|FORM 10-QSECURITIES AND
EXCHANGE COMMISSIONWashington, D.C. 20549


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

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

|For the quarterly period ended September 30, 2002


OR
|------------------------------------------------------

| |  | |_| |  | 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
0-27750


IMPATH 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 StreetNew
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 or15(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 SEPTEMBER 30, 2002
|-------------------------------------- | ---------------------------------
|                                       |                                  
|Common Stock, par value$.005 per share | 16,329,233                       

|Index


IMPATH Inc. and Subsidiaries
|------------------------------------

| |  |  |  | PAGE NUMBER
| |  |  |  | -----------

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

|Item 1. |  | Consolidated Financial Statements (Unaudited):                                                       |  |   
|------- |  | ---------------------------------------------------------------------------------------------------- |  | --
|       
|        |  | Consolidated Balance Sheets at September 30, 2002and December 31, 2001                               |  | 3 
|       
|        |  | Consolidated Statements of Operations for the Three and NineMonths Ended September 30, 2002 and 2001 |  | 4 
|       
|        |  | Consolidated Statement of Stockholders Equity for theNine Months Ended September 30, 2002           |  | 5 
|       
|        |  | Consolidated Statements of Cash Flows for the NineMonths Ended September 30, 2002 and 2001           |  | 6 
|       
|        |  | Notes to Consolidated Financial Statements                                                           |  | 7 
|       
|Item 2. |  | Managements Discussion and Analysisof Financial Condition and Results of Operations                 |  | 12
|       
|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                                           |  | 18
|       
|Item 4. |  | Controls and Procedures                                                                              |  | 18

## PART II. Other Information

|Item 6. |  | Exhibits and Reports on Form 8-K |  | 19
|------- |  | -------------------------------- |  | --

|Signatures and Certification |  |  |  | 20
|---------------------------- |  |  |  | --

|2
Part I. Financial Information


Item 1. Consolidated
Financial Statements (Unaudited)


IMPATH Inc. and
Subsidiaries




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

|                                                             | September 30,2002 |  | December 31,2001 |            
|------------------------------------------------------------ | ----------------- |  | ---------------- | -----------
|ASSETS                                                       |                   |  |                  |            
|Current assets:                                              |                   | 
|Cash and cash equivalents                                    |                   |  | $                | 3,670,660  
|Marketable securities, at market value                       |                   |  |                  | 7,273,980  
|Accounts receivable, net of allowance for doubtful accounts  |                   |  |                  | 71,430,068 
|Prepaid expenses                                             |                   |  |                  | 1,958,463  
|Deferred tax assets                                          |                   |  |                  | 5,227,139  
|Other current assets                                         |                   |  |                  | 19,084,176 
|                                                             |                   |  |                  |            
|Total current assets                                         |                   |  |                  | 108,644,486
|                                                            
|Fixed assets, less accumulated depreciation and amortization |                   |  |                  | 87,948,508 
|                                                            
|Deposits and other non-current assets                        |                   |  |                  | 580,121    
|Intangible assets, net of accumulated amortization           |                   |  |                  | 37,029,137 
|Goodwill                                                     |                   |  |                  | 48,678,698 
|                                                             |                   |  |                  |            
|Total  Assets                                                |                   |  | $                | 282,880,950
|                                                             |                   |  |                  |            
|LIABILITIES AND STOCKHOLDERS EQUITY                         |                   | 
|                                                            
|Current liabilities:                                         |                   | 
|Current portion of capital lease obligations                 |                   |  | $                | 14,445,486 
|Short Term Borrowing                                         |                   |  |                  | 3,675,000  
|Accounts payable                                             |                   |  |                  | 5,097,935  
|Deferred revenue                                             |                   |  |                  | 3,641,647  
|Income taxes payable                                         |                   |  |                  | 5,790,287  
|Accrued expenses & other current liabilities                 |                   |  |                  | 5,340,974  
|                                                             |                   |  |                  |            
|Total current liabilities                                    |                   |  |                  | 37,991,329 
|                                                             |                   |  |                  |            
|Capital lease obligations, net of current portion            |                   |  |                  | 19,455,411 
|Long term note payable, net of current portion               |                   |  |                  | 48,925,000 
|Deferred tax liabilities                                     |                   |  |                  | 7,844,249  
|                                                            
|Stockholders equity:                                        |                   | 
|Common stock                                                 |                   |  |                  | 92,844     
|Additional paid-in capital                                   |                   |  |                  | 140,425,571
|Retained earnings                                            |                   |  |                  | 55,653,403 
|Accumulated other comprehensive (loss)                       |                   |  |                  | (3,939     
|                                                             |                   |  |                  |            
|                                                             |                   |  |                  | 196,167,879
|Less:                                                        |                   | 
|Cost of 2,239,476 and 2,209,476 shares of common stock       |                   | 
|held in treasury in 2002 and 2001                            |                   |  |                  | (27,402,470
|Deferred compensation                                        |                   |  |                  | (100,448   
|                                                             |                   |  |                  |            
|Total stockholders equity                                   |                   |  |                  | 168,664,961
|                                                             |                   |  |                  |            
|Total liabilities and stockholders equity                   |                   |  | $                | 282,880,950
|                                                             |                   |  |                  |            

|See accompanying notes to unaudited consolidated financial statements.


3
IMPATH Inc. and
Subsidiaries




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

|                                                                                                 | Three Months EndedSeptember 30 |  | Nine Months EndedSeptember 30 |           
|------------------------------------------------------------------------------------------------ | ------------------------------ |  | ----------------------------- | ----------
|
|Revenues:                                                                                        |                                |  |                               |           
|Net Physicians Services                                                                          |                                |  | $                             | 49,051,243
|IMPATH Predictive Oncology                                                                       |                                |  |                               | 5,186,521 
|Information Services                                                                             |                                |  |                               | 3,025,698 
|                                                                                                 |                                |  |                               |           
|                                                                                                 |                                |  |                               | 57,263,462
|                                                                                                 |                                |  |                               |           
|                                                                                                
|Cost of services                                                                                 |                                |  |                               | 16,900,211
|                                                                                                 |                                |  |                               |           
|                                                                                                
|Gross Profit                                                                                     |                                |  |                               | 40,363,251
|                                                                                                 |                                |  |                               |           
|                                                                                                
|Operating expenses:                                                                              |                                | 
|Selling, general and administrative                                                              |                                |  |                               | 25,211,659
|Depreciation and amortization                                                                    |                                |  |                               | 5,404,958 
|Acquired in process research & development                                                       |                                |  |                               |          
|                                                                                                 |                                |  |                               |           
|                                                                                                
|Total operating expenses                                                                         |                                |  |                               | 30,616,617
|                                                                                                 |                                |  |                               |           
|                                                                                                
|Income/(loss)  from operations                                                                   |                                |  |                               | 9,746,634 
|                                                                                                
|Other Income                                                                                     |                                |  |                               | 49,092    
|Other Expense                                                                                    |                                |  |                               | (973,260  
|                                                                                                 |                                |  |                               |           
|                                                                                                
|Other expense, net                                                                               |                                |  |                               | (924,168  
|                                                                                                 |                                |  |                               |           
|                                                                                                
|Income/(loss) before income tax
       (expense)/benefit                                         |                                |  |                               | 8,822,466 
|                                                                                                
|Income tax (expense)/benefit                                                                     |                                |  |                               | (3,793,660
|                                                                                                 |                                |  |                               |           
|Net income/(loss)                                                                                |                                |  | $                             | 5,028,806 
|                                                                                                 |                                |  |                               |           
|                                                                                                
|Earnings/ (loss) per share:                                                                      |                                | 
|Basic:                                                                                           |                                | 
|Net income per common share                                                                      |                                |  | $                             | 0.31      
|                                                                                                 |                                |  |                               |           
|                                                                                                
|Weighted average common shares outstanding                                                       |                                |  |                               | 16,331,000
|                                                                                                 |                                |  |                               |           
|Diluted:                                                                                         |                                | 
|Net income /(loss)per common share, assuming                                                     |                                | 
|dilution                                                                                         |                                |  | $                             | 0.31      
|                                                                                                 |                                |  |                               |           
|                                                                                                
|                                                                                                 |                                | 
|Weighted average common and common
       equivalent shares outstanding,       assuming dilution |                                |  |                               | 16,444,000
|                                                                                                 |                                |  |                               |           

|See accompanying notes to unaudited consolidated financial statements


4



IMPATH Inc. and Subsidiaries
Consolidated Statement of Stockholders Equity
Nine Months Ended September 30, 2002
(Unaudited)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                | Common Stock |  | AdditionalPaid-inCapital |        | RetainedEarnings |   | AccumulatedOtherComprehensive(Loss) |  | TreasuryStock |            | DeferredCompensation |          | Total |             
|--------------------------------------------------------------- | ------------ |  | ------------------------ | ------ | ---------------- | - | ----------------------------------- |  | ------------- | ---------- | -------------------- | -------- | ----- | ------------
|                                                               
|Shares                                                          |              |  | Amount                  
|                                                                |              |  |                          |        |                  |   |                                     |  |               |            |                      |          |       |             
|Balance at December
    31, 2001                                | 18,406,579   |  | $                        | 92,033 |                  | $ | 138,259,994                         |  | $             | 44,226,341 |                      | ($10,776 | )     | ($26,750,281
|                                                                |              |  |                          |        |                  |   |                                     |  |               |            |                      |          |       |             
|Common shares
    issued upon
    exercise of stock
    options | 162,130      |  |                          | 811    |                  |   | 2,165,577                           |  |               |            |                      |          |       |             
|                                                                |              |  |                          |        |                  |   |                                     |  |               |            |                      |          |       |             
|Repurchase of
    common shares                                 |              |  |                          |        |                  |   |                                     |  |               |            |                      |          |       | (652,189    
|                                                                |              |  |                          |        |                  |   |                                     |  |               |            |                      |          |       |             
|Change in deferred
    Compensation                             |              |  |                          |        |                  |   |                                     |  |               |            |                      |          |       |             
|Comprehensive
     income:                                      |              |  |                          |        |                  |   |                                     |  |               |            |                      |          |       |             
|Change in unrealized
    net appreciation of
    securities     |              |  |                          |        |                  |   |                                     |  |               |            |                      | 6,837    |       |             
|Net income for the
    period ended
    Sept 30, 2002           |              |  |                          |        |                  |   |                                     |  |               | 11,427,062 |                      |          |       |             
|                                                                |              |  |                          |        |                  |   |                                     |  |               |            |                      |          |       |             
|Total comprehensive
     income                                 |              |  |                          |        |                  |   |                                     |  |               |            |                      |          |       |             
|                                                                |              |  |                          |        |                  |   |                                     |  |               |            |                      |          |       |             
|Balance at September
    30, 2002                               | 18,568,709   |  | $                        | 92,844 |                  | $ | 140,425,571                         |  | $             | 55,653,403 |                      | ($3,939  | )     | ($27,402,470

|See accompanying notes to unaudited consolidated financial statements


5
IMPATH Inc. and Subsidiaries




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

|                                                                  | Nine Months Ended September 30, | 
|----------------------------------------------------------------- | ------------------------------- | 
|
|Cash flows from operating activities:                             |                                 | 
|Net income                                                        |                                 | 
|Adjustments to reconcile net income to net cash provided by       |                                 | 
|operating activities:                                             |                                 | 
|Acquired in process research & development                        |                                 | 
|Depreciation and amortization                                     |                                 | 
|Provision for uncollectible accounts receivable                   |                                 | 
|Non-cash deferred compensation                                    |                                 | 
|Changes in assets and liabilities (net of effect from acquisition |                                 | 
|of business):                                                     |                                 | 
|(Increase) in accounts receivable                                 |                                 | 
|(Increase) in prepaid expenses and current assets                 |                                 | 
|(Increase) in deposits and other assets                           |                                 | 
|(Decrease)/increase in accounts payable and accrued expenses      |                                 | 
|(Decrease) in income taxes payable                                |                                 | 
|(Decrease) in deferred revenues                                   |                                 | 
|                                                                  |                                 | 
|                                                                 
|Total adjustments                                                 |                                 | 
|                                                                  |                                 | 
|Net cash provided by operating activities                         |                                 | 
|                                                                  |                                 | 
|Cash flows from investing activities:                             |                                 | 
|Purchases of marketable securities                                |                                 | 
|Sales/maturities of marketable securities                         |                                 | 
|Acquisition of business, net of cash acquired                     |                                 | 
|Purchase of intangible assets                                     |                                 | 
|Capital expenditures                                              |                                 | 
|                                                                  |                                 | 
|                                                                 
|Net cash (used in) investing activities                           |                                 | 
|                                                                  |                                 | 
|Cash flows from financing activities:                             |                                 | 
|Issuance of common stock from exercise of options and warrants    |                                 | 
|Repurchase of common stock                                        |                                 | 
|Payments of capital lease obligations                             |                                 | 
|Proceeds from bank loans                                          |                                 | 
|Payments of notes payable                                         |                                 | 
|                                                                  |                                 | 
|Net cash provided by financing activities                         |                                 | 
|                                                                  |                                 | 
|Net decrease in cash and cash equivalents                         |                                 | 
|Cash and cash equivalents at beginning of period                  |                                 | 
|                                                                  |                                 | 
|Cash and cash equivalents at end of period                        |                                 | 
|                                                                  |                                 | 

|See accompanying notes to unaudited 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), 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 accounting principles generally
accepted in the United States of America (GAAP) for complete annual 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 Form10-K for the year ended
December 31, 2001.


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 exercisable
options and warrants had been exercised to the extent their effect is dilutive.
Net loss per diluted share for the three-months ended September 30, 2001 does
not include common equivalent shares as they are anti-dilutive.


Comprehensive Net Income


Comprehensive net
income/(loss) is equal to the net income reported adjusted for the unrealized
net depreciation of marketable securities, net of related deferred taxes.
Comprehensive net income/(loss) for the three months ended September 30, 2002
and 2001 was $5,171,930 and $(1,740,366) respectively. Comprehensive net income
for the nine months ended September 30, 2002 and 2001 was $11,433,899 and
$6,338,564, respectively.


Investments


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 gain or loss is recorded as a separate component of
stockholders equity, net of related deferred taxes. At September 30, 2002,
approximately $652,204 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 marketable securities.


Accounts Receivable, Net of Allowance for Doubtful Accounts


In accordance with
(GAAP) and consistent with healthcare industry practices, the
Company presents its accounts receivable at net realizable value. Net accounts
receivable balances are comprised of the following as of September 30, 2002 and
December 31, 2001:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                | September 30, 2002 | December 31, 2001
|------------------------------- | ------------------ | -----------------
|Gross accounts receivable       |                    |                  
|Allowance for doubtful accounts |                    |                  
|Contractual allowance reserve   |                    |                  
|                                |                    |                  
|                                |                    |                  
|                                |                    |                  

|7
Segment information


The Company operates in
three reportable business segments: (1) Physician Services, (2) IMPATH
Predictive OncologyTM (IPO) and (3) Information Services.
Physician Services derives revenue from performing specialized cancer analyses.
IPO provides (i) contract laboratory services, (ii) cancer database and
pharmacoeconomic information and (iii) clinical trial support services to
genomics, biotechnology and pharmaceutical companies. Information Services
derives revenues by licensing its tumor registry software to community hospitals
and state agencies. Beginning with the acquisition of Tamtron Corporation,
(Tamtron), in January 2002, Information Services also provides
pathology information management software, which is licensed to hospitals and
academic medical centers around the country. The Company measures the
performance of its operating segments through Income (loss) from
operations as defined on the accompanying consolidated statements of
operations.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Three Months Ended($ in Thousands) | TotalIMPATH Inc. | PhysicianServices | IMPATHPredictive Oncology | InformationServices
|---------------------------------- | ---------------- | ----------------- | ------------------------- | -------------------
|                                  
|2002                               |                  |                   |                           |                    
|Revenue, net                       |                  |                   | $                         | 57,263             
|Operating income (loss)            |                  |                   | $                         | 9,746              
|Depreciation and                   |                  |                  
|Amortization                       |                  |                   | $                         | 5,405              
|                                  
|2001                               |                  |                  
|Revenue, net                       |                  |                   | $                         | 48,426             
|Operating income (loss)            |                  |                   | $                         | (3,301             
|Depreciation and                   |                  |                  
|Amortization                       |                  |                   | $                         | 4,119              
|                                  

|Nine Months Ended($ in Thousands) | TotalIMPATH Inc. | PhysicianServices | IMPATHPredictive Oncology | InformationServices
|--------------------------------- | ---------------- | ----------------- | ------------------------- | -------------------
|                                 
|2002                              |                  |                   |                           |                    
|Revenue, net                      |                  |                   | $                         | 166,457            
|Operating income (loss)           |                  |                   | $                         | 22,504             
|Depreciation and                  |                  |                  
|Amortization                      |                  |                   | $                         | 18,528             
|                                 
|2001                              |                  |                  
|Revenue, net                      |                  |                   | $                         | 137,636            
|Operating income (loss)           |                  |                   | $                         | 12,085             
|Depreciation and                  |                  |                  
|Amortization                      |                  |                   | $                         | 11,363             
|                                 

|Intangible Asset


Payments to acquire tissue
and tumor samples for use in GeneBank has been classified as an
intangible asset, with total purchases of $10,001,699 for the nine months ended
September 30, 2002. GeneBank payments are being amortized using the
straight-line method over its estimated useful life of seven years.


Recently Issued Accounting Standards


In July 2001, the FASB
issued SFAS No. 141, Business Combinations (SFAS 141),
which requires business combinations initiated after June 30, 2001 to be
accounted for using the purchase method of accounting, and SFAS No. 142,
Goodwill and Other Intangible Assets (SFAS 142), which
broadens the criteria for recording intangible assets separate from goodwill.
SFAS 142 requires the use of a nonamortization approach to account for purchased
goodwill and certain intangibles. Under the nonamortization approach, goodwill
and intangibles with indefinite lives will not be amortized into results of
operations, but instead will be reviewed for impairment at least annually and an
impairment charge will be recorded in the periods in which the recorded carrying
value of goodwill and certain intangibles is more than its estimated fair value.
Goodwill acquired in a business combination for which the acquisition date is
after June 30, 2001 will not be amortized. The Company has adopted the
provisions of SFAS 142, related to goodwill acquired prior to June 30, 2001 and
intangible assets, on January 1, 2002. The Company has reclassified to goodwill
approximately $100,000 which was previously assigned to the workforce. The
Company had approximately $25,454,000 of unamortized goodwill as of January 1,
2002 which was subject to the transition provisions of SFAS 142. The Company
completed its transitional goodwill impairment assessment in the second quarter
of fiscal year 2002. The assessment indicated that there was no goodwill
impairment. The Company will perform its annual impairment test in the fourth
quarter of each fiscal year, upon completion and approval of the Companys
financial operating plan.


8
The Companys pro
forma basic and diluted earnings per share for the nine months ended September
30, 2001 assuming the Company adopted Statement 142 at the beginning of fiscal
2001 would have been $0.35 and $0.34 per share respectively versus $0.39 and
$0.37 per share respectively as reported, had amortization expense of $513,000
net of tax, not been reported during the nine month period. The aggregate
acquired intangible asset amortization for the three and nine month periods
ended September 30, 2002 was approximately $700,000 and $2,040,000,
respectively. The estimated acquired intangible asset amortization expense for
the fiscal years ended December 31, 2002 through 2005 is approximately $2.7
million per year. Goodwill by segment for the period ended December 31, 2001 for
Physician Services, IPO and Information Services was approximately $4.2 million,
$10.8 million and $10.5 million, respectively. Goodwill by segment for the
period ended September 30, 2002 for Physician Services, IPO and Information
Services was approximately $1 million, $13.6 million and $34.0 million,
respectively.


The following disclosure
presents certain information on the Companys acquired intangible assets as
of September 30, 2002, and December 31, 2001. All intangible assets are
amortized over their estimated useful lives, as indicated below, with no
residual values.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Acquired Intangible Assets(In $ Thousands) |  | Weighted-AverageAmortizationPeriod | GrossCarryingAmount | AccumulatedAmortization | Net Balance
|------------------------------------------ |  | ---------------------------------- | ------------------- | ----------------------- | -----------
|                                          
|At September 30, 2002                      |  |                                    |                     |                         |            
|Amortized acquired intangible assets:      |  |                                   
|Technology                                 |  |                                    |                     | 5 years                 |            
|Customer Lists                             |  |                                    |                     | 15 years                |            
|                                           | 
|                                           |  |                                    |                     |                         |            
|                                           | 
|                                          
|At December 31, 2001                       |  |                                   
|Amortized acquired intangible assets:      |  |                                   
|Customer Lists                             |  |                                    |                     | 15 years                |            
|                                           | 
|                                           |  |                                    |                     |                         |            
|                                           | 

|In April 2002, the FASB
issued SFAS No. 145, Rescission of FASB No. 4, 44 and 64, Amendment of
FASB Statement No. 13, and Technical Corrections (SFAS 145).
SFAS 145 updates, clarifies and simplifies existing accounting pronouncements.
SFAS 145 rescinds Statement No.#4, which required all gains and losses from
extinguishment of debt to be aggregated and, if material, classified as an
extraordinary item, net of related income tax effect. As a result, the criteria
in APB No. 30 will now be used to classify those gains and losses because
Statement No. 4 has been rescinded. Statement No. 44 was issued to establish
accounting requirements for the effects of transition to provisions of the Motor
Carrier Act of 1980. Because the transition has been completed, Statement No. 44
is no longer necessary. SFAS 145 amends Statement No. 13 to require that certain
lease modifications that have economic effects similar to sale-leaseback
transactions be accounted for in the same manner as sale-leaseback transactions.
This amendment is consistent with FASBs goal of requiring similar
accounting treatment for transactions that have similar economic effects. SFAS
145 also makes technical corrections to existing pronouncements. While those
corrections are not substantive in nature, in some instances, they may change
accounting practice. We are required to adopt SFAS 145 effective for fiscal
2003. We do not expect the adoption of SFAS 145 to have a material impact on our
consolidated financial statements.


In June 2002, the FASB
issued SFAS No. 146, Accounting for Costs Associated With Exit or Disposal
Activities. This SFAS modifies the timing and measurement of the
recognition of costs associated with an exit or disposal activity. The statement
is effective for exit or disposal activities initiated after December 31, 2002.


9
Recent Acquisition


On January 18, 2002, the
Company completed its acquisition of Tamtron for $25,930,241 million in cash,
plus debt repayment of $651,492, as well as acquisition expenses of $2,622,326
for a total purchase price of $29,204,059. Tamtron is a San Jose, California,
based company whose flagship PowerPath® software is designed
specifically to assist companies who provide surgical pathology, cytology and
autopsy services (e.g. anatomic pathology) in streamlining operations and
supporting multi-site or multi-entity healthcare networks. The source of funds
for the acquisition was a combination of the Companys available cash, as
well as advances totaling $25 million under its amended credit facility. In
connection with the Tamtron acquisition, on January 18, 2002, the Company
amended its original credit facility and converted its $25 million 364-day
facility to a $28 million term loan. The term loan is to be repaid over a
five-year period, with interest only payable for the first twelve months.
Thereafter, the loan is payable in seventeen payments of principal plus
interest, with principal payments of $4.9 million due in 2003, 2004, 2005 and
2006 and a final principal payment of $8.4 million due in 2007. Both the
revolving credit line and the term loan currently bears interest at LIBOR plus
1.25%, which amounted to 3.1% at September 30, 2002.


The acquisition has been
accounted for under the purchase method, in accordance with SFAS 141, pursuant
to which the purchase price is allocated to the underlying assets and
liabilities based on their estimated fair values. The resulting goodwill from
this transaction of $23.5 million will not be amortized, and intangibles of
$11.0 million will be amortized over periods ranging from five to fifteen years.
The following table reflects the allocation of the purchase price.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |                                                          
| |  |  | ---------------------------------------------------------
| |  |  | Cash                                                     
| |  |  | Prepaid expenses and other current assets                
| |  |  | Accounts receivables, net of allowance                   
| |  |  | Property and equipment, net of accumulated depreciation  
| |  |  | Intangible assets  customer lists and acquired software 
| |  |  | Goodwill                                                 
| |  |  | Acquired in process research & development               
| |  |  | Current and other liabilities, including deferred revenue
| |  |  | Deferred tax, liability                                  
| |  | 
| |  |  |                                                          
| |  | 

|At the time of acquisition, Tamtron had annualized
revenue of approximately $10 million, which is generated primarily through
software sales and maintenance contracts. Tamtrons current customer base
includes more than 350 sites, including hospitals and academic medical centers
around the country, which process over 5 million cases per year.


Pro forma historical
results (unaudited) for the nine months ended September 30, 2001, adjusted, as
if Tamtron had been acquired on January 1, 2001, approximate $141.5 million in
revenue, $6.5 million in net income, and $0.39 in diluted earnings per share.
The pro forma results are not necessarily indicative of what actually would have
occurred if the acquisition had been completed as of January 1, 2001, nor are
they necessarily indicative of future results.


Debt


In October 2002, the
Company amended its Senior Secured Credit Facility to increase the availability
under its revolving credit line from $25 million to $40 million. The amended
credit facility continues to be syndicated by Fleet National Bank, which acts as
agent for the lenders. The increased funds were made available to the Company
without any modification of the financial terms or other material covenants and
requirements provided by the Companys existing credit facility.


10
Software Development Cost


Once technological
feasibility has been established, the Company capitalizes software development
costs incurred related to software developed for resale until the product is
released for commercial use. Similarly, costs incurred to develop upgrades are
capitalized until the upgrades are commercially released. Before technological
feasibility has been established, the Company expenses all costs incurred for
the product.


Commitments and Contingencies


From time to time, the
Company is involved in various legal actions in the normal course of business,
some of which seek monetary damages. While the Company cannot predict with
absolute certainty the outcome of any of the proceedings in which it is
involved, 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.


Certain executive officers
of the Company have entered into agreements which provide severance of up to one
years salary in the event of termination without cause. On August 7, 2002,
certain executive officers of the Company entered into agreements which provide
for certain payments to the executive, including three years of salary and bonus
upon the consummation of a change of control.


Discontinuance of Biologic & Immunologic Science Laboratories, Inc. Product Offerings


During the course of the
Companys strategic review for the quarter ended March 31, 2002, it was
determined that the Company would no longer offer certain products based on
technology which was purchased from Biologic & Immunologic Science
Laboratories, Inc. (BIS), an acquisition that was completed in July
1998. As a result, the Company recorded a goodwill write-down of $3,200,000,
which eliminated all remaining goodwill from the BIS acquisition. The goodwill
impairment was necessitated by the Companys decision to completely
discontinue the BIS product offering. Additionally, the Company recorded a
one-time charge of $1,900,000 to account for severance and related costs, as
well as an increase in allowances for bad-debt expenses related to those
accounts the Company will no longer be servicing.


Stockholders Equity


On July 19, 2002, the
Company announced that its Board of Directors has adopted a Stockholder Rights
Plan (Rights Plan) designed to protect Company stockholders in the
event of takeover activity that would deny them the full value of their
investment. The Rights Plan was not adopted in response to any specific takeover
initiative.


In adopting the Rights
Plan, the Board declared a dividend distribution of one preferred stock purchase
right for each outstanding share of common stock of the Company, payable to
stockholders of record at the close of business on August 1, 2002. The rights
will become exercisable only in the event, with certain exceptions, a person or
group of affiliated or associated persons acquires 15% or more of the
Companys voting stock, or a person or group of affiliated or associated
persons commences a tender or exchange offer, which if successfully consummated,
would result in such person or group owning 15% or more of the Companys
voting stock. A stockholder who owns 15% or more of the Companys voting
stock as of July 19, 2002, will not trigger the provision unless the stockholder
thereafter acquires an additional one percent or more of the outstanding stock.
The Company is not currently aware of any 15% stockholders. The rights will
expire on July 19, 2012.


11



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


Forward-Looking Statements


This Quarterly Report on
Form 10-Q may contain statements that the Company believes are, or may be
considered to be, forward-looking statements within the meaning of
various provisions of the Securities Act of 1933 and the Securities Exchange Act
of 1934. These forward-looking statements generally can be identified by the use
of statements that include phrases such as the Company believes,
expects, anticipates, intends,
plans, foresees or other similar words or phrases.
Similarly, statements that describe the Companys projected growth and
goals and its plans for expansion also are forward-looking statements. All of
these forward-looking statements are subject to certain risks and uncertainties,
many of which are outside of managements control, and which could cause
the Companys actual results to differ materially from those contemplated
by the relevant forward-looking statement. Some of the most significant factors
that could cause the actual results to differ materially from the
forward-looking statement, alone or in combination, would be the failure to
continue to successfully integrate the businesses acquired by the Company,
unanticipated disagreements with the Companys joint venture partners,
unanticipated changes in the healthcare industry (as a result of cost
containment measures, changes in governmental regulations, including
reimbursement programs and patient confidentiality issues, or other factors), an
inability to procure consented, well-characterized tissue specimens, the adverse
effect of any legal proceedings involving the Company, an unanticipated failure
in the commercialization of the Companys biopharmaceutical products, or an
unanticipated loss of business. In addition, the September 11, 2001 terrorist
attacks, and change in international political conditions as a result of these
events, may continue to effect the United States and the global economy and
increase other risks. Readers are urged to consider these factors carefully in
evaluating the forward-looking statements. The forward-looking statements
included in this Quarterly Report on Form 10-Q are made only as of the date of
this Quarterly Report and the Company undertakes no obligation to publicly
update these forward-looking statements to reflect subsequent events or
circumstances.


Three Months Ended September 30, 2002Compared with Three Months Ended September 30, 2001


The Companys total
net revenues for the three months ended September 30, 2002 and 2001 were $57.3
million and $48.4 million, respectively, representing an increase of $8.9
million, or 18.4%, in 2002. This growth was primarily attributable to a 17%
increase in case volume, resulting from increased sales and marketing
activities, as well as a growth in lymphoma and leukemia cases, which increased
15% over the year ago quarter. IPO revenues increased 26.8% to $5.2 million this
quarter as compared to the year ago quarter, primarily driven by increases in
the number of projects with biopharmaceutical companies as well as revenue
generated by the IMPATH Clinical Trials NetworkTM(ICTN).


Cost of services, which
primarily includes payroll, laboratory supplies, logistics and outside services,
for the three months ended September 30, 2002 and 2001 were $16.9 million and
$16.6 million, respectively, representing an increase of $300,000, or 1.8% in
2002. Cost of services for September 2001 included one-time charges of $650,000
in severance and related costs associated with the Companys restructuring
of its clinical trials business made pursuant to the acquisition of a clinical
trials network from Innovative Clinical Solutions Ltd. (ICSL) and
$400,000 for salaries paid to laboratory employees idled during the events of
September 11th. The additional increase was necessitated by case
volume growth and the continuing product shift to more complex cases, as well as
costs associated with the operations of Tamtron. Cost of services as a
percentage of total revenues decreased to 29.5% in 2002 from 34.2% in 2001
primarily due the one-time charges in 2001 and increased sales at IPO and
Information Services, which have lower associated cost of services as a
percentage of revenue.


Gross profit for the three
months ended September 30, 2002 and 2001 was $40.4 million and $31.9 million,
respectively, representing an increase of $8.5 million, or 26.6%, in 2002. Gross
profit margins increased to 70.5% in 2002, up from 65.8% in 2001, primarily due
to the matters discussed above.


Selling, general and
administrative expenses for the three months ended September 30, 2002 and 2001
were $25.2 million and $31.0 million, respectively, representing a decrease of
$5.8 million, or 18.7%, in 2002. In 2001, the Company incurred a one-time charge
of $9.7 million for the resolution with the government regarding the
Companys billing practices. In 2002, the Company incurred additional
expenses related to incremental laboratory supplies and courier services due to
case volume growth, as well as costs associated with the administration of ICTN.
Selling, general and administrative expenses, as a percentage of revenues,
decreased to 44.0% in 2002 from 64.0% in 2001, primarily due to the one-time
charge in 2001.


12
Depreciation and
amortization expense for the three months ended September 30, 2002 and 2001 was
$5.4 million and $4.1 million, respectively, representing an increase of $1.3
million, or 31.7%, in 2002. This increase was primarily driven by depreciation
expense for new office and laboratory furniture and equipment, as well as
leasehold improvements incurred in connection with the expansion the
Companys New York and Los Angeles facilities. The Company also incurred
depreciation expense for enhancements made to the Companys clinical and
billing systems, as well as expenses related to the amortization of GeneBank.
Amortization of goodwill ceased as a result of the January 1, 2002 adoption of
SFAS 142, and prior year goodwill amortization was $300,000. As a percentage of
total revenues, depreciation and amortization expense increased to 9.4% in 2002
from 8.5% in 2001.


Income (loss) from
operations for the three months ended September 30, 2002 and 2001 was $9.7
million and $(3.3) million, respectively, representing an increase of $13.0
million in 2002. This increase is a result of the aforementioned one-time
charges in 2001. As a percentage of total revenues, income (loss) from
operations increased to 16.9% in 2002, from (6.8)% in 2001.


Other expense, net for the
three months ended September 30, 2002 and 2001 was $924,000 and $486,000
respectively, representing an increase of $438,000 in 2002. The increase was
primarily due to increased interest expense associated with capital lease
obligations and long term borrowings, as well as a reduction in the amount of
interest bearing securities on hand.


The tax provision for the
three months ended September 30, 2002 of approximately $3.8 million reflects
federal, state and local income tax expense. The effective tax rate for each of
2002 and 2001 was 43.0%.


Net income (loss) for the
three months ended September 30, 2002 and 2001 was $5.0 million and $(2.2)
million, respectively, representing an increase of $7.2 million in 2002.Net income (loss) as a percentage of revenues increased to 8.8% for 2002
from (4.5)% in 2001, primarily due to the one-time charges in 2001.


Nine Months Ended September 30, 2002Compared with Nine Months Ended September 30, 2001


The Companys total
net revenues for the nine months ended September 30, 2002 and 2001 were $166.5
million and $137.6 million, respectively, representing an increase of $28.9
million, or 21%, in 2002. This growth was primarily attributable to a 13%
increase in case volume, resulting from increased sales and marketing
activities, as well as the growth in lymphoma and leukemia cases, which
increased 19% over the year ago period. IPO revenues increased 59%, to $16.8
million, for the nine months as compared to the year ago period primarily due to
the increase in the number of projects with biopharmaceutical companies as well
as revenue generated by ICTN.


Cost of services, which
primarily includes payroll, laboratory supplies, logistics and outside services,
for the nine months ended September 30, 2002 and 2001 were $49.9 million and
$46.8 million, respectively, representing an increase of $3.1 million, or 6.6%, in
2002. Cost of services in 2002 included one-time charge in the first quarter of
$1.0 million relating to certain severance payments in conjunction with the
decision to no longer offer certain non-core products based on technology
purchased from BIS. Cost of services in 2001 included one-time charges of
$650,000 in severance and related costs associated with the Companys
restructuring of its clinical trials business made pursuant to the acquisition
of a clinical trials network from ICSL and $400,000 for salaries paid to
laboratory employees idled during the events of September 11th. The
additionalincrease was necessitated by case volume growth, a
continuing product shift to more complex cases, as well as the costs associated
with the operations of Tamtron. Cost of services as a percentage of total
revenues decreased to 30.0% in 2002, from 34.0% in 2001 due to the one-time
charges as well as increased sales at IPO which has lower associated cost of
services as a percentage of revenue.


13
Gross profit for the nine
months ended September 30, 2002 and 2001 was $116.5 million and $90.8 million,
respectively, representing an increase of $25.7 million, or 28.3%, in 2002. Gross
profit margins increased to 70% in 2002, up from 66.0% in 2001, due to the
reasons noted above.


Selling, general and
administrative expenses for the nine months ended September 30, 2002 and 2001
were $74.6 million and $67.3 million, respectively, representing an increase of
$7.3 million, or 10.9%, in 2002. In 2002, the Company incurred a one-time charge
of $900,000 in the first quarter, as a result of increased bad-debt allowances
related to the discontinuance of BIS product offerings. In 2001, the Company
incurred a one-time charge of $9.7 million for the resolution with the
government regarding theCompanys billing practices. The Company
incurred additional expenses in this period related to incremental laboratory
supplies and courier services due to case volume growth, as well as costs
associated with the administration of ICTN. In 2002, selling, general and
administrative expenses, as a percentage of revenues, decreased to 44.8% in
2002, from 48.9% in 2001, primarily due to the one-time charges noted above.


Depreciation and
amortization expense for the nine months ended September 30, 2002 and 2001 was
$18.5 million and $11.4 million, respectively, representing an increase of $7.1
million, or 62.3%, in 2002. This increase was primarily due to a one-time charge
of $3.2 million in amortization expense for the write-down of BIS goodwill as
well as depreciation expense for new furniture, laboratory equipment, and
leasehold improvements incurred in connection with the expansion the
Companys New York and Los Angeles facilities. The Company also incurred
depreciation expense for enhancements made to the Companys clinical and
billing systems, as well as expenses related to the amortization of GeneBank.
Amortization of goodwill ceased as a result of the Companys January 1,
2002 adoption of SFAS 142, and prior year goodwill amortization was $1.0
million. As a percentage of total revenues, depreciation and amortization
expense increased to 11.1% in 2002, from 8.2% in 2001.


Income from operations for
the nine months ended September 30, 2002 and 2001 was $22.5 million and $12.1
million, respectively, representing an increase of $10.4 million, or 86.0%, in
2002. Income from operations increased to 13.5% in 2002 from 8.8% in 2001, as a
percentage of total revenues, as a result of the aforementioned charges in 2001.


Other expense, net for the
nine months ended September 30, 2002 and 2001 was $2.5 million and $1.2 million,
respectively, representing an increase of $1.3 million, or 108.0% in 2002. The
increase was primarily due to increased interest expense associated with capital
lease obligations and long-term borrowings, as well as a reduction in the amount
of interest bearing securities on hand.


The tax provision for the
nine months ended September 30, 2002 of approximately $8.6 million reflects
federal, state and local income tax expense. The effective tax rate for 2002 and
2001 remained consistent at 43.0%.


Net income for the nine
months ended September 30, 2002 and 2001 was $11.4 million and $6.2 million,
respectively, representing an increase of $5.2 million, or 83.9%, in 2002. Due
to the non-recurring charges, primarily in 2001, net income as a percentage of
revenues increased to 6.8% in 2002 from 4.5% in 2001.


14
Liquidity and Capital Resources


Since its inception, the
Company has raised approximately $103.9 million of capital through public
offerings of its common stock, and $6.6 million of capital from private
placements of its preferred stock. All of the Companys preferred stock 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
Companyexpands its existing facilities and pursues its growth strategy.


The Companys cash and
cash equivalent balances at September 30, 2002 and December 31, 2001 were $3.7
million and $5.9 million, respectively, representing a decrease of $2.2 million
in 2002. The Company also had approximately $7.3 million in marketable
securities at September 30, 2002, representing a $9.2 million decrease from the
$16.5 million at December 31, 2001. The net decrease in cash and cash
equivalents and marketable securities for the nine-month period was primarily
due to $28.6 million for the acquisition of Tamtron, $21.5 million in lease
payments and capital expenditures, $10.0 million for the acquisition of GeneBank
samples, and offset by the receipt of $33.6 million in loan proceeds. The
Company generated approximately $16.5 million in operating cash flow in the 2002
nine-month period.


In June 2001, the Company
entered into a $50 million Senior Secured Credit Facility consisting of a
five-year commitment for a $25 million revolving credit line and a $25 million
364-day facility intended for acquisitions. The credit facility syndicated by
Fleet National Bank, which also acts as Agent for the lenders, replaced the
Companys previous $15 million unsecured line of credit that expired on
June 28, 2001. In connection with the Tamtron acquisition, on January 18, 2002,
the Company amended its original credit facility and converted its $25 million
364-day facility to a $28 million term loan. The term loan is to be repaid over
a five-year period, with interest only payable for the first twelve months.
Thereafter, the loan is payable in seventeen payments of principal plus
interest, with principal payments of $4.9 million due in 2003, 2004, 2005 and
2006 and a final principal payment of $8.4 million due in 2007. Both the
revolving credit line and the term loan currently bears interest at LIBOR plus
1.25%, which was approximately 3.1% at September 30, 2002. As of September 30,
2002, the Company had $24.6 million outstanding under the revolving credit line
and $28 million drawn down from the term loan. The $24.6 million under the
revolving credit line is due in full in five years. In connection with the
amended facility, the Company also amended certain debt covenants contained in
the original facility. The Company was in compliance with these covenants as of
September 30, 2002. The covenants are principally related to current ratios,
stockholders equity and debt to EBITDA ratios. In October 2002, the
Company amended its Senior Secured Credit Facility to increase the availability
under its revolving credit line from $25 million to $40 million. The amended
credit facility continues to be syndicated by Fleet National Bank, which acts as
agent for the lenders. The increased funds were made available to the Company
without any modification of the financial terms or other material covenants and
requirements provided by the Companys existing credit facility.


On May 7, 2002, the Company
announced its intentions to resume its repurchase of shares of the
Companys common stock. The share repurchase program was approved by the
Companys Board of Directors in January of 2000 and authorized the
repurchase of up to $15,000,000 of common stock of the Company from time to time
in open market or private transactions, depending on market conditions, share
price and other considerations. In May 2002, the Company repurchased 30,000
shares for approximately $650,000. Approximately $13.1 million of common stock
remains available for repurchase under the program. Any additional purchases
will be funded from available cash and working capital.


The company has the
following lease commitments:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------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| | Year ending December 31, | Operating leases | Capital leases                    | 
| | ------------------------ | ---------------- | --------------------------------- | 
| |                          |                  | 2002                              | 
| |                          |                  | 2003                              | 
| |                          |                  | 2004                              | 
| |                          |                  | 2005                              | 
| |                          |                  | 2006                              | 
| |                          |                  | Thereafter                        | 
| |                          |                  |                                   | 
| |                          |                  |                                   | 
| |                          |                  |                                   | 
| |                          |                  | Amount representing interest      | 
| |                          |                  | (rates range from 4.45% to 9.94%) | 

|15
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 yield on four-year
treasury notes. As of September 30, 2002, the Company had fully drawn against
this 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 September 30, 2002
approximately $1.0 million was drawn against this 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 $21.2 million
in March 2001, under the same lease terms. As of September 30, 2002,
approximately $20.8 million was drawn against this line. In November 2001, the
Company established an additional $10 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. As of September 30, 2002 the Company had not drawn
against this line. In April 2000, the Company established an $875,000 credit
line with Dynamics Commercial Funding Corp. with lease terms of 36 months and a
rate equal to the yield on three-year treasury notes. As of September 30, 2002,
the Company had fully drawn against this line. In June 2000, the Company
established an additional $4.0 million credit line with Dynamics Commercial
Funding Corp. with lease terms of 48 months and a rate equal to the yield on
four-year treasury notes. As of September 30, 2002, the Company had fully drawn
against this line. In November 2000, the Company established an additional $2.9
million credit line with Dynamics Commercial Funding Corp. with lease terms of
48 months and a rate equal to the yield on four-year treasury notes. As of
September 30, 2002, approximately $2.6 million was drawn against this line. In
April 2000, the Company established a $3.0 million credit line with First Sierra
Financial, Inc. (currently Popular Leasing, USA) with lease terms of
48 months and a rate equal to the yield on four-year treasury notes. As of
September 30, 2002, the Company had fully drawn against this line. In September
2000, the Company established an additional $6.0 million credit line with First
Sierra Financial, Inc. (currently Popular Leasing, USA) with the
lease terms of 48 months and a rate equal to the yield on four-year treasury
notes. As of September 30, 2002, the Company had fully drawn against this line.
In November 2001, the Company established an additional $2 million credit line
with Popular Leasing, USA with lease terms of 48 months and a rate equal to .35%
above yield on four-year treasury notes. As of September 30, 2002 the Company
had fully drawn against the line. In July 2002, the Company established an
additional $1.7 million credit line with Popular Leasing, USA with lease terms
of 48 months and a rate equal to the yield on four-year treasury notes. As of
September 30, 2002, the Company has fully drawn against this line. In July 2000,
the Company established a $7.15 million credit line with Advanced Capital
Resources Corp. (currently Applied Financial, Inc.) with lease terms
of 48 months and a rate equal to the yield on four-year treasury notes. As of
September 30, 2002, approximately $6.6 million was drawn against this line. In
November 2000, the Company established a $3.0 million credit line with Trimarc
Financial Corp. with lease terms of 48 months and a rate equal to the yield on
four-year treasury notes. As of September 30, 2002, the Company had fully drawn
against this line. In April 2001, the Company established an additional $1.1
million credit line with Trimarc Financial Corp. with lease terms of 48 months
and a rate equal to the yield on four-year treasury notes. As of September 30,
2002 the Company had fully drawn against this line. In January 2001, the Company
established a $2 million credit line with IFC Credit Corp. with lease terms of
48 months and a rate equal to the yield on four-year treasury notes. As of
September 30, 2002, approximately $525,000 was drawn against this line. In
January 2002, the Company established a $2 million credit line with Key
Equipment Finance with lease term of 48 months and a rate equal to the yield on
four-year treasury notes. As of September 30, 2002, approximately $229,000 was
drawn against this line. In May 2002, the Company established a $950,000 credit
line with Celtic Leasing Corp. with lease terms of 48 months and a rate equal to
the yield on four-year treasury notes. As of September 30, 2002, approximately
$182,000 was drawn against this line. In April 2002, the Company established a
$1 million credit line with U. S. Bancorp Oliver-Allen Technology Leasing
(USBOATL) with lease term of 48 months and a rate equal to the yield on
four-year treasury notes. As of September 30, 2002, the Company had fully 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, specifically, acquisitions of businesses
or technologies that could require additional liquidity needs. 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. See Forward-Looking Statements.


16
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 to date has not been material 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 believes that continued growth in its businesses and
advancements in science and technology (and the resulting impact on the
Companys product mix and sales and marketing efforts) will reduce the
potential impact of inflation or changing prices.


Critical Accounting Policies


The Companys critical
accounting policies are as follows:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------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| |  |  | Revenue
recognition;
| | - |  | --------------------

| |  |  | Estimating
valuation allowances and accrued liabilities, specifically contractual and bad debt
allowances for doubtful accounts; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Accounting
for income taxes
| | - |  | ---------------------------

|Revenue
recognition.The Company generally recognizes revenue from Physician
Services upon completion of the testing process. Revenue is reported at the
estimated net realizable amounts from patients, third-party and government
payors and others, for services rendered, including estimated retroactive
adjustments under reimbursement agreements with certain payors. Retroactive
adjustments are accrued on an estimated basis in the period the related services
are rendered and adjusted in future periods as final settlements are determined.


Revenue from IPO is
recognized within the guidance contained in the provisions of SEC Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial
Statements. Revenue is recognized upon completion of analysis in
accordance with the terms of the contract. In cases where the contract calls for
the biological specimen to be shipped, revenue is recognized upon shipment of
the biological material to the customer.


Revenue from Information
Services is deferred and recognized on a straight-line basis over the term of
the respective agreement. The Company also utilizes the percentage of completion
method in order to recognize certain software revenue. Many license agreements
also have support and maintenance obligations that correspond to the revenue
recognized by the Company.


Contractual
allowances and allowance for doubtful accounts.The preparation
of financial statements requires the Companys management to make estimates
and assumptions that affect the reported amount of assets and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reported period.
Specifically, the Companys management must make estimates of contractual
allowances and potential future uncollectible accounts receivable. Significant
management judgments and estimates must be made and used in connection with
establishing the allowances in any accounting period. Material differences may
result in the amount and timing of the Companys revenue and expenses for
any period if management made different judgments or utilized different
estimates. Management specifically analyzes accounts receivable and analyzes
historical bad debts, customer concentrations, customer credit-worthiness,
current economic trends and changes in the Companys customer payment terms
when evaluating the adequacy of the allowance for doubtful accounts.


Accounting for income
taxes.As part of the process of preparing the Companys
consolidated financial statements the Company is required to estimate its income
taxes in each of the jurisdictions in which the Company operates. This process
involves estimating its actual current tax exposure together with assessing
temporary differences resulting from differing treatment of items, such as
deferred revenue, for tax and accounting purposes. These differences result in
deferred tax assets and liabilities, which are included within the
Companys consolidated balance sheet. The Company must then assess the
likelihood that its deferred tax assets will be recovered from future taxable
income and to the extent the Company believes that recovery is not likely, it
must establish a valuation allowance. To the extent the Company establishes a
valuation allowance or increase this allowance in a period, it must include an
expense within the tax provision in the statement of operations.


17
Significant management
judgment is required in determining its provision for income taxes, its deferred
tax assets and liabilities and any valuation allowance recorded against its net
deferred tax assets. In the event that actual results differ from these
estimates or the Company adjusts these estimates in future periods, the Company
may need to establish an additional valuation allowance which could materially
impact its financial position and results of operations.


18



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, see Forward Looking Statements. Actual
results may differ materially from those described.


The Companys holdings
of financial instruments are comprised primarily 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 its business and operations. The Company manages these funds accordingly.
The Company seeks reasonable assuredness of the safety of principal and market
liquidity by investing in rated 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 September 30, 2002, approximately 48% of its holdings
were in instruments maturing in two years or less and more than 81% of such
holdings maturing in one year or less.




ITEM 4. Controls and Procedures.


Within the 90 days prior to
the date of filing this Quarterly Report on Form 10-Q, the Company carried out
an evaluation, under the supervision and with the participation of the
Companys management, including the Chief Executive Officer, Chief Financial Officer and Vice
President of Corporate Finance, of the effectiveness of the Companys
disclosure controls and procedures as defined in Exchange Act Rule 13a-14. Based
upon that evaluation, the Chief Executive Officer, Chief Financial Officer and Vice President of
Corporate Finance have concluded that the Companys current disclosure
controls and procedures are effective and provide them with the material
information relating to the Company as required to be disclosed in the reports
the Company files or submits under the Exchange Act on the timely basis.


There have been no
significant changes in the Companys internal controls or in other factors
that could significantly affect internal controls subsequent to the date of the
evaluation by the Chief Executive Officer, Chief Financial Officer and Vice President of Corporate
Finance.


19
PART II. Other Information




ITEM 6. Exhibits and Reports on Form 8-K


(a) Exhibits:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 10.33 |  | THIRD AMENDATORY AGREEMENT TO CREDIT AGREEMENT, JOINDER AND ASSIGNMENT AGREEMENT
dated as of October 17, 2002 by and among IMPATH INC., IMPATH PREDICTIVE
ONCOLOGY, INC., IMPATH-BIS INC., MEDICAL REGISTRY SERVICES, INC., IMPATH-BCP,
INC., IMPATH-PCRL INC., IMPATH-HDC, INC., IMPATH INFORMATION SERVICES, INC.,
TAMTRON CORPORATION, IMPATH-CSL INC., FLEET NATIONAL BANK, THE BANK OF NEW YORK,
KEY CORPORATE CAPITAL INC., BANK LEUMI USA, and FLEET NATIONAL BANK, as agent.
| |  | ----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 10.34 |  | Letter Agreement dated September 26, 2002 between James V. Agnello and IMPATH
Inc.
| |  | ----- |  | ----------------------------------------------------------------------------------

| |  | 99.1 |  | Certification
of Anu Saad, Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002.
| |  | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 99.2 |  | Certification
of James V. Agnello, Chief Finanical Officer and Senior Vice President, Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002.
| |  | ---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) Reports on Form 8-K:
|------------------------

| | A
current report on Form 8-K dated July 19, 2002 was filed on July 23, 2002 by the
registrant, in connection with the adoption of the Stockholder Rights Plan.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|20



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: November 14, 2002 |  | By /s/ JAMES V. AGNELLO
James V. Agnello
Chief Financial Officer and Senior Vice President
|------------------------ |  | --------------------------------------------------------------------------------------------------------

|Dated: November 14, 2002 |  | By /s/ ANU D. SAAD

Anu D. Saad, Ph.D.Chairman and Chief Executive Officer
|------------------------ |  | ----------------------------------------------------------------------------------------

|21
CERTIFICATIONS


I, Anu Saad, certify that:
|----------------------------------------------

| |  | 1. |  | I
have reviewed this quarterly report on Form 10-Q of IMPATH Inc.;
| |  | -- |  | ------------------------------------------------------------------

| |  | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
| |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 3. |  | Based on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;
| |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
| |  | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | a) |  | designed
such disclosure controls and procedures to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this quarterly report is
being prepared;
| |  |  |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | b) |  | evaluated
the effectiveness of the registrants disclosure controls and procedures as of a
date within 90 days prior to the filing date of this quarterly report (the Evaluation
Date); and
| |  |  |  | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | c) |  | presented
in this quarterly report our conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the Evaluation Date;.
| |  |  |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
| |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | a) |  | all
significant deficiencies in the design or operation of internal controls which could
adversely affect the registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors any material
weaknesses in internal controls; and
| |  |  |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | b) |  | any fraud, whether or not material, that involves management or other employees who have
a significant role in the registrants internal controls; and
| |  |  |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
| |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Dated: November 14, 2002
By /s/ ANU D. SAAD

Anu D. Saad, Ph.D.
Chairman of the Board and Chief Executive Officer


22
I, James V. Agnello, certify
that:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 1. |  | I
have reviewed this quarterly report on Form 10-Q of IMPATH Inc.;
| |  | -- |  | ------------------------------------------------------------------

| |  | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
| |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 3. |  | Based on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;
| |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
| |  | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | a) |  | designed
such disclosure controls and procedures to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this quarterly report is
being prepared;
| |  |  |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | b) |  | evaluated
the effectiveness of the registrants disclosure controls and procedures as of a
date within 90 days prior to the filing date of this quarterly report (the Evaluation
Date); and
| |  |  |  | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | c) |  | presented
in this quarterly report our conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the Evaluation Date;.
| |  |  |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
| |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | a) |  | all
significant deficiencies in the design or operation of internal controls which could
adversely affect the registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors any material
weaknesses in internal controls; and
| |  |  |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | b) |  | any
fraud, whether or not material, that involves management or other employees who have a
significant role in the registrants internal controls; and
| |  |  |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
| |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date: November 14, 2002
By /s/ JAMES V. AGNELLO

James V. Agnello
Chief Financial Officer and Senior Vice President


23
|--------------------------------------------------------------------------------------------------------------------------------------