UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~January~~April 3130, 2015

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 000-15266

BIO-REFERENCE LABORATORIES, INC.

(Exact name of registrant as specified in its charter)

NEW JERSEY		22-2405059
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
481 Edward H. Ross Drive, Elmwood Park, NJ		07407
(Address of principal executive offices)		(Zip Code)

481 Edward H. Ross Drive, Elmwood Park, NJ		07407
(Address of principal executive offices)		(Zip Code)

(201) 791-2600

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 and Exchange Act of 1934 during the past 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

~~Yes~~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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated file in Rule 12b-2 of the Exchange Act.

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

Yes o No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of the issuer’s common stock, as of the latest practicable date: 27,~~776~~802,976 shares of Common Stock ($.01 par value) at ~~March~~June 63, 2015.

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BIO-REFERENCE LABORATORIES, INC.

FORM 10-Q

~~JANUARY 31~~April 30, 2015

~~INDEX~~I N D E X

	~~Page~~		Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	1
Consolidated Balance Sheets as of January 31, 2015 (unaudited) and October 31, 2014
		Consolidated Balance Sheets as of April 30, 2015 (unaudited) and October 31, 2014.	1
Consolidated Statements of Operations for the three months ended January 31, 2015 and January 31, 2014 (unaudited)	3
		Consolidated Statements of Operations (unaudited) for the three months and six-months ended April 30, 2015 and April 30, 2014	3
Consolidated Statements of Cash Flows for the three months ended January 31, 2015 and January 31, 2014 (unaudited)	4
		Consolidated Statements of Cash Flows (unaudited) for the six-months ended April 30, 2015 and April 30, 2014	4
~~Notes to consolidated financial statements (unaudited)~~	6	Notes to consolidated financial statements (unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	9		10
Item 3. Quantitative and Qualitative Disclosures About Market Risk	13		16
Item 4. Controls and Procedures	13		16
PART II. OTHER INFORMATION			17
Item 5. Other Information	14
Item 1.	Legal Proceedings		17
Item 6. Exhibits	14
Item 5.	Other Information		17
Signatures	15
Item 6. Exhibits			17
Signatures			18

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PART I — FINANCIAL INFORMATION

BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

[Dollars In Thousands Except Share and Per Share Data]

ASSETS

	January 31,			October 31,
	April 30,			October 31,
	2015			2014
	(Unaudited)
CURRENT ASSETS:
Cash and Cash Equivalents	$	2225,~~240~~146		$	17,507
Accounts Receivable - Net	~~268~~285,~~720~~361			263,346
Inventory	2220,~~511~~783			20,791
Other Current Assets	9,~~809~~224			10,165
Deferred Tax Assets	3839,~~068~~456			40,040
TOTAL CURRENT ASSETS	~~361~~379,~~348~~970			351,849
PROPERTY AND EQUIPMENT - AT COST	~~160~~172,~~965~~893			156,342
LESS: Accumulated Depreciation	(95101,~~323~~250		)	(89,954		)
PROPERTY AND EQUIPMENT - NET	6571,~~642~~643			66,388
OTHER ASSETS:
Investments	5,267			5,153
Investments in Unconsolidated Affiliate	5,290			5,153
Deposits	1,~~113~~127			1,056
Goodwill - Net	35,185			35,185
Intangible Assets - Net	13,~~925~~450			14,403
Other Assets	1,~~416~~615			1,415
Deferred Tax Assets	4,247			3,414
Deferred Tax Asset	4,438			3,414
TOTAL OTHER ASSETS	61,~~153~~105			60,626
TOTAL ASSETS	$	~~488~~512,~~143~~718		$	478,863

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

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BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

[Dollars In Thousands Except Share and Per Share Data]

LIABILITIES AND SHAREHOLDERS’ EQUITY

	January 31,		October 31,
	April 30,		October 31,
	2015		2014
	(Unaudited)
CURRENT LIABILITIES:
Accounts Payable	$	6866,~~030~~073	$	71,166
Accrued Salaries and Commissions Payable	2026,~~710~~950		15,822
Accrued Taxes and Expenses	1611,~~391~~493		15,620
Other Short Term Acquisition Payable	1,~~895~~695		1,924
Revolving Note Payable - Bank	3349,~~735~~315		33,380
Current Maturities of Long-Term Debt	~~533~~541		524
Capital Lease Obligations - Short-Term Portion	6,~~262~~259		6,128
TOTAL CURRENT LIABILITIES	~~147~~162,~~556~~326		144,564
LONG-TERM LIABILITIES:
LONG-TERM LIABILITIES
Capital Lease Obligations - Long-Term Portion	1110,~~760~~863		12,252
Long Term Debt - Net of Current Portion	3,009		3,145
Long - Term Debt — Net of Current Portion	2,871		3,145
TOTAL LONG-TERM LIABILITIES	1413,~~769~~734		15,397
SHAREHOLDERS’ EQUITY:
SHAREHOLDERS’ EQUITY
Preferred Stock, Authorized 1,666,667 shares, including 3,000 shares of Series A Junior Preferred Stock
Preferred Stock $.10 Par Value;
None Issued	—		—
Authorized 1,666,667 shares, including 3,000 shares of Series A Junior Preferred Stock None Issued	0		0
Common Stock, $.01 Par Value;
Common Stock, $.01 Par Value; Authorized 35,000,000 shares:
Authorized 35,000,000 shares:
Issued and Outstanding 27,798,976 and 27,272,644 at April 30, 2015 and at October 31, 2014, respectively	278		277
Issued and Outstanding 27,752,976 and 27,727,644 at January 31, 2015 and at October 31, 2014, respectively	277		277
Additional Paid-In Capital	40,640		39,979
Additional Paid-In Capital	40,262		39,979
Retained Earnings	295,740		278,646
Retained Earnings	285,279		278,646
TOTAL SHAREHOLDERS’ EQUITY	336,658		318,902
TOTAL SHAREHOLDERS’ EQUITY	325,818		318,902
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	512,718	$	478,863
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	488,143	$	478,863

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

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BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

[Dollars In Thousands Except Share and Per Share Data]

[UNAUDITED]

	Three months ended						Six months ended
	January 31,
	April 30,						April 30,
	2015			2014			2015			2014
NET REVENUES:	$	~~208~~223,~~833~~986		$	~~181~~201,~~270~~366		$	432,820		$	382,635
COST OF SERVICES:
Depreciation	4,966			4,575
Depreciation and Amortization	5,091			4,659			10,057			9,234
Employee Related Expenses	5356,~~685~~491			4951,~~110~~566			110,176			100,676
Reagents and Lab Supplies	40,582			37,231
Reagents and Laboratory Supplies	42,977			38,352			83,559			75,583
Other Cost of Services	1920,~~845~~444			18,~~200~~240			40,290			36,439
TOTAL COST OF SERVICES	~~119~~125,~~078~~003			~~109~~112,~~116~~817			244,082			221,932
GROSS PROFIT ON REVENUES	8998,~~755~~983			7288,~~154~~549			188,738			160,703
General and Administrative Expenses:
GENERAL AND ADMINISTRATIVE EXPENSES:
Depreciation and Amortization	1,~~567~~606			1,~~114~~586			3,174			2,700
Other General and Administrative Expenses	58,260			49,586
General and Administrative Expenses	58,797			50,992			117,056			100,578
Bad Debt Expense	1819,~~000~~654			1517,~~574~~092			37,654			32,665
TOTAL GENERAL AND ADMIN. EXPENSES	77,827			66,274
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES	80,057			69,670			157,884			135,943
OPERATING INCOME	11,928			5,880
INCOME FROM OPERATIONS	18,926			18,879			30,854			24,760
OTHER (INCOME) EXPENSES:
OTHER (INCOME) EXPENSE:
Interest Expense	~~560~~666			~~609~~597			1,226			1,206
Interest Income	(2223		)	(1412		)	(45		)	(26		)
Other (Income) Expense	~~(114~~2		)	3056			(112		)	86
TOTAL OTHER (INCOME) EXPENSES - NET	~~424~~645			~~625~~641			1,069			1,266
INCOME BEFORE INCOME TAXES	1118,~~504~~281			518,~~255~~238			29,785			23,494
Provision for Income Taxes	47,~~871~~820			27,~~301~~965			12,691			10,267
NET INCOME	$	610,~~633~~461		$	210,~~954~~273		$	17,094		$	13,227
NET INCOME PER SHARE - BASIC:	$	0.24		$	0.11
NET INCOME PER COMMON SHARE - BASIC:	$	0.38		$	0.37		$	0.62		$	0.48
WEIGHTED AVERAGE NUMBER OF SHARES BASIC:	27,740,309			27,700,167
WEIGHTED AVERAGE NUMBER OF SHARES - BASIC:	27,786,309			27,716,644			27,781,143			27,712,525
NET INCOME PER SHARE - DILUTED:	$	0.24		$	0.11
NET INCOME PER COMMON SHARE - DILUTED:	$	0.38		$	0.37		$	0.61		$	0.47
WEIGHTED AVERAGE NUMBER OF SHARES - DILUTED:	27,~~867~~881,~~214~~908			27,~~848~~857,~~492~~467			27,874,074			27,855,141

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

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BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

[Dollars In Thousands Except Share and Per Share Data]

[UNAUDITED]

	Three months ended
	Six months ended
	January 31,
	April, 30
	2015			2014
OPERATING ACTIVITIES:
Net Income	$	617,~~633~~094		$	213,~~954~~227
Adjustments to Reconcile Net Income to
Adjustments to Reconcile Net Income to Cash Provided by (Used for) Operating Activities:
Cash Provided by Operating Activities:
Depreciation and Amortization	13,231			11,934
Depreciation and Amortization	6,533			5,689
Deferred Income Tax (Benefit) Expense	(440		)	5,976
Deferred Income Taxes (Benefit)	1,139			5,519
Stock Based Compensation	40			290
Loss (Gain) on Disposal of Fixed Assets	99			38
(Gain) Loss on Disposal of Fixed Assets	173			109
Undistributed Equity Method (Income) Loss	(~~114~~112		)	3086
Change in Assets and Liabilities:
Change in Assets and Liabilities, (Increase) Decrease in:
(Increase) Decrease in:
Accounts Receivable	(20,244		)	(13,227		)
Accounts Receivable	611			2,166
Provision for Doubtful Accounts	(1,771		)	(14,480		)
Provision for Doubtful Accounts	(5,985		)	(13,646		)
Inventory	8			(855		)
Inventory	(1,720		)	(2,647		)
Other Current Assets	941			87
Other Current Assets	356			289
Other Assets	(200		)	(200		)
Other Assets	(1		)
Deposits	(71		)	(38		)
Deposits	(57		)	(3		)
Increase (Decrease) in:
Accounts Payable and Accrued Liabilities	21,~~523~~908			(3,~~431~~097		)
NET CASH - OPERATING ACTIVITIES	$10,557	~~10,057~~		$(188	~~(2,752~~	)
INVESTING ACTIVITIES:
Acquisition of Equipment and Leasehold Improvements	(415,~~149~~739		)	(27,~~771~~048		)
Business Acquisitions Related Costs	(29		)	(258		)
Business Acquisitions and Related Costs	(254		)	(258		)
NET CASH - INVESTING ACTIVITIES	(415,~~178~~993		)	(37,~~029~~306		)
FINANCING ACTIVITIES:
Payments of Long-Term Debt	(~~127~~257		)	(~~121~~243		)
Payments of Capital Lease Obligations	(13,~~617~~225		)	(12,~~479~~933		)
Increase (Decrease) in Revolving Line of Credit	~~355~~15,935			317,~~840~~021
Proceeds from Exercise of Options	~~243~~622			~~122~~177
NET CASH - FINANCING ACTIVITIES	(113,~~146~~075		)	214,~~362~~022
NET INCREASE IN CASH AND CASH EQUIVALENTS	4,733			(3,419		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	7,639			6,528
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIODS	17,507			17,952
CASH AND CASH EQUIVALENTS AT END OF PERIODS	~~22,240~~$	25,146		~~14,533~~$	24,480
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	~~570~~1,189		$	~~583~~1,166
Income Taxes	$	216,~~791~~538		$	29,~~813~~867

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

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SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

[Dollars In Thousands]

[~~Unaudited~~UNAUDITED]

During the ~~three~~six-month periods ended ~~January~~April 3130, 2015 and ~~January~~April 3130, 2014, the Company entered into capital leases totaling $1,~~259~~967 and $45,~~191~~905, respectively.

During the ~~three~~six-month periods ended ~~January~~April 3130, 2015 and ~~January~~April 3130, 2014, the Company wrote-off approximately $~~785~~1,155 and $~~644~~920 of property and equipment, ~~that~~most of which were fully depreciated.

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BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

[Dollars In Thousands Except Share and Per Share Data, Or Unless Otherwise Noted]

(UNAUDITED)

[1] Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the instructions to Form 10-Q and, therefore, do not include all information and footnotes necessary for complete audited financial statements. However, in the opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial position and operating results have been included in these statements. Interim results are not necessarily indicative of results for a full year. Reference is made to the October 31, 2014 audited consolidated financial statements of Bio-Reference Laboratories, Inc.(“BRLI” or the “Company”) contained in its Annual Report on Form 10-K for the year ended October 31, 2014.

The consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes for the year ended October 31, 2014 as filed with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K. Significant accounting policies followed by the Company are set forth in Note 2 to the Company’s 2014 Annual Report on Form 10-K.

[2] Fair Value Measurements

As of ~~January~~April 3130, 2015, the Company’s financial instruments primarily consist of cash, ~~cash equivalents,~~ short-term trade receivables and payables for which their carrying amounts approximate fair values, and long term debt, for which based on the borrowing rates currently available to the Company for bank loans with similar terms and average maturities, its carrying amount approximates its fair value.

[3] New Accounting Pronouncements~~, Reclassifications and Other Matters~~

~~Certain~~Removed ~~prior~~and ~~year amounts may have been reclassified to conform to the current year presentation~~Reserved.

[4] Revenue Recognition and Contractual Adjustments

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

Service revenues before provision for bad debts are determined utilizing gross service revenues net of contractual adjustments and discounts. 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 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 due to the contractual adjustments and discounts 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. This calculation is 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 table below shows the adjustments made to gross service revenues to arrive at net revenues, the amount reported on our statement of operations.

Table of Contents

	($)
	Three Months Ended January 31
	Three Months Ended		Six Months Ended
	[Unaudited]
	April 30,		April 30,
	2015	2014
	[Unaudited]		[Unaudited]
Gross Service Revenues	1,065,293	909,879
	2015	2014	2015	2014
Contractual Adjustments and Discounts:
Gross Service Revenues	1,175,282	1,017,621	2,240,575	1,927,499
Medicare/Medicaid Portion	94,063	88,919
Contractual Adjustments and Discounts:
All Other Third Party Payors*	749,201	624,145
Medicare/Medicaid Portion	101,262	94,520	195,325	183,439
Total Contractual Adjustments and Discounts	843,264	713,064
All Other Third Party Payors*	838,004	706,234	1,587,205	1,330,379
Service Revenues Net of Contractual Adjustments and Discounts	222,029	196,815
Total Contractual Adjustments and Discounts	939,266	800,754	1,782,530	1,513,818
Patient Service Revenue Provision for Bad Debts**	13,196	15,545
Service Revenues Net of Contractual Adjustments and Discounts	236,016	216,867	458,045	413,681
Net Revenues	208,833	181,270
Patient Service Revenue Provision for Bad Debts**	12,030	15,501	25,225	31,046
Net Revenues	223,986	201,366	432,820	382,635

* 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.

** Represents the amount of Bad Debt Expense that is required to be presented as a deduction from patient service revenue (net of contractual allowances and discounts) pursuant to ASU No. 2011-7.

When new business is received by BRLI, service revenues net of contractual adjustments and discounts are calculated by reducing gross service revenues by the estimated contractual allowance. The Patient Service Revenue Provision for Bad Debts represents the amount of bad debt expense expected to occur on patient service revenue based upon our experience. The remaining bad debt expense is presented as part of operating expenses. The bad debt expense presented as part of operating expense represents the bad debt expense related to receivables from service revenues determined after taking into account our ability to collect on such revenue.

BRLI recognized the amounts in subsequent periods for actual allowances/discounts to gross service revenue; bad debt may have been adjusted over the same periods of time to maintain an accurate balance between net 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. One ~~Depending~~such ~~upon~~legislation ~~the~~is ~~nature~~Protecting ofAccess ~~regulatory~~to ~~action,~~Medicare ifAct ~~any,~~of ~~which~~2014 (Public isLaw ~~taken~~113—93)(“PAMA”) ~~and~~was ~~the~~signed ~~content~~into oflaw ~~legislation,~~on ~~if any~~April 1, ~~which~~2014. The islegislation ~~adopted,~~directed ~~the~~CMS ~~Company~~to ~~could~~conduct ~~experience~~ a ~~significant~~market ~~decrease~~survey inand ~~revenues~~to ~~from~~determine whether Medicare ~~and~~is ~~Medicaid,~~reimbursing ~~which~~at ~~could~~a ~~have~~commercially areasonable ~~material~~rates. To ~~adverse~~date, ~~effect~~CMS onhas fallen behind the ~~Company.~~schedule ~~The~~legislated ~~Company~~in isPAMA. ~~unable~~As tothe ~~predict~~result, ~~however,~~ the ~~extent~~current toreimbursement ~~which~~rates ~~such~~remain ~~actions~~unchanged, ~~will~~subject beto ~~taken~~typical annual reviews, until 2017.

[5] Accounts Receivable Allowances

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 by 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 adjustments and discounts 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. 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 payer’s timely filing limits. Accounts Receivable on the balance sheet is net of the following amounts for contractual credits and doubtful accounts:

	[Unaudited]
	January 31,	October 31,
	2015	2014
Contractual Credits/Discounts	535,118	513,466
Doubtful Accounts	78,541	83,276
Total Allowance	613,659	596,742

Table of Contents

	($)
	[Unaudited]
	April 30,	October 31,
	2015	2014

Contractual Credits/Discounts	582,180	513,466
Doubtful Accounts	81,505	83,276
Total Allowance	663,685	596,742

[6] Intangible Assets

The following disclosures present certain information on the Company’s intangible assets as of ~~January~~April 3130, 2015 (Unaudited) and October 31, 2014. All intangible assets are being amortized over their estimated useful lives, as indicated below, with no estimated residual value.

~~January~~April 3130, 2015

	Weighted-Average		Accumulated
	Amortization Period		~~Accumulated~~Amortization	Net of Accumulated
Intangible Asset	Years	Cost ($)	~~Amortization~~ ($)	Amortization ($)
Customer Lists	20	8,738	3,~~373~~469	5,~~365~~269
Covenants Not-to-Compete	5	11,131	6,~~032~~325	54,~~099~~806
Patents and Licenses	17	5,297	1,~~836~~922	3,~~461~~375
Totals		25,166	11,~~241~~716	13,~~925~~450

October 31, 2014

	Weighted-Average			Accumulated
	Amortization Period			~~Accumulated~~Amortization		Net of Accumulated
Intangible Asset	Years	Cost ($)		~~Amortization~~ ($)		Amortization ($)
Customer Lists	20	$	8,738	$	3,275	$	5,463
Covenants Not-to-Compete	3	11,131		5,738		5,393
Patents and Licenses	17	5,297		1,750		3,547
Totals		$	25,166	$	10,763	$	14,403

The aggregate intangible amortization expense for the three months ended ~~January~~April 3130, 2015 and 2014 was $~~478~~474 and $~~229~~730, respectively. The aggregate intangible amortization expense for the six months ended April 30, 2015 and 2014 was $952 and $959, respectively. The estimated intangible asset amortization expense for the remainder of ~~the~~ fiscal year ending October 31, 2015 and for the four subsequent years is as follows:

October 31,		($)
2015		~~1,375~~900
2016		1,540
2017		1,063
2018		946
2019		904
Thereafter		8,097
Total		13,~~925~~450

[7] Revolving Note Payable - Bank

On February 3, 2014, the Company entered into an amended revolving note payable loan agreement with PNC Bank, N.A. (“PNC Bank Credit Line”). This amendment increased the maximum credit line to $70,000. The maximum amount of the credit line available to the Company pursuant to the loan agreement is the lesser of (i) $70,000 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 January 31, 2015, the Company elected to have all of the total advances outstanding to be subject to the bank’s base rate of interest of 3.50%. 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 and fixed charge coverage, and the prohibition of the payment of cash dividends by the Company. As of January 31, 2015, the Company utilized $33,735 of the available credit under this revolving note payable loan agreement.

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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 April 30, 2015, the Company elected to have all of the total advances outstanding to be subject to the bank’s base rate of interest of 3.50%. 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 and fixed charge coverage, and the prohibition of the payment of cash dividends by the Company. As of April 30, 2015, the Company utilized $49,315 of the available credit under this revolving note payable loan agreement.

On May 14, 2015 a date subsequent to the period covered in these financial statements the Company further amended its PNC Bank Credit Line to increase the maximum that can be borrowed under the credit line to $120,000 as well as extended the credit line through October 2020. This amendment is effective as of May 5, 2015. The other terms of the amendment remained substantially unchanged.

[8] Long-Term Debt - Bank

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 84 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 ~~January~~April 3130, 2015 is approximately $3,~~542~~412.

[9] Provision for Income Taxes

The provision for income taxes for the three -months ended ~~January~~April 3130, 2015 consists of a current tax ~~expense~~provision of $39,~~731~~400 and a deferred tax ~~expense~~benefit of $1,~~140~~580. ~~At January 31, 2015, the Company had a current deferred tax asset of $38,068 included in other current assets and a long-term deferred tax asset of $4,247 included in other assets.~~

The provision for income taxes for the ~~three~~ six-months ended ~~January~~April 3130, ~~2014~~2015 consists of a current tax ~~benefit~~provision of $313,~~218~~131 and a deferred tax ~~expense~~benefit of $~~5,519~~440. ~~At January 31, 2014, the Company had a current deferred tax asset of $36,265 included in other current assets and a long-term deferred tax asset of $2,447 included in other assets.~~

8The provision for income taxes for the three-months ended April 30, 2014 consists of a current tax provision of $7,508 and a deferred tax provision of $457.

The provision for income taxes for the six-months ended April 30, 2014 consists of a current tax provision of $4,291 and a deferred tax provision of $5,976.

On April 30, 2015, the Company had a current deferred tax asset of $39,456 and a long-term deferred tax asset of $4,438 included in other assets. On April 30, 2014, the Company had a current deferred tax asset of $35,964 and a long-term deferred tax asset of $2,291 included in other assets.

[10] Subsequent events

On June 3, 2015 the Company, OPKO Health, Inc., a Delaware corporation (“OPKO”) and Bamboo Acquisition, Inc., a New Jersey corporation and a direct wholly owned subsidiary of OPKO (“Sub”), entered into an agreement and plan of merger (the “Merger Agreement”). Pursuant to the Merger Agreement, Sub will be merged with and into the Company (the “Merger”) and the Company will be the surviving corporation and OPKO’s wholly owned subsidiary. The Merger is intended to qualify as a reorganization within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”).

At the effective time of the Merger (the “Effective Time”), each issued and outstanding share of the Company’s common stock, par value $0.01 per share (the “Company Common Stock”), (other than any shares of the Company Common Stock (including shares held in treasury by the Company) held by OPKO or any OPKO subsidiary or the Company or any Company subsidiary) will automatically be converted into and exchanged for the right to receive 2.75 shares (the “Exchange Ratio”) of OPKO’s common stock, par value $0.01 per share (the “OPKO Common Stock”). No fractional shares of OPKO Common Stock will be issued in the Merger, and the Company’s shareholders will receive one share of OPKO Common Stock in lieu of any fractional shares, after taking into account all of the shares of the Company Common Stock represented by certificates or book-entries, delivered by such shareholder.

In addition, subject to certain limitations described in the Merger Agreement, each option to purchase shares of the Company Common Stock will be converted into and become rights with respect to the OPKO Common Stock and OPKO will assume each such option, in accordance with the terms of the applicable option plan and/or stock option agreement. The number of shares of OPKO Common Stock subject to such options will be equal to the number of shares of Company Common Stock subject to such options multiplied by 2.75, rounded down to the nearest whole share. The per share exercise price under each option will be adjusted by dividing the per share exercise price of such option by 2.75 and rounding up to the nearest cent.

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The obligations of the Company and OPKO to consummate the Merger are subject to customary conditions, including, but not limited to, obtaining the required approval of the Company’s shareholders.

Subject to the satisfaction or waiver of the foregoing conditions and the other terms and conditions contained in the Merger Agreement, the transaction is expected to close in the second half of 2015.

The Merger Agreement contains certain termination rights for both the Company and OPKO in certain circumstances.

If the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, the Company will be required to pay OPKO a termination fee of up to $54,000,000. In addition, under certain circumstances, the Company would be obligated to reimburse OPKO’s out of pocket expenses incurred in connection with the Merger Agreement up to $3,000,000.

Forward-Looking Statements

Statements included in this Annual Report on Form 10-Q (Quarterly 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. 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. Such statements concern matters that involve known and unknown risks and uncertainties that may cause the Company’s actual results in future periods, performance or achievements, or industry results, to be materially different from any future results, performance or achievements described, implied or suggested herein. Although we believe our expectations are based upon reasonable assumptions, there can be no assurance that our financial goals will be realized.

Factors could cause actual results, performance or achievement to differ materially from those expressed or implied from these forward-looking statements include, but are not limited to, the factors discussed under “Risk Factors” as well as elsewhere herein, which may include:

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 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;

Changing relationships with payers, including the various state and multi-state Blues programs, suppliers and strategic partners; Efforts by third-party payors to reduce utilization and reimbursement for clinical testing services;

Failure to timely or accurately bill for our services;

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

Increased competition, including price competition;

Ability to attract and retain experienced and qualified personnel;

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.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this filing. We assume no obligation to update the forward-looking statements to reflect actual results or changes in the factors affecting such forward-looking statements.

Item 2. — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Overview~~[Dollars In Thousands Except Per Share Data, Total Patient Data Or Unless Otherwise Noted]

We are a clinical diagnostic laboratory headquartered in northeastern New Jersey. We are a national laboratory in certain focused areas of laboratory testing and a full service laboratory in the larger metropolitan areas of New York, New Jersey, Maryland, Pennsylvania, Delaware, Washington DC, Florida, California, Texas, Illinois and Massachusetts.Overview

We ~~have~~are ~~developed~~ a ~~national~~clinical ~~reputation~~diagnostic ~~for~~laboratory ~~our~~headquartered ~~expertise~~ in ~~certain~~northeastern ~~focused~~New ~~areas of clinical testing~~Jersey. ~~GenPath~~ Oncology, 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 technically advanced multiplex process for identifying sexually transmitted infections, is offered as GenPath Women’s Health. We are a ~~full-service~~national 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~~certain ~~cases. Physicians~~focused ~~outside~~areas of ~~our regional footprint send samples to our~~ laboratory intesting ~~order to take advantage of the expertise that we are able to provide in blood-based cancer pathology~~ and ~~associated~~a ~~diagnostics~~full ~~or to take advantage of the superior~~ service, ~~support~~laboratory ~~and technologically advanced testing we offer~~ in ~~our~~the ~~Women’s~~larger ~~Health~~metropolitan ~~initiative.~~areas ~~These accounts frequently send routine testing to us for processing along with specialized testing in order to simplify their diagnostic ordering and review procedures and to take advantage~~ of ~~our~~New ~~outstanding capability~~York, ~~service~~New and support. 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 footprintJersey, ~~we provide the same services that we provide on a national basis as well as some regional focused diagnostic services~~Maryland, ~~such as histology and pathology support services~~Pennsylvania, ~~substance abuse testing~~Delaware, ~~fertility~~Washington ~~testing~~DC, ~~hemostasis testing~~Florida, ~~women’s health testing~~California, 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. Laboratorio Buena Salud is the first national testing laboratory dedicated to serving Spanish-speaking populations in the United States. All business is conducted in SpanishTexas, Illinois ~~including patient~~ and ~~physician interactions~~Massachusetts.

~~Over~~We ~~the~~have ~~last~~developed ~~few~~a ~~years,~~national ~~there~~reputation ~~have~~for ~~been~~our ~~fundamental~~expertise ~~changes~~ in ~~the~~certain ~~laboratory~~focused ~~services~~areas ~~industry.~~of Inclinical ~~the~~testing. GenPath ~~1990s~~Oncology, the ~~industry~~name ~~was~~by ~~negatively~~which ~~impacted~~we byare ~~the~~known ~~growth~~for ofour ~~managed~~cancer ~~care,~~and ~~increased~~oncology ~~government regulation~~services, ~~and~~is ~~investigations~~recognized ~~into~~for ~~fraud~~the ~~and~~superior ~~abuse.~~hematopathology ~~These~~services ~~factors~~it ~~led~~provides tothroughout ~~revenue~~the ~~and~~country. ~~profit~~Our ~~declines~~Women’s ~~and~~Health ~~industry consolidations~~initiative, ~~especially~~through ~~among~~which ~~commercial~~we ~~laboratories.~~provide ~~There~~dedicated ~~are~~services ~~currently~~for ~~only~~obstetrics ~~three~~and USgynecology ~~publicly~~practices, ~~traded~~including ~~full~~a ~~service~~technically ~~laboratories~~advanced ~~operating~~multiplex ~~primarily~~process infor ~~the~~identifying ~~U.S.~~sexually ~~While~~transmitted ~~that~~infections, ~~means~~is ~~that~~offered ~~the~~as ~~two~~GenPath ~~national~~Women’s ~~mega-laboratories~~Health. We ~~and Bio-Reference Laboratories~~ are ~~the~~a ~~only~~full-service ~~remaining~~laboratory ~~publicly~~that ~~traded~~primarily ~~full~~services ~~service~~physician ~~commercial~~office ~~laboratories,~~practices; ~~there~~our ~~are~~drivers ~~numerous~~pick ~~hospital~~up ~~outreach~~samples ~~programs~~ and ~~smaller~~deliver ~~reference~~reports ~~laboratories~~and ~~that~~supplies, ~~compete~~we ~~for~~provide ~~the~~sophisticated ~~commercial~~technical ~~clinical~~support, ~~laboratory~~phlebotomy ~~business~~services ~~scattered~~or ~~throughout~~patient ~~the~~service ~~country.~~centers ~~Clinical~~where ~~laboratories~~appropriate, ~~have~~and ~~had~~electronic tocommunication ~~improve~~services ~~efficiency,~~in ~~leverage~~many ~~economies~~cases. Physicians outside of ~~scale,~~our ~~comply~~regional ~~with~~footprint ~~government~~send ~~regulations~~samples ~~and~~to ~~other~~our ~~laws~~laboratory ~~and~~in ~~develop~~order ~~more profitable approaches~~ to ~~pricing.~~take ~~Moreover,~~advantage ~~there~~of ~~has~~the ~~been~~expertise athat ~~proliferation~~we ofare ~~technology~~able ~~advancements~~to provide in ~~clinical~~blood-based ~~diagnostics~~cancer ~~over~~pathology ~~the~~and ~~last~~associated ~~decade~~diagnostics ~~that~~or ~~has~~to ~~created~~take ~~significant~~advantage ~~opportunities~~of ~~for~~the ~~new~~superior ~~testing and growth.~~service,

910

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Assupport aand ~~full~~technologically ~~service~~advanced ~~clinical~~testing ~~laboratory,~~ we ~~are~~offer ~~constantly~~in ~~looking~~our ~~for~~Women’s ~~new~~Health ~~technologies~~initiative. ~~and~~These ~~new~~accounts ~~methodologies~~frequently ~~that~~send ~~will~~routine ~~help~~testing to us tofor ~~grow.~~processing ~~Since~~along ~~the~~with ~~turn~~specialized oftesting ~~the~~in ~~century,~~order ~~our~~to ~~size~~simplify ~~alone~~their ~~has~~diagnostic ~~made~~ordering usand ~~attractive~~review procedures and to ~~companies~~take ~~that~~advantage ~~are~~of ~~driving~~our ~~the~~outstanding ~~advances~~capability, inservice ~~technology~~and support. Our Wecorrectional ~~represent~~healthcare aservices ~~significant~~are ~~opportunity~~used ~~for~~throughout ~~these~~the ~~companies~~country toat ~~market~~prisons ~~their~~and ~~products~~jails. ~~with~~The afocused ~~nationally~~markets ~~recognized~~we ~~specialty~~serve ~~provider~~on ina ~~our~~national ~~focused~~basis ~~areas~~outside of ~~specialty~~our orregional infootprint ~~one~~do ofnot ~~the~~require ~~major~~many ~~population centers~~ of the ~~world—the~~logistical ~~New~~and ~~York~~other ~~Metropolitan~~ancillary ~~area.~~support Weservices ~~have~~required ~~had~~within ~~several~~the ~~successful strategic relationships with such technology opportunities~~region. InEven ~~addition~~within toour ~~new~~regional ~~technology opportunities~~footprint, we ~~have~~provide anthe ~~extremely~~same ~~seasoned~~services ~~and~~that ~~talented~~we ~~management~~provide ~~staff~~on ~~that~~a ~~has~~national ~~been~~basis ~~able~~as towell ~~identify~~as ~~emerging~~some ~~laboratory~~regional ~~markets~~focused ~~that~~diagnostic ~~are~~services, ~~under-served~~such oras ~~under-utilized.~~histology Weand ~~have~~pathology ~~recently~~support ~~developed~~services, ~~programs~~substance ~~for~~abuse ~~cardiology~~testing, ~~histology~~fertility ~~and~~testing, hemostasis testing, women’s health totesting, goand ~~along~~molecular ~~with~~diagnostics ~~our~~that ~~existing~~are ~~hemostasis,~~unavailable ~~hematopathology~~from ~~and~~many ~~correctional~~of ~~healthcare~~the ~~initiatives~~smaller ~~which~~regional ~~have~~competitors; ~~already~~testing ~~been established and~~ in ~~which~~some weof ~~have~~these ~~been~~areas ~~increasing~~may ~~our~~be ~~market~~provided ~~share~~outside ~~for~~of ~~the~~physician ~~past several years~~offices. Laboratorio WeBuena ~~offer~~Salud ais ~~comprehensive pre-natal program to leverage our presence in~~ the ~~women’s~~first ~~health~~national ~~environment~~testing ~~and~~laboratory wededicated ~~will continue~~ to ~~vigilantly~~serving ~~seek~~Spanish-speaking ~~focused~~populations ~~diagnostic~~in ~~marketing~~the ~~opportunities~~United ~~where~~States. All webusiness ~~can~~is ~~provide~~conducted ~~information,~~in ~~technology~~Spanish, ~~service~~including orpatient ~~support that expand~~ and ~~grow~~physician ~~our clinical laboratory~~interactions.

~~While~~Over wethe ~~recognize~~last ~~that~~few weyears, ~~are~~there ahave ~~clinical~~been ~~laboratory~~fundamental ~~that~~changes ~~processes~~in ~~samples,~~the welaboratory ~~also~~services ~~understand~~industry. ~~that~~In wethe ~~are~~1990s, anthe ~~information~~industry ~~company~~was ~~that~~negatively ~~needs~~impacted toby ~~effectively communicate~~ the ~~results~~growth of ~~our~~managed ~~efforts~~care, ~~back~~increased togovernment ~~healthcare~~regulation, ~~providers.~~and ~~Laboratory~~investigations ~~results~~into ~~play~~fraud aand ~~major~~abuse. ~~role~~These infactors ~~the~~led ~~implementation~~to ofrevenue ~~physician~~and ~~healthcare.~~profit ~~Laboratory~~declines ~~results~~and ~~are~~industry ~~used~~consolidations, toespecially ~~diagnose,~~among ~~monitor~~commercial ~~and~~laboratories. ~~classify~~There ~~health~~are ~~concerns.~~currently Inonly ~~many~~three ~~cases,~~US ~~laboratory~~publicly ~~results~~traded ~~represent~~full ~~the~~service ~~confirming~~laboratories ~~data~~operating primarily in ~~diagnosing~~the ~~complicated~~U.S. ~~health~~While ~~issues.~~that ~~Since~~means ~~laboratory~~that ~~results~~the ~~play~~two ~~such~~national anmega-laboratories ~~important~~and ~~role~~Bio-Reference inLaboratories ~~routine~~are ~~physician~~the ~~care,~~only weremaining ~~have~~publicly ~~developed~~traded ~~informatics~~full ~~solutions~~service ~~that~~commercial ~~leverage~~laboratories, ~~our~~there ~~role~~are innumerous ~~healthcare.~~hospital Weoutreach ~~built~~programs aand ~~web-based~~smaller ~~solution~~reference tolaboratories ~~quickly,~~that ~~accurately,~~compete ~~conveniently~~for ~~and~~the ~~competitively~~commercial ~~collect~~clinical ~~ordering~~laboratory ~~information~~business ~~and~~scattered ~~deliver~~throughout ~~results~~the country. ~~That~~ ~~solution~~Clinical islaboratories ~~called~~have ~~CareEvolve. CareEvolve~~had ~~has~~to ~~been~~improve ~~essential~~efficiency, toleverage ~~our~~economies ~~own~~of ~~operations.~~scale, Wecomply ~~license~~with ~~the~~government ~~technology~~regulations toand other ~~laboratories~~laws ~~throughout~~and ~~the~~develop ~~country~~more ~~that~~profitable ~~they~~approaches ~~utilize~~ to ~~more~~pricing. ~~effectively~~Moreover, ~~compete~~there ~~against~~has ~~the~~been ~~national~~a ~~laboratories.~~proliferation ~~These~~of ~~other~~technology ~~laboratories~~advancements ~~licensing~~in ~~our~~clinical ~~technology~~diagnostics ~~are~~over ~~typically~~the ~~not~~last ~~our~~decade ~~competitors~~that ~~since~~has ~~they~~created ~~are~~significant ~~outside~~opportunities ~~our~~for ~~regional~~new ~~footprint~~testing and growth.

WeAs ~~have~~a ~~also~~full ~~created~~service ~~our~~clinical ~~PSIMedica~~laboratory, ~~business~~we ~~unit~~are constantly looking for new technologies and new methodologies that ~~has~~will ~~developed~~help aus ~~Clinical~~to ~~Knowledge~~grow. ~~Management~~Since ~~(CKM)~~the ~~System~~turn of the century, our size alone has made us attractive to companies that ~~takes~~are ~~data~~driving ~~from~~the ~~enrollment,~~advances ~~claims,~~in ~~pharmacy,~~technology. ~~laboratory~~We ~~results~~represent ~~and~~a ~~any~~significant ~~other~~opportunity ~~available~~for ~~electronic~~these ~~source~~companies to ~~provide~~market ~~both~~their ~~administrative~~products ~~and~~with ~~clinical~~a ~~analysis~~nationally ofrecognized aspecialty ~~population.~~provider ~~The~~in ~~system~~our ~~uses~~focused ~~proprietary~~areas ~~algorithms~~of tospecialty ~~cleanse~~or ~~and~~in ~~configure~~one of the ~~data~~major ~~and~~population ~~transfer~~centers of the ~~resulting~~world—the ~~information~~New ~~into~~York aMetropolitan ~~healthcare~~area. ~~data~~We ~~repository.~~have ~~Using~~had ~~advanced~~several ~~cube~~successful strategic relationships with such technology ~~methodologies,~~opportunities. ~~the~~In ~~data~~addition ~~can~~to benew ~~analyzed~~technology ~~from~~opportunities, awe ~~myriad~~have ofan ~~views~~extremely seasoned and ~~from~~talented ~~highly~~management ~~granular~~staff ~~transactional~~that ~~detail~~has been able to ~~global~~identify ~~trended~~emerging ~~overview~~laboratory markets that are under-served or under-utilized. ~~Events~~We ~~such~~have asrecently ~~the~~developed ~~Hurricane~~programs ~~Katrina~~for incardiology, ~~Louisiana~~histology and ~~general~~women’s ~~pressures~~health ~~from~~to ~~the~~go ~~government~~along ~~have~~with ~~made~~our ~~development~~existing ofhemostasis, anhematopathology ~~electronic~~and ~~medical~~correctional ~~record~~healthcare ~~system~~initiatives ~~and~~which ~~Pay-for~~have ~~Performance~~already ~~reimbursement~~been ~~priority~~established ~~goals~~and in ~~the~~which ~~healthcare~~we ~~industry.~~have Abeen ~~large~~increasing ~~portion~~our ofmarket anshare ~~individual’s~~for ~~medical~~the ~~record~~past ~~consists~~several ofyears. ~~laboratory~~We ~~data~~offer ~~and~~ a ~~key~~comprehensive ~~performance~~pre-natal ~~indicator~~program to leverage our presence in ~~any~~the ~~Pay-for-Performance~~women’s ~~initiative~~health isenvironment ~~laboratory~~and ~~result~~we ~~data.~~will ~~Our~~continue ~~CKM~~to ~~system~~vigilantly isseek afocused ~~mature,~~diagnostic ~~full~~marketing ~~functioning~~opportunities ~~solution~~where ~~that~~we ~~will~~can ~~allow~~provide usinformation, totechnology, ~~play~~service aor ~~role~~support inthat ~~these~~expand ~~important~~and ~~national~~grow ~~initiatives~~our clinical laboratory.

ToWhile ~~date~~we recognize that we are a clinical laboratory that processes samples, ~~neither~~we also understand that we are an information company that needs to effectively communicate the results of our ~~PSIMedica~~efforts ~~business~~back ~~unit~~to ~~nor~~healthcare ~~CareEvolve~~providers. ~~has~~Laboratory ~~produced~~results ~~significant~~play ~~revenues~~a ~~relative~~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 ~~primary~~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 built a web-based solution to quickly, accurately, conveniently and competitively collect ordering information and deliver results. That solution is called CareEvolve. CareEvolve 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.

~~First~~We ~~Quarter~~have ~~Fiscal~~also ~~2015~~created ~~Compared~~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 ~~First~~provide ~~Quarter~~both ~~Fiscal~~administrative ~~2014~~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 Hurricane Katrina 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.

~~NET~~To ~~REVENUES:~~date, neither our PSIMedica business unit nor CareEvolve has produced significant revenues relative to the primary laboratory operations.

Net revenues for the three-month period ended January 31, 2015 were $208,833 as compared to $181,270 for the three-month period ended January 31, 2014. This represents a 15% increase in net revenues. This increase is due to a 7% increase in patient counts and an increase in revenue per patient of 8% due to a shift in business to higher reimbursement esoteric testing which continues to be the principal driver in net revenue per patient. The number of patients serviced during the three-month period ended January 31, 2015 was 2,352 which was 7% greater when compared to the prior fiscal year’s three-month period. Net revenue per patient for the three-month period ended January 31, 2015 was $88.09 compared to net revenue per patient of $81.17 for the three-month period ended January 31, 2014, an increase of 8%. In comparing these two quarters it is important to keep in mind the effect of inclement weather on the first quarter of 2014’s numbers. This impact in our estimate amounted to be about 5 cents per share.11

~~Our~~Table ~~revenues and patient counts could be adversely affected by a number~~ of factors, including, but not limited, to an extended economic 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.Contents

~~COST~~Second OFQuarter ~~SERVICES:~~Fiscal 2015 Compared to Second Quarter Fiscal 2014

~~Cost~~NET of services increased from $109,116 for the three-month period ended January 31, 2014 to $119,078 for the three-month period ended January 31, 2015, an increase of $9,962 or 9%. This increase is less than the increase in net as the company is beginning to realize savings associated with the increased scale of its operations.REVENUES:

~~GROSS~~Net ~~PROFITS:~~revenues for the three-month period ended April 30, 2015 were $223,986 as compared to $201,366 for the three-month period ended April 30, 2014. This represents an 11% increase in net revenues. This increase is due to an 8% increase in patient counts and an increase in revenue per patient of 3%. The number of patients serviced during the three-month period ended April 30, 2015 was 2,559, which was 8% greater when compared to the prior fiscal year’s corresponding three-month period. This increase in patient counts is mainly due to the overall success of all our lines of business. Net revenue per patient for the three-month period ended April 30, 2015 was $86.69 compared to net revenue per patient of $84.18 for the three-month period ended April 30, 2014, an increase of 3%.

~~Gross~~Our ~~profits~~revenues ~~increased~~and ~~from~~patient ~~$72,154~~counts ~~for~~could ~~the~~be ~~three-month~~adversely ~~period~~affected ~~ended~~by ~~January 31~~a number of factors, ~~2014~~including, tobut ~~$89~~not limited,~~755~~ ~~for~~to ~~the~~an ~~three-month~~extended ~~period~~economic ~~ended~~downturn ~~January 31,~~in ~~2015~~general or healthcare economic conditions, an ~~increase~~unexpected ofreduction ~~$17~~in reimbursement rates,~~601~~ increased market penetration by our competitors or ~~24%.~~a ~~Gross~~substantial ~~profit~~adverse ~~margin~~change ~~increased~~in tofederal ~~43%~~regulatory ~~from~~requirements ~~40%~~governing our industry.

~~GENERAL~~COST ~~AND~~OF ~~ADMINISTRATIVE EXPENSES~~SERVICES:

~~General~~Cost ~~and~~of ~~administrative~~services ~~expenses~~increased from $112,817 for the three -month period ~~ending~~ended ~~January~~April 3130, 2014 ~~were $66,274 as compared~~ to $77125,~~827~~003 for the ~~quarter~~three-month period ended ~~January~~April 3130, 2015, an increase of $11~~,553or 17~~%. This increase iswas ~~only~~related ~~slightly~~largely ~~greater than the increase in net revenues. This is mainly due~~ to ~~additional~~our ~~legal~~continuing ~~and~~integration ~~administrative~~ expenses ~~incurred as the result~~ of ~~two~~our ~~large~~California ~~ongoing litigations disclosed separately as well as integrating~~ operations ~~of recently acquired businesses in Florida and California~~.

~~INTEREST~~GROSS ~~EXPENSE~~PROFITS:

~~Interest~~Gross ~~expense~~profits ~~decreased~~increased to $~~560~~98,983 ~~during~~for the three-month period ~~ending~~ended ~~January~~April 3130, 2015 from $~~609~~88,549 ~~during~~for the three-month period ended ~~January~~April 3130, 2014., ~~This~~an ~~decrease~~increase isof ~~due~~12%. toThis aincrease ~~decrease~~is in ~~the~~line ~~utilization~~with ofthe ~~our~~increase ~~PNC~~in ~~Bank Credit Line~~revenues.

~~NET~~GENERAL ~~INCOME~~AND ADMINISTRATIVE EXPENSES:

WeGeneral ~~realized~~and ~~net~~administrative ~~income~~expenses ~~of $6,633~~ for the three-month period ~~ended~~ending ~~January~~April 3130, ~~2015, as compared to $2,954 for the three-month period ended January 31,~~ 2014, anwere ~~increase of~~ $369,~~679~~670 oras ~~125%. Pre-tax income for the period ended January 31, 2015 was $11,504,~~ compared to $580,~~255~~057 for the ~~three-month period~~quarter ended ~~January~~April 3130, ~~2014~~2015, an increase of ~~$6,249 or 119~~15%. This ~~substantial~~ increase inis ~~pre-tax~~slightly ~~income~~more isthan the ~~result~~increase ofin ~~several factors such as substantial winding down of additional integration costs related to~~ our ~~acquisitions~~net inrevenues ~~Florida~~ and ~~California~~is ~~and~~mainly ~~being~~due ~~more adapt~~ to ~~the~~an ~~changing~~increase ~~reimbursement~~in ~~landscape.~~marketing ~~The~~expenses ~~provision~~we ~~for~~incurred ~~income~~as ~~taxes increased to $4,871 for~~ the ~~three-month~~result ~~period~~of ~~ended~~expanding ~~January 31,~~our ~~2015~~sales ~~from~~and ~~$2,301~~marketing ~~for the period ended January 31, 2014~~operations.

10INTEREST EXPENSE:

~~Table~~Interest expense increased to $666 during the three-month period ending April 30, 2015 from $597 during the three-month period ended April 30, 2014. This increase is due to an increase in the utilization of ~~Contents~~our PNC Bank’s credit line.

~~LIQUIDITY~~NET ~~AND CAPITAL RESOURCES~~INCOME:

~~Our~~We ~~working~~realized ~~capital~~net atincome ~~January 31,~~of ~~2015 was~~ $~~213~~10,~~792~~461 asfor ~~compared~~the tothree-month ~~$207,285~~period atended ~~October~~April 3130, ~~2014. This~~2015, ~~represents~~as ancompared ~~increase~~to ~~of about 3%. Our cash position increased by about~~ $410,~~733~~273 ~~during~~for the ~~current~~three-month period~~. We~~ ~~increased~~ended ~~our~~April 30, ~~short~~2014, ~~term~~an ~~debt~~increase byof ~~$364 and repaid $136 in existing debt~~2%. WePre-tax ~~had~~income ~~current~~for ~~liabilities~~the ofperiod ~~$147,556~~ended ~~at January~~April 3130, ~~2015.~~2014 Wewas ~~generated~~ $1018,~~057 in cash from operations~~238, compared to ~~utilizing~~ $318,~~431~~281 for the ~~quarter~~three-month period ended ~~January~~April 3130, ~~2014~~2015, an increase of ~~$12,809~~less inthan ~~cash generated from operations year over year~~1%. ~~The~~This small increase iswas ~~attributable~~primarily tocaused aby ~~better~~an ~~collection~~increase ~~rate~~ in ~~relation~~our tomarketing ~~sales~~expenses.The ~~growth~~provision ~~rate~~for ~~happening~~income astaxes ~~the~~decreased ~~result~~to of$7,820 usfor ~~being more adapt to~~ the ~~changing~~three-month ~~reimbursement~~period ~~landscape~~ended ~~associated~~April 30, ~~with~~2015 ~~the~~from ~~implementation~~$7,965 offor the ~~Affordable~~period ~~Care~~ended ~~Act. We~~April 30, ~~believe that this represents the latest trend~~2014.

~~Our~~Six ~~cash~~Months ~~balance at January 31,~~ 2015 ~~totaled~~Compared ~~$22,240 as compared~~ to ~~$17,507~~Six atMonths ~~October 31,~~ 2014, an increase of $4,733. 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 2015.

~~Accounts~~NET receivable, net of allowance for doubtful accounts, totaled $268,720 at January 31, 2015, an increase of $5,374 or 2% from October 31, 2014. Cash collected during the three-month period ended January 31, 2015 increased 18% over the comparable prior year three-month period.REVENUES:

~~Credit~~Net ~~risk~~revenues ~~with~~for ~~respect~~the tosix-month ~~accounts~~period ~~receivable~~ended isApril 30, ~~generally~~2015 ~~diversified~~were ~~due~~$432,820 as compared to $382,635 for the ~~large~~six-month ~~number~~period ofended ~~patients~~April 30, ~~comprising~~2014. ~~our~~This ~~client~~represents ~~base~~a 13% increase in net revenues. We ~~have~~This ~~significant~~increase ~~receivable~~is ~~balances~~due ~~with~~to ~~government~~a ~~payors~~7% ~~and~~increase ~~various~~in ~~insurance~~patient ~~carriers~~counts while the revenue per patient increased by 6%. ~~Generally~~The number of patients serviced during the six-month period ended April 30, we2015 dowas ~~not~~4,911, ~~require~~which ~~collateral~~was or7% ~~other~~greater ~~security~~when compared to ~~support~~the ~~customer~~prior ~~receivables.~~fiscal ~~However,~~year’s wecorresponding ~~continually~~six-month ~~monitor~~period. ~~and~~This ~~evaluate~~increase ~~our~~in ~~client~~patient ~~acceptance~~counts ~~and~~is ~~collection~~mainly ~~procedures~~due to ~~minimize~~the ~~potential~~overall ~~credit~~success ~~risks~~of ~~associated~~all ~~with~~ our ~~accounts~~lines ~~receivable~~of ~~and~~business. ~~establish~~Net anrevenue ~~allowance~~per patient for ~~uncollectible~~the ~~accounts.~~six-month Asperiod aended ~~consequence~~April 30, we2014 ~~believe~~was ~~that~~$82.73 ~~our~~compared ~~accounts~~to ~~receivable~~net ~~credit~~revenue ~~risk~~per ~~exposure~~patient ~~beyond~~for ~~such~~the ~~allowance~~six-month isperiod ~~not~~ended ~~material~~April 30, to2015 ~~the~~of ~~financial~~$87.36, ~~statements~~an increase of 6%.

AOur ~~number~~revenues ofand ~~proposals~~patient ~~for~~counts ~~legislation~~could ~~continue to~~ be ~~under~~adversely ~~discussion~~affected ~~that~~by ~~could~~a ~~substantially~~number ~~reduce~~of ~~Medicare~~factors, ~~and~~including, ~~Medicaid~~but ~~reimbursements~~not limited, to ~~clinical~~an ~~laboratories. Depending~~extended ~~upon~~economic ~~the~~downturn ~~nature~~in ofgeneral ~~regulatory~~or ~~action,~~healthcare ~~and~~economic ~~the content of legislation~~conditions, wean ~~could~~unexpected ~~experience~~reduction ~~a significant decrease~~ in ~~revenues~~reimbursement ~~from~~rates, ~~Medicare~~increased ~~and~~market ~~Medicaid,~~penetration ~~which~~by ~~could~~our ~~have~~competitors or a ~~material~~substantial adverse ~~effect~~change onin ~~us.~~federal Weregulatory ~~are~~requirements ~~unable~~governing toour ~~predict,~~industry ~~however,~~as ~~the~~well ~~extent~~as ofa ~~which~~failure ~~such~~to ~~actions~~continue ~~will~~the besizeable ~~taken~~annual ifpercentage atincrease ~~all~~in base business.

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:12

~~Differences~~Table ~~between~~of ~~fee schedules and actual reimbursement rates.~~Contents

~~Incomplete~~COST orOF ~~inaccurate billing information provided by physicians or clinics.~~SERVICES:

~~Disparity~~Cost inof ~~coverage~~services ~~and~~increased ~~information~~to ~~requirements~~$244,082 for the six-month period ended April 30, 2015 from $221,932 for the six-month period ended April 30, 2014. This represents a 10% increase in direct operating costs.

~~Disputes~~GROSS ~~with payors.~~PROFITS:

~~Internal~~Gross ~~and~~profits ~~external~~on ~~compliance~~net ~~policies~~revenues ~~and~~increased ~~procedures~~to $188,738 for the six-month period ended April 30, 2015 from $160,703 for the six-month period ended April 30, 2014, an increase of 17%. Gross profit margins were 44% for the six-month period ended April 30, 2015 compared to 42% in the corresponding six-month period ended April 30, 2014.

~~Significant~~GENERAL ~~costs~~AND ~~are~~ADMINISTRATIVE 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 billing 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 accounts receivable allowance for doubtful accounts. Days Sales Outstanding (“DSO”) for the period ended January 31, 2015 was 113 days up from 111 days in the quarter end January 31, 2014. However, when you compare our collections to our net collectible revenues as reported on our financial statements for the comparable periods in question, it varies between 98% to 102% depending on the period.EXPENSES:

~~See~~General ~~Notes~~and toadministrative ~~our~~expenses ~~consolidated~~for ~~financial~~the ~~statements~~six-month period ended April 30, 2015 were $157,884 as compared to $135,943 for the ~~information~~six-month onperiod ~~our~~ended ~~short~~April 30, 2014. This represents an increase of 16%. This increase is 3% more than the increase in net revenues and ~~long~~is ~~term~~mainly ~~debt~~due to additional marketing expenses incurred as we expanded our marketing operations.

WeINTEREST intend to expand our laboratory operations through aggressive marketing while also diversifying into related medical fields through acquisitions. These acquisitions may involve cash, notes, common stock, and/or combinations thereof. In the event stock is used for such acquisition dilution of ownership will occur.EXPENSE:

~~Tabular~~Interest ~~Disclosure~~expense increased to $1,226 during the six-month period ending April 30, 2015 as compared to $1,206 during the six-month period ending April 30, 2014, an increase of ~~Contractual~~$20. This ~~Obligations~~increase is due to an increase in the utilization of our PNC Bank credit line.

	Next Four Years and Thereafter ($)	FY 2015 ($)
Long-Term Debt	3,145	524
Capital Leases	12,789	6,624
Operating Leases	4,637	8,909
Purchase Obligations	121,707	63,692
Long-Term Liabilities under Employment and Consultant Contracts	9,113	4,582

INCOME:

~~Impact~~We realized net income of ~~Inflation~~$17,094 for the six-month period ended April 30, 2015 as compared to $13,227 for the six-month period ended April 30, 2014, an increase of 29%. Our operating income increased by 25% for the six-month period ended April 30, 2015 as compared to the six-month period ended April 30, 2014. Pre-tax income for the six-month period ended April 30, 2015 was $29,785 as compared to $23,494 for the period ended April 30, 2014, an increase of 27%. The provision for income taxes increased from $10,267 for the period ended April 30, 2014, to $12,691 for the current six-month period, an increase of 24%.

ToLIQUIDITY ~~date,~~AND ~~inflation~~CAPITAL ~~has not had a material effect on our operations.~~RESOURCES:

11Our working capital at April 30, 2015 was $217,644 as compared to $207,285 at October 31, 2014, an increase of 5%. Our cash increased by $7,639 during the current period. We increased our short-term debt by $17 and repaid $274 in existing debt. We had current liabilities of $162,326 at April 30, 2015. We generated $10,557 in cash from operations, compared to utilizing 188 for the six-month period ended April 30, 2014, an overall increase of $10,745 in cash generated from operations year over year.

~~Table~~On May 14, 2015 a date subsequent to the period covered in these financial statements the Company further amended its PNC Bank Credit Line to increase the maximum that can be borrowed under the credit line to $120,000 as well as extended the credit line through October 2020. This amendment is effective as of ~~Contents~~May 5, 2015. The other terms of the amendment remained substantially unchanged.

~~Critical~~Accounts ~~Accounting~~receivable, ~~Policies~~net of allowance for doubtful accounts, totaled $285,361 at April 30, 2015, an increase of $22,015 or 8% from October 31, 2014. Cash collected during the three-month period ended April 30, 2015 increased 11% over the comparable prior year three-month period.

~~The~~Credit ~~preparation~~risk with respect to accounts receivable is generally diversified due to the large number of ~~financial~~patients ~~statements~~comprising inour ~~conformity~~client base. We have significant receivable balances with Ugovernment payors and various insurance carriers.S. Generally, ~~generally~~we ~~accepted~~do ~~accounting~~not ~~principles~~require ~~requires~~collateral ~~management~~or other security to ~~make~~support ~~estimates~~customer ~~and~~receivables. ~~assumptions~~However, ~~that~~we ~~affect~~continually ~~the~~monitor ~~reported~~and ~~amounts~~evaluate ofour ~~assets~~client acceptance and ~~liabilities~~collection ~~and~~procedures ~~disclosure~~to ofminimize ~~contingent~~potential ~~assets~~credit risks associated with our accounts receivable and ~~liabilities~~establish atan ~~the~~allowance ~~date~~for ofuncollectible ~~the~~accounts. ~~financial~~As ~~statements~~a ~~and~~consequence, ~~the~~we ~~reported~~believe ~~amounts~~that ofour ~~revenues~~accounts ~~and~~receivable ~~expenses~~credit ~~during~~risk exposure beyond such allowance is not material to the ~~reported~~financial ~~periods~~statements.

~~Accounting~~A number of proposals for ~~Intangible~~legislation continue to be under discussion that could substantially reduce Medicare and ~~Other~~Medicaid ~~Long-Lived~~reimbursements ~~Assets~~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, which could have a material adverse effect on us. We are unable to predict, however, the extent of which such actions will be taken if at all.

WeBilling ~~evaluate~~for ~~the~~laboratory ~~possible~~services ~~impairment~~is ofcomplicated ~~our~~and ~~long-lived~~we ~~assets,~~must ~~including~~bill ~~intangible~~various ~~assets.~~payors, Wesuch ~~review~~as the ~~recoverability~~individual, ~~of our long-lived assets when events or changes in circumstances occur that indicate that~~ the ~~carrying~~insurance ~~value~~company, of the ~~asset~~government ~~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~~federal ~~and~~or ~~without interest charges~~state), of the ~~related~~private ~~operations.~~company Ifor the ~~expected~~health ~~undiscounted~~clinic. ~~pretax~~Other ~~cash~~factors ~~flows~~that ~~are~~may ~~less~~complicate ~~than~~billing ~~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.~~include:

~~Accounting for Revenue~~13

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

~~Service~~Differences ~~revenues~~between ~~before~~fee ~~provision~~schedules ~~for bad debts are determined utilizing gross service revenues net of contractual adjustments~~ and ~~discounts. Even~~actual 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 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 due to the contractual adjustments and discounts 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. This calculation is 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 table below shows the adjustments made to gross service revenues to arrive at net revenues, the amount reported on our statement of operations.

	($)
	Three Months Ended January 31
	[Unaudited]
	2015	2014
Gross Service Revenues	1,065,293	909,879
Contractual Adjustments and Discounts:
Medicare/Medicaid Portion	94,063	88,919
All Other Third Party Payors*	749,201	624,145
Total Contractual Adjustments and Discounts	843,264	713,064
Service Revenues Net of Contractual Adjustments and Discounts	222,029	196,815
Patient Service Revenue Provision for Bad Debts**	13,196	15,545
Net Revenues	208,833	181,270

Incomplete or inaccurate billing information provided by physicians or clinics.

*Disparity ~~All~~in ~~Other~~coverage ~~Third Party~~ and ~~Direct~~information 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 accountsrequirements.

**Disputes ~~Represents~~with ~~the amount of Bad Debt Expense that is required to be presented as a deduction from patient service revenue (net of contractual allowances and discounts) pursuant to ASU No~~payors. ~~2011-7.~~

~~When~~Internal ~~new~~and ~~business~~external iscompliance ~~received~~policies ~~by BRLI, service revenues net of contractual adjustments~~ and ~~discounts are calculated by reducing gross service revenues by the estimated contractual allowance~~procedures. The Patient Service Revenue Provision for Bad Debts represents the amount of bad debt expense expected to occur on patient service revenue based upon our experience. The remaining bad debt expense is presented as part of operating expenses. The bad debt expense presented as part of operating expense represents the bad debt expense related to receivables from service revenues determined after taking into account our ability to collect on such revenue.

12Significant 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 billing 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 the period ended April 30, 2015 was 113 days, an increase of 10 days, or about 10%, from the 103 days that we reported for the period ended April 30, 2014. On a rolling basis, our actual collections represent between 98% and 102% of our net collectable revenues.

~~Table~~See ofNotes ~~Contents~~to our consolidated financial statements for the information on our short and long term debt.

~~BRLI~~We ~~recognized~~intend ~~the amounts in subsequent periods for actual allowances/discounts~~ to ~~gross~~expand ~~service~~our ~~revenue;~~laboratory ~~bad~~operations ~~debt~~organically ~~may~~through ~~have~~marketing ~~been~~while ~~adjusted~~also ~~over~~diversifying ~~the~~into ~~same~~related ~~periods~~medical offields ~~time~~through ~~to maintain an accurate balance between net revenues and actual revenues~~acquisitions. These ~~Management~~acquisitions ~~has~~may ~~reviewed~~involve 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 actioncash, ~~if any~~notes, ~~which~~common isstock ~~taken~~ and/or ~~the~~combinations ~~content of legislation, if any, which is adopted, the Company could experience a significant decrease in revenues from Medicare and Medicaid, which could have a material adverse effect on the Company~~thereof. ~~The Company is unable to predict, however, the extent to which such actions will be taken.~~

ItTabular isDisclosure ~~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 by 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 adjustments and discounts 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. 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 payer’s timely filing limits. Accounts Receivable on the balance sheet is net of the following amounts for contractual credits and doubtful accounts:Obligations

	[Unaudited]
	Next Four Years and Thereafter ($)	FY 2015 ($)
	January 31,	October 31,
Long-Term Debt	3,145	524
	2015	2014
Capital Leases	12,789	6,624
Contractual Credits/Discounts	535,118	513,466
Operating Leases	4,637	8,909
Doubtful Accounts	78,541	83,276
Purchase Obligations	128,626	73,709
Total Allowance	613,659	596,742
Long-Term Liabilities under Employment and Consultant Contracts	9,113	4,582

~~Item~~Our 3cash -balance ~~QUANTITATIVE~~at ~~AND~~April 30, ~~QUALITATIVE~~2015 ~~DISCLOSURES~~totaled ~~ABOUT~~$25,146 ~~MARKET~~as ~~RISK~~compared ~~[Not~~to in$17,507 ~~Thousands]~~at October 31, 2014. 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 for the next 12 months.

WeImpact doof not invest in or trade instruments that 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.Inflation

WeTo dodate, ~~have~~inflation ~~exposure~~has tonot ~~both~~had ~~rising~~a ~~and~~material ~~falling~~effect ~~interest~~on ~~rates. At January 31, 2015, advances of approximately $33,735,000 under~~ our ~~Loan Agreement with PNC Bank were subject to interest charges at the bank’s then prime rate of 3~~operations.~~50 %.~~

WeCritical ~~estimate~~Accounting that our monthly cash interest expense at January 31, 2015 was approximately $187,000 and that a one percentage point increase or decrease in short-term rates would increase or decrease our monthly interest expense by approximately $28,000.Policies

~~Item~~The 4preparation -of ~~CONTROLS~~financial ~~AND~~statements ~~PROCEDURES~~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.

AnAccounting ~~evaluation~~for ~~was~~Intangible ~~performed under the supervision~~ and ~~with~~Other 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 13aLong-~~15(e) under~~Lived the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our principal executive officer and our principal financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC forms and rules, and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosures.Assets

~~There~~We ~~have~~evaluate ~~been~~the nopossible ~~changes~~impairment inof our ~~internal~~long-lived ~~control~~assets, ~~over~~including ~~financial~~intangible ~~reporting~~assets. ~~during~~We review the ~~fiscal~~recoverability ~~quarter~~of ~~ended~~our ~~January 31,~~long-lived ~~2015~~assets when events or changes in circumstances occur that ~~has~~indicate ~~materially~~that ~~affected,~~the orcarrying value of the asset may not be recoverable. Evaluation of possible impairment is ~~reasonably~~based ~~likely~~on our ability to ~~materially~~recover ~~affect~~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 ~~registrant’s~~difference ~~internal~~between ~~control~~the ~~over~~estimated ~~financial~~fair ~~reporting~~value and the carrying amount of the asset.

13Accounting for Revenue

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

~~BIO-REFERENCE~~Service ~~LABORATORIES, INC~~revenues before provision for bad debts are determined utilizing gross service revenues net of contractual adjustments and discounts. 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

~~PART II—OTHER INFORMATION~~14

~~Item~~Table 1of ~~— Legal Proceedings~~Contents

~~BioReference~~insurance ~~Laboratories, Inc~~provider to pay all or a portion of their healthcare expenses; the majority of services provided by BRLI are to patients covered under a third party payor contract. In vcertain 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 ~~Horizon~~of ~~Healthcare~~these ~~Services~~third party payors may differ not only with regard to rates, ~~Inc~~ but also with regard to terms and conditions of payment and providing coverage (reimbursement) for specific tests. Estimated ~~d/b/~~revenues are established based on a ~~Horizon~~series ~~Blue~~of ~~Cross~~highly ~~Blue~~complex ~~Shield~~procedures and judgments that require industry specific healthcare experience and an understanding of ~~New~~payor ~~Jersey~~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 due to the contractual adjustments and discounts 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. This calculation is 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 table below shows the adjustments made to gross service revenues to arrive at net revenues, the amount reported on our statement of operations.

On December 18, 2013, the Company filed an action in the Superior Court of New Jersey against Horizon Blue Cross Blue Shield of New Jersey (“Horizon”), captioned BioReference Laboratories, Inc. v. Horizon Healthcare Services, Inc. d/b/a Horizon Blue Cross Blue Shield of New Jersey, Docket No. BER L-009748-13 (N.J. Super. Ct. Bergen Cnty.). The Company has been an in-network provider to Horizon’s preferred provider organization (“PPO”) members for more than 20 years and filed the lawsuit after attempts to resolve its dispute with Horizon were unsuccessful.

	($)
	Three Months Ended		Six Months Ended
	April 30,		April 30,
	[Unaudited]		[Unaudited]
	2015	2014	2015	2014
Gross Service Revenues	1,175,282	1,017,621	2,240,575	1,927,499

Contractual Adjustments and Discounts:
Medicare/Medicaid Portion	101,262	94,520	195,325	183,439
All Other Third Party Payors*	838,004	706,234	1,587,205	1,330,379
Total Contractual Adjustments and Discounts	939,266	800,754	1,782,530	1,513,818
Service Revenues Net of Contractual Adjustments and Discounts	236,016	216,867	458,045	413,681
Patient Service Revenue Provision for Bad Debts**	12,030	15,501	25,225	31,046
Net Revenues	223,986	201,366	432,820	382,635

~~The~~* ~~Company~~All ~~currently~~Other ~~provides~~Third ~~services~~Party ~~to Horizon pursuant to an Ancillary Services Provider Agreement entered into in 2003~~ and ~~amended~~Direct inPayors ~~2007. The~~consists ~~central claims in the lawsuit arise from the Company’s performance~~ of ~~laboratory~~almost ~~services~~eight ~~since~~hundred atdistinct ~~least 2008 for members of Horizon’s NJ DIRECT plan~~payors, ~~who~~including ~~receive~~commercial ~~benefits~~health ~~under~~insurers ~~a program that Horizon has bid, promoted,~~ and ~~represented~~administrators toas bewell aas ~~PPO~~professionally ~~product~~billed ~~for~~accounts ~~New~~such ~~Jersey state, county, and municipal workers and teachers. The lawsuit alleges that, despite these representations, Horizon has been improperly treating NJ DIRECT~~ as ~~a Managed Care program in its dealings with the Company~~physicians, ~~thereby costing the Company more than $20~~hospitals,~~000,000~~ inclinics ~~unreimbursed services~~ and depriving state beneficiaries of valuable rights and benefits to which they are entitled. The lawsuit alleges that Horizon furthered its fraud against the Company by means of a sham Request for Proposal issued in 2011 and through false and incorrect communications to the Company and other ~~providers. The~~direct ~~Company~~billed ~~asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud against Horizon~~accounts. In addition to compensatory damages, the Company seeks to recover punitive damages from Horizon due to Horizon’s intentional and malicious misconduct. The Company also seeks declaratory and injunctive relief.

On** ~~February 5,~~Represents ~~2014, Horizon filed a motion to dismiss~~ the ~~complaint,~~amount ~~which the Company opposed. On March 28, 2014, the Honorable Robert C. Wilson~~ of ~~the~~Bad ~~Superior~~Debt ~~Court~~Expense ofthat ~~New~~is ~~Jersey~~required ~~issued~~to anbe ~~oral~~presented ~~ruling~~as ~~denying~~a ~~Horizon’s~~deduction ~~motion~~from topatient ~~dismiss~~service ~~without~~revenue ~~prejudice~~(net ~~pending the completion~~ of ~~discovery. The~~contractual ~~Company~~allowances and ~~Horizon~~discounts) ~~are~~pursuant ~~conducting discovery, which is currently scheduled~~ to ~~close~~ASU ~~on July~~No. ~~30, 2015~~2011-7. ~~The Company intends to vigorously prosecute its claims against Horizon.~~

~~University~~When ofnew ~~Utah~~business ~~Research~~is ~~Foundation~~received by BRLI, etservice ~~al. v.~~revenues ~~GeneDx, Inc~~net of contractual adjustments and discounts are calculated by reducing gross service revenues by the estimated contractual allowance., ~~Civil~~The ~~Action~~Patient NoService Revenue Provision for Bad Debts represents the amount of bad debt expense expected to occur on patient service revenue based upon our experience. ~~2:13cv00954~~ The (Dremaining bad debt expense is presented as part of operating expenses. The ~~Utah)~~bad debt expense presented as part of operating expense represents the bad debt expense related to receivables from service revenues determined after taking into account our ability to collect on such revenue.

OnBRLI ~~October 16,~~recognized ~~2013,~~the ~~Myriad~~amounts ~~Genetics, Inc.,~~in ~~Endorecherche, Inc.,~~subsequent ~~HSC~~periods ~~Research~~for ~~and~~actual ~~Development~~allowances/discounts ~~Limited~~to ~~Partnership,~~gross ~~Trustees~~service ofrevenue; ~~the~~bad ~~University~~debt ofmay ~~Pennsylvania,~~have ~~and~~been ~~University~~adjusted over the same periods of ~~Utah~~time ~~Research~~to ~~Foundation~~maintain ~~(“Plaintiffs”)~~an ~~filed~~accurate abalance ~~complaint~~between ~~for~~net ~~patent~~revenues ~~infringement~~and ~~against~~actual ~~GeneDx, Inc~~revenues., aManagement ~~wholly-owned~~has ~~subsidiary~~reviewed ofthe ~~Bio-Reference~~allowances/discounts ~~Laboratories, Inc.,~~recognized in subsequent periods and believes the ~~United~~amounts ~~States~~to ~~District~~be ~~Court~~immaterial. A number of proposals for legislation or regulation continue to be under discussion which could have the ~~District~~effect of ~~Utah,~~substantially ~~Central~~reducing ~~Division~~Medicare inreimbursements ~~Salt~~for ~~Lake~~clinical ~~City,~~laboratories ~~Utah~~or ~~(“District~~introducing cost sharing to beneficiaries. One such legislation is Protecting Access to Medicare Act of ~~Utah~~2014 (Public ~~litigation~~Law 113—93)(“PAMA”). ~~The~~was ~~complaint~~signed ~~alleged~~into ~~that~~law ~~GeneDx~~on ~~offers~~April 1, ~~laboratory~~2014. The ~~services,~~legislation ~~including~~directed ~~testing~~CMS ~~and~~to ~~analysis~~conduct ofa ~~BRCA1,~~market ~~BRCA2,~~survey and ~~MUTYH~~to ~~genes~~determine whether Medicare is reimbursing at a commercially reasonable rates. To date, ~~that~~CMS ~~infringe~~has ~~sixteen~~fallen ~~(16)~~behind Uthe schedule legislated in PAMA.S. ~~Patents~~As ~~owned~~the orresult, ~~controlled~~the bycurrent ~~Plaintiffs~~reimbursement rates remain unchanged, subject to typical annual reviews, until 2017.

Following several months of discovery, the Court of Appeals for the Federal Circuit held several asserted claims invalid under 35 U.S.C. § 101 on December 17, 2014. The parties then filed the stipulation of dismissal after reaching agreement to settle the patent dispute. District Court Judge Robert J. Shelby granted Plaintiffs and GeneDx’s Joint Stipulated Motion to Dismiss the District of Utah litigation on February 13, 2015. The District Court also had previously granted several similar joint motions to dismiss other cases involving several of the patents and claims asserted against GeneDx. The adverse parties involved in those cases were: Ambry Genetics Corp.; Gene by Gene, Ltd.; Counsyl, Inc.; Quest Diagnostics Inc.; Invitae Corp.; Laboratory Corporation of America Holdings; and Pathway Genomics Corp..15

AsTable ~~part~~ of the settlement, GeneDx and Plaintiffs moved to terminate thirteen petitions for Inter Partes Review (“IPR”) filed by GeneDx with the U.S. Patent and Trademark Office (“USPTO”), challenging the validity of certain claims of 13 of the patents asserted against it in the District of Utah litigation. The Patent Trial and Appeal Board at the USPTO granted GeneDx and Plaintiffs’ motions to terminate on February 19, 2015, without instituting trial on the IPR petitions.Contents

~~Under~~It is typically the ~~settlement,~~responsibility ~~Plaintiffs~~of the patient to pay for laboratory service bills. Most individuals in the United States have ~~given~~an ~~GeneDx~~agreement with a ~~covenant~~third ~~not~~party payor such as Medicare, Medicaid or commercial insurance to ~~sue~~pay ~~over~~all or a portion of their healthcare expenses; this represents the major portion of payment for all services provided by BRLI. In certain cases, the ~~patents~~individual ~~asserted~~has no insurance or does not provide insurance information; in the ~~litigation.~~remainder ~~GeneDx~~of ~~will~~the ~~thus~~cases, ~~continue~~BRLI ~~offering~~is ~~its~~provided ~~services~~the ~~for~~third ~~cancer~~party ~~diagnostics~~billing ~~which~~information, ~~individually~~usually orby ~~part~~the referring physician, and seeks payment from the third party under the terms and conditions of ~~more~~the ~~comprehensive~~third ~~panels~~party payor for health service providers like BRLI. Each of these third party payors may differ not only with regard to rates, ~~all~~but ~~include~~also ~~testing~~with ~~for~~regard ~~mutations~~to interms and conditions of payment and coverage of specific tests. BRLI routinely reviews the ~~BRCA1~~reimbursement policies and ~~BRCA2~~subsequent ~~genes~~payments and collection rates from these different types of payors. ~~GeneDx~~Contractual ~~will~~adjustments ~~also~~and ~~continue~~discounts ~~offering~~are ~~its~~recorded ~~services~~as ~~for~~reductions ~~cancer~~to ~~diagnostics~~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 ~~testing~~revenue ~~for~~recorded ~~mutations~~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. BRLI writes off receivables against the ~~MUTYH~~allowance ~~gene~~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 payer’s timely filing limits. Accounts Receivable on the balance sheet is net of the following amounts for contractual credits and doubtful accounts:

Item 5 — Other Information

	($)
	[Unaudited]
	April 30,	October 31,
	2015	2014

Contractual Credits/Discounts	582,180	513,466
Doubtful Accounts	81,505	83,276
Total Allowance	663,685	596,742

~~None.~~OPKO Merger Agreement

~~Item~~On 6June 3, —2015 ~~EXHIBITS~~the Company, OPKO Health, Inc., a Delaware corporation (“OPKO”) and Bamboo Acquisition, Inc., a New Jersey corporation and a direct wholly owned subsidiary of OPKO (“Sub”), entered into an agreement and plan of merger (the “Merger Agreement”). Pursuant to the Merger Agreement, Sub will be merged with and into the Company (the “Merger”) and the Company, as the surviving corporation, will become OPKO’s wholly owned subsidiary. At the effective time of the Merger, each issued and outstanding share of the Company’s common stock will automatically be converted into and exchanged for the right to receive 2.75 shares of OPKO’s common stock. For further information about the Merger, see Note 10, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part I herein.

Exhibit No.		Description
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

Item 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK [Not in Thousands]

14We do not invest in or trade instruments that 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.

~~Table~~We do have exposure to both rising and falling interest rates. At April 30, 2015, advances of ~~Contents~~approximately $49,315,000 under our PNC Bank Credit Line were subject to interest charges at the bank’s then prime rate of 3.50%.

~~SIGNATURES~~We estimate that our monthly cash interest expense at April 30, 2015 was approximately $204,000 and that a one percentage point increase or decrease in short-term rates would increase or decrease our monthly interest expense by approximately $29,000.

~~Pursuant~~Item to4 ~~the~~— ~~requirements~~CONTROLS ofAND ~~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.~~PROCEDURES

	BIO-REFERENCE LABORATORIES, INC.
	(Registrant)
	/S/ Marc D. Grodman M.D.
	Marc D. Grodman, M.D. President and Chief Executive Officer
	/S/ Sam Singer
	Sam Singer
	Chief Financial and Accounting Officer
Date: March 9, 2015

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. Based on that evaluation, our principal executive officer and our principal financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC forms and rules, and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

15There have been no changes in our internal control over financial reporting during the fiscal quarter ended April 30, 2015 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Table of Contents

BIO-REFERENCE LABORATORIES, INC.

PART II—OTHER INFORMATION

Item 1 — Legal Proceedings

Bio-Reference Laboratories, Inc. v. Horizon Healthcare Services, Inc. d/b/a Horizon Blue Cross Blue Shield of New Jersey

On December 18, 2013, the Company filed an action in the Superior Court of New Jersey against Horizon Blue Cross Blue Shield of New Jersey (“Horizon”), captioned Bio-Reference Laboratories, Inc. v. Horizon Healthcare Services, Inc. d/b/a Horizon Blue Cross Blue Shield of New Jersey, Docket No. BER L-009748-13 (N.J. Super. Ct. Bergen Cnty.). The Company has been an in-network provider to Horizon’s preferred provider organization (“PPO”) members for more than 20 years and filed the lawsuit after attempts to resolve its dispute with Horizon were unsuccessful.

The Company currently provides services to Horizon pursuant to an Ancillary Services Provider Agreement entered into in 2003 and amended in 2007. The central claims in the lawsuit arise from the Company’s performance of laboratory services since at least 2008 for members of Horizon’s NJ DIRECT plan, who receive benefits under a program that Horizon has bid, promoted, and represented to be a PPO product for New Jersey state, county, and municipal workers and teachers. The lawsuit alleges that, despite these representations, Horizon has been improperly treating NJ DIRECT as a Managed Care program in its dealings with the Company, thereby costing the Company more than $20,000,000 in unreimbursed services and depriving state beneficiaries of valuable rights and benefits to which they are entitled. The lawsuit alleges that Horizon furthered its fraud against the Company by means of a sham Request for Proposal issued in 2011 and through false and incorrect communications to the Company and other providers. The Company asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud against Horizon. In addition to compensatory damages, the Company seeks to recover punitive damages from Horizon due to Horizon’s intentional and malicious misconduct. The Company also seeks declaratory and injunctive relief.

On February 5, 2014, Horizon filed a motion to dismiss the complaint, which the Company opposed. On March 28, 2014, the Honorable Robert C. Wilson of the Superior Court of New Jersey issued an oral ruling denying Horizon’s motion to dismiss without prejudice pending the completion of discovery. The Company and Horizon are conducting discovery, which is currently scheduled to close on July 30, 2015. The Company intends to vigorously prosecute its claims against Horizon.

Item 5 — OTHER INFORMATION

On June 3, 2015, the Company entered into a new employment agreement (the “CEO Contract”) with its Chief Executive Officer, Dr. Marc D. Grodman, and OPKO, effective as of, and contingent upon, the closing of the transactions contemplated by the Merger Agreement. The disclosure regarding, and the copy of, the CEO Contract that was filed by the Company on Form 8-K with the Securities and Exchange Commission on June 4, 2015 (the “June 4 Form 8-K”) contained a typographical error with respect to Dr. Grodman’s base salary. Dr. Grodman’s current annual base salary is $1,175,676. A corrected version of the CEO Contract is filed hereto as Exhibit 10.3 to this Form 10-Q, which is incorporated herein by reference and replaces Exhibit 10.1 filed with the June 4 Form 8-K.

Item 6 — EXHIBITS

10.1 Fourteenth Amendment to Loan Documents

10.2 Thirteenth Amended and Restated Secured Revolving Note

10.3 Employment Agreement dated as of June 3, 2015 among Bio-Reference Laboratories, Inc., OPKO Health, Inc. and Marc D. Grodman

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

Table of Contents

SIGNATURES

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

	BIO-REFERENCE LABORATORIES, INC.
	(Registrant)


	/S/ Marc D. Grodman M.D.
	Marc D. Grodman, M.D.
	President and Chief Executive Officer


	/S/ Nicholas Papazicos
	Nicholas Papazicos
	Senior Vice President, Chief Financial and Chief Accounting Officer


Date: June 8, 2015

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