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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 1 to Form 10-K
On Form 10-K/A

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

For the fiscal year ended December 31, 2000

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

For the transition period from  to

Commission file number 0-28328UroCor, Inc.

|                       |  |                                           
|---------------------- |  | ------------------------------------------
|A Delaware
Corporation |  | IRS Employer Identification
No. 75-2117882

840 Research Parkway
Oklahoma City, Oklahoma 73104

Telephone Number (405) 290-4000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

Common Stock, $.01 Par Value

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   No

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

|                                                                                                                        |  |   |             | 
|----------------------------------------------------------------------------------------------------------------------- |  | - | ----------- | 
|Aggregate market value of the voting stock (Common Stock) held by non-affiliates
of registrant as of September 28, 2001 |  | $ | 159,809,153 | 
|                                                                                                                       
|                                                                                                                       
|                                                                                                                       
|                                                                                                                       
|Number of shares of registrants Common Stock outstanding as of September 28, 2001                                      |  |   | 10,029,218  | 

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the registrants proxy statement relating to the 2001 annual
meeting of stockholders have been incorporated by reference into Part III
hereof.



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TABLE OF CONTENTS



|                                        |                                                                                                |  |  |  |  |  |  | 
|--------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|                                        | ITEM 6. SELECTED FINANCIAL DATA.                                                              
|                                        | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|PART IV                                
|                                        | ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.                    
|SIGNATURES                             
|EX -23.1 Consent of Arthur Andersen LLP



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##### Table of Contents






ITEM 6. SELECTED FINANCIAL DATA.

The following table sets forth certain selected financial data of UroCor for
each of the years in the five-year period ended December 31, 2000, derived from
the Companys audited financial statements. This information should be read in
conjunction with Managements Discussion and Analysis of Financial Condition
and Results of Operations and the Financial Statements and Notes thereto
included elsewhere in this Annual Report on Form 10-K.

|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |        |        |        |   |        |        |        | 
|--------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------ | ------ | ------------------------------------- | ------ | - | ------ | ------ | ------ | ---- | ------ | ------ | ------ | - | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                                                                                        |                                              |                          |        | Year Ended December 31,               |       
|                                                                                        |                                              |                          |        |                                       |       
|                                                                                        |                                              |                          |        | 1996                                  |        |   | 1997   |        |        | 1998 |        |        | 1999   |   |        | 2000   |       
|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |        |        |       
|                                                                                        |                                              |                          |        | (in thousands, except per share data) |       
|Statement of Operations Data:
Revenue                                                   |                                              | $                        | 26,522 |                                       |        | $ | 32,952 |        |        | $    | 47,606 |        |        | $ | 45,508 |        |        | $ | 52,622 |       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|Operating expenses:                                                                     |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |        |        |        |   |        |       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                        | Direct cost of services and
products         |                          |        | 9,966                                 |        |   |        | 12,574 |        |      |        | 19,263 |        |   |        | 18,650 |        |   |        | 19,826 |       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                        | Selling, general and
administrative expenses |                          |        | 11,441                                |        |   |        | 14,555 |        |      |        | 19,290 |        |   |        | 22,637 |        |   |        | 23,311 |       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                        | Provision for bad debts                      |                          |        | 1,294                                 |        |   |        | 2,267  |        |      |        | 8,409  |        |   |        | 6,418  |        |   |        | 4,479  |       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                        | Research and development                     |                          |        | 2,448                                 |        |   |        | 2,225  |        |      |        | 1,953  |        |   |        | 1,609  |        |   |        | 1,370  |       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                        | Special charges                              |                          |        |                                      |        |   |        |       |        |      |        | 3,506  |        |   |        | 3,468  |        |   |        | 10,290 |       
|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |       
|                                                                                        |                                              | Total operating expenses |        |                                       | 25,149 |   |        |        | 31,621 |      |        |        | 52,421 |   |        |        | 52,782 |   |        |        | 59,276 | 
|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |       
|                                                                                        | Income (loss) from operations                |                          |        | 1,373                                 |        |   |        | 1,331  |        |      |        | (4,815 | )      |   |        | (7,274 | )      |   |        | (6,654 | )     
|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |       
|Other income (expense)                                                                  |                                              |                          | 990    |                                       |        |   | 1,484  |        |        |      | 821    |        |        |   | 854    |        |        |   | 675    |       
|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |       
|Income (loss) before income taxes                                                       |                                              |                          | 2,363  |                                       |        |   | 2,815  |        |        |      | (3,994 | )      |        |   | (6,420 | )      |        |   | (5,979 | )     
|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |       
|Income tax benefit                                                                      |                                              |                          |       |                                       |        |   | 1,437  |        |        |      | 1,518  |        |        |   | 2,311  |        |        |   | 1,159  |       
|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |       
|Net income (loss)                                                                       |                                              | $                        | 2,363  |                                       |        | $ | 4,252  |        |        | $    | (2,476 | )      |        | $ | (4,109 | )      |        | $ | (4,820 | )     
|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |       
|Basic net income (loss) per
common share(1)                                             |                                              | $                        | .27    |                                       |        | $ | .42    |        |        | $    | (.24   | )      |        | $ | (.41   | )      |        | $ | (.50   | )     
|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |       
|Weighted average common and
common equivalent shares
outstanding(1)                     |                                              |                          | 8,731  |                                       |        |   | 10,203 |        |        |      | 10,402 |        |        |   | 9,903  |        |        |   | 9,690  |       
|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |       
|Diluted net income (loss) per
common share(1)                                           |                                              | $                        | .24    |                                       |        | $ | .38    |        |        | $    | (.24   | )      |        | $ | (.41   | )      |        | $ | (.50   | )     
|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |       
|Weighted average common and
common equivalent shares
outstanding  assuming
dilution(1) |                                              |                          | 9,832  |                                       |        |   | 11,053 |        |        |      | 10,402 |        |        |   | 9,903  |        |        |   | 9,690  |       
|                                                                                        |                                              |                          |        |                                       |        |   |        |        |        |      |        |        |        |   |       

|                                |  |                 |         |   |      |   |        |      |  |   |         |   |  |      |         |   |  |   |         |  
|------------------------------- |  | --------------- | ------- | - | ---- | - | ------ | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------- | -
|                                |  | At December 31, |        
|                                |  |                 |        
|                                |  | 1996            |         |   | 1997 |   |        | 1998 |  |   | 1999    |   |  | 2000 |        
|                                |  |                 |         |   |      |   |        |      |  |   |         |   |  |      |        
|                                |  | (in thousands)  |        
|Balance Sheet Data:             |  |                 |         |   |      |   |        |      |  |   |         |   |  |      |         |   |  |   |         |  
|                               
|                               
|                               
|                               
|Cash and marketable investments |  | $               | 33,475  |   |      | $ | 25,606 |      |  | $ | 19,204  |   |  | $    | 11,054  |   |  | $ | 12,491  |  
|                               
|                               
|                               
|                               
|Working capital                 |  |                 | 34,910  |   |      |   | 37,389 |      |  |   | 34,447  |   |  |      | 21,620  |   |  |   | 13,382  |  
|                               
|                               
|                               
|                               
|Total assets                    |  |                 | 50,270  |   |      |   | 54,452 |      |  |   | 53,320  |   |  |      | 42,162  |   |  |   | 51,329  |  
|                               
|                               
|                               
|                               
|Long-term liabilities           |  |                 | 659     |   |      |   | 218    |      |  |   | 9       |   |  |      |        |   |  |   | 1,239   |  
|                               
|                               
|                               
|                               
|Accumulated deficit             |  |                 | (11,991 | ) |      |   | (7,739 | )    |  |   | (10,215 | ) |  |      | (14,324 | ) |  |   | (19,144 | )
|                               
|                               
|                               
|                               
|Total stockholders equity      |  |                 | 45,687  |   |      |   | 50,755 |      |  |   | 48,835  |   |  |      | 37,874  |   |  |   | 35,106  |  



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|(1) |  | Computed on the basis described in Note 2 to the Financial Statements.
|--- |  | ----------------------------------------------------------------------

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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read in conjunction with
the Financial Statements and Notes thereto included elsewhere in this Annual
Report on Form 10-K. Special Note: Certain statements set forth below
constitute forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended. See BusinessSpecial Note Regarding Forward-Looking
Statements.

Overview

UroCor markets a comprehensive range of integrated products and services
directly to urologists and managed care organizations to assist in detecting,
diagnosing, treating and managing prostate cancer, bladder cancer, and kidney
stone and other complex urologic disorders. The Companys primary focus is
helping urologists improve patient care and outcomes while reducing the total
cost of managing these diseases.

During the year ended December 31, 2000, the Company derived approximately
97% of its revenue from diagnostic products and services that UroCor Labs
provides to the urology market to assist in the diagnosis, prognosis and
management of prostate cancer, bladder cancer and kidney stones disease. The
Company recognizes revenue when products are sold or services are rendered.
The Company typically bills various third-party payors for its products and
services, such as private insurance, managed care plans and governmental
programs (e.g., Medicare), as well as individual patients and physicians. For
the year ended December 31, 2000, approximately 52%, 37%, 7% and 4% of the
Companys diagnostic revenue was attributable to Medicare, private insurance
and managed care, individual patients, and physicians and hospitals,
respectively.

During the year ended December 31, 2000, the Company derived approximately
3% of its revenue from initial sales of two therapeutic products, ProstaSeed
and PACIS BCG. ProstaSeed is a UroCor-branded line of radiation implants (also
referred to as seeds) used in brachytherapy for early stage prostate cancer
that received regulatory approval for marketing in January 2000. The Company
began marketing PACIS BCG, a therapeutic product used in treating certain types
of bladder cancer, in June 2000. In February 2001, as a result of the
inability of the manufacturer of the product to provide UroCor with adequate
supplies of the product, the Company and the manufacturer agreed to terminate
the Companys distribution agreement for the product. The Company intends to
pursue and acquire new therapeutic products for marketing to its clients.

Results of Operations

The following table sets forth certain operating data expressed as a
percentage of revenue for each period indicated:

|                             |                                              |                          |       |                         |       |  |       |      |       |      |       |      |       | 
|---------------------------- | -------------------------------------------- | ------------------------ | ----- | ----------------------- | ----- |  | ----- | ---- | ----- | ---- | ----- | ---- | ----- | 
|                             |                                              |                          |       | Year Ended December 31, |      
|                             |                                              |                          |       |                         |      
|                             |                                              |                          |       | 1998                    |       |  | 1999  |      |       | 2000 |      
|                             |                                              |                          |       |                         |       |  |       |      |       |      |      
|Revenue                      |                                              |                          | 100.0 | %                       |       |  | 100.0 | %    |       |      | 100.0 | %   
|                            
|                            
|                            
|                            
|Operating expenses:          |                                              |                          |       |                         |       |  |       |      |       |      |       |     
|                            
|                            
|                            
|                            
|                             | Direct cost of services and products         |                          |       | 40.5                    |       |  |       | 41.0 |       |      |       | 37.7 |      
|                            
|                            
|                            
|                            
|                             | Selling, general and administrative expenses |                          |       | 40.5                    |       |  |       | 49.8 |       |      |       | 44.3 |      
|                            
|                            
|                            
|                            
|                             | Provision for bad debts                      |                          |       | 17.6                    |       |  |       | 14.1 |       |      |       | 8.5  |      
|                            
|                            
|                            
|                            
|                             | Research and development                     |                          |       | 4.1                     |       |  |       | 3.5  |       |      |       | 2.6  |      
|                            
|                            
|                            
|                            
|                             | Special charges                              |                          |       | 7.4                     |       |  |       | 7.6  |       |      |       | 19.6 |      
|                             |                                              |                          |       |                         |       |  |       |      |      
|                             |                                              | Total operating expenses |       |                         | 110.1 |  |       |      | 116.0 |      |       |      | 112.7 | 
|                             |                                              |                          |       |                         |       |  |       |      |      
|Loss from operations         |                                              |                          | (10.1 | )                       |       |  | (16.0 | )    |       |      | (12.7 | )   
|                            
|                            
|                            
|                            
|Other income                 |                                              |                          | 1.7   |                         |       |  | 1.9   |      |       |      | 1.3   |     
|                             |                                              |                          |       |                         |       |  |       |      |      
|Net loss before income taxes |                                              |                          | (8.4  | )                       |       |  | (14.1 | )    |       |      | (11.4 | )   
|                            
|                            
|                            
|                            
|Income taxes                 |                                              |                          | 3.2   |                         |       |  | 5.1   |      |       |      | 2.2   |     
|                             |                                              |                          |       |                         |       |  |       |      |      
|Net loss                     |                                              |                          | (5.2  | )%                      |       |  | (9.0  | )%   |       |      | (9.2  | )%  
|                             |                                              |                          |       |                         |       |  |       |      |      

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Revenue.Revenue increased 15.6%, from approximately $45.5 million in
1999 to approximately $52.6 million in 2000.

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Diagnostic services revenue increased 18.9% for 2000 resulting primarily
from the Companys price increases effective January 1, 2000 and August 14,
2000 and an increase in Medicares reimbursement allowance for most of the
Companys tests effective January 1, 2000. The Companys price increases and
the increase in Medicare reimbursement allowance resulted in an increase of
approximately $9.7 million in revenue for 2000 compared to 1999. This increase
was partially offset by a 13.9% decrease in case volume for 2000 compared to
1999. Diagnostic volumes declined during 2000 primarily as the result of the
elimination of certain managed care related marketing programs during the
second quarter 1999 and related collection efforts, in addition to the revision
of pricing on other contractual programs during the first quarter of 2000 that
resulted in the loss of some clients and decreased product usage from other
clients. The Companys client base at the end of 2000 was approximately 2,425
urologists of which 45% used two or more products compared to 2,650 urologists
at the end of 1999 of which 47% used two or more products.

Therapeutic products revenue decreased 36.4% from approximately $2.5
million for 1999 to approximately $1.6 million for 2000 principally due to the
termination on December 31, 1999 of a co-promotion agreement with a product
manufacturer. Such termination resulted in a one-time fee of $500,000, which
was included in therapeutic products revenue for 1999. The Companys marketing
of ProstaSeed and PACIS BCG accounted for substantially all of the therapeutic
products revenue for 2000. In February 2001, the Company and the manufacturer
of the Companys PACIS BCG product, terminated the Companys distribution
agreement. Therapeutic products revenue in subsequent periods is contingent
upon the successful manufacturing and marketing of ProstaSeed and the future
acquisition of rights, the development of and the obtaining of appropriate
United States Food and Drug Administration (the FDA) or other regulatory
approvals for, any other therapeutic products that could be marketed by the
Company.

Direct Cost of Services and Products.    As a percentage of revenue, direct
cost of products and services decreased to 37.7% for 2000 from 41.0% for 1999.
In the aggregate, direct costs of services and products increased 6.3% from
approximately $18.6 million in 1999 to approximately $19.8 million in 2000.

Direct costs for diagnostic services, as a percentage of revenue,
decreased to 33.7% for 2000 from 41.6% for 1999. The Companys price increases
discussed above in Revenue contributed to these decreased percentages, along
with shifts in volume mix towards the Companys higher margin tests. In the
aggregate, direct costs for diagnostic services decreased 3.8%, from
approximately $17.9 million in 1999 to approximately $17.2 million for 2000.
These decreases were primarily related to the decreases in case volumes, as
discussed above in Revenue, offset by increases in personnel costs related to
initial data and specimen processing and increases in inbound and outbound
shipping costs.

Direct costs for therapeutic products for 2000 were comprised of the
manufacturing and overhead costs related to ProstaSeed and direct costs related
to PACIS BCG. These direct costs exceeded the related revenue by 63.6% for
2000. In aggregate, the direct costs for therapeutic products were
approximately $2.6 million for 2000. Attainment of positive gross profit
margins for the Companys ongoing ProstaSeed marketing efforts is contingent
upon increasing sales volumes, which in turn is dependent on the efforts and
results of the Companys product distributors. Direct costs for therapeutic
products for 1999 consisted primarily of an allocation of the Companys sales
force costs for the co-promotion of two cancer products pursuant to an
agreement that terminated at December 31, 1999. In the aggregate, these direct
costs were approximately $787,000 for 1999. This allocation of costs ended
with the termination of the agreement at year-end 1999.

Selling, General and Administrative Expenses.    As a percentage of revenue,
selling, general and administrative expenses decreased to 44.3% for 2000 from
approximately 49.8% in 1999. In the aggregate, selling, general and
administrative expenses increased 3.0%, from approximately $22.6 million for
1999 to approximately $23.3 million for 2000. The increase in selling, general
and administrative expenses was due principally to increased costs related to
personnel, marketing and information systems for the Companys therapeutic
products of approximately $872,000 and the absence of an allocation of the
sales force to direct costs similar to the allocation for 1999 of approximately
$765,000, offset by a decrease in recruiting and relocation costs of
approximately $244,000 related to the filling of several key management
positions in 1999, a decrease in travel expenses of approximately $362,000
related to cost-saving measures by the sales force and a decrease in
depreciation and amortization of approximately $439,000.

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Provision for Bad Debts.As a percentage of revenue, provision for bad
debts decreased to 8.5% for 2000 from 14.1% for 1999. In the aggregate,
provision for bad debts decreased 30.2% from approximately $6.4 million in 1999
to approximately $4.5 million in 2000. The Company monitors the collection
quality of its accounts receivable through analytical review of aging
categories by payor group and collections performance. The Company provides an
amount on a monthly basis for estimated future bad debts on current period
revenues. In addition, from time to time, management makes an
additional provision in respect of specific events. During
the second quarter of 1999, the Company made an
additional provision of $3.9 million in respect of significantly
aged segments of accounts receivable principally related to certain
managed care and payor related programs,
as well as other balances
for which the likelihood of collection was doubtful or for which processing
costs could exceed the expected benefit. The Company has initiated
competitive marketing programs from time to time and, beginning in
1997, had placed significant emphasis on managed care payors in an
effort to gain access to managed care contracts. Under one of these
programs, the Company accepted managed care business as an
out-of-network or non-contracted provider. Although the program
appeared to be successful in obtaining business, it ultimately proved to
be a higher collection risk than the other payor sources with which the Company
had prior experience. In addition, this program complicated the collections
process to an extent that the collection of other balances was
compromised, and the Company subsequently discontinued the program in
April 1999. The Company is unable to quantify the specific revenues
related to this program. There was no comparable additional provision made during 2000.

Research and Development.As a percentage of revenue, research and
development expenses decreased to 2.6% for 2000 from 3.5% for 1999. In the
aggregate, research and development costs decreased 14.9% from approximately
$1.6 million in 1999 to approximately $1.4 million in 2000. The decrease in
expenses was due primarily to the Companys focus on strategic projects that
have been judged to have the highest potential of being commercialized, which
has resulted in overall lower base research and development program costs.

Special Charges.In the fourth quarter of 2000, the Company recognized
special charges of approximately $10.3 million related to a tentative
settlement with the United States Department of Justice (DOJ) concerning its
investigation into the Companys billing practices as a participant in various
federal and state insurance programs for the period 1992 through 1998. The
special charges represent a contemplated refund of $9.0 million, in addition to
related legal fees and other costs of approximately $1.3 million.

During the second quarter of 1999, the Company recognized special charges
related to the launching of an information systems initiative to increase
productivity, decrease costs and more efficiently collect billings. As a
result of this new focus for information systems, the Company restructured its
information systems function and terminated certain existing systems and
internal software development projects, resulting in approximately $2.9 million
in asset write-offs and approximately $226,000 in severance and outplacement
costs. Additionally, the Company settled claims with two former clients of the
Companys former Urology Support Services (USS) business, which the Company
exited in late 1998. These settlements totaled approximately $348,000 in
excess of amounts that had been accrued in 1998. The aggregate charges for
these two items totaled approximately $3.5 million for 1999. The following
table sets forth the effects of the special charges on UroCors operating
income for 1999 and 2000.

|                                                   |  |                   |            |   |                   |   |            |  
|-------------------------------------------------- |  | ----------------- | ---------- | - | ----------------- | - | ---------- | -
|                                                   |  | Year Ended        |            |   | Year Ended        |  
|                                                   |  | December 31, 1999 |            |   | December 31, 2000 |  
|                                                   |  |                   |            |   |                   |  
|Operating loss, as reported                        |  | $                 | (7,273,684 | ) |                   | $ | (6,653,815 | )
|                                                  
|                                                  
|                                                  
|                                                  
|Operating income (loss), excluding special charges |  |                   | (3,805,740 | ) |                   |   | 3,636,120  |  

Other Income (Expense).Interest income, net of interest expense
decreased 21.2%, from approximately $852,000 in 1999 to approximately $671,000
in 2000. This decline was due principally to decreased marketable investments
compared to 1999, resulting from the use of such resources to fund the
acquisition of the manufacturer of the Companys ProstaSeed product, stock
repurchases and milestone payments for therapeutic products.

Net Income.The following table sets forth the effects of the 1999 and
2000 special charges on UroCors net income and earnings per share for 1999 and
2000.

|                                                             |  |                   |            |   |                   |   |            |  
|------------------------------------------------------------ |  | ----------------- | ---------- | - | ----------------- | - | ---------- | -
|                                                             |  | Year Ended        |            |   | Year Ended        |  
|                                                             |  | December 31, 1999 |            |   | December 31, 2000 |  
|                                                             |  |                   |            |   |                   |  
|Net loss, as reported                                        |  | $                 | (4,108,847 | ) |                   | $ | (4,819,591 | )
|                                                            
|                                                            
|                                                            
|                                                            
|Net income (loss), excluding special charges                 |  |                   | (1,889,363 | ) |                   |   | 2,672,588  |  
|                                                            
|                                                            
|                                                            
|                                                            
|Diluted loss per share, as reported                          |  |                   | (.41       | ) |                   |   | (.50       | )
|                                                            
|                                                            
|                                                            
|                                                            
|Diluted earnings (loss) per share, excluding special charges |  |                   | (.18       | ) |                   |   | .27        |  

The most significant contributor to the increase in the Companys adjusted
operating and net income from 1999 to 2000 set forth in the tables above was
the increase in diagnostic revenue as discussed in Revenue above.

4



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Income Taxes.Income tax benefit recorded in 1999 was approximately $2.3
million resulting in an effective 36% federal and state income tax rate.
Income tax benefit recorded for 2000 was approximately $1.2 million based upon
an effective 36.6% federal and state income tax rate, offset by a reserve taken
on a portion of the net operating loss carryforwards of 18% for a net effective
rate of 19%.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Revenue.Revenue decreased 4.4%, from approximately $47.6 million in 1998
to approximately $45.5 million in 1999.

Diagnostic services revenue increased 4.1% for 1999 resulting from 7.2%
increase in case volume and a 2.9% decrease in overall average unit price. The
main contributor to the decrease in overall average unit price was the higher
volume growth for lower priced products, including stones and microbiology,
than in most of the Companys higher priced products. The diagnostics case
volume rate of increase decreased compared to prior years primarily the result
of the elimination of certain managed care related marketing programs and
related collection efforts that resulted in the loss of some clients and
decreased product usage from other clients. The Companys client base at the
end of 1999 was approximately 2,650 urologist of which 47% used two or more
products compared to 2,640 urologists at the end of 1998 of which 51% used two
or more products.

Therapeutics product revenue decreased 57.7% from approximately $6.0
million for 1998 to approximately $2.5 million for 1999 principally due to a
restructuring effective January 1, 1999, of the compensation terms of the
related co-promotion agreement to which such 1998 and 1999 revenues were
attributable. Therapeutic product co-promotion revenue in 1999 included an
early termination fee of $500,000 which became payable before March 2000 by the
manufacturer pursuant to the terms of the co-promotion agreement. Payment of
the fee was triggered by the manufacturers delivery of notice in September
1999 of termination, without cause, of the agreement, effective December 31,
1999.

Direct Cost of Services and Products.    As a percentage of revenue, direct
cost of products and services increased to 41.0% for 1999 from 40.5% for 1998.
In the aggregate, direct costs of services and products decreased 4.4% from
approximately $19.3 million in 1998 to approximately $18.6 million in 1999.
Direct costs for 1998 included approximately $772,000 for non-recurring direct
costs associated with the USS business that the Company exited in late 1998.
As a percent of revenue, direct costs for 1998 excluding the direct cost
associated with USS would have been 38.8%. The increase in this percentage for
1999 compared to the adjusted 1998 period was the result of the decline in
therapeutics co-promotion revenue under the restructured terms of the
co-promotion agreement.

Selling, General and Administrative Expenses.    As a percentage of revenue,
selling, general and administrative expenses increased to 49.8% for 1999 from
approximately 40.5% in 1998. In the aggregate, selling, general and
administrative expenses increased 17.3%, from approximately $19.3 million for
1998 to approximately $22.6 million in 1999. Selling, general and
administrative expenses in 1998 included approximately $526,000 for
non-recurring costs associated with the USS business that the Company exited in
late 1998. The increase in selling, general administrative expenses was due
principally to increased management personnel, and depreciation costs related
to information services and billing efforts, increased convention and meeting
costs and the incurrence of over $1.0 million related to personnel, marketing
and information systems in anticipation of the upcoming launch of the Companys
ProstaSeed product.

Provision for Bad Debts.As a percentage of revenue, provision for bad
debts decreased to 14.1% for 1999 from 17.6% for 1998. In the aggregate,
provision for bad debts decreased 23.7% from approximately $8.4 million in 1998
to approximately $6.4 million in 1999. The Company monitors the collection
quality of its accounts receivable through analytical review of aging
categories by payor group and collections performance. The Company provides an
amount on a monthly basis for estimated future bad debts on current period
revenues. In addition, from time to time, management makes an
additional provision in respect of specific events.

During
the second quarter of 1999, the Company made an
additional provision of $3.9 million in respect of significantly aged segments
of accounts receivable principally related to certain managed care
and payor related programs, as well as other balances for which the
likelihood of collection
was doubtful or for which processing costs could exceed the expected
benefit. The Company has initiated competitive marketing programs
from time to time and, beginning in 1997, had placed significant
emphasis on managed care payors in an effort to gain access to
managed care contracts. Under one of these programs, the Company
accepted managed care business as an out-of-network or non-contracted
provider. Although the program appeared to be successful in obtaining
business, it ultimately proved to be a higher collection risk than the other
payor sources with which the Company had prior experience. In addition,
this program complicated the collections process to an extent that
the collection of other balances was compromised, and the Company
subsequently discontinued the program in April 1999. The Company is
unable to quantify the specific revenues related to this program.

5



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During the third quarter
of 1998, the Company commenced cost reduction initiatives, including steps to
implement systems and processing changes intended to improve billing procedures
and related collection results. In connection with these initiatives,
the Company evaluated its billing and
collection functions and decided to reduce staffing and focus on balances that
had the best probability of collection. The Company also engaged
outside consultants with healthcare experience to assist management
in identifying the source of issues and to advise the Company
regarding these restructuring decisions. Management determined that the Company's accounts
receivable function lacked the technical knowledge and leadership
required for a fast growing organization and that the Company's
information systems were limited in meeting management information
requirements, leading to difficulties in achieving desired collection
goals. Additionally, the assessment of the Company's accounts receivable function
indicated that the department would have to grow significantly in order to work
through the complicated collections of the older receivables while also
implementing stronger structure and processes for efficient collection of
ongoing billings. Management therefore decided that it would be more
cost-effective to downsize the function, and to provide better tools, better
management and company-wide cooperation towards the effort of collections and to
forego the expenditure of any more time and expense on the significantly aged
balances that the Company decided to write off. These cost-reduction initiatives
and related events reduced collection costs and resulted in a $4.7 million
additional provision in the third quarter of 1998 on significantly aged balances
for which continued pursuit of collections was deemed too costly.

Subsequently, the Company made staffing changes including
appointment of a new director of accounts receivable in February 1999
and the hiring of a new chief financial officer in April 1999. The
Company thereafter established new staffing levels which were
targeted to reduce overall processing costs by at least 20%, in
addition to significant changes to the Company's daily operational
approach towards collections. The Company reorganized its receivables department and
implemented a payor-oriented approach rather than a functional
approach towards collections. As part of this reorganization, the
Company established objectives regarding days sales outstanding,
departmental costs as a percentage of revenues and provision for bad
debts. These objectives, as a whole, have been met since
approximately mid-1999. Also, in 1999, the Company completed its
evaluation of a new laboratory information system intended to support
continued future growth. In January 2000, the Company executed a
contract with a software company that specializes in laboratory
industry applications and expects to implement various components of
the application in late 2001 or early 2002.

Research and Development.As a percentage of revenue, research and
development expenses decreased to 3.5% for 1999 from 4.1% for 1998. In the
aggregate, research and development costs decreased 17.6% from approximately
$2.0 million in 1998 to approximately $1.6 million in 1999. The decrease in
expenses was due primarily to elimination of non-strategic projects in the
third quarter 1998 resulting in overall lower base research and development
program costs.

Special Charges.During the second quarter of 1999, the Company
recognized special charges related to the launching of an information systems
initiative to increase productivity, decrease costs and more efficiently
collect billings. As a result of this new operation focus for information
systems, the Company restructured its information systems function and
terminated certain existing systems and internal software development projects,
resulting in approximately $2.9 million in asset write-offs and approximately
$226,000 in severance and outplacement costs. Additionally, the Company
settled claims with two former clients of the USS business, which the Company
exited in late 1998. These settlements totaled approximately $348,000 in
excess of amounts that had been accrued in 1998. The aggregate charges for
these two items totaled approximately $3.5 million for 1999. Aggregate special
charges for 1998 were approximately $3.5 million, including approximately $2.2
million in exit costs related to USS and approximately $1.3 million in
non-strategic program asset write-offs, severance and other restructuring
costs. The following table sets forth the effects of the 1998 and 1999 special
charges and the 1998 operating losses of USS on UroCors operating income for
the 1998 and 1999.

|                                                                   |  |                   |            |   |                   |   |            |  
|------------------------------------------------------------------ |  | ----------------- | ---------- | - | ----------------- | - | ---------- | -
|                                                                   |  | Year Ended        |            |   | Year Ended        |  
|                                                                   |  | December 31, 1998 |            |   | December 31, 1999 |  
|                                                                   |  |                   |            |   |                   |  
|Operating loss, as reported                                        |  | $                 | (4,814,546 | ) |                   | $ | (7,273,684 | )
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Operating loss, excluding special charges and USS operating losses |  |                   | (179,843   | ) |                   |   | (3,805,740 | )

Other Income (Expense).Interest income net of interest expense decreased
28.6%, from approximately $1.2 million in 1998 to approximately $852,000 in
1999. This decline was due principally to decreased cash, cash equivalents and
investments compared to 1998, resulting from the use of such resources to fund
stock repurchases and capital expenditures. Other expenses of approximately
$356,000 (the 1998 Non-recurring Expenses) was primarily due to non-recurring
charges for professional fees related to implementing the Companys
stockholders rights plan and review of an unsolicited purported acquisition
offer in the third quarter of 1998.

Net Income.The following table sets forth the effects of the 1998 and
1999 special charges, the operating losses of USS in 1998 and the 1998
Non-recurring Expenses on UroCors net income and earnings per share for 1998
and 1999.

|                                                                                                      |  |                   |            |   |                   |   |            |  
|----------------------------------------------------------------------------------------------------- |  | ----------------- | ---------- | - | ----------------- | - | ---------- | -
|                                                                                                      |  | Year Ended        |            |   | Year Ended        |  
|                                                                                                      |  | December 31, 1998 |            |   | December 31, 1999 |  
|                                                                                                      |  |                   |            |   |                   |  
|Net loss, as reported                                                                                 |  | $                 | (2,476,359 | ) |                   | $ | (4,108,847 | )
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Net income (loss), excluding special charges, USS operating losses
and other expenses                 |  |                   | 617,766    |   |                   |   | (1,889,363 | )
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Diluted loss per share, as reported                                                                   |  |                   | (.24       | ) |                   |   | (.41       | )
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Diluted earnings (loss) per share, excluding special charges, USS
operating losses and other expenses |  |                   | .06        |   |                   |   | (.18       | )

The most significant contributor to the decline in the adjusted operating and
net income figures from 1998 to 1999 set forth in the tables above was the
decrease in therapeutic revenue as further discussed in Revenue above.

6



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Income Taxes.Income tax benefit recorded in 1998 was approximately $1.5
million resulting in an effective 38% federal and state income tax rate.
Income tax benefit recorded for 1999 was approximately $2.3 million based upon
an effective 36% federal and state income tax rate.

Quarterly Results of Operations

The following table presents the Companys results of operations for the
last 12 calendar quarters. This data is unaudited and includes, in the opinion
of the Companys management, all adjustments necessary to present fairly the
data in accordance with generally accepted accounting principles. Such
quarterly results are not necessarily indicative of future results of
operations.

The Companys quarterly operating results are affected by a wide variety
of factors, many of which are outside the Companys control, that could
materially and adversely affect revenue, operating expenses and income. These
factors include the volume and timing of cases received, seasonality related to
the timing of patient visits to the urologists office as affected by weather
and insurance deductible status, competitive pricing pressures, availability
and cost of diagnostic supplies, changes in the mix of products sold, the
timing and results of accounts receivable collections and write-offs, the
timing and costs of new product and technology introductions by the Company or
its competitors and retention and expansion of the Companys sales force.

The Companys results of operations for the third quarter of 1998 include
special charges of $2.2 million related to USS exit costs and $1.3 million
related to non-strategic program asset write-offs and other restructuring costs
including severance costs for workforce reduction. Results for the second
quarter of 1999 include special charges of $2.9 million related to information
processing initiatives and approximately $226,000 severance and outplacement
costs and $348,000 related to settlements with former USS clients. Results for
the fourth quarter of 2000 include special charges of $9.0 million related to
the tentative settlement of the DOJ investigation and related legal and other
costs of $1.3 million.

|                                  |                                              |   |                                  |       |  |      |        |       |      |   |        |       |  |   |        |       |  |    |        |       |    |   |        |       |  |   |        |       |  |    |        |       |    |   |        |       |  |   |        |       |  |   |        |       |  |   |        |        | 
|--------------------------------- | -------------------------------------------- | - | -------------------------------- | ----- |  | ---- | ------ | ----- | ---- | - | ------ | ----- |  | - | ------ | ----- |  | -- | ------ | ----- | -- | - | ------ | ----- |  | - | ------ | ----- |  | -- | ------ | ----- | -- | - | ------ | ----- |  | - | ------ | ----- |  | - | ------ | ----- |  | - | ------ | ------ | 
|                                  |                                              |   | Dollars in Thousands (unaudited) |      
|                                  |                                              |   |                                  |      
|                                  |                                              |   | 1998                             |       |  | 1999 |        |       | 2000 |  
|                                  |                                              |   |                                  |       |  |      |        |       |      |  
|                                  |                                              |   | Q1                               |       |  | Q2   |        |       | Q3   |   |        | Q4    |  |   | Q1     |       |  | Q2 |        |       | Q3 |   |        | Q4    |  |   | Q1     |       |  | Q2 |        |       | Q3 |   |        | Q4    | 
|                                  |                                              |   |                                  |       |  |      |        |       |      |   |        |       |  |   |        |       |  |    |        |       |    |   |        |       |  |   |        |       |  |    |        |       |    |   |        |       | 
|Revenue                           |                                              | $ | 10,614                           |       |  | $    | 11,264 |       |      | $ | 11,802 |       |  | $ | 13,926 |       |  | $  | 12,277 |       |    | $ | 11,295 |       |  | $ | 11,011 |       |  | $  | 10,925 |       |    | $ | 12,041 |       |  | $ | 12,320 |       |  | $ | 13,028 |       |  | $ | 15,233 |       
|                                 
|                                 
|                                 
|                                 
|Operating Expenses:               |                                              |   |                                  |       |  |      |        |       |      |   |        |       |  |   |        |       |  |    |        |       |    |   |        |       |  |   |        |       |  |    |        |       |    |   |        |       |  |   |        |       |  |   |        |       |  |   |        |       
|                                 
|                                 
|                                 
|                                 
|                                  | Direct costs of services and
products        |   |                                  | 4,436 |  |      |        | 4,951 |      |   |        | 5,045 |  |   |        | 4,831 |  |    |        | 4,796 |    |   |        | 4,899 |  |   |        | 4,531 |  |    |        | 4,423 |    |   |        | 4,378 |  |   |        | 4,655 |  |   |        | 5,281 |  |   |        | 5,512  | 
|                                 
|                                 
|                                 
|                                 
|                                  | Selling, general and
administrative expenses |   |                                  | 4,575 |  |      |        | 4,445 |      |   |        | 4,954 |  |   |        | 5,316 |  |    |        | 5,001 |    |   |        | 6,025 |  |   |        | 5,497 |  |    |        | 6,113 |    |   |        | 5,722 |  |   |        | 5,689 |  |   |        | 5,406 |  |   |        | 6,493  | 
|                                 
|                                 
|                                 
|                                 
|                                  | Provision for bad debts                      |   |                                  | 606   |  |      |        | 956   |      |   |        | 5,304 |  |   |        | 1,543 |  |    |        | 832   |    |   |        | 4,687 |  |   |        | 488   |  |    |        | 412   |    |   |        | 1,034 |  |   |        | 984   |  |   |        | 1,029 |  |   |        | 1,432  | 
|                                 
|                                 
|                                 
|                                 
|                                  | Research and development                     |   |                                  | 508   |  |      |        | 499   |      |   |        | 531   |  |   |        | 414   |  |    |        | 378   |    |   |        | 430   |  |   |        | 444   |  |    |        | 358   |    |   |        | 399   |  |   |        | 387   |  |   |        | 290   |  |   |        | 294    | 
|                                 
|                                 
|                                 
|                                 
|                                  | Special charges                              |   |                                  |      |  |      |        |      |      |   |        | 3,506 |  |   |        |      |  |    |        |      |    |   |        | 3,468 |  |   |        |      |  |    |        |      |    |   |        |      |  |   |        |      |  |   |        |      |  |   |        | 10,290 | 
|                                  |                                              |   |                                  |       |  |      |        |       |      |   |        |       |  |   |        |       |  |    |        |       |    |   |        |       |  |   |        |       |  |    |        |       |    |   |        |      
|Income (loss) from operations     |                                              |   | 489                              |       |  |      | 413    |       |      |   | (7,538 | )     |  |   | 1,822  |       |  |    | 1,270  |       |    |   | (8,214 | )     |  |   | 51     |       |  |    | (381   | )     |    |   | 508    |       |  |   | 605    |       |  |   | 1,022  |       |  |   | (8,788 | )     
|                                 
|                                 
|                                 
|                                 
|Other income (expense)            |                                              |   | 336                              |       |  |      | 297    |       |      |   | (67    | )     |  |   | 254    |       |  |    | 256    |       |    |   | 187    |       |  |   | 188    |       |  |    | 223    |       |    |   | 147    |       |  |   | 160    |       |  |   | 148    |       |  |   | 219    |       
|                                  |                                              |   |                                  |       |  |      |        |       |      |   |        |       |  |   |        |       |  |    |        |       |    |   |        |       |  |   |        |       |  |    |        |       |    |   |        |      
|Income (loss) before income taxes |                                              |   | 825                              |       |  |      | 710    |       |      |   | (7,605 | )     |  |   | 2,076  |       |  |    | 1,526  |       |    |   | (8,027 | )     |  |   | 239    |       |  |    | (158   | )     |    |   | 655    |       |  |   | 765    |       |  |   | 1,170  |       |  |   | (8,569 | )     
|                                 
|                                 
|                                 
|                                 
|Income tax benefit (expense)      |                                              |   | (313                             | )     |  |      | (270   | )     |      |   | 2,884  |       |  |   | (783   | )     |  |    | (581   | )     |    |   | 2,831  |       |  |   | (85    | )     |  |    | 146    |       |    |   | (249   | )     |  |   | (306   | )     |  |   | (478   | )     |  |   | 2,193  |       
|                                  |                                              |   |                                  |       |  |      |        |       |      |   |        |       |  |   |        |       |  |    |        |       |    |   |        |       |  |   |        |       |  |    |        |       |    |   |        |      
|Net income (loss)                 |                                              | $ | 512                              |       |  | $    | 440    |       |      | $ | (4,721 | )     |  | $ | 1,293  |       |  | $  | 945    |       |    | $ | (5,196 | )     |  | $ | 154    |       |  | $  | (12    | )     |    | $ | 406    |       |  | $ | 459    |       |  | $ | 692    |       |  | $ | (6,376 | )     
|                                  |                                              |   |                                  |       |  |      |        |       |      |   |        |       |  |   |        |       |  |    |        |       |    |   |        |       |  |   |        |       |  |    |        |       |    |   |        |      
|Basic earnings per
share          |                                              | $ | .05                              |       |  | $    | .04    |       |      | $ | (.45   | )     |  | $ | .12    |       |  | $  | .09    |       |    | $ | (.52   | )     |  | $ | .02    |       |  | $  | .00    |       |    | $ | .04    |       |  | $ | .05    |       |  | $ | .07    |       |  | $ | (.65   | )     
|                                  |                                              |   |                                  |       |  |      |        |       |      |   |        |       |  |   |        |       |  |    |        |       |    |   |        |       |  |   |        |       |  |    |        |       |    |   |        |      
|Diluted earnings
per share        |                                              | $ | .05                              |       |  | $    | .04    |       |      | $ | (.45   | )     |  | $ | .12    |       |  | $  | .09    |       |    | $ | (.52   | )     |  | $ | .02    |       |  | $  | .00    |       |    | $ | .04    |       |  | $ | .05    |       |  | $ | .07    |       |  | $ | (.65   | )     
|                                  |                                              |   |                                  |       |  |      |        |       |      |   |        |       |  |   |        |       |  |    |        |       |    |   |        |       |  |   |        |       |  |    |        |       |    |   |        |      

7



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##### Table of Contents



Liquidity and Capital Resources

As of December 31, 2000, cash, cash equivalents and marketable investments
totaled approximately $12.5 million and the Companys working capital was
approximately $13.2 million. As of December 31, 2000, the components of cash,
cash equivalents and marketable investments were cash and cash equivalents of
approximately $11.0 million, short-term marketable investments of approximately
$488,000 and long-term marketable investments of approximately $1.0 million.
Such marketable investments consisted principally of high-grade, fixed income
securities, with a maturity of less than two years.

Accounts receivable, net of allowance for doubtful accounts, totaled
approximately $12.5 million at December 31, 2000, an increase of approximately
$1.5 million from December 31, 1999, or 13.6%. This increase was principally
attributable to increased revenue. At December 31, 2000, the Companys average
number of days sales in net diagnostics receivables was approximately 77
compared to approximately 90 at December 31, 1999.

Virtually all of the Companys diagnostic services are rendered on a
fee-for-service basis. Accordingly, the Company assumes the financial risk
related to collection, including potential inability to collect accounts, long
collection cycles for accounts receivable, difficulties in gathering complete
and accurate billing information and delays attendant to reimbursement by
third-party payors, such as governmental programs, private insurance plans and
managed care organizations. The Company monitors the collection quality of its
accounts receivable through analytical review of aging categories by payor
group and collections performance. In the second quarter of 1999, the Company
recorded an additional provision for bad debts of $3.9 million to increase the
allowance for doubtful accounts as a result of the termination of certain
managed care related marketing programs and identification of significantly
aged segments of its accounts receivable for which the likelihood of
collectibility was doubtful. In the third quarter of 1998, the Company
recorded an additional provision for bad debts of $4.7 million to increase the
allowance for doubtful accounts in respect of certain accounts for which the
Company determined that the cost of additional collection efforts would exceed
the expected collections. While the Company maintains what it believes to be
an adequate allowance for doubtful accounts, there can be no assurances that
the Companys ongoing assessment of accounts receivable will not result in the
need for additional provision for bad debts. Such additional provision could
have an adverse effect on the Companys financial position and results of
operations.

Operating activities provided net cash of approximately $7.5 million in
2000 compared to approximately $4.9 million for 1999. The net cash provided by
operating activities in 2000 was primarily the result of the net loss of
approximately $4.8 million and the related deferred tax benefit of
approximately $998,000, an increase in accounts receivable of approximately
$1.4 million resulting from increased revenue, more than offset by an increase
in accrued liabilities of $10.9 million resulting from the accrual of $10.3
million of special charges in the fourth quarter, depreciation and amortization
of $3.0 million and an increase in accrued compensation of approximately
$455,000.

Net cash used in investing activities for 2000 was approximately $2.4
million and consisted primarily of capital expenditures of approximately $3.6
million, milestone payments due upon FDA clearance of a therapeutic product of
approximately $1.3 million, an increase in other assets of approximately $1.0
million, payments related to the acquisition of the manufacturer of the
Companys ProstaSeed product of $650,000, and an investment in a distributor of
the Companys ProstaSeed product, net of the Companys 2000 equity interest, of
$215,000, offset by maturities of short-term marketable investments of
approximately $2.6 million and maturities of long-term marketable investments
of approximately $1.7 million.

The Companys capital expenditures of approximately $3.6 million in 2000
were primarily for leasehold improvements, furniture and fixtures and computer
equipment and software. Of the total amount, approximately $867,000 related to
internal software development costs related primarily to installation and
customization of third-party software. While future capital expenditures will
depend upon a number of factors, the level of expenditures is expected to be
comparable to current levels as the Company expands to deliver therapeutics and
information services and continues to enhance current diagnostic services and
operational capabilities. The Company intends to finance the majority of these
capital expenditures with existing cash and investment balances and possibly
debt.

8



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##### Table of Contents



In February 2001, the Company and the DOJ reached a tentative settlement
of the DOJ investigation into certain matters that subsequently was amended in
March 2001. Pursuant to the terms of the current tentative settlement
agreement between the Company and the DOJ, upon the consummation of execution
of the final settlement agreement and related matters, the Company will refund
Medicare and various state programs $9.0 million. In addition to any refund or
similar amount, the Company has incurred and expects to continue to incur
certain expenses relating to the investigation, including without limitation,
expenses incurred in connection with the indemnification of legal and other
fees and costs for current and past directors, officers and employees of the
Company. The Company intends to make theses payments from existing cash and
investment balances.

In December 1994, the Company obtained distribution rights to a
therapeutic product that received clearance by the FDA in February 2000 for
marketing in the United States. Prior to 2000, the Company paid a total of
$1.25 million for distribution rights in installments based on achievement of
certain milestones by the manufacturer. The Company made additional milestone
payments totaling $1.25 during 2000 after the product received clearance by the
FDA for marketing in the United States. In February 2001, the Company and the
manufacturer of the product terminated the distribution agreement; in
connection therewith, the manufacturer paid the Company $7.0 million, which
resulted in a pretax profit in excess of $4.0 million that will be recorded in
the first quarter of 2001.

In October 1997, the Company entered into a co-promotion agreement with
the manufacturer of two therapeutic products. This agreement was revised
effective January 1, 1999, and for 1999, the Company recorded revenue of
approximately $2.5 million including a non-recurring fee of $500,000 as a
result of early termination under the agreement, as compared to approximately
$6.0 million revenue for 1998. In September 1999, the manufacturer sent the
Company a notice of termination without cause and terminated the agreement
effective December 31, 1999.

In March 2001, the Company entered into a collaborative agreement with a
manufacturer of therapeutic products giving it exclusive rights to distribute
one of the manufacturers products in the United States. Under the terms of
the agreement, UroCor will pay an initial $750,000 in 2001 and up to an
additional $2,275,000 in milestone payments in subsequent years during the
development and potential product launch of the product. As milestones are
achieved, the Company intends to make the additional payments from existing
cash and investment balances or debt.

The Company intends to pursue the acquisition, licensing or co-promotion
of new therapeutic products and to acquire diagnostic products or possibly
existing business. As such opportunities are identified, the Company intends
to make any related acquisition payments from existing cash and investment
balances or new debt.

In April 1999, the Companys Board of Directors authorized the repurchase
of up to $10 million of the Companys common stock. As of December 31, 2000,
the Company had repurchased approximately $7.6 million (or approximately 1.7
million shares) of its common stock. The Company intends to fund any
additional purchases using available cash and cash flow from operations, and
may elect to supplement its cash position with new debt.

At December 31, 2000, the Company had net operating loss carryforwards of
approximately $16.7 million available to reduce future taxable income after
considering certain annual limitations.

The Company believes that its existing capital resources will be
sufficient to provide the funds necessary to maintain its present level of
operations and implement its currently planned growth strategy. There may be
circumstances or new business opportunities, however, that would require
additional resources. In such event, the Company may be required to seek
additional financing, and there is no assurance that the Company would be able
to obtain such financing on a timely basis or on acceptable terms.

9



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##### Table of Contents






PART IV




ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|--- |  | ---------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | ----
|(a) |  | Documents included in this report:                                                                   |                                                                                                                                                                                                                |    
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  | 1.                                                                                                   | Financial Statements                                                                                                                                                                                           |     | Page
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  | Index to Financial Statements                                                                        |                                                                                                                                                                                                                | F-1
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  | Report of Independent Public Accountants                                                             |                                                                                                                                                                                                                | F-2
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  | Consolidated Balance Sheets as of December 31, 1999 and 2000                                         |                                                                                                                                                                                                                | F-3
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  | Consolidated Statements of Operations for the years ended December
31, 1998, 1999 and 2000           |                                                                                                                                                                                                                | F-4
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  | Consolidated Statements of Stockholders Equity for the years ended
December 31, 1998, 1999 and 2000 |                                                                                                                                                                                                                | F-5
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  | Consolidated Statements of Cash Flows for the years ended December
31, 1998, 1999 and 2000           |                                                                                                                                                                                                                | F-6
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  | Notes to the Consolidated Financial Statements                                                       |                                                                                                                                                                                                                | F-7
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  | 2.                                                                                                   | Financial Statement Schedules                                                                                                                                                                                  |     |     
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  | Report of Independent Public Accountants                                                             |                                                                                                                                                                                                                | S-1
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  | Schedule II  Valuation and Qualifying Accounts                                                      |                                                                                                                                                                                                                | S-2
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|(b) |  | Reports on Form 8-K:                                                                                 |                                                                                                                                                                                                                |    
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  | No reports on Form 8-K were filed during the quarter ended December
31, 2000.                        |                                                                                                                                                                                                                |    
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|(c) |  | Exhibits:                                                                                            |                                                                                                                                                                                                                |    
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  |                                                                                                      | Exhibits designated by the symbol  are filed with this
Amendment No. 1 to Form 10-K on Form 10-K/A.                                                                                                           |     |     
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  |                                                                                                      | Exhibits designated by the symbol * were filed with the Companys Annual
Report on Form 10-K filed April 2, 2001. All exhibits not so designated are
incorporated by reference to a prior filing as indicated. |     |     
|    |  |                                                                                                      |                                                                                                                                                                                                                |     |     
|    |  |                                                                                                      | Exhibits designated by the symbol  are management contracts
or compensatory plans or arrangements that are required to be
filed with this report pursuant to this Item 14.                                    |     |     

10



---



##### Table of Contents



UroCor undertakes to furnish to any stockholder so requesting a copy of
any of the following exhibits upon payment to the Company of the reasonable
costs incurred by Company in furnishing any such exhibit.

|            |  |                                                                                                                                                                                                                                                                                                                                 
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                     
|            |  |                                                                                                                                                                                                                                                                                                                                 
|3.1         |  | Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3.1 to the Registrants Form 10-Q for the
quarterly period ended September 30, 1998, filed with the
Commission on November 12, 1998).                                                                                                            
|            |  |                                                                                                                                                                                                                                                                                                                                 
|3.2         |  | Amended and Restated By-laws (incorporated by reference to
Exhibit 3.2 to the Registrants Registration Statement on Form
S-1 (Reg. No. 333-3182), filed with the Commission on April 3,
1996).                                                                                                                                 
|            |  |                                                                                                                                                                                                                                                                                                                                 
|4.1         |  | Rights Agreement dated as of August 17, 1998, between the Company
and American Stock Transfer & Trust Company, as Rights Agent
(incorporated by reference to Exhibit 4.1 to the Registrants
Current Report on Form 8-K, filed with the Commission on August
21, 1998).                                                         
|            |  |                                                                                                                                                                                                                                                                                                                                 
|4.2         |  | Form of Rights Certificate (incorporated by reference to Exhibit
4.3 to the Registrants Current Report on Form 8-K, filed with
the Commission on August 21, 1998).                                                                                                                                                             
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.1       |  | The UroCor, Inc. Second Amended and Restated 1992 Stock Option
Plan, as amended (incorporated by reference to Exhibit 4.4 to the
Registrants Registration Statement on Form S-8 (Reg. No.
333-58015), filed with the Commission on June 29, 1998).                                                                             
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.2        |  | Lease Agreement dated April 15, 1994, between Presbyterian Health
Foundation and UroCor, Inc. (incorporated by reference to the
Registrants Registration Statement on Form S-1 (Reg. No.
333-3182), filed with the Commission on April 3, 1996).                                                                               
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.3        |  | Amendment No. 1 to the Lease Agreement dated April 15, 1994,
between Presbyterian Health Foundation and UroCor, Inc.
(incorporated by reference to the Registrants Form 10-Q for the
quarterly period ended June 30, 1997, filed with the Commission
on August 11, 1997).                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.4        |  | Amendment No. 2 dated June 16, 1998, amending the Lease Agreement
between Presbyterian Health Foundation, as Landlord and UroCor,
Inc., as Tenant dated April 15, 1994 (incorporated by reference
to the Registrants Form 10-Q for the quarterly period ended
September 30, 1998, filed with the Commission November 12,
1998).
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.5        |  | Amendment No. 3 dated February 1, 1999, amending the Lease
Agreement between Presbyterian Health Foundation, as Landlord and
UroCor, Inc., as Tenant dated April 15, 1994 (incorporated by
reference to the Registrants Form 10-K for the period ended
December 31, 1998, filed with the Commission on March 31,
1999).        
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.6        |  | Amendment No. 4 dated September 28, 1999, amending the Lease
Agreement between Presbyterian Health Foundation, as Landlord and
UroCor, Inc., as Tenant dated April 15, 1994 (incorporated by
reference to the Registrants Form 10-K for the year ended
December 31, 1999, filed with the Commission on March 10,
2000).        
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.7       |  | Employment Agreement dated September 4, 1990, between Robert
Veltri and UroCor, Inc. (incorporated by reference to the
Registrants Registration Statement on Form S-1 (Reg. No.
333-3182), filed with the Commission on April 3, 1996).                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.8*      |  | Employment Agreement dated July 23, 1998, between Michael W.
George and UroCor, Inc. and amendment thereto dated January 8,
2001.                                                                                                                                                                                               
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.9       |  | Employment Agreement dated January 29, 1998 between Karl Nigg and
UroCor, Inc. (incorporated by reference to the Registrants Form
10-K for the period ended December 31, 1998, filed with the
Commission on March 31, 1999).                                                                                                   

11



---



##### Table of Contents



|            |  |                                                                                                                                                                                                                                                                                               
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                   
|            |  |                                                                                                                                                                                                                                                                                               
|10.10      |  | Employment Agreement dated March 15, 1999 between Bruce C. Hayden
and UroCor, Inc. (incorporated by reference to the Registrants
Form 10-Q for the quarterly period ended March 31, 1999, filed
with the Commission on May 17, 1999).                                                        
|            |  |                                                                                                                                                                                                                                                                                               
|10.11      |  | Employment Agreement dated December 17, 1999 between John L.
Armstrong, Jr. and UroCor, Inc. (incorporated by reference to the
Registrants Form 10-K for the year ended December 31, 1999,
filed with the Commission on March 10, 2000).                                                     
|            |  |                                                                                                                                                                                                                                                                                               
|10.12      |  | Form of Indemnity Agreement between UroCor, Inc. and each of the
individuals named in Schedule 10.1 thereto (incorporated by
reference to the Registrants Form 10-K for the year ended
December 31, 1999, filed with the Commission on March 10,
2000).                                      
|            |  |                                                                                                                                                                                                                                                                                               
|10.13*     |  | 2000 Management Incentive Compensation Plan.                                                                                                                                                                                                                                                  
|            |  |                                                                                                                                                                                                                                                                                               
|10.14       |  | Consulting Agreement dated effective October 26, 1999, and
Addendum to Agreement dated March 1, 2000 between William A.
Hagstrom and UroCor, Inc. (incorporated by reference to the
Registrants Form 10-K for the year ended December 31, 1999,
filed with the Commission on March 10, 2000).
|            |  |                                                                                                                                                                                                                                                                                               
|10.15       |  | Registration Rights Agreement dated June 2, 1995, among UroCor,
Inc. and the stockholders named therein (incorporated by
reference to the Registrants Registration Statement on Form S-1
(Reg. No. 333-3182), filed with the Commission on April 3,
1996).                                   
|            |  |                                                                                                                                                                                                                                                                                               
|10.16      |  | The UroCor, Inc. 1997 Non-Employee Director Stock Option Plan
(incorporated by reference to the Registrants Form 10-Q for the
quarterly period ended June 30, 1997, filed with the Commission
on August 11, 1997).                                                                           
|            |  |                                                                                                                                                                                                                                                                                               
|10.17      |  | The UroCor, Inc. 1997 Employee Stock Purchase Plan (incorporated
by reference to Exhibit 4.4 to the Registrants Registration
Statement on Form S-8 (Reg. No. 333-58017), filed with the
Commission on June 29, 1998).                                                                        
|            |  |                                                                                                                                                                                                                                                                                               
|10.18      |  | UroCor, Inc. Deferred Compensation Plan (incorporated by
reference to the Registrants Form 10-Q for the quarterly period
ended March 31, 1999, filed with the Commission on May 17,
1999).                                                                                                   
|            |  |                                                                                                                                                                                                                                                                                               
|10.19      |  | Form of Change In Control Agreement between UroCor, Inc. and each
of the individuals named and with the terms listed on Schedule
10.1 thereto (incorporated by reference to the Registrants Form
10-K for the year ended December 31, 1999, filed with the
Commission on March 10, 2000).    
|            |  |                                                                                                                                                                                                                                                                                               
|23.1*      |  | Consent of Arthur Andersen LLP.                                                                                                                                                                                                                                                               

12



---



##### Table of Contents



FINANCIAL STATEMENTS

|                                                                                                     |  |  |     | 
|---------------------------------------------------------------------------------------------------- |  |  | --- | 
|Report of Independent Public Accountants                                                             |  |  | F-2 | 
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|Consolidated Balance Sheets as of December 31, 1999 and 2000                                         |  |  | F-3 | 
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|Consolidated Statements of Operations for the years ended December 31, 1998, 1999 and 2000           |  |  | F-4 | 
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|Consolidated Statements of Stockholders Equity for the years ended December 31, 1998, 1999 and 2000 |  |  | F-5 | 
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1999 and 2000           |  |  | F-6 | 
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|Notes to the Consolidated Financial Statements                                                       |  |  | F-7 | 

F-1



---



##### Table of Contents



Report of Independent Public Accountants

To the Board of Directors and Shareholders
of UroCor, Inc.:

We have audited the accompanying consolidated balance sheets of UroCor, Inc. (a
Delaware corporation) as of December 31, 1999 and 2000, and the related
consolidated statements of operations, stockholders equity and cash flows for
each of the three years in the period ended December 31, 2000. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of UroCor, Inc. as of
December 31, 1999 and 2000, and the results of its consolidated operations and
their cash flows for each of the three years in the period ended December 31,
2000 in conformity with accounting principles generally accepted in the United
States.



| |                    
| | -------------------
| | ARTHUR ANDERSEN LLP

Oklahoma City, Oklahoma,
March 30, 2001

F-2



---



##### Table of Contents



UROCOR, INC.CONSOLIDATED BALANCE SHEETS

|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |              |            |             |              |            |  | 
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----------- | ---------- | ------------ | ---------- | ----------- | ------------ | ---------- |  | 
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            | December 31, |            |             | December 31, |           
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            | 1999         |            |             | 2000         |           
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |              |            |             |              |           
|ASSETS                                                        |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |              |            |            
|                                                             
|                                                             
|                                                             
|                                                             
|CURRENT ASSETS:                                               |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |              |            |            
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Cash and cash equivalents                                                                                |                                            | $           | 5,259,218  |              |            | $           | 11,006,568   |           
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Short-term marketable investments                                                                        |                                            |             | 3,107,392  |              |            |             | 488,587      |           
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Accounts receivable, net of allowance for doubtful accounts of
$5,177,414 in 1999 and $4,130,275 in 2000 |                                            |             | 11,032,693 |              |            |             | 12,476,454   |           
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Prepaid expenses                                                                                         |                                            |             | 824,164    |              |            |             | 565,167      |           
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Laboratory supplies, at average cost                                                                     |                                            |             | 616,087    |              |            |             | 473,205      |           
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Inventory                                                                                                |                                            |             | 210,013    |              |            |             | 309,308      |           
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Deferred tax asset, net                                                                                  |                                            |             | 3,817,722  |              |            |             | 2,286,619    |           
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Other current assets                                                                                     |                                            |             | 782,962    |              |            |             | 760,726      |           
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |             
|                                                              |                                                                                                                                                                                           |                                                                                                          | Total current assets                       |             |            | 25,650,251   |            |             |              | 28,366,634 | 
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |             
|LONG-TERM MARKETABLE INVESTMENTS                              |                                                                                                                                                                                           |                                                                                                          | 2,687,292                                  |             |            |              | 996,261    |            
|                                                             
|                                                             
|                                                             
|                                                             
|PROPERTY AND EQUIPMENT, net                                   |                                                                                                                                                                                           |                                                                                                          | 8,868,120                                  |             |            |              | 10,037,696 |            
|                                                             
|                                                             
|                                                             
|                                                             
|NON-CURRENT DEFERRED TAX ASSET, net                           |                                                                                                                                                                                           |                                                                                                          | 1,842,018                                  |             |            |              | 4,371,456  |            
|                                                             
|                                                             
|                                                             
|                                                             
|GOODWILL, net of accumulated amortization of $155,224 in 2000 |                                                                                                                                                                                           |                                                                                                          |                                           |             |            |              | 3,859,336  |            
|                                                             
|                                                             
|                                                             
|                                                             
|INTANGIBLE AND OTHER ASSETS, net                              |                                                                                                                                                                                           |                                                                                                          | 3,114,094                                  |             |            |              | 3,697,979  |            
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |             
|                                                              |                                                                                                                                                                                           |                                                                                                          | Total assets                               |             | $          | 42,161,775   |            |             | $            | 51,329,362 | 
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |             
|LIABILITIES AND STOCKHOLDERS EQUITY                          |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |              |            |            
|                                                             
|                                                             
|                                                             
|                                                             
|CURRENT LIABILITIES:                                          |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |              |            |            
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Accounts payable                                                                                         |                                            | $           | 3,457,851  |              |            | $           | 3,257,018    |           
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Accrued compensation                                                                                     |                                            |             | 401,657    |              |            |             | 856,648      |           
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Current installments of obligations under capital leases                                                 |                                            |             | 8,454      |              |            |             | 249,679      |           
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Accrued special charges                                                                                  |                                            |             |           |              |            |             | 9,892,432    |           
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                                                                                                           | Other accrued liabilities                                                                                |                                            |             | 162,768    |              |            |             | 728,516      |           
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |             
|                                                              |                                                                                                                                                                                           |                                                                                                          | Total current liabilities                  |             |            | 4,030,730    |            |             |              | 14,984,293 | 
|                                                             
|                                                             
|                                                             
|                                                             
|DEFERRED COMPENSATION                                         |                                                                                                                                                                                           |                                                                                                          | 256,810                                    |             |            |              | 469,855    |            
|                                                             
|                                                             
|                                                             
|                                                             
|OBLIGATIONS UNDER CAPITAL LEASES, net of current installments |                                                                                                                                                                                           |                                                                                                          |                                           |             |            |              | 594,280    |            
|                                                             
|                                                             
|                                                             
|                                                             
|NOTE PAYABLE                                                  |                                                                                                                                                                                           |                                                                                                          |                                           |             |            |              | 175,000    |            
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |             
|                                                              |                                                                                                                                                                                           |                                                                                                          | Total liabilities                          |             |            | 4,287,540    |            |             |              | 16,223,428 | 
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |             
|COMMITMENTS (Notes 5 and 6)                                   |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |              |            |            
|                                                             
|                                                             
|                                                             
|                                                             
|STOCKHOLDERS EQUITY:                                         |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |              |            |            
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Convertible preferred stock, $.01 par value  authorized 6,000,000 shares at
December 31, 1999 and 2000; issued in series; no shares outstanding at
December 31, 1999 and 2000            |                                                                                                          |                                            |            |            |              |            |            |             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Common stock, $.01 par value, authorized 20,000,000 shares at December 31, 1999
and 2000; 10,769,102 shares issued at December 31, 1999 and 11,030,131
shares issued at December 31, 2000 |                                                                                                          |                                            | 107,691     |            |              |            | 110,301     |             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Additional paid-in capital                                                                                                                                                                |                                                                                                          |                                            | 59,265,256  |            |              |            | 59,536,736  |             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Common stock held in treasury at cost, 1,576,266 shares at December 31, 1999
and 1,194,604 shares at December 31, 2000                                                                    |                                                                                                          |                                            | (7,174,508  | )          |              |            | (5,397,308  | )           
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Accumulated deficit                                                                                                                                                                       |                                                                                                          |                                            | (14,324,204 | )          |              |            | (19,143,795 | )           
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |             
|                                                              |                                                                                                                                                                                           |                                                                                                          | Total stockholders equity                 |             |            | 37,874,235   |            |             |              | 35,105,934 | 
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |             
|                                                              |                                                                                                                                                                                           |                                                                                                          | Total liabilities and stockholders equity |             | $          | 42,161,775   |            |             | $            | 51,329,362 | 
|                                                              |                                                                                                                                                                                           |                                                                                                          |                                            |             |            |             

The accompanying notes are an integral part of these consolidated balance sheets.

F-3



---



##### Table of Contents



UROCOR, INC.CONSOLIDATED STATEMENTS OF OPERATIONS

|                             |                                                                  |                                              |                 |                          |            |                         |            |           |            |           |            |           |            |            |            | 
|---------------------------- | ---------------------------------------------------------------- | -------------------------------------------- | --------------- | ------------------------ | ---------- | ----------------------- | ---------- | --------- | ---------- | --------- | ---------- | --------- | ---------- | ---------- | ---------- | 
|                             |                                                                  |                                              |                 |                          |            | Year ended December 31, |           
|                             |                                                                  |                                              |                 |                          |            |                         |           
|                             |                                                                  |                                              |                 |                          |            | 1998                    |            |           | 1999       |           |            | 2000      |           
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |            |           |            |           |           
|REVENUE                      |                                                                  | $                                            | 47,606,143      |                          |            | $                       | 45,508,473 |           |            | $         | 52,621,765 |          
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |            |           |            |           |            |            |            | 
|OPERATING EXPENSES:          |                                                                  |                                              |                 |                          |            |                         |            |           |            |           |            |          
|                            
|                            
|                            
|                            
|                             |                                                                  | Direct cost of services and products         |                 |                          | 19,262,966 |                         |            |           | 18,649,714 |           |            |           | 19,825,859 |           
|                            
|                            
|                            
|                            
|                             |                                                                  | Selling, general and administrative expenses |                 |                          | 19,290,082 |                         |            |           | 22,636,494 |           |            |           | 23,311,172 |           
|                            
|                            
|                            
|                            
|                             |                                                                  | Provision for bad debts                      |                 |                          | 8,409,477  |                         |            |           | 6,418,366  |           |            |           | 4,478,931  |           
|                            
|                            
|                            
|                            
|                             |                                                                  | Research and development                     |                 |                          | 1,952,558  |                         |            |           | 1,609,639  |           |            |           | 1,369,683  |           
|                            
|                            
|                            
|                            
|                             |                                                                  |                                              | Special charges |                          |            | 3,505,606               |            |           |            | 3,467,944 |            |           |            | 10,289,935 |           
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |           
|                             |                                                                  |                                              |                 | Total operating expenses |            |                         | 52,420,689 |           |            |           | 52,782,157 |           |            |            | 59,275,580 | 
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |           
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |            |           |            |           |            |            |            | 
|OPERATING LOSS               |                                                                  |                                              | (4,814,546      | )                        |            |                         | (7,273,684 | )         |            |           | (6,653,815 | )        
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |            |           |            |           |            |            |            | 
|OTHER INCOME (EXPENSE):      |                                                                  |                                              |                 |                          |            |                         |            |           |            |           |            |          
|                            
|                            
|                            
|                            
|                             |                                                                  | Interest, net                                |                 |                          | 1,176,238  |                         |            |           | 852,149    |           |            |           | 671,492    |           
|                            
|                            
|                            
|                            
|                             |                                                                  | Other                                        |                 |                          | (355,820   | )                       |            |           | 1,462      |           |            |           | 3,014      |           
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |           
|                             |                                                                  |                                              |                 | Total other income, net  |            |                         | 820,418    |           |            |           | 853,611    |           |            |            | 674,506    | 
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |           
|Net loss before income taxes |                                                                  |                                              | (3,994,128      | )                        |            |                         | (6,420,073 | )         |            |           | (5,979,309 | )        
|                            
|                            
|                            
|                            
|Income tax benefit           |                                                                  |                                              | 1,517,769       |                          |            |                         | 2,311,226  |           |            |           | 1,159,718  |          
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |           
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |            |           |            |           |            |            |            | 
|NET LOSS                     |                                                                  | $                                            | (2,476,359      | )                        |            | $                       | (4,108,847 | )         |            | $         | (4,819,591 | )        
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |           
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |            |           |            |           |            |            |            | 
|NET LOSS PER SHARE:          |                                                                  |                                              |                 |                          |            |                         |            |           |            |           |            |          
|                            
|                            
|                            
|                            
|Basic:                       |                                                                  |                                              |                 |                          |            |                         |            |           |            |           |            |          
|                            
|                            
|                            
|                            
|                             | Net Loss Per Common Share                                        |                                              | $               | (.24                     | )          |                         | $          | (.41      | )          |           | $          | (.50      | )         
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |           
|                             | Weighted Average Common and Common
Equivalent Shares Outstanding |                                              |                 | 10,402,281               |            |                         |            | 9,902,643 |            |           |            | 9,689,994 |           
|                             |                                                                  |                                              |                 |                          |            |                         |            |           |           

The accompanying notes are an integral part of these consolidated financial statements.

F-4



---



##### Table of Contents



UROCOR, INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

|                                              |                              |  |              |         |  |              |         |       |            |   |            |             |  |   |               |         |  |        |             |   |  |   |            |         | 
|--------------------------------------------- | ---------------------------- |  | ------------ | ------- |  | ------------ | ------- | ----- | ---------- | - | ---------- | ----------- |  | - | ------------- | ------- |  | ------ | ----------- | - |  | - | ---------- | ------- | 
|                                              |                              |  | Common Stock |         |  | Common Stock |         |       | Additional |   |            |             |  |   |               | Total   | 
|                                              |                              |  |              |         |  | Held in      |         |       | Paid-In    |   |            | Accumulated |  |   | Stockholders |        
|                                              |                              |  | Shares       |         |  | Par Value    |         |       | Treasury   |   |            | Capital     |  |   | Deficit       |         |  | Equity |            
|                                              |                              |  |              |         |  |              |         |       |            |   |            |             |  |   |               |         |  |        |            
|BALANCE AT
DECEMBER 31, 1997                  |                              |  | 10,345,616   |         |  | $            | 103,456 |       |            |   |           |             |  | $ | 58,390,646    |         |  | $      | (7,738,998  | ) |  | $ | 50,755,104 |        
|                                             
|                                             
|                                             
|                                             
|Stock Issuance -
Exercise of warrants         |                              |  | 50,945       |         |  |              | 509     |       |            |   |           |             |  |   | 190,831       |         |  |        |            |   |  |   | 191,340    |        
|                                             
|                                             
|                                             
|                                             
|                                              | Employee Stock
Purchase Plan |  |              | 33,658  |  |              |         | 337   |            |   |            |            |  |   |               | 192,955 |  |        |             |  |  |   |            | 193,292 | 
|                                             
|                                             
|                                             
|                                             
|                                              | Exercise of stock options    |  |              | 62,507  |  |              |         | 625   |            |   |            |            |  |   |               | 66,737  |  |        |             |  |  |   |            | 67,362  | 
|                                             
|                                             
|                                             
|                                             
|Stock Option -
Compensation Expense           |                              |  |              |         |  |              |         |       |            |   |            |             |  |   | 104,249       |         |  |        |             |   |  |   | 104,249    |        
|                                             
|                                             
|                                             
|                                             
|Net loss                                      |                              |  |             |         |  |              |        |       |            |   |           |             |  |   |              |         |  |        | (2,476,359  | ) |  |   | (2,476,359 | )      
|                                              |                              |  |              |         |  |              |         |       |            |   |            |             |  |   |               |         |  |       
|BALANCE AT
DECEMBER 31, 1998                  |                              |  | 10,492,726   |         |  |              | 104,927 |       |            |   |           |             |  |   | 58,945,418    |         |  |        | (10,215,357 | ) |  |   | 48,834,988 |        
|                                             
|                                             
|                                             
|                                             
|Stock Issuance -
Employee Stock Purchase Plan |                              |  | 30,147       |         |  |              | 302     |       |            |   |           |             |  |   | 116,243       |         |  |        |            |   |  |   | 116,545    |        
|                                             
|                                             
|                                             
|                                             
|                                              | Exercise of stock options    |  |              | 246,229 |  |              |         | 2,462 |            |   |            |            |  |   |               | 180,455 |  |        |             |  |  |   |            | 182,917 | 
|                                             
|                                             
|                                             
|                                             
|Stock Option -
Compensation Expense           |                              |  |             |         |  |              |        |       |            |   |           |             |  |   | 23,140        |         |  |        |            |   |  |   | 23,140     |        
|                                             
|                                             
|                                             
|                                             
|Repurchase of Common Stock                    |                              |  |              |         |  |              |         |       |            |   | (7,174,508 | )           |  |   |               |         |  |        |             |   |  |   | (7,174,508 | )      
|                                             
|                                             
|                                             
|                                             
|Net loss                                      |                              |  |             |         |  |              |        |       |            |   |           |             |  |   |              |         |  |        | (4,108,847  | ) |  |   | (4,108,847 | )      
|                                              |                              |  |              |         |  |              |         |       |            |   |            |             |  |   |               |         |  |       
|BALANCE AT
DECEMBER 31, 1999                  |                              |  | 10,769,102   |         |  | $            | 107,691 |       |            |   | (7,174,508 | )           |  | $ | 59,265,256    |         |  | $      | (14,324,204 | ) |  | $ | 37,874,235 |        
|                                             
|                                             
|                                             
|                                             
|Stock Issuance -
Exercise of stock warrants   |                              |  | 21,600       |         |  |              | 216     |       |            |   |           |             |  |   | 26,784        |         |  |        |             |   |  |   | 27,000     |        
|                                             
|                                             
|                                             
|                                             
|                                              | Employee Stock Purchase Plan |  |              | 29,061  |  |              |         | 291   |            |   |            |            |  |   |               | 109,733 |  |        |             |  |  |   |            | 110,024 | 
|                                             
|                                             
|                                             
|                                             
|                                              | Exercise of stock options    |  |              | 210,368 |  |              |         | 2,103 |            |   |            |            |  |   |               | 390,898 |  |        |             |  |  |   |            | 393,001 | 
|                                             
|                                             
|                                             
|                                             
|Stock Option -
Compensation Expense           |                              |  |             |         |  |              |        |       |            |   |           |             |  |   | 7,564         |         |  |        |            |   |  |   | 7,564      |        
|                                             
|                                             
|                                             
|                                             
|Repurchases of Common Stock                   |                              |  |             |         |  |              |        |       |            |   | (397,100   | )           |  |   |              |         |  |        |            |   |  |   | (397,100   | )      
|                                             
|                                             
|                                             
|                                             
|Treasury shares issued for
acquisition        |                              |  |              |         |  |              |         |       |            |   | 2,174,300  |             |  |   | (263,499      | )       |  |        |             |   |  |   | 1,910,801  |        
|                                             
|                                             
|                                             
|                                             
|Net loss                                      |                              |  |             |         |  |              |        |       |            |   |           |             |  |   |              |         |  |        | (4,819,591  | ) |  |   | (4,819,591 | )      
|                                              |                              |  |              |         |  |              |         |       |            |   |            |             |  |   |               |         |  |       
|BALANCE AT
DECEMBER 31, 2000                  |                              |  | 11,030,131   |         |  | $            | 110,301 |       |            | $ | (5,397,308 | )           |  | $ | 59,536,736    |         |  | $      | (19,143,795 | ) |  | $ | 35,105,934 |        
|                                              |                              |  |              |         |  |              |         |       |            |   |            |             |  |   |               |         |  |       

The accompanying notes are an integral part of these consolidated financial statements.

F-5



---



##### Table of Contents



UROCOR, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |           |            |            |            |           |            |           | 
|----------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | --------------------------------------------------- | --------------------------------------------------- | ---------- | ------------------------ | ---------- | ---------- | --------- | ---------- | ---------- | ---------- | --------- | ---------- | --------- | 
|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            | Years ended December 31, |           
|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |           
|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            | 1998                     |            |            | 1999      |            |            | 2000       |          
|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |           |            |            |            |          
|CASH FLOWS FROM OPERATING ACTIVITIES:                                   |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |           |            |            |           
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Net income (loss)                                                                                  |                                                                 | $                                                   | (2,476,359                                          | )          |                          | $          | (4,108,847 | )         |            | $          | (4,819,591 | )        
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities: |                                                                 |                                                     |                                                     |            |                          |            |            |           |            |            |            |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Depreciation and amortization                                                                      |                                                                 |                                                     | 2,604,075                                           |            |                          |            | 2,870,214  |           |            |            | 3,001,690  |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Deferred income tax benefit                                                                        |                                                                 |                                                     | (1,505,061                                          | )          |                          |            | (2,325,214 | )         |            |            | (998,335   | )        
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Stock option compensation expense                                                                  |                                                                 |                                                     | 104,249                                             |            |                          |            | 23,140     |           |            |            | 7,564      |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Deferred Compensation                                                                              |                                                                 |                                                     |                                                    |            |                          |            | 256,810    |           |            |            | 213,045    |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | (Gain) loss on disposition of equipment                                                            |                                                                 |                                                     |                                                    |            |                          |            | 4,539      |           |            |            | (71,111    | )        
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Loss on asset write downs                                                                          |                                                                 |                                                     | 2,020,204                                           |            |                          |            | 3,226,846  |           |            |            | 33,332     |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Changes in current assets and liabilities:                                                         |                                                                 |                                                     |                                                     |            |                          |            |            |           |            |            |            |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                                                                    |                                                                 | (Increase) decrease in accounts receivable          |                                                     |            | (2,333,600               | )          |            |           | 4,932,051  |            |            |           | (1,443,761 | )        
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                                                                    |                                                                 | Decrease in prepaid expense                         |                                                     |            | 42,256                   |            |            |           | 122,239    |            |            |           | 258,997    |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                                                                    |                                                                 | (Increase) decrease in laboratory supplies          |                                                     |            | 39,070                   |            |            |           | (157,518   | )          |            |           | 142,882    |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                                                                    |                                                                 | (Increase) decrease in inventory                    |                                                     |            | (125,232                 | )          |            |           | 26,315     |            |            |           | (99,295    | )        
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                                                                    |                                                                 | (Increase) decrease in other current assets         |                                                     |            | (490,034                 | )          |            |           | 282,947    |            |            |           | 22,236     |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                                                                    |                                                                 | Increase (decrease) in accounts payable             |                                                     |            | 1,226,736                |            |            |           | (32,530    | )          |            |           | (173,527   | )        
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                                                                    |                                                                 | Increase (decrease) in accrued compensation         |                                                     |            | (261,373                 | )          |            |           | (2,787     | )          |            |           | 454,991    |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                                                                    |                                                                 | Increase (decrease) in other accrued liabilities    |                                                     |            | 264,006                  |            |            |           | (209,659   | )          |            |           | 10,930,874 |          
|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |          
|                                                                        |                                                                                                    |                                                                 |                                                     | Net cash provided by (used in) operating activities |            |                          | (891,063   | )          |           |            | 4,908,546  |            |           |            | 7,459,991 | 
|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |          
|CASH FLOWS FROM INVESTING ACTIVITIES:                                   |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |           |            |            |           
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                                                                    | Maturities of short-term marketable investments, net            |                                                     |                                                     | 10,639,907 |                          |            |            | 2,949,768 |            |            |            | 2,618,805 |           
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                                                                    | Maturities (purchases) of long-term marketable investments, net |                                                     |                                                     | (99,677    | )                        |            |            | (574,959  | )          |            |            | 1,691,031 |           
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                                                                    | Cash acquired in acquisition of subsidiary                      |                                                     |                                                     |           |                          |            |            |          |            |            |            | 30,543    |           
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                                                                    | Cash paid for acquisition of subsidiary                         |                                                     |                                                     |           |                          |            |            |          |            |            |            | (650,000  | )         
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Capital expenditures                                                                               |                                                                 |                                                     | (5,258,767                                          | )          |                          |            | (4,984,080 | )         |            |            | (3,642,505 | )        
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Investment in distributor of ProstaSeed product, net                                               |                                                                 |                                                     |                                                    |            |                          |            |           |           |            |            | (215,040   | )        
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Milestone payments for therapeutic product                                                         |                                                                 |                                                     |                                                    |            |                          |            |           |           |            |            | (1,250,000 | )        
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Intangible and other assets                                                                        |                                                                 |                                                     | (262,869                                            | )          |                          |            | (989,889   | )         |            |            | (1,001,677 | )        
|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |          
|                                                                        |                                                                                                    |                                                                 | Net cash provided by (used in) investing activities |                                                     |            | 5,018,594                |            |            |           | (3,599,160 | )          |            |           | (2,418,843 | )        
|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |          
|CASH FLOWS FROM FINANCING ACTIVITIES:                                   |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |           |            |            |           
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Proceeds from employee stock purchase plan                                                         |                                                                 |                                                     | 193,292                                             |            |                          |            | 116,545    |           |            |            | 110,024    |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Proceeds from exercise of stock options                                                            |                                                                 |                                                     | 67,362                                              |            |                          |            | 182,917    |           |            |            | 393,001    |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Proceeds from exercise of warrants                                                                 |                                                                 |                                                     | 191,340                                             |            |                          |            |           |           |            |            | 27,000     |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Repurchases of Common Stock                                                                        |                                                                 |                                                     |                                                    |            |                          |            | (7,174,508 | )         |            |            | (397,100   | )        
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Principal payments under capital lease obligations and
other indebtedness                          |                                                                 |                                                     | (441,435                                            | )          |                          |            | (209,245   | )         |            |            | (22,994    | )        
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Proceeds from fixed asset sale/leaseback                                                           |                                                                 |                                                     |                                                    |            |                          |            |           |           |            |            | 596,271    |          
|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |          
|                                                                        |                                                                                                    |                                                                 | Net cash provided by (used in) financing activities |                                                     |            | 10,559                   |            |            |           | (7,084,291 | )          |            |           | 706,202    |          
|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |          
|Net increase (decrease) in cash and cash equivalents                    |                                                                                                    |                                                                 | 4,138,090                                           |                                                     |            |                          | (5,774,950 | )          |           |            | 5,747,350  |           
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|CASH AND CASH EQUIVALENTS, beginning of year                            |                                                                                                    |                                                                 | 6,896,033                                           |                                                     |            |                          | 11,034,123 |            |           |            | 5,259,218  |           
|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |          
|CASH AND CASH EQUIVALENTS, end of period                                |                                                                                                    | $                                                               | 11,034,123                                          |                                                     |            | $                        | 5,259,218  |            |           | $          | 11,006,568 |           
|                                                                        |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |          
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                       |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |           |            |            |           
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Cash paid for interest                                                                             |                                                                 | $                                                   | 47,458                                              |            |                          | $          | 10,477     |           |            | $          | 4,797      |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Cash paid for income taxes                                                                         |                                                                 | $                                                   | 550,000                                             |            |                          | $          | 300,000    |           |            | $          |           |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: |                                                                                                    |                                                                 |                                                     |                                                     |            |                          |            |            |           |            |            |           
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Current debt assumed in acquisition of subsidiary                                                  |                                                                 | $                                                   |                                                    |            |                          | $          |           |           |            | $          | 265,740    |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Long-term liabilities assumed in acquisition of subsidiary                                         |                                                                 | $                                                   |                                                    |            |                          | $          |           |           |            | $          | 175,000    |          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Issuance of 477,700 common shares in acquisition of subsidiary                                     |                                                                 | $                                                   |                                                    |            |                          | $          |           |           |            | $          | 1,910,800  |          

The accompanying notes are an integral part of these consolidated financial statements.

F-6



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UROCOR, INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2000

1. THE COMPANY:

UroCor, Inc. (the Company), a Delaware corporation, provides a broad
array of diagnostic services and markets therapeutic products and information
services to urologists and managed care organizations across the U.S. The
Company assists its customers to better manage their patients outcomes with
urologic cancers and other complex urologic diseases.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a)  Use of estimates. The preparation of these financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.

(b)  Cash Equivalents and Marketable Investments. The Company considers
all highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents. Pursuant to the Companys investment policy,
idle and excess funds are invested in high grade, fixed income securities
generally for no more than two years. These securities are classified as
Available-for-Sale as of December 31, 1999 and 2000. Marketable securities at
December 31, 2000 consist primarily of debt securities with maturities as great
as two years. The aggregate cost of marketable securities at December 31, 2000
was approximately $1.5 million. The Company considers any net unrealized gain
or loss on these investments to be temporary, and reflects such gains or losses
as a component of stockholders equity. As of December 31, 1999 and 2000,
there was not a material net unrealized gain or loss on these investments.

(c)  Inventory. Inventories are stated at lower of cost or market using
the first-in, first-out method. Inventory costs consist primarily of products
acquired for resale.

(d)  Property and Equipment. Property and equipment are stated at cost.
Equipment under capital leases is stated at the present value of minimum lease
payments at the inception of the lease.

Depreciation on property and equipment is calculated on the straight-line
basis over the estimated useful lives of the assets. Equipment held under
capital leases and leasehold improvements are amortized on the straight-line
basis over the shorter of the remaining lease term or the economic useful life
of the asset. The Company assesses impairment under the Financial Accounting
Standards Board Statement No. 121 Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of.

(e)  Software Development Costs. Certain internal costs for software
development relating to the Companys information services are capitalized as
property and equipment when incurred. Capitalization begins when the project
reaches technological feasibility and ceases when the product is ready for
release. Amortization of capitalized software development costs is provided
over the estimated economic life of the software, generally two to five years,
using the straight-line method. Capitalized software development costs are
reviewed internally annually for feasibility and impairment. Internal software
development costs which were capitalized to property and equipment during the
years ended December 31, 1998, 1999 and 2000 were $1,272,000, $351,000, and
$867,000, respectively.

(f)  Intangible and Other Assets. The Company has acquired options,
licenses, and distribution rights and applied for patents for various
diagnostic and therapeutic technologies or products. The costs related to such
rights are capitalized and included in intangible and other assets in the
accompanying balance sheets. Such costs are amortized over the estimated
economic life of the related technologies or products using the straight-line
method.

(g)  Goodwill. Goodwill relates to the excess of cost over the fair value
of net assets of Mills BioPharmaceuticals, Inc. acquired in April 2000. The
amortization period for goodwill was determined by the Company with
consideration given to the expected life of the current I-125 ProstaSeed
product and other potential products, as well as the potential of the
brachytherapy market. Amortization is calculated on a straight-line basis over
20 years.

F-7



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(h)  Research and Development. The Company conducts research and
development activities internally and also engages scientists and clinicians at
major academic and research institutions to conduct certain product development
and clinical evaluations work for specific diagnostic products and
technologies. Contracts covering external research specify periodic payment
terms and the nature of the work required and, in some cases, may extend for a
year or more. Internal research and development costs are expensed as
incurred, and external research and development contract costs are recognized
as such amounts are payable over the contract period.

(i)  Income Taxes. Deferred income taxes are recorded, where appropriate,
to reflect the estimated future tax effects of differences between financial
statement and tax bases of assets and liabilities.

(j)  Revenue. Revenue is recognized when products are sold or services are
rendered. Revenue subject to Medicare or third-party reimbursement is recorded
at estimated reimbursable amounts. The Company receives a significant portion
of its revenue from tests performed principally for beneficiaries of the
Medicare program. In 1998, 1999 and 2000, approximately 46%, 46%, and 52%,
respectively, of the Companys revenue was derived from tests performed
principally for beneficiaries of the Medicare program. Under law and
regulation, for most of the tests performed for Medicare beneficiaries, the
Company must accept reimbursement allowed by Medicare as payment in full. The
Company receives reimbursement for substantially all of its current services at
various rates or on a case-by-case basis.

Revenue from software licenses is recognized as license fees are earned
and from maintenance and services over the contractual period or as the
services are performed.

(k)  Provision for Bad Debts. The Company monitors the collection quality
of its accounts receivable through analytical review of aging categories by
payor group and collections performance. The Company provides an amount on a
monthly basis for estimated future bad debts on current period revenues. In
addition, from time to time, there are specific events for which management
makes an additional provision. During the second quarter of 1999, an
additional provision of $3,941,833 was made because certain managed care and
payor related marketing programs were discontinued, and management identified
significantly aged segments of accounts receivable related to these programs
for which likelihood of collection was doubtful or for which processing
costs could exceed the expected benefit. During the third quarter of 1998,
cost reduction initiatives were undertaken, including steps to implement
systems and processing changes intended to improve billing procedures and
related collection results. These initiatives reduced collection costs and
resulted in a $4,700,000 additional provision on balances for which continued
pursuit of collections was deemed too costly.

(l)  Net Income Per Common Share. The Company discloses earnings per share
figures basic and diluted. Diluted earnings per share reflects the effect of
dilutive securities calculated using the treasury stock method and the average
market price of common stock for each period, unless the result is
antidilutive, in which case such securities are not considered. In the period
of a net loss, the otherwise dilutive impact of outstanding stock options and
warrants is excluded from the computation of diluted earnings per share because
such impact would be antidilutive (i.e., consideration of such shares would
result in a lower diluted net loss per share in comparison to the basic net
loss per share).

(m)  Accrued Compensation. Accrued compensation consists of quarterly
commissions for sales representatives (usually paid the month following the
quarters end), bonus accruals for non-sales personnel (usually paid annually
following the end of the year) and recurring monthly accruals.

(n)  Contingencies. At the time the Company determines that a contingency
is probable and estimable, an accrual of the estimate is made, along with
estimated legal and other costs related to such contingency.

(o)  Reclassifications. Certain reclassifications have been made in the
1998 and 1999 financial statements to conform with the 2000 presentation.
Total assets and net income for 1998 and 1999 were not affected by the
reclassifications.

F-8



---



##### Table of Contents



3. PROPERTY AND EQUIPMENT:

Property and equipment, stated at cost, are summarized as follows:

|                                                 |  |      |            |   |      |   |            |  
|------------------------------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                 |  | 1999 |            |   | 2000 |  
|                                                 |  |      |            |   |      |  
|Laboratory equipment                             |  | $    | 3,229,423  |   |      | $ | 3,742,784  |  
|                                                
|                                                
|                                                
|                                                
|Computer equipment and software                  |  |      | 7,073,889  |   |      |   | 8,906,821  |  
|                                                
|                                                
|                                                
|                                                
|Office furniture, equipment and improvements     |  |      | 6,530,837  |   |      |   | 6,443,270  |  
|                                                 |  |      |            |   |      |  
|                                                 |  |      | 16,834,149 |   |      |   | 19,092,875 |  
|                                                
|                                                
|                                                
|                                                
|Less  Accumulated depreciation and amortization |  |      | (7,966,029 | ) |      |   | (9,055,179 | )
|                                                 |  |      |            |   |      |  
|                                                 |  | $    | 8,868,120  |   |      | $ | 10,037,696 |  
|                                                 |  |      |            |   |      |  

The depreciable lives for property and equipment are as follow:

|                                             |  |         |  | 
|-------------------------------------------- |  | ------- |  | 
|                                             |  | Years   | 
|                                             |  |         | 
|Laboratory equipment                         |  | 3 to 5 
|                                            
|                                            
|                                            
|                                            
|Computer equipment and software              |  | 2 to 5 
|                                            
|                                            
|                                            
|                                            
|Office furniture, equipment and improvements |  | 3 to 10

4. INTANGIBLE AND OTHER ASSETS:

Intangible and other assets consist of the following:

|                                                        |  |      |           |   |      |   |           |  
|------------------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- | -
|                                                        |  | 1999 |           |   | 2000 |  
|                                                        |  |      |           |   |      |  
|Licenses, options, patents and trademarks               |  | $    | 621,570   |   |      | $ | 632,522   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Less  Accumulated amortization                         |  |      | (23,324   | ) |      |   | (41,555   | )
|                                                        |  |      |           |   |      |  
|                                                        |  |      | 598,246   |   |      |   | 590,967   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Marketing agreement                                     |  |      | 690,000   |   |      |   |          |  
|                                                       
|                                                       
|                                                       
|                                                       
|Advance payment for purchase of inventory               |  |      | 250,000   |   |      |   |          |  
|                                                       
|                                                       
|                                                       
|                                                       
|Distribution agreement, net of accumulated amortization |  |      | 1,250,000 |   |      |   | 2,481,979 |  
|                                                       
|                                                       
|                                                       
|                                                       
|Investment in corporate-owned life insurance            |  |      | 203,355   |   |      |   | 314,634   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Investment in therapeutic distributor, net              |  |      |          |   |      |   | 196,080   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Deposits and other                                      |  |      | 122,493   |   |      |   | 114,319   |  
|                                                        |  |      |           |   |      |  
|                                                        |  | $    | 3,114,094 |   |      | $ | 3,697,979 |  
|                                                        |  |      |           |   |      |  

5. LEASES:

The Company has used capital lease financing arrangements to acquire
certain equipment. The agreements provide for the Company to arrange for the
equipment purchase, pay the vendor and receive reimbursement from the lessor or
to have the lessor pay the vendor directly. The lease payments paid by the
Company are for three to four years and provide for repayment of the equipment
cost plus an interest charge. The Company accounts for these arrangements as
capital leases with the capital asset amortized over the lease term. At
December 31, 1999 and 2000, the gross amount of property and equipment and
related amortization recorded under capital leases was as follows:

|                                                 |  |      |            |   |      |   |            |  
|------------------------------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                 |  | 1999 |            |   | 2000 |  
|                                                 |  |      |            |   |      |  
|Laboratory equipment                             |  | $    | 1,609,490  |   |      | $ | 1,254,535  |  
|                                                
|                                                
|                                                
|                                                
|Computer equipment and software                  |  |      | 874,565    |   |      |   | 1,239,141  |  
|                                                
|                                                
|                                                
|                                                
|Office furniture and equipment                   |  |      | 574,523    |   |      |   | 572,942    |  
|                                                 |  |      |            |   |      |  
|                                                 |  |      | 3,058,578  |   |      |   | 3,066,618  |  
|                                                
|                                                
|                                                
|                                                
|Less  Accumulated depreciation and amortization |  |      | (3,024,297 | ) |      |   | (2,229,860 | )
|                                                 |  |      |            |   |      |  
|                                                 |  | $    | 34,281     |   |      | $ | 836,758    |  
|                                                 |  |      |            |   |      |  

The Company also has noncancelable operating leases for laboratory
facilities, office space and equipment that expire over the next fourteen
years, with certain options for early termination. Rental expense for
operating leases during 1998, 1999 and 2000 approximated $1,340,000, $1,924,000
and $2,194,000, respectively.

F-9



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Future minimum lease commitments as of December 31, 2000 are:

|                                                                |  |         |         |  |           |   |            | 
|--------------------------------------------------------------- |  | ------- | ------- |  | --------- | - | ---------- | 
|                                                                |  | Capital |         |  | Operating |  
|                                                                |  | Leases  |         |  | Leases    |  
|                                                                |  |         |         |  |           |  
|2001                                                            |  |         | 320,958 |  |           |   | 1,567,497  | 
|                                                               
|                                                               
|                                                               
|                                                               
|2002                                                            |  |         | 320,958 |  |           |   | 1,471,950  | 
|                                                               
|                                                               
|                                                               
|                                                               
|2003                                                            |  |         | 295,257 |  |           |   | 1,453,201  | 
|                                                               
|                                                               
|                                                               
|                                                               
|2004                                                            |  |         |        |  |           |   | 1,483,954  | 
|                                                               
|                                                               
|                                                               
|                                                               
|2005                                                            |  |         |         |  |           |   | 1,587,994  | 
|                                                               
|                                                               
|                                                               
|                                                               
|Thereafter (laboratory and office space to 2013)                |  |         |        |  |           |   | 11,991,641 | 
|                                                                |  |         |         |  |           |  
|Total minimum lease payments                                    |  |         | 937,173 |  |           | $ | 19,556,237 | 
|                                                               
|                                                               
|                                                               
|                                                               
|Less  Amount representing interest                             |  |         | 93,214  |  |           |   |           
|                                                                |  |         |         |  |           |   |           
|Total obligations under capital leases                          |  |         | 843,959 |  |           |   |            | 
|                                                               
|                                                               
|                                                               
|                                                               
|Less  Current installments of obligations under capital leases |  |         | 249,679 |  |           |   |            | 
|                                                                |  |         |         |  |           |   |           
|Obligation under capital leases, net of current installments    |  | $       | 594,280 |  |           |   |            | 
|                                                                |  |         |         |  |           |   |           

In April 1999, the Company relocated to a new facility. Future monthly
rentals are included in the operating lease commitments above. The lease
expires by its terms in 2013, subject to early termination provisions.

6. COMMITMENTS AND CONTINGENCIES:

(a)  Employment Agreements. Certain key employees of the Company have
entered into arrangements regarding their terms of employment. While none of
such arrangements provide for fixed periods of employment, they do provide for
continued payment of salaries for up to twelve months following termination
without cause, aggregating approximately $824,000.

7. RELATED PARTY TRANSACTIONS:

The Company recognized rent expense totaling approximately $609,000,
$1,082,000, and $1,240,000 for 1998, 1999 and 2000, respectively, related to
its facilities which are leased from a shareholder. In managements opinion,
these transactions were conducted on terms no less favorable than those which
could have been obtained from unrelated third parties.

8. STOCKHOLDERS EQUITY:

(a)  Warrants. During 2000, all remaining warrants for the purchase of
shares of the Companys common stock expired. No value was attributed to these
warrants in connection with their issuances in 1994 through 1995. A summary of
the warrants is presented below:

|                               |  |          |         |  |           |          |             |          |  |         |           |  |          |          |             |  |           |  |         |          |  |       |             | 
|------------------------------ |  | -------- | ------- |  | --------- | -------- | ----------- | -------- |  | ------- | --------- |  | -------- | -------- | ----------- |  | --------- |  | ------- | -------- |  | ----- | ----------- | 
|                               |  | 1998     |         |  | 1999      |          |             | 2000     | 
|                               |  |          |         |  |           |          |             |          | 
|                               |  |          |         |  |           | Exercise |             |          |  |         |           |  | Exercise |          |             |  |           |  |         | Exercise | 
|                               |  |          |         |  |           | Price    |             |          |  |         |           |  | Price    |          |             |  |           |  |         | Price    | 
|                               |  | Warrants |         |  | Per Share |          |             | Warrants |  |         | Per Share |  |          | Warrants |             |  | Per Share | 
|                               |  |          |         |  |           |          |             |          |  |         |           |  |          |          |             |  |           | 
|Outstanding, beginning of year |  |          | 291,438 |  |           | $        | 1.25 - 5.00 |          |  |         | 224,436   |  |          | $        | 1.25 - 5.00 |  |           |  | 124,436 |          |  | $     | 1.25 - 5.00 | 
|                              
|                              
|                              
|                              
|Granted                        |  |          |        |  |           |          |             |          |  |         |          |  |          |          |             |  |           |  |        |          |  |       |             | 
|                              
|                              
|                              
|                              
|Expired                        |  |          | 13,358  |  |           | $4.30    |             |          |  | 100,000 |           |  | $4.30    |          |             |  | 102,836   |  |         | $5.00    | 
|                              
|                              
|                              
|                              
|Exercised                      |  |          | 53,644  |  |           | $        | 1.25 - 5.00 |          |  |         |          |  |          | $        | 1.25 - 5.00 |  |           |  | 21,600  |          |  | $1.25 |            
|                               |  |          |         |  |           |          |             |          |  |         |           |  |          |          |             |  |           |  |         |          | 
|Outstanding, end of year       |  |          | 224,436 |  |           | $        | 1.25 - 5.00 |          |  |         | 124,436   |  |          | $        | 1.25 - 5.00 |  |           |  |        |          |  |      |            
|                               |  |          |         |  |           |          |             |          |  |         |           |  |          |          |             |  |           |  |         |          | 

(b)  Stockholder Rights Plan. In August 1998, the Board of Directors adopted a
Stockholder Rights Plan that provides the holders of each share of Common Stock
with a Right. This Plan is intended to protect the Company and its
stockholders from coercive or unfair takeover tactics. Each Right will entitle
holders of the Companys common stock to buy one one-thousandth of an interest
in a share of Series I Preferred Stock of the Company at an exercise price of
$35.00, exercisable only if a person or group acquires beneficial ownership of
15% or more of UroCors common stock or announces a tender or exchange offer
upon consummation of which such person or group would beneficially own 15% or
more of the Companys common stock. If any person becomes the beneficial owner
of 15% or more of UroCors common stock, each Right not owned by such person or
related parties will enable its holder to purchase, at the Rights then-current
exercise price, shares of common stock of the Company having a value of twice
the Rights exercise price. In addition, if the Company is involved in a
merger or other business combination transaction with another person in which
its common shares are changed or converted, or sells 50% or more of its assets to another person, each Right that has not
previously been exercised will entitle its holder

F-10



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##### Table of Contents



to purchase, at the Rights
then-current exercise price, common shares of such other person having a value
of twice the Rights exercise price. The Rights have no voting power and will
expire on August 27, 2008. The Company will generally be entitled to redeem
the Rights at $.001 per Right at any time until the tenth business day
following public announcement that a 15% position has been acquired.

(c)  Treasury Stock. In April 1999, the Board of Directors authorized the
repurchase of up to $10 million of the Companys outstanding common shares.
Under these authorizations the Company has repurchased 1,672,304 shares at a
cost of $7,571,608. The Company reissued 477,700 shares in 2000 for the
acquisition of Mills Biopharmaceuticals, Inc., the manufacturer of the
Companys therapeutic product ProstaSeed.

9. STOCK COMPENSATION PLANS:

(a)  Stock Option Plans. The Company has adopted two stock option plans which
provide for the issuance of options to employees, directors and independent
contractors of the Company. These options vest over one to five years, expire
ten years after issuance and have an exercise price equal to or greater than
the stocks fair market value on the date of grant. During 1998, the
shareholders of the Company approved an additional 300,000 shares for the 1992
Option Plan. During 1999, the shareholders of the Company approved an
additional 300,000 shares for the 1992 Option Plan and 100,000 for the 1997
Non-Employee Director Stock Option Plan. During 2000, the shareholders of the
Company approved an additional 300,000 shares for the 1992 Option Plan.

A summary of the status of the plans is presented below:

|                                       |  |        |           |   |                |             |      |        |  |  |                |  |             |        |           |   |                |   |      |             |  |  |  |  |  |  |           |   |  |   |      |  |  |  |  | 
|-------------------------------------- |  | ------ | --------- | - | -------------- | ----------- | ---- | ------ |  |  | -------------- |  | ----------- | ------ | --------- | - | -------------- | - | ---- | ----------- |  |  |  |  |  |  | --------- | - |  | - | ---- |  |  |  |  | 
|                                       |  | 1998   |           |   | 1999           |             |      | 2000   | 
|                                       |  |        |           |   |                |             |      |        | 
|                                       |  |        |           |   |                | Wtd-Average |      |        |  |  |                |  | Wtd-Average |        |           |   |                |   |      | Wtd-Average | 
|                                       |  | Shares |           |   | Exercise Price |             |      | Shares |  |  | Exercise Price |  |             | Shares |           |   | Exercise Price |  
|                                       |  |        |           |   |                |             |      |        |  |  |                |  |             |        |           |   |                |  
|Outstanding, beginning of year         |  |        | 1,305,487 |   |                | $           | 4.36 |        |  |  |                |  |             |        | 1,580,328 |   |                | $ | 4.71 |             |  |  |  |  |  |  | 1,766,199 |   |  | $ | 4.74 | 
|                                      
|                                      
|                                      
|                                      
|Granted, price equals fair value       |  |        | 465,000   |   |                |             | 5.80 |        |  |  |                |  |             |        | 722,250   |   |                |   | 4.26 |             |  |  |  |  |  |  | 388,503   |   |  |   | 4.75 | 
|                                      
|                                      
|                                      
|                                      
|Granted, price greater than fair
value |  |        |          |   |                |             |     |        |  |  |                |  |             |        |          |   |                |   |     |             |  |  |  |  |  |  |          |   |  |   |     | 
|                                      
|                                      
|                                      
|                                      
|Exercised                              |  |        | (62,507   | ) |                |             | 1.08 |        |  |  |                |  |             |        | (246,229  | ) |                |   | .75  |             |  |  |  |  |  |  | (210,368  | ) |  |   | 1.87 | 
|                                      
|                                      
|                                      
|                                      
|Cancellations                          |  |        | (127,652  | ) |                |             | 6.78 |        |  |  |                |  |             |        | (290,150  | ) |                |   | 6.76 |             |  |  |  |  |  |  | (260,734  | ) |  |   | 7.51 | 
|                                       |  |        |           |   |                |             |      |        |  |  |                |  |             |        |           |   |                |   |      |             |  |  |  |  |  |  |           |   | 
|Outstanding, end of year               |  |        | 1,580,328 |   |                | $           | 4.71 |        |  |  |                |  |             |        | 1,766,199 |   |                | $ | 4.74 |             |  |  |  |  |  |  | 1,683,600 |   |  | $ | 4.67 | 
|                                       |  |        |           |   |                |             |      |        |  |  |                |  |             |        |           |   |                |   |      |             |  |  |  |  |  |  |           |   | 
|Exercisable, end of year               |  |        | 845,884   |   |                | $           | 2.91 |        |  |  |                |  |             |        | 776,911   |   |                | $ | 4.36 |             |  |  |  |  |  |  | 758,006   |   |  | $ | 4.64 | 
|                                       |  |        |           |   |                |             |      |        |  |  |                |  |             |        |           |   |                |   |      |             |  |  |  |  |  |  |           |   | 

In December 1995, the Company issued options to employees covering 295,000
shares of common stock exercisable at the then estimated fair market value of
$1.75 per share. Considering the Companys anticipated public offering price
per share and other events, in April 1996 the Company estimated that the
adjusted fair value of the common stock at the date of grant of these options
exceeded the exercise price of the options. Accordingly, the Company is
recognizing imputed compensation expense as a non-cash charge to operations,
aggregating approximately $410,000 over the actual vesting period of these
options of three to five years. During 1998, 1999 and 2000 the Company
recognized approximately $123,000, $9,152 and $7,564, respectively, of
compensation expense related to these options.

This table summarizes information about stock options outstanding at
December 31, 2000:

|              |  |                      |           |  |                |  |     |                |  |   |                   |  |  |                |         |  |  |   |      | 
|------------- |  | -------------------- | --------- |  | -------------- |  | --- | -------------- |  | - | ----------------- |  |  | -------------- | ------- |  |  | - | ---- | 
|Range of      |  |                      |           |  |                |  |     |                |  |   |                   |  |  | Number         |         |  |  |   |     
|Exercise      |  | Number Outstanding   |           |  | Wtd- Average   |  |     | Wtd-Average    |  |   | Exercisable at    |  |  | Wtd-Average    |        
|Prices        |  | at December 31, 2000 |           |  | Remaining Life |  |     | Exercise Price |  |   | December 31, 2000 |  |  | Exercise Price |        
|              |  |                      |           |  |                |  |     |                |  |   |                   |  |  |                |        
|$ .35 - 3.50  |  |                      | 450,897   |  |                |  | 6.4 |                |  | $ | 2.31              |  |  |                | 277,497 |  |  | $ | 1.59 | 
|             
|             
|             
|             
|$4.00 - 4.50  |  |                      | 264,635   |  |                |  | 8.7 |                |  |   | 4.22              |  |  |                | 56,450  |  |  |   | 4.29 | 
|             
|             
|             
|             
|$4.63 - 4.75  |  |                      | 502,150   |  |                |  | 8.8 |                |  |   | 4.68              |  |  |                | 120,100 |  |  |   | 4.69 | 
|             
|             
|             
|             
|$4.88 - 12.63 |  |                      | 465,918   |  |                |  | 7.3 |                |  |   | 7.19              |  |  |                | 303,959 |  |  |   | 7.47 | 
|              |  |                      |           |  |                |  |     |                |  |   |                   |  |  |                |        
|$ .35 - 12.63 |  |                      | 1,683,600 |  |                |  | 7.7 |                |  | $ | 4.67              |  |  |                | 758,006 |  |  | $ | 4.64 | 
|              |  |                      |           |  |                |  |     |                |  |   |                   |  |  |                |         |  |  |  

(b)  Employee Stock Purchase Plan (ESPP). In 1998, the Companys
shareholders approved the ESPP, under which 300,000 shares of the Companys
Common Stock could be sold to employees. Under its terms employees
may elect to withhold up to 10% of earnings each offering period to
purchase the Companys Common Stock. The purchase price is 85% of the lower of
the beginning or the ending market price for each offering period. Under the
ESPP, the Company sold 33,658, 30,147 and 29,061 shares to employees in 1998,
1999 and 2000, respectively.

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(c)  Accounting for Stock-Based Compensation. The Company accounts for
these plans under APB Opinion No. 25, under which no compensation cost has been
recognized except for the December 1995 stock option grant described above.
Had compensation cost for these plans been determined consistent with FASB
Statement No. 123, the Companys net income (loss) and earnings (loss) per
share would have been adjusted to the following pro forma amounts:

|                                                                                    |  |                                          |  |      |                                            |  |      |   |                                            |      |  |   |                                            | 
|----------------------------------------------------------------------------------- |  | ---------------------------------------- |  | ---- | ------------------------------------------ |  | ---- | - | ------------------------------------------ | ---- |  | - | ------------------------------------------ | 
|                                                                                    |  |                                          |  | 1998 |                                            |  | 1999 |   |                                            | 2000 | 
|                                                                                    |  |                                          |  |      |                                            |  |      |   |                                            |      | 
|Net Loss
Diluted Net Loss per Share

Weighted-average fair
value of options granted |  | As Reported
ProformaAs Reported
Proforma |  | $    | (2,476,359)
(3,178,395)
$(.24)
(.31)
$3.77 |  |      | $ | (4,108,847)
(4,824,997)
$(.41)
(.52)
$2.66 |      |  | $ | (4,819,591)
(5,364,089)
$(.50)
(.59)
$4.64 | 

The option pricing model used to determine an options fair market value
considers six factors. Options granted prior to May 22, 1996 were valued
without the volatility factor because the Company was not a public company
prior to that time. Because of this pricing convention and because the
Statement 123 method of accounting has not been applied to options granted
prior to January 1, 1995, the resulting proforma compensation cost impact on
net income and diluted net income per share may not be representative of what
might be expected in future years.

The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following
weighted-average assumptions used for grants in 1998, 1999 and 2000: dividend
yield of 0% for all years; expected volatility of 74% for 1998, 69% for 1999
and 82% for 2000; risk-free interest rates of 5.5%, 5.8% and 6.1%,
respectively; and expected life of 5.5 years, 5.3 years and 5.3 years for 1998,
1999 and 2000, respectively.

The fair value of employees purchase rights under the ESPP, was also
estimated using the Black-Scholes model with the following assumptions for
1998, 1999 and 2000: dividend yield of 0% for all years; expected volatility
for purchase rights of 63% for 1998, 78% for 1999 and 90% for 2000; risk-free
interest rates of 5.1% for 1998, 6.1% for 1999 and 5.7% for 2000; and expected
life of 1 year for 1998 and 1999 and 2.7 years for 2000. The weighted average
fair value of purchase rights was $2.81 for those granted in 1998, $2.03 for
those granted in 1999 and $3.82 for those granted in 2000.

10. EMPLOYEE BENEFIT PLAN:

(a)  The Company has established a 401(k) employee benefit plan in which
substantially all employees may participate. The plan is funded through
voluntary employee salary deferrals, and beginning October 1, 1997 the Company
began matching 25% of employee contributions up to a maximum of 12% of
compensation. Beginning January 1, 1999, the Company began matching 50% of
employee contributions up to a maximum of 6% of compensation. The Companys
1998, 1999 and 2000 contributions to this plan were approximately $138,000,
$226,000 and $297,000, respectively.

(b)  In 1999, the Company established a Deferred Compensation Plan for
directors and key employees. The plan is funded through voluntary deferrals
of director fees or employee salary. The Company does not currently match
contributions. Deferrals are deposited in corporate owned life insurance
contracts. Within each life insurance contract the directors and employees
have the option of selecting a variety of investments. The return on these
underlying investments will determine the amount of earnings credited to each
director or employees account. Otherwise, the directors and employees are
general creditors of the Company with respect to benefits from the Plan. The
expense associated with the Deferred Compensation Plan was approximately
$53,000 in both years 1999 and 2000.

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11. SPECIAL CHARGES:

(a)  During the third quarter of 1998, the Company recognized special
charges consisting of the following:

|                                                                   |  |   |           | 
|------------------------------------------------------------------ |  | - | --------- | 
|Exit costs related to Urology Support Services (USS)             |  | $ | 2,220,529 | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Non-strategic program asset write-offs & other
restructuring costs |  |   | 1,106,762 | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Severance costs for workforce reduction                            |  |   | 178,315   | 
|                                                                   |  |   |          
|Special charges                                                    |  | $ | 3,505,606 | 
|                                                                   |  |   |          

At the end of the third quarter of 1998, the Company made the decision to
exit the USS business when it determined that a successful spin-off of the unit
as an independent entity could not be completed in a timely manner and notified
all employees affected. The exit costs related to this decision of $2,220,529
include estimated expenses for orderly termination and transition of USS
service contracts, related asset write-downs and employee severance costs for
USS employees. The costs associated with terminating and transitioning the
USS service contracts were accrued at $328,747 and the majority of these
expenses were paid in the fourth quarter of 1998. The write-offs for software,
start-up costs and other assets associated with the USS business totaled
$1,763,178. Finally, severance and outplacement costs of $128,604 were
recognized for all 14 people employed by the USS business who were terminated
after transitioning the existing service contracts at the end of October 1998.
The majority of these benefits were paid out in the fourth quarter of 1998.

Also at the end of the third quarter of 1998, the Company eliminated 23
positions across all departments of the Company as part of streamlining the
organizational structure of the Company. The severance and outplacement costs
associated with this workforce reduction totaled $178,315 and were paid during
the fourth quarter of 1998. In addition to the workforce reduction, the
Companys restructuring included the elimination of certain non-strategic
programs, which resulted in asset write-downs principally for research and
software assets totaling $888,741. Other non-recurring costs associated with
this restructuring totaled $218,021.

(b)  During the second quarter of 1999, the Company recognized special
charges consisting of the following:

|                                                              |  |   |           | 
|------------------------------------------------------------- |  | - | --------- | 
|Information systems restructuring costs                       |  | $ | 2,893,700 | 
|                                                             
|                                                             
|                                                             
|                                                             
|Settlement of certain Urology Support Services (USS) claims |  |   | 348,146   | 
|                                                             
|                                                             
|                                                             
|                                                             
|Severance costs for workforce reduction                       |  |   | 226,098   | 
|                                                              |  |   |          
|Total special charges                                         |  | $ | 3,467,944 | 
|                                                              |  |   |          

During the second quarter of 1999, the Company accelerated an information
systems initiative to increase productivity, decrease costs and more
efficiently collect billings. As a result of this new operational focus on
information systems, the Company has restructured its information systems
function and terminated certain existing systems and internal software
development projects. The write-offs for systems and software projects related
to this restructuring totaled $2,893,700. Severance and outplacement costs
associated with restructuring this function and ending certain development
projects totaled $226,098.

During the second quarter of 1999, the Company settled claims by two of
the former clients of the USS business, which together with legal fees incurred
by the Company resulted in costs of $348,146 in excess of amounts that had been
previously accrued.

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##### Table of Contents



(c)  During the fourth quarter of 2000, the Company recognized special
charges consisting of the following:

|                                                                          |  |   |            | 
|------------------------------------------------------------------------- |  | - | ---------- | 
|Tentative settlement with the United States Department of Justice
(DOJ) |  | $ | 9,000,000  | 
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Legal and professional fees and other costs related to DOJ settlement     |  |   | 1,289,935  | 
|                                                                          |  |   |           
|Total special charges                                                     |  | $ | 10,289,935 | 
|                                                                          |  |   |           

In February 2001, the Company reached a tentative settlement with the DOJ
to settle matters covered by the DOJ investigation pursuant to which UroCor
would refund the various programs a total of $8.5 million by paying $6.0
million pursuant to a promissory note payable in equal annual installments over
three years bearing interest at a rate of 7% per annum. In March 2001, the
Company and the DOJ amended this term of the tentative settlemenet to provide
that the Company would refund the various programs a total of $9.0 million, all
payable at the closing of the final settlement agreement. Pursuant to the
current other principal terms of the tentative settlement agreement, the
proposed settlement would cover Company liabilities to the federal government
and state insurance programs with respect to the matters under investigation
through December 31, 2000, would settle matters covered by the investigation
without any admission by the Company of any wrongdoing in connection with such
matters and would require UroCor to operate under a corporate integrity
agreement for a period of time to be determined as part of the final settlement
 agreement. Determination of the final terms and consummation of the tentative
settlement are subject to certain judicial and governmental approvals and the
negotiation and approval of the specific provisions for the final settlement
agreement and the contemplated corporate integrity agreement. The Company also
incurred and accrued $1,289,935 during the fourth quarter for legal and
professional fees and other anticipated costs related to the ultimate
resolution of this investigation.

In the event the Company and the DOJ were unable to consummate the
proposed settlement, no assurances may be given regarding the resolution of
the DOJ investigation, and the Company is unable to predict its impact, if any,
on the Company. If the DOJ or, if applicable, any other plaintiff were to
pursue and prevail on matters that may arise from this investigation, any
judgment resulting from such litigation or any administrative penalties,
including, without limitation, significant recoupment of funds or civil or
criminal penalties or exclusion from federal and state health care programs
potentially resulting from such proceedings could have a material adverse
effect on the financial condition and results of operations of the Company.

NOTE 12  ACQUISITION:

On April 17, 2000, UroCor acquired Mills Biopharmaceuticals, Inc., the
manufacturer of UroCors ProstaSeed® I-125 sources for radiation treatment of
prostate cancer. The terms of the purchase agreement called for a combination
of $650,000 cash, assumption of certain liabilities and the issuance of 477,700
shares of treasury stock described in Footnote 8 for a total value of $4.3
million, including the milestone payments previously made, in addition to
certain royalty payments dependent upon the achievement of future sales levels.
Under the agreement, Dr. Stanley Mills, Mills Biopharmaceuticals president
and founder, was appointed UroCors Vice President Product Development for
radiation therapies subject to a separate employment agreement and the Company
agreed to lease the production facilities from Dr. Mills. This acquisition has
been accounted for under the purchase method of accounting. The Company made
an allocation of the purchase price based on estimated fair values at date of
acquisition. This allocation resulted in acquired goodwill of approximately
$4.0 million, which is being amortized over 20 years. The results of the
acquired businesses have been included in the consolidated financial statements
since the acquisition date.

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##### Table of Contents



NOTE 13  SEGMENT REPORTING:

Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures
about Segments of an Enterprise and Related Information, requires selected
information about reportable segments in interim financial reports that is
consistent with that made available to management to assess financial
performance. With the regulatory approvals for two therapeutic products
occurring in the first quarter of 2000 and the purchase of manufacturing
capabilities of Mills Biopharmaceuticals, described above, the Company is now
operating in two reportable segments1) diagnostic services and 2) therapeutic
products. For 1998, the Company also operated the Urology Support Services
(USS) business, providing medical billing services for a small number of
urologists, until it was discontinued late in 1998. The diagnostic services
segment provides testing services to urologists for diagnosing, selecting
appropriate therapies and managing patients with urologic diseases. The
therapeutic products segment offered ProstaSeed® for early stage prostate
cancer and PACIS BCG® for bladder cancer in 2000; the therapeutic revenue
activity prior to 2000 was related to a co-promotion agreement with Zeneca,
Inc., which entailed the Companys sales force selling two prostate cancer
products to urologists, however, the Company had no other direct costs related
to sales of these co-promotion products. The Companys management evaluates
performance based on several factors. However, the primary measurement focus
is Gross Profit (revenue less direct costs) and Operating Income, excluding
special charges and any other unusual items. The accounting policies of the
segments are the same as those described in the summary of significant
accounting policies in Note 2 above. Corporate expenses include overhead
expenses not allocated to specific business segments, including administrative
expenses and information services expenses. The expenses that are allocated to
business segments after the gross profit calculation to result in the operating
income figures include sales and marketing expenses, certain administrative
expenses directly attributable to the segments and bad debt expense. Asset
information by segment is not reported, because the Company does not yet
produce such information internally. The following table presents information
about the Companys segments for 1998, 1999 and 2000:

|                        |  |            |            |  |             |   |            |     |  |   |            |   |  |   |            | 
|----------------------- |  | ---------- | ---------- |  | ----------- | - | ---------- | --- |  | - | ---------- | - |  | - | ---------- | 
|                        |  | Diagnostic |            |  | Therapeutic |   |            |     |  |   |            |   |  |  
|                        |  | Services   |            |  | Products    |   |            | USS |  |   | Total      |  
|                        |  |            |            |  |             |   |            |     |  |   |            |  
|2000
Revenue            |  | $          | 51,011,916 |  |             | $ | 1,609,849  |     |  | $ |           |   |  | $ | 52,621,765 | 
|                       
|                       
|                       
|                       
|Gross Profit            |  | $          | 33,820,003 |  |             | $ | (1,024,097 | )   |  | $ |           |   |  | $ | 32,795,906 | 
|                       
|                       
|                       
|                       
|Operating Income (Loss) |  | $          | 16,725,113 |  |             | $ | (4,197,640 | )   |  | $ |           |   |  | $ | 12,527,473 | 
|                       
|                       
|                       
|                       
|1999
Revenue            |  | $          | 42,976,747 |  |             | $ | 2,531,726  |     |  | $ |           |   |  | $ | 45,508,473 | 
|                       
|                       
|                       
|                       
|Gross Profit            |  | $          | 25,113,851 |  |             | $ | 1,744,908  |     |  | $ |           |   |  | $ | 26,858,759 | 
|                       
|                       
|                       
|                       
|Operating Income        |  | $          | 5,049,531  |  |             | $ | 78,800     |     |  | $ |           |   |  | $ | 5,128,331  | 
|                       
|                       
|                       
|                       
|1998
Revenue            |  | $          | 41,484,226 |  |             | $ | 5,982,200  |     |  | $ | 139,717    |   |  | $ | 47,606,143 | 
|                       
|                       
|                       
|                       
|Gross Profit            |  | $          | 23,879,698 |  |             | $ | 5,096,136  |     |  | $ | (632,657   | ) |  | $ | 28,343,177 | 
|                       
|                       
|                       
|                       
|Operating Income (Loss) |  | $          | 1,776,363  |  |             | $ | 4,548,713  |     |  | $ | (1,159,094 | ) |  | $ | 5,165,982  | 

F-15



---



##### Table of Contents



Reconciliation of operating income above to corresponding totals in the
accompanying financial statements:

|                              |  |                    |            |      |           |   |            |   |           |      |            |   |            | 
|----------------------------- |  | ------------------ | ---------- | ---- | --------- | - | ---------- | - | --------- | ---- | ---------- | - | ---------- | 
|                              |  |                    |            | 1998 |           |   | 1999       |   |           | 2000 |           
|                              |  |                    |            |      |           |   |            |   |           |      |           
|Total for reportable segments |  | $                  | 5,165,982  |      |           |   | 5,128,331  |   |           | $    | 12,527,473 |  
|                             
|                             
|                             
|                             
|Less:                         |  | Special charges    |            |      | 3,505,606 |   |            |   | 3,467,944 |      |            |   | 10,289,935 | 
|                             
|                             
|                             
|                             
|                              |  | Corporate expenses |            |      | 6,474,922 |   |            |   | 8,934,071 |      |            |   | 8,891,353  | 
|                              |  |                    |            |      |           |   |            |   |           |     
|Operating income              |  | $                  | (4,814,546 | )    |           | $ | (7,273,684 | ) |           | $    | (6,653,815 | )
|                              |  |                    |            |      |           |   |            |   |           |     

14. INCOME TAXES:

The Company has provided for income taxes (benefit) as follows:

|                         |         |   |            |            |   |      |            |            |      |   |            |            |  
|------------------------ | ------- | - | ---------- | ---------- | - | ---- | ---------- | ---------- | ---- | - | ---------- | ---------- | -
|                         |         |   | 1998       |            |   | 1999 |            |            | 2000 |  
|                         |         |   |            |            |   |      |            |            |      |  
|Current:                 |         |   |            |            |   |      |            |            |      |   |            |           
|                        
|                        
|                        
|                        
|                         | Federal |   | $          |           |   |      | $          |           |      |   | $          |           |  
|                        
|                        
|                        
|                        
|                         | State   |   |            |           |   |      |            |           |      |   |            |           |  
|                         |         |   |            |            |   |      |            |            |     
|                         | Total   |   | $          |           |   |      | $          |           |      |   | $          |           |  
|                        
|                        
|                        
|                        
|Deferred:                |         |   |            |            |   |      |            |            |      |   |            |           
|                        
|                        
|                        
|                        
|                         | Federal |   | $          | (1,517,769 | ) |      | $          | (2,311,226 | )    |   | $          | (1,159,718 | )
|                        
|                        
|                        
|                        
|                         | State   |   |            |           |   |      |            |           |      |   |            |           |  
|                         |         |   |            |            |   |      |            |            |     
|                         | Total   |   |            | (1,517,769 | ) |      |            | (2,311,226 | )    |   |            | (1,159,718 | )
|                         |         |   |            |            |   |      |            |            |     
|Total income tax benefit |         | $ | (1,517,769 | )          |   | $    | (2,311,226 | )          |      | $ | (1,159,718 | )         
|                         |         |   |            |            |   |      |            |            |     

The provision for income taxes is different than the amount computed using
the applicable statutory federal income tax rate with the differences being
summarized below:

|                                                   |  |      |     |    |      |  |     |      |  |  |     |   
|-------------------------------------------------- |  | ---- | --- | -- | ---- |  | --- | ---- |  |  | --- | --
|                                                   |  | 1998 |     |    | 1999 |  |     | 2000 | 
|                                                   |  |      |     |    |      |  |     |      | 
|Tax expense (benefit) at statutory rates           |  |      | (34 | %) |      |  | (34 | %)   |  |  | (34 | %)
|                                                  
|                                                  
|                                                  
|                                                  
|State income taxes, less federal income tax effect |  |      | (4  | %) |      |  | (4  | %)   |  |  | (4  | %)
|                                                  
|                                                  
|                                                  
|                                                  
|Other                                              |  |      | 0   | %  |      |  | 2   | %    |  |  | 1   | % 
|                                                  
|                                                  
|                                                  
|                                                  
|Adjustment due to change in valuation allowance    |  |      | 0   | %  |      |  | 0   | %    |  |  | 18  | % 
|                                                   |  |      |     |    |      |  |     |      | 
|Benefit for income taxes                           |  |      | (38 | %) |      |  | (36 | %)   |  |  | (19 | %)
|                                                   |  |      |     |    |      |  |     |      | 

The annual utilization of the Companys net tax operating loss
carryforward will be limited by Internal Revenue Code Section 382 due to the
fact that a cumulative change in ownership of more than 50% has previously
occurred. Therefore, the future utilization of this net operating loss
carryforward at December 31, 2000 will be limited to approximately $16.7
million, of which approximately $16.1 million will be available in 2001 and $.6
million in subsequent years. The net operating loss carryforward will begin to
expire in 2013.

The tax effects of the temporary differences which gave rise to deferred
tax assets and liabilities at December 31, 1999 and 2000 were:

|                                |                              |   |           |           |  |      |            |           | 
|------------------------------- | ---------------------------- | - | --------- | --------- |  | ---- | ---------- | --------- | 
|                                |                              |   | 1999      |           |  | 2000 |           
|                                |                              |   |           |           |  |      |           
|Net operating loss carryforward |                              | $ | 3,784,636 |           |  | $    | 6,182,750  |          
|                               
|                               
|                               
|                               
|Depreciation and amortization   |                              |   | (79,737   | )         |  |      | 120,388    |          
|                               
|                               
|                               
|                               
|Deferred compensation           |                              |   | 92,452    |           |  |      | 173,409    |          
|                               
|                               
|                               
|                               
|Allowance for doubtful accounts |                              |   | 2,104,541 |           |  |      | 1,463,821  |          
|                               
|                               
|                               
|                               
|Other                           |                              |   | 82,474    |           |  |      | 74,313     |          
|                                |                              |   |           |           |  |     
|Net deferred tax asset          |                              | $ | 5,984,366 |           |  | $    | 8,014,681  |          
|                               
|                               
|                               
|                               
|Valuation allowance             |                              |   | (324,626  | )         |  |      | (1,356,606 | )        
|                                |                              |   |           |           |  |     
|                                | Total net deferred tax asset |   | $         | 5,659,740 |  |      | $          | 6,658,075 | 
|                                |                              |   |           |           |  |     

F-16



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##### Table of Contents



15. NET INCOME (LOSS) PER SHARE:

A summary of the components of net income (loss) per share and the impact
of dilutive securities is presented below:

|                                               |               |   |                                 |   |  |        |            |   |        |       |       |      |     |   |            |         |          |        |           |     |      |     |       |        |         |   |            |       |  |     |           |   |  |   |       |   | 
|---------------------------------------------- | ------------- | - | ------------------------------- | - |  | ------ | ---------- | - | ------ | ----- | ----- | ---- | --- | - | ---------- | ------- | -------- | ------ | --------- | --- | ---- | --- | ----- | ------ | ------- | - | ---------- | ----- |  | --- | --------- | - |  | - | ----- | - | 
|                                               |               |   | For the Year Ended December 31, |  
|                                               |               |   |                                 |  
|                                               |               |   | 1998                            |   |  | 1999   |            |   | 2000   |      
|                                               |               |   |                                 |   |  |        |            |   |        |      
|                                               |               |   |                                 |   |  |        | Weighted   |   |        | Per   |       |      |     |   |            |         | Weighted |        |           | Per |      |     |       |        |         |   | Weighted   |       |  | Per |          
|                                               |               |   |                                 |   |  |        | Average    |   |        | Share |       |      | Net |   |            | Average |          |        | Share     |     |      | Net |       |        | Average |   |            | Share | 
|                                               |               |   | Net Income                      |   |  | Shares |            |   | Amount |       |       | Loss |     |   | Shares     |         |          | Amount |           |     | Loss |     |       | Shares |         |   | Amount     |      
|                                               |               |   |                                 |   |  |        |            |   |        |       |       |      |     |   |            |         |          |        |           |     |      |     |       |        |         |   |            |      
|Net Income (Loss)
Per Share - Basic            |               | $ | (2,476,359                      | ) |  |        | 10,402,281 |   |        | $     | (0.24 | )    |     | $ | (4,108,847 | )       |          |        | 9,902,643 |     |      | $   | (0.41 | )      |         | $ | (4,819,591 | )     |  |     | 9,689,994 |   |  | $ | (0.50 | )
|                                              
|                                              
|                                              
|                                              
|Effect of Dilutive
Securities:                 |               |   |                                 |   |  |        |            |   |        |       |       |      |     |   |            |         |          |        |           |     |      |     |       |        |         |   |            |       |  |     |           |   |  |   |       |  
|                                              
|                                              
|                                              
|                                              
|                                               | Stock Options |   |                                 |  |  |        |            |  |        |       |       |     |     |   |            |        |          |        |           |    |      |     |       |       |         |   |            |      |  |     |           |  |  |   |       |  | 
|                                              
|                                              
|                                              
|                                              
|                                               | Warrants      |   |                                 |  |  |        |            |  |        |       |       |     |     |   |            |        |          |        |           |    |      |     |       |       |         |   |            |      |  |     |           |  |  |   |       |  | 
|                                               |               |   |                                 |   |  |        |            |   |        |       |       |      |     |   |            |         |          |        |           |     |      |     |       |        |         |   |           
|Net Income (Loss)
Per Share -Assuming
Dilution |               | $ | (2,476,359                      | ) |  |        | 10,402,281 |   |        | $     | (0.24 | )    |     | $ | (4,108,847 | )       |          |        | 9,902,643 |     |      | $   | (0.41 | )      |         | $ | (4,819,591 | )     |  |     | 9,689,994 |   |  | $ | (0.50 | )

Stock options and warrants to purchase shares of common stock at exercise
prices greater than the average market price of the common stock were
outstanding during each of the periods presented. Such options and warrants
were not included in the computation of Net Income Per ShareAssuming Dilution
because the impact would be antidilutive. Potential shares to be purchased
under such antidilutive stock options totaled 592,484, 966,546 and 445,777 for
1998, 1999 and 2000, respectively. There were no such antidilutive warrants for
1998, 1999 or 2000.

Additionally, for 1998, 1999 and 2000, the otherwise dilutive impact of
all other outstanding stock options and warrants is excluded from the
computation of Net Income Per ShareAssuming Dilution because such impact is
antidilutive in the year of a net loss (i.e., consideration of such shares
would result in a lower Net Loss Per ShareAssuming Dilution in comparison to
the Net Loss Per ShareBasic). For 1998, the otherwise dilutive effect of such
antidilutive stock options and warrants would have been an additional 600,748
and 55,408 weighted average shares, respectively, resulting in a total of
11,058,437 weighted average common and common equivalent shares outstanding,
assuming dilution. For 1999, the otherwise dilutive effect of such antidilutive
stock options and warrants would have been an additional 451,561 and 15,760
weighted average shares, respectively, resulting in a total of 10,369,964
weighted average common and common equivalent shares outstanding, assuming
dilution. For 2000, the otherwise dilutive effect of such antidilutive stock
options would have been an additional 363,034 weighted average shares,
resulting in a total of 10,053,028 weighted average common and common
equivalent shares outstanding, assuming dilution.

16. SUBSEQUENT EVENTS:

(a)  In March 2001, the Company entered into a collaborative agreement with
Bioniche Life Sciences, Inc., securing exclusive rights to distribute
Cystistat, a treatment for interstitial cystitis, in the United States. The
agreement provides that Bioniche will pursue FDA approval for marketing the
product in the United States. Under the terms of the agreement, UroCor made an
initial payment of $750,000 and will pay up to an additional $2,275,000 in
milestone payments in subsequent years during the development and potential
product launch of the product.

(b)  In February 2001, ongoing manufacturing supply issues led UroCor and
BioChem Pharma, Inc. (BioChem) to agree on a settlement to end their
distribution agreement for PACIS BCG that had been executed in 1994. Under the
terms of the settlement, UroCor received $7 million from BioChem, which
resulted in a pretax profit in excess of $4.0 million that will be recorded in
the first quarter of 2001.

F-17



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##### Table of Contents



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders
of UroCor, Inc.:

We have audited in accordance with auditing standards generally accepted
in the United States, the consolidated financial statements of UroCor, Inc.
included in this 2000 Annual Report to Shareholders on Form 10-K and have
issued our report thereon dated March 30, 2001. Our audits were made for the
purpose of forming an opinion on the basic consolidated financial statements
taken as a whole. The schedule of valuation and qualifying accounts for each of
the three years in the period ended December 31, 2000, is presented for
purposes of complying with the Securities and Exchange Commissions rules and
is not part of the basic consolidated financial statements. This schedule has
been subjected to the auditing procedures applied in the audits of the basic
consolidated financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.



| |                    
| | -------------------
| | ARTHUR ANDERSEN LLP

Oklahoma City, Oklahoma,
March 30, 2001

S-1



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##### Table of Contents



SCHEDULE II

UROCOR, INC.
VALUATION AND QUALIFYING ACCOUNTS

|                                      |                                 |         |           |           |            |          |           |           |       |           |              |   |  |         |  |            |   |  |  |           | 
|------------------------------------- | ------------------------------- | ------- | --------- | --------- | ---------- | -------- | --------- | --------- | ----- | --------- | ------------ | - |  | ------- |  | ---------- | - |  |  | --------- | 
|                                      |                                 |         |           |           |            |          | Additions |           |       |           |              |   |  |         |  |           
|                                      |                                 |         |           |           |            |          |           |           |       |           |              |   |  |         |  |           
|                                      |                                 |         |           |           |            |          | Charge to |           |       | Charge To |              |   |  |         |  |            |   |  | 
|                                      |                                 |         | Beginning |           |            | Cost and |           |           | Other |           |              |   |  |         |  | Ending     |  
|Description                           |                                 | Balance |           |           | Expense(1) |          |           | Accounts  |       |           | Deduction(2) |   |  | Balance | 
|                                      |                                 |         |           |           |            |          |           |           |       |           |              |   |  |         | 
|For the Year Ended
December 31, 1998: |                                 |         |           |           |            |          |           |           |       |           |              |   |  |         |  |            |   |  |  |          
|                                     
|                                     
|                                     
|                                     
|                                      | Allowance for
Doubtful
Accounts |         |           | 2,619,485 |            |          |           | 8,409,477 |       |           |              |  |  |         |  | (4,999,896 | ) |  |  | 6,029,066 | 
|                                     
|                                     
|                                     
|                                     
|For the Year Ended
December 31, 1999: |                                 |         |           |           |            |          |           |           |       |           |              |   |  |         |  |            |   |  |  |          
|                                     
|                                     
|                                     
|                                     
|                                      | Allowance for
Doubtful
Accounts |         |           | 6,029,066 |            |          |           | 6,418,366 |       |           |              |  |  |         |  | (7,270,018 | ) |  |  | 5,177,414 | 
|                                     
|                                     
|                                     
|                                     
|For the Year Ended
December 31, 2000: |                                 |         |           |           |            |          |           |           |       |           |              |   |  |         |  |            |   |  |  |          
|                                     
|                                     
|                                     
|                                     
|                                      | Allowance for
Doubtful
Accounts |         |           | 5,177,414 |            |          |           | 4,478,931 |       |           |              |  |  |         |  | (5,526,070 | ) |  |  | 4,130,275 | 



---

|(1) |  | Includes $4,700,000 recorded as an additional provision to the valuation
allowance in the third quarter of 1998 and $3,941,833 recorded as an additional
provision to the valuation allowance in the second quarter of 1999.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Represents write-offs of uncollectible accounts receivable against
the allowance for doubtful accounts.                                                                                                                     

S-2



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##### Table of Contents






SIGNATURES

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

| |                               |                                                                                                                
| | ----------------------------- | ---------------------------------------------------------------------------------------------------------------
| | UROCOR, INC.
    (Registrant)
|
| | By:                           | /s/ Bruce C. HaydenBruce C. Hayden, Senior Vice-President, Chief
    Financial Officer, Treasurer and Secretary

Dated: October 9, 2001.





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##### Table of Contents





|            |  |                                                                                                                                                                                                                                                                                                                                 
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                     
|            |  |                                                                                                                                                                                                                                                                                                                                 
|3.1         |  | Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3.1 to the Registrants Form 10-Q for the
quarterly period ended September 30, 1998, filed with the
Commission on November 12, 1998).                                                                                                            
|            |  |                                                                                                                                                                                                                                                                                                                                 
|3.2         |  | Amended and Restated By-laws (incorporated by reference to
Exhibit 3.2 to the Registrants Registration Statement on Form
S-1 (Reg. No. 333-3182), filed with the Commission on April 3,
1996).                                                                                                                                 
|            |  |                                                                                                                                                                                                                                                                                                                                 
|4.1         |  | Rights Agreement dated as of August 17, 1998, between the Company
and American Stock Transfer & Trust Company, as Rights Agent
(incorporated by reference to Exhibit 4.1 to the Registrants
Current Report on Form 8-K, filed with the Commission on August
21, 1998).                                                         
|            |  |                                                                                                                                                                                                                                                                                                                                 
|4.2         |  | Form of Rights Certificate (incorporated by reference to Exhibit
4.3 to the Registrants Current Report on Form 8-K, filed with
the Commission on August 21, 1998).                                                                                                                                                             
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.1       |  | The UroCor, Inc. Second Amended and Restated 1992 Stock Option
Plan, as amended (incorporated by reference to Exhibit 4.4 to the
Registrants Registration Statement on Form S-8 (Reg. No.
333-58015), filed with the Commission on June 29, 1998).                                                                             
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.2        |  | Lease Agreement dated April 15, 1994, between Presbyterian Health
Foundation and UroCor, Inc. (incorporated by reference to the
Registrants Registration Statement on Form S-1 (Reg. No.
333-3182), filed with the Commission on April 3, 1996).                                                                               
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.3        |  | Amendment No. 1 to the Lease Agreement dated April 15, 1994,
between Presbyterian Health Foundation and UroCor, Inc.
(incorporated by reference to the Registrants Form 10-Q for the
quarterly period ended June 30, 1997, filed with the Commission
on August 11, 1997).                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.4        |  | Amendment No. 2 dated June 16, 1998, amending the Lease Agreement
between Presbyterian Health Foundation, as Landlord and UroCor,
Inc., as Tenant dated April 15, 1994 (incorporated by reference
to the Registrants Form 10-Q for the quarterly period ended
September 30, 1998, filed with the Commission November 12,
1998).
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.5        |  | Amendment No. 3 dated February 1, 1999, amending the Lease
Agreement between Presbyterian Health Foundation, as Landlord and
UroCor, Inc., as Tenant dated April 15, 1994 (incorporated by
reference to the Registrants Form 10-K for the period ended
December 31, 1998, filed with the Commission on March 31,
1999).        
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.6        |  | Amendment No. 4 dated September 28, 1999, amending the Lease
Agreement between Presbyterian Health Foundation, as Landlord and
UroCor, Inc., as Tenant dated April 15, 1994 (incorporated by
reference to the Registrants Form 10-K for the year ended
December 31, 1999, filed with the Commission on March 10,
2000).        
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.7       |  | Employment Agreement dated September 4, 1990, between Robert
Veltri and UroCor, Inc. (incorporated by reference to the
Registrants Registration Statement on Form S-1 (Reg. No.
333-3182), filed with the Commission on April 3, 1996).                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.8*      |  | Employment Agreement dated July 23, 1998, between Michael W.
George and UroCor, Inc. and amendment thereto dated January 8,
2001.                                                                                                                                                                                               
|            |  |                                                                                                                                                                                                                                                                                                                                 
|10.9       |  | Employment Agreement dated January 29, 1998 between Karl Nigg and
UroCor, Inc. (incorporated by reference to the Registrants Form
10-K for the period ended December 31, 1998, filed with the
Commission on March 31, 1999).                                                                                                   



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##### Table of Contents



|            |  |                                                                                                                                                                                                                                                                                               
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                   
|            |  |                                                                                                                                                                                                                                                                                               
|10.10      |  | Employment Agreement dated March 15, 1999 between Bruce C. Hayden
and UroCor, Inc. (incorporated by reference to the Registrants
Form 10-Q for the quarterly period ended March 31, 1999, filed
with the Commission on May 17, 1999).                                                        
|            |  |                                                                                                                                                                                                                                                                                               
|10.11      |  | Employment Agreement dated December 17, 1999 between John L.
Armstrong, Jr. and UroCor, Inc. (incorporated by reference to the
Registrants Form 10-K for the year ended December 31, 1999,
filed with the Commission on March 10, 2000).                                                     
|            |  |                                                                                                                                                                                                                                                                                               
|10.12      |  | Form of Indemnity Agreement between UroCor, Inc. and each of the
individuals named in Schedule 10.1 thereto (incorporated by
reference to the Registrants Form 10-K for the year ended
December 31, 1999, filed with the Commission on March 10,
2000).                                      
|            |  |                                                                                                                                                                                                                                                                                               
|10.13*     |  | 2000 Management Incentive Compensation Plan.                                                                                                                                                                                                                                                  
|            |  |                                                                                                                                                                                                                                                                                               
|10.14       |  | Consulting Agreement dated effective October 26, 1999, and
Addendum to Agreement dated March 1, 2000 between William A.
Hagstrom and UroCor, Inc. (incorporated by reference to the
Registrants Form 10-K for the year ended December 31, 1999,
filed with the Commission on March 10, 2000).
|            |  |                                                                                                                                                                                                                                                                                               
|10.15       |  | Registration Rights Agreement dated June 2, 1995, among UroCor,
Inc. and the stockholders named therein (incorporated by
reference to the Registrants Registration Statement on Form S-1
(Reg. No. 333-3182), filed with the Commission on April 3,
1996).                                   
|            |  |                                                                                                                                                                                                                                                                                               
|10.16      |  | The UroCor, Inc. 1997 Non-Employee Director Stock Option Plan
(incorporated by reference to the Registrants Form 10-Q for the
quarterly period ended June 30, 1997, filed with the Commission
on August 11, 1997).                                                                           
|            |  |                                                                                                                                                                                                                                                                                               
|10.17      |  | The UroCor, Inc. 1997 Employee Stock Purchase Plan (incorporated
by reference to Exhibit 4.4 to the Registrants Registration
Statement on Form S-8 (Reg. No. 333-58017), filed with the
Commission on June 29, 1998).                                                                        
|            |  |                                                                                                                                                                                                                                                                                               
|10.18      |  | UroCor, Inc. Deferred Compensation Plan (incorporated by
reference to the Registrants Form 10-Q for the quarterly period
ended March 31, 1999, filed with the Commission on May 17,
1999).                                                                                                   
|            |  |                                                                                                                                                                                                                                                                                               
|10.19      |  | Form of Change In Control Agreement between UroCor, Inc. and each
of the individuals named and with the terms listed on Schedule
10.1 thereto (incorporated by reference to the Registrants Form
10-K for the year ended December 31, 1999, filed with the
Commission on March 10, 2000).    
|            |  |                                                                                                                                                                                                                                                                                               
|23.1*      |  | Consent of Arthur Andersen LLP.