----

----

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

| (  ) | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|----------------|------------------------------------------------------------------------------------------|

| Delaware                        | 95-3863205          |
|---------------------------------|---------------------|
| (State or other jurisdiction of | (I.R.S. Employer    |
| incorporation or organization)  | Identification No.) |

| 402 West County Road D, St. Paul, Minnesota | 55112      |
|---------------------------------------------|------------|
| (Address of principal executive offices)    | (Zip Code) |

| Class                                   |   | Outstanding at October 13, 2010 |
|-----------------------------------------|--------|---------------------------------|
| Common Stock, $0.15 par value per share |   | 8,735,687                       |

----

|    |                   |                                                        |  Page |
|---------|------------------------|-------------------------------------------------------------|------------|
| Part I  | Financial Information: |                                                        |
|    |                   |                                                        |       |
|    | Item 1:                | Financial Statements (Unaudited)                            |       |
|    |                   |                                                        |       |
|    |                   | Consolidated Statements of Income – Three and Nine    |       |
|    |                   | Months Ended September  30, 2010 and 2009         | 3          |
|    |                   |                                                        |       |
|    |                   | Consolidated Balance Sheets – September 30, 2010      |       |
|    |                   | and December 31, 2009                                       | 4          |
|    |                   |                                                        |       |
|    |                   | Consolidated Statements of Cash Flows – Nine Months   |       |
|    |                   | Ended September 30, 2010 and 2009                           | 5          |
|    |                   |                                                        |       |
|    |                   | Notes to Consolidated Financial Statements                  | 6          |
|    |                   |                                                        |       |
|    | Item 2:                | Management's Discussion and Analysis of                     |       |
|    |                   | Financial Condition and Results of Operations               | 10         |
|    |                   |                                                        |       |
|    | Item 3:                | Quantitative and Qualitative Disclosures                    |       |
|    |                   | About Market Risk                                           | 21         |
|    |                   |                                                        |       |
|    | Item 4:                | Controls and Procedures                                     | 21         |
|    |                   |                                                        |       |
| Part II | Other Information      |                                                        |
|    |                   |                                                        |       |
|    | Item 1A:               | Risk Factors                                                | 22         |
|    |                   |                                                        |       |
|    | Item 2:      | Unregistered Sales of Equity Securities and Use of Proceeds | 22         |
|    |                   |                                                        |       |
|    | Item 6:                | Exhibits                                                    | 22         |
|    |                   |                                                        |       |
|    |                   | Signatures                                                  | 23         |
|    |                   |                                                        |       |
|    |                   | Exhibit Index                                               | 24         |

----

|                                                                         | Three Months Ended                                                                                             |   | Nine Months Ended                                                                                              |   |
|------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------|--------|
|                                                                         | Sept 30, 2010                                                                                                  |   | Sept 30, 2009                                                                                                  |   | Sept 30, 2010 |   | Sept 30, 2009 |   |
|                                                                         |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
| REVENUES:                                                                    |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
|    Laboratory services:                                       |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
|       Drugs-of-abuse testing services          |   $           10,390                          |   |   $           9,465                           |   |  $          29,346 |   |  $          27,529 |   |
|       Clinical & other laboratory services | 7,928                                                                                                          |   | 6,188                                                                                                          |   | 22,396 |   | 16,962 |   |
|       Clinical trial services                  | 2,358                                                                                                          |   | 2,001                                                                                                          |   | 5,228 |   | 5,908 |   |
|    Product sales                                              | 5,123                                                                                                          |   | 4,607                                                                                                          |   | 15,175 |   | 13,852 |   |
|                                                                         | 25,799                                                                                                         |   | 22,261                                                                                                         |   | 72,145 |   | 64,251 |   |
|                                                                         |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
| COST OF REVENUES:                                                            |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
|   Cost of services                                                 | 12,951                                                                                                         |   | 11,704                                                                                                         |   | 36,535 |   | 34,455 |   |
|   Cost of sales                                                    | 2,036                                                                                                          |   | 1,871                                                                                                          |   | 6,357 |   | 5,801 |   |
|                                                                         | 14,987                                                                                                         |   | 13,575                                                                                                         |   | 42,892 |   | 40,256 |   |
|                                                                         |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
| GROSS PROFIT                                                                 | 10,812                                                                                                         |   | 8,686                                                                                                          |   | 29,253 |   | 23,995 |   |
|                                                                         |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
| OPERATING EXPENSES:                                                          |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
|    Selling, general and administrative                        | 8,394                                                                                                          |   |                  7,084    |   | 24,058 |   | 19,826 |   |
|    Research and development                                   | 576                                                                                                            |   | 555                                                                                                            |   | 1,698 |   | 1,714 |   |
|                                                                         | 8,970                                                                                                          |   |                  7,639    |   | 25,756 |   | 21,540 |   |
|                                                                         |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
| INCOME FROM OPERATIONS                                                       | 1,842                                                                                                          |   | 1,047                                                                                                          |   |               3,497 |   |               2,455 |   |
|                                                                         |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
| OTHER INCOME (EXPENSE):                                                      |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
|    Interest expense                                           |                   (1 | )      |                   (4 | )      |                  (2 | ) |                  (15 | ) |
|    Other income (expense)                                     | (33                                                                                                            | )      | 151                                                                                                            |   | 28 |   |                  (95 | ) |
|                                                                         | (34                                                                                                            | )      | 147                                                                                                            |   | 26 |   |               (110 | ) |
|                                                                         |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
| INCOME BEFORE INCOME TAX EXPENSE                                             | 1,808                                                                                                          |   |                  1,194    |   | 3,523 |   | 2,345 |   |
|                                                                         |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
| INCOME TAX EXPENSE                                                           |                  (660     | )      |                  (436     | )      |             (1,286 | ) |             (856 | ) |
|                                                                         |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
| NET INCOME                                                                   | $              1,148                     |   | $                 758     |   |  $            2,237 |   | $            1,489 |   |
|                                                                         |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
| BASIC EARNINGS PER COMMON SHARE                                              |  $                0.13    |   |  $                0.09    |   |  $              0.26 |   |  $              0.17 |   |
|                                                                         |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
| DILUTED EARNINGS PER COMMON SHARE                                            |  $                0.13    |   |  $                0.09    |   |  $              0.25 |   |  $              0.17 |   |
|                                                                         |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:                               |                                                                                                           |   |                                                                                                           |   |   |   |   |   |
|           Basic            | 8,718,772                                                                                                      |   | 8,547,213                                                                                                      |   | 8,686,962 |   | 8,529,608 |   |
|           Diluted          | 8,963,969                                                                                                      |   | 8,834,675                                                                                                      |   | 8,922,443 |   | 8,778,555 |   |

----

|                                                                                                                                | September 30,2010 |    | December 31,2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------|-------------------|---------|------------------|--------|
| ASSETS                                                                                                                              |              |    |             |   |   |   |
| CURRENT ASSETS:                                                                                                                     |              |    |             |   |   |   |
|    Cash and cash equivalents                                                                                         | $                 | 4,819   |             | $      | 4,165 |   |
|    Accounts receivable:                                                                                              |              |    |             |   |   |   |
|          Trade, less allowance for doubtful accounts ($1,051 in 2010 and $529 in 2009) |              | 21,434  |             |   | 14,916 |   |
|          Other                                                                         |              | 1,532   |             |   | 1,257 |   |
|              Total accounts receivable                             |              | 22,966  |             |   | 16,173 |   |
|    Inventories                                                                                                       |              | 3,760   |             |   | 3,593 |   |
|    Prepaid expenses and other                                                                                        |              | 1,059   |             |   | 1,429 |   |
|    Deferred income taxes                                                                                             |              | 2,317   |             |   | 3,603 |   |
|              Total current assets                                  |              | 34,921  |             |   | 28,963 |   |
| BUILDING, EQUIPMENT AND IMPROVEMENTS, net                                                                                           |              | 28,635  |             |   | 29,509 |   |
| GOODWILL                                                                                                                            |              | 15,967  |             |   | 15,967 |   |
| INTANGIBLE ASSETS, net                                                                                                              |              | 217     |             |   | 273 |   |
| OTHER ASSETS                                                                                                                        |              | 967     |             |   | 1,405 |   |
| TOTAL ASSETS                                                                                                                        | $                 | 80,707  |             | $      | 76,117 |   |
|                                                                                                                                |              |    |             |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                          |              |    |             |   |   |   |
| CURRENT LIABILITIES:                                                                                                                |              |    |             |   |   |   |
|    Accounts payable                                                                                                  | $                 | 3,838   |             | $      | 4,143 |   |
|    Accrued expenses                                                                                                  |              | 6,864   |             |   | 4,670 |   |
|    Current portion of long-term debt                                                                                 |              | -       |             |   | 302 |   |
|              Total current liabilities                             |              | 10,702  |             |   | 9,115 |   |
| OTHER LONG-TERM LIABILITIES                                                                                                         |              | 3,488   |             |   | 3,224 |   |
| DEFERRED INCOME TAXES, net                                                                                                          |              | 2,346   |             |   | 2,346 |   |
|                                                                                                                                |              |    |             |   |   |   |
| STOCKHOLDERS' EQUITY:                                                                                                               |              |    |             |   |   |   |
|    Preferred stock, $1.00 par value; authorized shares, 50,000; none issued and outstanding                          |              | -       |             |   | - |   |
|    Common stock, $0.15 par value; authorized shares, 28,000,000; issued shares, 8,836,147 in                         |              |    |             |   |   |   |
|         2010 and 8,675,510  in 2009                                               |              | 1,325   |             |   | 1,301 |   |
|    Additional paid-in capital                                                                                        |              | 88,800  |             |   | 88,078 |   |
|    Accumulated deficit                                                                                               |              | (20,686 | )                |   | (22,923 | ) |
|    Common stock held in trust, at cost, 388,531 shares in 2010 and 367,911 shares in 2009                            |              | (4,268  | )                |   | (4,024 | ) |
|    Treasury stock, at cost, 103,460 shares in 2010 and 103,431 shares in 2009                                        |              | (1,000  | )                |   | (1,000 | ) |
|              Total stockholders' equity                            |              | 64,171  |             |   | 61,432 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                    | $                 | 80,707  |             | $      | 76,117 |   |

----

|                                                                                                                                      | Nine Months Ended  |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------------------|--------|
|                                                                                                                                      | September 30, 2010 |   | September 30, 2009 |   |
| CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:                                                                                              |               |   |   |   |   |   |
|    Net income                                                                                                              | $                  | 2,237  |   | $ | 1,489 |   |
|    Adjustments to reconcile net income to net cash provided by                                                             |               |   |   |   |   |   |
|            operating activities:                                                   |               |   |   |   |   |   |
|       Depreciation and amortization                                                                         |               | 4,316  |   |   | 4,027 |   |
|       Provision for losses on accounts receivable                                                           |               | 1,087  |   |   | 478 |   |
|       Loss on sale of equipment                                                                             |               | 5      |   |   | 13 |   |
|       Deferred compensation                                                                                 |               | 742    |   |   | 763 |   |
|       Deferred income taxes                                                                                 |               | 1,286  |   |   | 856 |   |
|       Changes in operating assets and liabilities:                                                          |               |   |   |   |   |   |
|          Accounts receivable                                                                 |               | (7,880 | ) |   | (3,809 | ) |
|          Inventories                                                                         |               | (167   | ) |   | 47 |   |
|          Prepaid expenses and other current assets                                           |               | 370    |   |   | 362 |   |
|          Other assets                                                                        |               | 5      |   |   | (298 | ) |
|          Accounts payable and accrued expenses                                               |               | 2,975  |   |   | (517 | ) |
|                 Net cash provided by operating activities |               | 4,976  |   |   | 3,411 |   |
|                                                                                                                                      |               |   |   |   |   |   |
| CASH FLOWS USED IN INVESTING ACTIVITIES:                                                                                                  |               |   |   |   |   |   |
|     Purchase of building, equipment and improvements                                                                  |               | (4,479 | ) |   | (3,493 | ) |
|     Proceeds from the sale of equipment                                                                               |               | 2      |   |   | - |   |
|                 Net cash used in investing activities     |               | (4,477 | ) |   | (3,493 | ) |
|                                                                                                                                      |               |   |   |   |   |   |
| CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:                                                                                    |               |   |   |   |   |   |
|     Principal payments on long-term debt                                                                              |               | (302   | ) |   | (508 | ) |
|     Purchase of common stock for incentive plan                                                                       |               | (289   | ) |   | (410 | ) |
|     Net proceeds from the exercise of stock options                                                                   |               | 746    |   |   | 271 |   |
|     Payment of taxes from traded shares                                                                               |               | -      |   |   | (72 | ) |
|               Net cash provided by (used in) financing activities   |               | 155    |   |   | (719 | ) |
|                                                                                                                                      |               |   |   |   |   |   |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                                          |               | 654    |   |   | (801 | ) |
|                                                                                                                                      |               |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                                                          |               | 4,165  |   |   | 4,069 |   |
|                                                                                                                                      |               |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                                                                | $                  | 4,819  |   | $ | 3,268 |   |
|                                                                                                                                      |               |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                                                                                        |               |   |   |   |   |   |
|    Cash paid for:                                                                                                          |               |   |   |   |   |   |
|           Interest                                                                      | $                  | 2      |   | $ | 16 |   |
|           Income taxes                                                                  |               | 47     |   |   | 42 |   |
|                                                                                                                                      |               |   |   |   |   |   |
| Supplemental noncash activities:                                                                                                          |               |   |   |   |   |   |
|           Asset additions and related obligations in payables                           |               | 153    |   |   | 1,314 |   |

----

----

| (In thousands)                                      | Three Months EndedSeptember 30, |   | Nine Months EndedSeptember 30, |
|-----------------------------------------------------|---------------------------------|--------|--------------------------------|
|                                                | 2010                            |   | 2009                           |   | 2010 |   | 2009 |
| Laboratory Services:                                |                            |   |                           |   |   |   |   |   |   |   |   |
|   Revenues                                | $                               | 20,676 |                           | $ | 17,654 |   | $ | 56,970 |   | $ | 50,399 |
|   Depreciation and amortization           |                            | 1,279  |                           |   | 1,204 |   |   | 3,720 |   |   | 3,527 |
|   Income from operations                  |                            | 910    |                           |   | 261 |   |   | 844 |   |   | 38 |
|   Capital expenditures for segment assets |                            | 1,957  |                           |   | 1,251 |   |   | 4,225 |   |   | 3,222 |
|                                                |                            |   |                           |   |   |   |   |   |   |   |   |
| Product Sales:                                 |                            |   |                           |   |   |   |   |   |   |   |   |
|   Revenues                                | $                               | 5,123  |                           | $ | 4,607 |   | $ | 15,175 |   | $ | 13,852 |
|   Depreciation and amortization           |                            | 197    |                           |   | 182 |   |   | 596 |   |   | 500 |
|   Income from operations                  |                            | 932    |                           |   | 786 |   |   | 2,653 |   |   | 2,417 |
|   Capital expenditures for segment assets |                            | 109    |                           |   | 98 |   |   | 254 |   |   | 271 |
|                                                |                            |   |                           |   |   |   |   |   |   |   |   |
| Corporate (unallocated):                            |                            |   |                           |   |   |   |   |   |   |   |   |
|   Other income (expense)                  | $                               | (34)   |                           | $ | 147 |   | $ | 26 |   | $ | (110) |
|                                                |                            |   |                           |   |   |   |   |   |   |   |   |
| Company:                                            |                            |   |                           |   |   |   |   |   |   |   |   |
|   Revenues                                | $                               | 25,799 |                           | $ | 22,261 |   | $ | 72,145 |   | $ | 64,251 |
|   Depreciation and amortization           |                            | 1,476  |                           |   | 1,386 |   |   | 4,316 |   |   | 4,027 |
|   Income from operations                  |                            | 1,842  |                           |   | 1,047 |   |   | 3,497 |   |   | 2,455 |
|   Other income (expense)                  |                            | (34)   |                           |   | 147 |   |   | 26 |   |   | (110) |
|   Income before income tax expense        |                            | 1,808  |                           |   | 1,194 |   |   | 3,523 |   |   | 2,345 |
|   Capital expenditures for assets         |                            | 2,066  |                           |   | 1,349 |   |   | 4,479 |   |   | 3,493 |

| (In thousands)          | September 30, 2010 |   | December 31,2009 |
|-------------------------|--------------------|--------|------------------|
| Assets:                 |               |   |             |   |   |
| Laboratory Services     | $                  | 63,017 |             | $ | 60,630 |
| Product Sales           |               | 15,373 |             |   | 11,884 |
| Corporate (unallocated) |               | 2,317  |             |   | 3,603 |
| Company                 | $                  | 80,707 |             | $ | 76,117 |

| (In thousands)                  | Three Months EndedSeptember 30, |   | Nine Months EndedSeptember 30, |
|---------------------------------|---------------------------------|--------|--------------------------------|
|                            | 2010                            |   | 2009                           |   | 2010 |   | 2009 |
|                            |                            |   |                           |   |   |   |   |   |   |   |   |
| POC on-site testing products    | $                               | 4,688  |                           | $ | 4,149 |   | $ | 13,479 |   | $ | 12,490 |
| Contract manufacturing services |                            | 265    |                           |   | 360 |   |   | 1,213 |   |   | 1,065 |
| Other diagnostic products       |                            | 170    |                           |   | 98 |   |   | 483 |   |   | 297 |
|                            | $                               | 5,123  |                           | $ | 4,607 |   | $ | 15,175 |   | $ | 13,852 |

----

| (In thousands)                         | September 30, 2010 |   | December 31, 2009 |
|----------------------------------------|--------------------|--------|-------------------|
|                                   |               |   |              |   |   |
| Raw materials                          | $                  | 916    |              | $ | 653 |
| Work in process                        |               | 379    |              |   | 400 |
| Finished goods                         |               | 347    |              |   | 360 |
| Supplies, including off-site inventory |               | 2,118  |              |   | 2,180 |
|                                   | $                  | 3,760  |              | $ | 3,593 |

| (In thousands, except share andper share data)                                          | Three Months EndedSeptember 30, |      | Nine Months EndedSeptember 30, |
|-----------------------------------------------------------------------------------------|---------------------------------|-----------|--------------------------------|
|                                                                                    | 2010                            |      | 2009                           |   | 2010 |   | 2009 |
|                                                                                    |                            |      |                           |   |   |   |   |   |   |   |   |
| Net income (A)                                                                          | $                               | 1,148     |                           | $ | 758 |   | $ | 2,237 |   | $ | 1,489 |
| Weighted average number of basic common shares outstanding (B)                          |                            | 8,718,772 |                           |   | 8,547,213 |   |   | 8,686,962 |   |   | 8,529,608 |
| Dilutive effect of stock options  computed based on the treasury stock method |                            | 245,197   |                           |   | 287,462 |   |   | 235,481 |   |   | 248,947 |
| Weighted average number of diluted common shares outstanding (C)                        |                            | 8,963,969 |                           |   | 8,834,675 |   |   | 8,922,443 |   |   | 8,778,555 |
| Basic earnings per common share (A/B)                                                   | $                               | 0.13      |                           | $ | 0.09 |   | $ | 0.26 |   | $ | 0.17 |
| Diluted earnings per common share (A/C)                                                 | $                               | 0.13      |                           | $ | 0.09 |   | $ | 0.25 |   | $ | 0.17 |

----

----

| ·   | changes in federal, state, local and third party payer regulations or policies or other future reforms in the health care system (or in the interpretation of current regulations), affecting governmental and third-party coverage or reimbursement for  laboratory testing |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | loss or suspension of a license or imposition of a fine or penalties under, or future changes in, or interpretations of, the law or regulations of the Clinical Laboratory Improvement Act of 1967, the Clinical Laboratory Improvement Amendments of 1988, the Substance Abuse and Mental Health Services Administration (SAMHSA), or those of Medicare, Medicaid, the False Claims Act or other federal, state or local agencies  |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | failure to comply with HIPAA, including changes to federal and state privacy and security obligations and changes to HIPAA, including those changes included within HITECH and any subsequent amendments, which could result in increased costs, denial of claims and/or significant penalties |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | failure to maintain the security of customer-related information could damage the Company’s reputation with customers, cause it to incur substantial additional costs and become subject to litigation |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes in FDA regulations or policies (or in the interpretation of current regulations) affecting laboratory developed tests and the 510(k) clearance process |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased competition, including price competition |
|--------------------|----------------------------------------------------|

| ·   | changes in demand for our services and products by our customers |
|--------------------|------------------------------------------------------------------|

| ·   | changes in general economic and business conditions, both nationally and internationally, which can influence the level of job growth and, in turn, the level of pre-employment drug screening activity |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | technological or regulatory developments, or evolving industry standards, that could affect or delay the sale of our products |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | our ability to attract and retain experienced and qualified personnel |
|--------------------|-----------------------------------------------------------------------|

| ·   | risks and uncertainties with respect to our patents and proprietary rights, including: |
|--------------------|----------------------------------------------------------------------------------------|

| o   | other companies challenging our patents |
|---------------|-----------------------------------------|

| o   | patents issued to other companies that may harm our ability to do business |
|---------------|----------------------------------------------------------------------------|

| o   | other companies designing around technologies we have developed |
|---------------|-----------------------------------------------------------------|

| o   | our inability to obtain appropriate licenses from third parties |
|---------------|-----------------------------------------------------------------|

| o   | our inability to protect our trade secrets |
|---------------|--------------------------------------------|

| o   | risk of infringement upon the proprietary rights of others |
|---------------|------------------------------------------------------------|

| o   | our inability to prevent others from infringing on our proprietary rights |
|---------------|---------------------------------------------------------------------------|

| ·   | our inability to control the costs in our business |
|--------------------|----------------------------------------------------|

| ·   | our inability to obtain sufficient financing to continue to sustain or expand our operations |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | adverse results in litigation matters |
|--------------------|---------------------------------------|

| ·   | our inability to continue to develop innovative products and services |
|--------------------|-----------------------------------------------------------------------|

| ·   | our inability to provide our services in a timely manner |
|--------------------|----------------------------------------------------------|

| ·   | an unforeseen decrease in the acceptance of current new products and services, including in the market for clinical laboratory testing for physicians offices and patients |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | fluctuations in clinical trial activities |
|--------------------|-------------------------------------------|

| ·   | inaccurate information regarding market opportunities |
|--------------------|-------------------------------------------------------|

----

| ·   | failure to receive regulatory approvals and clearances |
|--------------------|--------------------------------------------------------|

| ·   | other factors, including those set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2009 |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                         | Three Months Ended  |                           | Nine Months Ended                  |
|--------------------------------------------------------------|---------------------|--------------------------------|------------------------------------|
| (In thousands, except percentages)                           | Sept 30,2010        | Sept 30,2009                   | $ Change                           | % Change |   | Sept 30,2010 | Sept 30,2009 | $Change | %Change |
| Revenues:                                                    |                |                           |                               |   |   |   |   |   |   |
|                                                         |                |                           |                               |   |   |   |   |   |   |
| Laboratory Services                                          |                |                           |                               |   |   |   |   |   |   |
|    Drugs-of abuse testing  services | $  10,390 | $    9,465 | $     925 | 10% |   | $  29,346 | $  27,529 | $   1,817 | 7% |
|    Clinical & other laboratory services   | 7,928               | 6,188                          | 1,740                              | 28% |   | 22,396 | 16,962 | 5,434 | 32% |
|    Clinical trial services                    | 2,358               | 2,001                          | 357                                | 18% |   | 5,228 | 5,908 | (680) | (12)% |
|                                                         |                |                           |                               |   |   |   |   |   |   |
| Product Sales                                                |                |                           |                               |   |   |   |   |   |   |
|    POC on-site testing products               | 4,688               | 4,149                          | 539                                | 13% |   | 13,479 | 12,490 | 989 | 8% |
|    Contract manufacturing services            | 265                 | 360                            | (95)                               | (27)% |   | 1,213 | 1,065 | 148 | 14% |
|    Other diagnostic products                  | 170                 | 98                             | 72                                 | 75% |   | 483 | 297 | 186 | 63% |
|                                                         |                |                           |                               |   |   |   |   |   |   |
|                                                         | $  25,799 | $  22,261            | $   3,538           | 16% |   | $  72,145 | $  64,251 | $   7,894 | 12% |

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|                               | Three Months Ended              |          | Quarter-over-Quarter      |
|------------------------------------|---------------------------------|---------------|---------------------------|
| (In thousands, except percentages) | Sept 30,2010                    | % of Revenues | Sept 30,2009              | % of Revenues |   | $ Change | %Change |
| Cost of Revenues:                  |                            |          |                      |   |   |   |   |
|                               |                            |          |                      |   |   |   |   |
| Cost of Services                   | $    12,951 | 62.6%*        | $   11,704 | 66.3%* |   | $  1,247 | 11% |
|                               |                            |          |                      |   |   |   |   |
| Cost of Sales                      | 2,036                           | 39.7%**       | 1,871                     | 40.6%** |   | 165 | 9% |
|                               |                            |          |                      |   |   |   |   |
|                               | $    14,987 | 58.1%         | $   13,575 | 61.0% |   | $  1,412 | 10% |

|                               | Nine Months Ended               |          | Year-over-Year      |
|------------------------------------|---------------------------------|---------------|---------------------|
| (In thousands, except percentages) | Sept 30,2010                    | % of Revenues | Sept 30,2009        | % of Revenues |   | $ Change | %Change |
| Cost of Revenues:                  |                            |          |                |   |   |   |   |
|                               |                            |          |                |   |   |   |   |
| Cost of Services                   | $    36,535 | 64.1%*        | $  34,455 | 68.4%* |   | $  2,080 | 6% |
|                               |                            |          |                |   |   |   |   |
| Cost of Sales                      | 6,357                           | 41.9%**       | 5,801               | 41.9%** |   | 556 | 10% |
|                               |                            |          |                |   |   |   |   |
|                               | $    42,892 | 59.5%         | $  40,256 | 62.7% |   | $  2,636 | 7% |

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|                                                 | Three Months Ended       |          | Quarter-over-Quarter     |
|------------------------------------------------------|--------------------------|---------------|--------------------------|
| (In thousands, except percentages)                   | Sept 30, 2010            | % of Revenues | Sept 30, 2009            | % of Revenues |   | $ Change | % Change |
| Operating Expenses:                                  |                     |          |                     |   |   |   |   |
|                                                 |                     |          |                     |   |   |   |   |
| Selling, general and   administrative | $   8,394 | 32.5%         | $   7,084 | 31.8% |   | $       1,310 | 19% |
|                                                 |                     |          |                     |   |   |   |   |
| Research and   development            | 576                      | 2.2%          | 555                      | 2.5% |   | 21 | 4% |
|                                                 |                     |          |                     |   |   |   |   |
|                                                 | $   8,970 | 34.8%         | $   7,639 | 34.3% |   | $       1,331 | 17% |

|                                                 | Nine Months Ended         |          | Year-over-Year      |
|------------------------------------------------------|---------------------------|---------------|---------------------|
| (In thousands, except percentages)                   | Sept 30, 2010             | % of Revenues | Sept 30, 2009       | % of Revenues |   | $ Change | % Change |
| Operating Expenses:                                  |                      |          |                |   |   |   |   |
|                                                 |                      |          |                |   |   |   |   |
| Selling, general and   administrative | $   24,058 | 33.3%         | $  19,826 | 30.9% |   | $       4,232 | 21% |
|                                                 |                      |          |                |   |   |   |   |
| Research and   development            | 1,698                     | 2.4%          | 1,714               | 2.7% |   | (16) | (1)%  |
|                                                 |                      |          |                |   |   |   |   |
|                                                 | $   25,756 | 35.7%         | $  21,540 | 33.5% |   | $       4,216 | 20% |

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| ·   | Tangible Net Worth not less than $40,000,000 at any time, with “Tangible Net Worth” defined as the aggregate of total stockholders’ equity plus subordinated debt less any intangible assets. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Current Ratio not less than 1.3 to 1.0 at each month end, with “Current Ratio” defined as total current assets divided by total current liabilities. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Total Liabilities divided by Tangible Net Worth not greater than 1.75 to 1.0 at any time, with “Total Liabilities” defined as the aggregate of current liabilities and non-current liabilities less subordinated debt, and with “Tangible Net Worth” as defined above. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A Debt Service Coverage Ratio not less than 1.5 to 1.0 as of each fiscal quarter end, determined on a rolling four-quarter basis, with “Debt Service Coverage Ratio” defined as the aggregate of net income before non-cash tax expense plus depreciation expense and amortization expense, divided by the aggregate of the current maturity of long-term debt for the previous four fiscal quarters plus current capital lease obligations for the previous four fiscal quarters. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Period                        |   | Total Number of Shares Purchased (a) |   | Average Price Paid per Share |   | Total Number of Shares Purchased as part of Publicly Announced Plans or Programs |   | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs |
|-------------------------------|--------|--------------------------------------|--------|------------------------------|--------|----------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------|
|                          |   |                                 |   |                         |   |                                                                             |   |                                                                           |
| July 1 - 31                   |   | -                                    |   | -                            |   | -                                                                                |   | -                                                                              |
| August 1 - 31                 |   | -                                    |   | -                            |   | -                                                                                |   | -                                                                              |
| September 1 - 30              |   | 29                                   |   | $11.38                       |   | -                                                                                |   | -                                                                              |
|     Total |   | 29                                   |   | $11.38                       |   | -                                                                                |   | -                                                                              |

| (a)   | Pursuant to private repurchases of the Company’s common stock authorized by the Board of Directors. |
|-----------------|-----------------------------------------------------------------------------------------------------------|

| ITEM 6 | EXHIBITS.  See Exhibit Index on page following signature page |
|--------|-------------------------------------------------------------------------|

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| Signature            | Title                                                            | Date             |
|----------------------|------------------------------------------------------------------|------------------|
| /s/ Richard J. Braun | President, Chief Executive Officer, and                          | October 28, 2010 |
| Richard J. Braun     | Chairman of the Board of Directors (Principal Executive Officer) |             |
|                 |                                                             |             |
| /s/ Kevin J. Wiersma | Vice President and Chief Financial Officer                       | October 28, 2010 |
| Kevin J. Wiersma     | (Principal Financial Officer)                                    |             |
|                 |                                                             |             |
| /s/ Angela M. Lacis  | Corporate Controller                                             | October 28, 2010 |
| Angela M. Lacis      | (Principal Accounting Officer)                                   |             |
|                 |                                                             |             |

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|   |   |
|--------|--------|

|   | 10.1 | Form of Restricted Stock Agreement under 2010 Stock Incentive Plan (incorporated herein by reference to Exhibit 99.2 to the Company’s Registration Statement on Form S-8 filed with the Commission on August 18, 2010). |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.1   | Certification |
|--------|------------------|---------------|

|   | 31.2   | Certification |
|--------|------------------|---------------|

|   | 32.1 | Section 906 Certification of Chief Executive Officer pursuant to the Sarbanes-Oxley Act of 2002. |
|--------|------|--------------------------------------------------------------------------------------------------|

|   | 32.2 | Section 906 Certification of Chief Financial Officer pursuant to the Sarbanes-Oxley Act of 2002. |
|--------|------|--------------------------------------------------------------------------------------------------|

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