20%), primarily attributable to the increase in net revenues. Gross profit margins decreased to 48% for fiscal 2011 from fiscal 2010 rate of 49%.

GENERAL AND ADMINISTRATIVE EXPENSES:

General and administrative expenses for the year ended October 31, 2011 were $211,015 as compared to $177,394 for the year ended October 31, 2010, an increase of $33,621 or 19%.  This is basically in line with the increase in net revenues.  Marketing expenses increased by 25% due to increases in our sales force together with substantial investment in marketing materials and we expect this trend to continue in the near future.

INTEREST EXPENSE:

Interest expense increased from $1,566 during the year ended October 31, 2010 to $1,747 during the year ended October 31, 2011; an increase of $181 or 12%. This increase is due to an increase in utilization of the PNC Bank line of credit, acquisition debt and capital leases. Management believes that this trend will continue in the near term due to the increase in utilization rates.

NET INCOME:

We realized net income of $36,359 for the twelve month period ended October 31, 2011 as compared to $26,381 for the twelve month period ended October 31, 2010, an increase of 38%.

Pre-tax income for the period ended October 31, 2011 was $64,846, as compared to $46,963 for the period ended October 31, 2010, an increase of $17,883 (38%) and was caused primarily by an increase in net revenues.  The provision for income taxes increased from $20,582 for the period ended October 31, 2010, to $28,487 (38%) for the current twelve month period.

Our diluted net income per share went from $0.94 in fiscal 2010 to $1.29 in fiscal 2011, or $1.16 on a pro-forma basis (without taking into account the following non-recurring items: the New Jersey sales tax refund, the loss on sale of corporate aircraft and the New York excess laboratory fee refund)

Fiscal Year 2010 Compared to Fiscal Year 2009

NET REVENUES:

Net revenues for the year ended October 31, 2010 were $458,024 as compared to $362,654 for the year ended October 31, 2009; this represents a 26% increase in net revenues. This increase is due to a 21% increase in patients serviced and a 5% increase in net revenue per patient. Our laboratory operations had net revenues of $359,625 in fiscal 2009 and $454,308 in fiscal 2010.  During the fiscal year ended October 31, 2010, we increased our sales force by approximately 22% in the specialty testing services that we market nationally. This increase occurred in two phases: one in January 2010 and one in May of the same year. We believe that this increase in sales personnel accounted for a majority of the 21% increase in our patient volume. This allowed us to expand or increase our presence in sixteen states and we expect this trend to continue.  While there is always uncertainty as to the sustainability of such growth in the future, we believe that our historical performance of 20% compound annual growth rate for the past 17 years, the current demand for our services and our continued corporate focus on strategic growth, together with our expertise in the industry, will allow our present growth trends to continue in the near future.  Going beyond that, however, the Company’s revenues and patient counts could be adversely affected by a number of factors including, but not limited to an extended downturn in general or healthcare economic conditions, an unexpected reduction in reimbursement rates, increased market penetration by our competitors, or a substantial adverse change in federal regulatory requirements governing our industry as well as a failure to continue the sizeable annual percentage increase in base business from significantly higher levels after 17 years of sustained growth.

The number of patients serviced during the year ended October 31, 2010 was 5,607, which was 21% greater when compared to the prior fiscal year.  Net revenue per patient for the year ended October 31, 2010 was $81.03 compared to net revenue per patient for the year ended October 31, 2009 of $77.38, an increase of $3.65 or 5% as a result of increases in esoteric testing.

COST OF SERVICES:

Cost of Services for the year ended October 31, 2010 was $232, 252 as compared to $183,524 for the year ended October 31, 2009, an increase of 27% as compared to a 26% increase in net revenues. Therefore, this increase is basically in line with the increase in net revenues.  The Company’s reagents and laboratory supplies expense increased by 35% due to the higher cost of specialty testing reagents.  Our vehicle operating expenses also increased by 20% due to the higher cost of fuel.  We expect these trends to continue.

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GROSS PROFIT:

Gross profit on net revenues increased to $225,772 for the year ended October 31, 2010 from $179,130 for the year ended October 31, 2009; an increase of $46,642 (26%), primarily attributable to the increase in net revenues. Gross profit margins remained constant year over year at 49%

GENERAL AND ADMINISTRATIVE EXPENSES:

General and administrative expenses for the year ended October 31, 2010 were $177,394 as compared to $140,808 for the year ended October 31, 2009, an increase of $36,586 or 26%.  This is basically in line with the increase in net revenues.  Marketing expenses increased by 33% due to increases in our sales force together with substantial investment in marketing materials and we expect this trend to continue in the near future.

INTEREST EXPENSE:

Interest expense increased from $1,512 during the year ended October 31, 2009 to $1,566 during the year ended October 31, 2010; an increase of $54. This increase is due to an increase in utilization of the PNC Bank line of credit, acquisition debt and capital leases. Management believes that this trend will continue in the near term due to the increase in utilization rates.

NET INCOME:

We realized net income of $26,381 for the twelve month period ended October 31, 2009 as compared to $21,850 for the twelve month period ended October 31, 2009, an increase of 21%.

Pre-tax income for the period ended October 31, 2010 was $46,963, as compared to $38,589 for the period ended October 31, 2009, an increase of $8,374 (22%) and was caused primarily by an increase in net revenues.  The provision for income taxes increased from $16,739 for the period ended October 31, 2009, to $20,582 (23%) for the current twelve month period.

Our diluted net income per share went from $0.78 in fiscal 2009, or $0.75 on a pro-forma basis (without taking into account the following non-recurring item: the restitution agreement) to $0.94 in fiscal 2010.

Liquidity and Capital Resources

Our working capital at October 31, 2011 was approximately $124,266 as compared to approximately $89,459 at October 31, 2010, an increase of $34,807 (39%). Our cash position increased by approximately $4,234 during the current period. We decreased our short term borrowing by approximately $7,522 and borrowed approximately $1,361 in long term debt. We had current liabilities of approximately $82,514 at October 31, 2011. We generated approximately $30,946 in cash from operations, an increase of approximately $17,541 as compared to the year ended October 31, 2010.

Accounts receivable, net of allowance for doubtful accounts, totaled approximately $148,060 at October 31, 2011, an increase of approximately $18,938 from October 31, 2010, or 15%. This increase was primarily attributable to increased revenue.  Cash collected over the twelve month period ended October 31, 2011 increased 25% over the prior twelve month period.

Net service revenues on the statements of operations are as follows:

	October, 31
	2011			2010			2009
Gross Revenues	$	2,482,349		$	1,902,573		$	1,423,287
Contractual Adjustments and Discounts:
Medicare/Medicaid Portion	293,874			281,002			247,333
All Other Third Party and Direct Payors*	1,629,833			1,163,547			813,300
Total Contractual Adjustments and Discounts	1,923,707			1,444,549			1,060,633
Net Service Revenues	$	558,642		$	458,024		$	362,654
Percent of Contractual Adjustments and Discounts To Gross Revenues	77.5		%	74.5		%	71.0		%

* All Other Third Party and Direct Payors consists of almost eight hundred distinct payors, including commercial health insurers and administrators as well as professionally billed accounts such as physicians, hospitals, clinics and other direct billed accounts.

The table above illustrates the relationship between contractual adjustments and gross revenues for the fiscal years 2011, 2010, and 2009. Between 2010 and 2011, contractual adjustments increased approximately 300 basis points.  The average “across the board” collection percent for fiscal year 2007 was 26%, while the rate for fiscal year 2011 was 18%, a decrease in our collection rate of 8%, or a 31% reduction in the collection rate. In the aggregate, this has resulted in a change of our contractual rate, leading to larger contractual allowances and lower net revenues when computed as a percentage of gross revenues. Although individual collection rates may vary from period to period or payor to payor, based on the specific historical data analyzed, this is consistent with the current state of the economy as well as the ongoing trends in health care reimbursement.

Credit risk with respect to accounts receivable is generally diversified due to the large number of patients comprising our client base.  We have significant receivable balances with government payors and various insurance carriers.  Generally, we do not require collateral or other security to support customer receivables. However, we continually monitor and evaluate our client acceptance and collection procedures to minimize potential credit risks associated with our accounts receivable and to establish an allowance for uncollectible accounts. As a consequence, we believe that our accounts receivable credit risk exposure beyond such allowance is not material to the financial statements.

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A number of proposals for legislation continue to be under discussion which could substantially reduce Medicare and Medicaid (CMS) reimbursements to clinical laboratories.  Depending upon the nature of regulatory action, and the content of legislation, we could experience a significant decrease in revenues from Medicare and Medicaid (CMS), which could have a material adverse effect on us. We are unable to predict, however, the extent to which such actions will be taken.

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LABORATORY GROSS RECEIVABLES BY PAYOR GROUP

	FY 2011
	30 DAYS	%		60 DAYS			90 DAYS			>90 DAYS			TOTAL
Self Pay	7,790	16	%	8,614	18	%	8,475	18	%	22,526	48	%	47,405	100	%
Medicare	25,991	45	%	11,082	19	%	4,501	8	%	15,858	28	%	57,433	100	%
Medicaid	5,664	24	%	3,476	14	%	3,419	14	%	11,534	48	%	24,093	100	%
Pro Bill	18,304	63	%	4,925	17	%	1,691	6	%	4,341	15	%	29,260	100	%
Commercial Insurance	134,372	49	%	47,903	18	%	27,542	10	%	62,768	23	%	272,585	100	%
Grand Total	192,121	45	%	76,000	18	%	45,629	11	%	117,027	27	%	430,776	100	%

	FY 2010
	30 DAYS	%		60 DAYS	%		90 DAYS	%		>90 DAYS	%		TOTAL	%
Self Pay	5,836	16	%	6,775	18	%	6,093	16	%	18,484	50	%	37,188	100	%
Medicare	25,106	48	%	9,504	18	%	4,072	8	%	13,385	26	%	52,067	100	%
Medicaid	5,025	27	%	4,082	22	%	3,155	17	%	6,259	34	%	18,521	100	%
Pro Bill	13,683	56	%	4,100	17	%	548	2	%	5,903	24	%	24,234	100	%
Commercial Insurance	106,455	49	%	33,057	15	%	21,304	10	%	56,757	26	%	217,573	100	%
Total	156,105	45	%	57,518	16	%	35,172	10	%	100,788	29	%	349,583	100	%

Billing for laboratory services is complicated and we must bill various payors, such as the individual, the insurance company, the government (federal or state), the private company or the health clinic. Other factors that may complicate billing include:

Differences between fee schedules and reimbursement rates;

Incomplete or inaccurate billing information as provided by the physician;

Disparity in coverage and information requirements;

Disputes with payors; and

Internal and external compliance policies and procedures.

Significant costs are incurred as a result of our participation in government programs since billing and reimbursement for laboratory tests are subject to complex regulations. We perform the requested tests and report the results whether the information is correct or not or even missing. This adds to the complexity and slows the collection process and increases the aging of our accounts receivable (“A/R”). When patient invoices are not collected in a timely manner the item is written off to the allowance.

Days Sales Outstanding (“DSO”) for fiscal years 2010 and 2011 were 94 and 91, respectively, a decrease of approximately 3%. These changes are due to constant vigilance on the part of management and internal changes to collection practices. However, when you compare our DSO lag to our collectible net revenues as reported on our financial statements for the periods in question, it varies between 98% to 102%, depending on the period.

Overall, the components of A/R as shown above for the two most recently completed fiscal years under review have not varied much year over year. The percent of A/R over 90 days has decreased to 27% as of October 31, 2011 as compared to 29% as of October 31, 2010, a decrease of only 2%.

See Note 5 to our consolidated financial statements for information regarding outstanding loans.

See Note 18 to our consolidated financial statements describing our merger and acquisition activities.

The weighted average interest rate on short-term borrowings outstanding as of October 31, 2011 and 2010 was approximately 3.25%.

We intend to expand our laboratory operations through aggressive marketing while also attempting to diversify into related medical fields through acquisitions.  These acquisitions may involve cash, notes, Common Stock, and/or combinations thereof.

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Contractual Obligations

The following table summarizes our significant contractual obligations as of October 31, 2011:

	Total ($)	FY 2012 ($)	FY 2013 ($)	FY 2014 ($)	FY 2015 ($)	FY 2016 ($)	Thereafter ($)
Long-Term Debt	5,897	1,270	458	487	518	551	2,613
Capital Leases	10,118	3,330	2,697	2,168	1,302	492	129
Operating Leases	13,842	5,942	2,765	2,315	1,155	836	829
Purchase Obligations	64,470	17,448	14,921	14,357	10,538	7,206	—
Long-Term Liabilities under Employment and Consultant Contracts	13,839	4,011	3,351	2,597	1,410	1,410	1,060

No one supplier who is counterparty to any particular supply agreement is contracted to provide more than one percent of our Cost of Services in any future period. Such contracts are made in the ordinary course of business. No directors, officers, promoters, voting trustees or individuals known to be Bio-Reference Laboratories, Inc (“BRLI”) security holders are counterparties to these agreements. Management does not believe that BRLI is substantially dependent upon these supply agreements, as the goods may be obtained from different suppliers or wholesalers, if needed. None of these agreements are leases or call for the acquisition or sale of property, plant and equipment.

Our cash balances at October 31, 2011 totaled approximately $22,013 as compared to approximately $17,779 at October 31, 2010.  We believe that our cash position, the anticipated cash generated from future operations, and the  availability of our credit line with PNC Bank, will meet our anticipated cash needs in fiscal 2012.

Off-Balance Sheet Arrangements

As of October 31, 2011, we did not have any off-balance sheet items.

Impact of Inflation

To date, inflation has not had a material effect on our operations.

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods.

Accounting for Intangible and Other Long-Lived Assets

We evaluate the possible impairment of our long-lived assets, including intangible assets. We review the recoverability of our long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable.  Evaluation of possible impairment is based on our ability to recover the asset from the expected future pretax cash flows (undiscounted and without interest charges) of the related operations. If the expected undiscounted pretax cash flows are less than the carrying amount of such asset, an impairment loss is recognized for the difference between the estimated fair value and the carrying amount of the asset.

Accounting for Revenue

Service revenues are principally generated from laboratory testing services including chemical diagnostic tests such as blood analysis, urine analysis and genetic testing among others. Net service revenues are recognized at the time the testing services are performed and are reported at their estimated net realizable amounts.

Net service revenues are determined utilizing gross service revenues net of contractual allowances.  Even though it is the responsibility of the patient to pay for laboratory service bills, most individuals in the United States have an agreement with a third party payor such as Medicare, Medicaid or a commercial insurance provider to pay all or a portion of their healthcare expenses; the majority of services provided by Bio-Reference Laboratories, Inc. (“BRLI”) are to patients covered under a third party payor contract.  In certain cases, the individual has no insurance or does not provide insurance information and in other cases tests are performed under contract to a professional organization (such as physicians, hospitals, and clinics) which reimburse BRLI directly; in the remainder of the cases, BRLI is provided the third party billing information and seeks payment from the third party under the terms and conditions of the third party payor for health service providers like BRLI.   Each of these third party payors may differ not only with regard to rates, but also with regard to terms and conditions of payment and providing coverage (reimbursement) for specific tests.  Estimated revenues are established based on a series of highly complex procedures and judgments that require industry specific healthcare experience and an understanding of payor methods and trends. We review our calculations on a monthly basis in order to make certain that we are properly allowing for the uncollectable portion of our gross billings and that our estimates remain sensitive to variances and changes within our payor groups.  The contractual allowance calculation is made on the basis of historical allowance rates for the various specific payor groups on a monthly basis with a greater weight being given to the most recent trends; this process is adjusted based on recent changes in underlying contract provisions and shifts in the testing being performed.  Bad Debt represents our estimate of net revenues that will ultimately be uncollectable and is based upon our analysis of historical payment rates by specific payor groups on a monthly basis with primary weight being given to the most recent trends; this approach allows bad debt to more accurately adjust to short-term changes in the business environment.  These two calculations are routinely analyzed by BRLI on the basis of actual allowances issued by payors and the actual payments made to determine what adjustments, if any, are needed.  The chart below shows the adjustments made to gross service revenues to arrive at net service revenues.

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	October, 31
	2011			2010			2009
Gross Revenues	$	2,482,349		$	1,902,573		$	1,423,287
Contractual Adjustments and Discounts:
Medicare/Medicaid Portion	293,874			281,002			247,333
All Other Third Party and Direct Payors*	1,629,833			1,163,547			813,300
Total Contractual Adjustments and Discounts	1,923,707			1,444,549			1,060,633
Net Service Revenues	$	558,642		$	458,024		$	362,654
Percent of Contractual Adjustments and Discounts To Gross Revenues	77.5		%	74.5		%	71.0		%

* All Other Third Party and Direct Payors consists of almost eight hundred distinct payors, including commercial health insurers and administrators as well as professionally billed accounts such as physicians, hospitals, clinics and other direct billed accounts.

When new business is received by BRLI, net service revenues are calculated by reducing gross service revenues by the estimated contractual allowance.  The bad debt expense is determined by calculating the appropriate collection rate for net current service revenues and is a component of general and administrative expenses.  BRLI recognized the amounts in subsequent periods for actual allowances/discounts to gross service revenue; bad debt was adjusted over the same periods of time to maintain an accurate balance between net service revenues and actual revenues.  Management has reviewed the allowances/discounts recognized in subsequent periods and believes the amounts to be immaterial.  A number of proposals for legislation or regulation continue to be under discussion which could have the effect of substantially reducing Medicare reimbursements for clinical laboratories or introducing cost sharing to beneficiaries. Depending upon the nature of regulatory action, if any, which is taken and the content of legislation, if any, which is adopted, the Company could experience a significant decrease in revenues from Medicare and Medicaid (CMS), which could have a material adverse effect on the Company. The Company is unable to predict, however, the extent to which such actions will be taken.

Accounting for Contractual Credits and Doubtful Accounts

It is typically the responsibility of the patient to pay for laboratory service bills.  Most individuals in the United States have an agreement with a third party payor such as Medicare, Medicaid or commercial insurance to pay all or a portion of their healthcare expenses; this represents the major portion of payment for all services provided to BRLI.  In certain cases, the individual has no insurance or does not provide insurance information; in the remainder of the cases, BRLI is provided the third party billing information, usually by the referring physician, and seeks payment from the third party under the terms and conditions of the third party payor for health service providers like BRLI.  Each of these third party payors may differ not only with regard to rates, but also with regard to terms and conditions of payment and coverage of specific tests.   BRLI routinely reviews the reimbursement policies and subsequent payments and collection rates from these different types of payors.  Contractual credits are recorded as reductions to gross service revenues and are collectively referred to as the contractual allowance.   BRLI has not been required to record an adjustment in a subsequent period related to revenue recorded in a prior period which was material in nature.  Aging of accounts receivable is monitored by billing personnel and follow-up activities including collection efforts are conducted as necessary.  Bad debt expense is recorded within selling, general and administrative expenses.  BRLI writes off receivables against the allowance for doubtful accounts when they are deemed uncollectible.  For client billing, accounts are written off when all reasonable collection efforts prove to be unsuccessful.  Patient accounts, where the patient is directly responsible for all or a remainder portion of the account after partial payment or denial by a third party payor, are written off after the normal dunning cycle has occurred, although these may be subsequently transferred to a third party collection agency after being written off.  Third party payor accounts are written off when they exceed the payor’s timely filing limits.  Accounts Receivable on the balance sheet is net of the following amounts for contractual credits and doubtful accounts:

	October 31
	2011		2010
Contractual Credits/Discounts	$	235,922	$	186,372
Doubtful Accounts	45,220		34,904
Total Allowance	$	281,142	$	221,276

Accounting for Employee Benefit Plans

See Note 21 to our consolidated financial statements for a discussion on Employee Benefit Plans.

New Authoritative Pronouncements

See Note 22 to our consolidated financial statement that discusses new authoritative pronouncements.

Item 7A. - Quantitative and Qualitative Disclosures about Market Risk

We do not invest in or trade instruments which are sensitive to market risk. We also do not have any material foreign operations or foreign sales so we have no exposure to foreign currency exchange rate risk.

We do have exposure to both rising and falling interest rates. At October 31, 2011, advances of approximately $18,632,000 under our Loan Agreement with PNC Bank were subject to interest charges at the bank’s then prime rate of 3.25 %.

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We estimate that our monthly cash interest expense at October 31, 2011 was approximately $143,000 and that a one percentage point increase or decrease in short-term rates would increase or decrease our monthly interest expense by approximately $16,000.

See Note 5 to the Consolidated Financial Statements contained herein for information on our loans.

Item 8. - Financial Statements and Supplementary Data

Financial Statements are annexed hereto.

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

None

Item 9A. - Controls and Procedures

(a)Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer as to the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Based on that evaluation, the principal executive officer and the principal financial officer of the Company have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective at a reasonable assurance level.

(b)Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization of management and/or our Board of Directors; and

(iii) provide reasonable assurance regarding the prevention or timely detection of any unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on its evaluation, our management concluded that our internal control over financial reporting was effective as of the end of the period covered by this Annual Report on Form 10-K.

MSPC, Certified Public Accountants and Advisors, A Professional Corporation, an independent registered public accounting firm, has audited the Consolidated Financial Statements included in this Annual Report on Form l0-K and, as part of their audit, has issued its attestation report, included herein, on the effectiveness of our internal control over financial reporting. See “Report of Independent Registered Public Accounting Firm” on included in this filling.

(c)Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the fourth quarter of fiscal 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. - Other Information

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

Executive Officers and Directors

The following table sets forth certain information with respect to each of our directors and executive officers.

Name	Age	Position
Marc D. Grodman, M.D	60	Chairman of the Board, President, Chief Executive Officer and Director
Howard Dubinett	60	Executive Vice President, Chief Operating Officer and Director
Sam Singer	68	Vice President, Chief Financial Officer, Chief Accounting Officer and Director
Joseph Benincasa(a)(c)(e)	62	Director
Harry Elias(a)(c)(e)	81	Director
Gary Lederman, Esq. (b)(c)(e)	77	Director
John Roglieri, M.D. (a)(d)(e)	72	Director

(a)Member of the Audit Committee

(b)Chairman of the Audit Committee

(c)Member of the Compensation Committee

(d)Chairman of the Compensation Committee

(e)Member of Nominating Committee

Marc D. Grodman, M.D. founded the Company in December 1981 and has been our Chairman of the Board, President, Chief Executive Officer and a director since our formation. Dr. Grodman is an Assistant Professor of Clinical Medicine at Columbia University’s College of Physicians and Surgeons and Assistant Attending Physician at Presbyterian Hospital, New York City. Since January 2005, Dr. Grodman has been a member of the board of directors, served as Chairman and currently serves as Vice Chairman of the American Clinical Laboratory Association, an industry organization comprised of the largest and most significant commercial clinical laboratories in the United States. From 1980 to 1983, Dr. Grodman attended the Kennedy School of Government at Harvard University and was a Primary Care Clinical Fellow at Massachusetts General Hospital. From 1982 to 1984, he was a medical consultant to the Metal Trades Department of the AFL-CIO. Dr. Grodman received a B.A. degree from the University of Pennsylvania in 1973 and an M.D. degree from Columbia University’s College of Physicians and Surgeons in 1977.  Except for his part-time duties as Assistant Professor of Clinical Medicine and Assistant Attending Physician at Columbia University and Presbyterian Hospital, Dr. Grodman devotes all of his working time to our business.    We believe that Dr. Grodman is qualified to serve on our board of directors because of his extensive medical expertise, his experience on the faculty at Columbia University College of Physicians and Surgeons, his leadership role in our industry and his knowledge of trends in the healthcare industry.

Howard Dubinett has been our Executive Vice-President and Chief Operating Officer of the Company since our formation in 1981. He became a director in April 1986. Mr. Dubinett attended Rutgers University. We believe that Mr. Dubinett is qualified to serve on our board of directors because of his extensive knowledge of and experience in our business and his knowledge of healthcare regulation.

Sam Singer has been our Chief Financial Officer since October 1987, a director since November 1989, and a Senior Vice President since 2007.  Mr. Singer was the Controller for Sycomm Systems Corporation, a data processing and management consulting company, from 1981 to 1987, prior to joining us.  Mr. Singer also serves on the boards of several not-for-profit institutions. He received a B.A. degree from Strayer University and an M.B.A. from Rutgers University.  We believe that Mr. Singer is qualified to serve on our board of directors because of his extensive experience in financial matters, including financial reporting, and his experience with our business gained through his tenure as our Chief Financial Officer.

Joseph Benincasa joined our board of directors in June 2005. Mr. Benincasa currently serves as the executive director of The Actors’ Fund of America, a position he has held since 1989. The Actors’ Fund is the leading national, non-profit human services organization providing comprehensive social and health care services, employment, training and housing support to the entertainment profession. For six years, from 2000 to 2006, Mr. Benincasa served as a director of St. Peter’s University Medical Center, a major hospital in northern New Jersey. He also sits on the board of directors of Broadway Cares/Equity Fights AIDS; the National Theatre Workshop of the Handicapped; Career Transition for Dancers; the Times Square Alliance; the New York Society of Association Executives and the Somerset Patriots, a minor league baseball team. Mr. Benincasa holds a B.A. degree from St. Joseph’s University, an M. Ed. Degree from Rutgers University and also attended the Fordham University Graduate School of Business. We believe that Mr. Benincasa is qualified to serve on our board of directors because of his familiarity with healthcare issues gained through his board service at St. Peter’s University Medical Center and his extensive experience with administrative matters.

Harry Elias became a member of the board of directors in March 2004. Mr. Elias commenced his employment in sales and marketing with JVC Company of America (“JVC”), a distributor of audio and video products, in 1967, subsequently being appointed as JVC’s Senior Vice President of Sales and Marketing in 1983 and as Executive Vice President of Sales and Marketing in 1990. In 1995, Mr. Elias was named as JVC’s Chief Operating Officer, a position he occupied until April 2003 when he resigned his positions upon his appointment as JVC’s “Honorable Chairman.” In January 2005, after retiring from JVC, Mr. Elias was appointed Chairman of the Board of and commenced to serve as a consultant to AKAI USA, the sole distributor in the United States of electronic products produced by AKAI, a Chinese manufacturer. Mr. Elias

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retired from AKAI in 2007 and currently is self-employed as a business consultant. We believe that Mr. Elias is qualified to serve on our board of directors because of the experience and skills he gained in running a large business operation.

Gary Lederman, Esq. became a member of our board of directors in May 1997. He received his B.A. degree from Brooklyn College in 1954 and his J.D. degree from NYU Law School in 1957.  He was manager of Locals 370, 491 and 662 of the U.F.C.W. International Union from 1961 to 1985.. During the 1970s, Mr. Lederman also served as a member of the New York Attorney General’s Consumer Fraud Advisory Committee. He is retired from the unions and has been a lecturer at Queensboro Community College in the field of insurance.   He served on an institutional review board for RTL, a pharmaceutical drug testing laboratory until his retirement in February 2007. We believe that Mr. Lederman is qualified to serve on our board of directors as a result of his legal expertise, his union manager experience and responsibilities and his experience with RTL, including his involvement with health and welfare funds and his familiarity with consumer regulation and the activities of pharmaceutical companies.

John Roglieri, M.D. became a member of our board of directors in September 1995.  He is an Assistant Professor of Clinical Medicine at Columbia University’s College of Physicians and Surgeons and an Assistant Attending Physician at Presbyterian Hospital, New York City.  Dr. Roglieri received a B.S. degree in Chemical Engineering and a B.A. degree in Applied Sciences from Lehigh University in 1960, an M.D. degree from Harvard Medical School in 1966, and a Masters degree from Columbia University’s School of Business in 1978.  From 1969 until 1971, he was a Senior Assistant Surgeon in the U.S. Public Health Service in Washington, D.C.  From 1971 until 1973 he was a Clinical and Research Fellow at Massachusetts General Hospital.  From 1973 until 1975, he was director of the Robert Wood Johnson Clinical Scholars program at Columbia University.  In 1975 he was appointed Vice-President, Ambulatory Services at Presbyterian Hospital, a position which he held until 1980.  Since 1980, he has maintained a private practice of internal medicine at Columbia-Presbyterian Medical Center.  From 1988 until 1992, he was also director of the Employee Health Service at Presbyterian Hospital. From 1992 through 1999, Dr. Roglieri was the corporate medical director of NYLCare, a managed care subsidiary of New York Life Insurance Company. Dr. Roglieri was chief medical officer of Physician WebLink, a national physician practice management company, from 1999 to 2000. Since 2001, he has been a medical director for New York Life in Manhattan. He is a member of advisory boards to several pharmaceutical companies, a member of the Editorial Advisory Board of the journals Managed Care and Seminars in Medical Practice. We believe that Dr. Roglieri is qualified to serve on our board of directors due to his extensive medical background, his role as director of the Employee Health service at Presbyterian Hospital, his role as corporate medical director of a managed care organization and the skill and expertise gained through his many other activities.

There are no family relationships between or among any directors or executive officers of Bio-Reference Laboratories.

Board Composition

Director Independence

Our board of directors has determined that each of Messrs. Benincasa, Elias and Lederman and Dr. Roglieri are independent within the applicable rules of the SEC and the NASDAQ Stock Market, and that each of them is also an independent director under Rule 10A-3 of the Exchange Act for the purpose of audit committee membership.  In addition, our board has determined that Mr. Lederman is an audit committee financial expert within the meaning of the applicable rules of the SEC and the NASDAQ Stock Market.

Staggered Board

Our Certificate of Incorporation provides for a staggered board of directors. Accordingly, our board is divided into three classes of directors and the members of only one class are elected each year to serve a three-year term. Dr. Grodman and Mr. Dubinett are the Class I directors whose terms expire in fiscal 2013. Mr. Singer and Mr. Elias are the Class II directors whose terms expire in fiscal 2014. Mr. Benincasa, Mr. Lederman and Dr. Roglieri are the Class III directors whose terms expire in fiscal 2012.

Board Leadership Structure and Board’s Role in Risk Oversight

We have always employed a traditional board leadership model, with our Chief Executive Officer also serving as Chairman of our Board of Directors. We believe this traditional leadership structure benefits our company. A combined Chairman/CEO role helps provide strong, unified leadership for our management team and Board of Directors. Our clients, stockholders and other business partners have always viewed our Chairman/CEO as a visionary leader in our industry, and we believe that having a single leader for the company is good for our business. Accordingly, we believe a combined Chairman/CEO position is the best governance model for our company and our stockholders.

Management is responsible for the day-to-day management of risks we face, while our board of directors, as a whole and through its committees, has responsibility for the oversight of risk management.  In its risk management role, our board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.

The board of directors’ role in overseeing the management of risk we face is conducted primarily through its committees, as discussed in the description of each committee below and as specified in each committee’s respective charter.  The board of directors (or the appropriate board committee in the case of risks that are under the purview of a particular committee) discusses with management potential risk exposures, their potential impact on our company and the steps we take to manage them.  When a board committee is responsible for evaluating and overseeing the management of a particular risk or risks, the committee will report such matters to the full board.  This enables the board of directors and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships.

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Board Meetings and Committees

Our board of directors met four times during our fiscal year ended October 31, 2011.  Our board of directors has established the following committees—an audit committee, a compensation committee and a nominating committee.  The audit committee met four times during fiscal 2011.  The compensation committee met once during fiscal 2011.  The nominating committee did not meet during fiscal 2011.  During fiscal 2011, each director attended at least 75% of the meetings of the board of directors and committees on which such director served.  Each of the committees of our board of directors acts in accordance with a written charter adopted by our board of directors.

Audit Committee

Our audit committee is comprised of Gary Lederman (Chairman), Joseph Benincasa, Harry Elias and John Roglieri. The audit committee meetings at least once a year with the outside auditors with respect to, and shall advise the board of directors in, matters relating to the corporations reporting practices, its application of accounting principals and its internal controls.  The outside auditors are accountable to the board of directors and the audit committee and the board of directors and the audit committee have the authority and responsibility to select, evaluate, and where appropriate, replace the outside auditors or to nominate the outside auditors to be proposed for shareholder approval in any proxy statement. The audit committee shall be directly responsible for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for us.  The audit committee shall be directly responsible for the resolution of disagreements between our management and the outside auditors regarding financial reporting.

Compensation Committee

Our compensation committee is comprised of John Roglieri (Chairman), Joseph Benincasa, Harry Elias and Gary Lederman. The compensation committee oversees the compensation policies and their specific application to our executive officers; prepares an annual report on executive compensation for inclusion in our Annual Report and/or proxy statement, The compensation committee negotiates and approves the compensation of our chief executive officer and our other executive officers; selects a peer group of companies against which to compare our compensation of our chief executive officer; monitor compensation trends and solicit independent advice when deemed appropriate; and approve, reject or modify incentive bonus compensation plans for our senior management, as recommended by management.

From time to time our compensation committee may determine to engage an independent compensation consultant to assist it in reviewing the compensation levels for our executive officers.  Starting in fiscal 2010 and continuing into fiscal 2011 the compensation committee engaged Compensation Resources, Inc. as its independent compensation consultant in connection with the negotiation of the new employment agreement with our chief executive officer.

Nominating Committee

Our nominating committee is comprised of Harry Elias, Joseph Benincasa, Gary Lederman and John Roglieri (Chairman).  The nominating committee establishes criteria for the selection of directors; identifies individuals qualified to be directors; evaluates director candidates proposed by stockholders; recommends individuals to fill vacancies on the board; and recommends nominees for director at each annual stockholder meeting.  The nominating committee considers nominees recommended by stockholders in accordance with the procedures set forth in our by-laws and applicable law.  The nominating committee generally identifies potential candidates for director by seeking referrals from management, members of the board of directors and other business contacts. Candidates are evaluated based upon factors such as independence, knowledge, judgment, integrity, character, leadership, skills, education, experience, financial literacy, standing in the community and ability to foster a diversity of backgrounds and views and to complement the board’s existing strengths. There are no differences in the manner in which the nominating committee evaluates nominees for director based on whether the nominee is recommended by a stockholder.  The nominating committee seeks to create a board of directors that is strong in its collective knowledge and has a diversity of skills and experience and diversity of backgrounds. The nominating committee assesses the effectiveness of its diversity policies by annually reviewing the nominees for director to our board of directors to determine if such nominees satisfy our then-current needs.

Code of Ethics

Our Code of Ethics is applicable to our senior management, as well as our key financial and accounting personnel. It has been designed to deter wrongdoing and to promote:

honest and ethical conduct including the ethical handling of actual or apparent conflicts of interest;

fair, accurate, timely and understandable disclosure in our public communications and reports filed with the SEC;

compliance with applicable governmental laws, rules and regulations;

prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and

accountability to ensure adherence to the Code.

The Code requires each covered person to deal ethically and honestly with the company and to avoid business, financial or other direct or indirect interests or relationships that conflict with those of the company or divide the covered person’s loyalty to the company. Each covered person is required to sign an attestation of compliance with the Code at the end of each fiscal year.

Compliance with Section 16(a) of the Exchange Act

We have recently discovered certain discrepancies between our shareholder records and certain Section 16 filings made by our officers and directors.  We are currently undertaking a review of such filings to determine any deficiencies.

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Item 11 — Executive Compensation

The table below summarizes the total compensation paid or accrued by us with respect to the fiscal years ended October 31, 2009, 2010 and 2011 to our named executive officers (“NEOs”).  Our NEOs for fiscal 2011 are Marc D. Goodman, our President and Chief Executive Officer; Howard Dubinett, our Executive Vice President and Chief Operating Officer; and Sam Singer, our Senior Vice President and Chief Financial Officer.  This table does not include any amount for our group life, health, hospitalization or medical reimbursement plans, if any, as such benefits do not discriminate in scope, terms or operation, in favor of any or our officers, senior management members or directors, and are generally available to all salaried employees.

SUMMARY COMPENSATION TABLE

Name and Principal Position	Fiscal Year	Salary($)	Bonus($) (1)	Stock Awards($)	Option Awards($)	Non-Equity Incentive Plan Compensation ($)(2)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)(3)	Total($)
Marc D. Grodman M.D., President and Chief Executive Officer	2011	1,059,044	1,321,241	0	0	63,543	0	229,638	2,673,466
	2010	1,013,439	0	0	0	60,806	0	113,491	1,187,736
	2009	965,180	0	0	0	96,518	0	111,090	1,172,788
Howard Dubinett, Executive Vice President and Chief Operating Officer	2011	418,518	0	0	0	25,111	0	45,044	488,673
	2010	400,496	0	0	0	24,030	0	42,014	466,540
	2009	381,425	0	0	0	38,143	0	40,070	459,638
Sam Singer, Senior Vice President and Chief Financial Officer	2011	418,518	110,000	0	0	25,111	0	45,087	598,716
	2010	400,496	0	0	0	24,030	0	40,240	464,766
	2009	381,425	0	0	0	38,143	0	40,240	459,808

(1) The amounts shown in this column for fiscal 2011 represent (i) with respect to Dr. Grodman, cash bonuses of $1,202,241 and $119,000 paid in connection with his payment of the premium costs for an insurance policy owned by the Company insuring the life of Dr. Grodman pursuant to an Endorsement Split-Dollar Insurance Agreement among the Company, Dr. Grodman and an Insurance Trust established by Dr. Goodman; and (ii) with respect to Mr. Singer, a one time cash bonus for his activity in the collection of $6.7 million sales tax refund from the State of New Jersey.

(2) The amounts shown in this column represent amounts earned under the Senior Management Incentive Bonus Plan adopted by the Compensation Committee for the applicable fiscal year.

(3) The amounts in the “All Other Compensation” column for fiscal 2011 are detailed below.

Name	Personal Use of Company Leased Automobile ($)	Personal Use of Company Airplane ($) (a)	Life Insurance Premium ($) (b)	401(k) Plan Contribution ($)	Total ($)
Marc D. Grodman	26,023	2,865	200,000	750	229,638
Howard Dubinett	19,304	0	25,000	750	45,044
Sam Singer	19,337	0	25,000	750	45,087

(a) Represents our aggregate incremental costs for personal use of the Company’s aircraft.

(b) See “Split Dollar Life Insurance” below.

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GRANTS OF PLAN-BASED AWARDS

This table provides information regarding awards granted to our NEOs under the 2011 Senior Management Incentive Bonus Plan.

	Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)
Name	Threshold ($)	Maximum ($)
Marc D. Grodman M.D.	42,362	264,761
Howard Dubinett	16,741	104,630
Sam Singer	16,741	104,630

(1) The amounts represent the range of annual cash incentive awards the NEO was potentially entitled to receive based on the achievement of the performance goals for fiscal 2011 under the 2011 Senior Management Incentive Bonus Plan.  These cash incentive awards were granted with no specified target level, as defined under SEC Regulation S-K, rule 402(d).

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Employment Agreements with NEOs

Dr. Grodman

On December 31, 2010, the Company executed an employment agreement with Dr. Grodman (the “New Contract”), employing him as President and Chief Executive Officer through October 31, 2017. The New Contract replaced Dr. Grodman’s employment agreement then in effect and due to expire on October 31, 2011 (the “Old Contract”). The New Contract is automatically renewable for one additional two year period subject to the right of either party to elect not to renew at least four months prior thereto. The New Contract provides Dr. Grodman with a minimum annual base compensation of $1,059,044 commencing as of November 1, 2010, subject to annual percentage increases based on the Consumer Price Index as well as to increases at the discretion of the Compensation Committee. Dr. Grodman’s minimum annual base compensation for fiscal 2011 as determined by the Compensation Committee was $1,059,044 and for fiscal 2012 is $1,093,000. Under the New Contract we agreed to lease and insure an automobile for his benefit and agreed to provide him with access for personal use our airplane, which use will be taxable to him. The New Contract also provides Dr. Grodman with participation rights in any fringe benefit and bonus plans available to the Company’s employees to the extent determined by the Compensation Committee. The New Contract provides that in the event of Dr. Grodman’s total disability we may continue to employ him and compensate him at his then current base compensation for the month the disability occurs and a period of 36 months thereafter followed by an unpaid 3 month period, following which his employment will terminate unless we grant an additional leave of absence. If Dr. Grodman incurs a partial disability then his base compensation will be equitably adjusted based on the time he is able to devote to the Company. In the event of Dr. Grodman’s termination due to his death, the Company will pay his estate a death benefit equal to 24 times his monthly base compensation in effect at the date of his death, paid over 24 months. Under the New Contract we may terminate Dr. Grodman’s employment for “Cause” and Dr. Grodman has the right to terminate his employment for “Good Reason”. If he terminates for Good Reason he will be entitled to continuation of his base compensation and employee benefits through the end of the period he otherwise would have been employed under the New Contract.

“Cause” is defined in the New Contact to mean: any act or acts of dishonesty by Dr. Grodman constituting criminal acts resulting or intending to result directly or indirectly in his gain or personal enrichment at our expense; his commission of a crime involving fraud, embezzlement or theft; or his material breach of the New Contract. “Good Reason” is defined in the New Contract to mean: a material diminution of Dr. Grodman’s base compensation; a material diminution in his authority, duties or responsibilities; a material diminution of the authority, duties or responsibilities of any supervisor he reports to; a material diminution in the budget over which he retains authority; a material change in the geographic location at which he provides services; or any other action or inaction that constitutes a material breach by us of the New Contract.

In the event of a Change in Control of the Company, Dr. Grodman can elect to terminate his employment by providing written notice within 30 days following the Change in Control, with a termination date effective at the earlier of 45 days after the Change in Control or the next to last day of the calendar year in which the Change in Control occurs. In that event, he will be entitled to be paid a lump sum severance payment equal to 2.99 times the average of the annual compensation paid to him by the Company for the five calendar years preceding the earlier of the calendar year in which the Change of Control occurred or the calendar year of the date of termination, reduced by the amount of any other payment or the value of any other benefit received or to be received by him in connection with the termination of his employment or contingent on a Change in Control that are not deductible by us pursuant to Section 280G of the Internal Revenue Code of 1986, as amended (the “Tax Code”). “Change in Control” is defined in the New Contact to mean a “change in effective control” or a “change in the ownership of a substantial portion of a corporation’s assets” as such terms are defined under Section 409A of the Tax Code, and means either the acquisition within 12 months by a person or group of ownership of 30% or more of the total voting power of our stock; the replacement of a majority of the member’s of our Board of Directors during any 12 month period by directors not endorsed prior to their appointment or election by a majority of the Board of Directors; or the acquisition by a person or group within 12 months of our assets with a total gross fair market value equal to more than 40% of the total gross fair market value of our assets prior to such acquisition.

Dr. Grodman is also subject to certain non-competition restrictions preventing him from competing with the Company after termination of his employment.  Such restrictions will run for one year from the date of his termination, other than following a termination by him for Good Reason in which case they will continue until the greater of one year from the date of termination or ½ of the period remaining from the date of termination through October 31, 2017.

Pursuant to the New Contract, the Company agreed to transfer to an Insurance Trust (the “1999 Trust”) established by Dr. Grodman, an insurance policy (“Policy A”) owned by the Company insuring the life of Dr. Grodman pursuant to an Endorsement Split-Dollar Insurance Agreement (“Split-Dollar Agreement No. 1”) among the Company, Dr. Grodman and the 1999 Trust, by paying a $1,202,411 bonus (the “Initial Bonus”) to Dr. Grodman, which is equal to the amount of the premiums paid by the Company on Policy A through the date of the New Contract. Split-Dollar Agreement No. 1 required the Company to pay the annual premiums on Policy A and provided that in the event of Dr. Grodman’s death while serving as a full time Company employee, the Company would receive that amount out of the policy death proceeds equal to its “interest in the policy” (i.e. the greater of the premiums it had paid on the policy or the policy cash value at the date of death) and the balance of the death proceeds would be paid to Dr. Grodman’s designated beneficiaries. Pursuant to the New Contract, Split-Dollar Agreement No. 1 was terminated and in a “book entry” transaction, the Initial Bonus was “paid” to Dr. Grodman who in turn “transferred” the Initial Bonus amount to the 1999 Trust which in turn “repaid” the Initial Bonus amount back to the Company. The Company then, in accordance with Split-Dollar Agreement No. 1, transferred ownership of Policy A to the 1999 Trust. To facilitate these transactions, the parties agreed that the actual monetary funds did not need to change hands but agreed to treat the transactions appropriately for tax and accounting purposes. The Company also agreed to pay bonuses to Dr. Grodman of $119,000 in 2011, $70,000 in 2012 and $70,000 in 2013 unless his employment was terminated for “Cause” prior to a payment. These three bonuses were equal in amount to the remaining premiums payable on Policy A. The Company will expense the Initial Bonus ratably over the term of the New Contract. If Dr. Grodman’s employment is terminated for “Cause”, he is obligated to pay back the unexpended portion of the Initial Bonus back to the Company.

The Company also agreed to obtain a second insurance policy, a second-to-die policy (“Policy B”) insuring the lives of Dr. Grodman and his wife. Policy B will be owned by the Company pursuant to a second Endorsement Split-Dollar Insurance Agreement (“Split-Dollar Agreement No. 2”)  among the Company, Dr. Grodman and an Insurance Trust (the “2011 Trust”) established by Dr. Grodman. Policy B provides for seven years of annual premiums of approximately $200,000 each, to be paid by the Company unless Dr. Grodman’s employment is terminated for “Cause.” At Dr. Grodman’s death, if his wife survives him, or in the event his employment is terminated for “Cause”,  Dr. Grodman’s estate or Dr. Grodman, as the case may be, will

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cause the premiums paid by the Company under Policy B up to said date, to be paid back to the Company and the Company will transfer ownership of Policy B to Dr. Grodman’s estate, or to Dr. Grodman, as the case may be. If Dr. Grodman survives his wife, and assuming his employment has not been terminated for “Cause,” at his death, the Company will be paid the greater of the premiums it paid on Policy B or the Policy B cash value out of the death proceeds and Dr.Grodman’s estate will be paid the balance of the death proceeds, provided, however, that if Dr. Grodman survives his wife and assuming his employment has not been terminated for “Cause,” at his wife’s death, Dr Grodman or his designee shall have the option, exercisable within 90 days of her death, to purchase Policy B from the Company for the greater of the premiums paid or the cash value at the date of her death.

Mr. Singer

Mr. Singer serves as Senior Vice President and Chief Financial Officer pursuant to an employment agreement that will expire on January 31, 2012 unless further extended.  Mr. Singer’s minimum annual compensation under his employment agreement is $355,000 subject to increases based on increases in the Consumer Price Index as well as to increases at the discretion of the Compensation Committee. Mr. Singer’s minimum annual base compensation for fiscal 2011 as determined by the Compensation Committee was $418,518 and for fiscal 2012 is $431,911. The employment agreement provides for the leasing of an automobile for his use and participation in fringe benefit, bonus, pension, profit sharing, and similar plans maintained for the Company’s employees. In the event of Mr. Singer’s total disability we may continue to employ him and compensate him at his then current base compensation for the month the disability occurs and a period of 12 months thereafter followed by an unpaid 3 month period, following which his employment will terminate unless we grant an additional leave of absence. If Mr. Singer incurs a partial disability then his base compensation will be equitably adjusted based on the time he is able to devote to the Company. In the event of Mr. Singer’s termination due to his death, our obligations under the employment agreement will continue for 6 months. Under the employment agreement we may terminate Mr. Singer’s employment for “Cause” and Mr. Singer has the right to terminate for “Good Reason”. If he terminates for Good Reason he will be entitled to continuation of his base compensation and employee benefits through the end of the employment period he otherwise would have been employed under his employment agreement.  In the event of termination due to a Change in Control of the Company, Mr. Singer will be entitled to the same severance payment described above for Dr. Grodman.  Mr. Singer’s agreement does not contain non-competition restrictions.

“Cause” is defined in Mr. Singer’s employment agreement to mean: an act or acts of dishonesty by Mr. Singer constituting criminal acts resulting or intended to result directly or indirectly in his gain or personal enrichment at our expense; his commission of a crime involving fraud, embezzlement or theft against us; or his engaging in competition with us.  Good Reason and Change in Control under Mr. Singer’s employment agreement has the same meanings as provided in Dr. Grodman’s New Contract.

Mr. Dubinett

Mr. Dubinett’s employment agreement with us expired on October 31, 2011.  Mr. Dubinett’s employment agreement was substantially identical with Mr. Singer’s employment agreement.  Mr. Dubinett’s minimum annual base compensation for fiscal 2011 as determined by the Compensation Committee was $418,518 and for fiscal 2012 is $431,911.

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Potential Payments Upon Termination or Change in Control as of October 31, 2011.

The following table sets out the estimated payments that would have been paid to each of our NEOs upon termination of employment due to death, for Good Reason or following a Change in Control in accordance with their employment agreements as described above as in effect, and in each case assuming such termination had occurred, as of October 31, 2011.  We have calculated these estimated payments to meet SEC disclosure requirements. The estimated payments are not necessarily indicative of the actual amounts any of our NEOs would receive in such circumstances. The table excludes compensation amounts accrued through October 31, 2011 that would be paid in the normal course of continued employment, such as accrued but unpaid base compensation, and vested account balances under our retirement plans that are generally available to all of our salaried employees.

	Base Compensation Continuation/ Lump Sum ($) (a)	Benefits Continuation ($) (b)	Total ($)
Marc D. Grodman M.D.
Good Reason	6,354,264	14,184	6,368,448
Death	2,118,088	0	2,118,088
Change in Control	3,660,825	0	3,660,825
Howard Dubinett
Good Reason	0	0	0
Death	209,259	0	209,259
Change in Control	1,129,584	0	1,129,584
Sam Singer
Good Reason	104,630	1,229	105,859
Death	209,259	0	209,259
Change in Control	1,129,584	0	1,129,584

(a) For a Good Reason termination this payment reflects a continuation of base compensation through the end of period the NEO otherwise would have been employed under his employment agreement.  For death this payment reflects a continuation of base compensation for 24 months in the case of Dr. Grodman and 6 months in the case of Messrs. Dubinett and Singer.  For Change in Control this payment reflects an amount equal to 2.99 times the NEOs five-year average compensation, without reduction.

(b) For a Good Reason termination this payment reflects our estimated costs for a continuation of the NEOs benefits under our medical plan through the end of period the NEO otherwise would have been employed under his employment agreement.

Split-Dollar Life Insurance

We have established split-dollar life insurance programs for each of the NEOs. We are the sole owner of the policies and, accordingly, only we are entitled to receive the net cash surrender value of the policies.  We have entered into Endorsement Split-Dollar Life Insurance Agreements with each of the NEOs pursuant to which we have agreed to continue to pay the annual premiums on the policies during the period of the NEO’s full-time employment by the Company ($70,000 under Dr. Grodman’s policy and $25,000 each under Messrs. Dubinett’s and Singer’s policies). In the event of an NEO’s death while serving as a full-time employee of the Company, we will be entitled to receive that amount of the death proceeds equal to our interest in the policy (the aggregate amount of premiums paid by the Company with respect to the policy less the amount of any loans, if any, from the Insurer to the Company against the cash value or policy proceeds, and less the aggregate amount of any premiums paid by the NEO to the Company in reimbursement of premiums paid by the Company) and the balance of the death proceeds will be paid to the NEO’s designated beneficiaries. The premiums paid by the Company on such policies (including certain predecessor policies) are approximately $250,000 at October 31, 2011. As of such date the aggregate net cash surrender value of the three policies was approximately $725,000 and is recorded on the books of the Company at such value.

See “Employment Agreements with NEOs” as to the transfer of the split-dollar insurance policy on Dr. Grodman’s life, owned by the Company, to Dr Grodman’s insurance trust and as to the purchase by the Company of a new split-dollar second-to-die insurance policy on the lives of Dr. Grodman and his wife.

Stock Options

See Note 11 of Notes to the Consolidated Financial Statements for information on the company’s stock option plans.

Option Grants to Our NEOs in Last Fiscal Year

No options to purchase shares of our Common Stock were granted to any of our NEOs in fiscal 2011.

Option Exercises and Stock Vested

At October 31, 2011, there were no outstanding options held by our NEOs or any of our directors. During fiscal 2011 no options were exercised by any member of the Board of Directors.

Director Compensation

During fiscal 2011, each director who was not a Company employee was compensated for his services as a director with a quarterly fee of $16,250. In addition, Gary Lederman as chairman of the Audit Committee and John Roglieri M.D. as chairman of the Compensation Committee were each compensated for serving as a Committee Chairman with an additional quarterly fee of $3,750. No director’s fees were paid to our employee directors.

The following table sets forth the compensation paid to our directors in fiscal 2011.

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Fiscal 2011	Fees Earned or paid in
Director Name:	Cash ($)	Chairman Fees ($)		Other	Total ($)
Joseph Benincasa	65,000	—		—	65,000
Harry Elias	65,000	—		—	65,000
Gary Lederman (a)	65,000	15,000	(a)	—	80,000
John Roglieri M.D (b)	65,000	15,000	(b)	—	80,000

(a) Chairman of the Audit Committee

(b) Chairman of the Compensation Committee

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Compensation Discussion and Analysis

Executive Compensation Philosophy

The objective of our compensation program for our NEOs is to reward them for their leadership and efficiency in their areas of responsibility and for their overall contribution to the Company’s performance.  Our NEOs for fiscal 2011 are Dr. Grodman, our President and Chief Executive officer, Mr. Dubinett, our Executive Vice President Chief Operating officer who is responsible for healthcare regulatory compliance and insurance matters, and Mr. Singer, our Senior Vice President and Chief Financial Officer who is responsible for all financial matters.

The elements of compensation for each of the NEOs are the following cash amounts.

(i)Annual “Base Compensation,” consisting of a set annual cash amount; and

(ii)Participation in the annual Senior Management Incentive Bonus Plan (“Annual Bonus Plan”), which provides cash incentives based on the level of achievement of specific performance objectives.

Because our NEOs own substantial equity interests in the Company, our compensation program for them focuses primarily on base salary, subject to annual increase based upon a review of the executive’s and the Company’s performance and increases in the Consumer Price Index. In addition, to further incentivize our NEOs, we annually establish an Annual Bonus Plan that is designed to assist in the Company’s profitability by encouraging a “team effort” that rewards participants based on the level of achievement of Company financial targets set by the Compensation Committee with no reward if minimum targets are not achieved. Annual Bonus Plan targets were achieved with respect to fiscal 2010 and fiscal 2011 so that bonuses were earned and paid to our NEOs under the Annual Bonus Plan for fiscal 2010 (the “2010 Bonus Plan”) and the Annual Bonus Plan for fiscal 2011 (the “2011 Bonus Plan”).  See “Senior Management Incentive Bonus Plan” herein.

Process for Determining Executive Compensation

Our Compensation Committee reviews and approves salaries and other compensation of our NEOs. Our Compensation Committee also establishes and reviews the achievement of performance goals and other matters relating to the Annual Bonus Plans.

With regard to Dr. Grodman’s New Contract, Dr. Grodman negotiated the terms directly with the Compensation Committee. During the negotiation, the Compensation Committee did not have specific performance objectives for the Company to achieve in the future but believed that the steady increase in each of the past four years in the Company’s net revenues and profits were to a significant degree attributable to Dr. Grodman’s leadership as president and chief executive officer. The Compensation Committee believed it was important for the Company and its stockholders to secure Dr. Grodman’s services for another seven years. In addition, the Compensation Committee relied in part on executive compensation studies furnished by Compensation Resources, Inc., an independent executive compensation consulting firm (“CRI”) engaged by the Compensation Committee. After taking into account the compensation paid to the chief executive officers of a peer group of nine publicly owned clinical testing laboratories (including the two major national laboratories, Quest Diagnostics, Inc. and Laboratory CP of America Holdings) CRI concluded that Dr. Grodman’s compensation package under the Old Contract was below (by over 20%) the comparable value delivered to the chief executive officers in the peer group and that Dr. Grodman’s compensation in its totality under the New Contract was reasonable when compared to the other chief executive officers in the peer group. The nine peer group publicly owned clinical testing laboratories used as a benchmark by CRI were;

Bioclinica Inc.

Genoptix Inc

Laboratory CP of Amer Hldgs

Medtox Scientific Inc.

Neogenomics Inc.

Orchid Cellmark Inc.

Psychemedics Corp.

Quest Diagnostics Inc.

Response Genetics Inc.

To better align Dr. Grodman’s compensation package with those of the chief executive officers in the peer group, under the New Contract, Dr. Grodman’s minimum base compensation was raised to $1,059,044 per year, he was provided with a death benefit of 24 months continuation of his base compensation if he dies while employed by us and we agreed to increase the period during which he may be on a paid leave of absence due to a total disability from 18 months to 36 months.

Mr. Dubinett and Mr. Singer each negotiated the terms of their contracts including their Base Compensation with Dr. Grodman who then recommends the terms to the Compensation Committee for approval. Since fiscal 2008, the Base Compensation and the increase in Base Compensation in each year for Mr. Dubinett and for Mr. Singer have been identical. This is because in the opinion of Dr. Grodman and the Compensation Committee, Mr. Dubinett and Mr. Singer have performed their duties flawlessly and to distinguish between them in compensation could cause the Company to lose the services of one of them.  At the time of the filing of this Annual Report on Form 10-K, both Mr. Dubinett and Mr. Singer are in discussions with the Company on the terms of new or extended employment agreements.  The relative short term of each of their employment agreements could allow for early termination if Dr. Grodman or the Compensation Committee is not satisfied with either officer’s performance. Furthermore, the increases in their Base Compensation in each of the past three fiscal years have been as follows and such increases include automatic increases in fiscal years 2010 and 2011 based upon increases in the Consumer Price Index.

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Increases in Base Compensation for Each of

Mr. Dubinett and Mr. Singer Over the Prior Three Fiscal Years

Period	Amount ($)	Percentage Increase
Fiscal 2009	18,490	5	%
Fiscal 2010	19,075	5	%
Fiscal 2011	18,022	4	%

* Includes increases in fiscal 2010 and fiscal 2011 due to increases in the Consumer Price Index.

The Compensation Committee also determined that the Base Compensation paid with respect to fiscal 2011, and the terms of the extension agreements with Messrs. Dubinett (through October 31, 2011) and Singer (through January 31, 2012), were reasonable in relationship to the services performed, the responsibilities assumed and the results obtained, and were in the best interests of the Company. In connection with Dr. Grodman’s compensation, the Compensation Committee considered the Company’s increase in net revenues, patients serviced, working capital and shareholders’ equity in fiscal 2011 compared with the corresponding period in fiscal 2010. Furthermore, after a review of the base compensation paid to the named executive officers of the following companies, namely Alliance Healthcare Services, Inc., Bioclinica Inc., Genoptix Inc., Insight Health Svcs Hldg Corp, Laboratory Cp of America Hldgs, Medtox Scientific Inc., Quest Diagnostics Inc. and Radnet Inc., the Compensation Committee concluded that the base compensation to be paid to Messrs. Grodman, Dubinett and Singer for fiscal 2011 was well within the range of the base compensation levels of the named executive officers at such other companies and was appropriate.

Benefits

Our policy is to provide health benefits as well as access to our 401(k) Plan to which we contribute a maximum of $750 per employee each year, to all of our employees including our NEOs.

We lease automobiles for their use but amounts reflecting their personal use are reported as income to them subject to tax. Similarly, personal use of the Company airplane by any of our NEOs is reported as income to them, subject to tax. See Footnote (3) to the “Summary Compensation Table”.

Change in Control Benefits

Our employment agreements with our NEOs provide for substantial severance payments to them in the event of a change in control of the Company. This provision provides an additional level of financial security for our NEOs. These executives could well be asked to evaluate a transaction purportedly expected to maximize shareholder value while resulting in the elimination of their jobs. The severance payment provision (2.99 times the annual average of the preceding five years of compensation) could help to minimize the distraction caused by concerns over personal financial security in the context of a proposed change in control.

Equity Awards

Due to the substantial stock ownership position of our NEOs, we do not grant them stock options or other equity awards.

Policy Regarding the One Million Dollar Deduction Limitation

Section 162(m) of the Tax Code generally disallows a tax deduction to public corporations for compensation in excess of $1,000,000 paid for any fiscal year to a corporation’s chief executive officer and to the three other most highly compensated executive officers in office as of the end of the fiscal year, other than the chief financial officer. The statute exempts qualifying performance-based compensation from the deduction limit if certain requirements are met. However, shareholder interests may at times be best served by not restricting the Compensation Committee’s discretion and flexibility in developing compensation programs, even though the programs may result in non-deductible compensation expenses. Accordingly, the Compensation Committee may from time to time approve elements of compensation for certain officers that are not fully deductible.

Annual Bonus Plans for fiscal 2010 and 2011.

The Compensation Committee adopts Annual Bonus Plans for each year which it believes will incentivize our senior management to push to achieve operating results which the Compensation Committee believes will inure to the benefit of our stockholders as well as management. Each Annual Bonus Plan provides goals which the Compensation Committee believes could only be achieved through extraordinary team efforts by our senior management and that are designed to incentivize our senior management to operate the Company in the most efficient manner possible. While not specifically emulating any specific company or companies, the Compensation Committee takes into consideration the economy in general and the goals of the Company that it wished to reward, namely to improve Company margins within attainable goals for management.  The Compensation Committee has at all times sought to provide a mechanism to reward outstanding efforts that enhance shareholder value without impacting the finances of the Company.  The following is a description of the 2010 Bonus Plan and the 2011 Bonus Plan. The Compensation Committee has adopted a similar plan for fiscal 2012. Any bonuses required to be paid under the provision of any Annual Bonus Plans are required to be paid to each participant on the pro-rata formula established upon the adoption of the Plan and not at the discretion of the Compensation Committee.

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2010 Bonus Plan

The 2010 Bonus Plan was based on two separate financial formula calculations. The first formula provided for bonuses (up to a maximum of 10% of the participant’s annual gross wages for 2010, less any bonus, auto or airplane usage expense charge-back or other unearned revenue (“2010 Wages”)) based on the level of the Company’s achievement of total operating income (TOI) as a percentage of our net revenues for fiscal 2010 as follows:

If TOI is greater than:		and less than:		Bonus equal to the following percentage of the participant’s 2010 wages:
10.74	%	11.26	%	4	%
11.24	%	11.76	%	6	%
11.74	%	12.26	%	8	%
12.24	%	12.76	%	10	%

The second formula provided for bonuses (up to a maximum of 15% of the participant’s 2010 Wages ) based on the percentage increase on a year over year basis in the Company’s operating income before interest and taxes (“OIBIT”) from fiscal 2009 to fiscal 2010, determined by subtracting the Company’s fiscal 2009 OIBIT from the Company’s fiscal 2010 OIBIT and dividing the difference by the Company’s OIBIT for fiscal 2009  to determine the percentage of change (“2010 PC”) , as follows:

If 2010 PC is greater than:		and less than:		Bonus equal to the following percentage of the participant’s 2010 Wages:
24.99	%	30.01	%	6	%
29.99	%	35.01	%	9	%
34.99	%	40.01	%	12	%
39.99	%	N/A		15	%

Actual results under the 2010 Bonus Plan were as follows:

			Bonus equal to the following percentage of the participant’s 2010 Wages:
TOI as a percentage of our net revenues for fiscal 2010	10.56	%	0	%
2010 PC	26.24	%	6	%
Total Bonus Percentage:	—		6	%

2011 Bonus Plan

The 2011 Bonus Plan was based on two separate financial formula calculations. The first formula provided for bonuses (up to a maximum of 10% of the participant’s annual gross wages for 2011, less any bonus, auto or airplane usage expense charge-back or other unearned revenue (“2011 Wages”)) based on the level of the Company’s achievement of TOI as a percentage of our net revenues for fiscal 2011 as follows:

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If TOI is greater than or equal to:		and less than:		Bonus equal to the following percentage of the participant’s 2011 Wages:
11.00	%	11.50	%	4	%
11.50	%	12.00	%	6	%
12.00	%	12.50	%	8	%
12.50	%	N/A		10	%

The second formula provided for bonuses (up to a maximum of 15% of the participant’s 2011 Wages) based on the percentage increase on a year over year basis in the Company’s OIBIT from fiscal 2010 to fiscal 2011, determined by subtracting the Company’s fiscal 2010 OIBIT from the Company’s fiscal 2011 OIBIT and dividing the difference by the Company’s OIBIT for fiscal 2010 to determine the percentage of change (“2011 PC”), as follows:

If 2011 PC is greater than or equal to:		and less than:		Bonus equal to the following percentage of the participant’s 2011 Wages:
20	%	25	%	6	%
25	%	30	%	9	%
30	%	35	%	12	%
35	%	N/A		15	%

Actual results under the 2011 Bonus Plan were as follows:

			Bonus equal to the following percentage of the participant’s 2011 Wages:
TOI as a percentage of our net revenues for fiscal 2011	10.70	%	0	%
2011 PC	23.56	%	6	%
Total Bonus Percentage:	—		6	%

Special Bonus for Mr. Singer

In addition, in fiscal 2011, the Compensation Committee approved a one-time special cash bonus to Mr. Singer in the amount of $110,000 for his activity in the collection of a $6.7 million sales tax refund from the State of New Jersey.

See Item 11 — the “Summary Compensation Table”, column (g) “Non-Equity Incentive Plan Compensation” as to the bonuses paid under the Senior Management Incentive Compensation Plan with respect to fiscal 2011, 2010 and 2009.

Compensation Committee Interlocks and Insider Participation

During fiscal 2011, the members of the Company’s Compensation Committee were:

John Roglieri M.D. — Chairman

Joseph Benincasa

Harry Elias

Gary Lederman

No member of the Compensation Committee was an officer or employee of the Company in fiscal 2011 or was formerly an officer of the Company.

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Compensation Committee Report

The members of the Company’s Compensation Committee hereby state:

We have reviewed and discussed the Compensation Discussion and Analysis contained in this Annual Report on Form 10-K for the year ended October 31, 2011 with the Company’s Management, and

Based on such review and discussions, we have recommended to the Company’s Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2011.

	COMPENSATION COMMITTEE
By	John Roglieri M.D., Chairman
	Joseph Benincasa
	Harry Elias
	Gary Lederman

Item 12. - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information as of January 4, 2012 with respect to the ownership of Common Stock by (i) each person known to us to be the beneficial owner of more than 5% of our outstanding Common Stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all directors and executive officers as a group.

Name and Address of Beneficial Owner*	Shares of Common Stock Beneficially Owned(1)	Percentage Ownership
Marc D. Grodman(2)	2,752,800	10	%
Howard Dubinett(3)	375,138	1	%
Sam Singer(4)	44,332	**
Joseph Benincasa	0	0	%
Harry Elias	0	0	%
Gary Lederman(5)	30,400	**
John Roglieri(6)	5,000	**
Executive Officers and Directors as a group (seven persons) (2)(3)(4)(5)(6)	3,207,670	11	%
Black Rock, Inc(7) 40 East 52nd Street New York, NY 10022	1,858,663	7	%
Prudential Financial, Inc. (8) 751 Broad Street Newark, NJ 07102-3777	2,852,815	10	%

*The address of all of the Company’s directors and executive officers is c/o the Company, 481 Edward H. Ross Drive, Elmwood Park, New Jersey 07407.

**Less than one (1%) percent.

(1)Except as otherwise noted, each holder named in the table has sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned.

(2)Includes 2,308,466 shares owned directly. Also includes 347,934 shares owned directly by Dr. Grodman’s wife, Pam Grodman, and 96,400 shares owned by their children. Dr. Grodman disclaims beneficial ownership of these 444,334 shares.

(3)Includes 375,138 shares owned directly.

(4)Includes 29,332 shares owned directly, and 15,000 shares owned by children who share Mr. Singer’s household. Mr. Singer disclaims beneficial ownership of these 15,000 shares.

(5)Includes 30,400 shares owned directly.

(6)Includes 5,000 shares owned directly.

(7)Black Rock, Inc. (“Black Rock”) is the beneficial owner of these 1,858,663 shares.  In its Schedule 13G filing dated February 2, 2011 filed with the Securities and Exchange Commission, Black Rock stated that to the best of its knowledge, these 1,858,663 shares were acquired in the ordinary course of business; were not acquired for the purpose of and do not have the effect of changing or influencing the control of the Company; and were not acquired in connection with or as a participant in any transaction having such purpose or effect.

(8)Prudential Financial, Inc. (“Prudential”) is the beneficial owner of these 2,852,815 shares.  In its Schedule 13G filing dated November 10, 2011 effective for October 31, 2011 filed with the Securities and Exchange Commission, Prudential stated that to the best of its knowledge, these 2,852,815 shares were acquired in the ordinary course of business; were not acquired for the purpose of and do not have the effect of

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changing or influencing the control of the Company; and were not acquired in connection with or as a participant in any transaction having such purpose or effect.

Equity Compensation Plan Information

The following table provides information as of October 31, 2011 regarding shares of Common Stock that may be issued pursuant to the Company’s equity compensation plans:

	(a) Number of Shares Issuable upon Exercise of Outstanding Options		(b) Weighted-Average Exercise Price per Share of Outstanding Options		(c) Number of Shares Remaining Available for Future Issuances Under Equity Compensation Plans (Excluding Shares Reflected in Column (a))
Equity Compensation Plans Approved by Stockholders	355,500	(1)	$	9.02	828,520	(2)

(1) Reflects shares issuable upon exercise of outstanding ISOs granted pursuant to the Company’s 2000 and 2003 Employee Stock Option Plans.

(2) Reflects shares reserved for issuance upon the grant of ISOs which may be granted pursuant to the Company’s 2000 and 2003 Employee Incentive Stock Option Plans.

Item 13. – Certain Relationships and Related Transactions

No material transactions occurred between the Company and related parties during fiscal 2011.  See item 11 herein and footnote 7 to the consolidated financial statements.

It is the Company’s policy that transactions involving related persons (excluding executive officer compensation which is determined by the Compensation Committee) are to be presented to and assessed by the independent members of the board of directors. Related persons include the Company’s directors and executive officers, immediate family members of the directors and executive officers, and certain large security holders and their family members. If the determination is made that a related person has or may have a material direct or indirect interest in any Company transaction and that the amount involved equals or exceeds $120,000, the Company’s independent directors will review, approve and ratify the transaction, if appropriate, and the transaction will be disclosed if required under SEC rules. If the related party at issue is a director of the Company or a family member of a director, then that director will not participate in the relevant discussion and review.

Information considered in evaluating such transactions include the nature of the related person’s interest in the transaction, the material terms of the transaction, the importance of the transaction to the Company and the related person, whether the transaction would impair the judgment of a director or an executive officer to act in the best interests of the Company, and any other matters that management or the independent directors deem appropriate. Corporate policy requires all directors and employees, including all executives, to disclose their interests (including indirect interests through family members) with individuals or entities doing business with the Company, to management and/or the Board of Directors, and to remove themselves from all decisions related to that organization. No such transactions with related parties occurred in fiscal year 2009 through 2011.

Item 14. - Principal Accountant Fees and Services

The firm of MSPC, Certified Public Accountants and Advisors, A Professional Corporation (“MSPC”) audited our accounts and the accounts of our subsidiaries for the fiscal years ended October 31, 2011 and 2010. MSPC and its predecessor firm have been our auditors since 1988. The table set forth below lists the fees billed to the company by MSPC for audit services rendered in connection with the audits of our consolidated financial statements for the years ended October 31, 2011 and 2010, and fees billed for other services rendered by MSPC during these periods.

	2011	2010
	(in thousands) ($)
(1) Audit Fees	273	285.5
(2) Audit-Related Fees	43	52
(3) Tax Fees	14.5	64
(4) All Other Fees	0	0
Total	330.5	401.5

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(1)Audit Fees

MSPC billed us approximately $258,500 for professional services rendered in connection with the audit of our annual financial statements for the fiscal year ended October 31, 2011 and the review of the financial statements included in our quarterly reports on Form 10-Q for such fiscal year compared to approximately $270,000 in billings for such services for the fiscal year ended October 31, 2010. In addition, MSPC billed us approximately $14,500 in fiscal 2011 for its audit of our 401(k) Plan for calendar year 2010 as compared to approximately $15,500 of such fees in fiscal 2010 with respect to calendar year 2009.

(2)Audit-Related Fees

MSPC billed us approximately $43,000 during fiscal 2011 and approximately $52,000 during fiscal 2010 for Sarbanes-Oxley (“SOX”) related audit fees.

(3)Tax Fees

MSPC billed us approximately $14,500 for tax services for fiscal 2011 and approximately $64,000 for tax services for fiscal 2010.

(4)All Other Fees

No fees were billed to us by MSPC with respect to fiscal 2011 or fiscal 2010 other than for services described in Item 14 (1), (2) and (3) herein.

(5)Pre-Approval Policies and Procedures

The engagement of MSPC to render the above audit and tax services was approved by our audit committee prior to the engagement.

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PART IV

Item 15. – Exhibits and Financial Statement Schedules

(a)1.Financial Statements

The following financial statements of the Company are included in Part II, Item 8, “Financial Statements and Supplementary Data:”

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets - October 31, 2011 and 2010

Consolidated Statements of Operations for the Years ended October 31, 2011, 2010 and 2009

Consolidated Statements of Shareholders’ Equity for the Years ended October 31, 2011, 2010, and 2009

Consolidated Statements of Cash Flows for the Years ended October 31, 2011, 2010 and 2009

Notes to Consolidated Financial Statements

2.Financial Statements Schedule

The following is included in Item 8, “Financial Statements and Supplementary Data:”

Schedule II — Valuation and Qualifying Accounts for the Years ended October 31, 2011, 2010 and 2009

(b)Exhibits

Exhibit No.	Item
3.1	Amended and Restated Certificate of Incorporation dated November 15, 1989
3.1.1	Amendment to Certificate of Incorporation dated August 23, 1993
3.1.2	Amendment to Certificate of Incorporation dated August 23, 1993
3.1.3	Amendment to Certificate of Incorporation dated March 27, 1998
3.1.4	Amendment to Certificate of Incorporation dated March 31, 1998
3.1.5	Amendment to Certificate of Incorporation dated September 26, 2003
3.2.2	By-laws, as amended.
4.1*	Form of Common Stock Certificate, $.01 par value (Incorporated by reference to exhibit filed with the Company’s annual report on form 10-K for the year ended October 31, 2004 (SEC File No. 0-15266)).
10.1*	Lease Agreement for Elmwood Park, New Jersey Premises, expiring in February, 2004 (Incorporated by reference to exhibit filed with the Company’s annual report on Form 10-K for the year ended October 31, 1999 (SEC File No. 0-15266)).
10.1.1*	Fifth Amendment dated as of July 16, 2004 to Lease for Elmwood Park, New Jersey Premises (Incorporated by reference to exhibit filed with the Company’s annual report on Form 10-K for the year ended October 31, 2004 (SEC File No. 0-15266)).
10.1.2*	Sixth Amendment dated as of October 27, 2004 to Lease for Elmwood Park, New Jersey Premises (Incorporated by reference into exhibit filed with the Company’s annual report on Form 10-K for the year ended October 31, 2004 (SEC File No. 0-15266)).
10.2*	Employment Agreement between the Company and Marc Grodman expiring October 31, 2017. (Incorporated by reference to exhibit filed with the Company’s current report on Form 8-K for December 31, 2010 (SEC File No. 0-15266)).
10.3*	Employment Agreement between the Company and Sam Singer as in effect at October 31, 2001 (Incorporated by reference to exhibit filed with the Company’s annual report on Form 10-K for the year ended October 31, 1999 (SEC File No. 0-15266)).
10.3.1*	Extension to Employment Agreement between the Company and Sam Singer effective November 1, 2002 (Incorporated by reference to exhibit filed with the Company’s annual report on Form 10-K for the year ended October 31, 2002 (SEC File No. 0-15266)).
10.3.2*	Extension to Employment Agreement between the Company and Sam Singer effective November 1, 2004 (Incorporated by reference to exhibit filed with the Company’s annual report on Form 10-K for the year ended October 31, 2004 (SEC File No. 0-15266)).
10.3.3*	Amendment No. 3 to Employment Agreement between the Company and Sam Singer dated December 18, 2007. (Incorporated by reference to exhibit filed with the Company’s annual report on Form 10-K for the year ended October 31, 2007 (SEC File No. 0-15266)).
10.3.4	Amendment No. 4 to Employment Agreement between the Company and Sam Singer dated March 4, 2008.

48

10.3.5	Amendment No. 5 to Employment Agreement between the Company and Sam Singer dated September 18, 2008.
10.3.6	Amendment No. 6 to Employment Agreement between the Company and Sam Singer dated October, 2009.
10.3.7	Amendment No. 7 to Employment Agreement between the Company and Sam Singer dated November 1, 2010.
10.4*	The Company’s 2000 Employee Incentive Stock Option Plan. (Incorporated by reference to exhibit filed with the Company’s annual report on Form 10-K for the year ended October 31, 2000 (SEC File No. 0-15266)).
10.4.1*	The Company’s 2003 Employee Incentive Stock Option Plan. (Incorporated by reference to exhibit filed with the Company’s Registration Statement on Form S-8 (File No. 333-111578)).
10.5*	The Company’s 2010 Senior Management Incentive Bonus Plan (Incorporated by reference to exhibit filed with the Company’s annual report on Form 10-K for the year ended October 31, 2010 (SEC File No. 0-15266)).
10.5.1	The Company’s 2011 Senior Management Incentive Bonus Plan.
10.5.2	The Company’s 2012 Senior Management Incentive Bonus Plan.
10.6*	Amended and Restated Loan and Security Agreement as of September 30, 2004 between the Company and PNC Bank, National Association. (Incorporated by reference to exhibit filed with the Company’s annual report on Form 10-K for the year ended October 31, 2004 (SEC File No. 0-15266)).
10.6.1*	Fourth Amendment as of October 31, 2006 to Loan and Security Agreement as of September 30, 2004 between the Company and PNC Bank, National Association (Incorporated by reference to exhibit filed with the Company’s annual report on Form 10-K for the year ended October 31, 2006 (SEC File No. 0-15266)).
10.6.2*	Fifth Amendment as of October 31, 2007 to Loan and Security Agreement as of September 30, 2004 between the Company and PNC Bank, National Association (Incorporated by reference to exhibit filed with the Company’s annual report on Form 10-K for the year ended October 31, 2007 (SEC File No. 0-15266)).
10.6.3*	Sixth Amendment as of May 12, 2008 to Loan and Security Agreement as of September 30, 2004 between the Company and PNC Bank, National Association (Incorporated by reference to exhibit filed with the Company’s current report on Form 8-K (for December 31, 2010) (SEC File No. 0-15266)).
10.6.4	Seventh Amendment as of October 22, 2010 to Loan and Security Agreement between the Company and PNC Bank, National Association.
10.6.5	Eighth Amendment as of November 2, 2011 to Loan and Security Agreement as of October 31, 2010 between the Company and PNC Bank, National Association.
21	Subsidiaries of the Company
23.1	Consent of Independent Registered Public Accounting Firm
31.1	Certification of Chief Executive Officer
31.2	Certification of Chief Financial Officer
32.1	Certification pursuant to 18 U.S.C. Section 1350 of Chief Executive Officer
32.2	Certification pursuant to 18 U.S.C. Section 1350 of Chief Financial Officer
101	Interactive Data File

The exhibits designated above with an asterisk (*) have previously been filed with the Commission and, pursuant to 17 C.F.R. Secs. 201.24 and 240.12b-32, are incorporated by reference to the documents as indicated.

49

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BIO-REFERENCE LABORATORIES, INC.
By	/S/ Marc D. Grodman
Marc D. Grodman
Chairman of the Board, President,
Chief Executive Officer and Director
Dated:    January 13, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/S/ Marc D. Grodman

Marc D. Grodman

Chairman of the Board, President,

Chief Executive Officer and Director

January 13, 2012

/S/ Howard Dubinett

Howard Dubinett

Executive Vice President,

Chief Operating Officer and Director

January 13, 2012

/S/ Sam Singer

Sam Singer

Sr. Vice President, Chief Financial Officer,

Chief Accounting Officer and Director

January 13, 2012

/S/ Joseph Benincasa

Joseph Benincasa

Director

January 13, 2012

/S/ Harry Elias

Harry Elias

Director

January 13, 2012

/S/ Gary Lederman

Gary Lederman

Director

January 13, 2012

/S/ John Roglieri

John Roglieri

Director

January 13, 2012

50

Index to Financial Statements and Financial Statement Schedule

	Page
Report of Independent Registered Public Accounting Firm	52
Consolidated Financial Statements:
Consolidated Balance Sheets	53
Consolidated Statements of Operations	55
Consolidated Statements of Stockholders’ Equity (Deficit)	56
Consolidated Statements of Cash Flows	57
Notes to Consolidated Financial Statements	59
Financial Statement Schedule:
Schedule II- Valuation and Qualifying Accounts	73

51

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Bio-Reference Laboratories, Inc.

Elmwood Park, New Jersey

We have audited the accompanying consolidated balance sheets of Bio-Reference Laboratories, Inc. and its subsidiaries (the “Company”) as of October 31, 2011 and 2010, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the fiscal years in the three-year period ended October 31, 2011.  We also have audited the Company’s internal control over financial reporting as of October 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).  The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.  Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects.  Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall consolidated financial statement presentation.  Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audits also included performing such other procedures as we considered necessary in the circumstances.  We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed 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.  A company’s internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Bio-Reference Laboratories, Inc. and its subsidiaries as of October 31, 2011 and 2010, and the consolidated results of their operations and their cash flows for each of the fiscal years in the three-year period ended October 31, 2011, in conformity with accounting principles generally accepted in the United States of America.  Also in our opinion, Bio-Reference Laboratories Inc. and its subsidiaries maintained, in all material respects, effective internal control over financial reporting as of October 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

MSPC

Certified Public Accountants and Advisors,

A Professional Corporation

Cranford, New Jersey

January 12, 2012

52

BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

[Dollars In Thousands, Except Share Data]

	October 31,			October 31,
	2011			2010
CURRENT ASSETS:
Cash and Cash Equivalents	$	22,013		$	17,779
Accounts Receivable - Net	148,060			129,122
Inventory	9,691			6,193
Other Current Assets	4,457			2,820
Deferred Tax Assets	22,559			16,883
TOTAL CURRENT ASSETS	206,780			172,797
PROPERTY AND EQUIPMENT - AT COST	81,717			67,250
LESS: Accumulated Depreciation	(38,150		)	(30,420		)
PROPERTY AND EQUIPMENT - NET	43,567			36,830
OTHER ASSETS:
Deposits	882			1,389
Goodwill - Net	23,408			22,608
Intangible Assets - Net	6,904			8,226
Other Assets	725			1,523
Deferred Tax Assets	993			758
TOTAL OTHER ASSETS	32,912			34,504
TOTAL ASSETS	$	283,259		$	244,131

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

53

BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

[Dollars In Thousands, Except Share Data]

	October 31,		October 31,
	2011		2010
CURRENT LIABILITIES:
Accounts Payable	$	38,612	$	36,972
Accrued Salaries and Commissions Payable	11,770		9,769
Accrued Taxes and Expenses	8,853		6,685
Other Short Term Acquisition Payable	375
Revolving Note Payable - Bank	18,632		26,154
Current Maturities of Long-Term Debt	1,270		1,217
Capital Lease Obligations - Short-Term Portion	3,002		2,541
TOTAL CURRENT LIABILITIES	82,514		83,338
LONG-TERM LIABILITIES:
Capital Lease Obligations - Long-Term Portion	6,351		4,336
Long Term Debt - Net of Current Portion	4,627		3,319
Other Long Term Acquisition Payable	—		750
TOTAL LONG-TERM LIABILITIES	10,978		8,405
SHAREHOLDERS’ EQUITY:
Preferred Stock $.10 Par Value; Authorized 1,666,667 shares, including 3,000 shares of Series A Junior Preferred Stock
None Issued	—		—
Common Stock, $.01 Par Value; Authorized 35,000,000 shares: Issued and Outstanding 27,949,900 and 27,847,204 at October 31, 2011 and at October 31, 2010, respectively	280		278
Additional Paid-In Capital	45,580		44,562
Retained Earnings	143,907		107,548
TOTAL SHAREHOLDERS’ EQUITY	189,767		152,388
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	283,259	$	244,131

54

BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

[Dollars In Thousands, Except Share Data]

	Years Ended
	October 31,
	2011			2010			2009
NET REVENUES:	$	558,642		$	458,024		$	362,654
COST OF SERVICES:
Depreciation and Amortization	11,036			8,653			7,244
Employee Related Expenses	126,354			104,519			84,582
Reagents and Lab Supplies	100,569			77,798			57,770
Other Cost of Services	49,894			41,282			33,928
TOTAL COST OF SERVICES	287,853			232,252			183,524
GROSS PROFIT ON REVENUES	270,789			225,772			179,130
General and Administrative Expenses:
Depreciation and Amortization	3,969			3,168			2,527
Other General and Administrative Expenses	131,967			111,983			86,763
Bad Debt Expense	75,079			62,243			51,518
TOTAL GENERAL AND ADMIN. EXPENSES	211,015			177,394			140,808
OPERATING INCOME	59,774			48,378			38,322
OTHER (INCOME) EXPENSES:
Interest Expense	1,747			1,566			1,512
Other Income	(6,656		)	—			(1,600		)
Interest Income	(163		)	(151		)	(179		)
TOTAL OTHER (INCOME) EXPENSES - NET	(5,072		)	1,415			(267		)
INCOME BEFORE INCOME TAXES	64,846			46,963			38,589
Provision for Income Taxes	28,487			20,582			16,739
NET INCOME	$	36,359		$	26,381		$	21,850
NET INCOME PER SHARE - BASIC:	$	1.30		$	0.95		$	0.79
WEIGHTED AVERAGE NUMBER OF SHARES - BASIC:	27,971,100			27,786,083			27,627,968
NET INCOME PER SHARE - DILUTED:	$	1.29		$	0.94		$	0.78
WEIGHTED AVERAGE NUMBER OF SHARES - DILUTED:	28,207,358			28,038,304			27,872,234

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

55

BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

[Dollars In Thousands Except Number of Shares]

	Series A					Additional
	Senior Preferred Stock		Common Stock			Paid-in		Retained		Deferred	Total Shareholders’
	Shares	Amount	Shares	Amount		Capital		Earnings		Compensation	Equity
Balance on October 31, 2008			27,553,590	$	276	$	41,947	$	59,317	—	$	101,540
Fractional Share Adjustments			530	—		—					—
Exercise of Options - Employees			117,660	—		843					843
Stock Based Compensation			—	—		40					40
Stock Issued for Acquisition			23,096	—		250					250
Common Stock Repurchased and Canceled			—	—		—					—
Net Income								21,850			21,850
Balance on October 31, 2009			27,694,876	$	276	$	43,080	$	81,167	—	$	124,523
Exercise of Options - Employees			117,800	2		795					797
Stock Based Compensation			11,432	—		290					290
Stock Issued for Acquisition			23,096	—		397					397
Net Income								26,381			26,381
Balance on October 31, 2010			27,847,204	$	278	$	44,562	$	107,548	—	$	152,388
Exercise of Options - Employees			102,696	1		497					498
Stock Based Compensation			—	—		40					40
Stock Issued for Acquisition			23,096	—		482					482
Net Income								36,359			36,359
Balance on October 31, 2011			27,972,996	$	279	$	45,581	$	143,907	—	$	189,767

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

56

BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

[Dollars In Thousands]

	Years Ended October 31,
	2011			2010			2009
OPERATING ACTIVITIES:
Net Income	$	36,359		$	26,381		$	21,850
Adjustments to Reconcile Net Income to
Cash Provided by Operating Activities:
Depreciation and Amortization	15,005			11,821			9,771
Amortization of Deferred Compensation
Deferred Income Tax Benefit	(5,911		)	(4,005		)	(5,093		)
Loss on Disposal of Property and Equipment	1,680			368			271
Stock - Based Compensation Expense	40			290			40
Change in Assets and Liabilities:
(Increase) Decrease in:
Accounts Receivable	(29,254		)	(32,984		)	(21,680		)
Provision for Doubtful Accounts	10,316			8,857			10,403
Inventory	(3,498		)	(2,045		)	(417		)
Other Current Assets	(1,637		)	(941		)	(108		)
Other Assets	798			(150		)	(149		)
Deposits	507			(759		)	(105		)
Increase (Decrease) in:
Accounts Payable and Accrued Liabilities	6,541			6,572			9,583
NET CASH - OPERATING ACTIVITIES	30,946			13,405			24,366
INVESTING ACTIVITIES:
Business Acquisitions Related Costs	(1,425		)	(1,917		)	(1,917		)
Acquisition of Equipment and Leasehold Improvements	(14,117		)	(16,494		)	(8,749		)
Acquisition of Intangible Assets	—			—			(141		)
NET CASH - INVESTING ACTIVITIES	(15,542		)	(18,411		)	(10,807		)
FINANCING ACTIVITIES:
Payments of Long-Term Debt	(1,178		)	(1,191		)	(1,177		)
Payments of Capital Lease Obligations	(2,968		)	(2,778		)	(2,547		)
Increase (Decrease) in Revolving Line of Credit	(7,522		)	8,962			(6,379		)
Proceeds from Exercise of Options	498			797			843
NET CASH - FINANCING ACTIVITIES	(11,170		)	5,790			(9,260		)
NET INCREASE IN CASH AND CASH EQUIVALENTS	4,234			784			4,299
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIODS	$	17,779		$	16,995		$	12,696
CASH AND CASH EQUIVALENTS AT END OF PERIODS	$	22,013		$	17,779		$	16,995
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	1,754		$	1,517		$	1,554
Income Taxes	$	32,773		$	26,539		$	21,277

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements

57

BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

[Dollars In Thousands Except Share Data]

Supplemental Schedule of Non-Cash Investing and Financing Activities:

During fiscal 2011, 2010 and 2009, the Company wrote-off approximately $5,944, $6,352 and $1,261 of property which was fully depreciated.

During the fiscal 2011, the Company disposed of certain equipment with an initial cost of $4,558.  During the same period the Company financed the purchase of new equipment through a term note of $5,408.

During fiscal 2011, 2010, and 2009, the Company incurred capital lease obligations totaling approximately $5,444, $3,403, and $3,469 in connection with the acquisition of property and equipment.

During fiscal 2011, 2010 and 2009 the Company wrote-off approximately $-0-, $-0-, $300 of intangible assets that were fully amortized.

During fiscal 2011, 2010 and 2009 the company recorded approximately $40, $40 and $40 of stock based compensation expense related to granting of stock options and Company’s stock to employees.

During fiscal 2010 the company financed the acquisition of certain assets of Lenetix Medical Screening Laboratory, Inc for $5,490.  See note [18] for additional information.

[See Notes 9, 11 and 18 for additional non-cash transactions]

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements

58

BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

[Dollars In Thousands Except Share Data or Unless Otherwise Indicated]

[1] Organization and Business

Bio-Reference Laboratories, Inc. [“Bio-Reference” or the “Company”] was incorporated on December 24, 1981.  Bio-Reference is principally engaged in providing laboratory testing services, primarily to customers in the greater New York metropolitan area as well as to customers in a number of other states.  Bio-Reference offers a comprehensive list of chemical diagnostic tests including blood and urine analysis, blood chemistry, hematology services, serology, radio-immuno analysis, toxicology (including drug screening), pap smears, tissue pathology (biopsies) and other tissue analysis.  We perform cancer cytogenetic testing at our leased facilities in at our main processing facility in Elmwood Park, Smithtown, NY, Clarksburg, MD and Milford, MA and genetic testing at our GeneDx leased facility in Gaithersburg, MD, as well as at our Elmwood Park facility.  We perform cytology testing in Frederick, MD, Milford, MA, Columbus, OH, Houston, TX and at our Elmwood Park facility.  Bio-Reference markets its laboratory testing services directly to physicians, geneticists, hospitals, clinics, correctional and other health facilities.

The Company’s laboratory testing business currently represents its one reportable business segment. The laboratory testing business accounts for over 98% of consolidated assets, net revenues and net income in each of the three years ended October 31, 2011.   All other operating segments include the Company’s non-clinical laboratory testing businesses and consist of our clinical knowledge management service through our PSIMedica business unit and a web-based connectivity portal solution for laboratories and physicians through its CareEvolve subsidiary.

[2] Summary of Significant Accounting Policies

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

Cash and Cash Equivalents - Cash equivalents are comprised of certain highly liquid investments with a maturity of three months or less when purchased.  The Company had $22,013 and $17,779 in cash and cash equivalents at October 31, 2011 and 2010, respectively.

Inventory - Inventory is stated at the lower of cost [determined on a first-in, first-out basis] or market.  Inventory consists primarily of purchased laboratory supplies, which is used in our various testing laboratories.

Property and Equipment - Property and equipment are carried at cost.  Depreciation is computed by the straight-line method over the estimated useful lives of the respective assets which range from 2 to 15 years.  Leasehold improvements are amortized over the life of the lease, which is approximately five years.

The statements of operations reflect depreciation expense related to property and equipment of $13,684, $10,520 and $8,644 for the years ended October 31, 2011, 2010 and 2009, respectively.

On sale or retirement, the asset cost and related accumulated depreciation or amortization are removed from the accounts, and any related gain or loss is reflected in general and administrative expenses.  Repairs and maintenance are charged to expense when incurred.

Goodwill - Effective November 1, 2001, the Company evaluates the recoverability and measures the possible impairment of its goodwill under Financial Accounting Standards Board (“FASB”) Codification 350-20, “Goodwill.”  The impairment test is a two-step process that begins with the estimation of the fair value of the reporting unit. The first step screens for potential impairment and the second step measures the amount of the impairment, if any.  Management’s estimate of fair value considers publicly available information regarding the market capitalization of the Company as well as (i) publicly available information regarding comparable publicly-traded companies in the laboratory testing industry, (ii) the financial projections and future prospects of the Company’s business, including its growth opportunities and likely operational improvements, and (iii) comparable sales prices, if available. As part of the first step to assess potential impairment, management compares the estimate of fair value for the Company to the book value of the Company’s consolidated net assets.  If the book value of the consolidated net assets is greater than the estimate of fair value, the Company would then proceed to the second step to measure the impairment, if any.  The second step compares the implied fair value of goodwill with its carrying value.

The implied fair value is determined by allocating the fair value of the reporting unit to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit.  The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.  If the carrying amount of the goodwill is greater than its implied fair value, an impairment loss will be recognized in that period.  No impairment loss was recognized in the years ended October 31, 2011, 2010 and 2009.

The balance sheet reflects prior Goodwill accumulated amortization of $2,401 as of October 31, 2011 and 2010, respectively.

Other Intangible Assets - Intangible assets are amortized using the straight-line method.  The estimated useful life of costs capitalized is evaluated for each specific project when completed, at which time such costs begin to be amortized. The statements of operations reflect amortization expense related to intangible assets of $1,322, $1,301, and $1,127 for the years ended October 31, 2011, 2010 and 2009, respectively.  The balance sheet reflects accumulated amortization of $7,271, and $5,948 as of October 31, 2011, and 2010, respectively. During the 2011 and 2010 fiscal year, the Company did not write off any intangible assets.  During the 2009 fiscal year, the Company wrote off approximately $300 of capitalized costs related to customer lists which were fully amortized.

On November 1, 2008, the Company adopted “Fair Value Measurements” for its financial assets discussed under topic number 820 “Fair Value Measurements and Disclosures” of FASB codification.  This topic provides a single definition of fair value, establishes a framework for measuring fair value in U.S. generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements.  This topic creates a three-level hierarchy for the inputs used in the valuation techniques to derive fair values where Level 1 is having the highest priority and Level 3 having the lowest priority.

59

	10/31/2011		Quoted Prices in Active Markets for Identical Assets/Liabilities	Significant Other Observable Inputs		Significant Unobservable Inputs
			Level 1	Level 2		Level 3
Assets:
Cash surrender value of officers’ life insurance policies (a component of Other Assets)	$	725	—	$	725	—

Accounting for Revenue

Service revenues are principally generated from laboratory testing services including chemical diagnostic tests such as blood analysis, urine analysis and genetic testing among others. Net service revenues are recognized at the time the testing services are performed and are reported at their estimated net realizable amounts.

Net service revenues are determined utilizing gross service revenues net of contractual allowances.  Even though it is the responsibility of the patient to pay for laboratory service bills, most individuals in the United States have an agreement with a third party payor such as Medicare, Medicaid or a commercial insurance provider to pay all or a portion of their healthcare expenses; the majority of services provided by Bio-Reference Laboratories, Inc. (“BRLI”) are to patients covered under a third party payor contract.  In certain cases, the individual has no insurance or does not provide insurance information and in other cases tests are performed under contract to a professional organization (such as physicians, hospitals, and clinics) which reimburse BRLI directly; in the remainder of the cases, BRLI is provided the third party billing information and seeks payment from the third party under the terms and conditions of the third party payor for health service providers like BRLI.   Each of these third party payors may differ not only with regard to rates, but also with regard to terms and conditions of payment and providing coverage (reimbursement) for specific tests.  Estimated revenues are established based on a series of highly complex procedures and judgments that require industry specific healthcare experience and an understanding of payor methods and trends. We review our calculations on a monthly basis in order to make certain that we are properly allowing for the uncollectable portion of our gross billings and that our estimates remain sensitive to variances and changes within our payor groups.  The contractual allowance calculation is made on the basis of historical allowance rates for the various specific payor groups on a monthly basis with a greater weight being given to the most recent trends; this process is adjusted based on recent changes in underlying contract provisions and shifts in the testing being performed.  Bad Debt represents our estimate of net revenues that will ultimately be uncollectable and is based upon our analysis of historical payment rates by specific payor groups on a monthly basis with primary weight being given to the most recent trends; this approach allows bad debt to more accurately adjust to short-term changes in the business environment.  These two calculations are routinely analyzed by BRLI on the basis of actual allowances issued by payors and the actual payments made to determine what adjustments, if any, are needed.  The chart below shows the adjustments made to gross service revenues to arrive at net service revenues.

	October, 31
	2011			2010			2009
Gross Revenues	$	2,482,349		$	1,902,573		$	1,423,287
Contractual Adjustments and Discounts:
Medicare/Medicaid Portion	293,874			281,002			247,333
All Other Third Party and Direct Payors*	1,629,833			1,163,547			813,300
Total Contractual Adjustments and Discounts	1,923,707			1,444,549			1,060,633
Net Service Revenues	$	558,642		$	458,024		$	362,654
Percent of Contractual Adjustments and Discounts To Gross Revenues	77.5		%	74.5		%	71.0		%

* All Other Third Party and Direct Payors consists of almost eight hundred distinct payors, including commercial health insurers and administrators as well as professionally billed accounts such as physicians, hospitals, clinics and other direct billed accounts.

When new business is received by BRLI, net service revenues are calculated by reducing gross service revenues by the estimated contractual allowance.  The bad debt expense is determined by calculating the appropriate collection rate for net current service revenues and is a component of general and administrative expenses.  BRLI recognized the amounts in subsequent periods for actual allowances/discounts to gross service revenue; bad debt was adjusted over the same periods of time to maintain an accurate balance between net service revenues and actual revenues.  Management has reviewed the allowances/discounts recognized in subsequent periods and believes the amounts to be immaterial.  A number of proposals for legislation or regulation continue to be under discussion which could have the effect of substantially reducing Medicare reimbursements for clinical laboratories or introducing cost sharing to beneficiaries. Depending upon the nature of regulatory action, if any, which is taken and the content of legislation, if any, which is adopted, the Company could experience a significant decrease in revenues from Medicare and Medicaid (CMS), which could have a material

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adverse effect on the Company. The Company is unable to predict, however, the extent to which such actions will be taken.

Accounting for Contractual Credits and Doubtful Accounts

It is typically the responsibility of the patient to pay for laboratory service bills.  Most individuals in the United States have an agreement with a third party payor such as Medicare, Medicaid or commercial insurance to pay all or a portion of their healthcare expenses; this represents the major portion of payment for all services provided to BRLI.  In certain cases, the individual has no insurance or does not provide insurance information; in the remainder of the cases, BRLI is provided the third party billing information, usually by the referring physician, and seeks payment from the third party under the terms and conditions of the third party payor for health service providers like BRLI.  Each of these third party payors may differ not only with regard to rates, but also with regard to terms and conditions of payment and coverage of specific tests.   BRLI routinely reviews the reimbursement policies and subsequent payments and collection rates from these different types of payors.  Contractual credits are recorded as reductions to gross service revenues and are collectively referred to as the contractual allowance.   BRLI has not been required to record an adjustment in a subsequent period related to revenue recorded in a prior period which was material in nature.  Aging of accounts receivable is monitored by billing personnel and follow-up activities including collection efforts are conducted as necessary.  Bad debt expense is recorded within selling, general and administrative expenses.  BRLI writes off receivables against the allowance for doubtful accounts when they are deemed uncollectible.  For client billing, accounts are written off when all reasonable collection efforts prove to be unsuccessful.  Patient accounts, where the patient is directly responsible for all or a remainder portion of the account after partial payment or denial by a third party payor, are written off after the normal dunning cycle has occurred, although these may be subsequently transferred to a third party collection agency after being written off.  Third party payor accounts are written off when they exceed the payor’s timely filing limits.  Accounts Receivable on the balance sheet is net of the following amounts for contractual credits and doubtful accounts:

	October 31
	2011		2010
Contractual Credits/Discounts	$	235,922	$	186,372
Doubtful Accounts	45,220		34,904
Total Allowance	$	281,142	$	221,276

Current Income Taxes — The Company recognizes interest and penalties on settlement of tax liabilities in its income from operations.  For the fiscal years 2009 through 2011, no material amounts for interest and penalties have been recorded.

Deferred Income Taxes - Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Earnings Per Share - Basic earnings per share [“EPS”] reflects the amount of income attributable to each share of common stock based on average common shares outstanding during the period.  Diluted EPS reflects Basic EPS while giving effect to all potential dilutive common shares that were outstanding during the period, such as common shares that could result from the exercise or conversion of securities into common stock.  The computation of Diluted EPS is calculated by using the treasury stock method, which assumes that any proceeds obtained from the exercise of such dilutive securities would be used to purchase common stock at the average market price of the common stock during the period.  This reduces the gross number of dilutive shares by the number of shares purchasable from the proceeds of the securities assumed to be exercised.  Securities whose conversion would have an anti-dilutive effect on EPS are not assumed converted.  Securities that could potentially dilute earnings in the future are disclosed in Note 10.

Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Recoverability and Impairment of Intangible Assets and Other Long-Lived Assets — The Company evaluates the possible impairment of its long-lived assets under the provisions of FASB codification 350-30-35 and 360-10-35.  The Company reviews the recoverability of its long-lived assets on an annual basis.  Evaluation of possible impairment is based on the Company’s ability to recover the asset from the expected future pretax cash flows (undiscounted and without interest charges) of the related operations. If the expected undiscounted pretax cash flows are less than the carrying amount of such asset, an impairment loss is recognized for the difference between the estimated fair value and carrying amount of the asset.  No impairment loss was recognized in the fiscal years ended October 31, 2011, 2010 and 2009.

Advertising Costs -Advertising costs are expensed when incurred.  Advertising costs amounted to approximately $2,024, $2,065 and $1,387 for the years ended October 31, 2011, 2010 and 2009, respectively.

Reclassifications - Certain prior year amounts may have been reclassified to conform to the current year presentation.

Other Income - During the quarter ended January 31, 2009, the Company executed a Restitution Agreement with John Littleton, a former Vice President in sales.  Mr. Littleton paid the Company $1,600 for payments made to him and others that were from our perspective, improperly paid. These payments were paid for a) recruiting fees for new hires paid to parties with an undisclosed relationship to him and b) reimbursement to him or others of improperly or insufficiently documented expenses; both of which are in violation of the Company’s policies.  This restitution payment is included in the Category “Other Income on the Consolidated Statements of Operations”.

During the period ended January 31, 2011, a sales tax refund claim was successfully resolved with New Jersey Division of Taxation in the amount of $6,878, including interest of $323 and excluding expenses of $398 incurred in pursuit of the claim.  This claim relates to New Jersey’s sales taxes paid by the Company during the period of October 2005 through June 2009.  The net amount of $6,480 is included as “Other Income” in the Company’s consolidated statement of operations for the period ended January 31, 2011.

During the period ended April 30, 2011, the Company received a refund of $1,629 from New York State Department of Health before expenses of approximately $542 incurred in pursuit of this refund claim.  This refund relates to the dispute over the state’s Laboratory Inspection and Reference fees.  The net amount of $1,087 is included as “Other Income” in the Company’s consolidated statement of operations for the period ended April 30, 2011.

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Subsequent Events — The management considered subsequent events through the date the financial statements are issued as defined in FASB Codification 855-10-50.

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[3] Property and Equipment - Property and equipment - at cost is summarized as follows:

	October 31
	2011		2010
Medical Equipment	$	38,479	$	31,249
Leasehold Improvements	14,388		12,859
Furniture, Fixtures and Office & Computer Equipment	13,586		10,435
Automobiles and Aircraft	15,264		12,707
Sub Totals	81,717		67,250
Less Accumulated Depreciation	38,150		30,420
Totals — Net of Accumulated Depreciation	$	43,567	$	36,830

[4] Intangible Assets

Intangible assets are summarized as follows:

October 31, 2011

	Weighted-Average			Accumulated		Net of  Accumulated
Intangible Asset	Amortization Period	Cost		Amortization		Amortization
Customer Lists	20	$	4,573	$	2,328	$	2,245
Covenants Not-to-Compete	5	4,305		4,237		68
Patents and Licenses	17	5,297		706		4,591
Totals		$	14,175	$	7,285	$	6,904

October 31, 2010

	Weighted-Average			Accumulated		Net of  Accumulated
Intangible Asset	Amortization Period	Cost		Amortization		Amortization
Customer Lists	20	$	4,573	$	2,138	$	2,435
Covenants Not-to-Compete	5	4,305		3,457		848
Patents and Licenses	17	5,297		354		4,943
Totals		$	14,175	$	5,949	$	8,226

The estimated amortization expense related to intangible assets for each of the five succeeding fiscal years and thereafter as of October 31, 2010 is as follows:

October 31,
2012	$	567
2013	558
2014	551
2015	526
2016	509
Thereafter	4,193
Total	$	6,904

[5] Revolving Note Payable - Bank

In October 2011, the Company entered into an amended revolving note payable loan agreement with PNC Bank, N.A.  The maximum amount of the credit line available to the Company pursuant to the loan agreement is the lesser of (i) $45,000 or (ii) 50% of the Company’s qualified accounts receivable [as defined in the agreement].  The amendment to the Loan and Security Agreement provides for an interest rate on advances to be subject, at the election of the Company, to either the bank’s base rate or the Eurodollar rate of interest plus, in certain instances, an additional interest percentage. 

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The additional interest percentage charge on bank’s base rate borrowings and on Eurodollar rate borrowings ranges from 1% to 4% and is determined based upon certain financial ratios achieved by the Company.  At October 31, 2011, the Company had elected to have all of the total advances outstanding to be subject to the bank’s base rate of interest of 3.25%.  The credit line is collateralized by substantially all of the Company’s assets. The line of credit is available through October 2016 and may be extended for annual periods by mutual consent, thereafter.  The terms of this agreement contain, among other provisions, requirements for maintaining defined levels of capital expenditures, fixed charge coverage, and the prohibition of the payment by the Company of cash dividends. As of October 31, 2011, the Company utilized $18,632 of the available credit under this revolving note payable loan agreement.  Prior to the October 2011 change, the terms of the revolving note payable were similar to the terms as amended with the exception that the maximum credit available was $40,000.

[6] Long-Term Debt - Bank

Effective as of October 31, 2007, we executed a fifth amendment to the Loan Agreement formalizing the repayment terms of the $5 million term loan from PNC Bank used by our wholly-owned BRLI No. 2 Acquisition Corp. subsidiary to fund the $5 million acquisition cash payment in connection with its purchase of the operating assets of GeneDx, Inc. The term loan is evidenced by a secured promissory note payable over a six year term in equal monthly principal payments of approximately $69, plus interest at an annual rate of 6.85%. The balance on this note as of October 31, 2011 is approximately $833.

In December 2010, The Company issued a seven year term note for $5,408 at the rate of interest of 6.12% per annum for the financing of new equipment.  The note is payable in eighty-four equal monthly installments commencing on January 29, 2011 of $61 including principal and interest followed by a balloon payment of the principal and interest outstanding on the loan repayment date of  December 29, 2017.  The balance on this note as of October 31, 2011 is approximately $5,064.

Principal repayment for each of the five succeeding fiscal years and thereafter as of October 31, 2010 is as follows:

Year Ended
October 31,
2012	$	1,270
2013	458
2014	487
2015	518
2016	551
Thereafter	2,613
Totals	$	5,897

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[7] Related Party Transactions [Not in Thousands]

See Item 11 — “Executive Compensation” as to rentals paid by the Company to Richard Faherty, one of the Company’s five most highly compensated senior management employees for use of Mr. Faherty’s airplane in fiscal 2011, 2010 and fiscal 2009 (when the Company’s owned airplane was unavailable).  Such aircraft rentals totaled $217,138 in fiscal 2011, $134,896 in fiscal 2010 and $95,550 in fiscal 2009 in compensation respectively.

[8] Income Taxes

The reconciliation of income tax from continuing operations computed at the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows:

	October 31
	2011		2010		2009
U.S. Federal Statutory Rate	35	%	35	%	35	%
State and Local Taxes, Net of U.S. Federal Tax Benefit	9.87	%	9.77	%	10.92	%
Permanent differences and Other	(0.94	)%	(0.94	)%	(2.54	)%
Actual Rate	43.93	%	43.83	%	43.38	%

The provision for income taxes shown in the consolidated statements of operations consists of the following:

	October 31
	2011			2010			2009
Current:
Federal	$	24,573		$	17,201		$	15,351
State & Local	9,825			7,069			6,481
Deferred:
Federal	(4,223		)	(2,618		)	(3,503		)
State and Local	(1,688		)	(1,070		)	(1,590		)
Total Provision for Income Taxes	$	28,487		$	20,582		$	16,739

At October 31, 2011 and 2010, the Company had a net deferred tax asset [liability] of approximately $23,552 and $17,641, respectively.  The deferred taxes primarily relate to timing differences associated with the deductibility of depreciation and amortization, bad debts and certain accrued expenses and deferred costs.  For fiscal years ended in 2011 and in 2010, the Company had no net operating loss carry-forwards available to reduce current year taxable income.

	October 31,
	2011		2010
Deferred Tax Asset:
Bad Debt Allowance	$	19,897	$	15,358
Depreciation and amortization	1,723		730
Accrued Expenses	1,932		1,553
Deferred Tax Asset - Net	23,552		17,641
Current Deferred Tax Asset - Net	21,710		16,883
Long Term Deferred Tax Asset - Net	1,842		758
Deferred Tax Asset — Net	$	23,552	$	17,641

During fiscal year ended October 31, 2011 the Company recorded a net deferred tax benefit of $5,911.  This reflects a net benefit of approximately $4,539 in allowance for bad debts, a benefit of approximately $993 from depreciation and amortization timing differences, and a benefit of approximately $379 in certain accrued expenses. Although realization is not assured and dependent upon things such as generating sufficient taxable income in future periods, management, through sufficient positive evidence,  believes it is more likely than not that all of the deferred tax asset will be realized. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income or changes in the accrued expenses during the future periods are reduced.

At October 31, 2011, fiscal 2008 through 2011 are subject to examination by US federal and state tax authorities.  Through the issuance of these financial statements the outcome of these examinations has not been determined.

[9] Capital Transactions

[A] Preferred Stock and Common Stock - The Company is authorized to issue an aggregate of 1,666,667 shares of preferred stock, $.10 par value.  None was outstanding as of October 31, 2011 and October 31, 2010.

Holders of the Company’s Common Stock are entitled to one vote per share on matters submitted for shareholder vote.  Holders are also entitled to receive dividends ratably, if declared.  In the event of dissolution or liquidation, holders are entitled to share ratably in all assets remaining after payment of liabilities.

On July 14, 2008 the Board of Directors authorized a repurchase of up to 1,000,000 shares of the Company’s common stock over the period ending October 31, 2010.  As of October 31, 2010 the Company repurchased 39,400 shares at a cost of $452.  The shares were canceled upon repurchase.

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On November 11, 2011 a date subsequent to the period covered in this report, the Company announced that its board of directors has approved a Stock Repurchase Program authorizing the repurchase of up to 1,000,000 shares of its Common Stock in the over-the-counter market at prevailing market prices over the period ending October 31, 2012.

[B] Equity Transactions for Services — For the fiscal years ended in 2011, 2010 and 2009, the company issued 11,432 16,432 and 2,500 shares of the Company’s common stock for employment or consulting services [See Note 11 for common stock options issued for employee and consulting services].

[10] Earnings Per Share

The computation of basic and diluted net earnings per common share is as follows [in thousands, except per share data rounded]:

	For Years Ended October 31,
	2011		2010		2009
Income Available to Common Stockholders	$	36,359	$	26,381	$	21,850
Weighted Average Common Shares Outstanding	27,971		27,786		27,628
Effect of Dilutive Securities:
Warrants/Options	236		252		244
Weighted Average Diluted Common Shares Outstanding	28,207		28,038		27,872
Net Income Per Share - Basic	$	1.30	$	0.95	$	0.79
Net Income Per Share - Diluted	$	1.29	$	0.94	$	0.78

[11] Stock Options and Warrants

Employee Incentive Stock Options - In June 2003, the Board of Directors adopted, and in July 2003, the stockholders approved, the 2003 Employee Incentive Stock Option Plan [the “2003 Plan”].  The 2003 Plan authorizes the grant of stock options, which may be designated as  incentive stock options, to purchase up to a maximum aggregate 1,600,000 shares of Company common stock (after giving effect to our 2-1 stock split). The 2003 Plan provides that the exercise price of an option granted there under shall not be less than the fair market value of the Common Stock  on the date the option is granted.  However, in the event an option is granted under the 2003 Plan to a holder of 10% or more of the Company’s outstanding Common Stock, the exercise price must be at least 110% of such fair market value.  Under the 2003 Plan, options must be granted before the June 2, 2013 Termination Date.  No option may have a term longer than ten years (limited to five years in the case of an option granted to a 10% or greater stockholder of the Company).  The aggregate fair market value of the Company’s Common Stock with respect to which options are exercisable for the first time by a grantee under all of the Company’s Stock Option Plans during any calendar year cannot exceed $100.  Options granted under the 2003 Plan are non-transferable and must be exercised by an optionee, if at all, while employed by the Company or a subsidiary or within three months after termination of such optionee’s employment due to retirement, or within one year of such termination if due to disability or death.  The Board (or a Stock Option Committee, if designated), may, in its sole discretion, cause the Company to lend money to or guaranty any obligation of an employee for the purpose of enabling such employee to exercise an option granted under the 2003 Plan provided that such loan or obligation cannot exceed fifty percent (50%) of the exercise price of such option. In fiscal year ended October 31, 2011, 2010 and 2009, -0-, -0- and -0- options were granted under the Plan, respectively. A total of 40,000, 59,000 and 72,060 incentive stock options issued under the 2003 Plan were exercised in fiscal years ended in October 31, 2011, 2010 and 2009, respectively.  A total of -0-, 12,000 and 10,000 options were cancelled in fiscal years ended October 31, 2011, 2010 and 2009.

In August 2000, the Company adopted, and on December 15, 2000, the stockholders approved, the 2000 Employee Incentive Stock Option Plan [“2000 Plan”]. The 2000 Plan provided for the granting of stock options, which may have been designated as incentive stock options, to purchase an aggregate of 1,600,000 shares of the Company’s common stock (after giving effect to our 2-1 stock split) at a price   not less than 100% of the fair market value per share of the common stock at the date of grant.  However, in the event an option was granted under the 2000 Plan to a holder of 10% or more of the Company’s outstanding common stock, the exercise price must have been at least 110% of fair market value at the date of grant.  Employees of the Company or its subsidiary, as determined, were eligible for the 2000 Plan.  The term of the options could not exceed ten years from the date of grant.  In fiscal years ended October 31, 2011, 2010 and 2009, no options were granted under the Plan. A total of 39,600, 58,800 and 45,600 incentive stock options issued under the 2000 Plan were exercised in fiscal years ended in October 31, 2011, 2010 and 2009, respectively. A total of -0-, -0-, and 110,000 options were cancelled in fiscal years ended October 31, 2011, 2010 and 2009, respectively.  Options issued under the 2000 Plan must have been granted before the August 2010 termination date.

The following is a summary of Employee Incentive Stock Option Plan transactions:

	2003 Plan
	Shares Under Options [In Thousands]		Weighted Average Exercise Price Per Share
Outstanding at October 31, 2008*	488		$	7.82
Granted	—		—
Expired	(10	)	$	9.13
Exercised	(72	)	7.74
Outstanding at October 31, 2009*	406		$	9.52
Granted	—		—
Expired	(12	)	8.62
Exercised	(59	)	8.88
Outstanding at October 31, 2010*	335		9.66
Granted	—		—
Expired	—		—
Exercised	(40	)	8.67
Outstanding at October 31, 2011*	295		9.80

*Eligible for exercise at October 31, 2008 were 454 at a weighted average exercise price per share of $8.61

*Eligible for exercise at October 31, 2009 were 376 at a weighted average exercise price per share of $7.80

*Eligible for exercise at October 31, 2010 were 310 at a weighted average exercise price per share of $9.66

*Eligible for exercise at October 31, 2011 were 275 at a weighted average exercise price per share of $9.80

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	2000 Plan
	Shares Under  Options [In Thousands]		Weighted  Average  Exercise Price  Per Share
Outstanding and Eligible for Exercise at October 31, 2008	314		$	4.43
Granted	—		—
Expired	(110	)	3.35
Exercised	(46	)	6.28
Outstanding and Eligible for Exercise at October 31, 2009	158		4.64
Granted	—		—
Expired	—		—
Exercised	(58	)	4.63
Outstanding and Eligible for Exercise at October 31, 2010	100		4.64
Granted	—		—
Expired	—		—
Exercised	(40	)	3.82
Outstanding and Eligible for Exercise at October 31, 2011	60		5.19

				Weighted Average			Exercisable
				Shares	Remaining	Exercise	Shares	Exercise
Exercise Price Range				Outstanding	Life	Price	Outstanding	Price
$2.76	to	$2.76	Per Share	22	1.67	2.76	22	2.76
$3.60	to	$3.60	Per Share	10	1.17	3.60	10	3.60
$6.11	to	$6.11	Per Share	6	3.69	6.54	6	6.54
$7.25	to	$7.25	Per Share	4	3.58	7.25	4	7.25
$7.41	to	$7.67	Per Share	94	3.36	7.53	94	7.53
$9.12	to	$9.12	Per Share	179	4.00	9.13	179	9.13
$17.50	to	$17.50	Per Share	40	6.08	17.50	20	17.50
				355			335

Compensation cost recognized for the years ended October 31, 2011, October 31, 2010 and October 31, 2009 was $40 for each one of the years, with a related tax benefit of $-0- with respect to these options.

[12] Employment Contracts and Consulting Agreements

During fiscal 2003, the Company established a Scientific Advisory Board [the “Board”] and entered into consulting agreements with members of the Board.  The terms of the agreements range from three years and two months to four years and three months.  Effective October 31, 2010 these agreements are on an at-will basis.

The Company has multiple employment contracts with its key executives with expiration dates ranging from October 31, 2011 through October 31, 2017. At October 31, 2011, the approximate aggregate minimum commitment under these employment contracts and agreements, excluding commissions or consumer price index increases, is as follows:

October 31	Employees and Consultants
2012	$	4,011
2013	3,351
2014	2,597
2015	1,410
2016	1,410
Thereafter	1,060
Total	$	13,839

Some of these agreements provide bonuses and commissions based on a percentage of collected revenues ranging from 1% to 10% on accounts referred by or serviced by the employee or consultant.

In addition to the above, the Company has entered into fifty two at — will employment and consulting agreements which together with prior at — will agreements provide for annual aggregate minimum commitments of approximately $28,690 which have no termination dates.

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[13] Capitalized Lease Obligations

The Company leases various assets under capital leases expiring in fiscal 2017 as follows:

	October 31
	2011		2010
Medical Equipment	$	7,732	$	4,924
Furniture, Fixtures and Office Equipment	—		—
Automobiles	9,512		7,313
Totals	17,244		12,237
Less: Accumulated Depreciation	4,950		4,240
Net	$	12,293	$	7,997

Depreciation expense on assets under capital leases was approximately $1,418, $2,364, and $1,237 for the years ended October 31, 2011, 2010 and 2009, respectively.

Aggregate future minimum rentals under capital leases are:

October 31,
2012	$	3,330
2013	2,697
2014	2,168
2015	1,302
2016	492
Thereafter	129
Total	10,118
Less Interest:	765
Present Value of Minimum Lease Payments	$	9,353

[14] Commitments and Contingencies

The Company leases various office and laboratory facilities and equipment under operating leases expiring from 2011 to 2019.  Several of these leases contain renewal options for one to five year periods.

Total expense for property and equipment rental for the years ended October 31, 2011, 2010 and 2009 was $8,010, $7,285 and $6,172, respectively.  There were no contingent rental amounts due through October 31, 2011.

Aggregate future minimum rental payments on non cancelable operating leases [exclusive of several month to month leases] are as follows:

October 31,	Property		Equipment
2012	$	5,530	$	412
2013	2,765		183
2014	2,315		51
2015	1,155		2
2016	836		—
Thereafter	829		—
Totals	$	13,430	$	648

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The Company has entered into several purchase agreements for reagent supplies through October, 2016.  Minimum purchase commitments as of October 31, 2011 are as follows:

October 31,
2012	$	17,448
2013	14,921
2014	14,357
2015	10,538
2016	7,206
Thereafter	—
Totals	$	64,470

Reagent supplies expensed under purchase agreements amount to $8,379, $7,290 and $7,477 for the years ended October 31, 2011, 2010 and 2009, respectively.

[15] Litigation

In the normal course of business, the Company is exposed to a number of asserted and unasserted potential claims.  In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company’s financial position or results of operations.

[16] Insurance

The Company maintains professional liability insurance of $3,000 in the aggregate, with a per occurrence limit of $1,000.  In addition, the Company maintains excess commercial insurance of $5,000 per occurrence and $5,000 in aggregate over the primary limits.  In addition, the Company also maintains excess umbrella coverage of $15,000.  The Company believes, but cannot assure, that its insurance coverage is adequate for its current business needs.  A determination of Company liability for uninsured or underinsured acts or omissions could have a material adverse affect on the Company’s operations.

[17] Significant Risks and Uncertainties

[A] Concentrations of Credit Risk - Cash - At October 31, 2011 and 2010, the Company had approximately $21,000 and $16,171 , respectively, in cash and certificate of deposit balances at financial institutions which were in excess of the federally insured limits.

[B] Concentration of Credit Risk - Accounts Receivable - Credit risk with respect to accounts receivable is generally diversified due to the large number of patients comprising the client base.  The Company does have significant receivable balances with government payors and various insurance carriers.  Generally, the Company does not require collateral or other security to support customer receivables.  However, the Company continually monitors and evaluates its client acceptance and collection procedures to minimize potential credit risks associated with its accounts receivable and establishes an allowance for uncollectible accounts and as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is not material to the financial statements.

A number of proposals for legislation continue to be under discussion which could substantially reduce Medicare and Medicaid (CMS) reimbursements to clinical laboratories.  Depending upon the nature of regulatory action, and the content of legislation, the Company could experience a significant decrease in revenues from Medicare and Medicaid (CMS), which could have a material adverse effect on the Company.  The Company is unable to predict, however, the extent to which such actions will be taken.

[18] Acquisitions

On March 2, 2010, the Company completed the purchase of substantially all of the tangible and intangible assets, excluding cash, receivables and certain other assets, of Lenetix Medical Screening Laboratory, Inc. (“Lenetix”) from Lenetix and its sole stockholder.  These assets were utilized in Lenetix’s operation of a clinical testing laboratory located in Mineola, New York.  The laboratory performs both clinical laboratory diagnostic testing and genetic testing. The purchase price of $5,490 included a down payment of $4,740 and a hold-back of $750 to insure the accuracy of the Sellers’ representations and to protect the Company from any claims based on the operations of the Laboratory prior to the closing.  This acquisition resulted in an addition to Goodwill in the amount of $490.

On August 5, 2011, the Company acquired all of the authorized, issued and outstanding shares of The Genetics Center, Inc. (“GCI”), a New York corporation engaged in the clinical laboratory business with principal place of business in Smithtown, New York for $800 in cash.  The entire acquisition was recorded as an addition to Goodwill.

[19] Fair Value of Financial Instruments

For certain financial instruments, including cash and cash equivalents, trade receivables, trade payables, and short-term debt, it was estimated that the carrying amount approximated fair value for the majority of these items because of their short maturities.  The fair value of the Company’s long-term debt is estimated based on the quoted market prices for similar issues or by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities.

Due to the non-interest bearing nature and unspecified payment terms, it was not practicable to estimate the fair value of amounts due from related parties [See also Note 7].

69

[20] Health Insurance Plan

The Company has a limited self-funded health insurance plan for its employees under which the Company pays the initial $150 of covered medical expenses per person each year.  The Company has a contract with an insurance carrier for any excess up to a maximum of $2,000 per person and $19,477 in the aggregate.  Health insurance premium expense for the years ended October 31, 2011, 2010 and 2009 amounted to approximately $4,426, $4,324 and $2,327, respectively.  Uninsured employee medical expenses incurred by the Company amounted to approximately $19,408, $14,347 and $10,394 for the years ended October 31, 2011, 2010 and 2009, respectively.  During fiscal years ended October 31, 2011, 2010 and 2009, employee contributions of $3,593, $2,720 and $2,142 offset the above health plan costs.

[21] Employee Benefit Plan

The Company sponsors a 401(k) Profit-Sharing Plan [the “Plan”].  Employees become eligible for participation after attaining the age of eighteen and completing one year of service.  Participants may elect to contribute up to ten percent of their compensation, as defined in the Plan, to a maximum allowed by the Internal Revenue Service.  The Company may choose to make a matching contribution to the plan for each participant who has elected to make tax-deferred contributions for the plan year, at a percentage determined each year by the Company. The Company elected to make a matching contribution which amounted to $993 for 2011, $801 for 2010, and $644 for 2009.  These amounts were charged to the Statement of Operations. The Employer contribution will be fully vested after the third year of service.

[22] New Authoritative Accounting Pronouncements

On September 15, 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-08, Intangibles—Goodwill and Other (Topic 350) Testing Goodwill for Impairment. The Board’s objective is to simplify goodwill impairment testing by permitting assessment of qualitative factors to determine whether events and circumstances lead to the conclusion that it is necessary to perform the two-step goodwill impairment test currently required under Topic 350, Intangible—Goodwill and Other.  Under ASU No. 2011-08, entities are not required to calculate the fair value of a reporting unit unless they conclude that it is more likely than not that the unit’s carrying value is greater than its fair value based on an assessment of events and circumstances. The “more likely than not” threshold is when there is a likelihood of more than 50% that a reporting unit’s carrying value is greater than its fair value. Entities may bypass the qualitative assessment during any reporting period.  ASU No. 2011-08 is effective for fiscal years beginning after December 15, 2011. Early adoption is permitted, including interim or annual goodwill impairment tests performed before September 15, 2011, for interim or annual reports that have not been issued.  This update is not expected to have a material impact on the Company’s consolidated financial statements.

In July 2011, the FASB issued ASU No. 2011-07: Health Care Entities (Topic 954) — Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities.  This update was issued to increase transparency relating to accounting practices used for net patient service revenue and related bad debt allowances by health care entities. Some health care entities recognize patient service revenue at the time the services are rendered regardless of whether the entity expects to collect that amount or has assessed the patient’s ability to pay. These prior accounting practices used by some health care entities resulted in a gross-up of patient service revenue and the provision for bad debts, leading to an impaired ability by outside users of financial statements to make accurate comparisons and analyses of financial statements between entities. ASU No. 2011-07 requires changes to the presentation of the statement of operations, reclassifying the provision for bad debts associated with patient service revenue from an operating expense to a deduction from patient service revenue, and also requires enhanced quantitative and qualitative disclosures relevant to the entity’s policies for recognizing revenue and assessing bad debts.  This update is not designed and will not change the net income reported by healthcare entities.  This update is effective for fiscal years beginning after December 15, 2011, with early adoption permitted.  We do not expect that this update will have any material impact on the company’s consolidated financial statements. We do not expect that we will be required to change our presentation of the statement of operations because the Company does not recognize revenues that it does not expect to collect and this update specifically exempts companies who follow that methodology from its application.

In December 2010, the FASB issued ASU No. 2010-28: Intangibles — Goodwill and Other (Topic 350) -When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts.  This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Early adoption is not permitted.  The amendments in this Update modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. The qualitative factors are consistent with the existing guidance and examples in paragraph 350-20-35-30, which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  This update is not expected to have a material impact on the Company’s consolidated financial statements.

In December 2010, FASB issued ASU No. 2010-29: Business Combinations (Topic 805) - Disclosure of Supplementary Pro Forma Information for Business Combinations.  The update is effective for the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted.  The amendments in this update specify that if a public entity is required to present comparative financial statements as a result of a business combination, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only.  The amendments in this Update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.  This update is not expected to have a material impact on the Company’s consolidated financial statements.

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[23] Selected Quarterly Financial Data [Unaudited]

	Three Month Ended								Audited Fiscal  Year
	1/31/11		4/30/11		7/31/11		10/31/11		2011
Net Revenues	$	121,659	$	137,658	$	148,029	$	151,297	$	556,185
Gross Profit	$	56,805	$	65,639	$	73,432	$	74,914	$	268,397
Net Income	$	7,986	$	7,817	$	10,081	$	10,476	$	35,343
Net Income Per Common Share:
Basic	$	0.29	$	0.28	$	0.36	$	0.37	$	1.26
Diluted	$	0.28	$	0.28	$	0.36	$	0.37	$	1.25
Weighted Average Common Shares Outstanding — Basic [in thousands]	27,884		27,920		27,941		27,949		27,971
Weighted Average Common Shares Outstanding - Diluted [in thousands]	28,122		28,142		28,147		28,138		28,207

	Three Month Ended								Audited Fiscal  Year
	1/31/10		4/30/10		7/31/10		10/31/10		2010
Net Revenues	$	99,261	$	110,447	$	121,719	$	126,596	$	458,024
Gross Profit	$	47,507	$	53,668	$	61,630	$	62,966	$	225,772
Net Income	$	4,005	$	5,787	$	8,013	8,577		$	26,381
Net Income Per Common Share:
Basic	$	0.14	$	0.21	$	0.29	$	0.31	$	0.95
Diluted	$	0.14	$	0.21	$	0.29	$	0.31	$	0.94
Weighted Average Common Shares Outstanding — Basic [in thousands]	27,723		27,772		27,815		27,835		27,786
Weighted Average Common Shares Outstanding - Diluted [in thousands]	28,022		28,077		28,098		28,087		28,038

	Three Month Ended								Audited Fiscal  Year
	1/31/09		4/30/09		7/31/09		10/31/09		2009
Net Revenues	$	75,735	$	87,183	$	97,424	$	102,312	$	362,654
Gross Profit	$	35,695	$	42,297	$	49,261	$	51,877	$	179,130
Net Income	$	3,598	$	4,630	$	6,439	$	7,183	$	21,850
Net Income Per Common Share:
Basic	$	.13	$	0.17	$	0.23	$	0.26	$	0.79
Diluted	$	.13	$	0.17	$	0.23	$	0.26	$	0.78
Weighted Average Common Shares Outstanding — Basic [in thousands]	27,570		27,598		27,628		27,668		27,618
Weighted Average Common Shares Outstanding - Diluted [in thousands]	27,820		27,823		27,923		27,958		27,864

71

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Bio-Reference Laboratories, Inc.

Elmwood Park, New Jersey

Our report on our audit of the basic consolidated financial statements of Bio-Reference Laboratories, Inc. and its subsidiaries appears earlier in this document.  That audit was conducted for the purpose of forming an opinion on the consolidated basic financial statements taken as a whole.  The supplemental schedule II is presented for purposes of complying with the Securities and Exchange Commission’s Rules and Regulations under the Securities Exchange Act of 1934 and is not otherwise a required part of the basic consolidated financial statements.  Such information has been subjected to the auditing procedures applied in the audit of the basic consolidated financial  statements, and in our opinion, is fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole.

	MSPC
	Certified Public Accountants and Advisors,
	A Professional Corporation
Cranford, New Jersey
January 12, 2012

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BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED OCTOBER 31, 2011, 2010 AND 2009

[In Thousands]

(a) Description	(b) Balance at the  Beginning of a  Period	(c) Charged to Cost and  Expenses	(d) Deductions Charged to Valuation Allowance Accounts		(e) Balance at the End of a Period
Year Ended October 31, 2011
Allowance for Doubtful Accounts	34,904	75,079	(64,763	)	45,220
Contractual Credits/Discounts	186,372	1,926,164	(1,876,614	)	235,922
Total Allowance	221,276	2,001,243	(1,941,377	)	281,142
Year Ended October 31, 2010
Allowance for Doubtful Accounts	26,047	62,243	(53,386	)	34,904
Contractual Credits/Discounts	130,974	1,444,549	(1,389,151	)	186,372
Total Allowance	157,021	1,506,792	(1,442,537	)	221,276
Year Ended October 31, 2009
Allowance for Doubtful Accounts	15,643	51,518	(41,114	)	26,047
Contractual Credits/Discounts	78,042	1,060,633	(1,007,701	)	130,974
Total Allowance	93,685	1,112,151	(1,048,815	)	157,021
Year Ended October 31, 2008
Allowance for Doubtful Accounts	11,643	40,313	(36,313	)	15,643
Contractual Credits/Discounts	79,257	737,959	(739,174	)	78,042
Total Allowance	90,900	778,272	(775,487	)	93,685

.   .   .   .   .   .   .   .   .   .

73

EX-3.1

Exhibit 3.1

FILED

NOV 15 1989

JANE BURGIO

Secretary of State

AMENDED AND

RESTATED

CERTIFICATE OF INCORPORATION

OF

MED-MOBILE, INC.

The undersigned corporation, in order to amend and restate its Certificate of Incorporation, hereby certifies as follows:

FIRST: The name of the corporation is

BIO-REFERENCE LABORATORIES, INC.

SECOND: The Corporation was originally incorporated in New Jersey on December 24, 1981 under the name “Med-Mobile, Inc.”

THIRD: The Certificate of Incorporation is hereby amended to effect the following:

(a)Article 1 is hereby amended to change the name of the corporation to Bio-Reference Laboratories, Inc.;

(b)Article 3 is hereby amended to (i) increase the authorized Common Stock of the corporation to 50,000,000 shares; and (ii) authorize a class of 5,000,000 shares of Preferred Stock, $.10 per value par share;

(c)Article 4 is hereby amended to set forth a new registered office of the Corporation;

(d)A new Article 6 is added to change the Board into three classes of two directors each;

(e)A new Article 7 is added which requires approval of 80% of the outstanding shares of Common Stock of the corporation for any merger, consolidation or sale of units or other acquisition of the Corporation not approved by the Board of Directors; and

(f)A new Article 8 is added which will limit the monetary liability of directors.

The text of the Certificate of Incorporation as amended is hereby restated as follows:

l.The name of the corporation is

BIO-REFERENCE LABORATORIES, INC.

2.The purpose or purposes for which the corporation is organized are: To do any lawful act or thing for which

corporations may be organized pursuant to the provisions of Title 14A, Corporations, General, of the New Jersey Statutes.

3.Capital Stock

(A)Authorized Capital Stock. The total number of shares of all classes of stock which this Corporation shall have authority to issue is FIFTY-FIVE MILLION (55,000,000) shares, consisting of FIFTY MILLION (50,000,000) shares of Common Stock, $.001 par value per share (hereinafter, the “Common Stock”), and FIVE MILLION (5,000,000) shares of Preferred Stock, $.10 par value per share (hereinafter, the “Preferred Stock”).

(B)Preferred Stock. Shares of Preferred Stock may be issued from time to time in one or more series as may from time to time be determined by the Board of Directors. Each series shall be distinctly designated. All shares of any one series of the Preferred Stock shall be alike in every particular event except that there may be different dates from which dividends thereon, if any, shall be cumulative, if made cumulative. The powers, preferences and relative participating, optional and other rights of each series, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. Subject to the provisions of subparagraph (4) of Paragraph (D) of this Article THIRD, the Board of Directors of this Corporation is hereby expressly granted authority to fix by resolution or resolutions adopted prior to the issuance of any shares of each particular series of Preferred Stock, the designation, powers, preferences and relative participating, optional and other rights, and the qualifications, limitations and restrictions thereof, if any, of such series, including, but without limiting the generality of the foregoing, the following:

(1)the distinctive designation of and the number of shares of Preferred Stock which shall constitute the series, which number may be increased (except as otherwise fixed by the Board of Directors) or decreased (but not below the number of shares thereof then outstanding) from time to time by action of the Board of Directors;

(2)the rate and times at which, and the terms and conditions upon which, dividends, if any, on shares of the series shall be paid, the extent of preferences or relation, if any, of such dividends to the dividends payable on any other class or classes of stock of this Corporation, or on any series of Preferred Stock or of any other class or classes of stock of this Corporation, and whether such dividends shall be cumulative or non-cumulative;

2

(3)the right, if any, of the holders of shares of the series to convert the same into, or exchange the same for, shares of any other class or classes of stock of this Corporation, or of any series of Preferred Stock of this Corporation, and the terms and conditions of such conversion or exchange;

(4)whether shares of the series shall be subject to redemption, and the redemption price or prices including, without limitation, a redemption price or prices payable in shares of the Common Stock and the time or times at which, and the terms and conditions upon which, shares of the series may be redeemed;

(5)the rights, if any, of the holders of shares of the series upon voluntary or involuntary liquidation, merger, consolidation, distribution or sale of assets, dissolution or winding up of this Corporation;

(6)the terms of the sinking fund or redemption or purchase account, if any, to be provided for shares of the series; and

(7)the voting powers, if any, of the holders of shares of the series which may, without limiting the generality of the foregoing, include (i) the right to more or less than one vote per share on any or all matters voted upon by the stockholders and (ii) the right to vote, as a series by itself or together with other series of Preferred Stock or together with all series of Preferred Stock as a class, upon such matters, under such circumstances and upon such conditions as the Board of Directors may fix, including, without limitation, the right, voting as a series by itself or together with other series of Preferred Stock or together with all series of Preferred Stock as a class, to elect one or more directors of this Corporation, or to elect a majority of the members of the Board, under such circumstances and upon such conditions as the Board may determine.

(C)Common Stock.

(1)After the requirements with respect to preferential dividends on Preferred Stock (fixed in accordance with provisions of paragraph (B) of this Article THIRD), if any, shall have been met and after this Corporation shall have complied with all the requirements, if any, with respect to the setting aside

3

of sums as sinking funds or redemption or purchase accounts (fixed in accordance with the provisions of paragraph (B) of this Article THIRD) and subject further to any other conditions which may be fixed in accordance with the provisions of paragraph (B) of this Article THIRD, then but not otherwise, the holders of Common Stock shall be entitled to receive such dividends, if any, as may be declared from time to time by the Board of Directors.

(2)After distribution in full of the preferential amount (fixed in accordance with the provisions of paragraph (B) of this Article THIRD), if any, to be distributed to the holders of Preferred Stock in the event of voluntary or involuntary liquidation, distribution or sale of assets, dissolution or winding-up of this Corporation, the holders of the Common Stock shall be entitled to receive all the remaining assets of this Corporation, tangible and intangible, of whatever kind available for distribution to stockholders, ratably in proportion to the number of shares of the Common Stock held by each.

(3)Except as otherwise be required by law, this Certificate of Incorporation or the provisions of the resolution or resolutions as may be adopted by the Board of Directors pursuant to paragraph (B) of this Article THIRD, each holder of Common Stock shall have one vote in respect of each share of Common Stock held by such holder on each matter voted upon by the stockholders.

(D)Other Provisions.

(1)The relative powers, preferences and rights of each series of Preferred Stock in relation to the powers, preferences and rights of each other series of Preferred Stock shall, in each case, be as fixed from time to time by the Board of Directors in the resolution or resolutions adopted pursuant to authority granted in paragraph (B) of this Article THIRD, and the consent, by class or series vote or otherwise, of the holders of the Preferred Stock of such of the series of the Preferred Stock as are from time to time outstanding shall not be required for the issuance by the Board of Directors of any other series of Preferred Stock whether the powers, preferences and rights of such other series shall be fixed by the Board of Directors as senior to, or on a parity with, the powers, preferences and rights of such outstanding

4

series, or any of them, provided, however, that the Board of Directors may provide in such resolution or resolutions adopted with respect to any series of Preferred Stock that the consent of the holders of a majority (or such greater portion as shall be therein fixed) of the outstanding shares of such series voting thereon shall be required for the issuance of any or all other shares of Preferred Stock.

(2)Subject to the provisions of subparagraph (1) of this paragraph, shares of any series of Preferred Stock may be issued from time to time as the Board of Directors shall determine and on such terms and for such consideration as shall be fixed by the Board of Directors.

(3)Shares of the Common Stock may be issued from time to time as the Board of Directors shall determine and on such terms and for such consideration as shall be fixed by the Board of Directors.

(4)No holder of any of the shares of any class or series of stock or of options, warrants or other rights to purchase shares of any class or series of stock or of other securities of the Corporation shall have any preemptive right to purchase or subscribe for any unissued stock of any class or series or any additional shares of any class or series to be issued by reason of any increase of the authorized capital stock of the Corporation of any class or series, or bonds, certificates of indebtedness, debentures or other securities convertible into or exchangeable for stock of the Corporation of any class or series, or carrying any right to purchase stock of any class or series.

4.The address of the corporation’s initial registered office is 481 Edward H. Ross Drive, Elmwood Park, New Jersey 07407. The name of the corporation’s registered agent at such address is Dr. Marc Grodman.

5.The name and address of the incorporator is as follows:

NAME	ADDRESS
Catherine E. Allen	28 West State Street
	Trenton, New Jersey 08608

6.A.The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the Corporation and do all

5

such lawful acts as are not by law or by the Certificate of Incorporation of the Corporation directed or required to be exercised or done by the shareholders.

B.The number of directors of the Corporation shall be as from time to time provided by or pursuant to the By-Laws of the Corporation, but shall be not less than three. The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors, but in no event shall any class include less than one director. At the annual meeting of shareholders in 1989, Class I directors shall be elected for a three-year term, Class II directors for a two-year term and Class III directors for a one-year term. At each succeeding annual meeting of shareholders beginning at the 1990 annual meeting, successors to the class of directors whose term expires at the annual meeting shall be elected for a three-year term. A director shall hold office until the annual meeting for the year in which his term expires and until his successor shall be elected and shall qualify. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible.

C.Newly created directorship resulting from any increase in the authorized number of directors constituting the entire Board of Directors or vacancies on the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or any other cause shall be filled only by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum, or by the sole remaining director. Directors elected to fill vacancies shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred and until such director’s successor shall be elected and shall qualify. The directors of any class of directors of the Corporation may be removed by the shareholders only for cause by the affirmative vote of the holders of at least 80% of the combined voting power of all outstanding voting stock. For the purpose of this Article 6, “cause” shall mean the willful failure of a director to perform in any substantial respect such director’s duties to the Corporation (other than any such failure resulting from incapability due to physical or mental illness), willful malfeasance by a director in the performance of his duties to the Corporation which is materially and demonstrably injurious to the Corporation, the commission by a director of an act of fraud in the performance of his duties, the conviction of a director for a felony punishable by confinement for a period in excess of one year, or the ineligibility of a director for continuation in office under any applicable rules, regulations or orders of any federal or state regulatory authority.

6

D.Notwithstanding the foregoing, whenever the holders of any one or more classes or series of preferred stock or preference shares issued by the Corporation shall have the right to vote separately by class or series to elect directors at an annual or special meeting of shareholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate of Incorporation applicable thereto, and such directors so elected shall not be divided into classes pursuant to this Article 6 unless expressly provided by such terms.

E.Where the term “Board of Directors” is used in this Certificate of Incorporation, such term shall mean the Board of Directors of the Corporation; provided, however, that to the extent any committee of directors of the Corporation is lawfully entitled to exercise the powers of the Board of Directors, such committee may exercise any right or authority of the Board of Directors under this Certificate of Incorporation.

F.Notwithstanding any other provisions of this Certificate of Incorporation or the By-Laws of this Corporation (and notwithstanding the fact that a lesser percentage or separate class vote may be specified by law, this Certificate of Incorporation, the By-Laws of the Corporation or otherwise), the affirmative vote of the holders of at least 80% of the combined voting power of all outstanding voting stock shall be required to adopt any provisions inconsistent with, or to amend or repeal, Paragraph b, c, or f of this Article 6.

7.The affirmation vote of the holders of not less than 80% of the outstanding voting stock of this corporation shall be required for the approval or authorization of any (i) merger or consolidation of this corporation with or into any other corporation, or (ii) sale, lease, exchange or other disposition of all or substantially all of the assets of this corporation to or with any other corporation, person or other entity; provided however, that such 80% voting requirement shall not be applicable if the Board of Directors of the corporation shall have approved such a transaction described in clause (i) or (ii) by a resolution adopted by 80% of the members of the Board of Directors.

8.The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by subsection 14A:2-7 of the New Jersey Business Corporation Act, as the same may be amended and supplemented.

FOURTH: The amendment effected herein was authorized by a vote of the holders of a majority of all of the outstanding

7

shares entitled to vote thereon pursuant to the Business Corporation Law of the State of New Jersey.

IN WITNESS WHEREOF, the undersigned hereby executes this document and affirms the facts set for herein are true and penalties of perjury this 10th day of November, 1989.

/s/ Marc D. Grodman

Marc D. Grodman, President

/s/ Sam singer

Sam singer, Assistant Secretary

8

EX-3.1.1

Exhibit 3.1.1

FILED

AUG 23 1993

DANIEL J. DALTON

Secretary of State

CERTIFICATE OF AMENDMENT TO THE

CERTIFICATE OF Incorporation OF

BIO-REFERENCE LABORATORIES, INC.

To:The Secretary of State

State of New Jersey

Pursuant to the provisions of Section 14A:Z-15.1, Corporations, General, of the New Jersey Statutes, the undersigned corporation executes this certificate of amendment to its certificate of incorporation:

(a)The name of the corporation is Bio-Reference Laboratories, Inc.

(b)On July 30, 1993, the board of directors of the corporation duly adopted resolutions approving a one-for-three reverse stock split of the corporation’s authorized and outstanding Common Stock, $.01 par value, and of the corporation’s authorized and outstanding Preferred Stock, $.10 par value, effective at the close of business on August 23, 1993, without changing the par value of the Common Stock and the Preferred Stock and without reducing, distributing or withdrawing the existing capital of the corporation.

(c)This amendment to the corporation’s certificate of incorporation will not adversely affect the rights or preferences of the holders of outstanding shares of any class or series of the corporation’s capital stock and will not result in the percentage of authorized shares that remains unissued after the reverse stock split exceeding the percentage of authorized shares that was unissued before the reverse stock split.

(d)The 55,000,000 authorized shares and the 6,897,710 outstanding shares of Common Stock are subject to the one-for-three reverse stock split and as a result of same, will be reduced to 18,333,333 authorized shares and 2,299,237 outstanding shares of Common Stock. The 5,000,000 authorized shares and the 1,812,226 outstanding shares of Preferred Stock are also subject to the one-for-three reverse stock split and as a result of same, will be reduced to 1,666,667 authorized shares and 604,076 outstanding shares of Preferred Stock. Any stockholder entitled to receive a fractional share of Common Stock or Preferred Stock as a result of the reverse stock split will be issued one whole share of the New Stock therefor.

(e)The amendment to the corporation’s certificate of incorporation made in connection with the one-for-three reverse stock split is as follows:

RESOLVED that Article 3(A) of this corporation’s certificate of incorporation, be and is hereby amended to decrease the authorized shares of Common Stock, $.01 par value per share, to 18,333,333 shares, without changing the par value per share, and to decrease the authorized shares of Preferred Stock, $.10 par value per share, to 1,666,667 shares, without changing the par value per share, and to read in its entirety as follows:

“3. Capital Stock (A) Authorized Capital Stock. The total number of shares of all classes of stock which this Corporation shall have authority to issue is TWENTY MILLION (20,000,000) shares, consisting of EIGHTEEN MILLION THREE HUNDRED THIRTY - THREE THOUSAND THREE HUNDRED THIRTY THREE (18,333,333) shares of Common Stock, $.01 par value per share (hereinafter, the ‘Common stock’), and ONE MILLION SIX HUNDRED SIXTY SIX THOUSAND SIX HUNDRED SIXTY SEVEN (1,666,667) shares of

2

Preferred Stock, $.10 par value per share (hereinafter, the ‘Preferred Stock’).”

(f)The effective date of the one-for-three reverse stock split shall be the close of business on August 23, 1993 or the date of filing of this certificate of amendment, whichever is later.

Dated this 20th day of August, 1993.

		BIO-REFERENCE LABORATORIES, INC.
	By	/s/ Marc D. Grodman
		Marc D. Grodman, President
ATTEST:
/s/ Sam Singer
Sam Singer, Secretary

3

EX-3.1.2

Exhibit 3.1.2

FILED

AUG 28 1993

DANIEL J. DALTON

Secretary of State

CERTIFICATE OF AMENDMENT TO THE
CERTIFICATEOF INCORPORATION OF
BIO-REFERENCE LABORATORIES, INC.

To:The Secretary of State
State of New Jersey

Pursuant to the provisions of Section 14A:7-2(2), Corporations, General; of the New Jersey Statutes, the undersigned corporation executes this certificate of amendment to its certificate of incorporation:

1.             The name of the corporation (hereinafter called the “Corporation”) is Bio-Reference Laboratories, Inc.

2.             The following resolution has been duly adopted by the Board of Directors of the Corporation as required by Subsection 14A:7-2(3) of the New Jersey Business Corporation Act.

RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Certificate of Incorporation, the Board of Directors hereby creates a series of Preferred Stock, $.10 par value, of the Corporation, and hereby states the designation and amount thereof and fixes the relative rights, preferences and limitations thereof (in addition to the provisions set forth in the Certificate of Incorporation of the Corporation, which are applicable to the preferred stock of all classes and series) as follows, so that ARTICLE (3) of the Corporation’s Certificate of Incorporation be, and it hereby ie, amended by inserting therein the following paragraph B(1) immediately following ARTICLE (3) (B), paragraph 7:

B(1).        Senior Preferred Stock.

(a)           Designation and Amount. An aggregate of 1,812,226 shares of Preferred Stock, $.10 par value, of the Corporation are hereby constituted as a series designated as “Senior Preferred Stock” (the “Senior Preferred Stock”). Such number of shares may be increased or decreased by resolution of the Board of Directors.

(b)           Vote. Except as may otherwise be required by law, this Certificate of Incorporation or the provisions of the resolution or resolutions as may be adopted by the Board of Directors pursuant to paragraph (B) of this Article THIRD, each holder of Senior Preferred Stock shall have one vote in respect of each share of Senior Preferred Stock held by such holder on each matter voted upon by the stockholders. The holders of shares of Senior Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

(c)           Dividends. Holders of Senior Preferred Stock shall be entitled to be paid dividends on a per share basis equal to dividends, if any paid on a per share basis to holders of Common Stock, at the time such dividends are paid with respect to the Common stock.

(d)           Liquidation Rights. After distribution in full of any preferential amount (fixed in accordance with the provisions of paragraph (B) of this Article THIRD), if any, to be distributed to the holders of Preferred Stock in the event of voluntary or involuntary liquidation, distribution or sale or assets, dissolution or winding-up of this Corporation, the holders of the Senior Preferred Stock together with the holders of the Common Stock shall be entitled to receive all the remaining assets of this Corporation, tangible and intangible, of whatever kind available for distribution to stockholders, ratably on a per share basis in proportion to the number of shares of the Senior Preferred Stock and the Common Stock held by each.

(e)           Conversion Rights. From and after the Date or Issuance and prior to the close of business on April 20, 2003, each share of Senior Preferred Stock shall be convertible, at the option of the holder, upon payment of the Conversion Price, into one share of Common Stock. The initial Conversion Price shall be $.50 per share. In the event of a stock dividend, combination, stock split or reverse stock split, the Conversion Price and the number of shares of Common Stock into which the Senior Preferred Stock may be converted shall be appropriately adjusted.

3.The foregoing resolution was duly adopted by the Board of Directors of the Corporation on April 20, 1993, pursuant to

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authority granted under Section 14A:7-2(2) of the New Jersey Business Corporation Act.

4.             The Certificate of Incorporation of the Corporation is amended so that the designation and number of shares of the series of Preferred Stock acted upon in the foregoing resolution, and the relative rights, preferences and limitations of such series, are as stated in the resolution.

IN WITNESS WHEREOF, Bio-Reference Laboratories, Inc. has caused this Certificate of Amendment to the Certificate of Incorporation to be duly executed this 20th day of August, 1993.

		BIO-REFERENCE LABORATORIES, INC.
	By	/s/ Marc D. Grodman
		Marc D. Grodman, President
ATTEST:
/s/ Sam Singer
Sam Singer, Secretary

3

EX-3.1.3

Exhibit 3.1.3

FILED

MAR 27 1998

LONNA R. HOCKS

Secretary of State

CERTIFICATE OF AMENDMENT TO THE

CERTIFICATE OF INCORPORATION OF

BIO-REFERENCE LABORATORIES, INC.

To:The Secretary of State
State of New Jersey

Pursuant to the provisions of Section 14A: 7-2(2), Corporations, General, of the New Jersey Statutes, the undersigned corporation executes this certificate of amendment to its certificate of incorporation:

1.             The name of the corporation (hereinafter called the “Corporation”) is Bio-Reference Laboratories, Inc.

2.             The following resolution has been duly adopted by the Board of Directors of the Corporation as required by Subsection 14A:7-2(3) of the New Jersey Business Corporation Act.

RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Certificate of Incorporation, the Board of Directors hereby creates a series of Series A Preferred Stock, $.l0 par value, of the Corporation, and hereby states the designation and amount thereof and fixes the relative rights, preferences and limitations thereof (in addition to the provisions set forth in the Certificate of Incorporation of the Corporation, which are applicable to the preferred stock of all classes and series) as follows, so that ARTICLE (3) of the Corporation’s Certificate of Incorporation be, and it hereby is, amended by deleting the present Article (3)B(1) and by inserting therein the following new paragraph B(1) immediately following ARTICLE (3)(B), paragraph 7:

“B(1).      Series A Senior Preferred Stock.

(a)           Designation and Amount. An aggregate of 604,078 shares of series A Preferred Stock, $.10 par value, of the Corporation are hereby constituted as a series designated as “Series A Senior Preferred Stock”

1

(the “Series A Senior Preferred Stock”). Such number of shares nay be increased or decreased by resolution of the Board of Directors.

(b)             Vote. Except as may otherwise be required by law, this Certificate of Incorporation or the provisions of the resolution or resolutions as may be adopted by the Board of Directors pursuant to paragraph (B) of this Article THIRD, each holder of Series A Senior Preferred Stock shall have one vote in respect of each share of Series A Senior Preferred Stock held by such holder on each matter voted upon by the stockholders. The holders of shares of Series A Senior Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

(c)             Dividends. Holders of Series A Senior Preferred Stock shall be entitled to be paid dividends on a per share basis equal to dividends, if any paid on a per share basis to holders of Common Stock, at the time such dividends are paid with respect to the Common Stock.

(d)             Liquidation Rights. After distribution in full of any preferential amount (fixed in accordance with the provisions of paragraph (B) of this Article THIRD), if any, to be distributed to the holders of Preferred Stock in the event of voluntary or involuntary liquidation, distribution or sale or assets, dissolution or winding-up of this Corporation, the holders of the Series A Senior Preferred Stock together with the holders of the Common Stock shall be entitled to receive all the remaining assets of this Corporation, tangible and intangible, of whatever kind available for distribution to stockholders, ratably on a per share basis in proportion to the number of shares of the Series A Senior Preferred Stock and the Common Stock held by each.

(e)             Conversion Rights. From and after the Date of Issuance and prior to the close of business on May 1, 2007, each share of Series A Senior Preferred Stock shall be convertible, at the option of the holder, upon payment of the Conversion Price, into one share of Common Stock. The initial Conversion Price shall be $.75 per share. In the event of a stock dividend, combination, stock split or reverse stock split, the Conversion Price and the number of shares of Common Stock into which the Series A Senior Preferred Stock may be converted shall be appropriately adjusted.”

2

3.             The foregoing resolution was duly adopted by the Board of Directors of the Corporation on May 17, 1997, pursuant to authority granted under Section 14A:7-2(2) of the New Jersey Business Corporation Act.

4.             The Certificate of Incorporation of the Corporation is amended so that the designation and number of shares of the series of Preferred Stock acted upon in the foregoing resolution, and the relative rights, preferences and limitations of such series, are as stated in the resolution.

IN WITNESS WHEREOF, Bio-Reference Laboratories, Inc. has caused this Certificate of Amendment to the Certificate of Incorporation to be duly executed this 25th day of March, 1998.

	BIO-REFERENCE LABORATORIES, INC.
By	/s/ Marc D. Grodman
	Marc D. Grodman, President

ATTEST:

/s/ Sam Singer

Sam Singer, Secretary

3

EX-3.1.4

Exhibit 3.1.4

FILED

MAR 31 1998

LONNA R. HOOKS

Secretary of State

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF INCORPORATION

of

BIO-REFERENCE LABORATORIES, INC.

To:The Secretary of State

State of New Jersey

Pursuant to the provisions of Section 14A:7-2(2), Corporations, General, of the New Jersey statutes, the undersigned corporation executes this certificate of amendment to its certificate of incorporation:

1.             The name of the corporation (hereinafter called the “Corporation”) is Bio-Reference Laboratories, Inc.

2.             The following resolution has been duly adopted by the Board of Directors of the Corporation as required by Subsection 14A:7-2(3) of the New Jersey Business Corporation Act.

RESOLVED, that pursuant to the authority vested in the Board of Directors of the Corporation in accordance with the provisions of its Certificate of Incorporation, the Board of Directors hereby creates a series of Preferred Stock, $.10 par value, of the Corporation, and hereby states the designation and amount thereof and fixes the relative rights, preferences and limitations thereof (in addition to the provisions set forth in the Certificate of Incorporation of the Corporation, which are applicable to the preferred stock of all classes and series) as follows, so that ARTICLE (3) of the Corporation’s Certificate of Incorporation be, and it hereby is, amended by inserting therein the following paragraph B(2) immediately following ARTICLE (3) (B), paragraph 7, paragraph B(1):

B(2). Series A Junior Participating Preferred Stock.

Section 1.               Designation and Amount. The shares of such series shall be designated as “Series A Junior Participating Preferred Stock” and the number of shares constituting such series shall be 3,000.

Section 2.               Dividends and Distributions. (A) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating

1

Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the 15th day of March, June, September and December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $500 or (b) subject to the provision for adjustment hereinafter set forth, 10,000 times the aggregate per share amount of all cash dividends, and 10,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $.01 per share, of the Corporation (the “Common Stock”) since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. In the event the Corporation shall at any time after March 31, 1998 (the “Rights Declaration Date”) (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(B)           The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $500 per share on the Series A Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

(C)           Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date in which

2

case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof.

Section 3.               Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights:

(A)          Subject to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Preferred stock shall entitle the holder thereof to 10,000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(B)           Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Preferred Stock, the holders of shares of Common Stock and the holders of Series A Senior Preferred Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

(C)           (i) If at any time dividends on any Series A Junior Participating Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a “default period”) which shall extend until such time when all accrued and unpaid dividends for all previous quarterly

3

dividend periods and for the current quarterly dividend period on all shares of Series A Junior Participating Preferred Stock then outstanding shall have been declared and paid or set apart for payment. During each default period, all holders of Preferred Stock (including holders of the Series A Junior Participating Preferred Stock) with dividends thereon, voting as a class, irrespective of series, shall have the right to elect two (2) Directors.

(ii)           During any default period, such voting right of the holders of Series A Junior Participating Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that neither such voting right nor the right of the holders of any other series of Preferred Stock, if any, to increase, in certain cases, the authorized number of Directors shall be exercised unless the holders of ten percent (10%) in number of shares of Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting right. At any meeting at which the holders of Preferred Stock shall exercise such voting right initially during an existing default period, they shall have the right, voting as a class, to elect Directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two (2) Directors. If the number which may be so elected at any special meeting does not amount to the required number, the holders of the Preferred Stock shall have the right to make such increase in the number of Directors as shall be necessary to permit the election by them of the required number. After the holders of the Preferred Stock shall have exercised their right to elect Directors in any default period and during the continuance of such period, the number of Directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series A Junior Participating Preferred Stock.

(iii)          Unless the holders of Preferred Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding, irrespective of series, may request, the calling of special meeting of the holders of Preferred stock, which meeting shall thereupon be called by the President, a Vice-President or the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this paragraph (C) (iii) shall be given to each holder of record of Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books

4

of the Corporation. Such meeting shall be called for a time not earlier than 10 days and not later than 60 days after such order or request or in default of the calling of such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding. Notwithstanding the provisions of this paragraph (C) (iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders.

(iv)          In any default period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number of Directors until the holders of Preferred Stock shall have exercised their right to elect two (2) Directors voting as a class, after the exercise of which right (x) the Directors so elected by the holders of Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in paragraph (C) (ii) of this Section 3) be filled by vote of a majority of the remaining Directors theretofore elected by holders of the class of stock which elected the Director whose office shall have become vacant. References in this paragraph (C) to Directors elected by the holders of a particular class of stock shall include Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence.

(v)           Immediately upon the expiration of a default period, (x) the right of the holders of Preferred Stock as a class to elect Directors shall cease, (y) the term of any Directors elected by the holders of Preferred Stock as a class shall terminate, and (z) the number of Directors shall be such number as may be provided for in the certificate of incorporation or by-laws irrespective of any increase made pursuant to the provisions of paragraph (C) (ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the certificate of incorporation or by-laws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors.

(D)          Except as set forth herein, holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

Section 4.               Certain Restrictions. (A) Whenever quarterly dividends or other dividends, or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends

5

and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not

(i)      declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock;

(ii)     declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

(iii)      redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Junior Participating Preferred Stock;

(iv)    redeem or purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

(B)           The corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation

6

could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

Section 5.               Reacquired Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.

Section 6.               Liquidation, Dissolution or Winding Up.

(A)          Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received $10,000 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the “Series A Liquidation Preference”). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the “Common Adjustment”) equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 10,000 (as appropriately adjusted as set forth in subparagraph C below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the “Adjustment Number”). Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively.

(B)           In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of preferred stock, if any, which rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences.

7

In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.

(C)           In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

Section 7.               Consolidation, Merger, etc.   In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 10,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common stock that were outstanding immediately prior to such event.

Section 8.               No Redemption. The shares of Series A Junior Participating Preferred Stock shall not be redeemable.

Section 9.               Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Corporation’s Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise.

Section 10.             Amendment. The Certificate of Incorporation of the Corporation shall not be further amended in any manner which

8

would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class; it being understood that nothing in this Section 10 shall be deemed to restrict the Corporation from designating additional shares of Series A Junior Participating Preferred Stock if the Board of Directors determines that it is necessary to do so in order to achieve the purposes of the Rights Agreement, dated as of March 31, 1998 between the Corporation and American Stock Transfer & Trust Company.

Section 11.             Fractional Shares.   Series A Junior Participating Preferred Stock may be issued in fractions of a share which shall entitled the holder, in proportion to such holders fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock.

IN WITNESS WHEREOF, Bio-Reference Laboratories, Inc. has caused this Certificate of Amendment to the Certificate of Incorporation to be duly executed this day of March 31, 1998.

	BIO-REFERENCE LABORATORIES, INC.
	By	/s/ Marc D. Grodman
		Marc D. Grodman, President
Attest:
/s/ Sam Singer
Sam Singer, Secretary

9

EX-3.1.5

Exhibit 3.1.5

FILED

SEP 26 2003

State Treasurer

CERTIFICATE OF AMENDMENT TO THE

CERTIFICATE OF INCORPORATION

OF BIO-REFERENCE LABORATORIES, INC.

To:	The Secretary of State
	State of New Jersey

Pursuant to the provisions of Section 14A: 9-4, Corporations, General, of the New Jersey Statutes, the undersigned corporation executes this certificate of amendment to its certificate of incorporation:

(a)       The name of the corporation is Bio-Reference Laboratories, Inc.

(b)      Article 3(A) of the corporation’s certificate of incorporation, as amended, is hereby further amended to increase the authorized Common Stock of the corporation from 18,333,333 shares to 35,000,000 shares. The resolution authorizing the amendment and the amendment is as follows:

RESOLVED that Article 3(A) of this corporation’s certificate of incorporation, as amended, be and it hereby is further amended to increase the authorized shares of Common Stock, $.01 par value per share, to 35,000,000 shares, without changing the par value per share, and to read in its entirety as follows:

“3. Capital Stock (A) authorized Capital Stock. The total number of shares of all classes of stock which this corporation shall have authority to issue is THIRTY SIX MILLION SIX HUNDRED SIXTY SIX THOUSAND SIX HUNDRED SIXTY SEVEN (36,666,667) shares, consisting of THIRTY FIVE MILLION (35,000,000) shares of Common Stock, $.01 par value per share (hereinafter the ‘Common Stock’) and ONE MILLION SIX HUNDRED SIXTY SIX THOUSAND SIX HUNDRED SIXTY SEVEN (1,666,667) shares of Preferred Stock, $.10 par value per share (hereinafter, the ‘Preferred Stock.’)”

(c)       The foregoing amendment to the corporation’s certificate of incorporation, as amended, was duly adopted by the shareholders of the corporation at a meeting of shareholders held on July 31, 2003.

(d)      There were an aggregate 11,429,783 shares of Common Stock and an aggregate 604,078 shares of Series A Senior Preferred Stock (and no other classes of stock) entitled to notice of and to vote at the July 31, 2003 shareholder meeting, Each such share was entitled to one vote. The holders of the Common Stock and the Series A Senior Preferred Stock vote together as one class.

(e)       At the July 31, 2003 shareholder meeting, an aggregate 11,178,575 votes were cast for and an aggregate 385,777 votes were voted against the proposed amendment set forth above to Article 3(A) of the corporation’s certificate of incorporation, as amended, so that said amendment was duty adopted.

(f)       This amendment is not intended to provide for an exchange, reclassification or cancellation of issued shares.

(g)      This amendment is intended to become effective at the time of filing with the New Jersey Secretary of State.

Dated this 22nd day of September 2003

	BIO-REFERENCE LABORATORIES, INC.
	By	/s/ Marc D. Grodman
		Marc D. Grodman, President
ATTEST:
/s/ Sam Singer
Sam Singer, Secretary

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EX-3.2.2

Exhibit No. 3.2.2

BIO-REFERENCE LABORATORIES, INC.

AMENDED AND RESTATED BY-LAWS

ARTICLE I

OFFICES

Section 1. Principal Office. The principal office of the corporation shall be in the Borough of Elmwood Park, State of New Jersey.

Section 2. Other Offices. The corporation may also have offices at such other places both within and without the State of New Jersey as the board of directors (sometimes hereinafter referred to as the “board”) may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETINGS OF SHAREHOLDERS

Section 1. Place of Meetings. All annual meetings of the shareholders for the election of directors shall be held at such place as may be fixed from time to time by action of the board of directors, either within or without the State of New Jersey, and stated in the notice of the meeting. Meetings of the shareholders for any other purpose may be held at such place, within or without the State of New Jersey, as shall be stated in the notice of the meeting.

Section 2. Date and Time of Annual Meeting. Annual meetings of the shareholders shall be held at such date and time as shall be designated from time to time by action of the board of directors and stated in the notice of the meeting, at which the shareholders shall elect the directors and transact such other business as may properly be brought before the meeting.

Section 3. Notice of Annual Meeting. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given, personally or by mail, to each shareholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting.

Section 4. Voting List; Inspection. The officer or agent who has charge of the stock transfer books of the corporation shall prepare, make and certify a complete list of the shareholders entitled to vote at the meeting or at any adjournment thereof, arranged in alphabetical order within each class, series or group of shareholders, and showing the address of each shareholder and the number of shares registered in the name of each shareholder. The list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may there be inspected by any shareholder who is present and who, at the meeting or prior thereto, makes or has made, as the case may be, a request to inspect such list.

Section 5. Special Meetings. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the president and shall be called by the president or the secretary upon the request in writing of a majority of the entire board of directors.

Section 6. Notice, Date and Time of Special Meetings. Written notice of a special meeting, stating (a) the place, date and hour of the meeting, (b) that the notice is being issued by or at the direction of the person or persons calling the meeting; and (c) the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than fifty days before the date of the meeting, to each shareholder of record entitled to vote at such meeting.

Section 7. Business Transacted at Special Meetings. Business transacted at any special meeting of shareholders shall be limited to the purposes stated in the notice.

Section 8. Quorum; Adjournment. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the shareholders for the transaction of business, except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the shareholders, the shareholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place to which the meeting is adjourned, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record on the new record date entitled to vote at the meeting.

Section 9. Votes Required. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question other than the election of directors brought before such meeting, unless the question is one upon which by express provision in the New Jersey Business Corporation Act or of the certificate of incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question. Directors shall, except as otherwise required by the New Jersey Business Corporation Act or the certificate of incorporation, be elected by a plurality of the votes cast at a meeting of shareholders by the holders of shares entitled to vote in the election.

Section 10. Voting of Shares. Unless otherwise provided in the certificate of incorporation, each shareholder shall at every meeting of the shareholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such shareholder, but no proxy shall be valid and voted on after eleven months from its date, unless the proxy provides for a longer period. Every proxy must be signed by the shareholder or his attorney-in-fact.

Section 11. Action Without a Meeting. Unless otherwise provided in the certificate of incorporation, and subject to the provisions of Section 615 of the New Jersey Business Corporation Act, any action required or permitted to be taken at any annual or special meeting of shareholders of the corporation may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of all outstanding stock entitled to vote thereon.

ARTICLE III

DIRECTORS

Section 1. General. The business of the corporation shall be managed under the direction of its board of directors, which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the shareholders.

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Section 2. Number and Term. The number of directors which shall constitute the whole board shall be three until otherwise determined by resolution adopted by a majority of the entire board of directors, and shall not be less than three nor more than fifteen, the actual number of directors to be determined by resolution adopted by a majority of the entire board of directors. The directors shall be divided into three classes designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire board of directors, but in no event shall any class include less than one director. A director shall hold office until the annual meeting for the year in which his term expires and until his successor shall be elected and shall qualify. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible.

Section 3. Qualifications of Directors. Each director shall be at least 18 years of age.

Section 4. Vacancies. Vacancies (including those occurring by removal of directors) and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority vote of the board of directors at a duly constituted meeting, and the director so chosen shall be designated a Class I, Class II or Class III director by the board and shall hold office for the remainder of the full term of the class of directors of which the director has been designated, until the next meeting of the shareholders at which the election of such class of directors is in the regular order of business, and until such director’s successor shall be elected and shall qualify, unless sooner displaced.

Section 5. Time and Place of Meetings. The board of directors may hold meetings, both regular and special, either within or without the State of New York, at such places and times as may be from time to time determined by the board.

Section 6. Annual Meeting. The first meeting of each newly elected board of directors shall be held without notice and as soon as practicable after each annual meeting of shareholders, at the same place as such annual meeting of shareholders or at such other place as may be determined by the board.

Section 7. Regular Meetings. Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by action of the board.

Section 8. Special Meetings. Special meetings of the board may be called by the chairman of the board or the president on one day’s notice to each director, either personally, by mail or by telegram or telephone; and special meetings shall be called by the chairman of the board or the president or secretary in like manner and on like notice on the written request of at least a majority of the directors then in office.

Section 9. Quorum; Action of the Board. At all meetings of the board or any committee thereof a majority of all the directors then in office shall constitute a quorum for the transaction of business and the act of a majority of those directors present at any meeting at which there is a quorum shall be the act of the board of directors or such committee, except as may be otherwise specifically provided by statute or the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors, a majority of the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place of the adjourned meeting, if the period of any adjournment does not exceed ten days, until a quorum shall be present.

Section 10. Action of Directors Without a Meeting. Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting and without notice, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 11. Telephone Conference Call. Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors, or any committee designated by the board of directors, may participate in a meeting of the board of directors, or any committee, by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

Section 12. Authorization of Committees. The board of directors may, by resolution passed by a majority of the entire board, designate one or more committees, each committee to consist of three or more of the directors of the corporation. The board may, by resolution adopted by action of the board, designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee; provided, however, that any such alternate member shall possess substantially the same qualifications as the member whom he replaces.

Section 13. Powers of Committees. Any such committee, to the extent provided in the resolution of the board of directors or in the certificate of incorporation or these by-laws, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have such power or authority as to the following matters:

(1) The submission to shareholders of any action that needs shareholders’ approval under the New Jersey Business Corporation Act.

(2) The filling of vacancies in the board of directors or in any committee.

(3) The fixing of compensation of the directors for serving on the board or on any committee.

(4) The amendment or repeal of the by-laws, or the adoption of new by-laws.

(5) The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by action of the board of directors.

Section 14. Minutes of Meetings and Reports to the Board. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

Section 15. Compensation of Directors. Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors for services in any capacity. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at such meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of committees may be allowed like compensation for attending committee meetings. Directors who are full-time employees of the corporation and are compensated as such shall receive no additional compensation for serving as directors.

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Section 16. Removal of Directors. Unless otherwise restricted by the certificate of incorporation or by law, any director or the entire board of directors may be removed for cause by vote of the shareholders. In addition, any director may be removed for cause by action of the board of directors.

ARTICLE IV

NOTICES

Section 1. Form of Notice. Whenever, under the provisions of applicable statutes or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or shareholder, such notice shall not be construed to mean personal notice, and may be given in writing, by mail, addressed to such director or shareholder, at his address as it appears on the records of the corporation (or, if he shall have filed with the secretary of the corporation a written request that notices to him be mailed to some other address, then to such other address), with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegram.

Section 2. Waiver of Notice. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice or by their duly authorized proxies, whether before or after the time stated therein, shall be deemed equivalent thereto. The attendance in person or by proxy of any shareholder at a meeting, and the attendance of any director at a meeting, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by such shareholder or director, as the case may be.

ARTICLE V

OFFICERS

Section 1. Designation of Officers. The officers of the corporation shall be elected by the board of directors and shall be a chairman of the board, a president, an executive vice president, a secretary and a chief financial officer. The board of directors may also elect one or more vice presidents, and one or more assistant secretaries and assistant financial officers. Any number of offices, except those of president and secretary, may be held by the same person, unless an applicable statute, the certificate of incorporation or these by-laws otherwise provides.

Section 2. Election of Officers. The board of directors at its first meeting after each annual meeting of the shareholders shall elect a chairman of the board, a president, a secretary and a chief financial officer.

Section 3. Other Officers. The board of directors may elect such other officers and appoint such agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.

Section 4. Salaries. The salaries of all officers and agents of the corporation shall be fixed by action of the board of directors.

Section 5. Term of Office. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected by the board of directors may be removed at any time, with or without cause, by action of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by action of the board of directors.

Section 6. Chairman of The Board. The chairman of the board shall be a member of the board and shall preside at all meetings of the board of directors, the shareholders and of the executive committee, if such a committee shall be created by the board of directors.

Section 7. President. The president shall be a member of the board and shall be the chief executive officer of the corporation. The president shall, in the absence or disability of the chairman of the board, preside at all meetings of the shareholders and the board of directors. The president or the executive vice president shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

Section 8. Executive Vice President. The executive vice president shall be the chief operating officer of the corporation, shall have general and active management of the business of the corporation, and shall be responsible for implementing all orders and resolutions of the board of directors.

Section 9. Chief Financial Officer. The chief financial officer shall be responsible for all corporation funds and monies deposited in the name of the corporation in such banking institutions or safe deposit vaults as the board of directors shall approve. He shall annually present an itemized report of receipts and disbursements, properly attested by an auditor, and insure that correct books are being maintained at the offices of the corporation reflecting all business transactions of the corporation.

Section 10. Secretary. The secretary shall act as a secretary of all meetings of the shareholders, the board of directors and of all the committees of the board, and shall keep the minutes thereof. The secretary shall serve all notices required to be given by the corporation and shall have charge of all books, records and papers of the corporation. The secretary shall have custody of the corporate seal of the corporation, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature. The secretary shall also see that the reports, statements and other documents required by law are kept and filed, and shall in general, perform all the duties incident to the office of secretary and such other duties as may be assigned by the board.

ARTICLE VI

CERTIFICATES OF STOCK

Section 1. Signatures; Payment of Consideration; Classes and Series of Stock.

(a) Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by, the chairman of the board of directors, or the president or a vice president and the secretary or an assistant secretary of the corporation, certifying the number of shares owned by him in the corporation.

(b) Except as may otherwise be permitted by statute, no certificate shall be issued for any share until such share is fully paid.

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(c) If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the designations, preferences, relative rights and limitations of each class or series authorized to be issued, and of the authority of the board to divide the shares into classes or series and to determine and change the relative rights, preferences and liquidations of any class or series, shall be set forth in full on the face or back of the certificate which the corporation shall issue to represent such class or series of stock; provided that, except as otherwise provided by the New Jersey Business Corporation Act, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each shareholder who so requests a full statement of such designations, preferences, relative rights and limitations.

Section 2. Facsimile Signatures. The signatures of the officers on the certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar other than the corporation itself or its employee. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the date of issue.

Section 3. Contents. Each certificate shall state on its face that the corporation is organized under the laws of the State of New Jersey, the name of the person to whom it is issued and the number and class, and the designation of the series, if any, of the shares which such certificate represents.

Section 4. Lost Certificates. The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation and alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 5. Transfer of Stock. Upon surrender to the corporation or the transfer agent or registrar of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

Section 6. Fixing Record Date. In order that the corporation may determine the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty days nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.

Section 7. Registered Shareholders. The corporation shall be entitled to treat the person in whose name shares are registered on its books as the owner of such shares for all purposes.

ARTICLE VII

GENERAL PROVISIONS

Section 1. Dividends. Subject to the relevant provisions of the certificate of incorporation, if any, dividends upon any class or series of the capital stock of the corporation may be declared by action of the board of directors, without regard to any classes of directors, at any regular or special meeting, pursuant to law. As, and to the extent, permitted by law, and subject to the relevant provisions of the certificate of incorporation, if any, dividends may be paid in cash, in property, or in shares of the capital stock.

Section 2. Reports to Shareholders. The board of directors shall present at each annual meeting, and at any special meeting of the shareholders when called for by vote of the shareholders, a full and clear statement of the business and condition of the corporation.

Section 3. Checks. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.

Section 4. Fiscal Year. The fiscal year of the corporation shall begin on the first day of November each year, unless otherwise fixed by resolution of the board of directors.·

Section 5. Corporate Seal. The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, New Jersey.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

ARTICLE VIII

INDEMNIFICATION

Section 1. The corporation shall indemnify its officers and directors to the extent permitted by the New Jersey Busness Corporation Act, and shall indemnify its other employees and agents to the extent to which such other employees and agents would be permitted to be indemnified under the New Jersey Business Corporation Act if they were officers or directors of the Corporation; provided, that such employees and agents shall in no event be indemnified to an extent greater than that permitted by New Jersey law.

ARTICLE IX

AMENDMENTS

Section 1. These by-laws may be altered, amended or repealed and new by-laws may be adopted by the shareholders and by the board of directors at any regular meeting of the shareholders or of the board of directors or at any special meeting of the shareholders or of the board of directors if notice of such alteration, amendment, repeal or adoption of new by-laws be contained in the notice of such meeting; provided, however, that no amendment of these by-laws may be adopted which contravenes a provision of the certificate of incorporation of the corporation.

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EX-10.3.4

Exhibit 10.3.4

BIO-REFERENCE LABORATORIES

AMENDMENT NO. 4

TO

EMPLOYMENT AGREEMENT

WITH SAM SINGER

AMENDMENT NO. 4 dated March 4, 2008, to an AGREEMENT OF EMPLOYMENT dated as of May 1, 1997 between Bio-Reference Laboratories, Inc., a New Jersey corporation (the “Company”) and Sam Singer, its Senior Vice President and Chief Financial Officer (the “Employee”); as amended on November 1, 2002 (Amendment No. 1); on January 7, 2004 (Amendment No. 2); and on December 18, 2007 (Amendment No. 3); (the original Agreement of Employment and the Three Amendments collectively referred to as the “Employment Agreement”);

WITNESSETH:

WHEREAS the parties previously executed the Employment Agreement providing for the employment by the Company of the Employee as its Senior Vice President and Chief Financial Officer; and

WHEREAS the parties hereby agree to modify the Employment Agreement to the extent required to ensure that the Employment Agreement is in compliance with Internal Revenue Code (“IRC”) §409A and the regulations adopted thereunder; and to modify certain other provisions; all as herein set forth:

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and intended to be legally bound hereby, the parties hereto agree to amend the Employment Agreement as follows:

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A.6(g) Disability. The first sentence of paragraph (g) of section 6 of the Employment Agreement is hereby amended to read in its entirety as follows:

“As used in this Employment Agreement, the term “Total Disability” shall mean a disability such that:

(i)The Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or

(ii)The Employee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.”

B.Termination. The third sentence of paragraph (c) of section 7 of the Employment Agreement is hereby amended to read in its entirety as follows:

“As used in this Employment Agreement, the term ‘Good Reason’ shall mean:

(i)A material diminution in the Employee’s Base Compensation.

(ii)A material diminution in the Employee’s authority, duties or responsibilities.

(iii)A material diminution in the authority, duties, or responsibilities of the supervisor (if any) to whom the Employee is required to report.

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(iv)A material diminution in the budget over which the Employee retains authority.

(v)A material change in the geographic location at which the Employee provides his services under the Employment Agreement.

(vi)Any other action or inaction that constitutes a material breach by the Company of the Employment Agreement.”

Paragraph (d) of section 7 of the Employment Agreement is hereby amended to read in its entirety as follows:

“(d) Notice of Termination (i) Any election by the Company to terminate the Employee’s employment hereunder for “Cause” shall be communicated by a written notice of termination (the “Notice of Termination”) forwarded to the Employee. The Notice of Termination shall recite the facts and circumstances claimed to provide the basis for such termination and shall specify the purported date of termination of the Employee’s employment hereunder (the “Date of Termination”). The Date of Termination shall be not less then seven (7) days from the date of receipt by the Employee of the Notice of Termination. If within said seven (7) day time period, the Company receives written notice from the Employee, given in good faith, that a dispute exists concerning such termination, and provided the Employee pursues resolution of the dispute with reasonable diligence, the Company will, subject to resolution of the dispute, continue to pay the Employee his full Base Compensation as in effect as of the date of his receipt of the Notice of Termination and continue the Employee as a participant in all compensation, benefit and insurance plans in which he was participating at such date, until the dispute is resolved. If the dispute resolution determines that the Employee’s

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employment was properly terminated “For Cause”, he will not be entitled to retain any payments made with respect to periods after the Date of Termination and will promptly return such amounts to the Company.

(ii) Any election by the Employee to terminate his employment hereunder for “Good Reason” shall be communicated by a written notice of termination (the “Notice of Termination”) forwarded to the Company. The Notice of Termination shall recite the facts and circumstances claimed to, constitute “Good Reason” and shall specify the purported date of termination of the Employee’s employment hereunder (the “Date of Termination”). The Date of Termination shall be not less than 40 days after receipt by the Company of the Notice of Termination. The Notice of Termination must be received by the Company not more than 90 days after the initial existence of the condition on which the Notice of Termination is based and the Company shall have 30 days after receipt of the Notice of Termination to remedy the condition. In the event of such remedy, the Employee’s employment will continue in accordance with this Employment Agreement.”

C.8. Change in Control. Section 8 of the Employment Agreement is hereby amended to read in its entirety as follows:

“8. Change in Control. In the event of a “Change in Control” of the Company as hereinafter defined, the Employee may elect as a result thereof to terminate his employment with the Company. Such election must be effected by written Notice of Termination which must be received by the Company no later than 30 days after such Change in Control occurs. The Notice of Termination must state a Date of Termination of employment effective at the earlier of 45 days after the occurrence of the Change in Control or the next to the last day of the calendar year in which the

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Change in Control occurs. In the event of such election and timely filing by the Employee of the Notice of Termination, the Employee shall receive the following benefits.

(a)The Company shall pay to the Employee his full Base Compensation at the rate in effect at the time of the Notice of Termination through the Date of Termination.

(b)In lieu of any further Base Compensation payments for periods subsequent to the Date of Termination, the Company shall pay to the Employee as severance pay, a lump sum payment (the “Severance Payment”) equal to 2.99 times the average of the annual Compensation which was payable by the Company and includible in the Employee’s gross income for federal income tax purposes for the five (5) calendar years, or for the portion of such period during which the Employee was actually employed by the Company if the Employee has been employed by the Company for less than five (5) calendar years, preceding the earlier of the calendar year in which a Change in Control occurred or the calendar year of the Date of Termination (the “Base Period”). Such average shall be determined in accordance with the provisions of Section 280G(d) of the Internal Revenue Code of 1986 as amended (the “Code”). As used in this Agreement, the term “Compensation” shall mean and include every type and form of compensation includible in the Employee’s gross income in respect of his employment by the Company except to the extent otherwise provided in Congressional or Joint Committee Reports or temporary or final regulations interpreting Section 280G(d) of the Code, but also excluding any income recognized as a result of the exercise of stock options, the sale of stock acquired on exercise of options or acquired by grant, income recognized as the

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result of a disqualifying disposition of stock acquired pursuant to an Incentive Stock Option, income attributable to the personal use of Company leased automobiles, to the personal use of Company assets including the Company’s airplane, income attributable to other personal expenses paid by the Company, and income recognized from rentals and sales to the Company. The Severance Payment shall be paid on the first date on which such payment can be made without being subject to the tax imposed by §409A of the Code.

(c)The Severance Payment shall be reduced by the amount of any other payment or the value of any benefit received or to be received by the Employee in connection with the termination of his employment or contingent upon a Change in Control (whether payable pursuant to the terms of this Agreement, any other plan, agreement or arrangement with the Company) unless (i) the Employee shall have effectively waived his receipt or enjoyment of such payment or benefit prior to the date of payment of the Severance Payment, (ii) in the opinion of tax counsel selected by the Company, such other payment or benefit does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code, or (iii) in the opinion of such tax counsel, the Severance Payment (in its full amount or as partially reduced, as the case may be) plus all other payments or benefits which constitute “parachute payments” within the meaning of Section 280G(b)(2) of the Code are reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4) of the Code, and such payments are deductible by the Company. The value of any non-cash benefit or any deferred cash payment shall be determined by the Company in accordance with the principles of Section 280G(d)(3) and (4) of the Code.

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(d)Except to the extent that Congressional or Joint Committee Reports or temporary or final regulations interpreting Section 280G of the Code specify that such payments would result, under paragraph (c) of this section 8, in a reduction in the Severance Payment, the Company shall pay to the Employee, not later than the thirtieth business day following the Date of Termination, a lump sum amount equal to any bonus compensation which has been allocated or awarded for a fiscal year preceding the Date of Termination but has not yet been paid.

(e)If it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding that, notwithstanding the good faith of the Employee and the Company in applying the terms of this section 8, the aggregate “parachute payments” paid are in an amount that would result in any portion of such “parachute payments” not being deductible by the Company by reason of Section 280G of the Code, then the Employee shall have an obligation to pay the Company upon demand an amount equal to the sum of (i) the portion of the aggregate “parachute payments” paid that would not be deductible by reason of Section 280G of the Code and (ii) interest on the amount set forth in clause (i) of this sentence at the applicable Federal rate (as defined in Section 1274(d) of the Code) from the date of receipt of such excess until the date of such payment.

(f)As used in the Employment Agreement, the term “Change in Control” shall mean a “Change in Effective Control” or “A Change in the Ownership of a Substantial Portion of a Corporation’s Assets,” under Treas. Reg. §1.409A-3(i)(5)(vi) or (vii) and shall mean either (1) or (2) below with regard to a change arising from the acquisition of the Company’s stock or appointment of new Directors (for a Change in

7

Control), or a disposition of the corporate business (for A Change in the Ownership of a Substantial Portion of a Corporation’s Assets) as defined in (3) below:

(1)The date any one person, or more than one person acting as a group (as determined under paragraph Treas. Reg. §1.409A-3 (i)(5)(v)(B)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing thirty percent (30%) or more of the total voting power of the stock of the Company.

(2)The date a majority of the members of the Company’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors before the date of the appointment or election.

(3)A change in the ownership of a substantial portion of the Company’s assets occurs on the date that any one person, or more than one person acting as a group (as determined under Treas. Reg. §1.409A-3 (i)(5)(v)(B)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions.”

D.      Section 409A Compliance. The Employment Agreement is hereby amended by adding a new Section 12 to read in its entirety as follows:

“12. Section 409A Compliance. The Employee agrees that he is responsible for the payment of any tax liability (including any taxes and penalties arising under Section 409A of the Code) that may result from any payments or benefits that he

8

receives pursuant to the Employment Agreement. Anything to the contrary herein contained notwithstanding, the Employee further agrees that if the Company reasonably determines that the Employee’s receipt of payments or benefits pursuant to the Employment Agreement would cause the Employee to incur liability for additional tax under Section 409A of the Code, the Company may in its discretion suspend such payments or benefits until the end of the six-month period following termination of the Employee’s employment (the “409A Suspension Period”). As soon as reasonably practical after the end of the 409A Suspension Period, the Company will make a lump sum payment to the Employee in an amount equal to any payments and benefits that the Company does not make during the 409A Suspension Period. Thereafter, the Company will pay the Employee any remaining payments and benefits due pursuant to the Employment Agreement in accordance with the terms thereof (as if there had not been any suspension beforehand).”

E.      Other Provisions. Except as specifically modified of amended herein, the parties hereto hereby reaffirm each provision of the Employment Agreement as of the date hereof.

IN WITNESS WHEREOF, the undersigned have each duly executed this Amendment No. 1 to the Employment Agreement as of the date first above written.

COMPANY:
Bio-Reference Laboratories, Inc.
By	/s/ Marc Grodman M.D.
	Marc Grodman M.D.
	President
	Duly Authorized
EMPLOYEE:
	/s/ Sam Singer
	Sam Singer

9

EX-10.3.5

Exhibit 10.3.5

BIO-REFERENCE LABORATORIES

AMENDMENT NO. 5

TO

EMPLOYMENT AGREEMENT

WITH SAM SINGER

Bio-Reference Laboratories, Inc. (the “Company”) and Sam Singer (the “Employee”) hereby mutually agree that Section 8(d) as set forth in Amendment No. 4 dated March 4, 2008 to the Employment Agreement between the Company and the Employee is hereby deleted in its entirety and that except for such deletion, the parties hereby reaffirm each provision of the Employment Agreement as of the date hereof.

Dated: September 18, 2008

THE COMPANY		EMPLOYEE
Bio-Reference Laboratories, Inc.
By	/s/ Marc Grodman	/s/ Sam Singer
	Marc Grodman	Sam Singer
	President

EX-10.3.6

Exhibit 10.3.6

BIO-REFERENCE LABORATORIES

AMENDMENT NO. 6

TO

EMPLOYMENT AGREEMENT

WITH SAM SINGER

AMENDMENT NO. 6 dated as of October , 2009 to an AGREEMENT OF EMPLOYMENT dated as of May 1, 1997 between Bio-Reference Laboratories, Inc., a New Jersey corporation (the “Company”) and Sam Singer, its Senior Vice President and Chief Financial Officer (the “Employee”); as amended on November 1, 2002 (Amendment No. 1); on January 7, 2004 (Amendment No. 2); on December 18, 2007 (Amendment No. 3); on March 4, 2008 (Amendment No. 4); and on September 18, 2008 (Amendment No. 5); (the original Agreement of Employment and the Five Amendments collectively referred to as the “Employment Agreement”);

WITNESSETH:

WHEREAS the parties previously executed the Employment Agreement providing for the employment by the Company of the Employee as its Senior Vice President and Chief Financial Officer; and

WHEREAS the Employment Agreement is currently due to expire on October 31, 2010 and would be automatically extended at the end of each Company fiscal year for an additional one year term unless the Company elected on a timely basis not to extend the term, but the Employee has the right to terminate the Employment Agreement effective on January 1 of any calendar year commencing January 1, 2010 on not less than 90 days prior written notice; and

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WHEREAS the parties desire to amend the Employment Agreement to fix the Expiration Date as herein set forth:

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and intended to be legally bound hereby, the parties hereto agree to amend the Employment Agreement as follows:

A.“Term of Employment”. The “Expiration Date” of the Employment Agreement shall be the close of business on March 15, 2011.

B.“2. Renewal”. This Section is deleted in its entirety so that the Expiration Date set forth in A above is no longer subject to renewal and the Employee no longer has the right to terminate the Employment Agreement. The Employment Agreement shall expire at the close of business on March 15, 2011.

C.Other Provisions. Except for the above changes, the parties hereto hereby reaffirm each provision of the Employment Agreement as of the date hereof.

IN WITNESS WHEREOF, the undersigned have each duly executed this Amendment No. 6 to the Employment Agreement as of the date first above written.

COMPANY:
Bio-Reference Laboratories, Inc.
By	/s/ Marc Grodman M.D.
	Marc Grodman M.D.
	President
	Duly Authorized
EMPLOYEE:
	/s/ Sam Singer
	Sam Singer

2

EX-10.3.7

Exhibit 10.3.7

BIO-REFERENCE LABORATORIES

AMENDMENT NO. 7

TO

EMPLOYMENT AGREEMENT

WITH SAM SINGER

AMENDMENT NO. 7 dated as of November 1, 2010 to an AGREEMENT OF EMPLOYMENT dated as of May 1, 1997 between Bio-Reference Laboratories, Inc., a New Jersey corporation (the “Company”) and Sam Singer, its Senior Vice President and Chief Financial Officer (the “Employee”); as amended on November 1, 2002 (Amendment No. 1); on January 7, 2004 (Amendment No. 2); on December 18, 2007 (Amendment No. 3); on March 4, 2008 (Amendment No. 4); on September 18, 2008 (Amendment No. 5); and in October, 2009 (Amendment No. 6); (the original Agreement of Employment and the Six Amendments collectively referred to as the “Employment Agreement”);

WITNESSETH:

WHEREAS the parties previously executed the Employment Agreement providing for the employment by the Company of the Employee as its Senior Vice President and Chief Financial Officer; and

WHEREAS the Employment Agreement is currently due to expire on March 15, 2011; and

WHEREAS the parties desire to amend the Employment Agreement to fix the Expiration Date as herein set forth:

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NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and intended to be legally bound hereby, the parties hereto agree to amend the Employment Agreement as follows:

A.“Term of Employment”. The “Expiration Date” of the Employment Agreement shall be the close of business on January 31, 2012 and is not subject to renewal without the written consent of both parties.

B.“Terms of Employment”. This Section is hereby amended to read in its entirety as follows:

“1. Terms of Employment. The Company agrees to employ the Employee as its Senior Vice President and Chief Financial Officer and the Employee shall report directly to the President of the Company. The Employee agrees to continue his employment with the Company through January 31, 2012 (the “Expiration Date”).”

C.“Duties”. Paragraph (a) of Section 3 of the Employment Agreement is hereby amended to read in its entirety as follows:

“(a) During the Employment Period, the Employee shall perform such duties and exercise such powers relating to the Company as are commensurate with the office of Senior Vice President and Chief Financial Officer and shall report directly to the President of the Company. He shall have such other duties and powers as the President of the Company shall assign to him commensurate with the office of Chief Financial Officer, including by way of example but not limitation, similar duties with respect to any of the Company’s associated companies. As used in this Agreement, the term “Associated Companies” shall mean any company (i) of which not less than fifty (50%) of the equity is beneficially owned by the Company or (ii) any subsidiary of such company, if any.”

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D.Other Provisions. Except for the above changes, the parties hereto hereby reaffirm each provision of the Employment Agreement as of the date hereof.

IN WITNESS WHEREOF, the undersigned have each duly executed this Amendment No. 7 to the Employment Agreement as of the date first above written.

COMPANY:
Bio-Reference Laboratories, Inc.
By	/s/ Marc Grodman M.D.
	Marc Grodman M.D.
	President
	Duly Authorized
EMPLOYEE:
	/s/ Sam Singer
	Sam Singer

3

EX-10.5.1

Exhibit 10.5.1

	2011 Senior Management Incentive Bonus Plan
Participants:	Marc D. Grodman, MD, CEO
	Howard Dubinett, COO
	Charles T. Todd, Sr. VP Marketing & Sales
	Amar Kamath, VP Marketing
	Gary Reeves, VP, Women’s Health
	Warren Erdmann, SVP Operations
	Nick Cetani, VP Laboratory Director
	Ron Rayot, VP
	Chris Smith, VP
	Sam Singer, SVP and CFO
	Sally Howlett, VP Billing
	Nick Papazicos, SVP Financial Operations
	James Weisberger, MD, CMO
	Maryanne Amato, Director, Genpath
	Cory Fishkin, COO CareEvolve
	John Compton, CSO, GeneDx
	Sherri Bale, CCO GeneDx
	Richard L. Faherty, CIO
	John Mooney, VP
	Gary Reeves, VP

Proposed Plan:

A.The Senior Management Incentive Bonus Plan (the “Plan”) will be based on two (2) separate financial calculations. The first formula will be based on “Operating Income” as a percent of “Net Revenues” pursuant to the Consolidated Financial Statements of the Company. The second formula will be based on the percentage increase of “Operating Income” from fiscal 2010 to fiscal 2011 pursuant to the Consolidated Financial Statements of the Company.

B.There will be one class of participation.

C.Calculations for the first portion of the program will be as follows:

1.Operating Income shall consist of the Total Operating Income (hereinafter referred to as “TOI”) for the Entire Company including all divisions and subsidiaries.

2.In the event that TOI shall be equal to or greater than 10.75%, then and in such event, the participants will be entitled to a bonus based on the participant’s annual gross wages including any CPI adjustment paid to him or her in fiscal 2010 exclusive of any bonus, option exercise, auto or airplane usage expense charge-back, or other unearned revenue (“Annual Gross Wages”), pursuant to the following schedule:

If TOI is greater than		and less than		Percent Bonus
11.00	%	11.50	%	4	%
11.50	%	12.00	%	6	%
12.00	%	12.50	%	8	%
12.50	%	N/A		10	%

3.The maximum bonus to be paid under this portion of the program will be 10% of the Annual Gross Wages paid to the participant in fiscal 2011 regardless of TOI.

D.Calculations for the second portion of the program will be as follows:

1.Operating Income will consist of Operating Income before interest and taxes for the Entire Company including all divisions and subsidiaries.

2.Percentage increase on a year over year basis will be determined by subtracting the Operating Income as reported in the Company’s Consolidated Financial Statements for the 2010 fiscal year (“Base Year”) from the Operating Income as reported in the Company’s Consolidated Financial Statements for the 2011 fiscal year (“Current Year”). This will result in a difference (“Diff”). The Diff will be divided by the Base Year to determine the percentage of change (“PC”) in Operating Income between the Base Year and the Current Year.

3.In the event that the PC is positive (an increase) and equal to or greater than 20%, then and in such event, each participant will be entitled to a bonus based on the participant’s Annual Gross Wages pursuant to the following schedule:

If PC is greater than		and less than		Percent Bonus
20.00	%	25.00	%	6	%
25.00	%	30.00	%	9	%
30.00	%	35.00	%	12	%
35.00	%	N/A		15	%

4.The maximum bonus to be paid under this portion of the program will be 15% of Annual Gross Wages regardless of Operating Income.

E.The two portions shall be calculated separately and shall not be dependent on each other. Participants may earn a bonus from either or both financial calculations. Regardless, however, of the Company achievements, the maximum bonus to be paid under the Plan will be 25% of Annual Gross Wages in fiscal 2011.

EX-10.5.2

Exhibit 10.5.2

2012 Senior Management Incentive Bonus Plan

Participants:	Marc D. Grodman, MD, CEO
	Howard Dubinett, COO
	Charles T. Todd, Sr. VP Marketing & Sales
	Amar Kamath, VP Marketing
	Gary Reeves, VP, Women’s Health
	Warren Erdmann, SVP Operations
	Nick Cetani, VP Laboratory Director
	Ron Rayot, VP
	Chris Smith, VP
	Sam Singer, CFO
	Sally Howlett, VP Billing
	Nick Papazicos, SVP Financial Operations
	James Weisberger, MD, CMO
	Maryanne Amato, Director, Genpath
	Cory Fishkin, COO CareEvolve
	John Compton, CSO, GeneDx
	Sherri Bale, CCO GeneDx
	Richard L. Faherty, CIO
	John Mooney, VP

Proposed Plan:

A.The Senior Management Incentive Bonus Plan (the “Plan”) will be based on two (2) separate financial calculations.  The first formula will be based on “Operating Income” as a percent of “Net Revenues” pursuant to the Consolidated Financial Statements of the Company.  The second formula will be based on the percentage increase of “Operating Income” from fiscal 2011 to fiscal 2012 pursuant to the Consolidated Financial Statements of the Company.

B.There will be one class of participation.

C.Calculations for the first portion of the program will be as follows:

1.Operating Income shall consist of the Total Operating Income (hereinafter referred to as “TOI”) for the Entire Company including all divisions and subsidiaries.

2.In the event that TOI shall be equal to or greater than 11.00%, then and in such event, the participants will be entitled to a bonus based on the participant’s annual gross wages including any CPI adjustment paid to him or her in fiscal 2012 exclusive of any bonus, option exercise, auto or airplane usage expense charge-back, or other unearned revenue (“Annual Gross Wages”), pursuant to the following schedule:

If TOI is greater than
or equal to:		and less than		Percent Bonus
11.00	%	11.50	%	4	%
11.50	%	12.00	%	6	%
12.00	%	12.50	%	8	%
12.50	%	N/A		10	%

3.The maximum bonus to be paid under this portion of the program will be 10% of the Annual Gross Wages paid to the participant in fiscal 2012 regardless of TOI.

D.Calculations for the second portion of the program will be as follows:

1.Operating Income will consist of Operating Income before interest and taxes for the Entire Company including all divisions and subsidiaries.

2.Percentage increase on a year over year basis will be determined by subtracting the Operating Income as reported in the Company’s Consolidated Financial Statements for the 2011 fiscal year (“Base Year”) from the Operating Income as reported in the Company’s Consolidated Financial Statements for the 2012 fiscal year (“Current Year”).  This will result in a difference (“Diff”).  The Diff will be divided by the Base Year to determine the percentage of change (“PC”) in Operating Income between the Base Year and the Current Year.

3.In the event that the PC is positive (an increase) and equal to or greater than 25%, then and in such event, each participant will be entitled to a bonus based on the participant’s Annual Gross Wages pursuant to the following schedule:

If PC is greater than
or equal to:		and less than		Percent Bonus
25.00	%	30.00	%	6	%
30.00	%	35.00	%	9	%
35.00	%	40.00	%	12	%
40.00	%	N/A		15	%

4.The maximum bonus to be paid under this portion of the program will be 15% of Annual Gross Wages regardless of Operating Income.

E.The two portions shall be calculated separately and shall not be dependent on each other.  Participants may earn a bonus from either or both financial calculations.  Regardless, however, of the Company achievements, the maximum bonus to be paid under the Plan will be 25% of Annual Gross Wages in fiscal 2012.

EX-10.6.4

Exhibit 10.6.4

Seventh Amendment to Loan Documents

THIS SEVENTH AMENDMENT TO LOAN DOCUMENTS (this “Amendment”) is made as of Oct. 22, 2010, and is by and among Bio-Reference Laboratories, Inc. (“BRLI”), and BRLI No. 2 Acquisition Corp., which conducts business as GENEDX, Inc. (referred to herein from time to time as a “Subsidiary Party”) (BRLI and the Subsidiary Party herein each a “Borrower” and, collectively, “Borrowers”), the financial institutions which are party hereto (collectively, the “Lenders” and individually a “Lender”) and PNC BANK, NATIONAL ASSOCIATION in its capacity as the agent for the Lenders and as the sole Lender (in each such capacity, the “Bank”).

BACKGROUND

A.The Borrowers have executed and delivered to the Bank, one or more promissory notes, letter agreements, loan agreements, security agreements, mortgages, pledge agreements, collateral assignments, and other agreements, instruments, certificates and documents, some or all of which are more fully described on attached Exhibit A, which is made a part of this Amendment (collectively as amended from time to time, the “Loan Documents”) which evidence or secure some or all of the Borrowers’ obligations to the Bank for one or more loans or other extensions of credit (the “Obligations”).

B.The Borrowers and the Bank desire to amend the Loan Documents to, among other things, extend the term of their lending arrangements, increase the amount available to be borrowed under Borrowers’ revolving line of credit, and change certain of the other terms and conditions of the Loan Documents, all as provided for in this Amendment.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows:

1.Certain of the Loan Documents are amended as set forth in Exhibit A. Any and all references to any Loan Document in any other Loan Document shall be deemed to refer to such Loan Document as amended by this Amendment. This Amendment is deemed incorporated into each of the Loan Documents. Any initially capitalized terms used in this Amendment without definition shall have the meanings assigned to those terms in the Loan Documents. To the extent that any term or provision of this Amendment is or may be inconsistent with any term or provision in any Loan Document, the terms and provisions of this Amendment shall control.

2.(a) Each of the Borrowers hereby certifies that: (a) all of its representations and warranties in the Loan Documents, as amended by this Amendment, are, except as may otherwise be stated in this Amendment: (i) true and correct as of the date of this Amendment, (ii) ratified and confirmed without condition as if made anew, and (iii) incorporated into this Amendment by reference.

(b) Each of the Borrowers hereby certifies that (i) no Event of Default or event which, with the passage of time or the giving of notice or both, would constitute an Event of Default, exists under any Loan Document which will not be cured by the execution and effectiveness of this Amendment, (ii) no consent, approval, order or authorization of, or registration or filing with, any third party is required in connection with the execution, delivery and carrying out of this Amendment or, if required, has been obtained or shall be obtained on a timely basis pursuant to the terms of this Amendment and (iii) this Amendment has been duly authorized, executed and delivered so that it constitutes the legal, valid and binding obligation of each Borrower, enforceable in accordance with its terms. The Borrowers confirm that the Obligations remain outstanding without defense, set off, counterclaim, discount or charge of any kind as of the date of this Amendment.

3.Each of the Borrowers hereby confirms that any collateral for the Obligations, including liens, security interests, mortgages, and pledges granted by the Borrowers or third parties (if applicable), shall continue unimpaired and in full force and effect, and shall cover and secure all of the Borrowers’ existing and future Obligations to the Bank, as modified by this Amendment.

4.As a condition precedent to the effectiveness of this Amendment, the Borrowers shall comply with the terms and conditions (if any) specified in Exhibit A.

5.To induce the Bank to enter into this Amendment, to the extent permitted by law, each of the Borrowers waives and releases and forever discharges the Bank and its officers, directors, attorneys, agents, and employees from any liability, damage, claim, loss or expense of any kind that it may have against the Bank or any of them arising out of or relating to the Obligations. Each of the Borrowers further agrees to indemnify and hold the Bank and its officers, directors, attorneys, agents and employees harmless from any loss, damage, judgment, liability or expense (including attorneys’ fees) suffered by or rendered against the Bank or any of them on account of any claims arising out of or relating to the Obligations. Each of the Borrowers further states that it has carefully read the foregoing release and indemnity, knows the contents thereof and grants the same as its own free act and deed.

6.This Amendment may be signed in any number of counterpart copies and by the parties to this Amendment on separate counterparts, but all such copies shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart. Any party so executing this Amendment by facsimile transmission shall promptly deliver a manually executed counterpart, provided that any failure to do so shall not affect the validity of the counterpart executed by facsimile transmission.

7.This Amendment will be binding upon and inure to the benefit of each Borrower and the Bank and their respective heirs, executors, administrators, successors and assigns.

8.This Amendment will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the State of New Jersey, excluding its conflict of laws rules.

9.Except as amended hereby, the terms and provisions of the Loan Documents remain unchanged, are and shall remain in full force and effect unless and until modified or amended in writing in accordance with their terms, and are hereby ratified and confirmed. Except as expressly provided herein, this Amendment shall not constitute an amendment, waiver, consent or release with respect to any provision of any Loan Document, a waiver of any default or Event of Default under any Loan Document, or a waiver or release of any of the Bank’s rights and remedies (all of which are hereby reserved). Each of the Borrowers expressly ratifies and confirms the waiver of jury trial provisions contained in the Loan Documents.

[Signature page follows.]

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WITNESS the due execution of this Seventh Amendment to Loan Documents as a document under seal as of the date first written above.

ATTEST:			BIO-REFERENCE LABORATORIES, INC.
By:	/s/ Sam Singer	By:	/s/ Marc D. Grodman
Name:	SAM SINGER		Name:	MARC D. GRODMAN	(SEAL)
Title:	Secretary		Title:	President
ATTEST:			BRLI NO. 2 ACQUISITION CORP.,
			doing business as GENEDX, Inc.,
			a Subsidiary Party
By:	/s/ Sam Singer	By:	/s/ Marc D. Grodman
Name:	SAM SINGER		(SEAL)
Title:	Secretary		Name:	MARC D. GRODMAN
			Title:	President
			PNC BANK, NATIONAL ASSOCIATION
			By:	/s/ Parameswar Sivaramakrishnan
			(SEAL)
			Name:	PARAMESWAR SIVARAMAKRISHNAN
			Title:	Vice President

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EXHIBIT A TO
SEVENTH AMENDMENT TO LOAN DOCUMENTS

A.The “Loan Documents” that are the subject of this Amendment include the following (as any of the foregoing have previously been amended, modified or otherwise supplemented):

1.Amended and Restated Loan and Security Agreement dated as of September 30, 2004, as amended by that certain: (a) letter amendment dated April 20, 2005, (b) Second Amendment to Loan Documents dated as of January 19, 2006, (c) Third Amendment to Loan Documents dated September 13, 2006, (d) Fourth Amendment to Loan Documents Dated as of October 1, 2006, (e) Fifth Amendment to Loan Documents dated as of October 31, 2007, and (f) Sixth Amendment to Loan Documents dated as of May 12, 2008 (as amended, the “Loan Agreement”).

2.All other documents, instruments, agreements, and certificates executed and delivered in connection with the Loan Documents listed in this Section A.

B.The Loan Agreement is hereby amended as follows:

1.New Definitions. Article 1 of the Loan Agreement, Section 1.2 is hereby amended to add the following as new definitions:

“Seventh Amendment” shall mean the Seventh Amendment to Loan Documents dated as of the Seventh Amendment Closing Date.

“Seventh Amendment Closing Date” shall mean Oct 22, 2010.

3.Amendment to Capital Expenditures Covenant. As of the Seventh Amendment Date Article 7 of the Loan Agreement is hereby amended to amend and restate Subsection 7.6 in its entirety as follows:

7.6.Capital Expenditures. Enter into any agreements to purchase or pay for or become obligated to pay for capital expenditures, long term leases, capital leases and/or sale lease-backs, during any fiscal year in an amount aggregating in excess of Twenty Million Dollars ($20,000,000.00) during any fiscal year.

C.Conditions to Effectiveness of Amendment: Bank’s willingness to agree to the amendments set forth in this Amendment is subject to the prior satisfaction of the following conditions:

1.Execution by all parties and delivery to PNC of the following, each in form and substance acceptable to Agent:

(a)This Seventh Amendment, together with the Consent by Guarantor attached to this Seventh Amendment;

(b)A resolution authorizing the due execution of this Amendment by each Borrower; and

(c)Such other documents, agreements and instruments as Bank shall reasonably require.

2.Reimbursement by Borrowers of the fees and expenses of Bank’s counsel, whether incurred in connection with this Amendment or in conjunction with the continuing commercial lending relationship between PNC and Borrowers, which fees and expense may be paid by Agent making

a loan from the revolving line of credit, from time to time, in the amount of such fees and expenses and retaining the proceeds in satisfaction of same.

A-2

CONSENT BY GUARANTOR

The undersigned Guarantor to the provisions of the foregoing Amendment (the “Amendment”) and all prior amendments (if any) and confirms and agrees that:

(a)the Guarantor’s obligations under its: (i) Continuing Unlimited Corporate Guaranty dated as of September 30, 2004, (ii) Amended and Restated Continuing Unlimited Corporate Guaranty dated as of October 31, 2006, and (iii) Guarantor’s Security Agreement dated as of September 30, 2004 (collectively, the “Guaranty”), relating to the Obligations mentioned in the Amendment, shall be unimpaired by the Amendment; and

(b)the Guarantor has no defenses, set offs, counterclaims, discounts or charges of any kind against the Bank, its officers, directors, employees, agents or attorneys with respect to the Guaranty; and (c) all of the terms, conditions and covenants in the Guaranty remain unaltered and in full force and effect and are hereby ratified and confirmed and apply to the Obligations, as modified by the Amendment. The Guarantor certifies that all representations and warranties made in the Guaranty are true and correct.

The Guarantor hereby confirms that any collateral for the Obligations, including liens, security interests, mortgages, and pledges granted by the Guarantor or third parties (if applicable), shall continue unimpaired and in full force and effect, shall cover and secure all of the Guarantor’s existing and future Obligations to the Bank, as modified by this Amendment.

The Guarantor ratifies and confirms the waiver of jury trial provisions contained in the Guaranty.

WITNESS the due execution of this Consent and Acknowledgement as a document under seal as of the date of this Seventh Amendment, intending to be legally bound hereby.

ATTEST:			CareEvolve.com, Inc.
By:	/s/ Sam Singer	By:	/s/ Marc D. Grodman
Name:	SAM SINGER		Name:	MARC D. GRODMAN	(SEAL)
Title:	Secretary		Title:	President

CORPORATE RESOLUTION OF
BIO-REFERENCE LABORATORIES, INC.
TO AMEND LOAN DOCUMENTS

The undersigned, being the Chief Financial Officer of BIO-REFERENCE LABORATORIES, INC. (the “Corporation”) does hereby certify that the following Resolution was duly adopted by unanimous consent of the Board of Directors of the Corporation, and in lieu of meeting:

WHEREAS, the Corporation and BRLI NO.2 ACQUISITION CORP. (collectively, the “Companies”) are engaged in a commercial lending relationship with PNC BANK, NATIONAL ASSOCIATION, (“PNC”) pursuant to which certain loan agreements have previously been executed; and

WHEREAS, the Companies and PNC have negotiated an amendment to their commercial lending agreements modify the capital expenditure covenant set forth in the Loan Agreement (as hereinafter defined); and

WHEREAS, in furtherance of the said negotiations it has been determined that it is in the best interest of the Corporation to enter into a Seventh Amendment to the Amended and Restated Loan and Security Agreement dated as of September 30, 2004, as amended by that certain letter amendment dated April 20, 2005, by that certain Second Amendment to Loan Documents dated as of January 19, 2006, by that certain Third Amendment to Loan Documents dated September 14, 2006, by that certain Fourth Amendment to Loan Documents dated as of October 31, 2006, and by that certain Fifth Amendment to Loan Documents dated as of October 31, 2007, and by that certain Sixth Amendment to Loan Documents dated as of May 12, 2008 (collectively, the “Loan Agreement”).

NOW, THEREFORE, be it

RESOLVED, that the President and/or Chief Financial Officer of the Corporation or any other person authorized by either of them, are authorized to negotiate for and borrow money; discount bills receivable or negotiable paper; and obtain credit for the Corporation from PNC under such terms and conditions as they, in their best business judgment may deem advisable, and in connection therewith, to make, execute, endorse and deliver any notes, drafts, acceptances, agreements or any other obligations of the Corporation, or amendments to any previously executed obligations or agreements, and as security therefor, to mortgage, pledge, or hypothecate any stocks, notes, bills or accounts receivable, bills of lading, warehouse receipts, inventory, equipment, fixtures, furniture, real estate or other instruments or assets of the Corporation and to execute and deliver any and all endorsements, instruments of assignment, pledge agreements, financing statements, security agreements, mortgages, powers of attorney, documents or other instruments in furtherance thereof, and to do such other acts and things as may be necessary or advisable in order to carry out and perform on the part of the Corporation, the covenants, conditions and agreements on its part to be carried out, or to carry out and perform the full effect, intent and purposes of this Resolution.

As Chief Financial Officer, I further certify that the foregoing Resolution has not been repealed, annulled, altered or amended in any respect but remains in full force and effect, and that there is nothing in the Articles of Incorporation or By-Laws of said Corporation with which anything contained in said Resolution is in conflict.

IN WITNESS WHEREOF, I have hereunto set my hand as Chief Financial Officer and affixed the seal of this Corporation as of the 22nd day of October, 2010.

BIO-REFERENCE LABORATORIES, INC.
By:	/s/ Sam Singer
Name:	Sam Singer
Title:	Chief Financial Officer

2

CORPORATE RESOLUTION OF
BRLI NO. 2 ACQUISITION CORP.
TO AMEND LOAN DOCUMENTS

The undersigned, being the Chief Financial Officer of BRLI NO. 2 ACQUISITION CORP. (the “Corporation”) does hereby certify that the following Resolution was duly adopted by unanimous consent of the Board of Directors of the Corporation, and in lieu of meeting:

WHEREAS, the Corporation and BIO-REFERENCE LABORATORIES, INC. (collectively, the “Companies”) are engaged in a commercial lending relationship with PNC BANK, NATIONAL ASSOCIATION, (“PNC”) pursuant to which certain loan agreements have previously been executed; and

WHEREAS, the Companies and PNC have negotiated an amendment to their commercial lending agreements to modify the capital expenditure covenant set forth in the Loan Agreement (as hereinafter defined); and

WHEREAS, in furtherance of the said negotiations it has been determined that it is in the best interest of the Corporation to enter into a Seventh Amendment to the Amended and Restated Loan and Security Agreement dated as of September 30, 2004, as amended by that certain letter amendment dated April 20, 2005, by that certain Second Amendment to Loan Documents dated as of January 19, 2006, by that certain Third Amendment to Loan Documents dated September 14, 2006, by that certain Fourth Amendment to Loan Documents dated as of October 31, 2006, and by that certain Fifth Amendment to Loan Documents dated as of October 31, 2007, and by that certain Sixth Amendment to Loan Documents dated as of May 12, 2008 (collectively, the Loan Agreement”).

NOW, THEREFORE, be it

RESOLVED, that the President and/or Chief Financial Officer of the Corporation or any other person authorized by either of them, are authorized to negotiate for and borrow money; discount bills receivable or negotiable paper; and obtain credit for the Corporation from PNC under such terms and conditions as they, in their best business judgment may deem advisable, and in connection therewith, to make, execute, endorse and deliver any notes, drafts, acceptances, agreements or any other obligations of the Corporation, or amendments to any previously executed obligations or agreements, and as security therefor, to mortgage, pledge, or hypothecate any stocks, notes, bills or accounts receivable, bills of lading, warehouse receipts, inventory, equipment, fixtures, furniture, real estate or other instruments or assets of the Corporation and to execute and deliver any and all endorsements, instruments of assignment, pledge agreements, financing statements, security agreements, mortgages, powers of attorney, documents or other instruments in furtherance thereof, and to do such other acts and things as may be necessary or advisable in order to carry out and perform on the part of the Corporation, the covenants, conditions and agreements on its part to be carried out, or to carry out and perform the full effect, intent and purposes of this Resolution.

As Chief Financial Officer, I further certify that the foregoing Resolution has not been repealed, annulled, altered or amended in any respect but remains in full force and effect, and that there is nothing in the Articles of Incorporation or By-Laws of said Corporation with which anything contained in said Resolution is in conflict.

IN WITNESS WHEREOF, I have hereunto set my hand as Chief Financial Officer and affixed the seal of this Corporation as of the 22nd day of October, 2010.

BRLI NO. 2 ACQUISITION CORP.
By:	/s/ Sam Singer
Name:	Sam Singer
Title:	Chief Financial Officer

2

EX-10.6.5

Exhibit 10.6.5

Execution Version

Eighth Amendment to Loan Documents

THIS EIGHTH AMENDMENT TO LOAN DOCUMENTS (this “Amendment”) is made as of October 31, 2011, and is by and among Bio-Reference Laboratories, Inc. (“BRLI”), and BRLI No. 2 Acquisition Corp., which conducts business as GeneDx (referred to herein from time to time as “GeneDx” and a “Subsidiary Party”) (BRLI and the Subsidiary Party herein each a “Borrower” and, collectively, “Borrowers”), the financial institutions which are party hereto (collectively, the “Lenders” and individually a “Lender”) and PNC BANK, NATIONAL ASSOCIATION in its capacity as the agent for the Lenders and, as of the date hereof, as the sole Lender (in each such capacity, the “Bank”).

BACKGROUND

A.          The Borrowers have executed and delivered to the Bank, one or more promissory notes, letter  agreements, loan agreements, security agreements, mortgages, pledge agreements, collateral assignments, and other agreements, instruments, certificates and documents, some or all of which are more fully described on attached Exhibit A, which is made a part of this Amendment (collectively as amended from time to time, the “Loan Documents”) which evidence or secure some or all of the Borrowers’ obligations to the Bank for one or more loans or other extensions of credit (the “Obligations”).

B.           The Borrowers and the Bank desire to amend the Loan Documents to, among other things, extend the term of their lending arrangements, increase the amount available to be borrowed under Borrowers’ revolving line of credit, and change certain of the other terms and conditions of the Loan Documents, all as provided for in this Amendment.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows:

1.           Certain of the Loan Documents are amended as set forth in Exhibit A. Any and all references to any Loan Document in any other Loan Document shall be deemed to refer to such Loan Document as amended by this Amendment. This Amendment is deemed incorporated into each of the Loan Documents. Any initially capitalized terms used in this Amendment without definition shall have the meanings assigned to those terms in the Loan Documents. To the extent that any term or provision of this Amendment is or may be inconsistent with any term or provision in any Loan Document, the terms and provisions of this Amendment shall control.

2.           (a) Each of the Borrowers hereby certifies that: (a) all of its representations and warranties in the Loan Documents, as amended by this Amendment, are, except as may otherwise be stated in this Amendment: (i) true and correct as of the date of this Amendment, (ii) ratified and confirmed without condition as if made anew, and (iii) incorporated into this Amendment by reference.

(b) Each of the Borrowers hereby certifies that (i) no Event of Default or event which, with the passage of time or the giving of notice or both, would constitute an Event of Default, exists under any Loan Document which will not be cured by the execution and effectiveness of this Amendment, (ii) no consent, approval, order or authorization of, or registration or filing with, any third party is required in connection with the execution, delivery and carrying out of this Amendment or, if required, has been obtained or shall be obtained on a timely basis pursuant to the terms of this Amendment and (iii) this Amendment has been duly authorized, executed and delivered so that it constitutes the legal, valid and binding obligation of each Borrower, enforceable

in accordance with its terms. The Borrowers confirm that the Obligations remain outstanding without defense, set off, counterclaim, discount or charge of any kind as of the date of this Amendment.

3.           Each of the Borrowers hereby confirms that any collateral for the Obligations, including liens, security interests, mortgages, and pledges granted by the Borrowers or third parties (if applicable), shall continue unimpaired and in full force and effect, and shall cover and secure all of the Borrowers’ existing and future Obligations to the Bank, as modified by this Amendment.

4.           As a condition precedent to the effectiveness of this Amendment, the Borrowers shall comply with the terms and conditions (if any) specified in Exhibit A.

5.           To induce the Bank to enter into this Amendment, to the extent permitted by law, each of the Borrowers waives and releases and forever discharges the Bank and its officers, directors, attorneys, agents, and employees from any liability, damage, claim, loss or expense of any kind that it may have against the Bank or any of them arising out of or relating to the Obligations. Each of the Borrowers further agrees to indemnify and hold the Bank and its officers, directors, attorneys, agents and employees harmless from any loss, damage, judgment, liability or expense (including attorneys’ fees) suffered by or rendered against the Bank or any of them on account of any claims arising out of or relating to the Obligations. Each of the Borrowers further states that it has carefully read the foregoing release and indemnity, knows the contents thereof and grants the same as its own free act and deed.

6.           This Amendment may be signed in any number of counterpart copies and by the parties to this Amendment on separate counterparts, but all such copies shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart. Any party so executing this Amendment by facsimile transmission shall promptly deliver a manually executed counterpart, provided that any failure to do so shall not affect the validity of the counterpart executed by facsimile transmission.

7.           This Amendment will be binding upon and inure to the benefit of each Borrower and the Bank and their respective heirs, executors, administrators, successors and assigns.

8.           This Amendment will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the State of New Jersey, excluding its conflict of laws rules.

9.           Except as amended hereby, the terms and provisions of the Loan Documents remain unchanged, are and shall remain in full force and effect unless and until modified or amended in writing in accordance with their terms, and are hereby ratified and confirmed. Except as expressly provided herein, this Amendment shall not constitute an amendment, waiver, consent or release with respect to any provision of any Loan Document, a waiver of any Default or Event of Default under any Loan Document, or a waiver or release of any of the Bank’s rights and remedies (all of which are hereby reserved). Each of the Borrowers expressly ratifies and confirms the waiver of jury trial provisions contained in the Loan Documents.

[Signature page follows.]

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WITNESS the due execution of this Eighth Amendment to Loan Documents as a document under seal as of the date first written above.

ATTEST:			BIO-REFERENCE LABORATORIES, INC.
By:	/s/ Sam Singer	By:	/s/ Marc D. Grodman
Name:	SAM SINGER		Name:	MARC D. GRODMAN	(SEAL)
Title:	Secretary		Title:	President

ATTEST:	BRLI NO. 2 ACQUISITION CORP.,
	doing business as GeneDx
	a Subsidiary Party

By:	/s/ Sam Singer	By:	/s/ Marc D. Grodman
Name:	SAM SINGER		(SEAL)
Title:	Secretary		Name:	MARC D. GRODMAN
			Title:	President

PNC BANK, NATIONAL ASSOCIATION
By:	/s/ Parameswar Sivaramakrishnan
			(SEAL)
Name:		PARAMESWAR SIVARAMAKRISHNAN
Title:		Vice President

3

Execution Version

ELEVENTH AMENDED AND RESTATED SECURED REVOLVING NOTE
(PNC Bank, National Association)

$45,000,000.00 As of October 31, 2011

FOR VALUE RECEIVED, BIO-REFERENCE LABORATORIES, INC., a New Jersey corporation with an address at 481 Edward H. Ross Drive, Elmwood Park, New Jersey 07497 and its Subsidiary or Subsidiaries party hereto (collectively, jointly and severally the “Borrowers”), promise to pay on the earlier of demand made in accordance with the terms of the Loan Documents (as defined herein) or October 31, 2016, to the order of PNC BANK, NATIONAL ASSOCIATION (the “Lender”), in lawful money of the United States of America in immediately available funds at the Payment Office of PNC Bank, National Association as the Agent for the Lenders (the “Agent”) at its offices located at Two Tower Center Boulevard, East Brunswick, New Jersey 08816, or at such other location as Lender may designate from time to time, the principal sum of FORTY-FIVE MILLION DOLLARS ($45,000,000.00) (the “Facility”) or such lesser amount as may be advanced to or for the benefit of Borrowers hereunder, together with interest accruing on the outstanding principal balance from the date hereof as provided below:

1.    Rate of Interest. Amounts outstanding under this Note  will bear interest at a rate per annum which, as Borrowers shall elect in accordance with the terms of the Loan Documents, shall be at all time equal to either (a) the Alternate Base Rate per annum plus the Applicable Margin with respect to Domestic Rate Loans or (b) the Eurodollar Rate plus the Applicable Margin with respect to Eurodollar Rate Loans. Interest will be calculate on the basis of a year of 360 days for the actual number of days in each interest period. For all Domestic Rate Loans, if and when the Alternate Base Rate changes, the rate of interest on this Note will change automatically without notice to Borrowers, effective on the date of any such change. In no event will the rate of interest hereunder exceed the maximum rate allowed by law.

2.    Advances. Borrowers may request advances, repay and request additional advances hereunder, subject to the terms and conditions of this Note and the Loan Documents. In no event shall the aggregate unpaid principal amount of advances under this Note exceed the face amount of this Note.

3.    Payment Terms. The outstanding principal balance and any accrued but unpaid interest shall be due and payable to Agent on the earlier of demand made in accordance with the Loan Documents or October 31, 2016. Accrued interest will be due and payable in the absence of demand on the first (1st) day of each month with respect to Domestic Rate Loans and on the last day of each Interest Period (or calendar quarter within an Interest Period, in the case of Interest Periods exceeding three months) with respect to Eurodollar Rate Loans. If any payment under this Note shall become due on a Saturday, Sunday or public holiday under the laws of the State of New Jersey, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in computing interest in connection with such payment. Borrowers hereby authorize Agent to charge Borrowers’ deposit account at Agent for any payment when due hereunder. Payments received will be applied to charges, fees and expenses (including attorneys’ fees), accrued interest and principal in any order Agent may choose, in its sole discretion.

4.   Late Payments; Default Rate. If Borrowers fail to make any payment of principal, interest or other amount coming due pursuant to the provisions of this Note within ten (10) calendar days of the date due and payable, Borrowers also shall pay to Lender a late charge equal to two percent (2%) of the amount of such payment. Such ten (10) day period shall not be construed in any way to extend the due date of any such payment. The late charge is imposed for the purpose of defraying Lender’s expenses incident to the handling of delinquent payments and is in addition to, and not in lieu of, the exercise by Agent or Lender of any rights and remedies hereunder, under the other Loan Documents or under applicable laws, and any fees and expenses of any agents or attorneys which Agent or Lender may employ. Upon the occurrence of an Event of Default under the Loan Documents, at the option of the Required Lenders, this Note shall bear interest at a rate per annum (based on a year of 360 days and actual days elapsed) which shall be two percent (2%) per annum in excess of the interest rate in effect from time to time with respect to Domestic Rate Loans but not more than the maximum rate allowed by law (the “Default Rate”). The Default Rate shall continue to apply whether or not judgment shall be entered on this Note.

5.    Prepayment. The indebtedness evidenced by this Note may be prepaid in whole or in part at any time without penalty, subject, however, to the provisions of the Loan Documents, so that the outstanding principal balance hereof may be reduced to Zero ($0) Dollars from time to time.

6.    Other Loan Documents. This Note is issued in connection with the Amended and Restated Loan and Security Agreement dated as of September 30, 2004, as heretofore and as may in the future be amended from time to time (the “Credit Agreement”) and the Other Documents executed in conjunction therewith, as the same have been and may hereafter be amended from time to time, the terms of which are incorporated herein by reference (the “Loan Documents”) and is secured by the property described in the Loan Documents and by such other collateral as previously may have been, is, or in the future may be granted to Agent to secure this Note. Any capitalized term not defined herein shall be defined as set forth in the Credit Agreement, the terms and conditions of which are incorporated herein by reference as if set forth herein at length.

7.    Advance Procedures. A request for advance made by telephone must be promptly confirmed in writing by such method as Agent may require. Borrowers authorize Agent to accept telephonic requests for advances, and Agent shall be entitled to rely upon the authority of any person providing such instructions. Borrowers hereby indemnify and hold Agent harmless from and against any and all damages, losses, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) which may arise or be created by the acceptance of such telephone requests or making such advances. Agent will enter on its books and records, which entry when made will be presumed correct, the date and amount of each advance, as well as the date and amount of each payment made by Borrowers.

8.    Events of Default. The occurrence of any of the Events of Default set forth in the Loan Documents will be deemed to be an “Event of Default” under this Note. Upon the occurrence of an Event of Default: (a) Lender shall be under no further obligation to make advances hereunder; (b) if an Event of Default specified in Section 10.5 or 10.6 of the Credit Agreement shall occur, the outstanding principal balance and accrued interest hereunder together with any additional amounts payable hereunder shall be immediately due and payable without demand or notice of any kind; (c) if any other Event of Default shall occur, the outstanding principal balance and accrued interest hereunder together with any additional amounts payable hereunder, at the option of the Required Lenders and without demand or notice of any kind, may be accelerated and become immediately due and payable; (d) at the option of Agent or at the discretion of the Required Lenders, this Note will

2

bear interest at the Default Rate from the date of the occurrence of the Event of Default; and (e) Agent and Lender may exercise from time to time any of the rights and remedies available to Agent and Lender under the Loan Documents or under applicable law.

9.    Right of Setoff. In addition to all liens upon and rights of setoff against the money, securities or other property of Borrowers given to Lender by law, Lender shall have, with respect to Borrowers’ obligations to Lender under this Note and to the extent permitted by law, a contractual possessory security interest in and a contractual right of setoff against, and Borrowers hereby assign, convey, deliver, pledge and transfer to Lender all of Borrowers’ right, title and interest in and to, all deposits, moneys, securities and other property of Borrowers now or hereafter in the possession of or on deposit with, or in transit to, Lender whether held in general or special account or deposit, whether held jointly with someone else, or whether held by Lender for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust accounts. Every such security interest and right of setoff may be exercised without demand upon or notice to Borrowers. Every such right of setoff shall be deemed to have been exercised hereunder without any action of Lender, although Lender may enter such setoff on its books and records at a later time.

10.    Miscellaneous. No delay or omission of Agent or Lender to exercise any right or power arising hereunder shall impair any such right or power or be considered to be a waiver of any such right or power, nor shall Agent’s or Lender’s action or inaction impair any such right or power. Borrowers agree to pay on demand, to the extent permitted by law, all costs and expenses incurred by Agent and Lender in the enforcement of their rights in this Note and in any security therefor, including without limitation reasonable fees and expenses of their counsel. If any provision of this Note is found to be invalid by a court, all the other provisions of this Note will remain in full force and effect. Borrowers and all other makers and endorsers of this Note hereby forever waive presentment, protest, notice of dishonor and notice of non-payment. Borrowers also waives all defenses based on suretyship or impairment of collateral. If this Note is executed by more than one Borrower, the obligations of such persons or entities hereunder will be joint and several. This Note shall bind Borrowers and their successors and assigns, and the benefits hereof shall inure to the benefit of Lender and its successors and assigns.

This Note has been delivered to and accepted by Lender and will be deemed to be made in the State of New Jersey. THIS NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF LENDER AND BORROWERS DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, EXCLUDING ITS CONFLICT OF LAWS RULES. The jurisdiction and venue provisions of the Credit Agreement are incorporated in this Note by reference as though set forth herein at length.

11.    Waiver of Jury Trial. BORROWERS IRREVOCABLY WAIVE ANY AND ALL RIGHTS BORROWERS MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS NOTE OR ANY TRANSACTION CONTEMPLATED IN ANY SUCH DOCUMENTS. BORROWERS ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

12.    Substitution of Note. This Note evidences indebtedness created under the Credit Agreement, which indebtedness is in full force and effect on a continuing basis, unimpaired and undischarged, under the Credit Agreement. This Note is issued in substitution for and replacement of, but not in

3

payment or satisfaction of, that certain Tenth Amended and Restated Secured Revolving Note dated as of May 12, 2008, in the face amount of $40,000,000.00.

Borrowers acknowledge that they have read and understood all the provisions of this Note, including the waiver of jury trial, and have been advised by counsel as necessary or appropriate.

WITNESS the due execution of this Eleventh Amended and Restated Secured Revolving Note as a document under seal, as of the date first written above, with the intent to be legally bound hereby.

ATTEST:		BIO-REFERENCE LABORATORIES, INC.,
		a New Jersey corporation
By:	/s/ Sam Singer	By:	/s/ Marc D. Grodman
	SAM SINGER, Secretary		MARC D. GRODMAN, President
ATTEST:		BRLI NO. 2 ACQUISITION CORP.,
		a New Jersey corporation
		doing business as GENEDX, Inc.
By:	/s/ Sam Singer	By:	/s/ Marc D. Grodman
	SAM SINGER, Secretary		MARC D. GRODMAN, President

4

EX-21

EXHIBIT 21

The following are the Company’s wholly-owned subsidiaries:

		Name under which it
		Conducts or
	Jurisdiction of Incorporation	Conducted Business
CareEvolve.com, Inc.	New Jersey	CareEvolve
BRLI No. 2 Acquisition Corp.	New Jersey	GeneDx
BRLI-GENPATH Diagnostics, Inc.	New Jersey	BRLI-GENPATH Diagnostics, Inc.
GENOME DIAGNOSTICS, Ltd.	Canada	GENOME DIAGNOSTICS, Ltd.
The Genetics Center, Inc.	New York	Genetics Center

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (File No. 333-111578) of Bio-Reference Laboratories, Inc. and its subsidiaries (the “Company”) of our report dated January 12, 2012, relating to the Company’s consolidated financial statements and the effectiveness of the Company’s internal control over financial reporting, which appears in this Annual Report on form 10-K.

	MSPC
	Certified Public Accountants and Advisors,
	A Professional Corporation
Cranford, New Jersey
January 12, 2012

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Marc D. Grodman, certify that: 1. I have reviewed this report on Form 10-K of Bio-Reference Laboratories, Inc. (the “registrant”);

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 this report;

4. The registrant’s other certifying officer 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 quarter of fiscal 2011) 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 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:

(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.

Dated:January 12, 2011.

/S/ Marc D. Grodman

Marc D. Grodman

Chief Executive Officer

Bio-Reference Laboratories, Inc.

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Sam Singer, certify that: 1. I have reviewed this report on Form 10-K of Bio-Reference Laboratories, Inc. (the “registrant”);

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 this report;

4. The registrant’s other certifying officer 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 quarter of fiscal 2011) 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 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:

(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.

Dated:January 12, 2011.

/S/ Sam Singer

Sam Singer

Chief Financial Officer

Bio-Reference Laboratories, Inc.

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Marc D. Grodman, Chief Executive Officer of Bio-Reference Laboratories, Inc. (the “registrant”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(a)the Annual Report on Form 10-K of the registrant for the fiscal year ended October, 31 2011, which this certification accompanies (the “Periodic Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(b)based on my knowledge, the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

Dated: January 12, 2011.

/S/ Marc D. Grodman

Marc D. Grodman

Chief Executive Officer

Bio-Reference Laboratories, Inc.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Sam Singer, Chief Financial Officer of Bio-Reference Laboratories, Inc. (the “registrant”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(a)the Annual Report on Form 10-K of the registrant for the fiscal year ended October 31 2011, which this certification accompanies (the “Periodic Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(b)based on my knowledge, the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

Dated: January 12, 2011.

/S/ Sam Singer

Sam Singer

Chief Financial Officer

Bio-Reference Laboratories, Inc

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Fair Value of Financial Instruments

12 Months Ended

Oct. 31, 2011

Fair Value of Financial Instruments

Fair Value of Financial Instruments

[19] Fair Value of Financial Instruments

For certain financial instruments, including cash and cash equivalents, trade receivables, trade payables, and short-term debt, it was estimated that the carrying amount approximated fair value for the majority of these items because of their short maturities.  The fair value of the Company’s long-term debt is estimated based on the quoted market prices for similar issues or by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities.

Due to the non-interest bearing nature and unspecified payment terms, it was not practicable to estimate the fair value of amounts due from related parties [See also Note 7].

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Property and Equipment

12 Months Ended

Oct. 31, 2011

Property and Equipment

Property and Equipment

[3] Property and Equipment - Property and equipment - at cost is summarized as follows:

	October 31
	2011		2010
Medical Equipment	$	38,479	$	31,249
Leasehold Improvements	14,388		12,859
Furniture, Fixtures and Office & Computer Equipment	13,586		10,435
Automobiles and Aircraft	15,264		12,707
Sub Totals	81,717		67,250
Less Accumulated Depreciation	38,150		30,420
Totals — Net of Accumulated Depreciation	$	43,567	$	36,830

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Selected Quarterly Financial Data [Unaudited]

12 Months Ended

Oct. 31, 2011

Selected Quarterly Financial Data [Unaudited]

Selected Quarterly Financial Data [Unaudited]

[23] Selected Quarterly Financial Data [Unaudited]

	Three Month Ended								Audited Fiscal  Year
	1/31/11		4/30/11		7/31/11		10/31/11		2011
Net Revenues	$	121,659	$	137,658	$	148,029	$	151,297	$	556,185
Gross Profit	$	56,805	$	65,639	$	73,432	$	74,914	$	268,397
Net Income	$	7,986	$	7,817	$	10,081	$	10,476	$	35,343
Net Income Per Common Share:
Basic	$	0.29	$	0.28	$	0.36	$	0.37	$	1.26
Diluted	$	0.28	$	0.28	$	0.36	$	0.37	$	1.25
Weighted Average Common Shares Outstanding — Basic [in thousands]	27,884		27,920		27,941		27,949		27,971
Weighted Average Common Shares Outstanding - Diluted [in thousands]	28,122		28,142		28,147		28,138		28,207

	Three Month Ended								Audited Fiscal  Year
	1/31/10		4/30/10		7/31/10		10/31/10		2010
Net Revenues	$	99,261	$	110,447	$	121,719	$	126,596	$	458,024
Gross Profit	$	47,507	$	53,668	$	61,630	$	62,966	$	225,772
Net Income	$	4,005	$	5,787	$	8,013	8,577		$	26,381
Net Income Per Common Share:
Basic	$	0.14	$	0.21	$	0.29	$	0.31	$	0.95
Diluted	$	0.14	$	0.21	$	0.29	$	0.31	$	0.94
Weighted Average Common Shares Outstanding — Basic [in thousands]	27,723		27,772		27,815		27,835		27,786
Weighted Average Common Shares Outstanding - Diluted [in thousands]	28,022		28,077		28,098		28,087		28,038

	Three Month Ended								Audited Fiscal  Year
	1/31/09		4/30/09		7/31/09		10/31/09		2009
Net Revenues	$	75,735	$	87,183	$	97,424	$	102,312	$	362,654
Gross Profit	$	35,695	$	42,297	$	49,261	$	51,877	$	179,130
Net Income	$	3,598	$	4,630	$	6,439	$	7,183	$	21,850
Net Income Per Common Share:
Basic	$	.13	$	0.17	$	0.23	$	0.26	$	0.79
Diluted	$	.13	$	0.17	$	0.23	$	0.26	$	0.78
Weighted Average Common Shares Outstanding — Basic [in thousands]	27,570		27,598		27,628		27,668		27,618
Weighted Average Common Shares Outstanding - Diluted [in thousands]	27,820		27,823		27,923		27,958		27,864

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New Authoritative Accounting Pronouncements

12 Months Ended

Oct. 31, 2011

New Authoritative Accounting Pronouncements

New Authoritative Accounting Pronouncements

[22] New Authoritative Accounting Pronouncements

On September 15, 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-08, Intangibles—Goodwill and Other (Topic 350) Testing Goodwill for Impairment. The Board’s objective is to simplify goodwill impairment testing by permitting assessment of qualitative factors to determine whether events and circumstances lead to the conclusion that it is necessary to perform the two-step goodwill impairment test currently required under Topic 350, Intangible—Goodwill and Other.  Under ASU No. 2011-08, entities are not required to calculate the fair value of a reporting unit unless they conclude that it is more likely than not that the unit’s carrying value is greater than its fair value based on an assessment of events and circumstances. The “more likely than not” threshold is when there is a likelihood of more than 50% that a reporting unit’s carrying value is greater than its fair value. Entities may bypass the qualitative assessment during any reporting period.  ASU No. 2011-08 is effective for fiscal years beginning after December 15, 2011. Early adoption is permitted, including interim or annual goodwill impairment tests performed before September 15, 2011, for interim or annual reports that have not been issued.  This update is not expected to have a material impact on the Company’s consolidated financial statements.

In July 2011, the FASB issued ASU No. 2011-07: Health Care Entities (Topic 954) — Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities.  This update was issued to increase transparency relating to accounting practices used for net patient service revenue and related bad debt allowances by health care entities. Some health care entities recognize patient service revenue at the time the services are rendered regardless of whether the entity expects to collect that amount or has assessed the patient’s ability to pay. These prior accounting practices used by some health care entities resulted in a gross-up of patient service revenue and the provision for bad debts, leading to an impaired ability by outside users of financial statements to make accurate comparisons and analyses of financial statements between entities. ASU No. 2011-07 requires changes to the presentation of the statement of operations, reclassifying the provision for bad debts associated with patient service revenue from an operating expense to a deduction from patient service revenue, and also requires enhanced quantitative and qualitative disclosures relevant to the entity’s policies for recognizing revenue and assessing bad debts.  This update is not designed and will not change the net income reported by healthcare entities.  This update is effective for fiscal years beginning after December 15, 2011, with early adoption permitted.  We do not expect that this update will have any material impact on the company’s consolidated financial statements. We do not expect that we will be required to change our presentation of the statement of operations because the Company does not recognize revenues that it does not expect to collect and this update specifically exempts companies who follow that methodology from its application.

In December 2010, the FASB issued ASU No. 2010-28: Intangibles — Goodwill and Other (Topic 350) -When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts.  This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Early adoption is not permitted.  The amendments in this Update modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. The qualitative factors are consistent with the existing guidance and examples in paragraph 350-20-35-30, which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  This update is not expected to have a material impact on the Company’s consolidated financial statements.

In December 2010, FASB issued ASU No. 2010-29: Business Combinations (Topic 805) - Disclosure of Supplementary Pro Forma Information for Business Combinations.  The update is effective for the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted.  The amendments in this update specify that if a public entity is required to present comparative financial statements as a result of a business combination, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only.  The amendments in this Update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.  This update is not expected to have a material impact on the Company’s consolidated financial statements.

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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Oct. 31, 2011

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED OCTOBER 31, 2011, 2010 AND 2009

[In Thousands]

(a) Description	(b) Balance at the  Beginning of a  Period	(c) Charged to Cost and  Expenses	(d) Deductions Charged to Valuation Allowance Accounts		(e) Balance at the End of a Period
Year Ended October 31, 2011
Allowance for Doubtful Accounts	34,904	75,079	(64,763	)	45,220
Contractual Credits/Discounts	186,372	1,926,164	(1,876,614	)	235,922
Total Allowance	221,276	2,001,243	(1,941,377	)	281,142
Year Ended October 31, 2010
Allowance for Doubtful Accounts	26,047	62,243	(53,386	)	34,904
Contractual Credits/Discounts	130,974	1,444,549	(1,389,151	)	186,372
Total Allowance	157,021	1,506,792	(1,442,537	)	221,276
Year Ended October 31, 2009
Allowance for Doubtful Accounts	15,643	51,518	(41,114	)	26,047
Contractual Credits/Discounts	78,042	1,060,633	(1,007,701	)	130,974
Total Allowance	93,685	1,112,151	(1,048,815	)	157,021
Year Ended October 31, 2008
Allowance for Doubtful Accounts	11,643	40,313	(36,313	)	15,643
Contractual Credits/Discounts	79,257	737,959	(739,174	)	78,042
Total Allowance	90,900	778,272	(775,487	)	93,685

.   .   .   .   .   .   .   .   .   .

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Summary of Significant Accounting Policies

12 Months Ended

Oct. 31, 2011

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

[2] Summary of Significant Accounting Policies

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

Cash and Cash Equivalents - Cash equivalents are comprised of certain highly liquid investments with a maturity of three months or less when purchased.  The Company had $22,013 and $17,779 in cash and cash equivalents at October 31, 2011 and 2010, respectively.

Inventory - Inventory is stated at the lower of cost [determined on a first-in, first-out basis] or market.  Inventory consists primarily of purchased laboratory supplies, which is used in our various testing laboratories.

Property and Equipment - Property and equipment are carried at cost.  Depreciation is computed by the straight-line method over the estimated useful lives of the respective assets which range from 2 to 15 years.  Leasehold improvements are amortized over the life of the lease, which is approximately five years.

The statements of operations reflect depreciation expense related to property and equipment of $13,684, $10,520 and $8,644 for the years ended October 31, 2011, 2010 and 2009, respectively.

On sale or retirement, the asset cost and related accumulated depreciation or amortization are removed from the accounts, and any related gain or loss is reflected in general and administrative expenses.  Repairs and maintenance are charged to expense when incurred.

Goodwill - Effective November 1, 2001, the Company evaluates the recoverability and measures the possible impairment of its goodwill under Financial Accounting Standards Board (“FASB”) Codification 350-20, “Goodwill.”  The impairment test is a two-step process that begins with the estimation of the fair value of the reporting unit. The first step screens for potential impairment and the second step measures the amount of the impairment, if any.  Management’s estimate of fair value considers publicly available information regarding the market capitalization of the Company as well as (i) publicly available information regarding comparable publicly-traded companies in the laboratory testing industry, (ii) the financial projections and future prospects of the Company’s business, including its growth opportunities and likely operational improvements, and (iii) comparable sales prices, if available. As part of the first step to assess potential impairment, management compares the estimate of fair value for the Company to the book value of the Company’s consolidated net assets.  If the book value of the consolidated net assets is greater than the estimate of fair value, the Company would then proceed to the second step to measure the impairment, if any.  The second step compares the implied fair value of goodwill with its carrying value.

The implied fair value is determined by allocating the fair value of the reporting unit to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit.  The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.  If the carrying amount of the goodwill is greater than its implied fair value, an impairment loss will be recognized in that period.  No impairment loss was recognized in the years ended October 31, 2011, 2010 and 2009.

The balance sheet reflects prior Goodwill accumulated amortization of $2,401 as of October 31, 2011 and 2010, respectively.

Other Intangible Assets - Intangible assets are amortized using the straight-line method.  The estimated useful life of costs capitalized is evaluated for each specific project when completed, at which time such costs begin to be amortized. The statements of operations reflect amortization expense related to intangible assets of $1,322, $1,301, and $1,127 for the years ended October 31, 2011, 2010 and 2009, respectively.  The balance sheet reflects accumulated amortization of $7,271, and $5,948 as of October 31, 2011, and 2010, respectively. During the 2011 and 2010 fiscal year, the Company did not write off any intangible assets.  During the 2009 fiscal year, the Company wrote off approximately $300 of capitalized costs related to customer lists which were fully amortized.

On November 1, 2008, the Company adopted “Fair Value Measurements” for its financial assets discussed under topic number 820 “Fair Value Measurements and Disclosures” of FASB codification.  This topic provides a single definition of fair value, establishes a framework for measuring fair value in U.S. generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements.  This topic creates a three-level hierarchy for the inputs used in the valuation techniques to derive fair values where Level 1 is having the highest priority and Level 3 having the lowest priority.

	10/31/2011		Quoted Prices in Active Markets for Identical Assets/Liabilities	Significant Other Observable Inputs		Significant Unobservable Inputs
			Level 1	Level 2		Level 3
Assets:
Cash surrender value of officers’ life insurance policies (a component of Other Assets)	$	725	—	$	725	—

Accounting for Revenue

Service revenues are principally generated from laboratory testing services including chemical diagnostic tests such as blood analysis, urine analysis and genetic testing among others. Net service revenues are recognized at the time the testing services are performed and are reported at their estimated net realizable amounts.

Net service revenues are determined utilizing gross service revenues net of contractual allowances.  Even though it is the responsibility of the patient to pay for laboratory service bills, most individuals in the United States have an agreement with a third party payor such as Medicare, Medicaid or a commercial insurance provider to pay all or a portion of their healthcare expenses; the majority of services provided by Bio-Reference Laboratories, Inc. (“BRLI”) are to patients covered under a third party payor contract.  In certain cases, the individual has no insurance or does not provide insurance information and in other cases tests are performed under contract to a professional organization (such as physicians, hospitals, and clinics) which reimburse BRLI directly; in the remainder of the cases, BRLI is provided the third party billing information and seeks payment from the third party under the terms and conditions of the third party payor for health service providers like BRLI.   Each of these third party payors may differ not only with regard to rates, but also with regard to terms and conditions of payment and providing coverage (reimbursement) for specific tests.  Estimated revenues are established based on a series of highly complex procedures and judgments that require industry specific healthcare experience and an understanding of payor methods and trends. We review our calculations on a monthly basis in order to make certain that we are properly allowing for the uncollectable portion of our gross billings and that our estimates remain sensitive to variances and changes within our payor groups.  The contractual allowance calculation is made on the basis of historical allowance rates for the various specific payor groups on a monthly basis with a greater weight being given to the most recent trends; this process is adjusted based on recent changes in underlying contract provisions and shifts in the testing being performed.  Bad Debt represents our estimate of net revenues that will ultimately be uncollectable and is based upon our analysis of historical payment rates by specific payor groups on a monthly basis with primary weight being given to the most recent trends; this approach allows bad debt to more accurately adjust to short-term changes in the business environment.  These two calculations are routinely analyzed by BRLI on the basis of actual allowances issued by payors and the actual payments made to determine what adjustments, if any, are needed.  The chart below shows the adjustments made to gross service revenues to arrive at net service revenues.

	October, 31
	2011			2010			2009
Gross Revenues	$	2,482,349		$	1,902,573		$	1,423,287
Contractual Adjustments and Discounts:
Medicare/Medicaid Portion	293,874			281,002			247,333
All Other Third Party and Direct Payors*	1,629,833			1,163,547			813,300
Total Contractual Adjustments and Discounts	1,923,707			1,444,549			1,060,633
Net Service Revenues	$	558,642		$	458,024		$	362,654
Percent of Contractual Adjustments and Discounts To Gross Revenues	77.5		%	74.5		%	71.0		%

* All Other Third Party and Direct Payors consists of almost eight hundred distinct payors, including commercial health insurers and administrators as well as professionally billed accounts such as physicians, hospitals, clinics and other direct billed accounts.

When new business is received by BRLI, net service revenues are calculated by reducing gross service revenues by the estimated contractual allowance.  The bad debt expense is determined by calculating the appropriate collection rate for net current service revenues and is a component of general and administrative expenses.  BRLI recognized the amounts in subsequent periods for actual allowances/discounts to gross service revenue; bad debt was adjusted over the same periods of time to maintain an accurate balance between net service revenues and actual revenues.  Management has reviewed the allowances/discounts recognized in subsequent periods and believes the amounts to be immaterial.  A number of proposals for legislation or regulation continue to be under discussion which could have the effect of substantially reducing Medicare reimbursements for clinical laboratories or introducing cost sharing to beneficiaries. Depending upon the nature of regulatory action, if any, which is taken and the content of legislation, if any, which is adopted, the Company could experience a significant decrease in revenues from Medicare and Medicaid (CMS), which could have a material adverse effect on the Company. The Company is unable to predict, however, the extent to which such actions will be taken.

Accounting for Contractual Credits and Doubtful Accounts

It is typically the responsibility of the patient to pay for laboratory service bills.  Most individuals in the United States have an agreement with a third party payor such as Medicare, Medicaid or commercial insurance to pay all or a portion of their healthcare expenses; this represents the major portion of payment for all services provided to BRLI.  In certain cases, the individual has no insurance or does not provide insurance information; in the remainder of the cases, BRLI is provided the third party billing information, usually by the referring physician, and seeks payment from the third party under the terms and conditions of the third party payor for health service providers like BRLI.  Each of these third party payors may differ not only with regard to rates, but also with regard to terms and conditions of payment and coverage of specific tests.   BRLI routinely reviews the reimbursement policies and subsequent payments and collection rates from these different types of payors.  Contractual credits are recorded as reductions to gross service revenues and are collectively referred to as the contractual allowance.   BRLI has not been required to record an adjustment in a subsequent period related to revenue recorded in a prior period which was material in nature.  Aging of accounts receivable is monitored by billing personnel and follow-up activities including collection efforts are conducted as necessary.  Bad debt expense is recorded within selling, general and administrative expenses.  BRLI writes off receivables against the allowance for doubtful accounts when they are deemed uncollectible.  For client billing, accounts are written off when all reasonable collection efforts prove to be unsuccessful.  Patient accounts, where the patient is directly responsible for all or a remainder portion of the account after partial payment or denial by a third party payor, are written off after the normal dunning cycle has occurred, although these may be subsequently transferred to a third party collection agency after being written off.  Third party payor accounts are written off when they exceed the payor’s timely filing limits.  Accounts Receivable on the balance sheet is net of the following amounts for contractual credits and doubtful accounts:

	October 31
	2011		2010
Contractual Credits/Discounts	$	235,922	$	186,372
Doubtful Accounts	45,220		34,904
Total Allowance	$	281,142	$	221,276

Current Income Taxes — The Company recognizes interest and penalties on settlement of tax liabilities in its income from operations.  For the fiscal years 2009 through 2011, no material amounts for interest and penalties have been recorded.

Deferred Income Taxes - Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Earnings Per Share - Basic earnings per share [“EPS”] reflects the amount of income attributable to each share of common stock based on average common shares outstanding during the period.  Diluted EPS reflects Basic EPS while giving effect to all potential dilutive common shares that were outstanding during the period, such as common shares that could result from the exercise or conversion of securities into common stock.  The computation of Diluted EPS is calculated by using the treasury stock method, which assumes that any proceeds obtained from the exercise of such dilutive securities would be used to purchase common stock at the average market price of the common stock during the period.  This reduces the gross number of dilutive shares by the number of shares purchasable from the proceeds of the securities assumed to be exercised.  Securities whose conversion would have an anti-dilutive effect on EPS are not assumed converted.  Securities that could potentially dilute earnings in the future are disclosed in Note 10.

Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Recoverability and Impairment of Intangible Assets and Other Long-Lived Assets — The Company evaluates the possible impairment of its long-lived assets under the provisions of FASB codification 350-30-35 and 360-10-35.  The Company reviews the recoverability of its long-lived assets on an annual basis.  Evaluation of possible impairment is based on the Company’s ability to recover the asset from the expected future pretax cash flows (undiscounted and without interest charges) of the related operations. If the expected undiscounted pretax cash flows are less than the carrying amount of such asset, an impairment loss is recognized for the difference between the estimated fair value and carrying amount of the asset.  No impairment loss was recognized in the fiscal years ended October 31, 2011, 2010 and 2009.

Advertising Costs -Advertising costs are expensed when incurred.  Advertising costs amounted to approximately $2,024, $2,065 and $1,387 for the years ended October 31, 2011, 2010 and 2009, respectively.

Reclassifications - Certain prior year amounts may have been reclassified to conform to the current year presentation.

Other Income - During the quarter ended January 31, 2009, the Company executed a Restitution Agreement with John Littleton, a former Vice President in sales.  Mr. Littleton paid the Company $1,600 for payments made to him and others that were from our perspective, improperly paid. These payments were paid for a) recruiting fees for new hires paid to parties with an undisclosed relationship to him and b) reimbursement to him or others of improperly or insufficiently documented expenses; both of which are in violation of the Company’s policies.  This restitution payment is included in the Category “Other Income on the Consolidated Statements of Operations”.

During the period ended January 31, 2011, a sales tax refund claim was successfully resolved with New Jersey Division of Taxation in the amount of $6,878, including interest of $323 and excluding expenses of $398 incurred in pursuit of the claim.  This claim relates to New Jersey’s sales taxes paid by the Company during the period of October 2005 through June 2009.  The net amount of $6,480 is included as “Other Income” in the Company’s consolidated statement of operations for the period ended January 31, 2011.

During the period ended April 30, 2011, the Company received a refund of $1,629 from New York State Department of Health before expenses of approximately $542 incurred in pursuit of this refund claim.  This refund relates to the dispute over the state’s Laboratory Inspection and Reference fees.  The net amount of $1,087 is included as “Other Income” in the Company’s consolidated statement of operations for the period ended April 30, 2011.

Subsequent Events — The management considered subsequent events through the date the financial statements are issued as defined in FASB Codification 855-10-50.

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Oct. 31, 2011	Oct. 31, 2010
CURRENT ASSETS:
Cash and Cash Equivalents	$ 22,013	$ 17,779
Accounts Receivable - Net	148,060	129,122
Inventory	9,691	6,193
Other Current Assets	4,457	2,820
Deferred Tax Assets	22,559	16,883
TOTAL CURRENT ASSETS	206,780	172,797
PROPERTY AND EQUIPMENT - AT COST	81,717	67,250
LESS: Accumulated Depreciation	(38,150)	(30,420)
PROPERTY AND EQUIPMENT - NET	43,567	36,830
OTHER ASSETS:
Deposits	882	1,389
Goodwill - Net	23,408	22,608
Intangible Assets - Net	6,904	8,226
Other Assets	725	1,523
Deferred Tax Assets	993	758
TOTAL OTHER ASSETS	32,912	34,504
TOTAL ASSETS	283,259	244,131
CURRENT LIABILITIES:
Accounts Payable	38,612	36,972
Accrued Salaries and Commissions Payable	11,770	9,769
Accrued Taxes and Expenses	8,853	6,685
Other Short Term Acquisition Payable	375
Revolving Note Payable - Bank	18,632	26,154
Current Maturities of Long-Term Debt	1,270	1,217
Capital Lease Obligations - Short-Term Portion	3,002	2,541
TOTAL CURRENT LIABILITIES	82,514	83,338
LONG-TERM LIABILITIES:
Capital Lease Obligations - Long-Term Portion	6,351	4,336
Long Term Debt - Net of Current Portion	4,627	3,319
Other Long Term Acquisition Payable		750
TOTAL LONG-TERM LIABILITIES	10,978	8,405
SHAREHOLDERS' EQUITY:
Common Stock, $.01 Par Value; Authorized 35,000,000 shares: Issued and Outstanding 27,949,900 and 27,847,204 at October 31, 2011 and at October 31, 2010, respectively	280	278
Additional Paid-In Capital	45,580	44,562
Retained Earnings	143,907	107,548
TOTAL SHAREHOLDERS' EQUITY	189,767	152,388
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	283,259	244,131
Series A Junior Preferred Stock
SHAREHOLDERS' EQUITY:
Preferred Stock $.10 Par Value; Authorized 1,666,667 shares, including 3,000 shares of Series A Junior Preferred Stock None Issued

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 31, 2011	Oct. 31, 2010	Oct. 31, 2009
OPERATING ACTIVITIES:
Net Income	$ 36,359	$ 26,381	$ 21,850
Adjustments to Reconcile Net Income to Cash Provided by Operating Activities:
Depreciation and Amortization	15,005	11,821	9,771
Deferred Income Tax Benefit	(5,911)	(4,005)	(5,093)
Loss on Disposal of Property and Equipment	1,680	368	271
Stock - Based Compensation Expense	40	290	40
(Increase) Decrease in:
Accounts Receivable	(29,254)	(32,984)	(21,680)
Provision for Doubtful Accounts	10,316	8,857	10,403
Inventory	(3,498)	(2,045)	(417)
Other Current Assets	(1,637)	(941)	(108)
Other Assets	798	(150)	(149)
Deposits	507	(759)	(105)
Increase (Decrease) in:
Accounts Payable and Accrued Liabilities	6,541	6,572	9,583
NET CASH - OPERATING ACTIVITIES	30,946	13,405	24,366
INVESTING ACTIVITIES:
Business Acquisitions Related Costs	(1,425)	(1,917)	(1,917)
Acquisition of Equipment and Leasehold Improvements	(14,117)	(16,494)	(8,749)
Acquisition of Intangible Assets			(141)
NET CASH - INVESTING ACTIVITIES	(15,542)	(18,411)	(10,807)
FINANCING ACTIVITIES:
Payments of Long-Term Debt	(1,178)	(1,191)	(1,177)
Payments of Capital Lease Obligations	(2,968)	(2,778)	(2,547)
Increase (Decrease) in Revolving Line of Credit	(7,522)	8,962	(6,379)
Proceeds from Exercise of Options	498	797	843
NET CASH - FINANCING ACTIVITIES	(11,170)	5,790	(9,260)
NET INCREASE IN CASH AND CASH EQUIVALENTS	4,234	784	4,299
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIODS	17,779	16,995	12,696
CASH AND CASH EQUIVALENTS AT END OF PERIODS	22,013	17,779	16,995
Cash paid during the period for:
Interest	1,754	1,517	1,554
Income Taxes	32,773	26,539	21,277
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Write-off of property	5,944	6,352	1,261
Equipment with an initial cost	4,558
Purchase of new equipment	5,408
Capital Leases	5,444	3,403	3,469
Write-off of Intangible Assets	0	0	300
Stock-based compensation expense	40	40	40
Acquisition of certain assets		$ 5,490

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Insurance

12 Months Ended

Oct. 31, 2011

Insurance

Insurance

[16] Insurance

The Company maintains professional liability insurance of $3,000 in the aggregate, with a per occurrence limit of $1,000.  In addition, the Company maintains excess commercial insurance of $5,000 per occurrence and $5,000 in aggregate over the primary limits.  In addition, the Company also maintains excess umbrella coverage of $15,000.  The Company believes, but cannot assure, that its insurance coverage is adequate for its current business needs.  A determination of Company liability for uninsured or underinsured acts or omissions could have a material adverse affect on the Company’s operations.

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Acquisitions

12 Months Ended

Oct. 31, 2011

Acquisitions

Acquisitions

[18] Acquisitions

On March 2, 2010, the Company completed the purchase of substantially all of the tangible and intangible assets, excluding cash, receivables and certain other assets, of Lenetix Medical Screening Laboratory, Inc. (“Lenetix”) from Lenetix and its sole stockholder.  These assets were utilized in Lenetix’s operation of a clinical testing laboratory located in Mineola, New York.  The laboratory performs both clinical laboratory diagnostic testing and genetic testing. The purchase price of $5,490 included a down payment of $4,740 and a hold-back of $750 to insure the accuracy of the Sellers’ representations and to protect the Company from any claims based on the operations of the Laboratory prior to the closing.  This acquisition resulted in an addition to Goodwill in the amount of $490.

On August 5, 2011, the Company acquired all of the authorized, issued and outstanding shares of The Genetics Center, Inc. (“GCI”), a New York corporation engaged in the clinical laboratory business with principal place of business in Smithtown, New York for $800 in cash.  The entire acquisition was recorded as an addition to Goodwill.

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Organization and Business

12 Months Ended

Oct. 31, 2011

Organization and Business

Organization and Business

[1] Organization and Business

Bio-Reference Laboratories, Inc. [“Bio-Reference” or the “Company”] was incorporated on December 24, 1981.  Bio-Reference is principally engaged in providing laboratory testing services, primarily to customers in the greater New York metropolitan area as well as to customers in a number of other states.  Bio-Reference offers a comprehensive list of chemical diagnostic tests including blood and urine analysis, blood chemistry, hematology services, serology, radio-immuno analysis, toxicology (including drug screening), pap smears, tissue pathology (biopsies) and other tissue analysis.  We perform cancer cytogenetic testing at our leased facilities in at our main processing facility in Elmwood Park, Smithtown, NY, Clarksburg, MD and Milford, MA and genetic testing at our GeneDx leased facility in Gaithersburg, MD, as well as at our Elmwood Park facility.  We perform cytology testing in Frederick, MD, Milford, MA, Columbus, OH, Houston, TX and at our Elmwood Park facility.  Bio-Reference markets its laboratory testing services directly to physicians, geneticists, hospitals, clinics, correctional and other health facilities.

The Company’s laboratory testing business currently represents its one reportable business segment. The laboratory testing business accounts for over 98% of consolidated assets, net revenues and net income in each of the three years ended October 31, 2011.   All other operating segments include the Company’s non-clinical laboratory testing businesses and consist of our clinical knowledge management service through our PSIMedica business unit and a web-based connectivity portal solution for laboratories and physicians through its CareEvolve subsidiary.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Oct. 31, 2011	Oct. 31, 2010
Preferred Stock, Par Value (in dollars per share)	$ 0.10	$ 0.10
Preferred Stock, Authorized shares, including Series A Junior Preferred Stock	1,666,667	1,666,667
Preferred Stock, Issued shares	0	0
Common Stock, Par Value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, Authorized shares	35,000,000	35,000,000
Common Stock, Issued shares	27,949,900	27,847,204
Common Stock, Outstanding shares	27,949,900	27,847,204
Series A Junior Preferred Stock
Preferred Stock, Authorized shares	3,000	3,000

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Stock Options and Warrants

12 Months Ended

Oct. 31, 2011

Stock Options and Warrants

Stock Options and Warrants

[11] Stock Options and Warrants

Employee Incentive Stock Options - In June 2003, the Board of Directors adopted, and in July 2003, the stockholders approved, the 2003 Employee Incentive Stock Option Plan [the “2003 Plan”].  The 2003 Plan authorizes the grant of stock options, which may be designated as  incentive stock options, to purchase up to a maximum aggregate 1,600,000 shares of Company common stock (after giving effect to our 2-1 stock split). The 2003 Plan provides that the exercise price of an option granted there under shall not be less than the fair market value of the Common Stock  on the date the option is granted.  However, in the event an option is granted under the 2003 Plan to a holder of 10% or more of the Company’s outstanding Common Stock, the exercise price must be at least 110% of such fair market value.  Under the 2003 Plan, options must be granted before the June 2, 2013 Termination Date.  No option may have a term longer than ten years (limited to five years in the case of an option granted to a 10% or greater stockholder of the Company).  The aggregate fair market value of the Company’s Common Stock with respect to which options are exercisable for the first time by a grantee under all of the Company’s Stock Option Plans during any calendar year cannot exceed $100.  Options granted under the 2003 Plan are non-transferable and must be exercised by an optionee, if at all, while employed by the Company or a subsidiary or within three months after termination of such optionee’s employment due to retirement, or within one year of such termination if due to disability or death.  The Board (or a Stock Option Committee, if designated), may, in its sole discretion, cause the Company to lend money to or guaranty any obligation of an employee for the purpose of enabling such employee to exercise an option granted under the 2003 Plan provided that such loan or obligation cannot exceed fifty percent (50%) of the exercise price of such option. In fiscal year ended October 31, 2011, 2010 and 2009, -0-, -0- and -0- options were granted under the Plan, respectively. A total of 40,000, 59,000 and 72,060 incentive stock options issued under the 2003 Plan were exercised in fiscal years ended in October 31, 2011, 2010 and 2009, respectively.  A total of -0-, 12,000 and 10,000 options were cancelled in fiscal years ended October 31, 2011, 2010 and 2009.

In August 2000, the Company adopted, and on December 15, 2000, the stockholders approved, the 2000 Employee Incentive Stock Option Plan [“2000 Plan”]. The 2000 Plan provided for the granting of stock options, which may have been designated as incentive stock options, to purchase an aggregate of 1,600,000 shares of the Company’s common stock (after giving effect to our 2-1 stock split) at a price   not less than 100% of the fair market value per share of the common stock at the date of grant.  However, in the event an option was granted under the 2000 Plan to a holder of 10% or more of the Company’s outstanding common stock, the exercise price must have been at least 110% of fair market value at the date of grant.  Employees of the Company or its subsidiary, as determined, were eligible for the 2000 Plan.  The term of the options could not exceed ten years from the date of grant.  In fiscal years ended October 31, 2011, 2010 and 2009, no options were granted under the Plan. A total of 39,600, 58,800 and 45,600 incentive stock options issued under the 2000 Plan were exercised in fiscal years ended in October 31, 2011, 2010 and 2009, respectively. A total of -0-, -0-, and 110,000 options were cancelled in fiscal years ended October 31, 2011, 2010 and 2009, respectively.  Options issued under the 2000 Plan must have been granted before the August 2010 termination date.

The following is a summary of Employee Incentive Stock Option Plan transactions:

	2003 Plan
	Shares Under Options [In Thousands]		Weighted Average Exercise Price Per Share
Outstanding at October 31, 2008*	488		$	7.82
Granted	—		—
Expired	(10	)	$	9.13
Exercised	(72	)	7.74
Outstanding at October 31, 2009*	406		$	9.52
Granted	—		—
Expired	(12	)	8.62
Exercised	(59	)	8.88
Outstanding at October 31, 2010*	335		9.66
Granted	—		—
Expired	—		—
Exercised	(40	)	8.67
Outstanding at October 31, 2011*	295		9.80

*Eligible for exercise at October 31, 2008 were 454 at a weighted average exercise price per share of $8.61

*Eligible for exercise at October 31, 2009 were 376 at a weighted average exercise price per share of $7.80

*Eligible for exercise at October 31, 2010 were 310 at a weighted average exercise price per share of $9.66

*Eligible for exercise at October 31, 2011 were 275 at a weighted average exercise price per share of $9.80

	2000 Plan
	Shares Under  Options [In Thousands]		Weighted  Average  Exercise Price  Per Share
Outstanding and Eligible for Exercise at October 31, 2008	314		$	4.43
Granted	—		—
Expired	(110	)	3.35
Exercised	(46	)	6.28
Outstanding and Eligible for Exercise at October 31, 2009	158		4.64
Granted	—		—
Expired	—		—
Exercised	(58	)	4.63
Outstanding and Eligible for Exercise at October 31, 2010	100		4.64
Granted	—		—
Expired	—		—
Exercised	(40	)	3.82
Outstanding and Eligible for Exercise at October 31, 2011	60		5.19

				Weighted Average			Exercisable
				Shares	Remaining	Exercise	Shares	Exercise
Exercise Price Range				Outstanding	Life	Price	Outstanding	Price
$2.76	to	$2.76	Per Share	22	1.67	2.76	22	2.76
$3.60	to	$3.60	Per Share	10	1.17	3.60	10	3.60
$6.11	to	$6.11	Per Share	6	3.69	6.54	6	6.54
$7.25	to	$7.25	Per Share	4	3.58	7.25	4	7.25
$7.41	to	$7.67	Per Share	94	3.36	7.53	94	7.53
$9.12	to	$9.12	Per Share	179	4.00	9.13	179	9.13
$17.50	to	$17.50	Per Share	40	6.08	17.50	20	17.50
				355			335

Compensation cost recognized for the years ended October 31, 2011, October 31, 2010 and October 31, 2009 was $40 for each one of the years, with a related tax benefit of $-0- with respect to these options.

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Document and Entity Information (USD $)	12 Months Ended
	Oct. 31, 2011	Jan. 09, 2012	Apr. 30, 2011
Document and Entity Information
Entity Registrant Name	BIO REFERENCE LABORATORIES INC
Entity Central Index Key	0000792641
Document Type	10-K
Document Period End Date	Oct. 31, 2011
Amendment Flag	false
Current Fiscal Year End Date	--10-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 704,188,409
Entity Common Stock, Shares Outstanding		27,949,900
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY

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Employment Contracts and Consulting Agreements

12 Months Ended

Oct. 31, 2011

Employment Contracts and Consulting Agreements

Employment Contracts and Consulting Agreements

[12] Employment Contracts and Consulting Agreements

During fiscal 2003, the Company established a Scientific Advisory Board [the “Board”] and entered into consulting agreements with members of the Board.  The terms of the agreements range from three years and two months to four years and three months.  Effective October 31, 2010 these agreements are on an at-will basis.

The Company has multiple employment contracts with its key executives with expiration dates ranging from October 31, 2011 through October 31, 2017. At October 31, 2011, the approximate aggregate minimum commitment under these employment contracts and agreements, excluding commissions or consumer price index increases, is as follows:

October 31	Employees and Consultants
2012	$	4,011
2013	3,351
2014	2,597
2015	1,410
2016	1,410
Thereafter	1,060
Total	$	13,839

Some of these agreements provide bonuses and commissions based on a percentage of collected revenues ranging from 1% to 10% on accounts referred by or serviced by the employee or consultant.

In addition to the above, the Company has entered into fifty two at — will employment and consulting agreements which together with prior at — will agreements provide for annual aggregate minimum commitments of approximately $28,690 which have no termination dates.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Oct. 31, 2011	Oct. 31, 2010	Oct. 31, 2009
NET REVENUES:	$ 558,642	$ 458,024	$ 362,654
COST OF SERVICES:
Depreciation and Amortization	11,036	8,653	7,244
Employee Related Expenses	126,354	104,519	84,582
Reagents and Lab Supplies	100,569	77,798	57,770
Other Cost of Services	49,894	41,282	33,928
TOTAL COST OF SERVICES	287,853	232,252	183,524
GROSS PROFIT ON REVENUES	270,789	225,772	179,130
General and Administrative Expenses:
Depreciation and Amortization	3,969	3,168	2,527
Other General and Administrative Expenses	131,967	111,983	86,763
Bad Debt Expense	75,079	62,243	51,518
TOTAL GENERAL AND ADMIN. EXPENSES	211,015	177,394	140,808
OPERATING INCOME	59,774	48,378	38,322
OTHER (INCOME) EXPENSES:
Interest Expense	1,747	1,566	1,512
Other Income	(6,656)		(1,600)
Interest Income	(163)	(151)	(179)
TOTAL OTHER (INCOME) EXPENSES - NET	(5,072)	1,415	(267)
INCOME BEFORE INCOME TAXES	64,846	46,963	38,589
Provision for Income Taxes	28,487	20,582	16,739
NET INCOME	$ 36,359	$ 26,381	$ 21,850
NET INCOME PER SHARE - BASIC: (in dollars per share)	$ 1.30	$ 0.95	$ 0.79
WEIGHTED AVERAGE NUMBER OF SHARES - BASIC: (in shares)	27,971,100	27,786,083	27,627,968
NET INCOME PER SHARE - DILUTED: (in dollars per share)	$ 1.29	$ 0.94	$ 0.78
WEIGHTED AVERAGE NUMBER OF SHARES - DILUTED: (in shares)	28,207,358	28,038,304	27,872,234

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Long-Term Debt - Bank

12 Months Ended

Oct. 31, 2011

Long-Term Debt - Bank

Long-Term Debt - Bank

[6] Long-Term Debt - Bank

Effective as of October 31, 2007, we executed a fifth amendment to the Loan Agreement formalizing the repayment terms of the $5 million term loan from PNC Bank used by our wholly-owned BRLI No. 2 Acquisition Corp. subsidiary to fund the $5 million acquisition cash payment in connection with its purchase of the operating assets of GeneDx, Inc. The term loan is evidenced by a secured promissory note payable over a six year term in equal monthly principal payments of approximately $69, plus interest at an annual rate of 6.85%. The balance on this note as of October 31, 2011 is approximately $833.

In December 2010, The Company issued a seven year term note for $5,408 at the rate of interest of 6.12% per annum for the financing of new equipment.  The note is payable in eighty-four equal monthly installments commencing on January 29, 2011 of $61 including principal and interest followed by a balloon payment of the principal and interest outstanding on the loan repayment date of  December 29, 2017.  The balance on this note as of October 31, 2011 is approximately $5,064.

Principal repayment for each of the five succeeding fiscal years and thereafter as of October 31, 2010 is as follows:

Year Ended
October 31,
2012	$	1,270
2013	458
2014	487
2015	518
2016	551
Thereafter	2,613
Totals	$	5,897

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Revolving Note Payable - Bank

12 Months Ended

Oct. 31, 2011

Revolving Note Payable - Bank

Revolving Note Payable - Bank

[5] Revolving Note Payable - Bank

In October 2011, the Company entered into an amended revolving note payable loan agreement with PNC Bank, N.A.  The maximum amount of the credit line available to the Company pursuant to the loan agreement is the lesser of (i) $45,000 or (ii) 50% of the Company’s qualified accounts receivable [as defined in the agreement].  The amendment to the Loan and Security Agreement provides for an interest rate on advances to be subject, at the election of the Company, to either the bank’s base rate or the Eurodollar rate of interest plus, in certain instances, an additional interest percentage.  The additional interest percentage charge on bank’s base rate borrowings and on Eurodollar rate borrowings ranges from 1% to 4% and is determined based upon certain financial ratios achieved by the Company.  At October 31, 2011, the Company had elected to have all of the total advances outstanding to be subject to the bank’s base rate of interest of 3.25%.  The credit line is collateralized by substantially all of the Company’s assets. The line of credit is available through October 2016 and may be extended for annual periods by mutual consent, thereafter.  The terms of this agreement contain, among other provisions, requirements for maintaining defined levels of capital expenditures, fixed charge coverage, and the prohibition of the payment by the Company of cash dividends. As of October 31, 2011, the Company utilized $18,632 of the available credit under this revolving note payable loan agreement.  Prior to the October 2011 change, the terms of the revolving note payable were similar to the terms as amended with the exception that the maximum credit available was $40,000.

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Significant Risks and Uncertainties

12 Months Ended

Oct. 31, 2011

Significant Risks and Uncertainties

Significant Risks and Uncertainties

[17] Significant Risks and Uncertainties

[A] Concentrations of Credit Risk - Cash - At October 31, 2011 and 2010, the Company had approximately $21,000 and $16,171 , respectively, in cash and certificate of deposit balances at financial institutions which were in excess of the federally insured limits.

[B] Concentration of Credit Risk - Accounts Receivable - Credit risk with respect to accounts receivable is generally diversified due to the large number of patients comprising the client base.  The Company does have significant receivable balances with government payors and various insurance carriers.  Generally, the Company does not require collateral or other security to support customer receivables.  However, the Company continually monitors and evaluates its client acceptance and collection procedures to minimize potential credit risks associated with its accounts receivable and establishes an allowance for uncollectible accounts and as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is not material to the financial statements.

A number of proposals for legislation continue to be under discussion which could substantially reduce Medicare and Medicaid (CMS) reimbursements to clinical laboratories.  Depending upon the nature of regulatory action, and the content of legislation, the Company could experience a significant decrease in revenues from Medicare and Medicaid (CMS), which could have a material adverse effect on the Company.  The Company is unable to predict, however, the extent to which such actions will be taken.

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Capitalized Lease Obligations

12 Months Ended

Oct. 31, 2011

Capitalized Lease Obligations

Capitalized Lease Obligations

[13] Capitalized Lease Obligations

The Company leases various assets under capital leases expiring in fiscal 2017 as follows:

	October 31
	2011		2010
Medical Equipment	$	7,732	$	4,924
Furniture, Fixtures and Office Equipment	—		—
Automobiles	9,512		7,313
Totals	17,244		12,237
Less: Accumulated Depreciation	4,950		4,240
Net	$	12,293	$	7,997

Depreciation expense on assets under capital leases was approximately $1,418, $2,364, and $1,237 for the years ended October 31, 2011, 2010 and 2009, respectively.

Aggregate future minimum rentals under capital leases are:

October 31,
2012	$	3,330
2013	2,697
2014	2,168
2015	1,302
2016	492
Thereafter	129
Total	10,118
Less Interest:	765
Present Value of Minimum Lease Payments	$	9,353

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Capital Transactions

12 Months Ended

Oct. 31, 2011

Capital Transactions

Capital Transactions

[9] Capital Transactions

[A] Preferred Stock and Common Stock - The Company is authorized to issue an aggregate of 1,666,667 shares of preferred stock, $.10 par value.  None was outstanding as of October 31, 2011 and October 31, 2010.

Holders of the Company’s Common Stock are entitled to one vote per share on matters submitted for shareholder vote.  Holders are also entitled to receive dividends ratably, if declared.  In the event of dissolution or liquidation, holders are entitled to share ratably in all assets remaining after payment of liabilities.

On July 14, 2008 the Board of Directors authorized a repurchase of up to 1,000,000 shares of the Company’s common stock over the period ending October 31, 2010.  As of October 31, 2010 the Company repurchased 39,400 shares at a cost of $452.  The shares were canceled upon repurchase.

On November 11, 2011 a date subsequent to the period covered in this report, the Company announced that its board of directors has approved a Stock Repurchase Program authorizing the repurchase of up to 1,000,000 shares of its Common Stock in the over-the-counter market at prevailing market prices over the period ending October 31, 2012.

[B] Equity Transactions for Services — For the fiscal years ended in 2011, 2010 and 2009, the company issued 11,432 16,432 and 2,500 shares of the Company’s common stock for employment or consulting services [See Note 11 for common stock options issued for employee and consulting services].

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Related Party Transactions

12 Months Ended

Oct. 31, 2011

Related Party Transactions

Related Party Transactions

[7] Related Party Transactions [Not in Thousands]

See Item 11 — “Executive Compensation” as to rentals paid by the Company to Richard Faherty, one of the Company’s five most highly compensated senior management employees for use of Mr. Faherty’s airplane in fiscal 2011, 2010 and fiscal 2009 (when the Company’s owned airplane was unavailable).  Such aircraft rentals totaled $217,138 in fiscal 2011, $134,896 in fiscal 2010 and $95,550 in fiscal 2009 in compensation respectively.

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Income Taxes

12 Months Ended

Oct. 31, 2011

Income Taxes

Income Taxes

[8] Income Taxes

The reconciliation of income tax from continuing operations computed at the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows:

	October 31
	2011		2010		2009
U.S. Federal Statutory Rate	35	%	35	%	35	%
State and Local Taxes, Net of U.S. Federal Tax Benefit	9.87	%	9.77	%	10.92	%
Permanent differences and Other	(0.94	)%	(0.94	)%	(2.54	)%
Actual Rate	43.93	%	43.83	%	43.38	%

The provision for income taxes shown in the consolidated statements of operations consists of the following:

	October 31
	2011			2010			2009
Current:
Federal	$	24,573		$	17,201		$	15,351
State & Local	9,825			7,069			6,481
Deferred:
Federal	(4,223		)	(2,618		)	(3,503		)
State and Local	(1,688		)	(1,070		)	(1,590		)
Total Provision for Income Taxes	$	28,487		$	20,582		$	16,739

At October 31, 2011 and 2010, the Company had a net deferred tax asset [liability] of approximately $23,552 and $17,641, respectively.  The deferred taxes primarily relate to timing differences associated with the deductibility of depreciation and amortization, bad debts and certain accrued expenses and deferred costs.  For fiscal years ended in 2011 and in 2010, the Company had no net operating loss carry-forwards available to reduce current year taxable income.

	October 31,
	2011		2010
Deferred Tax Asset:
Bad Debt Allowance	$	19,897	$	15,358
Depreciation and amortization	1,723		730
Accrued Expenses	1,932		1,553
Deferred Tax Asset - Net	23,552		17,641
Current Deferred Tax Asset - Net	21,710		16,883
Long Term Deferred Tax Asset - Net	1,842		758
Deferred Tax Asset — Net	$	23,552	$	17,641

During fiscal year ended October 31, 2011 the Company recorded a net deferred tax benefit of $5,911.  This reflects a net benefit of approximately $4,539 in allowance for bad debts, a benefit of approximately $993 from depreciation and amortization timing differences, and a benefit of approximately $379 in certain accrued expenses. Although realization is not assured and dependent upon things such as generating sufficient taxable income in future periods, management, through sufficient positive evidence,  believes it is more likely than not that all of the deferred tax asset will be realized. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income or changes in the accrued expenses during the future periods are reduced.

At October 31, 2011, fiscal 2008 through 2011 are subject to examination by US federal and state tax authorities.  Through the issuance of these financial statements the outcome of these examinations has not been determined.

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Earnings Per Share

12 Months Ended

Oct. 31, 2011

Earnings Per Share

Earnings Per Share

[10] Earnings Per Share

The computation of basic and diluted net earnings per common share is as follows [in thousands, except per share data rounded]:

	For Years Ended October 31,
	2011		2010		2009
Income Available to Common Stockholders	$	36,359	$	26,381	$	21,850
Weighted Average Common Shares Outstanding	27,971		27,786		27,628
Effect of Dilutive Securities:
Warrants/Options	236		252		244
Weighted Average Diluted Common Shares Outstanding	28,207		28,038		27,872
Net Income Per Share - Basic	$	1.30	$	0.95	$	0.79
Net Income Per Share - Diluted	$	1.29	$	0.94	$	0.78

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Litigation

12 Months Ended

Oct. 31, 2011

Litigation

Litigation

[15] Litigation

In the normal course of business, the Company is exposed to a number of asserted and unasserted potential claims.  In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company’s financial position or results of operations.

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Health Insurance Plan

12 Months Ended

Oct. 31, 2011

Health Insurance Plan

Health Insurance Plan

[20] Health Insurance Plan

The Company has a limited self-funded health insurance plan for its employees under which the Company pays the initial $150 of covered medical expenses per person each year.  The Company has a contract with an insurance carrier for any excess up to a maximum of $2,000 per person and $19,477 in the aggregate.  Health insurance premium expense for the years ended October 31, 2011, 2010 and 2009 amounted to approximately $4,426, $4,324 and $2,327, respectively.  Uninsured employee medical expenses incurred by the Company amounted to approximately $19,408, $14,347 and $10,394 for the years ended October 31, 2011, 2010 and 2009, respectively.  During fiscal years ended October 31, 2011, 2010 and 2009, employee contributions of $3,593, $2,720 and $2,142 offset the above health plan costs.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Retained Earnings
Balance at Oct. 31, 2008	$ 101,540	$ 276	$ 41,947	$ 59,317
Balance (in shares) at Oct. 31, 2008		27,553,590
Increase (Decrease) in Stockholders' Equity
Fractional Share Adjustments (in shares)		530
Exercise of Options - Employees	843		843
Exercise of Options - Employees (in shares)		117,660
Stock Based Compensation	40		40
Stock Issued for Acquisition	250		250
Stock Issued for Acquisition (in shares)		23,096
Net Income	21,850			21,850
Balance at Oct. 31, 2009	124,523	276	43,080	81,167
Balance (in shares) at Oct. 31, 2009		27,694,876
Increase (Decrease) in Stockholders' Equity
Exercise of Options - Employees	797	2	795
Exercise of Options - Employees (in shares)		117,800
Stock Based Compensation	290		290
Stock Based Compensation (in shares)		11,432
Stock Issued for Acquisition	397		397
Stock Issued for Acquisition (in shares)		23,096
Net Income	26,381			26,381
Balance at Oct. 31, 2010	152,388	278	44,562	107,548
Balance (in shares) at Oct. 31, 2010		27,847,204
Increase (Decrease) in Stockholders' Equity
Exercise of Options - Employees	498	1	497
Exercise of Options - Employees (in shares)		102,696
Stock Based Compensation	40		40
Stock Issued for Acquisition	482		482
Stock Issued for Acquisition (in shares)		23,096
Net Income	36,359			36,359
Balance at Oct. 31, 2011	$ 189,767	$ 279	$ 45,581	$ 143,907
Balance (in shares) at Oct. 31, 2011		27,972,996

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Intangible Assets

12 Months Ended

Oct. 31, 2011

Intangible Assets

Intangible Assets

[4] Intangible Assets

Intangible assets are summarized as follows:

October 31, 2011

	Weighted-Average			Accumulated		Net of  Accumulated
Intangible Asset	Amortization Period	Cost		Amortization		Amortization
Customer Lists	20	$	4,573	$	2,328	$	2,245
Covenants Not-to-Compete	5	4,305		4,237		68
Patents and Licenses	17	5,297		706		4,591
Totals		$	14,175	$	7,285	$	6,904

October 31, 2010

	Weighted-Average			Accumulated		Net of  Accumulated
Intangible Asset	Amortization Period	Cost		Amortization		Amortization
Customer Lists	20	$	4,573	$	2,138	$	2,435
Covenants Not-to-Compete	5	4,305		3,457		848
Patents and Licenses	17	5,297		354		4,943
Totals		$	14,175	$	5,949	$	8,226

The estimated amortization expense related to intangible assets for each of the five succeeding fiscal years and thereafter as of October 31, 2010 is as follows:

October 31,
2012	$	567
2013	558
2014	551
2015	526
2016	509
Thereafter	4,193
Total	$	6,904

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Employee Benefit Plan

12 Months Ended

Oct. 31, 2011

Employee Benefit Plan

Employee Benefit Plan

[21] Employee Benefit Plan

The Company sponsors a 401(k) Profit-Sharing Plan [the “Plan”].  Employees become eligible for participation after attaining the age of eighteen and completing one year of service.  Participants may elect to contribute up to ten percent of their compensation, as defined in the Plan, to a maximum allowed by the Internal Revenue Service.  The Company may choose to make a matching contribution to the plan for each participant who has elected to make tax-deferred contributions for the plan year, at a percentage determined each year by the Company. The Company elected to make a matching contribution which amounted to $993 for 2011, $801 for 2010, and $644 for 2009.  These amounts were charged to the Statement of Operations. The Employer contribution will be fully vested after the third year of service.

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Commitments and Contingencies

12 Months Ended

Oct. 31, 2011

Commitments and Contingencies.

Commitments and Contingencies

[14] Commitments and Contingencies

The Company leases various office and laboratory facilities and equipment under operating leases expiring from 2011 to 2019.  Several of these leases contain renewal options for one to five year periods.

Total expense for property and equipment rental for the years ended October 31, 2011, 2010 and 2009 was $8,010, $7,285 and $6,172, respectively.  There were no contingent rental amounts due through October 31, 2011.

Aggregate future minimum rental payments on non cancelable operating leases [exclusive of several month to month leases] are as follows:

October 31,	Property		Equipment
2012	$	5,530	$	412
2013	2,765		183
2014	2,315		51
2015	1,155		2
2016	836		—
Thereafter	829		—
Totals	$	13,430	$	648

The Company has entered into several purchase agreements for reagent supplies through October, 2016.  Minimum purchase commitments as of October 31, 2011 are as follows:

October 31,
2012	$	17,448
2013	14,921
2014	14,357
2015	10,538
2016	7,206
Thereafter	—
Totals	$	64,470

Reagent supplies expensed under purchase agreements amount to $8,379, $7,290 and $7,477 for the years ended October 31, 2011, 2010 and 2009, respectively.