|FORM 10-Q



SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549


(Mark one)
|-----------------------------------------------------------------------------------

|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934.
|--- |  | -----------------------------------------------------------------------------------------

|For the quarterly period ended March 31, 2000OR
|-----------------------------------------------

|[ ] |  | 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 0-27750IMPATH INC.(exact name of registrant as specified in its charter)
|--------------------------------------------------------------------------------------------------------------------------------------------

|Delaware | 8071 | 13-3459685
|-------- | ---- | ----------

|(State or other jurisdiction ofincorporation or organization) | (Primary Standard IndustrialClassification Code Number) | (I.R.S. EmployerIdentification No.)
|------------------------------------------------------------- | ------------------------------------------------------- | -----------------------------------

|521 West 57th Street New York, New York 10019
(212) 698-0300(Address, including zip code, and telephone number, including
area code, of registrants principal executive offices)


Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. 
Yes X No ___


Indicate the number of shares
outstanding of each of the issuers classes of common stock, as of the
latest practicable date.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|CLASS | OUTSTANDING AT MARCH 31, 2000
|----- | -----------------------------

|Common Stock, par value | 7,661,311
|----------------------- | ---------

|$ .005 per share | 
|---------------- | 

|Index



IMPATH INC. and Subsidiaries


PART I.  Financial Information
|----------------------------------------------------------------------

|                                                                    | Page Number
|------------------------------------------------------------------- | -----------
|Item 1. Consolidated Financial Statements (Unaudited):              |            
|                                                                    |            
|Consolidated Balance Sheets at March 31, 2000                       |            
|and December 31, 1999                                               |            
|                                                                    |            
|Consolidated Statements of Operations for the Three                 |            
|Months Ended March 31, 2000 and March 31, 1999                      |            
|                                                                    |            
|Consolidated Statements of Stockholders Equity for the             |            
|Three  Months Ended March 31, 2000                                  |            
|                                                                    |            
|Consolidated Statements of Cash Flows for the Three                 |            
|Months Ended March 31, 2000 and March 31, 1999                      |            
|                                                                    |            
|Notes to Consolidated Financial Statements                          |            
|                                                                    |            
|Item 2. Managements Discussion and Analysis                        |            
|of Financial Condition and Results of Operations                    |            
|                                                                    |            
|Item 3.  Quantitative and Qualitative Disclosures about Market Risk |            
|                                                                    |            
|Signatures                                                          |            
|                                                                    |            
|PART II. OTHER INFORMATION                                          |            
|Item 6.  Exhibits and Reports on Form 8-K                           |            

|2
|-

|Item 1. Consolidated Financial Statements
(Unaudited)


IMPATH INC. and Subsidiaries


Consolidated Balance Sheets (unaudited)
|------------------------------------------------------------------------------------------------------------------------------

|                                                             | March 31, 2000 | December 31,1999
|------------------------------------------------------------ | -------------- | ----------------
|ASSETS                                                       |                |                 
|                                                             |                |                
|Current assets:                                              |               
|Cash and cash equivalents                                    |                | $4,835,139      
|Marketable securities, at market value                       |                | 20,957,439      
|Accounts receivable, net of allowance for doubtful accounts  |                | 41,914,500      
|Prepaid expenses                                             |                | 1,120,105       
|Deferred tax assets                                          |                | 1,784,074       
|Other current assets                                         |                | 6,948,604       
|                                                            
|Total current assets                                         |                | 77,559,861      
|Fixed assets, less accumulated depreciation and amortization |                | 35,762,079      
|Deposits and other assets                                    |                | 607,874         
|Investment in preferred stock                                |                | 5,000,000       
|Intangible assets, net of accumulated amortization           |                | 38,420,711      
|                                                            
|Total assets                                                 |                | $157,350, 525   
|                                                            
|LIABILITIES AND STOCKHOLDERS EQUITY                         |               
|                                                             |               
|Current liabilities:                                         |               
|Current portion of capital lease obligations                 |                | $5,121,055      
|Current portion of notes payable                             |                | 926,254         
|Short term borrowings                                        |                | 3,000,000       
|Accounts payable                                             |                | 3,571,772       
|Deferred revenue                                             |                | 2,051,438       
|Income taxes payable                                         |                | 3,375,133       
|Accrued expenses & other current liabilities                 |                | 2,245,222       
|                                                            
|Total current liabilities                                    |                | 20,290,874      
|                                                            
|Capital lease obligations, net of current portion            |                | 13,298,695      
|Notes payable, net of current portion                        |                | 800,000         
|Deferred tax liabilities                                     |                | 2,666,649       
|Stockholders equity:                                        |               
|Common stock                                                 |                | 43,829          
|Common stock to be issued                                    |                | 645,000         
|Additional paid-in capital                                   |                | 124,206,204     
|Retained earnings                                            |                | 23,150,984      
|Accumulated other comprehensive (loss)                       |                | (690,450        
|                                                            
|                                                             |                | 147,355,567     
|Less:                                                        |               
|Cost of 1,104,738 and 955,738 shares of common stock         |               
|held in treasury in 2000 and 1999, respectively              |                | (26,750,281     
|Deferred compensation                                        |                | (310,979        
|                                                            
|Total stockholders equity                                   |                | 120,294,307     
|                                                            
|Total liabilities and stockholders' equity                   |                | $157,350,525    
|                                                            

|See accompanying notes to consolidated financial statements.
|------------------------------------------------------------

|3
|-

|IMPATH INC. and Subsidiaries


Consolidated Statements of Operations (Unaudited)
|--------------------------------------------------------------------------------

|                                                | Three Months Ended March 31 |                  
|----------------------------------------------- | --------------------------- | -----------------
|
|Revenues:                                       |                             |                  
|Net diagnostic and prognostic services          |                             | $ 27,435,875     
|Biopharmaceutical services                      |                             | 1,945,009        
|Tumor registry services                         |                             | 1,181,948        
|                                               
|                                                |                             | 30,562,832       
|                                               
|Operating expenses:                             |                            
|Salaries and related costs                      |                             | 12,112,396       
|Selling, general and administrative             |                             | 11,267,211       
|Depreciation and amortization                   |                             | 2,375,078        
|                                               
|Total operating expenses                        |                             | 25,754,685       
|                                               
|Income from operations                          |                             | 4,808,147        
|Interest income                                 |                             | 474,119          
|Interest expense                                |                             | (381,197         
|                                               
|Other Income, net                               |                             | 92,922           
|Income before income tax expense                |                             | 4,901,069        
|Income tax expense                              |                             | (2,080,237       
|                                               
|Net income                                      |                             | $   2,820,832    
|                                               
|Earnings per share:                             |                            
|Basic:                                          |                            
|Net income per common share                     |                             | $            0.37
|                                               
|Weighted average common shares outstanding      |                             | 7,689,000        
|                                               
|Diluted:                                        |                            
|Net income per common share-assuming            |                            
|dilution                                        |                             | $            0.36
|                                               
|Weighted average common and common              |                            
|equivalent shares outstanding-assuming dilution |                             | 7,904,000        
|                                               

|See accompanying notes to consolidated financial statements.
|------------------------------------------------------------

|4
|-

|IMPATH INC. and Subsidiaries


Consolidated Statement of StockholdersEquity



Three Months Ended March 31, 2000


(Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------

|                             | Common Stock |           |  |         |  |            |   |              | 
|---------------------------- | ------------ | --------- |  | ------- |  | ---------- | - | ------------ | 
|
|Balance at December 31, 1999 |              | 8,695,181 |  | $43,475 |  | $1,735,000 |   | $122,553,938 | 
|                             |             
|Common shares issued upon    |             
|exercise of stock options    |              | 30,865    |  | 154     |  |            |   | 562,466      | 
|                             |             
|Issuance of common shares    |              | 40,000    |  | 200     |  | (1,090,000 | ) | 1,089,800    | 
|                             |             
|Repurchase of common shares  |              |           |  |         |  |            |   |              | 
|                             |             
|Amortization of deferred     |             
|compensation                 |              |           |  |         |  |            |   |              | 
|Comprehensive income:        |             
|Change in unrealized net     |             
|depreciation of securities   |              |           |  |         |  |            |   |              | 
|Net income for the period    |             
|ended March 31, 2000         |              |           |  |         |  |            |   |              | 
|                            
|                             |             
|Total comprehensive income   |              |           |  |         |  |            |   |              | 
|                            
|Balance at March 31, 2000    |              | 8,766,046 |  | $43,829 |  | $645,000   |   | $124,206,204 | 
|                            

|See accompanying notes to consolidated financial statements
|-----------------------------------------------------------

|5
|-

|IMPATH INC. and Subsidiaries


Consolidated Statements of Cash Flows (Unaudited)
|--------------------------------------------------------------------------------

|                                                              | Three Months Ended March 31, |              
|------------------------------------------------------------- | ---------------------------- | -------------
|
|Cash flows from operating activities:                         |                              |              
|Net income                                                    |                              | $   2,820,832
|Adjustments to reconcile net income to net cash used in       |                             
|operating activities:                                         |                             
|Depreciation and amortization                                 |                              | 2,375,078    
|Provision for uncollectible accounts receivable               |                              | 4,076,236    
|Non-cash compensation                                         |                              | 67,241       
|Changes in assets and liabilities:                            |                             
|(Increase) in accounts receivable                             |                              | (10,475,706  
|Decrease in prepaid taxes                                     |                              |             
|(Increase) in prepaid expenses and current assets             |                              | (2,681,893   
|(Increase) in deposits and other assets                       |                              | (269,501     
|Decrease in accounts payable and accrued expenses             |                              | (658,482     
|Increase in income taxes payable                              |                              | 1,940,186    
|Increase in deferred revenues                                 |                              | 63,292       
|                                                             
|Total adjustments                                             |                              | (5,563,549   
|                                                             
|Net cash used in operating activities                         |                              | (2,742,717   
|                                                             
|Cash flows from investing activities:                         |                             
|Purchases of marketable securities                            |                              | (1,624,649   
|Sales/maturities of marketable securities                     |                              | 4,397,811    
|Capital expenditures                                          |                              | (762,597     
|                                                             
|Net cash provided by (used in) investing activities           |                              | 2,010,565    
|                                                             
|Cash flows from financing activities:                         |                             
|Issuance of common stock from exercise of shares and warrants |                              | 477,382      
|Repurchase of common stock                                    |                              | (3,399,814   
|Payments of capital lease obligations                         |                              | (1,347,094   
|Proceeds from capital leases                                  |                              | 1,653,234    
|Proceeds (Repayment) of bank loans                            |                              | 3,000,000    
|Payments of notes payable                                     |                              | (138,333     
|                                                             
|Net cash provided by (used in) financing activities           |                              | 245,375      
|                                                             
|Net decrease in cash and cash equivalents                     |                              | (486,777     
|Cash and cash equivalents at beginning of period              |                              | 5,321,916    
|                                                             
|Cash and cash equivalents at end of period                    |                              | $   4,835,139
|                                                             

|See accompanying notes to consolidated financial statements.
|------------------------------------------------------------

|6
|-

|IMPATH INC.


Notes to Consolidated Financial Statements (unaudited)



General:


The accompanying unaudited consolidated financial statements
have been prepared by management in accordance with the rules and regulations of
the United States Securities and Exchange Commission.


In the opinion of IMPATH Inc. (the Company or
IMPATH), the accompanying unaudited consolidated financial
statements contain all adjustments, consisting only of normal recurring
adjustments necessary for the fair presentation of the financial information for
all periods presented. Results for the interim periods are not necessarily
indicative of the results for an entire year and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. These consolidated financial statements
should be read in conjunction with the consolidated financial statements and the
notes thereto contained in the Companys Annual Report on Form 10-K for
the year ended December 31, 1999.


Net Income Per Share:


Net income per share, basic is based on the weighted average
number of shares of common stock outstanding and includes shares to be issued
from the date the commitment to issue was consummated. Diluted earnings per
share is based on the weighted average number of shares of common stock, shares
to be issued and common equivalent shares outstanding. Common equivalent shares
from stock options and warrants are included in the computation assuming the
related options and warrants had been exercised to the extent their effect is
dilutive.


Comprehensive Net Income:


Comprehensive net income is equal to the net income reported
adjusted for the unrealized net depreciation of marketable securities, net of
related deferred taxes. Comprehensive net income for the three months ended
March 31, 2000 and 1999 was $2,835,411 and $1,726,075, respectively.


Investment:


In accordance with Statement of Financial Accounting Standards
(SFAS) No. 115, the Companys investments (consisting primarily
of government and corporate fixed income securities) were classified as
available for sale. As a result, the unrealized depreciation is recorded as a
separate component of stockholders equity, net of related deferred taxes.
At March 31, 2000, approximately $5,000,000 of securities with original
maturities of three months or less were included as cash equivalents. The
remaining securities included in the investment portfolio with original
maturities that exceed three months are included in current assets.



Accounts Receivable, Net of Allowance for Doubtful
Accounts:


In accordance with Generally Accepted Accounting Principles
(GAAP) and consistent with healthcare industry practices, IMPATH
presents its accounts receivable at net realizable value. Net accounts
receivable balances are comprised of the following as of March 31, 2000 and
December 31, 1999:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                | March 31, 2000 | December 31, 1999
|------------------------------- | -------------- | -----------------
|                                |                |                  
|Gross accounts receivable       |                | $ 76,925,120     
|Allowance for doubtful accounts |                | (8,913,557       
|Contractual allowance reserve   |                | (26,097,063      
|                               
|                                |                | $ 41,914,500     
|                               

|Commitments and Contingencies:


The Company is involved in various legal actions in the normal
course of business, some of which seek monetary damages. The Company believes
any ultimate liability associated with these contingencies would not have a
material adverse effect on the Companys consolidated financial position or
results of operations.


As a provider of healthcare-oriented services, the Company is
subject to extensive and frequently changing federal, state and local laws
governing licensure, reimbursement, financial relationships referrals, conduct
of operations and other aspects of the Companys business. In recent years,
the federal government has expanded its investigative and enforcement activities
relating to the billing of government programs, such as Medicare and Medicaid, by
laboratories and other healthcare providers. In January 2000, the Company was
notified that the U.S. Attorneys office for the Southern District of New
York was investigating certain of the Companys billing practices. The
Company believes that its billing practices are in compliance with applicable
laws and is cooperating in the investigation.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7
|-

|ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




Three Months Ended March 31, 2000Compared with Three Months Ended March 31, 1999



The Companys total revenues for the three months ended
March 31, 2000 and 1999 were $30.5 million and $16.9 million, respectively,
representing an increase of $13.6 million, or 80.5%, in 2000. This growth was
primarily attributable to a 16.0% increase in case volume resulting from
increased sales and marketing activities, as well as a 50% increase in revenue
realization per case due to product mix changes toward lymphoma/leukemia cases which
encompass more analyses and a continuing payor mix shift towards third-party payers.
In addition, revenues increased 672% over prior year billings as a result of the
successful integration recently acquired BioClinical Partners Inc., (BCP) and
increases in the numbers of projects with genomic companies.


Salaries and related costs for the first three months of 2000
and 1999 were $12.1 million and $6.7 million, respectively, representing an
increase of $5.4 million, or 80.6%, in 2000. This increase was the result of
increased personnel headcount due to case volume growth, personnel costs
incurred in connection with the Company's recent acquisitions and staff
augmentation necessitated by billing and collection delays associated with the
the new billing system. As a percentage of total revenues, salaries and
related costs remained consistent at 39.6%.


Selling, general and administrative expenses for the first three
months of 2000 and 1999 were $11.3 million and $6.4 million, respectively,
representing an increase of $4.9 million, or 76.6%, in 2000. The largest
component of this increase was $2.3 million of increased bad debt expense
associated with higher revenues and the billing and collection delays associated
with the new billing system. The Company also incurred an additional
$806,000 in incremental laboratory supplies and courier costs due to increasing
case volume growth. Additionally, operating expenses increased by $1.5 million
in connection with Company acquisitions. As a percentage of total revenues,
selling, general and administrative expenses decreased to 36.9% in 2000 from
37.5% in 1999 due to the implementation of certain operating efficiencies
combined with a higher revenue realization per case.


Depreciation and amortization expense for the first three months
of 2000 and 1999 was $2.4 million and $1.4 million, respectively, representing
an increase of $1 million , or 71.4%, in 2000. This increase was primarily due to
approximately $440,000 in depreciation expense associated with the on-going development of the
Companys clinical and billing systems, an additional $252,000 in
depreciation and amortization expense in connection with leasehold improvements
resulting from the expansion of the Companys New York facility and $210,000
in amortization of intangible assets associated with recent
Companys acquisitions. As a percentage of total revenues, depreciation and
amortization decreased to 7.8% in 2000 from 8.0% in 1999, primarily as a result of the higher revenue realization per case.


Income from operations for the first three months of 2000 and
1999 was $4.8 million and $2.5 million, respectively, representing an increase
of $2.3 million, or 92.0%, in 2000. The 2000 figure reflects an increase in
Company operating margins from both of its core diagnostic and prognostic services, and
biopharmaceutical/genomic services, partially mitigated by increased salaries and related costs
referred to above. As a percentage of total revenues, income from operations
increased to 15.7% in 2000 from 14.9% in 1999.


Other income, net for the first three months of 2000 and 1999,
was $93,000 and $500,000, respectively, representing a decrease of $407,000, or
81.4%, in 2000. The decrease was the result of increased interest expense due to
additional capital lease obligations and acquisition-related debt, as well as
reduced interest income due to the sale of interest bearing securities, the
proceeds of which were used to finance the Companys stock buyback program and
the acquisitions of BCP and Pacific Coast Reference Laboratories, Inc., (PCRL).


The tax provision for the first three months of 2000 of $2
million reflects federal, state and local income tax expense. The Company has
estimated its annual effective tax rate for 2000 to be approximately 43%
compared to 40% in 1999. This increase resulted from an increase in the
Companys state and local tax provision associated with a reduction in
tax-exempt interest income and increased net income.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8
|-

|Net income for the first three months of 2000 and 1999 was $2.8
million and $1.8 million, respectively, representing an increase of $1 million,
or 55.6%, in 2000. As a percentage of total revenues, net income decreased to
9.2% in 2000 from 10.5% in 1999. The decrease was primarily due to  lower interest income and higher tax rate.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9
|-

|Liquidity and Capital Resources


Since inception, the Company has raised approximately $103.9
million of capital through the public offerings of its common stock and $6.6
million from private placements of preferred stock, all of which was converted
into common stock at the closing of the Companys initial public offering
in February 1996. The Companys working capital and capital expenditure
needs have increased and are expected to continue to increase as the Company
expands its existing facilities and pursues its growth strategy.


The Companys cash and cash equivalent balances at March
31, 2000 and March 31, 1999 were $4.8 million and $5.3 million, respectively,
representing a decrease of $500,000 in 2000. The Company also had approximately
$20.9 million invested in a portfolio of investment-grade fixed-income
securities at March 31, 2000, representing a $2.8 million decrease from the
$23.7 million at December 31, 1999. The decrease was primarily due to the
repurchase of 149,000 shares of common stock for approximately $3.4 million
under the stock buyback program.


For the three months ended March 31, 2000, net cash used in
operating activities was approximately $2.7 million. This was primarily due to an
increase in accounts receivable, net of allowance for bad debt of approximately
$6.4 million, in the period due to rapid sales growth and the claims
filing delays associated with the Companys new billing system. The
continuing shift away from direct hospital billing and towards private insurance,
as well as product mix changes toward lymphoma/leukemia cases, which carry a
higher revenue realization per case, also contributed to this increase. In
addition, as a result of increased case volume growth and changes in corporate
purchasing methods, laboratory supply inventory increased approximately $1.6
millon. These activities were partially offset by higher net income, as well as
an increase in income taxes payable of $1.9 million.


The Company incurred approximately $763,000 in capital
expenditures associated with the development of the Companys outcomes
database, network infrastructure and the Companys expansion of its
laboratory and office facilities. The Company received approximately $500,000
for the three months ended March 31, 2000 through the issuance of common stock
upon the exercise of Company stock options and warrants.


The Company has a line of credit for an aggregate principal
amount of $15.0 million with Fleet Bank. Borrowing under the line bears interest
at LIBOR plus 2.0%. As of March 31, 2000, the Company had $3.0 million
outstanding under this line. The Company has lines of credit for financing
equipment, leasehold improvements and computer hardware and software. In July
1999, the Company established a $6.0 million credit line with Newcourt Financial (currently CIT Group)
with lease terms that are based on 48 monthly payments at a rate equal to .35% above
the yield on four year treasury notes. As of March 31, 2000, the Company had fully drawn
against the line. In September 1999, the Company established a $6.0 million
credit line with Fleet Bank with lease terms based on 48 monthly payments at
a rate equal to .20% above the yield on four year treasury notes. As of March 31,
2000, approximately $1 million was drawn against the line. In December 1999, the
Company established a $6.2 million credit line with First American Bankcorp,
Inc. with lease terms of 48 months and a rate equal to the yield on four-year
treasury notes. The line of credit was subsequently increased to $15.0 million
in March, 2000, under the same lease terms. As of March 31, 2000, approximately
$5.3 million was drawn against this line.


The Companys growth strategy is anticipated to be financed
through its current cash resources and existing third-party credit facilities.
The Company believes the combination of these sources will be sufficient to fund
its operations and satisfy the Companys cash requirements for the next 12
months and the foreseeable future. There may be circumstances, however, that
would accelerate the Companys use of cash resources. If this occurs, the
Company may, from time to time, incur additional indebtedness or issue, in
public or private transactions, equity or debt securities. However, there can be
no assurance that suitable debt or equity financing will be available to the
Company.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10
|--

|Impact of Inflation and Changing Prices


The impact of inflation and changing prices on the Company has
been primarily limited to salary, laboratory and operating supplies and rent
increases and has not been material to date to the Companys operations. In
the future, the Companys revenue realization per case may not be
sufficient to cover the cost of inflation, although the Company is responding to
these concerns by attempting to increase the volume and adjust the product mix
of its business.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11
|--

|ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK


The following discussion about our exposure to market risk of
financial instruments contains forward-looking statements. Actual results may
differ materially from those described.


The Companys holdings of financial instruments are
comprised of U.S. corporate debt, U.S. government debt and commercial paper. All
such instruments are classified as securities available for sale. The Company
does not invest in portfolio equity securities or commodities or use financial
derivatives for trading purposes. The Companys debt security portfolio
represents funds held temporarily pending use in our business and operations.
The Company manages these funds accordingly. The Company seeks reasonable
assurance of the safety of principal and market liquidity by investing in grade
fixed income securities while at the same time seeking to achieve a favorable
rate of return. The Companys market risk exposure consists principally of
exposure to changes in interest rates. The Companys holdings are also
exposed to the risks of changes in the credit quality of issuers. The Company
typically invests in the shorter-end of the maturity spectrum, and at March 31,
2000, more than 77% of the Companys holdings were in instruments maturing
in two years or less and more than 42% of such holdings matured in one year or
less.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12
|--

|SIGNATURES


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

|                    |  |                                                                        
|------------------- |  | -----------------------------------------------------------------------
|Dated: May 15, 2000 |  | IMPATH INC.---------------------------------                           
|                    |  | (Registrant)                                                           
|                   
|                    |  |                                                                        
|Dated: May 15, 2000 |  | By  /s/ ANU D. SAAD -----------------------------------                
|                    |  | Anu D. Saad, Ph.D.                                                     
|                    |  | resident and Chief                                                     
|                    |  | Executive Officer                                                      
|                   
|                    |  |                                                                        
|Dated: May 15, 2000 |  | By /s/ DAVID J. CAMMARATA----------------------------------------------
|                    |  | David J. Cammarata                                                     
|                    |  | Executive Vice President,                                              
|                    |  | Chief Financial Officer,                                               
|                    |  | and Principal Accounting Officer                                       

|13
|--

|INDEX TO EXHIBITS
|-----------------

|ExhibitNumber | Description | PageNumber             
|------------- | ----------- | -----------------------
|27            |             | Financial Data Schedule

|14
|--