Item 1. Business
Overview
Enzo Biochem, Inc. (the “Company” “we”, “our” or “Enzo”) is a growth-oriented integrated life sciences and biotechnology company focused on harnessing biological processes to develop research tools, diagnostics and therapeutics and serves as a provider of test services, including esoteric tests, to the medical community. Since our founding in 1976, our strategic focus has been on the development of enabling technologies in research, development, manufacture, licensing and marketing of innovative health care products, platforms and services based on molecular and cellular technologies. Our pioneering work in genomic analysis coupled with its extensive patent estate and enabling platforms have strategically positioned the Company to play an important role in the rapidly growing life sciences and molecular medicine marketplaces.
In the course of our research and development activities, we have built a substantial portfolio of intellectual property assets, comprising 107 key issued patents worldwide, and over 300 pending patent applications, along with extensive enabling technologies and platforms.
Operating Segments
We are comprised of three operating segments, of which the Therapeutics and Life Sciences segments have evolved out of our core competencies: the use of nucleic acids as informational molecules and the use of compounds for immune modulation and augmented by the acquisition of a number of related companies. Information concerning sales by geographic area and business segments for the years ended July 31, 2011, 2010 and 2009 is located in Note 17 in the Notes to Consolidated Financial Statements.
Below are brief descriptions of each of our operating segments:
| Enzo Life Sciences manufactures, develops and markets functional biology and cellular biochemistry products and tools to life sciences, pharmaceutical and clinical research customers world-wide and has amassed a large patent and technology portfolio. Enzo Life Sciences, Inc. is a recognized leader in labeling and detection technologies across research and diagnostic markets. Our strong portfolio of proteins, antibodies, peptides, small molecules, labeling probes, dyes and kits provides life science researchers tools for target identification/validation, high content analysis, gene expression analysis, nucleic acid detection, protein biochemistry and detection, and cellular analysis. We are internationally recognized and acknowledged as a leader in manufacturing, in-licensing, and commercialization of over 9,000 of our own products and in addition distribute over 30,000 products made by over 40 other original manufacturers. Our strategic focus is directed to innovative high quality research reagents and kits in the primary key research areas of protein homeostasis, epigenetics, live cell analysis, molecular biology and immunoassays. |

| The segment is an established source for a comprehensive panel of products to scientific experts in the fields of Natural Products/Antibiotics, Autophagy, Cancer, Cell Cycle, Cell Death, Cell Signaling, Cellular Analysis, Endocrinology/Hormones, DNA regulation, Compound Screening, Genomics/Molecular Biology, GPCRs, Immunology, Inflammation, Metabolism, Neuroscience, Nitric Oxide pathway, Obesity/Adipokines, Oxidative Stress, Proteases. Proteosomes, Protein Expression and modification, Signal Transduction, Stress/Heat Shock proteins and Ubiquitin/Ubl signaling. |
| Enzo Clinical Labs is a regional clinical laboratory serving the New York, New Jersey and Eastern Pennsylvania medical communities. The Company believes having clinical diagnostic services allows us to capitalize first hand on our extensive advanced molecular and cytogenetic capabilities and the broader trends in predictive and personalized diagnostics. Enzo Clinical Labs offers a menu of routine and esoteric clinical laboratory tests or procedures used in general patient care by physicians to establish or support a diagnosis, monitor treatment or medication, and search for an otherwise undiagnosed condition. We operate a full-service clinical laboratory in Farmingdale, New York, a network of approximately 30 patient service centers throughout New York and New Jersey, a stand alone stat or rapid response laboratory in New York City and a full-service phlebotomy and logistics department. |
| Enzo Therapeutics is a biopharmaceutical venture that has developed multiple novel approaches in the areas of gastrointestinal, infectious, ophthalmic and metabolic diseases, many of which are derived from the pioneering work of Enzo Life Sciences. Enzo Therapeutics has focused its efforts on developing treatment regimens for diseases and conditions for which current treatment options are ineffective, costly, and/or cause unwanted side effects. This focus has generated a clinical and preclinical pipeline, as well as more than 45 patents and patent applications. |

2
| Fiscal year ended July 31, | 2011 | 2010 | 2009 |
| Product revenues | $ | 41,830 | 41 | % | $ | 43,111 | 44 | % | $ | 40,592 | 45 | % |
| Royalty and license fee income | 7,437 | 7 | 9,793 | 10 | 9,376 | 11 |
| Clinical laboratory services | 52,762 | 52 | 44,178 | 46 | 39,604 | 44 |
| Total | $ | 102,029 | 100 | % | $ | 97,082 | 100 | % | $ | 89,572 | 100 | % |
|  research spending by academic, government and private organizations to determine the function and clinical relevance of the gene sequences and proteins that have been identified by genome research; |
|  development of commercial applications based on information derived from this research; and |
|  ongoing advancements in tools that accelerate these research and development activities. |
|  | the increasing number of diagnostic tests being developed from discoveries in genome research; |
|  | advances in formats and other technologies that automate and accelerate gene-based diagnostic testing; |
|  | growing emphasis by the health care industry on early diagnosis and treatment of disease and; |
|  | application of gene-based diagnostics as tools to match therapies to specific patient genetics commonly referred to as pharmacogenomics. |
|  | amplification of the target DNA sequence (a process that is essential for the detection of very small amounts of nucleic acid); |
|  | labeling the probe with a marker that generates a detectable signal upon hybridization; |
|  | addition of the probe to the sample containing the DNA and; |
|  | binding or hybridization of the probe to the target DNA sequence, if present, to generate a detectable signal. |
|  | generate biological, genetic, and structural information concerning LRP; |
|  | determine the structure of LRP docking sites of its ligands; |
|  | identify the functionally important residues via site-directed mutagenesis; |
|  | build the fine structure map and employ it as the basis for virtual screening; |
|  | show that compounds specifically bind to wild type LRP5, but not to mutated LRP5; |
|  | generate a cell-based assay capable of identifying active compounds and; |
|  | synthesize proprietary molecules that are active in animal models of disease. |
| Through this novel, proprietary, functional screening system, we have identified small molecules capable of reversing sclerostin-mediated inhibition of Wnt signaling. Preclinical animal studies with several candidate lead compounds produced the following results: |
|  | significant increases in total and femoral bone density through new bone formation; |
|  | significant reduction in alveolar bone loss and; |
|  | significant reduction in bone resorption. |
|  | the viral promoters are inactivated; |
|  | insertional gene activation is prevented  a major safety factor; |
|  | chromosomal integration and; |
|  | nuclear localization. |
| Enzo Life Sciences  Enabling Discovery in Life Sciences |
| Enzo Life Sciences is a positioned as a leading manufacturer and supplier of high quality reagents, kits and products supplied to scientific researchers in academia, clinical research and drug discovery. With direct sales operations in US, Switzerland, Germany, UK, France and Benelux, Enzo Life Sciences also supports its 9,000 products through a global network of dedicated distributors. |
| Axxora.com  the Innovative Research Reagents Marketplace |
| Axxora.com is a proven distribution platform for original manufacturers of innovative research reagents. An increasing number of researchers use our unique marketplace to instantly connect with over 40 specialty manufacturers and gain access to over 30,000 products. Purchasing groups from universities, research institutes, biotech and pharmaceutical companies utilize this extensive catalog to source research reagents and conveniently consolidate orders. |
| Adipokines | Interferons |
| Antibiotics | In Vitro Toxicology |
| Apotosis/Cell Death | Kinases/Inhibitors |
| Biologically Active Peptides | Leukotrienes/Prostaglandins/Thromboxanes |
| Bone Metabolism | Microarray Labeling |
| Cancer Research | Multidrug Resistance |
| Cell Death | Natural Products/Antibiotics |
| Cell Cycle | Neuroscience |
| Chemokines/Cytokines | Nitric Oxide Pathway |
| Cytoskeletal Research | Nuclear Receptors |
| Dependence Receptors | Oxidative Stress |
| DNA Fragmentation/Damage/Repair | Protein Aggregation |
| DNA Regulation | Proteosome/Ubiquitin |
| Epigenetics | Receptors |
| FISH | Signal Transduction |
| Growth Factors/Cytokines | Stem Cell/Cell Differentiation |
| Hypoxia | Stress Proteins/Heat Shock Proteins |
| Immunology | TNF/TNF Receptor Superfamily |
| Inflammation/Innate Immunity | Transcription Factors |
| Viral Signaling |
|  | pricing differences between our standard gross fee schedules and the reimbursement rates of the payers; |
|  | disputes with payers as to which party is responsible for payment and; |
|  | disparity in coverage and information requirements among various payers. |
| Enzo Biochem, Inc. |
| 527 Madison Ave. |
| New York, New York 10022 |
| Tel: (212) 583-0100 |
| Attn: Investor Relations |

Item 1A. Risk Factors
Risks relating to our Company and our industries
We have experienced significant losses in our last five fiscal years and quarter to quarter over such periods and our losses have resulted in the use of cash in operations. If such losses and cash uses continue the value of your investment could decline significantly.
We incurred a net loss of $12.9 million, $22.2 million and $23.6 million for the fiscal years ended July 31, 2011, 2010, and 2009 respectively. If our revenues do not increase, or if our operating expenses exceed expectations or cannot be reduced, we will continue to suffer substantial losses and use cash in operations which could have an adverse effect on our business and adversely affect your investment in our Company.
Our operating results may vary from period to period.
Our operating results may vary significantly from quarter to quarter and from year to year, depending on a variety of factors including:
|  | competitive conditions, including changes in third-party reimbursements: |
|  | health care reform regulations affecting providers and plan sponsors; |
|  | exchange rate fluctuations; |
|  | changes in tax laws, the results of tax audits or the measurement of tax uncertainties; |
|  | the timing of our research and development, sales and marketing expenses; |
|  | the introduction of new products by us or our competitors; |
|  | the success of identifying, acquiring and integrating businesses that complement our product offerings, add new technology or add presence in a market; |
|  | expenses associated with defending our intellectual property portfolio; |
|  | customer demand for our products due to changes in purchasing requirements and research needs; |
|  | general worldwide economic conditions affecting funding of research and; |
|  | seasonal fluctuations affected by weather and holiday periods. |

Consequently, results for any interim period may not necessarily be indicative of results in subsequent periods.
Our future success will depend in part upon our ability to enhance existing products and to develop and introduce new products.
The market for our products is characterized by rapidly changing technology, evolving industry standards and new product introductions, which may make our existing products obsolete. Our future success will depend in part upon our ability to enhance existing products and to develop and introduce new products.
The development of new or enhanced products is a complex and uncertain process requiring the accurate anticipation of technological and market trends as well as precise technological execution. In addition, the successful development of new products will depend on the development of new technologies. We will be required to undertake time-consuming and costly development activities and to seek regulatory approval for these new products. We may experience difficulties that could delay or prevent the successful development, introduction and marketing of these new products. Regulatory clearance or approval of any new products may not be granted by the FDA or foreign regulatory authorities on a timely basis, or at all, and the new products may not be successfully commercialized.
We may be unable to identify, acquire and integrate acquisition targets.
In the past five fiscal years we have made significant acquisitions in our Life Sciences segment. Our strategy envisions that a part our future growth will come from acquiring and integrating similar operations and/or product lines. There can be no assurance that we will be able to identify suitable acquisition candidates and, once identified, to negotiate successfully their acquisition at a price or on terms and conditions favorable to us, or to integrate the operations of such acquired businesses with the existing operations. In addition, we compete for acquisition candidates with other entities, some of which have greater financial resources than ours. Our failure to implement successfully its acquisition strategy would limit our potential growth.
23
|  | Require us to reduce our prices to retain market share; |
|  | Require us to increase our marketing efforts which could reduce our profit margins; |
|  | Increase our cost of labor to attract qualified personnel; |
|  | Render our biotechnology products uneconomical or obsolete or; |
|  | Reduce our revenue. |
|  | significant delays in obtaining or failing to obtain required approvals; |
|  | loss of, or changes to, previously obtained approvals; |
|  | failure to comply with existing or future regulatory requirements and; |
|  | changes to manufacturing processes, manufacturing process standards or Good Manufacturing Practices following approval or changing interpretations of these factors. |
|  | the circumstances under which uses and disclosures of protected health information are permitted or required without a specific authorization by the patient, including but not limited to treatment purposes, activities to obtain payments for our services, and our healthcare operations activities; |
|  | a patients rights to access, amend and receive an accounting of certain disclosures of protected health information; |
|  | the content of notices of privacy practices for protected health information and; |
|  | administrative, technical and physical safeguards required of entities that use or receive protected health information. |
|  | future fluctuations in exchange rates; |
|  | complex regulatory requirements and changes in those requirements; |
|  | trade protection measures and import or export licensing requirements; |
|  | multiple jurisdictions and differing tax laws, as well as changes in those laws; |
|  | restrictions on our ability to repatriate investments and earnings from foreign operations; |
|  | changes in the political or economic conditions in a country or region, particularly in developing or emerging markets; |
|  | changes in shipping costs and; |
|  | difficulties in collecting on accounts receivable. |
|  | fluctuations in our quarterly operating and earnings per share results; |
|  | the gain or loss of significant contracts; |
|  | loss of key personnel; |
|  | announcements of technological innovations or new products by us or our competitors; |
|  | delays in the development and introduction of new products; |
|  | legislative or regulatory changes; |
|  | general trends in the industries we operate; |
|  | recommendations and/or changes in estimates by equity and market research analysts; |
|  | biological or medical discoveries; |
|  | disputes and/or developments concerning intellectual property, including patents and litigation matters; |
|  | public concern as to the safety of new technologies; |
|  | sales of common stock of existing holders; |
|  | securities class action or other litigation; |
|  | developments in our relationships with current or future customers and suppliers and; |
|  | general economic conditions, both in the United States and worldwide. |
|  | a staggered board of directors, so that it would take three successive annual meetings to replace all directors; and |
|  | advance notice requirements for the submission by stockholders of nominations for election to the board of directors and for proposing matters that can be acted upon by stockholders at a meeting. |

Item 2. Properties
The following are the principal facilities of the Company:
| Location | Primary use | Segments | Leased/owned | Square footage |
| Farmingdale, NY | Clinical laboratory and research | Clinical Labs, | Leased | 43,000 |
| (Note 1) | Therapeutics |
| Farmingdale, NY | Manufacturing, research, sales | Life Sciences, | Owned | 22,000 |
| and administrative office | Other |
| New York, NY | Corporate headquarters | Other | Leased | 11,300 |
| (Note 2) |
| San Diego, CA | Sales, administration and distribution | Life Sciences | Leased | 6,400 |
| (Note 3) |
| Lausen, Switzerland | Operational headquarters in | Life Sciences | Leased | 18,829 |
| (Note 4) | Europe, including sales and distribution |
| Ann Arbor, Michigan | Sales, manufacturing, research, | Life Sciences | Leased | 26,820 |
| (Note 5) | administration and distribution |

| Note 1 |  In March 2005, the Company amended and extended the lease for its Farmingdale laboratory for a period of 12 years (See Note 15 to the Consolidated Financial Statements). |
| Note 2 |  In February 2010, the lease, which includes 4,100 square feet under a sublease rental agreement through December 31, 2011, was extended through May 2020 |
| Note 3 |  The lease for this property was acquired in connection with the Axxora acquisition in May 2007 and was amended and extended through February 2014. |
| Note 4 |  The lease for this property was acquired in connection with the Axxora acquisition in May 2007 and was amended and extended through April 2013. |
| Note 5 |  The lease for this property was acquired in connection with the Assay Designs acquisition in March 2009 and was amended and extended through April 2016. |
| We believe the current facilities are suitable and adequate for the Companys current operating needs for its clinical laboratories, life science and therapeutics segments and that the production capacity in various locations is sufficient to manage product requirements. |

Item 3. Legal Proceedings
In October 2002, the Company filed suit in the United States District Court of the Southern District of New York against Amersham plc, Amersham Biosciences, Perkin Elmer, Inc., Perkin Elmer Life Sciences, Inc., Sigma-Aldrich Corporation, Sigma Chemical Company, Inc., Molecular Probes, Inc. and Orchid Biosciences, Inc. In January 2003, the Company amended its complaint to include defendants Sigma Aldrich Co. and Sigma Aldrich, Inc. The counts set forth in the suit are for breach of contract; patent infringement; unfair competition under state law; unfair competition under federal law; tortious interference with business relations; and fraud in the inducement of contract. The complaint alleges that these counts arise out of the defendants’ breach of distributorship agreements with the Company concerning labeled nucleotide products and technology, and the defendants’ infringement of patents covering the same. In April, 2003, the court directed that individual complaints be filed separately against each defendant. The defendants have answered the individual complaints and asserted a variety of affirmative defenses and counterclaims. Fact discovery is ongoing. The court issued a claim construction opinion on July 10, 2006. The Company and Sigma Aldrich (“Sigma”) entered into a Settlement Agreement and Release effective September 15, 2006 (the “Agreement”). Pursuant to the Agreement, the Company’s litigation with Sigma was dismissed and the Company recognized $2 million on settlement in the quarter ending October 31, 2006. On January 3, 2007, the remaining defendants moved for summary judgment on all counts in the individual complaints. During a two-day hearing held on July 17 through July 18, 2007, the defendants subsequently withdrew the invalidity portion of their summary judgment motions. On March 13, 2009, the court denied defendants’ summary judgment motion and stayed the cases pending resolution of an appeal to the United States Court of Appeals for the Federal Circuit in Enzo’s Connecticut litigation against Applera Corporation and Tropix, Inc.
33
| 2011 Fiscal Year (August 1, 2010 to July 31, 2011): |
| High | Low |
| 1st Quarter | $ | 4.62 | $ | 3.37 |
| 2nd Quarter | $ | 5.80 | $ | 4.16 |
| 3rd Quarter | $ | 5.09 | $ | 3.46 |
| 4th Quarter | $ | 4.74 | $ | 3.52 |
| 2010 Fiscal Year (August 1, 2009 to July 31, 2010): |
| High | Low |
| 1st Quarter | $ | 7.66 | $ | 4.51 |
| 2nd Quarter | $ | 6.24 | $ | 4.52 |
| 3rd Quarter | $ | 6.67 | $ | 4.66 |
| 4th Quarter | $ | 6.18 | $ | 3.90 |
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuances under equity compensation plans (excluding securities reflected in column (a) (c) |
| Equity compensation plans approved by security holders | 785,124 | $ | 14.53 | 2,818,300 |
| Equity compensation plans not approved by security holders |  |  |  |
| Total | 785,124 | $ | 14.53 | 2,818,300 |

| (Mark one) |
| x | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the fiscal year ended July 31, 2011 |
| or |
| o | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from ______________ to ______________ |
| Commission File Number 001-09974 |
| ENZO BIOCHEM, INC. |
| (Exact name of registrant as specified in its charter) |
| New York | 13-2866202 |
| (State or other jurisdiction | (I.R.S. Employer |
| of incorporation or organization) | Identification No.) |
| 527 Madison Ave. |
| New York, New York | 10022 |
| (Address of principal executive offices) | (Zip Code) |
| (212) 583-0100 |
| (Registrants telephone number, including area code) |
| Securities registered pursuant to Section 12(b) of the Act: |
| (Title of Each Class) | (Name of Each Exchange on Which Registered) |
| Common Stock, $.01 par value | The New York Stock Exchange |
| Large accelerated filer o | Accelerated filer x | Non-accelerated filer o | Smaller Reporting Company o |
| Description | Page |
| Part I |
| Item 1. | Business | 2 |
| Item 1A. | Risk Factors | 23 |
| Item 1B. | Unresolved Staff Comments | 32 |
| Item 2. | Properties | 33 |
| Item 3. | Legal Proceedings | 33 |
| Item 4. | (Removed and Reserved) | 37 |
| Part II |
| Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 37 |
| Item 6. | Selected Financial Data | 38 |
| Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations | 38 |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 52 |
| Item 8. | Financial Statements and Supplementary Data | 52 |
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 52 |
| Item 9A. | Controls and Procedures | 53 |
| Item 9B. | Other Information | 55 |
| Part III |
| Item 10. | Directors, Executive Officers and Corporate Governance | 55 |
| Item 11. | Executive Compensation | 55 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 55 |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 55 |
| Item 14. | Principal Accountant Fees and Services | 55 |
| Part IV |
| Item 15. | Exhibits and Financial Statement Schedules | 55 |
| List of Consolidated Financial Statements and Financial Statements Schedule | F-1 |
| Report of Independent Registered Public Accounting Firm | F-2 |
| Consolidated Balance Sheets | F-3 |
| Consolidated Statements of Operations | F-4 |
| Consolidated Statements of Stockholders Equity & Comprehensive Income (Loss) | F-5 |
| Consolidated Statements of Cash Flows | F-6 |
| Notes to Consolidated Financial Statements | F-7 |
| Schedule II - Valuation Accounts and Qualifying Accounts | S-1 |
| Enzo Life Sciences manufactures, develops and markets functional biology and cellular biochemistry products and tools to life sciences, pharmaceutical and clinical research customers world-wide and has amassed a large patent and technology portfolio. Enzo Life Sciences, Inc. is a recognized leader in labeling and detection technologies across research and diagnostic markets. Our strong portfolio of proteins, antibodies, peptides, small molecules, labeling probes, dyes and kits provides life science researchers tools for target identification/validation, high content analysis, gene expression analysis, nucleic acid detection, protein biochemistry and detection, and cellular analysis. We are internationally recognized and acknowledged as a leader in manufacturing, in-licensing, and commercialization of over 9,000 of our own products and in addition distribute over 30,000 products made by over 40 other original manufacturers. Our strategic focus is directed to innovative high quality research reagents and kits in the primary key research areas of protein homeostasis, epigenetics, live cell analysis, molecular biology and immunoassays. |
| The segment is an established source for a comprehensive panel of products to scientific experts in the fields of Natural Products/Antibiotics, Autophagy, Cancer, Cell Cycle, Cell Death, Cell Signaling, Cellular Analysis, Endocrinology/Hormones, DNA regulation, Compound Screening, Genomics/Molecular Biology, GPCRs, Immunology, Inflammation, Metabolism, Neuroscience, Nitric Oxide pathway, Obesity/Adipokines, Oxidative Stress, Proteases. Proteosomes, Protein Expression and modification, Signal Transduction, Stress/Heat Shock proteins and Ubiquitin/Ubl signaling. |
| Enzo Clinical Labs is a regional clinical laboratory serving the New York, New Jersey and Eastern Pennsylvania medical communities. The Company believes having clinical diagnostic services allows us to capitalize first hand on our extensive advanced molecular and cytogenetic capabilities and the broader trends in predictive and personalized diagnostics. Enzo Clinical Labs offers a menu of routine and esoteric clinical laboratory tests or procedures used in general patient care by physicians to establish or support a diagnosis, monitor treatment or medication, and search for an otherwise undiagnosed condition. We operate a full-service clinical laboratory in Farmingdale, New York, a network of approximately 30 patient service centers throughout New York and New Jersey, a stand alone stat or rapid response laboratory in New York City and a full-service phlebotomy and logistics department. |
| Enzo Therapeutics is a biopharmaceutical venture that has developed multiple novel approaches in the areas of gastrointestinal, infectious, ophthalmic and metabolic diseases, many of which are derived from the pioneering work of Enzo Life Sciences. Enzo Therapeutics has focused its efforts on developing treatment regimens for diseases and conditions for which current treatment options are ineffective, costly, and/or cause unwanted side effects. This focus has generated a clinical and preclinical pipeline, as well as more than 45 patents and patent applications. |
| Fiscal year ended July 31, | 2011 | 2010 | 2009 |
| Product revenues | $ | 41,830 | 41 | % | $ | 43,111 | 44 | % | $ | 40,592 | 45 | % |
| Royalty and license fee income | 7,437 | 7 | 9,793 | 10 | 9,376 | 11 |
| Clinical laboratory services | 52,762 | 52 | 44,178 | 46 | 39,604 | 44 |
| Total | $ | 102,029 | 100 | % | $ | 97,082 | 100 | % | $ | 89,572 | 100 | % |
|  research spending by academic, government and private organizations to determine the function and clinical relevance of the gene sequences and proteins that have been identified by genome research; |
|  development of commercial applications based on information derived from this research; and |
|  ongoing advancements in tools that accelerate these research and development activities. |
|  | the increasing number of diagnostic tests being developed from discoveries in genome research; |
|  | advances in formats and other technologies that automate and accelerate gene-based diagnostic testing; |
|  | growing emphasis by the health care industry on early diagnosis and treatment of disease and; |
|  | application of gene-based diagnostics as tools to match therapies to specific patient genetics commonly referred to as pharmacogenomics. |
|  | amplification of the target DNA sequence (a process that is essential for the detection of very small amounts of nucleic acid); |
|  | labeling the probe with a marker that generates a detectable signal upon hybridization; |
|  | addition of the probe to the sample containing the DNA and; |
|  | binding or hybridization of the probe to the target DNA sequence, if present, to generate a detectable signal. |
|  | generate biological, genetic, and structural information concerning LRP; |
|  | determine the structure of LRP docking sites of its ligands; |
|  | identify the functionally important residues via site-directed mutagenesis; |
|  | build the fine structure map and employ it as the basis for virtual screening; |
|  | show that compounds specifically bind to wild type LRP5, but not to mutated LRP5; |
|  | generate a cell-based assay capable of identifying active compounds and; |
|  | synthesize proprietary molecules that are active in animal models of disease. |
| Through this novel, proprietary, functional screening system, we have identified small molecules capable of reversing sclerostin-mediated inhibition of Wnt signaling. Preclinical animal studies with several candidate lead compounds produced the following results: |
|  | significant increases in total and femoral bone density through new bone formation; |
|  | significant reduction in alveolar bone loss and; |
|  | significant reduction in bone resorption. |
|  | the viral promoters are inactivated; |
|  | insertional gene activation is prevented  a major safety factor; |
|  | chromosomal integration and; |
|  | nuclear localization. |
| Enzo Life Sciences  Enabling Discovery in Life Sciences |
| Enzo Life Sciences is a positioned as a leading manufacturer and supplier of high quality reagents, kits and products supplied to scientific researchers in academia, clinical research and drug discovery. With direct sales operations in US, Switzerland, Germany, UK, France and Benelux, Enzo Life Sciences also supports its 9,000 products through a global network of dedicated distributors. |
| Axxora.com  the Innovative Research Reagents Marketplace |
| Axxora.com is a proven distribution platform for original manufacturers of innovative research reagents. An increasing number of researchers use our unique marketplace to instantly connect with over 40 specialty manufacturers and gain access to over 30,000 products. Purchasing groups from universities, research institutes, biotech and pharmaceutical companies utilize this extensive catalog to source research reagents and conveniently consolidate orders. |
| Adipokines | Interferons |
| Antibiotics | In Vitro Toxicology |
| Apotosis/Cell Death | Kinases/Inhibitors |
| Biologically Active Peptides | Leukotrienes/Prostaglandins/Thromboxanes |
| Bone Metabolism | Microarray Labeling |
| Cancer Research | Multidrug Resistance |
| Cell Death | Natural Products/Antibiotics |
| Cell Cycle | Neuroscience |
| Chemokines/Cytokines | Nitric Oxide Pathway |
| Cytoskeletal Research | Nuclear Receptors |
| Dependence Receptors | Oxidative Stress |
| DNA Fragmentation/Damage/Repair | Protein Aggregation |
| DNA Regulation | Proteosome/Ubiquitin |
| Epigenetics | Receptors |
| FISH | Signal Transduction |
| Growth Factors/Cytokines | Stem Cell/Cell Differentiation |
| Hypoxia | Stress Proteins/Heat Shock Proteins |
| Immunology | TNF/TNF Receptor Superfamily |
| Inflammation/Innate Immunity | Transcription Factors |
| Viral Signaling |
|  | pricing differences between our standard gross fee schedules and the reimbursement rates of the payers; |
|  | disputes with payers as to which party is responsible for payment and; |
|  | disparity in coverage and information requirements among various payers. |
| Enzo Biochem, Inc. |
| 527 Madison Ave. |
| New York, New York 10022 |
| Tel: (212) 583-0100 |
| Attn: Investor Relations |
|  | competitive conditions, including changes in third-party reimbursements: |
|  | health care reform regulations affecting providers and plan sponsors; |
|  | exchange rate fluctuations; |
|  | changes in tax laws, the results of tax audits or the measurement of tax uncertainties; |
|  | the timing of our research and development, sales and marketing expenses; |
|  | the introduction of new products by us or our competitors; |
|  | the success of identifying, acquiring and integrating businesses that complement our product offerings, add new technology or add presence in a market; |
|  | expenses associated with defending our intellectual property portfolio; |
|  | customer demand for our products due to changes in purchasing requirements and research needs; |
|  | general worldwide economic conditions affecting funding of research and; |
|  | seasonal fluctuations affected by weather and holiday periods. |
|  | Require us to reduce our prices to retain market share; |
|  | Require us to increase our marketing efforts which could reduce our profit margins; |
|  | Increase our cost of labor to attract qualified personnel; |
|  | Render our biotechnology products uneconomical or obsolete or; |
|  | Reduce our revenue. |
|  | significant delays in obtaining or failing to obtain required approvals; |
|  | loss of, or changes to, previously obtained approvals; |
|  | failure to comply with existing or future regulatory requirements and; |
|  | changes to manufacturing processes, manufacturing process standards or Good Manufacturing Practices following approval or changing interpretations of these factors. |
|  | the circumstances under which uses and disclosures of protected health information are permitted or required without a specific authorization by the patient, including but not limited to treatment purposes, activities to obtain payments for our services, and our healthcare operations activities; |
|  | a patients rights to access, amend and receive an accounting of certain disclosures of protected health information; |
|  | the content of notices of privacy practices for protected health information and; |
|  | administrative, technical and physical safeguards required of entities that use or receive protected health information. |
|  | future fluctuations in exchange rates; |
|  | complex regulatory requirements and changes in those requirements; |
|  | trade protection measures and import or export licensing requirements; |
|  | multiple jurisdictions and differing tax laws, as well as changes in those laws; |
|  | restrictions on our ability to repatriate investments and earnings from foreign operations; |
|  | changes in the political or economic conditions in a country or region, particularly in developing or emerging markets; |
|  | changes in shipping costs and; |
|  | difficulties in collecting on accounts receivable. |
|  | fluctuations in our quarterly operating and earnings per share results; |
|  | the gain or loss of significant contracts; |
|  | loss of key personnel; |
|  | announcements of technological innovations or new products by us or our competitors; |
|  | delays in the development and introduction of new products; |
|  | legislative or regulatory changes; |
|  | general trends in the industries we operate; |
|  | recommendations and/or changes in estimates by equity and market research analysts; |
|  | biological or medical discoveries; |
|  | disputes and/or developments concerning intellectual property, including patents and litigation matters; |
|  | public concern as to the safety of new technologies; |
|  | sales of common stock of existing holders; |
|  | securities class action or other litigation; |
|  | developments in our relationships with current or future customers and suppliers and; |
|  | general economic conditions, both in the United States and worldwide. |
|  | a staggered board of directors, so that it would take three successive annual meetings to replace all directors; and |
|  | advance notice requirements for the submission by stockholders of nominations for election to the board of directors and for proposing matters that can be acted upon by stockholders at a meeting. |
| Location | Primary use | Segments | Leased/owned | Square footage |
| Farmingdale, NY | Clinical laboratory and research | Clinical Labs, | Leased | 43,000 |
| (Note 1) | Therapeutics |
| Farmingdale, NY | Manufacturing, research, sales | Life Sciences, | Owned | 22,000 |
| and administrative office | Other |
| New York, NY | Corporate headquarters | Other | Leased | 11,300 |
| (Note 2) |
| San Diego, CA | Sales, administration and distribution | Life Sciences | Leased | 6,400 |
| (Note 3) |
| Lausen, Switzerland | Operational headquarters in | Life Sciences | Leased | 18,829 |
| (Note 4) | Europe, including sales and distribution |
| Ann Arbor, Michigan | Sales, manufacturing, research, | Life Sciences | Leased | 26,820 |
| (Note 5) | administration and distribution |
| Note 1 |  In March 2005, the Company amended and extended the lease for its Farmingdale laboratory for a period of 12 years (See Note 15 to the Consolidated Financial Statements). |
| Note 2 |  In February 2010, the lease, which includes 4,100 square feet under a sublease rental agreement through December 31, 2011, was extended through May 2020 |
| Note 3 |  The lease for this property was acquired in connection with the Axxora acquisition in May 2007 and was amended and extended through February 2014. |
| Note 4 |  The lease for this property was acquired in connection with the Axxora acquisition in May 2007 and was amended and extended through April 2013. |
| Note 5 |  The lease for this property was acquired in connection with the Assay Designs acquisition in March 2009 and was amended and extended through April 2016. |
| We believe the current facilities are suitable and adequate for the Companys current operating needs for its clinical laboratories, life science and therapeutics segments and that the production capacity in various locations is sufficient to manage product requirements. |
| 2011 Fiscal Year (August 1, 2010 to July 31, 2011): |
| High | Low |
| 1st Quarter | $ | 4.62 | $ | 3.37 |
| 2nd Quarter | $ | 5.80 | $ | 4.16 |
| 3rd Quarter | $ | 5.09 | $ | 3.46 |
| 4th Quarter | $ | 4.74 | $ | 3.52 |
| 2010 Fiscal Year (August 1, 2009 to July 31, 2010): |
| High | Low |
| 1st Quarter | $ | 7.66 | $ | 4.51 |
| 2nd Quarter | $ | 6.24 | $ | 4.52 |
| 3rd Quarter | $ | 6.67 | $ | 4.66 |
| 4th Quarter | $ | 6.18 | $ | 3.90 |
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuances under equity compensation plans (excluding securities reflected in column (a) (c) |
| Equity compensation plans approved by security holders | 785,124 | $ | 14.53 | 2,818,300 |
| Equity compensation plans not approved by security holders |  |  |  |
| Total | 785,124 | $ | 14.53 | 2,818,300 |

Item 6. Selected Financial Data
The following table, which is derived from the audited consolidated financial statements of the Company for the fiscal years 2007 through 2011 should be read together with the discussion in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Company’s consolidated financial statements and notes to those statements included elsewhere in this Annual Report on Form 10-K.
| For the fiscal year ended July 31, (In thousands, except per share amounts) |
| Operating Results | 2011 | 2010 | (1)   2009 | (2)   2008 | (3)   2007 |
| Revenues | $ | 102,029 | $ | 97,082 | $ | 89,572 | $ | 77,795 | $ | 52,908 |
| Operating loss | $ | (12,928 | ) | $ | (22,058 | ) | $ | (23,407 | ) | $ | (14,786 | ) | $ | (20,966 | ) |
| Net loss | $ | (12,960 | ) | $ | (22,233 | ) | $ | (23,564 | ) | $ | (10,653 | ) | $ | (13,260 | ) |
| Basic and diluted net loss per common share: | $ | (0.34 | ) | $ | (0.59 | ) | $ | (0.63 | ) | $ | (0.29 | ) | $ | (0.38 | ) |
| July 31, (in thousands) |
| Financial Position | 2011 | 2010 | (4)   2009 | (4)   2008 | (4)   2007 |
| Working capital | $ | 33,670 | $ | 42,181 | $ | 60,518 | $ | 92,392 | $ | 113,850 |
| Total assets | $ | 109,474 | $ | 115,245 | $ | 133,128 | $ | 154,522 | $ | 159,002 |
| Long term obligations | $ | 96 | — | — | — | — |
| Stockholders’ equity | $ | 88,715 | $ | 97,016 | $ | 116,781 | $ | 138,289 | $ | 141,894 |

Notes to Selected Financial Data
(1) On March 12, 2009, Enzo Life Sciences Inc. acquired Assay Designs, Inc. (“ADI”). As such, the operating results of ADI are included in the consolidated operating results beginning March 12, 2009.
(2) On May 8, 2008, Enzo Life Sciences Inc. acquired Biomol International, LP. (“Biomol”). As such, the operating results of Biomol are included in the consolidated operating results beginning May 8, 2008.
(3) On May 29, 2007, Enzo Life Sciences Inc. acquired Axxora Life Sciences, Inc. (“Axxora”). As such, the operating results of Axxora are included in the consolidated operating results beginning May 29, 2007.
(4) The above acquisitions were primarily paid using cash.
| (Mark one) |
| x | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the fiscal year ended July 31, 2011 |
| or |
| o | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from ______________ to ______________ |
| Commission File Number 001-09974 |
| ENZO BIOCHEM, INC. |
| (Exact name of registrant as specified in its charter) |
| New York | 13-2866202 |
| (State or other jurisdiction | (I.R.S. Employer |
| of incorporation or organization) | Identification No.) |
| 527 Madison Ave. |
| New York, New York | 10022 |
| (Address of principal executive offices) | (Zip Code) |
| (212) 583-0100 |
| (Registrants telephone number, including area code) |
| Securities registered pursuant to Section 12(b) of the Act: |
| (Title of Each Class) | (Name of Each Exchange on Which Registered) |
| Common Stock, $.01 par value | The New York Stock Exchange |
| Large accelerated filer o | Accelerated filer x | Non-accelerated filer o | Smaller Reporting Company o |
| Description | Page |
| Part I |
| Item 1. | Business | 2 |
| Item 1A. | Risk Factors | 23 |
| Item 1B. | Unresolved Staff Comments | 32 |
| Item 2. | Properties | 33 |
| Item 3. | Legal Proceedings | 33 |
| Item 4. | (Removed and Reserved) | 37 |
| Part II |
| Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 37 |
| Item 6. | Selected Financial Data | 38 |
| Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations | 38 |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 52 |
| Item 8. | Financial Statements and Supplementary Data | 52 |
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 52 |
| Item 9A. | Controls and Procedures | 53 |
| Item 9B. | Other Information | 55 |
| Part III |
| Item 10. | Directors, Executive Officers and Corporate Governance | 55 |
| Item 11. | Executive Compensation | 55 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 55 |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 55 |
| Item 14. | Principal Accountant Fees and Services | 55 |
| Part IV |
| Item 15. | Exhibits and Financial Statement Schedules | 55 |
| List of Consolidated Financial Statements and Financial Statements Schedule | F-1 |
| Report of Independent Registered Public Accounting Firm | F-2 |
| Consolidated Balance Sheets | F-3 |
| Consolidated Statements of Operations | F-4 |
| Consolidated Statements of Stockholders Equity & Comprehensive Income (Loss) | F-5 |
| Consolidated Statements of Cash Flows | F-6 |
| Notes to Consolidated Financial Statements | F-7 |
| Schedule II - Valuation Accounts and Qualifying Accounts | S-1 |
| Enzo Life Sciences manufactures, develops and markets functional biology and cellular biochemistry products and tools to life sciences, pharmaceutical and clinical research customers world-wide and has amassed a large patent and technology portfolio. Enzo Life Sciences, Inc. is a recognized leader in labeling and detection technologies across research and diagnostic markets. Our strong portfolio of proteins, antibodies, peptides, small molecules, labeling probes, dyes and kits provides life science researchers tools for target identification/validation, high content analysis, gene expression analysis, nucleic acid detection, protein biochemistry and detection, and cellular analysis. We are internationally recognized and acknowledged as a leader in manufacturing, in-licensing, and commercialization of over 9,000 of our own products and in addition distribute over 30,000 products made by over 40 other original manufacturers. Our strategic focus is directed to innovative high quality research reagents and kits in the primary key research areas of protein homeostasis, epigenetics, live cell analysis, molecular biology and immunoassays. |
| The segment is an established source for a comprehensive panel of products to scientific experts in the fields of Natural Products/Antibiotics, Autophagy, Cancer, Cell Cycle, Cell Death, Cell Signaling, Cellular Analysis, Endocrinology/Hormones, DNA regulation, Compound Screening, Genomics/Molecular Biology, GPCRs, Immunology, Inflammation, Metabolism, Neuroscience, Nitric Oxide pathway, Obesity/Adipokines, Oxidative Stress, Proteases. Proteosomes, Protein Expression and modification, Signal Transduction, Stress/Heat Shock proteins and Ubiquitin/Ubl signaling. |
| Enzo Clinical Labs is a regional clinical laboratory serving the New York, New Jersey and Eastern Pennsylvania medical communities. The Company believes having clinical diagnostic services allows us to capitalize first hand on our extensive advanced molecular and cytogenetic capabilities and the broader trends in predictive and personalized diagnostics. Enzo Clinical Labs offers a menu of routine and esoteric clinical laboratory tests or procedures used in general patient care by physicians to establish or support a diagnosis, monitor treatment or medication, and search for an otherwise undiagnosed condition. We operate a full-service clinical laboratory in Farmingdale, New York, a network of approximately 30 patient service centers throughout New York and New Jersey, a stand alone stat or rapid response laboratory in New York City and a full-service phlebotomy and logistics department. |
| Enzo Therapeutics is a biopharmaceutical venture that has developed multiple novel approaches in the areas of gastrointestinal, infectious, ophthalmic and metabolic diseases, many of which are derived from the pioneering work of Enzo Life Sciences. Enzo Therapeutics has focused its efforts on developing treatment regimens for diseases and conditions for which current treatment options are ineffective, costly, and/or cause unwanted side effects. This focus has generated a clinical and preclinical pipeline, as well as more than 45 patents and patent applications. |
| Fiscal year ended July 31, | 2011 | 2010 | 2009 |
| Product revenues | $ | 41,830 | 41 | % | $ | 43,111 | 44 | % | $ | 40,592 | 45 | % |
| Royalty and license fee income | 7,437 | 7 | 9,793 | 10 | 9,376 | 11 |
| Clinical laboratory services | 52,762 | 52 | 44,178 | 46 | 39,604 | 44 |
| Total | $ | 102,029 | 100 | % | $ | 97,082 | 100 | % | $ | 89,572 | 100 | % |
|  research spending by academic, government and private organizations to determine the function and clinical relevance of the gene sequences and proteins that have been identified by genome research; |
|  development of commercial applications based on information derived from this research; and |
|  ongoing advancements in tools that accelerate these research and development activities. |
|  | the increasing number of diagnostic tests being developed from discoveries in genome research; |
|  | advances in formats and other technologies that automate and accelerate gene-based diagnostic testing; |
|  | growing emphasis by the health care industry on early diagnosis and treatment of disease and; |
|  | application of gene-based diagnostics as tools to match therapies to specific patient genetics commonly referred to as pharmacogenomics. |
|  | amplification of the target DNA sequence (a process that is essential for the detection of very small amounts of nucleic acid); |
|  | labeling the probe with a marker that generates a detectable signal upon hybridization; |
|  | addition of the probe to the sample containing the DNA and; |
|  | binding or hybridization of the probe to the target DNA sequence, if present, to generate a detectable signal. |
|  | generate biological, genetic, and structural information concerning LRP; |
|  | determine the structure of LRP docking sites of its ligands; |
|  | identify the functionally important residues via site-directed mutagenesis; |
|  | build the fine structure map and employ it as the basis for virtual screening; |
|  | show that compounds specifically bind to wild type LRP5, but not to mutated LRP5; |
|  | generate a cell-based assay capable of identifying active compounds and; |
|  | synthesize proprietary molecules that are active in animal models of disease. |
| Through this novel, proprietary, functional screening system, we have identified small molecules capable of reversing sclerostin-mediated inhibition of Wnt signaling. Preclinical animal studies with several candidate lead compounds produced the following results: |
|  | significant increases in total and femoral bone density through new bone formation; |
|  | significant reduction in alveolar bone loss and; |
|  | significant reduction in bone resorption. |
|  | the viral promoters are inactivated; |
|  | insertional gene activation is prevented  a major safety factor; |
|  | chromosomal integration and; |
|  | nuclear localization. |
| Enzo Life Sciences  Enabling Discovery in Life Sciences |
| Enzo Life Sciences is a positioned as a leading manufacturer and supplier of high quality reagents, kits and products supplied to scientific researchers in academia, clinical research and drug discovery. With direct sales operations in US, Switzerland, Germany, UK, France and Benelux, Enzo Life Sciences also supports its 9,000 products through a global network of dedicated distributors. |
| Axxora.com  the Innovative Research Reagents Marketplace |
| Axxora.com is a proven distribution platform for original manufacturers of innovative research reagents. An increasing number of researchers use our unique marketplace to instantly connect with over 40 specialty manufacturers and gain access to over 30,000 products. Purchasing groups from universities, research institutes, biotech and pharmaceutical companies utilize this extensive catalog to source research reagents and conveniently consolidate orders. |
| Adipokines | Interferons |
| Antibiotics | In Vitro Toxicology |
| Apotosis/Cell Death | Kinases/Inhibitors |
| Biologically Active Peptides | Leukotrienes/Prostaglandins/Thromboxanes |
| Bone Metabolism | Microarray Labeling |
| Cancer Research | Multidrug Resistance |
| Cell Death | Natural Products/Antibiotics |
| Cell Cycle | Neuroscience |
| Chemokines/Cytokines | Nitric Oxide Pathway |
| Cytoskeletal Research | Nuclear Receptors |
| Dependence Receptors | Oxidative Stress |
| DNA Fragmentation/Damage/Repair | Protein Aggregation |
| DNA Regulation | Proteosome/Ubiquitin |
| Epigenetics | Receptors |
| FISH | Signal Transduction |
| Growth Factors/Cytokines | Stem Cell/Cell Differentiation |
| Hypoxia | Stress Proteins/Heat Shock Proteins |
| Immunology | TNF/TNF Receptor Superfamily |
| Inflammation/Innate Immunity | Transcription Factors |
| Viral Signaling |
|  | pricing differences between our standard gross fee schedules and the reimbursement rates of the payers; |
|  | disputes with payers as to which party is responsible for payment and; |
|  | disparity in coverage and information requirements among various payers. |
| Enzo Biochem, Inc. |
| 527 Madison Ave. |
| New York, New York 10022 |
| Tel: (212) 583-0100 |
| Attn: Investor Relations |
|  | competitive conditions, including changes in third-party reimbursements: |
|  | health care reform regulations affecting providers and plan sponsors; |
|  | exchange rate fluctuations; |
|  | changes in tax laws, the results of tax audits or the measurement of tax uncertainties; |
|  | the timing of our research and development, sales and marketing expenses; |
|  | the introduction of new products by us or our competitors; |
|  | the success of identifying, acquiring and integrating businesses that complement our product offerings, add new technology or add presence in a market; |
|  | expenses associated with defending our intellectual property portfolio; |
|  | customer demand for our products due to changes in purchasing requirements and research needs; |
|  | general worldwide economic conditions affecting funding of research and; |
|  | seasonal fluctuations affected by weather and holiday periods. |
|  | Require us to reduce our prices to retain market share; |
|  | Require us to increase our marketing efforts which could reduce our profit margins; |
|  | Increase our cost of labor to attract qualified personnel; |
|  | Render our biotechnology products uneconomical or obsolete or; |
|  | Reduce our revenue. |
|  | significant delays in obtaining or failing to obtain required approvals; |
|  | loss of, or changes to, previously obtained approvals; |
|  | failure to comply with existing or future regulatory requirements and; |
|  | changes to manufacturing processes, manufacturing process standards or Good Manufacturing Practices following approval or changing interpretations of these factors. |
|  | the circumstances under which uses and disclosures of protected health information are permitted or required without a specific authorization by the patient, including but not limited to treatment purposes, activities to obtain payments for our services, and our healthcare operations activities; |
|  | a patients rights to access, amend and receive an accounting of certain disclosures of protected health information; |
|  | the content of notices of privacy practices for protected health information and; |
|  | administrative, technical and physical safeguards required of entities that use or receive protected health information. |
|  | future fluctuations in exchange rates; |
|  | complex regulatory requirements and changes in those requirements; |
|  | trade protection measures and import or export licensing requirements; |
|  | multiple jurisdictions and differing tax laws, as well as changes in those laws; |
|  | restrictions on our ability to repatriate investments and earnings from foreign operations; |
|  | changes in the political or economic conditions in a country or region, particularly in developing or emerging markets; |
|  | changes in shipping costs and; |
|  | difficulties in collecting on accounts receivable. |
|  | fluctuations in our quarterly operating and earnings per share results; |
|  | the gain or loss of significant contracts; |
|  | loss of key personnel; |
|  | announcements of technological innovations or new products by us or our competitors; |
|  | delays in the development and introduction of new products; |
|  | legislative or regulatory changes; |
|  | general trends in the industries we operate; |
|  | recommendations and/or changes in estimates by equity and market research analysts; |
|  | biological or medical discoveries; |
|  | disputes and/or developments concerning intellectual property, including patents and litigation matters; |
|  | public concern as to the safety of new technologies; |
|  | sales of common stock of existing holders; |
|  | securities class action or other litigation; |
|  | developments in our relationships with current or future customers and suppliers and; |
|  | general economic conditions, both in the United States and worldwide. |
|  | a staggered board of directors, so that it would take three successive annual meetings to replace all directors; and |
|  | advance notice requirements for the submission by stockholders of nominations for election to the board of directors and for proposing matters that can be acted upon by stockholders at a meeting. |
| Location | Primary use | Segments | Leased/owned | Square footage |
| Farmingdale, NY | Clinical laboratory and research | Clinical Labs, | Leased | 43,000 |
| (Note 1) | Therapeutics |
| Farmingdale, NY | Manufacturing, research, sales | Life Sciences, | Owned | 22,000 |
| and administrative office | Other |
| New York, NY | Corporate headquarters | Other | Leased | 11,300 |
| (Note 2) |
| San Diego, CA | Sales, administration and distribution | Life Sciences | Leased | 6,400 |
| (Note 3) |
| Lausen, Switzerland | Operational headquarters in | Life Sciences | Leased | 18,829 |
| (Note 4) | Europe, including sales and distribution |
| Ann Arbor, Michigan | Sales, manufacturing, research, | Life Sciences | Leased | 26,820 |
| (Note 5) | administration and distribution |
| Note 1 |  In March 2005, the Company amended and extended the lease for its Farmingdale laboratory for a period of 12 years (See Note 15 to the Consolidated Financial Statements). |
| Note 2 |  In February 2010, the lease, which includes 4,100 square feet under a sublease rental agreement through December 31, 2011, was extended through May 2020 |
| Note 3 |  The lease for this property was acquired in connection with the Axxora acquisition in May 2007 and was amended and extended through February 2014. |
| Note 4 |  The lease for this property was acquired in connection with the Axxora acquisition in May 2007 and was amended and extended through April 2013. |
| Note 5 |  The lease for this property was acquired in connection with the Assay Designs acquisition in March 2009 and was amended and extended through April 2016. |
| We believe the current facilities are suitable and adequate for the Companys current operating needs for its clinical laboratories, life science and therapeutics segments and that the production capacity in various locations is sufficient to manage product requirements. |
| 2011 Fiscal Year (August 1, 2010 to July 31, 2011): |
| High | Low |
| 1st Quarter | $ | 4.62 | $ | 3.37 |
| 2nd Quarter | $ | 5.80 | $ | 4.16 |
| 3rd Quarter | $ | 5.09 | $ | 3.46 |
| 4th Quarter | $ | 4.74 | $ | 3.52 |
| 2010 Fiscal Year (August 1, 2009 to July 31, 2010): |
| High | Low |
| 1st Quarter | $ | 7.66 | $ | 4.51 |
| 2nd Quarter | $ | 6.24 | $ | 4.52 |
| 3rd Quarter | $ | 6.67 | $ | 4.66 |
| 4th Quarter | $ | 6.18 | $ | 3.90 |
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuances under equity compensation plans (excluding securities reflected in column (a) (c) |
| Equity compensation plans approved by security holders | 785,124 | $ | 14.53 | 2,818,300 |
| Equity compensation plans not approved by security holders |  |  |  |
| Total | 785,124 | $ | 14.53 | 2,818,300 |
| For the fiscal year ended July 31, (In thousands, except per share amounts) |
| Operating Results | 2011 | 2010 | (1)   2009 | (2)   2008 | (3)   2007 |
| Revenues | $ | 102,029 | $ | 97,082 | $ | 89,572 | $ | 77,795 | $ | 52,908 |
| Operating loss | $ | (12,928 | ) | $ | (22,058 | ) | $ | (23,407 | ) | $ | (14,786 | ) | $ | (20,966 | ) |
| Net loss | $ | (12,960 | ) | $ | (22,233 | ) | $ | (23,564 | ) | $ | (10,653 | ) | $ | (13,260 | ) |
| Basic and diluted net loss per common share: | $ | (0.34 | ) | $ | (0.59 | ) | $ | (0.63 | ) | $ | (0.29 | ) | $ | (0.38 | ) |
| July 31, (in thousands) |
| Financial Position | 2011 | 2010 | (4)   2009 | (4)   2008 | (4)   2007 |
| Working capital | $ | 33,670 | $ | 42,181 | $ | 60,518 | $ | 92,392 | $ | 113,850 |
| Total assets | $ | 109,474 | $ | 115,245 | $ | 133,128 | $ | 154,522 | $ | 159,002 |
| Long term obligations | $ | 96 | — | — | — | — |
| Stockholders’ equity | $ | 88,715 | $ | 97,016 | $ | 116,781 | $ | 138,289 | $ | 141,894 |
| Fiscal year ended July 31, | 2011 | 2010 | 2009 |
| Product revenues | $ | 41,830 | 41 | % | $ | 43,111 | 44 | % | $ | 40,592 | 45 | % |
| Royalty and license fee income | 7,437 | 7 | 9,793 | 10 | 9,376 | 11 |
| Clinical laboratory services | 52,762 | 52 | 44,178 | 46 | 39,604 | 44 |
| Total | $ | 102,029 | 100 | % | $ | 97,082 | 100 | % | $ | 89,572 | 100 | % |
| 2011 | 2010 | Increase (Decrease) | % Change |
| Revenues: |
| Product revenues | $ | 41,830 | $ | 43,111 | $ | (1,281 | ) | (3 | ) |
| Royalty and license fee income | 7,437 | 9,793 | (2,356 | ) | (24 | ) |
| Clinical laboratory services | 52,762 | 44,178 | 8,584 | 19 |
| Total revenues | 102,029 | 97,082 | 4,947 | 5 |
| Operating expenses: |
| Cost of product revenues | 22,137 | 22,547 | (410 | ) | (2 | ) |
| Cost of clinical laboratory services | 31,682 | 29,570 | 2,112 | 7 |
| Research and development | 7,806 | 9,704 | (1,898 | ) | (20 | ) |
| Selling, general, and administrative | 45,191 | 48,395 | (3,204 | ) | (7 | ) |
| Provision for uncollectible accounts receivable | 4,431 | 3,480 | 951 | 27 |
| Legal | 3,710 | 1,746 | 1,964 | 112 |
| Litigation settlement and related legal costs |  | 3,698 | (3,698 | ) | (100 | ) |
| Total operating expenses | 114,957 | 119,140 | (4,183 | ) | (4 | ) |
| Operating loss | (12,928 | ) | (22,058 | ) | 9,130 | 41 |
| Other income (expense): |
| Interest | 11 | 19 | (8 | ) | (42 | ) |
| Other | 45 | 44 | 1 | 2 |
| Foreign exchange gain (loss) | 49 | (266 | ) | 315 | 118 |
| Loss before income taxes | $ | (12,823 | ) | $ | (22,261 | ) | $ | 9,438 | 42 |
| 2010 | 2009 | Increase (Decrease) | % Change |
| Revenues: |
| Product revenues | $ | 43,111 | $ | 40,592 | $ | 2,519 | 6 |
| Royalty and license fee income | 9,793 | 9,376 | 417 | 4 |
| Clinical laboratory services | 44,178 | 39,604 | 4,574 | 12 |
| Total revenues | 97,082 | 89,572 | 7,510 | 8 |
| Operating expenses: |
| Cost of product revenues | 22,547 | 26,766 | (4,219 | ) | (16 | ) |
| Cost of clinical laboratory services | 29,570 | 26,295 | 3,275 | 12 |
| Research and development | 9,704 | 9,220 | 484 | 5 |
| Selling, general, and administrative | 48,395 | 41,314 | 7,081 | 17 |
| Provision for uncollectible accounts receivable | 3,480 | 5,189 | (1,709 | ) | (33 | ) |
| Legal | 1,746 | 4,195 | (2,449 | ) | (58 | ) |
| Litigation settlement and related legal costs | 3,698 |  | 3,698 |  |
| Total operating expenses | 119,140 | 112,979 | 6,161 | 5.5 |
| Operating loss | (22,058 | ) | (23,407 | ) | 1,349 | (6 | ) |
| Other income (expense): |
| Interest | 19 | 581 | (562 | ) | (97 | ) |
| Other | 44 | 74 | (30 | ) | (41 | ) |
| Foreign exchange loss | (266 | ) | (725 | ) | 459 | (63 | ) |
| Loss before income taxes | $ | (22,261 | ) | $ | (23,477 | ) | $ | 1,216 | (5 | ) |
| In 000s | Total | Less than 1 year | 1-3 years | 4-5 years | Over 5 years |
| Real estate and equipment leases | $ | 20,592 | $ | 4,520 | $ | 6,685 | $ | 5,217 | $ | 4,170 |
| Employment agreements | 1,223 | 1,223 |  |  |  |
| Total contractual cash obligations | $ | 21,815 | $ | 5,743 | $ | 6,685 | $ | 5,217 | $ | 4,170 |
| Year ended July 31 2011 | Year ended July 31 2010 | Year ended July 31 2009 |
| Revenue category | (In 000s) | (in %) | (In 000s) | (in %) | (In 000s) | (in %) |
| Medicare | $ | 11,856 | 22 | $ | 11,158 | 25 | $ | 9,138 | 23 |
| Third-party payers | 24,335 | 46 | 19,534 | 44 | 20,073 | 51 |
| Patient self-pay | 11,554 | 22 | 8,758 | 20 | 6,056 | 15 |
| HMOs | 5,017 | 10 | 4,728 | 11 | 4,337 | 11 |
| Total | $ | 52,762 | 100 | % | $ | 44,178 | 100 | % | $ | 39,604 | 100 | % |
|  | an analysis of industry reimbursement trends; |
|  | an evaluation of third-party reimbursement rates changes and changes in reimbursement arrangements with third-party payers; |
|  | a rolling monthly analysis of current and historical claim settlement and reimbursement experience statistics with payers; |
|  | an analysis of current gross billings and receivables by payer. |
| As of July 31, 2011 | As of July 31, 2010 |
| Billing category | (In 000s) | (in %) | (In 000s) | (in %) |
| Clinical Labs |
| Medicare | $ | 1.434 | 19 | $ | 849 | 14 |
| Third party payers | 3,087 | 40 | 2,664 | 46 |
| Patient self-pay | 2,865 | 37 | 2,024 | 35 |
| HMOs | 314 | 4 | 296 | 5 |
| Total Clinical Labs | 7,700 | 100 | % | 5,833 | 100 | % |
| Total Life Sciences | 7,545 | 7,173 |
| Total accounts receivable | $ | 15,245 | $ | 13,006 |
| In 000s | July 31, 2011 | July 31, 2010 |
| Beginning balance | $ | 2,839 | $ | 4,786 |
| Provision for doubtful accounts | 4,431 | 3,480 |
| Write-offs, net | (3,782 | ) | (5,427 | ) |
| Ending balance | $ | 3,488 | $ | 2,839 |
| As of July 31, 2011 | Total Amount | % | Medicare Amount | % | Third Party Payers Amount | % | Self-pay Amount | % | HMOs Amount | % |
| 1-30 days | $ | 29,880 | 60 | % | 5,843 | 60 | % | 13,851 | 56 | % | 6,173 | 55 | % | 4,013 | 95 | % |
| 31-60 days | 7,013 | 14 | % | 791 | 8 | % | 3,441 | 14 | % | 2,687 | 24 | % | 93 | 2 | % |
| 61-90 days | 4,029 | 8 | % | 566 | 6 | % | 2,522 | 10 | % | 890 | 8 | % | 51 | 1 | % |
| 91-120 days | 3,826 | 8 | % | 917 | 9 | % | 1,819 | 7 | % | 1,046 | 9 | % | 44 | 1 | % |
| 121-150 days | 2,084 | 4 | % | 375 | 4 | % | 1,385 | 6 | % | 288 | 3 | % | 37 | 1 | % |
| Greater than 150 days* | 3,050 | 6 | % | 1,234 | 13 | % | 1,717 | 7 | % | 94 | 1 | % | 5 | 0 | % |
| Totals | $ | 49,882 | 100 | % | 9,726 | 100 | % | 24,735 | 100 | % | 11,178 | 100 | % | 4,243 | 100 | % |
| As of July 31, 2010 | Total Amount | % | Medicare Amount | % | Third Party Payers Amount | % | Self-pay Amount | % | HMOs Amount | % |
| 1-30 days | $ | 21,678 | 66 | % | $ | 2,886 | 57 | % | $ | 10,846 | 64 | % | $ | 4,242 | 59 | % | $ | 3,704 | 99 | % |
| 31-60 days | 4,256 | 13 | % | 439 | 9 | % | 2,458 | 15 | % | 1,344 | 18 | % | 15 | 1 | % |
| 61-90 days | 2,565 | 8 | % | 281 | 6 | % | 1,337 | 8 | % | 935 | 13 | % | 12 |  | % |
| 91-120 days | 1,771 | 5 | % | 248 | 5 | % | 850 | 5 | % | 671 | 9 | % | 2 |  | % |
| 121-150 days | 936 | 3 | % | 236 | 4 | % | 696 | 4 | % | 2 |  | % | 2 |  | % |
| Greater than 150 days** | 1,733 | 5 | % | 967 | 19 | % | 711 | 4 | % | 52 | 1 | % | 3 |  | % |
| Totals | $ | 32,939 | 100 | % | $ | 5,057 | 100 | % | $ | 16,898 | 100 | % | $ | 7,246 | 100 | % | $ | 3,738 | 100 | % |

Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of July 31, 2011. This evaluation was carried out under the supervision and with participation of our Chief Executive Officer and Chief Financial Officer. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Therefore, effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level as of July 31, 2011, and that information required to be disclosed in the reports that we file under the Exchange Act is recorded, processed, summarized and reported in a timely manner and is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting during the fourth quarter ended July 31, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) under the Exchange Act.
Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and
• provide reasonable assurance regarding prevention and timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems that are determined to be effective provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of our internal control over financial reporting based on criteria for effective internal control over financial reporting described in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on its assessment, management concluded that we maintained effective internal control over financial reporting as of July 31, 2011. Ernst & Young LLP, our independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting as of July 31, 2011. This report, in which Ernst & Young LLP has expressed an unqualified opinion, appears in this Item 9A.
53
Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders of Enzo Biochem, Inc. We have audited Enzo Biochem, Inc.’s (“the Company”) internal control over financial reporting as of July 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Enzo Biochem, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, Enzo Biochem, Inc. maintained, in all material respects, effective internal control over financial reporting as of July 31, 2011 based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Enzo Biochem, Inc. as of July 31, 2011 and 2010 and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss) and cash flows for each of the three years in the period ended July 31, 2011 of Enzo Biochem, Inc. and our report dated October 14, 2011 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Jericho, New York October 14, 2011 54
| (Mark one) |
| x | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the fiscal year ended July 31, 2011 |
| or |
| o | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from ______________ to ______________ |
| Commission File Number 001-09974 |
| ENZO BIOCHEM, INC. |
| (Exact name of registrant as specified in its charter) |
| New York | 13-2866202 |
| (State or other jurisdiction | (I.R.S. Employer |
| of incorporation or organization) | Identification No.) |
| 527 Madison Ave. |
| New York, New York | 10022 |
| (Address of principal executive offices) | (Zip Code) |
| (212) 583-0100 |
| (Registrants telephone number, including area code) |
| Securities registered pursuant to Section 12(b) of the Act: |
| (Title of Each Class) | (Name of Each Exchange on Which Registered) |
| Common Stock, $.01 par value | The New York Stock Exchange |
| Large accelerated filer o | Accelerated filer x | Non-accelerated filer o | Smaller Reporting Company o |
| Description | Page |
| Part I |
| Item 1. | Business | 2 |
| Item 1A. | Risk Factors | 23 |
| Item 1B. | Unresolved Staff Comments | 32 |
| Item 2. | Properties | 33 |
| Item 3. | Legal Proceedings | 33 |
| Item 4. | (Removed and Reserved) | 37 |
| Part II |
| Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 37 |
| Item 6. | Selected Financial Data | 38 |
| Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations | 38 |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 52 |
| Item 8. | Financial Statements and Supplementary Data | 52 |
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 52 |
| Item 9A. | Controls and Procedures | 53 |
| Item 9B. | Other Information | 55 |
| Part III |
| Item 10. | Directors, Executive Officers and Corporate Governance | 55 |
| Item 11. | Executive Compensation | 55 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 55 |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 55 |
| Item 14. | Principal Accountant Fees and Services | 55 |
| Part IV |
| Item 15. | Exhibits and Financial Statement Schedules | 55 |
| List of Consolidated Financial Statements and Financial Statements Schedule | F-1 |
| Report of Independent Registered Public Accounting Firm | F-2 |
| Consolidated Balance Sheets | F-3 |
| Consolidated Statements of Operations | F-4 |
| Consolidated Statements of Stockholders Equity & Comprehensive Income (Loss) | F-5 |
| Consolidated Statements of Cash Flows | F-6 |
| Notes to Consolidated Financial Statements | F-7 |
| Schedule II - Valuation Accounts and Qualifying Accounts | S-1 |
| Enzo Life Sciences manufactures, develops and markets functional biology and cellular biochemistry products and tools to life sciences, pharmaceutical and clinical research customers world-wide and has amassed a large patent and technology portfolio. Enzo Life Sciences, Inc. is a recognized leader in labeling and detection technologies across research and diagnostic markets. Our strong portfolio of proteins, antibodies, peptides, small molecules, labeling probes, dyes and kits provides life science researchers tools for target identification/validation, high content analysis, gene expression analysis, nucleic acid detection, protein biochemistry and detection, and cellular analysis. We are internationally recognized and acknowledged as a leader in manufacturing, in-licensing, and commercialization of over 9,000 of our own products and in addition distribute over 30,000 products made by over 40 other original manufacturers. Our strategic focus is directed to innovative high quality research reagents and kits in the primary key research areas of protein homeostasis, epigenetics, live cell analysis, molecular biology and immunoassays. |
| The segment is an established source for a comprehensive panel of products to scientific experts in the fields of Natural Products/Antibiotics, Autophagy, Cancer, Cell Cycle, Cell Death, Cell Signaling, Cellular Analysis, Endocrinology/Hormones, DNA regulation, Compound Screening, Genomics/Molecular Biology, GPCRs, Immunology, Inflammation, Metabolism, Neuroscience, Nitric Oxide pathway, Obesity/Adipokines, Oxidative Stress, Proteases. Proteosomes, Protein Expression and modification, Signal Transduction, Stress/Heat Shock proteins and Ubiquitin/Ubl signaling. |
| Enzo Clinical Labs is a regional clinical laboratory serving the New York, New Jersey and Eastern Pennsylvania medical communities. The Company believes having clinical diagnostic services allows us to capitalize first hand on our extensive advanced molecular and cytogenetic capabilities and the broader trends in predictive and personalized diagnostics. Enzo Clinical Labs offers a menu of routine and esoteric clinical laboratory tests or procedures used in general patient care by physicians to establish or support a diagnosis, monitor treatment or medication, and search for an otherwise undiagnosed condition. We operate a full-service clinical laboratory in Farmingdale, New York, a network of approximately 30 patient service centers throughout New York and New Jersey, a stand alone stat or rapid response laboratory in New York City and a full-service phlebotomy and logistics department. |
| Enzo Therapeutics is a biopharmaceutical venture that has developed multiple novel approaches in the areas of gastrointestinal, infectious, ophthalmic and metabolic diseases, many of which are derived from the pioneering work of Enzo Life Sciences. Enzo Therapeutics has focused its efforts on developing treatment regimens for diseases and conditions for which current treatment options are ineffective, costly, and/or cause unwanted side effects. This focus has generated a clinical and preclinical pipeline, as well as more than 45 patents and patent applications. |
| Fiscal year ended July 31, | 2011 | 2010 | 2009 |
| Product revenues | $ | 41,830 | 41 | % | $ | 43,111 | 44 | % | $ | 40,592 | 45 | % |
| Royalty and license fee income | 7,437 | 7 | 9,793 | 10 | 9,376 | 11 |
| Clinical laboratory services | 52,762 | 52 | 44,178 | 46 | 39,604 | 44 |
| Total | $ | 102,029 | 100 | % | $ | 97,082 | 100 | % | $ | 89,572 | 100 | % |
|  research spending by academic, government and private organizations to determine the function and clinical relevance of the gene sequences and proteins that have been identified by genome research; |
|  development of commercial applications based on information derived from this research; and |
|  ongoing advancements in tools that accelerate these research and development activities. |
|  | the increasing number of diagnostic tests being developed from discoveries in genome research; |
|  | advances in formats and other technologies that automate and accelerate gene-based diagnostic testing; |
|  | growing emphasis by the health care industry on early diagnosis and treatment of disease and; |
|  | application of gene-based diagnostics as tools to match therapies to specific patient genetics commonly referred to as pharmacogenomics. |
|  | amplification of the target DNA sequence (a process that is essential for the detection of very small amounts of nucleic acid); |
|  | labeling the probe with a marker that generates a detectable signal upon hybridization; |
|  | addition of the probe to the sample containing the DNA and; |
|  | binding or hybridization of the probe to the target DNA sequence, if present, to generate a detectable signal. |
|  | generate biological, genetic, and structural information concerning LRP; |
|  | determine the structure of LRP docking sites of its ligands; |
|  | identify the functionally important residues via site-directed mutagenesis; |
|  | build the fine structure map and employ it as the basis for virtual screening; |
|  | show that compounds specifically bind to wild type LRP5, but not to mutated LRP5; |
|  | generate a cell-based assay capable of identifying active compounds and; |
|  | synthesize proprietary molecules that are active in animal models of disease. |
| Through this novel, proprietary, functional screening system, we have identified small molecules capable of reversing sclerostin-mediated inhibition of Wnt signaling. Preclinical animal studies with several candidate lead compounds produced the following results: |
|  | significant increases in total and femoral bone density through new bone formation; |
|  | significant reduction in alveolar bone loss and; |
|  | significant reduction in bone resorption. |
|  | the viral promoters are inactivated; |
|  | insertional gene activation is prevented  a major safety factor; |
|  | chromosomal integration and; |
|  | nuclear localization. |
| Enzo Life Sciences  Enabling Discovery in Life Sciences |
| Enzo Life Sciences is a positioned as a leading manufacturer and supplier of high quality reagents, kits and products supplied to scientific researchers in academia, clinical research and drug discovery. With direct sales operations in US, Switzerland, Germany, UK, France and Benelux, Enzo Life Sciences also supports its 9,000 products through a global network of dedicated distributors. |
| Axxora.com  the Innovative Research Reagents Marketplace |
| Axxora.com is a proven distribution platform for original manufacturers of innovative research reagents. An increasing number of researchers use our unique marketplace to instantly connect with over 40 specialty manufacturers and gain access to over 30,000 products. Purchasing groups from universities, research institutes, biotech and pharmaceutical companies utilize this extensive catalog to source research reagents and conveniently consolidate orders. |
| Adipokines | Interferons |
| Antibiotics | In Vitro Toxicology |
| Apotosis/Cell Death | Kinases/Inhibitors |
| Biologically Active Peptides | Leukotrienes/Prostaglandins/Thromboxanes |
| Bone Metabolism | Microarray Labeling |
| Cancer Research | Multidrug Resistance |
| Cell Death | Natural Products/Antibiotics |
| Cell Cycle | Neuroscience |
| Chemokines/Cytokines | Nitric Oxide Pathway |
| Cytoskeletal Research | Nuclear Receptors |
| Dependence Receptors | Oxidative Stress |
| DNA Fragmentation/Damage/Repair | Protein Aggregation |
| DNA Regulation | Proteosome/Ubiquitin |
| Epigenetics | Receptors |
| FISH | Signal Transduction |
| Growth Factors/Cytokines | Stem Cell/Cell Differentiation |
| Hypoxia | Stress Proteins/Heat Shock Proteins |
| Immunology | TNF/TNF Receptor Superfamily |
| Inflammation/Innate Immunity | Transcription Factors |
| Viral Signaling |
|  | pricing differences between our standard gross fee schedules and the reimbursement rates of the payers; |
|  | disputes with payers as to which party is responsible for payment and; |
|  | disparity in coverage and information requirements among various payers. |
| Enzo Biochem, Inc. |
| 527 Madison Ave. |
| New York, New York 10022 |
| Tel: (212) 583-0100 |
| Attn: Investor Relations |
|  | competitive conditions, including changes in third-party reimbursements: |
|  | health care reform regulations affecting providers and plan sponsors; |
|  | exchange rate fluctuations; |
|  | changes in tax laws, the results of tax audits or the measurement of tax uncertainties; |
|  | the timing of our research and development, sales and marketing expenses; |
|  | the introduction of new products by us or our competitors; |
|  | the success of identifying, acquiring and integrating businesses that complement our product offerings, add new technology or add presence in a market; |
|  | expenses associated with defending our intellectual property portfolio; |
|  | customer demand for our products due to changes in purchasing requirements and research needs; |
|  | general worldwide economic conditions affecting funding of research and; |
|  | seasonal fluctuations affected by weather and holiday periods. |
|  | Require us to reduce our prices to retain market share; |
|  | Require us to increase our marketing efforts which could reduce our profit margins; |
|  | Increase our cost of labor to attract qualified personnel; |
|  | Render our biotechnology products uneconomical or obsolete or; |
|  | Reduce our revenue. |
|  | significant delays in obtaining or failing to obtain required approvals; |
|  | loss of, or changes to, previously obtained approvals; |
|  | failure to comply with existing or future regulatory requirements and; |
|  | changes to manufacturing processes, manufacturing process standards or Good Manufacturing Practices following approval or changing interpretations of these factors. |
|  | the circumstances under which uses and disclosures of protected health information are permitted or required without a specific authorization by the patient, including but not limited to treatment purposes, activities to obtain payments for our services, and our healthcare operations activities; |
|  | a patients rights to access, amend and receive an accounting of certain disclosures of protected health information; |
|  | the content of notices of privacy practices for protected health information and; |
|  | administrative, technical and physical safeguards required of entities that use or receive protected health information. |
|  | future fluctuations in exchange rates; |
|  | complex regulatory requirements and changes in those requirements; |
|  | trade protection measures and import or export licensing requirements; |
|  | multiple jurisdictions and differing tax laws, as well as changes in those laws; |
|  | restrictions on our ability to repatriate investments and earnings from foreign operations; |
|  | changes in the political or economic conditions in a country or region, particularly in developing or emerging markets; |
|  | changes in shipping costs and; |
|  | difficulties in collecting on accounts receivable. |
|  | fluctuations in our quarterly operating and earnings per share results; |
|  | the gain or loss of significant contracts; |
|  | loss of key personnel; |
|  | announcements of technological innovations or new products by us or our competitors; |
|  | delays in the development and introduction of new products; |
|  | legislative or regulatory changes; |
|  | general trends in the industries we operate; |
|  | recommendations and/or changes in estimates by equity and market research analysts; |
|  | biological or medical discoveries; |
|  | disputes and/or developments concerning intellectual property, including patents and litigation matters; |
|  | public concern as to the safety of new technologies; |
|  | sales of common stock of existing holders; |
|  | securities class action or other litigation; |
|  | developments in our relationships with current or future customers and suppliers and; |
|  | general economic conditions, both in the United States and worldwide. |
|  | a staggered board of directors, so that it would take three successive annual meetings to replace all directors; and |
|  | advance notice requirements for the submission by stockholders of nominations for election to the board of directors and for proposing matters that can be acted upon by stockholders at a meeting. |
| Location | Primary use | Segments | Leased/owned | Square footage |
| Farmingdale, NY | Clinical laboratory and research | Clinical Labs, | Leased | 43,000 |
| (Note 1) | Therapeutics |
| Farmingdale, NY | Manufacturing, research, sales | Life Sciences, | Owned | 22,000 |
| and administrative office | Other |
| New York, NY | Corporate headquarters | Other | Leased | 11,300 |
| (Note 2) |
| San Diego, CA | Sales, administration and distribution | Life Sciences | Leased | 6,400 |
| (Note 3) |
| Lausen, Switzerland | Operational headquarters in | Life Sciences | Leased | 18,829 |
| (Note 4) | Europe, including sales and distribution |
| Ann Arbor, Michigan | Sales, manufacturing, research, | Life Sciences | Leased | 26,820 |
| (Note 5) | administration and distribution |
| Note 1 |  In March 2005, the Company amended and extended the lease for its Farmingdale laboratory for a period of 12 years (See Note 15 to the Consolidated Financial Statements). |
| Note 2 |  In February 2010, the lease, which includes 4,100 square feet under a sublease rental agreement through December 31, 2011, was extended through May 2020 |
| Note 3 |  The lease for this property was acquired in connection with the Axxora acquisition in May 2007 and was amended and extended through February 2014. |
| Note 4 |  The lease for this property was acquired in connection with the Axxora acquisition in May 2007 and was amended and extended through April 2013. |
| Note 5 |  The lease for this property was acquired in connection with the Assay Designs acquisition in March 2009 and was amended and extended through April 2016. |
| We believe the current facilities are suitable and adequate for the Companys current operating needs for its clinical laboratories, life science and therapeutics segments and that the production capacity in various locations is sufficient to manage product requirements. |
| 2011 Fiscal Year (August 1, 2010 to July 31, 2011): |
| High | Low |
| 1st Quarter | $ | 4.62 | $ | 3.37 |
| 2nd Quarter | $ | 5.80 | $ | 4.16 |
| 3rd Quarter | $ | 5.09 | $ | 3.46 |
| 4th Quarter | $ | 4.74 | $ | 3.52 |
| 2010 Fiscal Year (August 1, 2009 to July 31, 2010): |
| High | Low |
| 1st Quarter | $ | 7.66 | $ | 4.51 |
| 2nd Quarter | $ | 6.24 | $ | 4.52 |
| 3rd Quarter | $ | 6.67 | $ | 4.66 |
| 4th Quarter | $ | 6.18 | $ | 3.90 |
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuances under equity compensation plans (excluding securities reflected in column (a) (c) |
| Equity compensation plans approved by security holders | 785,124 | $ | 14.53 | 2,818,300 |
| Equity compensation plans not approved by security holders |  |  |  |
| Total | 785,124 | $ | 14.53 | 2,818,300 |
| For the fiscal year ended July 31, (In thousands, except per share amounts) |
| Operating Results | 2011 | 2010 | (1)   2009 | (2)   2008 | (3)   2007 |
| Revenues | $ | 102,029 | $ | 97,082 | $ | 89,572 | $ | 77,795 | $ | 52,908 |
| Operating loss | $ | (12,928 | ) | $ | (22,058 | ) | $ | (23,407 | ) | $ | (14,786 | ) | $ | (20,966 | ) |
| Net loss | $ | (12,960 | ) | $ | (22,233 | ) | $ | (23,564 | ) | $ | (10,653 | ) | $ | (13,260 | ) |
| Basic and diluted net loss per common share: | $ | (0.34 | ) | $ | (0.59 | ) | $ | (0.63 | ) | $ | (0.29 | ) | $ | (0.38 | ) |
| July 31, (in thousands) |
| Financial Position | 2011 | 2010 | (4)   2009 | (4)   2008 | (4)   2007 |
| Working capital | $ | 33,670 | $ | 42,181 | $ | 60,518 | $ | 92,392 | $ | 113,850 |
| Total assets | $ | 109,474 | $ | 115,245 | $ | 133,128 | $ | 154,522 | $ | 159,002 |
| Long term obligations | $ | 96 | — | — | — | — |
| Stockholders’ equity | $ | 88,715 | $ | 97,016 | $ | 116,781 | $ | 138,289 | $ | 141,894 |
| Fiscal year ended July 31, | 2011 | 2010 | 2009 |
| Product revenues | $ | 41,830 | 41 | % | $ | 43,111 | 44 | % | $ | 40,592 | 45 | % |
| Royalty and license fee income | 7,437 | 7 | 9,793 | 10 | 9,376 | 11 |
| Clinical laboratory services | 52,762 | 52 | 44,178 | 46 | 39,604 | 44 |
| Total | $ | 102,029 | 100 | % | $ | 97,082 | 100 | % | $ | 89,572 | 100 | % |
| 2011 | 2010 | Increase (Decrease) | % Change |
| Revenues: |
| Product revenues | $ | 41,830 | $ | 43,111 | $ | (1,281 | ) | (3 | ) |
| Royalty and license fee income | 7,437 | 9,793 | (2,356 | ) | (24 | ) |
| Clinical laboratory services | 52,762 | 44,178 | 8,584 | 19 |
| Total revenues | 102,029 | 97,082 | 4,947 | 5 |
| Operating expenses: |
| Cost of product revenues | 22,137 | 22,547 | (410 | ) | (2 | ) |
| Cost of clinical laboratory services | 31,682 | 29,570 | 2,112 | 7 |
| Research and development | 7,806 | 9,704 | (1,898 | ) | (20 | ) |
| Selling, general, and administrative | 45,191 | 48,395 | (3,204 | ) | (7 | ) |
| Provision for uncollectible accounts receivable | 4,431 | 3,480 | 951 | 27 |
| Legal | 3,710 | 1,746 | 1,964 | 112 |
| Litigation settlement and related legal costs |  | 3,698 | (3,698 | ) | (100 | ) |
| Total operating expenses | 114,957 | 119,140 | (4,183 | ) | (4 | ) |
| Operating loss | (12,928 | ) | (22,058 | ) | 9,130 | 41 |
| Other income (expense): |
| Interest | 11 | 19 | (8 | ) | (42 | ) |
| Other | 45 | 44 | 1 | 2 |
| Foreign exchange gain (loss) | 49 | (266 | ) | 315 | 118 |
| Loss before income taxes | $ | (12,823 | ) | $ | (22,261 | ) | $ | 9,438 | 42 |
| 2010 | 2009 | Increase (Decrease) | % Change |
| Revenues: |
| Product revenues | $ | 43,111 | $ | 40,592 | $ | 2,519 | 6 |
| Royalty and license fee income | 9,793 | 9,376 | 417 | 4 |
| Clinical laboratory services | 44,178 | 39,604 | 4,574 | 12 |
| Total revenues | 97,082 | 89,572 | 7,510 | 8 |
| Operating expenses: |
| Cost of product revenues | 22,547 | 26,766 | (4,219 | ) | (16 | ) |
| Cost of clinical laboratory services | 29,570 | 26,295 | 3,275 | 12 |
| Research and development | 9,704 | 9,220 | 484 | 5 |
| Selling, general, and administrative | 48,395 | 41,314 | 7,081 | 17 |
| Provision for uncollectible accounts receivable | 3,480 | 5,189 | (1,709 | ) | (33 | ) |
| Legal | 1,746 | 4,195 | (2,449 | ) | (58 | ) |
| Litigation settlement and related legal costs | 3,698 |  | 3,698 |  |
| Total operating expenses | 119,140 | 112,979 | 6,161 | 5.5 |
| Operating loss | (22,058 | ) | (23,407 | ) | 1,349 | (6 | ) |
| Other income (expense): |
| Interest | 19 | 581 | (562 | ) | (97 | ) |
| Other | 44 | 74 | (30 | ) | (41 | ) |
| Foreign exchange loss | (266 | ) | (725 | ) | 459 | (63 | ) |
| Loss before income taxes | $ | (22,261 | ) | $ | (23,477 | ) | $ | 1,216 | (5 | ) |
| In 000s | Total | Less than 1 year | 1-3 years | 4-5 years | Over 5 years |
| Real estate and equipment leases | $ | 20,592 | $ | 4,520 | $ | 6,685 | $ | 5,217 | $ | 4,170 |
| Employment agreements | 1,223 | 1,223 |  |  |  |
| Total contractual cash obligations | $ | 21,815 | $ | 5,743 | $ | 6,685 | $ | 5,217 | $ | 4,170 |
| Year ended July 31 2011 | Year ended July 31 2010 | Year ended July 31 2009 |
| Revenue category | (In 000s) | (in %) | (In 000s) | (in %) | (In 000s) | (in %) |
| Medicare | $ | 11,856 | 22 | $ | 11,158 | 25 | $ | 9,138 | 23 |
| Third-party payers | 24,335 | 46 | 19,534 | 44 | 20,073 | 51 |
| Patient self-pay | 11,554 | 22 | 8,758 | 20 | 6,056 | 15 |
| HMOs | 5,017 | 10 | 4,728 | 11 | 4,337 | 11 |
| Total | $ | 52,762 | 100 | % | $ | 44,178 | 100 | % | $ | 39,604 | 100 | % |
|  | an analysis of industry reimbursement trends; |
|  | an evaluation of third-party reimbursement rates changes and changes in reimbursement arrangements with third-party payers; |
|  | a rolling monthly analysis of current and historical claim settlement and reimbursement experience statistics with payers; |
|  | an analysis of current gross billings and receivables by payer. |
| As of July 31, 2011 | As of July 31, 2010 |
| Billing category | (In 000s) | (in %) | (In 000s) | (in %) |
| Clinical Labs |
| Medicare | $ | 1.434 | 19 | $ | 849 | 14 |
| Third party payers | 3,087 | 40 | 2,664 | 46 |
| Patient self-pay | 2,865 | 37 | 2,024 | 35 |
| HMOs | 314 | 4 | 296 | 5 |
| Total Clinical Labs | 7,700 | 100 | % | 5,833 | 100 | % |
| Total Life Sciences | 7,545 | 7,173 |
| Total accounts receivable | $ | 15,245 | $ | 13,006 |
| In 000s | July 31, 2011 | July 31, 2010 |
| Beginning balance | $ | 2,839 | $ | 4,786 |
| Provision for doubtful accounts | 4,431 | 3,480 |
| Write-offs, net | (3,782 | ) | (5,427 | ) |
| Ending balance | $ | 3,488 | $ | 2,839 |
| As of July 31, 2011 | Total Amount | % | Medicare Amount | % | Third Party Payers Amount | % | Self-pay Amount | % | HMOs Amount | % |
| 1-30 days | $ | 29,880 | 60 | % | 5,843 | 60 | % | 13,851 | 56 | % | 6,173 | 55 | % | 4,013 | 95 | % |
| 31-60 days | 7,013 | 14 | % | 791 | 8 | % | 3,441 | 14 | % | 2,687 | 24 | % | 93 | 2 | % |
| 61-90 days | 4,029 | 8 | % | 566 | 6 | % | 2,522 | 10 | % | 890 | 8 | % | 51 | 1 | % |
| 91-120 days | 3,826 | 8 | % | 917 | 9 | % | 1,819 | 7 | % | 1,046 | 9 | % | 44 | 1 | % |
| 121-150 days | 2,084 | 4 | % | 375 | 4 | % | 1,385 | 6 | % | 288 | 3 | % | 37 | 1 | % |
| Greater than 150 days* | 3,050 | 6 | % | 1,234 | 13 | % | 1,717 | 7 | % | 94 | 1 | % | 5 | 0 | % |
| Totals | $ | 49,882 | 100 | % | 9,726 | 100 | % | 24,735 | 100 | % | 11,178 | 100 | % | 4,243 | 100 | % |
| As of July 31, 2010 | Total Amount | % | Medicare Amount | % | Third Party Payers Amount | % | Self-pay Amount | % | HMOs Amount | % |
| 1-30 days | $ | 21,678 | 66 | % | $ | 2,886 | 57 | % | $ | 10,846 | 64 | % | $ | 4,242 | 59 | % | $ | 3,704 | 99 | % |
| 31-60 days | 4,256 | 13 | % | 439 | 9 | % | 2,458 | 15 | % | 1,344 | 18 | % | 15 | 1 | % |
| 61-90 days | 2,565 | 8 | % | 281 | 6 | % | 1,337 | 8 | % | 935 | 13 | % | 12 |  | % |
| 91-120 days | 1,771 | 5 | % | 248 | 5 | % | 850 | 5 | % | 671 | 9 | % | 2 |  | % |
| 121-150 days | 936 | 3 | % | 236 | 4 | % | 696 | 4 | % | 2 |  | % | 2 |  | % |
| Greater than 150 days** | 1,733 | 5 | % | 967 | 19 | % | 711 | 4 | % | 52 | 1 | % | 3 |  | % |
| Totals | $ | 32,939 | 100 | % | $ | 5,057 | 100 | % | $ | 16,898 | 100 | % | $ | 7,246 | 100 | % | $ | 3,738 | 100 | % |

The information required under this item will be set forth in the Company’s proxy statement to be filed with the Securities and Exchange Commission on or before November 28, 2011 and is incorporated herein by reference.
Item 11. Executive Compensation
The information required under this item will be set forth in the Company’s proxy statement to be filed with the Securities and Exchange Commission on or before November 28, 2011 and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required under this item will be set forth in the Company’s proxy statement to be filed with the Securities and Exchange Commission on or before November 28, 2011 and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
| (Mark one) |
| x | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the fiscal year ended July 31, 2011 |
| or |
| o | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from ______________ to ______________ |
| Commission File Number 001-09974 |
| ENZO BIOCHEM, INC. |
| (Exact name of registrant as specified in its charter) |
| New York | 13-2866202 |
| (State or other jurisdiction | (I.R.S. Employer |
| of incorporation or organization) | Identification No.) |
| 527 Madison Ave. |
| New York, New York | 10022 |
| (Address of principal executive offices) | (Zip Code) |
| (212) 583-0100 |
| (Registrants telephone number, including area code) |
| Securities registered pursuant to Section 12(b) of the Act: |
| (Title of Each Class) | (Name of Each Exchange on Which Registered) |
| Common Stock, $.01 par value | The New York Stock Exchange |
| Large accelerated filer o | Accelerated filer x | Non-accelerated filer o | Smaller Reporting Company o |
| Description | Page |
| Part I |
| Item 1. | Business | 2 |
| Item 1A. | Risk Factors | 23 |
| Item 1B. | Unresolved Staff Comments | 32 |
| Item 2. | Properties | 33 |
| Item 3. | Legal Proceedings | 33 |
| Item 4. | (Removed and Reserved) | 37 |
| Part II |
| Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 37 |
| Item 6. | Selected Financial Data | 38 |
| Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations | 38 |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 52 |
| Item 8. | Financial Statements and Supplementary Data | 52 |
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 52 |
| Item 9A. | Controls and Procedures | 53 |
| Item 9B. | Other Information | 55 |
| Part III |
| Item 10. | Directors, Executive Officers and Corporate Governance | 55 |
| Item 11. | Executive Compensation | 55 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 55 |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 55 |
| Item 14. | Principal Accountant Fees and Services | 55 |
| Part IV |
| Item 15. | Exhibits and Financial Statement Schedules | 55 |
| List of Consolidated Financial Statements and Financial Statements Schedule | F-1 |
| Report of Independent Registered Public Accounting Firm | F-2 |
| Consolidated Balance Sheets | F-3 |
| Consolidated Statements of Operations | F-4 |
| Consolidated Statements of Stockholders Equity & Comprehensive Income (Loss) | F-5 |
| Consolidated Statements of Cash Flows | F-6 |
| Notes to Consolidated Financial Statements | F-7 |
| Schedule II - Valuation Accounts and Qualifying Accounts | S-1 |
| Enzo Life Sciences manufactures, develops and markets functional biology and cellular biochemistry products and tools to life sciences, pharmaceutical and clinical research customers world-wide and has amassed a large patent and technology portfolio. Enzo Life Sciences, Inc. is a recognized leader in labeling and detection technologies across research and diagnostic markets. Our strong portfolio of proteins, antibodies, peptides, small molecules, labeling probes, dyes and kits provides life science researchers tools for target identification/validation, high content analysis, gene expression analysis, nucleic acid detection, protein biochemistry and detection, and cellular analysis. We are internationally recognized and acknowledged as a leader in manufacturing, in-licensing, and commercialization of over 9,000 of our own products and in addition distribute over 30,000 products made by over 40 other original manufacturers. Our strategic focus is directed to innovative high quality research reagents and kits in the primary key research areas of protein homeostasis, epigenetics, live cell analysis, molecular biology and immunoassays. |
| The segment is an established source for a comprehensive panel of products to scientific experts in the fields of Natural Products/Antibiotics, Autophagy, Cancer, Cell Cycle, Cell Death, Cell Signaling, Cellular Analysis, Endocrinology/Hormones, DNA regulation, Compound Screening, Genomics/Molecular Biology, GPCRs, Immunology, Inflammation, Metabolism, Neuroscience, Nitric Oxide pathway, Obesity/Adipokines, Oxidative Stress, Proteases. Proteosomes, Protein Expression and modification, Signal Transduction, Stress/Heat Shock proteins and Ubiquitin/Ubl signaling. |
| Enzo Clinical Labs is a regional clinical laboratory serving the New York, New Jersey and Eastern Pennsylvania medical communities. The Company believes having clinical diagnostic services allows us to capitalize first hand on our extensive advanced molecular and cytogenetic capabilities and the broader trends in predictive and personalized diagnostics. Enzo Clinical Labs offers a menu of routine and esoteric clinical laboratory tests or procedures used in general patient care by physicians to establish or support a diagnosis, monitor treatment or medication, and search for an otherwise undiagnosed condition. We operate a full-service clinical laboratory in Farmingdale, New York, a network of approximately 30 patient service centers throughout New York and New Jersey, a stand alone stat or rapid response laboratory in New York City and a full-service phlebotomy and logistics department. |
| Enzo Therapeutics is a biopharmaceutical venture that has developed multiple novel approaches in the areas of gastrointestinal, infectious, ophthalmic and metabolic diseases, many of which are derived from the pioneering work of Enzo Life Sciences. Enzo Therapeutics has focused its efforts on developing treatment regimens for diseases and conditions for which current treatment options are ineffective, costly, and/or cause unwanted side effects. This focus has generated a clinical and preclinical pipeline, as well as more than 45 patents and patent applications. |
| Fiscal year ended July 31, | 2011 | 2010 | 2009 |
| Product revenues | $ | 41,830 | 41 | % | $ | 43,111 | 44 | % | $ | 40,592 | 45 | % |
| Royalty and license fee income | 7,437 | 7 | 9,793 | 10 | 9,376 | 11 |
| Clinical laboratory services | 52,762 | 52 | 44,178 | 46 | 39,604 | 44 |
| Total | $ | 102,029 | 100 | % | $ | 97,082 | 100 | % | $ | 89,572 | 100 | % |
|  research spending by academic, government and private organizations to determine the function and clinical relevance of the gene sequences and proteins that have been identified by genome research; |
|  development of commercial applications based on information derived from this research; and |
|  ongoing advancements in tools that accelerate these research and development activities. |
|  | the increasing number of diagnostic tests being developed from discoveries in genome research; |
|  | advances in formats and other technologies that automate and accelerate gene-based diagnostic testing; |
|  | growing emphasis by the health care industry on early diagnosis and treatment of disease and; |
|  | application of gene-based diagnostics as tools to match therapies to specific patient genetics commonly referred to as pharmacogenomics. |
|  | amplification of the target DNA sequence (a process that is essential for the detection of very small amounts of nucleic acid); |
|  | labeling the probe with a marker that generates a detectable signal upon hybridization; |
|  | addition of the probe to the sample containing the DNA and; |
|  | binding or hybridization of the probe to the target DNA sequence, if present, to generate a detectable signal. |
|  | generate biological, genetic, and structural information concerning LRP; |
|  | determine the structure of LRP docking sites of its ligands; |
|  | identify the functionally important residues via site-directed mutagenesis; |
|  | build the fine structure map and employ it as the basis for virtual screening; |
|  | show that compounds specifically bind to wild type LRP5, but not to mutated LRP5; |
|  | generate a cell-based assay capable of identifying active compounds and; |
|  | synthesize proprietary molecules that are active in animal models of disease. |
| Through this novel, proprietary, functional screening system, we have identified small molecules capable of reversing sclerostin-mediated inhibition of Wnt signaling. Preclinical animal studies with several candidate lead compounds produced the following results: |
|  | significant increases in total and femoral bone density through new bone formation; |
|  | significant reduction in alveolar bone loss and; |
|  | significant reduction in bone resorption. |
|  | the viral promoters are inactivated; |
|  | insertional gene activation is prevented  a major safety factor; |
|  | chromosomal integration and; |
|  | nuclear localization. |
| Enzo Life Sciences  Enabling Discovery in Life Sciences |
| Enzo Life Sciences is a positioned as a leading manufacturer and supplier of high quality reagents, kits and products supplied to scientific researchers in academia, clinical research and drug discovery. With direct sales operations in US, Switzerland, Germany, UK, France and Benelux, Enzo Life Sciences also supports its 9,000 products through a global network of dedicated distributors. |
| Axxora.com  the Innovative Research Reagents Marketplace |
| Axxora.com is a proven distribution platform for original manufacturers of innovative research reagents. An increasing number of researchers use our unique marketplace to instantly connect with over 40 specialty manufacturers and gain access to over 30,000 products. Purchasing groups from universities, research institutes, biotech and pharmaceutical companies utilize this extensive catalog to source research reagents and conveniently consolidate orders. |
| Adipokines | Interferons |
| Antibiotics | In Vitro Toxicology |
| Apotosis/Cell Death | Kinases/Inhibitors |
| Biologically Active Peptides | Leukotrienes/Prostaglandins/Thromboxanes |
| Bone Metabolism | Microarray Labeling |
| Cancer Research | Multidrug Resistance |
| Cell Death | Natural Products/Antibiotics |
| Cell Cycle | Neuroscience |
| Chemokines/Cytokines | Nitric Oxide Pathway |
| Cytoskeletal Research | Nuclear Receptors |
| Dependence Receptors | Oxidative Stress |
| DNA Fragmentation/Damage/Repair | Protein Aggregation |
| DNA Regulation | Proteosome/Ubiquitin |
| Epigenetics | Receptors |
| FISH | Signal Transduction |
| Growth Factors/Cytokines | Stem Cell/Cell Differentiation |
| Hypoxia | Stress Proteins/Heat Shock Proteins |
| Immunology | TNF/TNF Receptor Superfamily |
| Inflammation/Innate Immunity | Transcription Factors |
| Viral Signaling |
|  | pricing differences between our standard gross fee schedules and the reimbursement rates of the payers; |
|  | disputes with payers as to which party is responsible for payment and; |
|  | disparity in coverage and information requirements among various payers. |
| Enzo Biochem, Inc. |
| 527 Madison Ave. |
| New York, New York 10022 |
| Tel: (212) 583-0100 |
| Attn: Investor Relations |
|  | competitive conditions, including changes in third-party reimbursements: |
|  | health care reform regulations affecting providers and plan sponsors; |
|  | exchange rate fluctuations; |
|  | changes in tax laws, the results of tax audits or the measurement of tax uncertainties; |
|  | the timing of our research and development, sales and marketing expenses; |
|  | the introduction of new products by us or our competitors; |
|  | the success of identifying, acquiring and integrating businesses that complement our product offerings, add new technology or add presence in a market; |
|  | expenses associated with defending our intellectual property portfolio; |
|  | customer demand for our products due to changes in purchasing requirements and research needs; |
|  | general worldwide economic conditions affecting funding of research and; |
|  | seasonal fluctuations affected by weather and holiday periods. |
|  | Require us to reduce our prices to retain market share; |
|  | Require us to increase our marketing efforts which could reduce our profit margins; |
|  | Increase our cost of labor to attract qualified personnel; |
|  | Render our biotechnology products uneconomical or obsolete or; |
|  | Reduce our revenue. |
|  | significant delays in obtaining or failing to obtain required approvals; |
|  | loss of, or changes to, previously obtained approvals; |
|  | failure to comply with existing or future regulatory requirements and; |
|  | changes to manufacturing processes, manufacturing process standards or Good Manufacturing Practices following approval or changing interpretations of these factors. |
|  | the circumstances under which uses and disclosures of protected health information are permitted or required without a specific authorization by the patient, including but not limited to treatment purposes, activities to obtain payments for our services, and our healthcare operations activities; |
|  | a patients rights to access, amend and receive an accounting of certain disclosures of protected health information; |
|  | the content of notices of privacy practices for protected health information and; |
|  | administrative, technical and physical safeguards required of entities that use or receive protected health information. |
|  | future fluctuations in exchange rates; |
|  | complex regulatory requirements and changes in those requirements; |
|  | trade protection measures and import or export licensing requirements; |
|  | multiple jurisdictions and differing tax laws, as well as changes in those laws; |
|  | restrictions on our ability to repatriate investments and earnings from foreign operations; |
|  | changes in the political or economic conditions in a country or region, particularly in developing or emerging markets; |
|  | changes in shipping costs and; |
|  | difficulties in collecting on accounts receivable. |
|  | fluctuations in our quarterly operating and earnings per share results; |
|  | the gain or loss of significant contracts; |
|  | loss of key personnel; |
|  | announcements of technological innovations or new products by us or our competitors; |
|  | delays in the development and introduction of new products; |
|  | legislative or regulatory changes; |
|  | general trends in the industries we operate; |
|  | recommendations and/or changes in estimates by equity and market research analysts; |
|  | biological or medical discoveries; |
|  | disputes and/or developments concerning intellectual property, including patents and litigation matters; |
|  | public concern as to the safety of new technologies; |
|  | sales of common stock of existing holders; |
|  | securities class action or other litigation; |
|  | developments in our relationships with current or future customers and suppliers and; |
|  | general economic conditions, both in the United States and worldwide. |
|  | a staggered board of directors, so that it would take three successive annual meetings to replace all directors; and |
|  | advance notice requirements for the submission by stockholders of nominations for election to the board of directors and for proposing matters that can be acted upon by stockholders at a meeting. |
| Location | Primary use | Segments | Leased/owned | Square footage |
| Farmingdale, NY | Clinical laboratory and research | Clinical Labs, | Leased | 43,000 |
| (Note 1) | Therapeutics |
| Farmingdale, NY | Manufacturing, research, sales | Life Sciences, | Owned | 22,000 |
| and administrative office | Other |
| New York, NY | Corporate headquarters | Other | Leased | 11,300 |
| (Note 2) |
| San Diego, CA | Sales, administration and distribution | Life Sciences | Leased | 6,400 |
| (Note 3) |
| Lausen, Switzerland | Operational headquarters in | Life Sciences | Leased | 18,829 |
| (Note 4) | Europe, including sales and distribution |
| Ann Arbor, Michigan | Sales, manufacturing, research, | Life Sciences | Leased | 26,820 |
| (Note 5) | administration and distribution |
| Note 1 |  In March 2005, the Company amended and extended the lease for its Farmingdale laboratory for a period of 12 years (See Note 15 to the Consolidated Financial Statements). |
| Note 2 |  In February 2010, the lease, which includes 4,100 square feet under a sublease rental agreement through December 31, 2011, was extended through May 2020 |
| Note 3 |  The lease for this property was acquired in connection with the Axxora acquisition in May 2007 and was amended and extended through February 2014. |
| Note 4 |  The lease for this property was acquired in connection with the Axxora acquisition in May 2007 and was amended and extended through April 2013. |
| Note 5 |  The lease for this property was acquired in connection with the Assay Designs acquisition in March 2009 and was amended and extended through April 2016. |
| We believe the current facilities are suitable and adequate for the Companys current operating needs for its clinical laboratories, life science and therapeutics segments and that the production capacity in various locations is sufficient to manage product requirements. |
| 2011 Fiscal Year (August 1, 2010 to July 31, 2011): |
| High | Low |
| 1st Quarter | $ | 4.62 | $ | 3.37 |
| 2nd Quarter | $ | 5.80 | $ | 4.16 |
| 3rd Quarter | $ | 5.09 | $ | 3.46 |
| 4th Quarter | $ | 4.74 | $ | 3.52 |
| 2010 Fiscal Year (August 1, 2009 to July 31, 2010): |
| High | Low |
| 1st Quarter | $ | 7.66 | $ | 4.51 |
| 2nd Quarter | $ | 6.24 | $ | 4.52 |
| 3rd Quarter | $ | 6.67 | $ | 4.66 |
| 4th Quarter | $ | 6.18 | $ | 3.90 |
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuances under equity compensation plans (excluding securities reflected in column (a) (c) |
| Equity compensation plans approved by security holders | 785,124 | $ | 14.53 | 2,818,300 |
| Equity compensation plans not approved by security holders |  |  |  |
| Total | 785,124 | $ | 14.53 | 2,818,300 |
| For the fiscal year ended July 31, (In thousands, except per share amounts) |
| Operating Results | 2011 | 2010 | (1)   2009 | (2)   2008 | (3)   2007 |
| Revenues | $ | 102,029 | $ | 97,082 | $ | 89,572 | $ | 77,795 | $ | 52,908 |
| Operating loss | $ | (12,928 | ) | $ | (22,058 | ) | $ | (23,407 | ) | $ | (14,786 | ) | $ | (20,966 | ) |
| Net loss | $ | (12,960 | ) | $ | (22,233 | ) | $ | (23,564 | ) | $ | (10,653 | ) | $ | (13,260 | ) |
| Basic and diluted net loss per common share: | $ | (0.34 | ) | $ | (0.59 | ) | $ | (0.63 | ) | $ | (0.29 | ) | $ | (0.38 | ) |
| July 31, (in thousands) |
| Financial Position | 2011 | 2010 | (4)   2009 | (4)   2008 | (4)   2007 |
| Working capital | $ | 33,670 | $ | 42,181 | $ | 60,518 | $ | 92,392 | $ | 113,850 |
| Total assets | $ | 109,474 | $ | 115,245 | $ | 133,128 | $ | 154,522 | $ | 159,002 |
| Long term obligations | $ | 96 | — | — | — | — |
| Stockholders’ equity | $ | 88,715 | $ | 97,016 | $ | 116,781 | $ | 138,289 | $ | 141,894 |
| Fiscal year ended July 31, | 2011 | 2010 | 2009 |
| Product revenues | $ | 41,830 | 41 | % | $ | 43,111 | 44 | % | $ | 40,592 | 45 | % |
| Royalty and license fee income | 7,437 | 7 | 9,793 | 10 | 9,376 | 11 |
| Clinical laboratory services | 52,762 | 52 | 44,178 | 46 | 39,604 | 44 |
| Total | $ | 102,029 | 100 | % | $ | 97,082 | 100 | % | $ | 89,572 | 100 | % |
| 2011 | 2010 | Increase (Decrease) | % Change |
| Revenues: |
| Product revenues | $ | 41,830 | $ | 43,111 | $ | (1,281 | ) | (3 | ) |
| Royalty and license fee income | 7,437 | 9,793 | (2,356 | ) | (24 | ) |
| Clinical laboratory services | 52,762 | 44,178 | 8,584 | 19 |
| Total revenues | 102,029 | 97,082 | 4,947 | 5 |
| Operating expenses: |
| Cost of product revenues | 22,137 | 22,547 | (410 | ) | (2 | ) |
| Cost of clinical laboratory services | 31,682 | 29,570 | 2,112 | 7 |
| Research and development | 7,806 | 9,704 | (1,898 | ) | (20 | ) |
| Selling, general, and administrative | 45,191 | 48,395 | (3,204 | ) | (7 | ) |
| Provision for uncollectible accounts receivable | 4,431 | 3,480 | 951 | 27 |
| Legal | 3,710 | 1,746 | 1,964 | 112 |
| Litigation settlement and related legal costs |  | 3,698 | (3,698 | ) | (100 | ) |
| Total operating expenses | 114,957 | 119,140 | (4,183 | ) | (4 | ) |
| Operating loss | (12,928 | ) | (22,058 | ) | 9,130 | 41 |
| Other income (expense): |
| Interest | 11 | 19 | (8 | ) | (42 | ) |
| Other | 45 | 44 | 1 | 2 |
| Foreign exchange gain (loss) | 49 | (266 | ) | 315 | 118 |
| Loss before income taxes | $ | (12,823 | ) | $ | (22,261 | ) | $ | 9,438 | 42 |
| 2010 | 2009 | Increase (Decrease) | % Change |
| Revenues: |
| Product revenues | $ | 43,111 | $ | 40,592 | $ | 2,519 | 6 |
| Royalty and license fee income | 9,793 | 9,376 | 417 | 4 |
| Clinical laboratory services | 44,178 | 39,604 | 4,574 | 12 |
| Total revenues | 97,082 | 89,572 | 7,510 | 8 |
| Operating expenses: |
| Cost of product revenues | 22,547 | 26,766 | (4,219 | ) | (16 | ) |
| Cost of clinical laboratory services | 29,570 | 26,295 | 3,275 | 12 |
| Research and development | 9,704 | 9,220 | 484 | 5 |
| Selling, general, and administrative | 48,395 | 41,314 | 7,081 | 17 |
| Provision for uncollectible accounts receivable | 3,480 | 5,189 | (1,709 | ) | (33 | ) |
| Legal | 1,746 | 4,195 | (2,449 | ) | (58 | ) |
| Litigation settlement and related legal costs | 3,698 |  | 3,698 |  |
| Total operating expenses | 119,140 | 112,979 | 6,161 | 5.5 |
| Operating loss | (22,058 | ) | (23,407 | ) | 1,349 | (6 | ) |
| Other income (expense): |
| Interest | 19 | 581 | (562 | ) | (97 | ) |
| Other | 44 | 74 | (30 | ) | (41 | ) |
| Foreign exchange loss | (266 | ) | (725 | ) | 459 | (63 | ) |
| Loss before income taxes | $ | (22,261 | ) | $ | (23,477 | ) | $ | 1,216 | (5 | ) |
| In 000s | Total | Less than 1 year | 1-3 years | 4-5 years | Over 5 years |
| Real estate and equipment leases | $ | 20,592 | $ | 4,520 | $ | 6,685 | $ | 5,217 | $ | 4,170 |
| Employment agreements | 1,223 | 1,223 |  |  |  |
| Total contractual cash obligations | $ | 21,815 | $ | 5,743 | $ | 6,685 | $ | 5,217 | $ | 4,170 |
| Year ended July 31 2011 | Year ended July 31 2010 | Year ended July 31 2009 |
| Revenue category | (In 000s) | (in %) | (In 000s) | (in %) | (In 000s) | (in %) |
| Medicare | $ | 11,856 | 22 | $ | 11,158 | 25 | $ | 9,138 | 23 |
| Third-party payers | 24,335 | 46 | 19,534 | 44 | 20,073 | 51 |
| Patient self-pay | 11,554 | 22 | 8,758 | 20 | 6,056 | 15 |
| HMOs | 5,017 | 10 | 4,728 | 11 | 4,337 | 11 |
| Total | $ | 52,762 | 100 | % | $ | 44,178 | 100 | % | $ | 39,604 | 100 | % |
|  | an analysis of industry reimbursement trends; |
|  | an evaluation of third-party reimbursement rates changes and changes in reimbursement arrangements with third-party payers; |
|  | a rolling monthly analysis of current and historical claim settlement and reimbursement experience statistics with payers; |
|  | an analysis of current gross billings and receivables by payer. |
| As of July 31, 2011 | As of July 31, 2010 |
| Billing category | (In 000s) | (in %) | (In 000s) | (in %) |
| Clinical Labs |
| Medicare | $ | 1.434 | 19 | $ | 849 | 14 |
| Third party payers | 3,087 | 40 | 2,664 | 46 |
| Patient self-pay | 2,865 | 37 | 2,024 | 35 |
| HMOs | 314 | 4 | 296 | 5 |
| Total Clinical Labs | 7,700 | 100 | % | 5,833 | 100 | % |
| Total Life Sciences | 7,545 | 7,173 |
| Total accounts receivable | $ | 15,245 | $ | 13,006 |
| In 000s | July 31, 2011 | July 31, 2010 |
| Beginning balance | $ | 2,839 | $ | 4,786 |
| Provision for doubtful accounts | 4,431 | 3,480 |
| Write-offs, net | (3,782 | ) | (5,427 | ) |
| Ending balance | $ | 3,488 | $ | 2,839 |
| As of July 31, 2011 | Total Amount | % | Medicare Amount | % | Third Party Payers Amount | % | Self-pay Amount | % | HMOs Amount | % |
| 1-30 days | $ | 29,880 | 60 | % | 5,843 | 60 | % | 13,851 | 56 | % | 6,173 | 55 | % | 4,013 | 95 | % |
| 31-60 days | 7,013 | 14 | % | 791 | 8 | % | 3,441 | 14 | % | 2,687 | 24 | % | 93 | 2 | % |
| 61-90 days | 4,029 | 8 | % | 566 | 6 | % | 2,522 | 10 | % | 890 | 8 | % | 51 | 1 | % |
| 91-120 days | 3,826 | 8 | % | 917 | 9 | % | 1,819 | 7 | % | 1,046 | 9 | % | 44 | 1 | % |
| 121-150 days | 2,084 | 4 | % | 375 | 4 | % | 1,385 | 6 | % | 288 | 3 | % | 37 | 1 | % |
| Greater than 150 days* | 3,050 | 6 | % | 1,234 | 13 | % | 1,717 | 7 | % | 94 | 1 | % | 5 | 0 | % |
| Totals | $ | 49,882 | 100 | % | 9,726 | 100 | % | 24,735 | 100 | % | 11,178 | 100 | % | 4,243 | 100 | % |
| As of July 31, 2010 | Total Amount | % | Medicare Amount | % | Third Party Payers Amount | % | Self-pay Amount | % | HMOs Amount | % |
| 1-30 days | $ | 21,678 | 66 | % | $ | 2,886 | 57 | % | $ | 10,846 | 64 | % | $ | 4,242 | 59 | % | $ | 3,704 | 99 | % |
| 31-60 days | 4,256 | 13 | % | 439 | 9 | % | 2,458 | 15 | % | 1,344 | 18 | % | 15 | 1 | % |
| 61-90 days | 2,565 | 8 | % | 281 | 6 | % | 1,337 | 8 | % | 935 | 13 | % | 12 |  | % |
| 91-120 days | 1,771 | 5 | % | 248 | 5 | % | 850 | 5 | % | 671 | 9 | % | 2 |  | % |
| 121-150 days | 936 | 3 | % | 236 | 4 | % | 696 | 4 | % | 2 |  | % | 2 |  | % |
| Greater than 150 days** | 1,733 | 5 | % | 967 | 19 | % | 711 | 4 | % | 52 | 1 | % | 3 |  | % |
| Totals | $ | 32,939 | 100 | % | $ | 5,057 | 100 | % | $ | 16,898 | 100 | % | $ | 7,246 | 100 | % | $ | 3,738 | 100 | % |
| (a) | (1) | Consolidated Financial Statements |
| Consolidated Balance Sheets - July 31, 2011 and 2010 |
| Consolidated Statements of Operations- Years ended July 31, 2011, 2010 and 2009 |
| Consolidated Statements of Stockholders Equity and Comprehensive Income (Loss) - Years ended July 31, 2011, 2010 and 2009 |
| Consolidated Statements of Cash Flows - Years ended July 31, 2011, 2010 and 2009 |
| Notes to Consolidated Financial Statements. |
| (2) | Financial Statement Schedule |
| (3) | Exhibits |
| Exhibit No. | Description |
| 3(a) | Certificate of Incorporation (1) |
| 3(b) | Certificate of Incorporation, as amended on March 17, 1980. (1) |
| 3(c) | Certificate of Amendment of the Certificate of Incorporation as amended on June 16, 1981. (2) |
| 3(d) | Certificate of Amendment to the Certificate of Incorporation as of July 22, 1988. (3) |
| 3(e) | Amended and restated Bylaws. (4) |
| 10(a) | 1994 Stock Option Plan. (5) |
| 10 (b) | 1999 Stock Option Plan. (6) |
| 10 (c) | 2005 Equity Compensation Incentive Plan (7) |
| 10 (d) | 2011 Incentive Plan (8) |
| 10 (e) | Lease agreement with Pari Management (9) |
| 10 (f) | Settlement and Release Agreement between the Company and Sigma Aldrich (10) |
| 10 (g) | Stock Purchase Agreement By and Among Enzo Life Sciences, Inc., Axxora Life Sciences Inc., and the Stock holders, Option holders and Warrant holders (12) |
| 10 (h) | Stock Asset Purchase Agreement By and Among Buyer Parties and Seller Parties with respect to the Biomol International and affiliate acquisition (13) |
| 10 (i) | Asset Purchase Agreement By and Among Enzo Life Sciences, Acquisition, Inc. and Assay Designs, Inc.(14) |
| 10 (j) | Amended and Restated Employment Agreement with Elazar Rabbani (15) |
| 10(k) | Amended and Restated Employment Agreement with Barry Weiner (15) |
| 14 (a) | Code of Ethics (11) |
| 21* | List of subsidiaries of the Company |
| 23* | Consent of Independent Registered Public Accounting Firm |
| 31 (a)* | Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31 (b)* | Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32 (a)* | Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32 (b)* | Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| Notes to exhibits |
| * | Filed herewith |
| (1) | The exhibits were filed as exhibits to the Companys Registration Statement on Form S-18 (File No. 2-67359) and are incorporated herein by reference. |
| (2) | This exhibit was filed as an exhibit to the Companys Form 10-K for the year ended July 31, 1981 and is incorporated herein by reference. |
| (3) | This exhibit was filed with the Companys Annual Report on Form 10-K for the year ended July 31, 1989 and is incorporated herein by reference. |
| (4) | This exhibit was filed with the Companys Current Report on Form 8-K May 8, 2008 and is incorporated herein by reference. |
| (5) | This exhibit was filed with the Companys Annual Report on Form 10-K for the year ended July 31, 1995 and is incorporated herein by reference. |
| (6) | This exhibit was filed with the Companys Registration Statement on Form S-8 (333-87153) and is incorporated herein by reference. |
| (7) | This exhibit was filed as an exhibit to the Companys Proxy Statement of Schedule 14A filed on January 19, 2005 and is incorporated herein by reference. |
| (8) | This exhibit was filed as appendix B to the Companys Definitive Proxy Statement on Schedule 14A, which was filed with the Securities and Exchange Commission on November 16, 2010 and is incorporated herein by reference. |
| (9) | This exhibit was filed with the Companys Annual Report on Form 10-K for the year ended July 31, 2006 and is incorporated herein by reference. |
| (10) | This exhibit was filed with the Companys Current Report on Form 8-K on September 21, 2006 and is incorporated herein by reference. |
| (11) | This exhibit was filed with the Companys Annual Report on Form 10-K for the year ended July 31, 2003 and is incorporated here by reference. |
| (12) | This exhibit was filed with the Companys Current Report on Form 8-K May 30, 2007 and is incorporated herein by reference. |
| (13) | This exhibit was filed with the Companys Current Report on Form 8-K May 8, 2008 and is incorporated herein by reference. |
| (14) | This exhibit was filed with the Companys Current Report on Form 8-K March 13, 2009 and is incorporated herein by reference. |
| (15) | This exhibit was filed with the Companys Annual Report on Form 10-K for the year ended July 31, 2010 and is incorporated herein by reference. |
| ENZO BIOCHEM, INC. |
| Date: October 14, 2011 | By: | /s/ Elazar Rabbani Ph.D. |
| Chairman of the Board |
| By: /s/ Elazar Rabbani Ph.D. | October 14, 2011 |
| Elazar Rabbani, |
| Chairman of Board of Directors and Secretary |
| (Principal Executive Officer) |
| By: /s/ Barry W. Weiner | October 14, 2011 |
| Barry W. Weiner, |
| President, Chief Financial Officer, Principal Accounting Officer, Treasurer and Director |
| By: /s/ Stephen B. H. Kent Ph.D. | October 14, 2011 |
| Stephen B. H. Kent, Director |
| By: /s/ Bernard L. Kasten MD | October 14, 2011 |
| Bernard Kasten, Director |
| By: /s/ Gregory M. Bortz | October 14, 2011 |
| Gregory M. Bortz, Director |
| Report of Independent Registered Public Accounting Firm | F-2 |
| Consolidated Balance Sheets  July 31, 2011 and 2010 | F-3 |
| Consolidated Statements of Operations  Years ended July 31, 2011, 2010 and 2009 | F-4 |
| Consolidated Statements of Stockholders Equity and Comprehensive Income (Loss)  Years ended July 31, 2011, 2010 and 2009 | F-5 |
| Consolidated Statements of Cash Flows  Years ended July 31, 2011, 2010 and 2009 | F-6 |
| Notes to Consolidated Financial Statements | F-7 |
| Schedule II - Valuation and Qualifying Accounts  Years ended July 31, 2011, 2010 and 2009 | S-1 |
| /s/ Ernst & Young LLP |
| Jericho, New York |
| October 14, 2011 |
| July 31, 2011 | July 31, 2010 |
| ASSETS |
| Current assets: |
| Cash and cash equivalents | $ | 14,161 | $ | 8,759 |
| Short term investments | 10,000 | 24,807 |
| Accounts receivable, net of allowance for doubtful accounts of $3,488 in 2011 and $2,839 in 2010 | 15,245 | 13,006 |
| Inventories | 9,260 | 8,882 |
| Prepaid expenses | 2,733 | 2,284 |
| Total current assets | 51,399 | 57,738 |
| Property, plant, and equipment, net | 10,335 | 11,858 |
| Goodwill | 27,373 | 24,943 |
| Intangible assets, net | 19,985 | 20,368 |
| Other | 382 | 338 |
| Total assets | $ | 109,474 | $ | 115,245 |
| LIABILITIES AND STOCKHOLDERS EQUITY |
| Current liabilities: |
| Accounts payable  trade | $ | 7,858 | $ | 6,455 |
| Accrued liabilities | 8,188 | 8,509 |
| Other current liabilities | 1,683 | 572 |
| Deferred taxes |  | 21 |
| Total current liabilities | 17,729 | 15,557 |
| Deferred taxes | 2,934 | 2,582 |
| Other | 96 | 90 |
| Commitments and contingencies |
| Stockholders equity: |
| Preferred Stock, $.01 par value; authorized 25,000,000 shares; no shares issued or outstanding |  |  |
| Common Stock, $.01 par value; authorized 75,000,000 shares; shares issued: 39,045,837 at July 31, 2011 and 38,782,725 at July 31, 2010 | 390 | 388 |
| Additional paid-in capital | 305,833 | 306,561 |
| Less treasury stock at cost: 450,014 shares at July 31, 2011 and 623,848 shares at July 31, 2010 | (6,387 | ) | (8,854 | ) |
| Accumulated deficit | (214,914 | ) | (201,954 | ) |
| Accumulated other comprehensive income | 3,793 | 875 |
| Total stockholders equity | 88,715 | 97,016 |
| Total liabilities and stockholders equity | $ | 109,474 | $ | 115,245 |
| Years ended July 31, |
| 2011 | 2010 | 2009 |
| Revenues: |
| Product revenues | $ | 41,830 | $ | 43,111 | $ | 40,592 |
| Royalty and license fee income | 7,437 | 9,793 | 9,376 |
| Clinical laboratory services | 52,762 | 44,178 | 39,604 |
| 102,029 | 97,082 | 89,572 |
| Operating expenses: |
| Cost of product revenues | 22,137 | 22,547 | 26,766 |
| Cost of clinical laboratory services | 31,682 | 29,570 | 26,295 |
| Research and development | 7,806 | 9,704 | 9,220 |
| Selling, general, and administrative | 45,191 | 48,395 | 41,314 |
| Provision for uncollectible accounts receivable | 4,431 | 3,480 | 5,189 |
| Legal | 3,710 | 1,746 | 4,195 |
| Litigation settlement and related costs |  | 3,698 |  |
| Total operating expenses | 114,957 | 119,140 | 112,979 |
| Operating loss | (12,928 | ) | (22,058 | ) | (23,407 | ) |
| Other income (expense): |
| Interest | 11 | 19 | 581 |
| Other | 45 | 44 | 74 |
| Foreign exchange gain (loss) | 49 | (266 | ) | (725 | ) |
| Loss before income taxes | (12,823 | ) | (22,261 | ) | (23,477 | ) |
| (Provision) benefit for income taxes | (137 | ) | 28 | (87 | ) |
| Net loss | ($ | 12,960 | ) | ($ | 22,233 | ) | ($ | 23,564 | ) |
| Net loss per common share: |
| Basic and diluted | ($ | 0.34 | ) | ($ | 0.59 | ) | ($ | 0.63 | ) |
| Weighted average common shares outstanding: |
| Basic and diluted | 38,357 | 38,001 | 37,511 |
| Common Stock Shares | Treasury Stock Shares | Common Stock Amount | Additional Paid-in Capital | Treasury Stock Amount | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Stockholders Equity | Comprehensive loss |
| Balance at July 31, 2008 | 38,007,581 | 777,719 | $ | 380 | $ | 303,811 | $ | (11,331 | ) | $ | (156,157 | ) | $ | 1,586 | $ | 138,289 |
| Net (loss) for the year ended July 31, 2009 |  |  |  |  |  | (23,564 | ) |  | (23,564 | ) | $ | (23,564 | ) |
| Purchase of treasury stock |  | 99,985 | (1,126 | ) |  |  | (1,126 | ) |  |
| Exercise of stock options | 251,162 | 3 | 1,471 |  |  |  | 1,474 |  |
| Vesting of restricted stock | 128,941 |  | 1 |  |  |  |  | 1 |  |
| Stock based compensation charges |  |  |  | 1,435 |  |  |  | 1,435 |  |
| Issuance of stock for employee 401(k) plan match |  | (142,150 | ) |  | (1,435 | ) | 2,017 |  |  | 582 |  |
| Issuance of stock for acquisition earn out | 202,196 |  | 2 | 998 |  |  |  | 1,000 |  |
| Foreign currency translation adjustments |  |  |  |  |  |  | (1,310 | ) | (1,310 | ) | (1,310 | ) |
| Comprehensive loss | (24,874 | ) |
| Balance at July 31, 2009 | 38,589,880 | 735,554 | 386 | 306,280 | (10,440 | ) | (179,721 | ) | 276 | 116,781 |
| Net (loss) for the year ended July 31, 2010 |  |  |  |  |  | (22,233 | ) |  | (22,233 | ) | (22,233 | ) |
| Vesting of restricted stock | 192,845 |  | 2 |  |  |  |  | 2 |  |
| Stock based compensation charges |  |  |  | 1,170 |  |  |  | 1,170 |  |
| Issuance of treasury stock for employee 401(k) plan match |  | (111,706 | ) |  | (889 | ) | 1,586 |  |  | 697 |  |
| Foreign currency translation adjustments |  |  |  |  |  |  | 599 | 599 | 599 |
| Comprehensive loss | (21,634 | ) |
| Balance at July 31, 2010 | 38,782,725 | 623,848 | 388 | 306,561 | (8,854 | ) | (201,954 | ) | 875 | 97,016 |
| Net (loss) for the year ended July 31, 2011 |  |  |  |  |  | (12,960 | ) |  | (12,960 | ) | (12,960 | ) |
| Vesting of restricted stock | 263,112 |  | 2 |  |  |  |  | 2 |  |
| Stock based compensation charges |  |  |  | 1,049 |  |  |  | 1,049 |  |
| Issuance of treasury stock for employee 401(k) plan match |  | (173,834 | ) |  | (1,777 | ) | 2,467 |  |  | 690 |  |
| Foreign currency translation adjustments |  |  |  |  |  |  | 2,918 | 2,918 | 2,918 |
| Comprehensive loss | $ | (10,042 | ) |
| Balance at July 31, 2011 | 39,045,837 | 450,014 | $ | 390 | $ | 305,833 | $ | (6,387 | ) | $ | (214,914 | ) | $ | 3,793 | $ | 88,715 |
| Years ended July 31, |
| 2011 | 2010 | 2009 |
| Cash flows from operating activities: |
| Net loss | ($ | 12,960 | ) | ($ | 22,233 | ) | ($ | 23,564 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
| Depreciation and amortization of property, plant and equipment | 2,962 | 2,727 | 2,185 |
| Amortization of intangible assets | 1,507 | 1,542 | 1,277 |
| Provision for uncollectible accounts receivable | 4,431 | 3,480 | 5,189 |
| Deferred income tax provision (benefit) | 17 | (45 | ) |  |
| Share based compensation charges | 1,049 | 1,170 | 1,435 |
| Share based 401(k) employer match expense | 690 | 1,115 | 582 |
| Deferred revenue recognized | (38 | ) | (450 | ) | (475 | ) |
| Foreign exchange (gain) loss on intercompany loan | (131 | ) | 45 | 697 |
| Changes in operating assets and liabilities: |
| Accounts receivable | (6,537 | ) | (3,844 | ) | (1,409 | ) |
| Inventories | (178 | ) | 681 | 2,647 |
| Prepaid expenses | (432 | ) | 220 | 208 |
| Accounts payable  trade | 1,462 | 2,348 | (571 | ) |
| Accrued liabilities | (208 | ) | (232 | ) | 528 |
| Other current liabilities | 34 | (78 | ) | (206 | ) |
| Other liabilities | 6 | 90 |  |
| Total adjustments | 4,634 | 8,769 | 12,087 |
| Net cash used in operating activities | (8,326 | ) | (13,464 | ) | (11,477 | ) |
| Cash flows from investing activities: |
| Capital expenditures | (1,223 | ) | (3,251 | ) | (2,709 | ) |
| Maturities of short term investments | 182,453 | 232,140 | 318,650 |
| Purchases of short term investments | (167,646 | ) | (213,643 | ) | (361,956 | ) |
| (Increase) decrease in security deposits and other | (45 | ) | 81 | 384 |
| Acquisitions, net of cash acquired |  |  | (14,541 | ) |
| Net cash provided by (used in) investing activities | 13,539 | 15,327 | (60,172 | ) |
| Cash flows from financing activities: |
| Installment loan payments | (68 | ) |  |  |
| Proceeds from the exercise of stock options |  |  | 348 |
| Net cash (used) provided by financing activities | (68 | ) |  | 348 |
| Effect of exchange rate changes on cash and cash equivalents | 257 | (33 | ) | (92 | ) |
| Increase (decrease) in cash and cash equivalents | 5,402 | 1,830 | (71,393 | ) |
| Cash and cash equivalents - beginning of year | 8,759 | 6,929 | 78,322 |
| Cash and cash equivalents - end of year | $ | 14,161 | $ | 8,759 | $ | 6,929 |
| 2011 | Years ended July 31 2010 | 2009 |
| Revenue category | (In 000s) | (in %) | (In 000s) | (in %) | (In 000s) | (in %) |
| Medicare | $ | 11,856 | 22 | $ | 11,158 | 25 | $ | 9,138 | 23 |
| Third-party payers | 24,335 | 46 | 19,534 | 44 | 20,073 | 51 |
| Patient self-pay | 11,554 | 22 | 8,758 | 20 | 6,056 | 15 |
| HMOs | 5,017 | 10 | 4,728 | 11 | 4,337 | 11 |
| Total | $ | 52,762 | 100 | % | $ | 44,178 | 100 | % | $ | 39,604 | 100 | % |
| As of July 31, 2011 | As of July 31, 2010 |
| Net accounts receivable by segment | (In 000s) | (in %) | (In 000s) | (in %) |
| Clinical Labs (by billing category) |
| Medicare | $ | 1,434 | 19 | $ | 849 | 14 |
| Third party payers | 3,087 | 40 | 2,664 | 46 |
| Patient self-pay | 2,865 | 37 | 2,024 | 35 |
| HMOs | 314 | 4 | 296 | 5 |
| Total Clinical Labs | 7,700 | 100 | % | 5,833 | 100 | % |
| Total Life Sciences | 7,545 | 7,173 |
| Total accounts receivable | $ | 15,245 | $ | 13,006 |
| July 31, 2011 | July 31, 2010 |
| Beginning balance | $ | 2,839 | $ | 4,786 |
| Provision for doubtful accounts | 4,431 | 3,480 |
| Write-offs | (3,782 | ) | (5,427 | ) |
| Ending balance | $ | 3,488 | $ | 2,839 |
| 2011 | 2010 | 2009 |
| Numerator: |
| Net loss | $ | (12,960 | ) | $ | (22,233 | ) | $ | (23,564 | ) |
| Denominator: |
| Weighted-average common shares outstanding- Basic | 38,357 | 38,001 | 37,511 |
| Add: effect of dilutive stock options and restricted stock |  |  |  |
| Weighted-average common shares outstanding - Diluted | 38,357 | 38,001 | 37,511 |
| Net loss per share |
| Basic and diluted | $ | (0.34 | ) | $ | (0.59 | ) | $ | (0.63 | ) |
| 2011 | 2010 | 2009 |
| Cost of clinical laboratory services | $ | 10 | $ | 12 | $ | 8 |
| Research and development | 14 | 14 | 13 |
| Selling, general and administrative | 1,025 | 1,144 | 1,414 |
| $ | 1,049 | $ | 1,170 | $ | 1,435 |
| Current assets | $ | 4,235 |
| Property and equipment | 1,747 |
| Other assets | 11 |
| Intangible assets | 6,360 |
| Goodwill | 1,823 |
| Total assets acquired | 14,176 |
| Less: |
| Current liabilities | 1,115 |
| Total liabilities assumed | 1,115 |
| Net assets acquired | $ | 13,061 |
| Customer relationships | 8 -15 years |
| Trademarks | Indefinite |
| Other intangibles | 4-5 years |
| Year ended July 31, 2009 | 2009 |
| Net revenues | $ | 96,227 |
| Net loss | $ | (24,098 | ) |
| Net loss per common share: |
| Basic and diluted | $ | (0.64 | ) |
| Level 1: | Valuations based on quoted market prices in active markets for identical assets or liabilities. |
| Level 2: | Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities |
| Level 3: | Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities |
| Accumulated income (loss) before tax | Tax (expense) or benefit | Accumulated income (loss) net of tax |
| Balance - July 31, 2008 | $ | 1,586 |  | $ | 1,586 |
| Fiscal 2009  unrealized loss on foreign currency translation | (1,310 | ) |  | (1,310 | ) |
| Balance  July 31, 2009 | 276 |  | 276 |
| Fiscal 2010  unrealized gain on foreign currency translation | 599 |  | 599 |
| Balance  July 31, 2010 | 875 |  | 875 |
| Fiscal 2011  unrealized gain on foreign currency translation | 2,918 |  | 2,918 |
| Balance  July 31, 2011 | $ | 3,793 |  | $ | 3,793 |
| 2011 | 2010 |
| Raw materials | $ | 1,063 | $ | 921 |
| Work in process | 2,517 | 2,136 |
| Finished products | 5,680 | 5,825 |
| $ | 9,260 | $ | 8,882 |
| 2011 | 2010 |
| Building and building improvements | $ | 4,320 | $ | 4,309 |
| Machinery and equipment | 6,916 | 6,814 |
| Office furniture and computer equipment | 14,551 | 13,057 |
| Leasehold improvements | 4,694 | 4,572 |
| 30,481 | 28,752 |
| Accumulated depreciation and amortization | (20,858 | ) | (17,606 | ) |
| 9,623 | 11,146 |
| Land and land improvements | 712 | 712 |
| $ | 10,335 | $ | 11,858 |
| Enzo Life Sciences | Enzo Clinical Labs | Total |
| August 1, 2009 | $ | 17,444 | $ | 7,452 | $ | 24,896 |
| Foreign currency translation | 47 |  | 47 |
| July 31, 2010 | 17,491 | 7,452 | 24,943 |
| Additional purchase price consideration  see Note 16 | 1,150 |  | 1,150 |
| Foreign currency translation | 1,280 |  | 1,280 |
| July 31, 2011 | $ | 19,921 | $ | 7,452 | $ | 27,373 |
| July 31, 2011 | July 31, 2010 |
| Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net |
| Finite-lived intangible assets: |
| Patents | $ | 11,027 | $ | (10,278 | ) | $ | 749 | $ | 11,027 | $ | (10,154 | ) | $ | 873 |
| Customer relationships | 12,789 | (3,472 | ) | 9,317 | 12,099 | (2,248 | ) | 9,851 |
| Non-compete and employment agreements | 547 | (547 | ) |  | 478 | (396 | ) | 82 |
| Website and acquired content | 1,063 | (748 | ) | 315 | 1,009 | (489 | ) | 520 |
| Licensed technology and other | 649 | (355 | ) | 294 | 628 | (285 | ) | 343 |
| Indefinitely-lived intangible assets: |
| Trademarks | 9,310 |  | 9,310 | 8,699 |  | 8,699 |
| Total | $ | 35,385 | $ | (15,400 | ) | $ | 19,985 | $ | 33,940 | $ | (13,572 | ) | $ | 20,368 |
| 2012 | $ | 1,367 |
| 2013 | 1,311 |
| 2014 | 1,196 |
| 2015 | 1,154 |
| 2016 | 1,143 |
| 2011 | 2010 | 2009 |
| Current (provision) benefit: |
| Federal | $ | 8 | $ | 119 | $ |  |
| State and local | (161 | ) | (75 | ) | (75 | ) |
| Foreign | 33 | (61 | ) | (12 | ) |
| Deferred (provision) benefit | (17 | ) | 45 |  |
| (Provision) benefit for income taxes | $ | (137 | ) | $ | 28 | $ | (87 | ) |
| 2011 | 2010 |
| Deferred tax assets: |
| Federal tax carryforward losses | $ | 25,504 | $ | 23,100 |
| Provision for uncollectible accounts receivable | 1,340 | 1,057 |
| State and local tax carry forward losses | 2,419 | 2,117 |
| Accrued royalties | 143 | 103 |
| Stock compensation | 1,218 | 1,017 |
| Depreciation |  | 183 |
| Research and development and other tax credit carryforwards | 633 | 618 |
| Foreign tax carryforward losses | 381 | 284 |
| Realized and unrealized losses on marketable securities |  | 138 |
| Inventory | 1,515 | 1,094 |
| Accrued expenses | 736 | 263 |
| Other, net | 23 | 15 |
| Gross deferred tax assets | 33,912 | 29,989 |
| Deferred tax liabilities: |
| Deferred patent costs | (170 | ) | (204 | ) |
| Intangibles | (2,983 | ) | (2,797 | ) |
| Depreciation | (27 | ) |
| Prepaid expenses | (691 | ) | (654 | ) |
| Other, net | (55 | ) | (36 | ) |
| Gross deferred tax liabilities | (3,926 | ) | (3,691 | ) |
| Net deferred tax assets (liabilities) before valuation allowance | 29,986 | 26,298 |
| Less: valuation allowance | (32,920 | ) | (28,901 | ) |
| Net deferred tax liabilities | $ | (2,934 | ) | $ | (2,603 | ) |
| July 31, 2011 | July 31, 2010 |
| Deferred taxes: |
| Current | $ |  | $ | 21 |
| Non-current | 2,934 | 2,582 |
| $ | 2,934 | $ | 2,603 |
| 2011 | 2010 | 2009 |
| United States operations | $ | (12,284 | ) | $ | (19,642 | ) | $ | (21,221 | ) |
| International operations | (539 | ) | (2,619 | ) | (2,256 | ) |
| Loss before taxes | $ | (12,823 | ) | $ | (22,261 | ) | $ | (23,477 | ) |
| 2011 | 2010 | 2009 |
| Federal statutory rate | 34 | % | 34 | % | 34 | % |
| Expenses not deductible for income tax return purposes | (2.3 | )% | (1.5 | )% | (0.4 | )% |
| State income taxes, net of (benefit) of federal tax deduction | 1.0 | % | 0.1 | % | 2.5 | % |
| Change in valuation allowance | (34.6 | )% | (32.3 | )% | (37.8 | )% |
| Reversal of tax reserve | 0.1 | % | 0.5 |  |
| Other | 0.7 | % | (0.7 | )% | 1.3 |
| (1.1 | )% | 0.1 | % | (0.4 | )% |
| 2011 | 2010 |
| Legal | $ | 610 | $ | 877 |
| Payroll, benefits, severance and commissions | 4,286 | 4,012 |
| Research and development | 709 | 716 |
| Professional fees | 782 | 963 |
| Outside reference lab testing |  | 194 |
| Other | 1,801 | 1,747 |
| $ | 8,188 | $ | 8,509 |
| 2011 | 2010 |
| Liability for purchase price consideration (see Note 16) | $ | 1,150 | $ |  |
| Deferred revenue | 396 | 496 |
| Other | 137 | 76 |
| $ | 1,683 | $ | 572 |
| 2011 | 2010 | 2009 |
| Options | Weighted - Average Exercise Price | Options | Weighted - Average Exercise Price | Options | Weighted - Average Exercise Price |
| Outstanding at beginning of year | 1,132,450 | $ | 14.30 | 1,191,519 | $ | 14.41 | 2,275,415 | $ | 13.13 |
| Exercised |  | $ |  |  | $ |  | (251,162 | ) | $ | 5.87 |
| Cancelled | (347,326 | ) | $ | 13.78 | (59,069 | ) | $ | 16.14 | (832,734 | ) | $ | 13.87 |
| Outstanding at end of year | 785,124 | $ | 14.53 | 1,132,450 | $ | 14.30 | 1,191,519 | $ | 14.41 |
| Exercisable at end of year | 785,124 | $ | 14.53 | 1,132,450 | $ | 14.30 | 1,191,519 | $ | 14.41 |
| Weighted average fair value of options granted during year | $ |  |  | $ |  |
| Options outstanding and exercisable |
| Range of Exercise prices | Shares | Weighted- Average Remaining Contractual Life in years | Weighted- Average Exercise Price |
| $8.33-12.25 | 362,489 | 1.45 | $ | 11.80 |
| $12.93-19.02 | 413,952 | 3.0 | $ | 16.80 |
| $20.20 | 8,683 | 0.5 | $ | 20.20 |
| 785,124 |
| 2011 | 2010 | 2009 |
| Awards | Weighted - Average Award Price | Awards | Weighted - Average Award Price | Awards | Weighted - Average Award Price |
| Outstanding at beginning of year | 417,578 | $ | 5.50 | 377,400 | $ | 6.05 | 220,240 | $ | 12.34 |
| Awarded | 181,643 | $ | 3.78 | 241,610 | $ | 5.54 | 291,801 | $ | 4.05 |
| Vested | (263,112 | ) | $ | 5.11 | (192,845 | ) | $ | 6.46 | (128,941 | ) | $ | 12.11 |
| Forfeited | (24,157 | ) | $ | 5.27 | (8,587 | ) | $ | 9.29 | (5,700 | ) | $ | 10.18 |
| Outstanding at end of year | 311,952 | $ | 4.84 | 417,578 | $ | 5.50 | 377,400 | $ | 6.05 |
| Weighted average market value of awards granted during year | $ | 3.78 | $ | 5.54 | $ | 4.05 |
| Years ended July 31, |
| 2012 | $ | 4,520 |
| 2013 | 3,750 |
| 2014 | 2,935 |
| 2015 | 2,705 |
| 2016 | 2,512 |
| Thereafter | 4,170 |
| $ | 20,592 |
| Life Sciences | Clinical Labs | Therapeutics | Other | Consolidated |
| Revenues: |
| Product revenues | $ | 41,830 |  |  |  | $ | 41,830 |
| Royalty and license fee income | 7,437 |  |  |  | 7,437 |
| Clinical laboratory services |  | $ | 52,762 |  |  | 52,762 |
| 49,267 | 52,762 |  |  | 102,029 |
| Operating expenses: |
| Cost of product revenues | 22,137 |  |  |  | 22,137 |
| Cost of clinical laboratory services |  | 31,682 |  |  | 31,682 |
| Research and development | 5,784 |  | $ | 2,022 |  | 7,806 |
| Selling, general and administrative | 17,855 | 18,426 |  | $ | 8,910 | 45,191 |
| Provision for uncollectible accounts receivable | 16 | 4,415 |  |  | 4,431 |
| Legal | 726 | 387 |  | 2,597 | 3,710 |
| Total operating expenses | 46,518 | 54,910 | 2,022 | 11,507 | 114,957 |
| Operating income (loss) | 2,749 | (2,148 | ) | (2,022 | ) | (11,507 | ) | (12,928 | ) |
| Other income (expense) |
| Interest | 2 | (5 | ) |  | 14 | 11 |
| Other | (3 | ) | 30 |  | 18 | 45 |
| Foreign exchange gain | 49 |  |  |  | 49 |
| Income (loss) before income taxes | $ | 2,797 | $ | (2,123 | ) | $ | (2,022 | ) | $ | (11,475 | ) | $ | (12,823 | ) |
| Depreciation and amortization included above | $ | 3,282 | $ | 1,012 | $ | 47 | $ | 128 | $ | 4,469 |
| Share-based compensation included in above: |
| Cost of clinical laboratory services |  | $ | 10 |  |  | $ | 10 |
| Research and development | $ | 14 |  |  |  | 14 |
| Selling, general and administrative | 84 | 61 |  | $ | 880 | 1,025 |
| Total | $ | 98 | $ | 71 |  | $ | 880 | $ | 1,049 |
| Capital expenditures | $ | 389 | $ | 834 |  | $ |  | $ | 1,223 |
| Life Sciences | Clinical Labs | Therapeutics | Other | Consolidated |
| Revenues: |
| Product revenues | $ | 43,111 |  |  |  | $ | 43,111 |
| Royalty and license fee income | 9,793 |  |  |  | 9,793 |
| Clinical laboratory services |  | $ | 44,178 |  |  | 44,178 |
| 52,904 | 44,178 |  |  | 97,082 |
| Operating expenses: |
| Cost of product revenues | 22,547 |  |  |  | 22,547 |
| Cost of clinical laboratory services |  | 29,570 |  |  | 29,570 |
| Research and development | 7,202 |  | $ | 2,502 |  | 9,704 |
| Selling, general and administrative | 19,800 | 18,503 |  | $ | 10,092 | 48,395 |
| Provision for uncollectible accounts receivable | 48 | 3,432 |  |  | 3,480 |
| Legal | 145 | 222 |  | 1,379 | 1,746 |
| Litigation settlement |  |  |  | 3,698 | 3,698 |
| Total operating expenses | 49,742 | 51,727 | 2,502 | 15,169 | 119,140 |
| Operating income (loss) | 3,162 | (7,549 | ) | (2,502 | ) | (15,169 | ) | (22,058 | ) |
| Other income (expense) |
| Interest | (5 | ) |  |  | 24 | 19 |
| Other | (8 | ) | 46 |  | 6 | 44 |
| Foreign exchange loss | (266 | ) |  |  |  | (266 | ) |
| Income (loss) before income taxes | $ | 2,883 | $ | (7,503 | ) | $ | (2,502 | ) | $ | (15,139 | ) | $ | (22,261 | ) |
| Depreciation and amortization included above | $ | 3,110 | $ | 982 | $ | 52 | $ | 125 | $ | 4,269 |
| Share-based compensation included in above: |
| Cost of clinical laboratory services | $ |  | 12 | $ |  |  | $ | 12 |
| Research and development | 14 |  |  |  | 14 |
| Selling, general and administrative and legal | 114 | 78 |  | $ | 952 | 1,144 |
| Total | $ | 128 | 90 | $ |  | $ | 952 | $ | 1,170 |
| Capital expenditures | $ | 1,450 | $ | 1,728 | $ | 11 | $ | 62 | $ | 3,251 |
| Life Sciences | Clinical Labs | Therapeutics | Other | Consolidated |
| Revenues: |
| Product revenues | $ | 40,592 |  |  |  | $ | 40,592 |
| Royalty and license fee income | 9,376 |  |  |  | 9,376 |
| Clinical laboratory services |  | $ | 39,604 |  |  | 39,604 |
| 49,968 | 39,604 |  |  | 89,572 |
| Operating expenses: |
| Cost of product revenues | 26,766 |  |  |  | 26,766 |
| Cost of clinical laboratory services |  | 26,295 |  |  | 26,295 |
| Research and development | 5,855 | $ | 3,365 |  | 9,220 |
| Selling, general and administrative | 14,546 | 15,425 |  | $ | 11,343 | 41,314 |
| Provision for uncollectible accounts receivable |  | 5,189 |  |  | 5,189 |
| Legal | 392 | 73 |  | 3,730 | 4,195 |
| Total operating expenses | 47,559 | 46,982 | 3,365 | 15,073 | 112,979 |
| Operating income (loss) | 2,409 | (7,378 | ) | (3,365 | ) | (15,073 | ) | (23,407 | ) |
| Other income (expense) |
| Interest |  | 57 |  | 524 | 581 |
| Other | 25 | 49 |  |  | 74 |
| Foreign exchange loss | (725 | ) |  |  |  | (725 | ) |
| Income (loss) before income taxes | $ | 1,709 | $ | (7,272 | ) | $ | (3,365 | ) | $ | (14,549 | ) | $ | (23,477 | ) |
| Depreciation and amortization included above | $ | 2,350 | $ | 946 | $ | 50 | $ | 116 | $ | 3,462 |
| Share-based compensation included in above: |
| Cost of clinical laboratory services |  | 8 | $ |  |  | $ | 8 |
| Research and development | $ | 13 |  |  |  | 13 |
| Selling, general and administrative and legal | 128 | $ | 135 | $ | 119 | $ | 1,032 | 1,414 |
| Total | $ | 141 | $ | 143 | $ | 119 | $ | 1,032 | $ | 1,435 |
| Capital expenditures | $ | 1,334 | $ | 1,253 | $ | 78 | $ | 44 | $ | 2,709 |
| Net sales to unaffiliated customers: | 2011 | 2010 | 2009 |
| United States | $ | 85,691 | $ | 82,873 | $ | 75,936 |
| Switzerland | 8,508 | 7,037 | 6,487 |
| United Kingdom | 2,825 | 2,507 | 2,517 |
| Other international countries | 5,005 | 4,665 | 4,632 |
| Total | $ | 102,029 | $ | 97,082 | $ | 89,572 |
| Long-lived assets at July 31, | 2011 | 2010 | 2009 |
| United States | $ | 44,028 | $ | 45,439 | $ | 45,896 |
| Switzerland | 8,958 | 7,063 | 7,075 |
| United Kingdom | 2,857 | 2,944 | 3,334 |
| Other international countries | 1,850 | 1,723 | 1,923 |
| Total | $ | 57,693 | $ | 57,169 | $ | 58,228 |
| 2011 | 2010 | 2009 |
| United States | $ | 32,928 | $ | 38,695 | $ | 36,332 |
| Foreign countries | 16,339 | 14,209 | 13,636 |
| $ | 49,267 | $ | 52,904 | $ | 49,968 |
| Quarter Ended |
| Fiscal 2011 | October 31, 2010 | January 31, 2011 | April 30, 2011 | July 31, 2011 |
| Total revenues | $ | 25,652 | $ | 23,734 | $ | 25,827 | $ | 26,816 |
| Gross profit | 13,473 | 10,331 | 12,364 | 12,042 |
| Loss before income taxes | (1,060 | ) | (5,562 | ) | (2,002 | ) | (4,199 | ) |
| Net loss | (1,122 | ) | (5,708 | ) | (2,110 | ) | (4,020 | ) |
| Basic and diluted loss per common share | $ | (0.03 | ) | $ | (0.15 | ) | $ | (0.05 | ) | $ | (0.11 | ) |
| Quarter Ended |
| Fiscal 2010 | October 31, 2009 | January 31, 2010 | April 30, 2010 | July 31, 2010 |
| Total revenues | $ | 25,165 | $ | 23,186 | $ | 23,786 | $ | 24,945 |
| Gross profit | 13,329 | 10,885 | 10,529 | 10,222 |
| Loss before income taxes | (1,893 | ) | (10,210 | ) | (4,401 | ) | (5,757 | ) |
| Net loss | (1,814 | ) | (10,328 | ) | (4,578 | ) | (5,513 | ) |
| Basic and diluted loss per common share | $ | (0.05 | ) | $ | (0.27 | ) | $ | (0.12 | ) | $ | (0.15 | ) |
| Year ended July 31, | Description | Balance at Beginning of period | Charged to costs and expenses | Charged to other accounts | Deductions | Balance at end of period |
| 2011 | Allowance for doubtful accounts receivable | 2,839 | 4,431 | 3,782 | (1) | 3,488 |
| 2010 | Allowance for doubtful accounts receivable | 4,786 | 3,480 |  | 5,427 | (1) | 2,839 |
| 2009 | Allowance for doubtful accounts receivable | 886 | 5,189 |  | 1,289 | (1) | 4,786 |
| 2011 | Deferred tax valuation allowance | 28,901 | 4,019 | 32,920 |
| 2010 | Deferred tax valuation allowance | 21,716 | 7,185 |  |  | 28,901 |
| 2009 | Deferred tax valuation allowance | 12,965 | 8,751 |  |  | 21,716 |
| (1) | Write-off of uncollectible accounts receivable. |


Question: What is the total square footage of the leased properties if the company is planning to expand its operations by leasing two more facilities, each with 15,000 square feet, in the next two years?

Solution:
def solution():
     #Define variables name and value
    Farmingdale_NY_1 = 43000
    New_York_NY = 11300
    San_Diego_CA = 6400
    Lausen_Switzerland = 18829
    Ann_Arbor_MI = 26820
    # future variables
    Future_leasing1 = 15000
    Future_leasing2 = 15000

    #Do math calculation to get the answer
    current_square_footage = Farmingdale_NY_1 + New_York_NY + San_Diego_CA + Lausen_Switzerland + Ann_Arbor_MI
    future_square_footage = Future_leasing1 + Future_leasing2
    total_square_footage = current_square_footage + future_square_footage
    return total_square_footage


Answer: 136349