FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended September 30, 1996

                                       OR

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

For the transition period                             to

Commission file number  1-11394

                                  EDITEK, INC.
             (Exact name of registrant as specified in its charter)

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

  1238 Anthony Road, Burlington, North Carolina                          27215
-------------------------------------------------------------------------------
(Address of principal executive offices)                            (Zip Code)

Registrant's telephone number including area code:               (910) 226-6311
-------------------------------------------------------------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                    Yes X No

The number of shares of Common Stock, $.15 par value, outstanding as of November
1, 1996 was 25,513,284.

<PAGE>

                                  EDITEK, INC.

                                      INDEX

                                                                           Page

Part I     Financial Information:

           Item 1:

             Balance Sheets - September 30, 1996 (Unaudited)
             and December 31, 1995 .......................................... 3

             Statements   of   Operations   -  Nine  Months  Ended
             September  30, 1996 and 1995 and Three  Months  Ended
             September 30, 1996 and 1995 (Unaudited)......................... 5

             Statements of Cash Flows - Nine Months
             Ended September 30, 1996 and 1995 (Unaudited) .................. 6

             Notes to Financial Statements .................................. 7


          Item 2:

             Management's Discussion and Analysis of
             Financial Condition and Results of Operations ..................11

Part II   Other Information .. ..............................................19
             Signatures......................................................20

<PAGE>

 PART I. FINANCIAL INFORMATION
<TABLE>

                                  EDITEK, Inc.

                                 BALANCE SHEETS
                                                                September 30      December 31
                                                                    1996              1995
                                                                 (Unaudited)
                                                              -----------------------------------
                                                                        (in thousands)
<S>                                                                <C>             <C>    
Assets
Current assets
   Cash and cash equivalents                                        $       325     $        258
   Accounts receivable
         Trade, less allowance for
         doubtful accounts ($232,000 - 1996,
          $130,000 - 1995)                                                4,757              977
         Other                                                              150               52
   Inventories:
         Raw Materials                                                      467              588
         Work in process                                                    121              169
         Finished goods                                                     655              180
                                                              -----------------------------------
                                                                          1,243              937
   Deposit on acquisition                                                     -              500
   Prepaid expenses and other                                               250              368
                                                              -----------------------------------
         Total current assets                                             6,725            3,092

Equipment and improvements
    Furniture and equipment                                               9,632            5,857
    Leasehold improvements                                                  954            1,696
                                                              -----------------------------------

                                                                         10,586            7,553
    Less accumulated depreciation
         and amortization                                                (8,085)          (6,824)
                                                              -----------------------------------

                                                                          2,501              729


Goodwill, Net                                                            22,166              117
                                                              -----------------------------------


                                                                  $      31,392      $     3,938
                                                              ===================================
</TABLE>

<PAGE>

<TABLE>

                                  EDITEK, Inc.
                                 BALANCE SHEETS
                                   (Continued)

                                                                September 30      December 31
                                                                    1996              1995
                                                                 (Unaudited)
                                                              -----------------------------------
                                                                        (in thousands)
<S>                                                              <C>                <C>    

Liabilities and stockholders' equity
Current liabilities
   Line of credit                                                $        1,033     $         -
   Accounts payable                                                       1,803           1,184
   Accrued expense                                                        1,871             834
   Accrued restructuring expenses                                           938               -
   Deferred revenues                                                          1              42
   Current  portion of notes payable                                      1,333              82
   Note payable to director                                                   -             100
                                                              -----------------------------------
         Total current liabilities                                        6,979           2,242

Long term debt                                                            1,778               -

Noncurrent Restructuring Expenses                                           767               -

Stockholders' equity
   Preferred Stock--authorized 1,000,000
         shares; 53 shares issued and outstanding                             -               -
   Common Stock, $.15 par value;
         authorized - 30,000,000 shares;
         issued and outstanding -
         25,513,284 shares in 1996 and
         10,439,775 shares in 1995                                        3,827           1,566
   Additional paid-in capital                                            56,356          33,973
   Accumulated deficit                                                  (38,139)        (33,667)
                                                              -----------------------------------
                                                                         22,044           1,872

Less: Note receivable from officer                                            -            (100)
         Treasury stock                                                    (176)            (76)
                                                              -----------------------------------
        Total stockholders' equity                                       21,868           1,696


                                                                  $      31,392     $     3,938
                                                              ===================================

See notes to financial statements.

</TABLE>

<PAGE>

<TABLE>

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
                                                                   Nine Months                Three Months
                                                                      Ended                      Ended
                                                                  September 30               September 30
                                                              1996         1995         1996            1995
                                                         ----------------------------------------------------
                                                                  (in thousands except for per share amounts)
<S>                                                       <C>          <C>          <C>             <C>    

Revenues

   Laboratory service revenues                            $  17,555    $ 3,149      $   6,072      $   1,086
   Product sales                                              2,410      2,094            722            747
   Royalties and fees                                            90        234              5             74
   Interest and other income                                     69        186             45              5
                                                         ----------------------------------------------------
                                                             20,124      5,663          6,844          1,912

Cost of services                                             13,122      3,062          4,707          1,004
Cost of sales                                                 1,779      1,738            552            615
                                                         ----------------------------------------------------

          Gross profit                                        5,223        863          1,585            293

Operating expenses
   Selling, general and administrative                        6,337      2,963          2,505          1,024
   Research and development                                   1,044        669            334            242
   Interest and financing costs                                 350         21            123              1
   Restructuring costs                                        1,966          -          1,108              -
                                                         ----------------------------------------------------

                                                              9,697      3,653          4,070          1,267

                                                         ----------------------------------------------------

            Net loss                                      $  (4,474)   $(2,790)     $  (2,485)     $    (974)
                                                         =====================================================



Loss per common share                                     $   (0.22)   $ (0.28)     $   (0.10)     $   (0.10)
                                                         =====================================================

Weighted average number of
common shares outstanding                                19,953,009  9,915,427     25,485,225      9,321,610
                                                         ===============================================================

See notes to financial statements.
</TABLE>

<PAGE>

<TABLE>


                                  EDITEK, Inc.

                      STATEMENTS OF CASH FLOWS (Unaudited)


                                                                     Nine Months Ended
                                                                        September 30
                                                                     1996          1995
                                                                     ----------------------
                                                                        (in thousands)
<S>                                                                   <C>         <C>    

Operating activities
Net loss                                                              $(4,474)    $(2,790)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
      Depreciation and amortization                                     1,703         501
      Write off of goodwill and other assets                              221           -
      Gain on sale or retirement of equipment                             (16)          -
      Changes in operating assets & liabilities
         net of effects from purchase of Medtox:
             Accounts receivable                                         (975)       (355)
             Inventories                                                   57          (2)
             Prepaid expenses & other                                     255        (462)
             Accounts payable and accrued liabilities                     198        (146)
             Deferred revenues                                            (96)        (26)
             Restructuring accruals                                       974           -
             Leases payable                                                 -         (23)
                                                                     ----------------------
Net cash used in operating activities                                  (2,153)     (3,303)


Investing activities
    Purchases of equipment & improvements                              (1,065)       (108)
    Proceeds from sale of equipment                                        24           -
    Cash used for BIOMAN acquisition                                        -         (37)
    Cash used for MEDTOX acquisition                                  (18,500)          -
                                                                     ----------------------

Net cash used in investing activities                                 (19,541)       (145)


Financing activities
    Payments on Debt                                                   (2,267)       (945)
    Proceeds from borrowings                                            5,033          16
    Costs associated with borrowings/acquisition                         (824)          -
    Proceeds from issuance of stock for:
      Employee stock purchase plan                                         64          21
      Exercise of stock options and warrants                               26         193
      Private placements                                                  600       3,715
      Preferred stock                                                  20,350           -
      Costs related to stock issuances                                 (1,221)       (231)
   Conversion of note payable to common stock                                -         61
   Increase in notes payable                                                 -        (71)
                                                                     ----------------------

Net cash provided by financing activities                              21,761       2,759
                                                                     ----------------------

Increase (Decrease) in cash and cash equivalents                      $    67     $  (689)

Cash and cash equivalents at beginning of period                      $   258     $ 1,105
                                                                     ---------------------

Cash and cash equivalents at end of period                            $   325     $   416
                                                                     =====================
</TABLE>

<PAGE>

                                  EDITEK, INC.

                          NOTES TO FINANCIAL STATEMENTS

                               September 30, 1996

NOTE A -- BASIS OF PRESENTATION

The accompanying  unaudited financial statements of EDITEK, Inc. (the "Company")
have been prepared in accordance with generally accepted  accounting  principles
for interim  financial  information  and with the  instructions to Form 10-Q and
Article  10 of  Regulation  S-X.  Accordingly,  they do not  include  all of the
information and notes required by generally accepted accounting  principles.  In
the opinion of  management,  all  adjustments  (consisting  of normal  recurring
accruals)  considered  necessary for a fair presentation of financial  condition
and results of operations  have been  included.  Operating  results for the nine
month period ended  September  30, 1996 are not  necessarily  indicative  of the
results that may be attained for the entire year. For further information, refer
to the financial  statements and notes thereto  included in the Company's Annual
Report on Form 10-K, (as amended), for the year ended December 31, 1995.

Loss Per Share:  Loss per share amounts are based on the weighted average number
of shares of common stock  outstanding.  Common stock  equivalents have not been
included in the computation as the effect would be anti-dilutive.

NOTE B -- ACQUISITION OF MEDTOX LABORATORIES, INC. ("MEDTOX")

On January 30,  1996,  the Company  acquired  MEDTOX,  a  toxicology  laboratory
located in St.  Paul,  Minnesota.  The  purchase  price was $24  million,  which
included $19 million cash and the issuance of 2,517,306  shares of common stock.
The  acquisition  was  accounted  for under the  purchase  method of  accounting
wherein the  Company  recognized  approximately  $22  million in  goodwill.  The
goodwill is being amortized over a period of 20 years.  The Company financed the
acquisition by issuing $20 million of convertible  preferred stock and borrowing
$4 million  under two $2 million  term loans.  The Company  also  entered into a
revolving line of credit of up to $7 million for working capital  purposes.  The
consolidated  results of operations for the nine months ended September 30, 1996
include the results of the MEDTOX  operations from January 26, 1996 to September
30, 1996.

NOTE C -- ACQUISITION OF BIOMAN PRODUCTS, INC. ("BIOMAN")

On June 1, 1995,  the Company  acquired  Bioman,  an  environmental  diagnostics
company.  The purchase price was $140,000,  which included cash and the issuance
of 21,489 shares of common stock.  The  acquisition  was accounted for under the
purchase  method of  accounting  wherein  the  Company  recognized  $117,000  of
goodwill,  which is being amortized over a period of 10 years.  The consolidated
results of operations  for the nine months ended  September 30, 1996 include the

<PAGE>

results of the Bioman operations. In September 1996, the Company sold the former
Bioman  operations  to a company  headed by former  employees of the Company and
Bioman. As a result of the sale of the former Bioman operations, the Company has
written off $101,000 of the remaining  goodwill  associated with the acquisition
of Bioman.

NOTE D -- DEBT

On August 15, 1989 the Company  entered into a long-term loan agreement with the
North  Carolina  Biotechnology  Center  ("NCBC"),  a  state  funded,  non-profit
organization  whereby the Company  borrowed an aggregate of $125,000 to fund the
development cost of a test for Chlamydia,  a sexually  transmitted  disease. The
loan  originally  had an interest rate of seven and one half percent  (7.5%) per
annum with all  principal  and  interest  due on August 15,  1994.  The  Company
amended the loan  agreement on the due date and issued  16,100  shares of common
stock for  $62,000 of the loan.  The  remaining  principal  of  $63,000  and all
accrued interest was paid on September 30, 1996.

To help finance the  acquisition of MEDTOX,  the Company  entered into revolving
and term loan  facilities  with  Heller  Financial,  Inc.  ("Heller").  The debt
financing is for a total of $11,000,000  and consists of two term loans totaling
$4,000,000  and up to $7,000,000 in the form of a revolving line of credit based
primarily on the receivables of the Company.  The amount of credit  available to
the  Company  varies  with the  accounts  receivable  and the  inventory  of the
Company.  The interest  rates on the two term loans of $2,000,000 are 2.5 points
above the prime  rate and 2.0 points  above the prime  rate,  respectively.  The
revolving  line of credit carries an interest rate equal to 1.5 points above the
prime rate.

As of  September  30,  1996,  the Company  was not in  compliance  with  certain
covenants in its loan  agreement  with Heller.  As a result of the existence and
continuance  of the lack of  compliance,  Heller  has  established  a reserve by
reducing the availability  under the revolving line of credit. The amount of the
reserve at September 30, 1996 is  $1,111,000.  The Company and Heller are in the
process of establishing new covenants where appropriate.

NOTE E -- RESTATEMENT OF 1995 FINANCIAL STATEMENTS

During  1995,  the  Company  recorded  a  restructuring  charge in the amount of
$758,000  associated  with the  consolidation  of the  laboratory  operations at
Princeton Diagnostic  Laboratories of America, Inc. ("PDLA") into the laboratory
operations  at MEDTOX.  Subsequent  to the filing of the 1995 Audited  Financial
Statements,  it was determined that the restructuring  charge should be recorded
during the first quarter of 1996, consistent with the consummation of the MEDTOX
acquisition on January 30, 1996. Accordingly,  the Company has restated the 1995
Audited Financial Statements.

<PAGE>

NOTE F -- GOODWILL

It is the  Company's  policy to account for  goodwill  and all other  intangible
assets  at the  lower of  amortized  cost or fair  value.  As  such,  management
continually  reviews the valuation and amortization of the intangible assets. As
part of its ongoing review, management estimates the fair value of the Company's
intangible assets,  taking into consideration any events or circumstances  which
might have diminished the fair value. As part of an overall management review of
the Company's  strategic  plan,  the Company is currently  reviewing the current
value of the goodwill  associated with the acquisition of MEDTOX to determine if
the  current  value is  appropriate  or if an  impairment  of the  goodwill  has
occurred.  While the analysis is not yet complete,  the Company  expects that an
impairment  has  occurred  and  that  the  Company  will  make  the  appropriate
adjustment at the  conclusion of the analysis  which is expected to be completed
prior to December 31, 1996.

<PAGE>

               CAUTIONARY STATEMENT IDENTIFYING IMPORTANT FACTORS
             THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER
               FROM THOSE PROJECTED IN FORWARD LOOKING STATEMENTS

         In  connection  with  the  "safe  harbor"  provisions  of  the  Private
Securities  Litigation  Reform  Act of 1995,  readers of this  document  and any
document  incorporated by reference  herein,  are advised that this document and
documents  incorporated by reference into this document  contain both statements
of historical facts and forward looking  statements.  Forward looking statements
are subject to certain risks and uncertainties, which could cause actual results
to differ  materially from those  indicated by the forward  looking  statements.
Examples  of forward  looking  statements  include,  but are not  limited to (i)
projections  of revenues,  income or loss,  earnings or loss per share,  capital
expenditures,  dividends,  capital  structure and other  financial  items,  (ii)
statements of the plans and objectives of the Company or its management or Board
of  Directors,  including  the  introduction  of new  products,  or estimates or
predictions  of actions  by  customers,  suppliers,  competitors  or  regulatory
authorities,   (iii)  statements  of  future  economic  performance,   and  (iv)
statements of assumptions  underlying  other statements and statements about the
Company or its business.

         This document and any documents  incorporated by reference  herein also
identify important factors which could cause actual results to differ materially
from  those  indicated  by the  forward  looking  statements.  These  risks  and
uncertainties include price competition, the decisions of customers, the actions
of  competitors,  the effects of government  regulation,  possible delays in the
introduction of new products,  customer acceptance of products and services, the
possible effects of the MEDTOX  acquisition and its related financings and other
factors which are described herein and/or in documents incorporated by reference
herein.

         The  cautionary  statements  made  pursuant to the  Private  Litigation
Securities  Reform Act of 1995 above and elsewhere by the Company  should not be
construed  as  exhaustive  or  as  any  admission   regarding  the  adequacy  of
disclosures made by the Company prior to the effective date of such Act. Forward
looking  statements are beyond the ability of the Company to control and in many
cases the Company  cannot  predict  what factors  would cause  results to differ
materially from those indicated by the forward looking statements.

<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Introduction

         The  Company  commenced  operations  in June 1983 and until  1986 was a
development  stage company.  The Company became engaged in the  manufacture  and
sale of  Conventional  Biodiagnostic  Products as a result of its acquisition of
Granite  Technological  Enterprises,   Inc.  in  1986.  The  Company  began  the
manufacture and sale of its EZ-SCREEN(R) diagnostic tests in 1985 and introduced
its patented  one-step assays,  VERDICT(R) and RECON(R),  in 1993. Also in 1993,
the  Company  formed  DIAGNOSTIX,  Inc.  to market its  agricultural  diagnostic
products.  In addition,  DIAGNOSTIX now markets the Company's  on-site substance
abuse  products to certain  segments of the  substance  abuse  marketplace.  The
Company entered the laboratory  testing market when it completed the acquisition
of PDLA in 1994. In 1995, the Company  acquired the former  operations of Bioman
through  its  DIAGNOSTIX,  Inc.  subsidiary.  On January  30,  1996 the  Company
completed the  acquisition  of MEDTOX.  The results of  operations  for the nine
months ended  September  30, 1996 include the  operations of MEDTOX from January
26,  1996  through  the end of the  period.  Since  inception,  the  Company has
financed  its working  capital  requirements  primarily  from the sale of equity
securities.

Nine Months Ended September 30, 1996 Compared to Nine Months Ended September 
30, 1995

         Total  revenues  for the nine  months  ended  September  30,  1996 were
$20,124,000  as compared to $5,663,000  for the nine months ended  September 30,
1995.  The increase was  attributable  to the increase in revenues from products
and  services.  These  revenues  totaled  $19,965,000  for the nine months ended
September  30,  1996,  as  compared  to  $5,243,000  for the nine  months  ended
September 30, 1995.

         Laboratory  service revenues were $17,555,000 for the nine months ended
September 30, 1996,  compared to $3,149,000 for the nine months ended  September
30, 1995. This increase was primarily the result of the revenues  contributed by
the MEDTOX  customer base. The MEDTOX revenues for the period February 1 through
September 30, 1995 were $13,831,000,  providing for proforma  laboratory service
revenues for the nine months ended September 30, 1995 of $16,980,000.

         Product sales include the sales  generated from substance abuse testing
products,  which  incorporates  the EZ-SCREEN and VERDICT  on-site test kits and
other  ancillary  products for the  detection of abused  substances.  Sales from
these  products  were  $1,134,000  for the nine months ended  September 30, 1996
compared  to sales  of  $914,000  recorded  for the same  period  in 1995.  This
increase of 24% was primarily  the result of sales of the EZ-SCREEN  PROFILE(TM)
test kits which were introduced in May of this year.

<PAGE>

         Product sales also include sales of agricultural  diagnostic  products.
Sales of these  products were  $970,000 for the nine months ended  September 30,
1996, an increase of 17% compared to sales of $830,000 for the nine months ended
September  30,  1995.  The Company had sales of  $367,000  which were  generated
through the former  operations  of Bioman,  which was acquired by the Company on
June 1,  1995.  Excluding  these  revenues,  sales  of  agricultural  diagnostic
products were $603,000 for the nine months ended  September 30, 1996 as compared
to $577,000 for the same period in 1995. In September 1996, the Company sold the
former Bioman  operations to a company headed by former employees of the Company
and Bioman.

         Sales of  microbiological  and  associated  product sales combined with
contract  manufacturing  services  were  $231,000  for  the  nine  months  ended
September  30,  1996  compared to  $313,000  for the same  period in 1995.  This
decrease of 26% was primarily the result of the Company's decision not to market
these products.  Accordingly,  the Company has closed down the operations of its
farm facility. While this closure will decrease the amount of revenues generated
from these sales, the elimination of the costs of the farm facility are expected
to improve the overall gross margin from the sale of the Company's products.

         Revenues generated from the shipment of products to the U.S. Department
of Defense were $75,000 for the nine months ended September 30, 1996 compared to
$37,000  for the same  period in 1995.  This  increase  was the result of modest
sales of finished products  following the completion of research and development
on certain tests in late 1995 and early 1996.

         Revenues from royalties and fees during the nine months ended September
30, 1996 were $90,000,  compared to $234,000 for the nine months ended September
30, 1995.  This  decrease was  primarily  due to lower  royalties  from American
Medical Laboratories, Inc.
("AML"), as AML lost accounts that required payment of royalties to the Company.

         Revenues  from  interest  and other  income for the nine  months  ended
September  30, 1996 were $69,000  compared to $186,000 for the nine months ended
September 30, 1995.  The $186,000 in 1995 included the recovery of debts owed by
a customer  of  laboratory  services  which had been  written  off, as well as a
payment  made to the Company by the  landlord of the  facility in New Jersey for
renewing the lease for that facility.  For the same period in 1996, there was no
such payment or recovery of such debts.

           The gross  margin from the  revenues  generated  from the  laboratory
services  was 25% for the nine  months  ended  September  30,  1996 an  increase
compared  to the same  period  in 1995,  when the cost of  providing  laboratory
services was approximately the same as the revenue realized from these services.

<PAGE>

The  improvement  in the gross margin was  primarily  due to the  operations  of
MEDTOX  and the  consolidation  of the  laboratory  operations  of PDLA into the
laboratory operations of MEDTOX.

         Gross margins from the sales of both manufactured products and products
purchased  for resale for the nine  months  ended  September  30,  1996 were 26%
compared  to 17% of  sales of  these  products  during  the  nine  months  ended
September  30,  1995.  This  increase  in gross  margin  from  product  sales is
primarily the result of the increased sales of contract manufacturing  services,
sales of the EZ-SCREEN  PROFILE test kits, as well as sales of the  agricultural
products sold through DIAGNOSTIX.

         Selling,  general and administration expenses for the nine months ended
September 30, 1996 were  $6,337,000,  compared to $2,963,000 for the nine months
ended September 30, 1995. Of the $3,374,000  increase,  MEDTOX related  expenses
totaled $2,411,000. Net of MEDTOX, there was an increase of $963,000 compared to
the same  period  in  1995.  This  increase  is  primarily  due to  $848,000  of
amortization  expense related to goodwill resulting from the MEDTOX acquisition.
In  addition,  the  Company has  expensed in excess of $500,000  for legal fees.
These legal fees are primarily for expenses relating to the Company's  inability
to issue shares to certain of the Series A Preferred Shareholders.

         Research and development expenses incurred during the nine months ended
September  30, 1996 were  $1,044,000 as compared to $669,000 for the same period
in 1995.  This  increase of  $375,000  was  primarily  the result of $310,000 of
research and development  expenses from MEDTOX as well as increases in personnel
costs.

         For the nine months ended September 30, 1996,  EDITEK incurred interest
expense of $350,000, compared to interest expense of $21,000 incurred during the
nine months ended  September 30, 1995. This increase was the result of the funds
borrowed by the Company to complete the financing for the acquisition of MEDTOX.

         In connection  with the acquisition of MEDTOX,  the Company  determined
that it would be beneficial to  consolidate  the  laboratory  operations of PDLA
into  the  laboratory  operations  at  MEDTOX  as well as to down  size  certain
administrative  positions  at  both  PDLA  and  MEDTOX  in  order  to  eliminate
duplicative functions. The Company also determined that to improve the operating
results of the Company,  it would be necessary to sell the former  operations of
Bioman,  close its farm  facility  and reduce its work force at its  Burlington,
North Carolina location.  As a result of these restructuring  steps, the Company
has taken charges of $1,966,000  during the nine months ended September 30, 1996
to cover  certain costs of the  restructurings,  including  $702,000  related to
certain severance payments (see Note E of the Financial Statements). The Company
had no such charge during the nine months ended September 30, 1995.

     As a result of the above,  the net loss for the nine months ended September
30, 1996 was  $4,474,000,  compared to the net loss of  $2,790,000  for the nine
months ended September 30, 1995.

<PAGE>

Three Months Ended September 30, 1996 Compared to Three Months Ended September 
30, 1995

         Total  revenues  for the three  months  ended  September  30, 1996 were
$6,844,000  as compared to $1,912,000  for the three months ended  September 30,
1995.  The increase was  attributable  to the increase in revenues from products
and  services.  These  revenues  totaled  $6,794,000  for the three months ended
September  30,  1996,  as  compared to  $1,833,000  for the three  months  ended
September 30, 1995.

         Laboratory  service revenues were $6,072,000 for the three months ended
September 30, 1996,  compared to $1,086,000 for the three months ended September
30, 1995. This increase was primarily the result of the revenues  contributed by
the MEDTOX  customer base. The MEDTOX  revenues for the same period in 1995 were
$5,092,000, providing for proforma laboratory service revenues of $6,178,000 for
the three months ended September 30, 1995.

         Product sales include the sales  generated from substance abuse testing
products,  which  incorporates  the EZ-SCREEN and VERDICT  on-site test kits and
other  ancillary  products for the  detection of abused  substances.  Sales from
these  products  were  $369,000 for the three months  ended  September  30, 1996
compared  to sales  of  $298,000  recorded  for the same  period  in 1995.  This
increase of 24% was primarily due to sales of the EZ-SCREEN PROFILE test kits.

         Product sales also include sales of agricultural  diagnostic  products.
Sales of these  products were  $283,000 for the three months ended  September 30
1996, a decrease of 19% compared to sales of $349,000 for the three months ended
September  30,  1995.  This  decrease was due to the absence of revenues for the
month of September, 1996 generated through the former operations of Bioman which
the Company sold effective September 3, 1996.

         Sales of  microbiological  and  associated  product sales combined with
contract  manufacturing  services  were  $70,000  for  the  three  months  ended
September  30,  1996  compared to  $100,000  for the same  period in 1995.  This
decrease of 30% was primarily the result of the Company's decision to close down
the operations of the farm facility in early September 1996.  While this closure
will decrease the amount of revenues generated from these sales, the elimination
of the costs of the farm  facility  are  expected to improve  the overall  gross
margin from the sale of the Company's products.

         There were no revenues  generated  from the shipment of products to the
U.S.  Department  of Defense for the three  months ended  September  30, 1996 or
September 30, 1995.

         Revenues  from  royalties  and  fees  during  the  three  months  ended
September  30, 1996 were $5,000,  compared to $74,000 for the three months ended

<PAGE>

September 30, 1995. This decrease was primarily due to lower royalties from AML,
as AML lost accounts that require payment of royalties to the Company.

         Revenues  from  interest  and other  income for the three  months ended
September  30, 1996 were  $45,000  compared to $5,000 for the three months ended
September  30, 1995.  The increase of $40,000 was  primarily due to gains on the
sale of certain assets.

           The gross  margin from the  revenues  generated  from the  laboratory
services  was 22% for the three  months  ended  September  30,  1996 an increase
compared  to the  same  period  in 1995,  when  the  gross  margin  was 8%.  The
improvement  in the gross margin was primarily  due to the  operations of MEDTOX
and the  consolidation of the laboratory  operations of PDLA into the laboratory
operations of MEDTOX.

         Gross margins from the sales of both manufactured products and products
purchased  for resale for the three  months  ended  September  30, 1996 were 24%
compared  to 18% of  sales of these  products  during  the  three  months  ended
September  30,  1995.  This  increase  in gross  margin  from  product  sales is
primarily  the result of  increased  sales of contract  manufacturing  services,
sales of the  EZ-SCREEN  PROFILE test kits and reduced  costs as a result of the
closure of the farm facility.

         Selling, general and administration expenses for the three months ended
September 30, 1996 were $2,505,000,  compared to $1,024,000 for the three months
ended September 30, 1995. The increase of $1,481,000 was primarily the result of
increased  costs  associated  with the MEDTOX  operation as well as amortization
expense  related  to  goodwill   resulting  from  the  MEDTOX   acquisition  and
approximately  $500,000 in legal fees  relating to the  Company's  inability  to
issue shares to certain of the Series A Preferred Shareholders.

         Research  and  development  expenses  incurred  during the three months
ended  September  30, 1996 were  $334,000  as compared to $242,000  for the same
period in 1995. This increase of $92,000 was primarily the result of $117,000 of
research and development expenses from MEDTOX.

         For the three months ended September 30, 1996, EDITEK incurred interest
expense of $123,000,  compared to interest expense of $1,000 incurred during the
three months ended September 30, 1995. This increase was the result of the funds
borrowed by the Company to complete the financing for the acquisition of MEDTOX.

         During the three months  ended  September  30,  1996,  the Company took
certain  actions  in order to  improve  the  operating  results  of the  Company
including  reducing the work force at its Burlington,  North Carolina  location.
Primarily  as a  result  of this  action  the  Company  has  taken a  charge  of
$1,108,000 during the three months ended September 30, 1996,  including $602,000
related to severance  payments.  The Company had no such charge during the three
months ended September 30, 1995.

<PAGE>

     As a result of the above, the net loss for the three months ended September
30, 1996 was  $2,485,000,  compared  to the net loss of  $974,000  for the three
months ended September 30, 1995.

         Management believes the acquisition of MEDTOX, the restructuring of the
laboratory operations,  the closing of the farm facility, the sale of the former
Bioman  operations  and the  reduction  in the work force in the North  Carolina
office will improve the operating results of the Company,  although there can be
no assurance  of the success of these  actions in reducing  costs and  improving
efficiencies.  Management  expects  net sales to grow  through  both  additional
strategic  acquisitions  and  the  addition  of new  accounts,  as  well  as the
introduction of new products,  including the recently launched EZ-SCREEN PROFILE
test kit.

Material Changes in Financial Condition

         As of September 30, 1996,  accounts receivable were $4,907,000 compared
to  $1,029,000  at December  31,  1995.  This  $3,878,000  increase is primarily
attributable to the MEDTOX accounts receivable balance at September 30, 1996.

         Inventories  were  $1,243,000  at  September  30,  1996 as  compared to
$937,000 at December 31, 1995. The increase of $306,000 was due to the inventory
balance of MEDTOX at September 30, 1996.

         Prepaid  expenses and other assets were  $250,000 at September 30, 1996
as compared to $868,000 at December 31, 1995. This decrease of $618,000, or 71%,
was primarily the result of the January  application of the $500,000 deposit the
Company had previously  made towards the purchase  price for the  acquisition of
MEDTOX.

         As of September 30, 1996, the Company had a balance of accounts payable
of  $1,803,000  compared to a balance of  $1,184,000  at December 31, 1995.  The
increase of $619,000  was net of an increase  due to accounts  payable of MEDTOX
and a  decrease  in past due  expenses  resulting  from the  Company's  improved
financial condition.

         Accrued  expenses were $1,871,000 at September 30, 1996, as compared to
$834,000 at December 31, 1995. Of the total increase of $1,037,000,  the accrued
expenses from MEDTOX were  $1,035,000  at September 30, 1996.  Net of the MEDTOX
balance,  the pro forma  increase  of $2,000  was the net  result of  payment of
certain  expenses  associated  with the  acquisition  of MEDTOX,  and  increased
accrued legal fees relating to the Company's inability to issue Common Shares to
certain of the Series A Preferred Shareholders..

         At September 30, 1996, the Company had accrued $996,000 for the payment
of  certain  restructuring  costs  associated  with  the  consolidation  of  the
laboratory  operations of PDLA with the laboratory  operations of MEDTOX as well
as costs  associated  with  certain  actions  taken by the  Company  including a

<PAGE>

reduction  in work force  during the nine months ended  September  30, 1996.  In
addition,  MEDTOX has accrued $709,000 for the payment of a lease obligation for
a  facility  no longer  used by MEDTOX.  As a result,  the  Company  has a total
balance of accrued  restructuring  costs of $1,705,000 at September 30, 1996. At
December 31, 1995 the Company had no accrual for restructuring costs (see Note E
of the Financial Statements).

         During the nine months ended September 30, 1996, the Company repaid the
$100,000 it had borrowed from Dr. Samuel C. Powell, a director of the Company as
well as the  balance  of the loan  payable to the North  Carolina  Biotechnology
Center. At September 30, 1996, the Company had a total balance of $4,144,000 for
its loans  payable to Heller  Financial,  Inc.  as  compared  to total  loans of
$182,000 at December 31, 1995.

Liquidity and Capital Resources

         Since its inception,  the working  capital  requirements of the Company
have been funded  primarily  by cash  received  from equity  investments  in the
Company.  At September 30, 1996,  the Company had cash and cash  equivalents  of
$325,000 and borrowing capability of approximately $2,300,000 from its revolving
line of  credit.  The  Company  believes  that  the  balance  of cash  and  cash
equivalents  at September 30, 1996  together  with the revolving  line of credit
should be sufficient to fund the planned operations through 1996 and 1997.

         As of September 30, 1996,  the Company had not achieved a positive cash
flow from  operations.  Accordingly,  the  Company  relies on  available  credit
arrangements  to fund  operations  until a positive  cash flow can be  achieved.
Management  believes that it has taken, and is prepared to continue to take, the
actions required to yield a positive cash flow from operations in the future.

         The Company  believes that the  acquisition  of MEDTOX,  the subsequent
consolidation  of the  laboratory  operations  from PDLA into MEDTOX,  the other
actions  previously  discussed  and other synergy that will be realized from the
acquisition  of MEDTOX will enable the Company to generate  positive  cash flow.
The  Company  continues  to  follow a plan  which  includes  (i)  continuing  to
aggressively  monitor and control costs,  (ii) increasing  revenue from sales of
the Company's products,  services,  and research and development  contracts,  as
well as (iii)  continuing to  selectively  pursue  synergistic  acquisitions  to
increase the Company's  critical mass.  There can be no assurance that costs can
be   controlled,   revenues  can  be  increased,   financing  may  be  obtained,
acquisitions successfully consummated, or that the Company will be profitable.

         The  Company  lacks  sufficient  shares of Common  Stock to satisfy the
conversion rights of the outstanding  Preferred Stock of the Company,  including
conversion notices received by the Company. Consequently, the Company would lack
shares of  Common  Stock to sell in a future  financing  should it need to raise
capital or for future acquisitions,  until and unless the Company's shareholders
approve an amendment to its Certificate of  Incorporation  increasing the number
of shares of  authorized  Common  Stock.  The Board of  Directors of the Company

<PAGE>

canceled a special meeting of  shareholders  scheduled for June 25,1996 at which
an amendment  to the  Company's  Certificate  of  Incorporation  to increase the
number of shares of authorized  common stock was to have been voted upon.  After
proxy  solicitation  for the  special  meeting  had begun,  the  American  Stock
Exchange stated that the vote to amend the charter required brokers and nominees
holding shares of common stock to obtain written  instructions  from  beneficial
owners regarding the voting of their shares.  The Company had received  numerous
proxies from  brokers and nominees  which did not indicate how many of the votes
were cast based on the beneficial owners' instructions. The meeting was canceled
because it was not possible to determine which votes could be counted.

         As of October 30, 1996,  five  separate  lawsuits  have been  commenced
against  the  Company by certain  holders  of the Series A  Preferred.  All five
lawsuits  are  currently  pending in the United  States  District  court for the
Southern District of New York.  Plaintiffs in each of the lawsuits allege breach
of  contract  with  respect to  conversion  of the  Preferred  Stock and certain
plaintiffs  have also alleged  misrepresentations  and securities  violations in
connection with the Company's sale of the Series A Preferred. The Company may be
subject to additional  litigation  from holders of Series A Preferred who do not
receive shares of Common Stock  issuable to them under the Company's  charter or
contractual  obligations.  The Company intends vigorously to contest each of the
five pending  lawsuits as well as any additional  litigations  that may be filed
hereafter.  However, the Company cannot predict the outcome of the lawsuits, and
decisions  in favor of  plaintiffs  in any or all of the  lawsuits  could have a
material adverse effect on the Company and its business. The Company also cannot
predict the total amount of legal  expenses that may be incurred in the event of
prolonged inability to issue shares to the Series A Preferred Shareholders.

         The  Company  is  currently   investigating   possible  claims  against
purchasers  of Series A Preferred  who may have  breached the Series A Preferred
subscription agreements or otherwise engaged in improprieties in connection with
the conversion or sale of Company stock.  The Company reserves the right to take
action  against any such person or persons,  which action may include but not be
limited to assertion of claims and the  withholding  of common shares  otherwise
issuable upon the conversion of Series A Preferred shares.

         The  Company  intends to seek  shareholder  approval  to  increase  the
authorized  Common  Stock at its Annual  Meeting of  Stockholders  to be held on
December 19, 1996. There can be no assurance the shareholders  will approve such
amendment.  If the Company lacks shares of Common Stock for future financings or
acquisitions,  the Company will have to rely on debt  financings or sales of its
Preferred  Stock.  There can be no  assurance  that the Company  will be able to
obtain  adequate  capital or  implement  acquisitions  through debt or Preferred
Stock financings.

<PAGE>


ITEM 2   CHANGES IN SECURITIES.  Inapplicable

ITEM 3   DEFAULTS ON SENIOR SECURITIES.  Inapplicable

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.  None

ITEM 5   OTHER INFORMATION.  Inapplicable

ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K

         There  were no  reports  filed on Form 8-K  during  the  three
         months ended September 30, 1996.

<PAGE>

                                   SIGNATURES


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


Date:    November 14, 1996


                              EDITEK, INC.

                              By:  /s/  Harry G. McCoy
                                   Harry G. McCoy, Chairman and President

                              By:  /s/  Richard J. Braun
                                   Richard J. Braun, Chief Executive Officer

                              By:  /s/  Peter J. Heath
                                  Peter J. Heath, Vice President of Finance
                                  and Chief Financial Officer

<PAGE>