UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                 For the Quarter Period Ended December 31, 2002

                         Commission file number 0-11580

                        PHARMAKINETICS LABORATORIES, INC.
             (Exact Name of Registrant as Specified in its Charter)

       Maryland                                         52-1067519
(State of Incorporation)                    (I.R.S. Employer Identification No.)

                             302 West Fayette Street
                            Baltimore, Maryland 21201
                    (Address of Principal Executive Offices)

        Registrant's Telephone Number, Including Area Code (410) 385-4500

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

                 Class                       Outstanding February 14, 2003
     Common Stock, $.005 par value                     2,496,129

<PAGE>

                        PHARMAKINETICS LABORATORIES, INC.
                                      INDEX

                                                                            Page
                                                                            ----
Part I. FINANCIAL INFORMATION

            Item 1. Financial Statements

                    Consolidated Balance Sheets                              2

                    Consolidated Statements of Operations                    3

                    Consolidated Statements of Cash Flows                    4

                    Notes to Consolidated Financial Statements               5

            Item 2. Management's Discussion and Analysis of Financial
                    Position and Results of Operation                        8

            Item 3. Quantitative and Qualitative Disclosures about
                    Market Risk                                             11

            Item 4. Controls and Procedures                                 11

Part II. OTHER INFORMATION

            Item 1. Legal Proceedings                                       11

            Item 2. Changes in Securities                                   11

            Item 3. Defaults Upon Senior Securities                         11

            Item 4. Submission of Matters to a Vote of Security Holders     11

            Item 5. Other Information                                       11

            Item 6. Exhibits and Reports on Form 8-K                        12


                                       1
<PAGE>

Part I.  FINANCIAL INFORMATION
Item 1. Financial Statements

The consolidated financial statements included in this report have been
prepared, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in consolidated financial statements prepared in accordance with
accounting principles generally accepted in the United States of America have
been condensed or omitted pursuant to such rules and regulations. These
consolidated financial statements should be read in conjunction with the audited
financial statements and the related notes included in our annual report on Form
10-K/A for the fiscal year ended June 30, 2002.

In the opinion of our management, any adjustments contained in the accompanying
unaudited consolidated financial statements are of a normal recurring nature
necessary to present fairly its financial position, results of operations, cash
flows as of and for the three-month and six-month periods ended December 31,
2002. Interim results are not necessarily indicative of results for the full
fiscal year.

                        PHARMAKINETICS LABORATORIES, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)

<TABLE>
<CAPTION>
                                                  December 31, 2002          June 30, 2002
                                                  -----------------          -------------
                                                     (unaudited)
<S>                                                   <C>                      <C>
               ASSETS
Current assets:
  Cash and cash equivalents                           $     228                $      46
  Accounts receivable, net                                  450                      676
  Contracts in process                                       46                       50
  Prepaid expenses                                          170                      143
                                                      ---------                ---------
    Total current assets                                    894                      915
Property, plant and equipment, net                        2,960                    3,164
                                                      ---------                ---------
                                                      $   3,854                $   4,079
                                                      ---------                ---------
LIABILITIES, MANDATORILY REDEEMABLE
 PREFERRED STOCK AND STOCKHOLDERS'
              DEFICIT
Current liabilities:
  Accounts payable                                    $   1,168                $   1,044
  Accrued expenses                                          249                      266
  Convertible notes payable                               1,133                      550
  Deposits on contracts in process                          352                      313
                                                      ---------                ---------
    Total current liabilities                             2,902                    2,173
                                                      ---------                ---------
Mandatorily Redeemable Class A,
Convertible Preferred Stock no par
value; issued and outstanding, 833,300
shares at December 31, 2002
and June 30, 2002, respectively                           4,938                    4,938
                                                      ---------                ---------
Stockholders' deficit:
Convertible preferred stock, authorized
1,500,000: Class B, no par
value; issued and outstanding, 250,000
shares at December 31, 2002 and
June 30, 2002, respectively                                 273                      273
Common stock, $.005 par value;
authorized,  10,000,000 shares;
issued and outstanding, 2,496,129
shares at December 31, 2002 and
June 30, 2002, respectively                                  12                       12
Additional paid-in capital                               11,930                   11,930
Accumulated deficit                                     (16,201)                 (15,247)
                                                      ---------                ---------
  Total stockholders' deficit                            (3,986)                  (3,032)
                                                      ---------                ---------
                                                      $   3,854                $   4,079
                                                      =========                =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       2
<PAGE>

                        PHARMAKINETICS LABORATORIES, INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
                      (In thousands, except for share data)

                                    Three Months Ended      Six Months Ended
                                        December 31,          December 31,
                                        ------------          ------------

                                      2002       2001       2002       2001
                                      ----       ----       ----       ----

Revenues                            $ 1,084    $ 1,726    $ 2,278    $ 3,908

Cost and expenses:
Cost of contracts                     1,160      1,385      2,432      3,665
Selling, general and
administrative                          369        429        767        873
Research and development                 --         29          1         73
                                    -------    -------    -------    -------
Total costs and expenses              1,529      1,843      3,200      4,611
                                    -------    -------    -------    -------
Loss from operations                   (445)      (117)      (922)      (703)

Other income and (expenses):
Interest income                           1          6          2         12
Interest expense                        (20)        (1)       (34)        (2)
                                    -------    -------    -------    -------
                                        (19)         5        (32)        10
                                    -------    -------    -------    -------
Net loss applicable to common
stockholders                        $  (464)   $  (112)   $  (954)   $  (693)
                                    =======    =======    =======    =======
Basic and diluted loss per common
share                               $ (0.19)   $ (0.04)   $ (0.38)   $ (0.28)
                                    =======    =======    =======    =======
Weighted-average shares used to
compute basic and diluted loss
per common share                      2,496      2,496      2,496      2,496
                                    =======    =======    =======    =======

See accompanying notes to consolidated financial statements.


                                       3
<PAGE>

                        PHARMAKINETICS LABORATORIES, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
                        (In thousands, except share data)

                                                              Six Months Ended,
                                                                 December 31,
                                                              2002        2001
                                                              ----        ----
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                  $  (954)    $  (693)
   Adjustments to reconcile net loss to net cash
   (used in) provided by operating activities:
    Depreciation and amortization                               242         266
   Changes in operating assets and liabilities:
   Accounts receivable, net                                     226         923
   Contracts in process                                           4          50
   Prepaid expenses                                             (27)         57
   Accounts payable and accrued expenses                        107         605
   Deposits on contracts in process                              39      (1,172)
                                                            -------     -------
Net cash (used in) provided by operating activities            (363)         36
                                                            -------     -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                           (38)       (265)
                                                            -------     -------
Net cash used in investing activities                           (38)       (265)
                                                            -------     -------

CASH FLOWS FROM FINANCING ACTIVITES:
  Proceeds from issuance of notes payable                       583          --
                                                            -------     -------
Net cash provided by  financing activities                      583          --
                                                            -------     -------

Net increase (decrease) in cash and cash equivalents            182        (229)

CASH AND CASH EQUIVALENTS AT THE BEG. OF PERIOD                  46         414
                                                            -------     -------

CASH AND CASH EQUIVALENTS AT THE END OF PERIOD              $   228     $   185
                                                            =======     =======

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>

                        PHARMAKINETICS LABORATORIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1. Organization and Description of Business

Description of Business

PharmaKinetics Laboratories, Inc. ("PKLB") is a contract research organization
("CRO"), located in Baltimore, Maryland, providing a range of clinical research
and development services to the worldwide pharmaceutical and biotechnology
industries in the development of prescription and non-prescription drug
products. These services include Phase I clinical research, bioanalytical
laboratory testing, and the management and monitoring of multi-center clinical
trials. PKLB offers ancillary services in these areas such as protocol
development, case report form design, data management, biostatistics and
regulatory consulting.

Financial Results and Liquidity

PKLB had cash and cash equivalents of $228,000 at December 31, 2002. PKLB's
primary source of funds is cash flow from operations, although PKLB from time to
time has borrowed funds from a director and Bioanalytical Systems Inc. ("BASi")
to cover short-term operating requirements. During the six-month period ended
December 31, 2002, cash and cash equivalents increased by $182,000. The increase
is due to the issuance of notes payable of approximately $583,000 offset by cash
used in operations in the amount of $363,000, principally due to the net loss of
$954,000 offset by an increase in working capital of $349,000 and a non-cash
charge of $242,000 for depreciation and amortization, and cash used in investing
activities of approximately $38,000.

The operating environment confronting PKLB raises substantial doubt about PKLB's
ability to continue as a going concern. PKLB's near term and long-term operating
strategies focus on its sales and marketing efforts to gain new as well as
previous customers. In addition, PKLB has and is pursuing cost cutting measures
and is taking other appropriate steps to manage PKLB's cash balances. However,
there can be no assurance that these strategies and measures will be effective.

On June 20, 2002, PKLB entered into an Agreement and Plan of Merger with BASi,
as amended by Amendment No. 1 to Agreement and Plan of Merger dated as of July
24, 2002, and as amended by Amendment No.2 to Agreement and Plan of merger dated
as of November 21, 2002 (the "Merger Agreement"), that provides for the merger
of PKLB with a wholly-owned subsidiary of BASi, with PKLB being the survivor of
the merger. Shares of PKLB common stock outstanding at the effective time of the
merger contemplated by the Merger Agreement will be converted into shares of
BASi common stock at a rate of one BASi share for each 12 PKLB shares; shares of
PKLB Class A Convertible Preferred Stock will be converted into 6% subordinated
convertible promissory notes issued by BASi in an aggregate principal amount of
$4,000,000 and shares of PKLB Class B Convertible Preferred Stock will be
converted into shares of BASi common stock at a rate of one BASi share for every
12 PKLB common shares into which the shares of PKLB Class B Convertible
Preferred Stock are convertible. The convertible promissory notes issued to
holders of PKLB Class A Convertible Preferred Stock in the merger will mature on
January 1, 2008, will not bear interest for the first year following the
effective time of the merger, and will be convertible at the option of the
holder into BASi common stock at a conversion price of $16 per share, after the
expiration of one year following the date of the merger.

The proposed transaction is subject to the satisfaction of certain closing
conditions, including, among others, PKLB shareholder approval.

On November 14, 2002, PKLB executed a Secured Convertible Revolving Note (the
"Note") in the principal amount of up to $925,000 to BASi to replace the
existing notes payable to BASi and to allow PKLB to borrow additional amounts
from BASi to cover short-term operating requirements. As of December 31, 2002,
$783,000 was outstanding under this Note. The Note carries an annual interest
rate of 8% and is due May 1, 2003. The outstanding principal amount of the Note
is convertible by BASi at any time into PKLB common stock at a price of $0.1585
per PKLB common share, the fair market value on the date of issuance. The loans
provided for by the Note are secured by a security interest in favor of BASi in
all of the assets of PKLB. PKLB Limited Partnership has guaranteed the repayment
of the Note to BASi and has pledged the real property located at 302 W. Fayette
Street, Baltimore, Maryland to BASi as security for its guaranty.

On November 13, 2002, the Board of Directors of PKLB approved the grant of a
debt conversion option similar to that granted to BASi with respect to the
principal balance of the outstanding notes payable to Leslie B. Daniels, a
director of PKLB. On November 22, 2002, PKLB issued a Convertible Promissory
Note payable to Mr. Daniels in the original


                                       5
<PAGE>

principal amount of $350,000, which note was issued in replacement of the
outstanding notes payable to Mr. Daniels. The Note carries an annual interest
rate of 8% and is due May 1, 2003. The outstanding principal amount of the
Convertible Promissory Note is convertible at any time into PKLB common stock at
a price of $0.1585 per PKLB common share, the fair market value on the date of
issuance.

The issuance of the Note to BASi and the Convertible Promissory Note to Mr.
Daniels trigger adjustments to the conversion prices of the PKLB Class A
Convertible Preferred Stock and the PKLB Class B Convertible Preferred Stock.

PKLB has obtained a waiver from the sole holder of PKLB Class B Convertible
Preferred Stock of the adjustments to its conversion rate resulting from the
issuance of the Note to BASi and the Convertible Promissory Note to Mr. Daniels.
Pursuant to the second amendment to the Merger Agreement, PKLB and BASi amended
the Merger Agreement to allow BASi to terminate the Merger Agreement in the
event that any of the holders of the Class A Convertible Preferred Stock
exercise their conversion rights prior to the consummation of the merger.
However, there can be no assurance that no holders of PKLB Class A Convertible
Preferred Stock will exercise their conversion rights.

PKLB cannot guarantee that the results from operations will be sufficient to
support PKLB's liquidity requirements through December 31, 2003 and beyond.
There can be no assurance that the proposed transaction with BASi will be
completed or the strategies underlying the merger will be accomplished or
whether, if accomplished, they will be adequate to allow PKLB to meet its cash
needs.

2. Summary of Significant Accounting Policies and Practices

Principles of Consolidation

The accompanying consolidated financial statements include the results of PKLB
and PKLB Limited Partnership, a wholly owned subsidiary, which owns the building
PKLB occupies. PKLB includes 100% of the building operations in its financial
statements.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year
presentation.

Use of Estimates

The preparation of PKLB's financial statements in conformity with generally
accepted accounting principles in the United States of America, requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, revenues and expenses, and disclosure of contingent
assets and liabilities at the date of the financial statements. Actual amounts
will differ from these estimates.

Earnings (Loss) per Share

Basic earnings (loss) per share ("EPS") is computed by dividing earnings (loss)
by the weighted-average number of shares outstanding for the period. The
computation of Diluted EPS is similar to Basic EPS except that the
weighted-average number of shares outstanding for the period is increased to
include the number of additional shares that would have been outstanding if the
dilutive potential common shares had been issued. Potential common shares are
excluded if the effect on earnings (loss) per share is antidilutive.


                                       6
<PAGE>

The following table presents the computations of basic and diluted EPS (in
thousands, except share data):

<TABLE>
<CAPTION>
                                          Three Months Ended        Six Months Ended
                                              December 31,             December 31,
                                           2002         2001         2002         2001
                                           ----         ----         ----         ----
<S>                                      <C>          <C>          <C>          <C>
Net loss                                 $   (464)    $   (112)    $   (954)    $   (693)
                                         ========     ========     ========     ========

Basic loss earnings per common
share                                    $  (0.19)    $  (0.04)    $  (0.38)    $  (0.28)
                                         ========     ========     ========     ========

Diluted loss per common share            $  (0.19)    $  (0.04)    $  (0.38)    $  (0.28)
                                         ========     ========     ========     ========

Weighted-average shares used to
compute basic loss per common share         2,496        2,496        2,496        2,496
                                         ========     ========     ========     ========

Effect of dilutive securities                  --           --           --           --
                                         --------     --------     --------     --------

Weighted-average shares used to
compute diluted loss per common share       2,496        2,496        2,496        2,496
                                         ========     ========     ========     ========
</TABLE>

For the three and six-month periods ended December 31, 2002 and 2001, 9,206,000
2,058,000 of common stock issuable upon the assumed conversion of convertible
debt and preferred stock were anti-dilutive and were not included in the
calculation of diluted loss per common share due to recorded net losses. For the
three and six-month periods ended December 31, 2002 and 2001, outstanding stock
options and warrants representing 489,000 and 683,000 shares, respectively, were
not included in the calculation of diluted loss per share, as the effect would
also be anti-dilutive.

3. Merger with Bioanaytical Systems, Inc.

On June 20, 2002, PKLB entered into a Merger Agreement with BASi, as amended by
Amendment No. 1 to Agreement and Plan of Merger dated as of July 24, 2002, and
as amended by Amendment No.2 to Agreement and Plan of merger dated as of
November 21, 2002 that provides for the merger of PKLB with a wholly-owned
subsidiary of BASi, with PKLB being the survivor of the merger. Shares of PKLB
common stock outstanding at the effective time of the merger contemplated by the
Merger Agreement will be converted into shares of BASi common stock at a rate of
one BASi share for each 12 PKLB shares; shares of PKLB Class A Convertible
Preferred Stock will be converted into 6% subordinated convertible promissory
notes issued by BASi in an aggregate principal amount of $4,000,000 and shares
of PKLB Class B Convertible Preferred Stock will be converted into shares of
BASi common stock at a rate of one BASi share for every 12 PKLB common shares
into which the shares of PKLB Class B Convertible Preferred Stock are
convertible. The convertible promissory notes issued to holders of PKLB Class A
Convertible Preferred Stock in the merger will mature on January 1, 2008, will
not bear interest for the first year following the effective time of the merger,
and will be convertible at the option of the holder into BASi common stock at a
conversion price of $16 per share, after the expiration of one year following
the date of the merger.

The proposed transaction is subject to the satisfaction of certain closing
conditions, including, among others, PKLB shareholder approval.

4. Related Party Transactions

Convertible Promissory Note

In fiscal year 2002, PKLB issued notes payable of $500,000 in the aggregate to
Mr. Leslie Daniels, a director, to cover short-term operating requirements.
These notes carry an annual interest rate of 8% and are payable upon demand. On
November 13, 2002, the Board of Directors of PKLB approved the grant of a debt
conversion option similar to that granted to BASi with respect to the principal
balance of the outstanding notes payable.

On November 22, 2002, PKLB issued a Convertible Promissory Note payable to Mr.
Daniels in the original principal amount of $350,000, which note was issued in
replacement of the outstanding notes payable to Mr. Daniels. The Note carries an
annual interest rate of 8% and is due May 1, 2003. The outstanding principal
amount of the Convertible Promissory Note is convertible at any time into PKLB
common stock at a price of $0.1585 per PKLB common share, the fair market value
on the date of issuance. At December 31, 2002, PKLB had $350,000 in outstanding
convertible promissory note payable to Mr. Daniels, which is included in the
accompanying Consolidated Balance Sheets as "Convertible Notes Payable".


                                       7
<PAGE>

PKLB recorded approximately $7,000 and $14,000, as interest expense in
connection with the Convertible Promissory Note payable to Mr. Daniels for the
three-month and six-month periods ended December 31, 2002.

Secured Convertible Revolving Note

In fiscal year 2002, PKLB issued notes payable of $200,000 in the aggregate to
BASi to cover short-term operating requirements. These notes carry an annual
interest rate of 8% and are due between December 2002 and March 30, 2003.

On November 14, 2002, PKLB executed a Secured Convertible Revolving Note (the
"Note") in the principal amount of up to $925,000 to BASi to replace the
existing notes payable to BASi and to allow PKLB to borrow additional amounts
from BASi to cover short-term operating requirements. The Note carries an annual
interest rate of 8% and is due May 1, 2003. The outstanding principal amount of
the Note is convertible by BASi at any time into PKLB common stock at a price of
$0.1585 per PKLB common share, the fair market value on the date of issuance.
The loans provided for by the Note are secured by a security interest in favor
of BASi in all of the assets of PKLB. PKLB Limited Partnership has guaranteed
the repayment of the Note to BASi and has pledged the real property located at
302 W. Fayette Street, Baltimore, Maryland to BASi as security for its guaranty.
At December 31, 2002, PKLB had $782,732 outstanding under the Note, which is
included in the accompanying Consolidated Balance Sheets as " Convertible Notes
Payable".

PKLB recorded approximately $12,000 and $18,000, as interest expense in
connection with the Note payable to BASi for the three-month and six-month
periods ended December 31, 2002.

5. Restatement

During 2002, PKLB determined that its Class A Convertible Preferred Stock is
mandatorily redeemable and accordingly, should have been classified outside of
stockholders' deficit. The June 30, 2002 balance sheet has been restated to
reflect this change, which had the effect of reducing stockholders' equity by
$4,938,000 at June 30, 2002. PKLB intends to file an amended 10-K shortly
reflecting this change.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation

Liquidity and Capital Resources

PKLB had cash and cash equivalents of $228,000 at December 31, 2002. PKLB's
primary source of funds is cash flow from operations, although PKLB from time to
time has borrowed funds from a director and BASi to cover short-term operating
requirements. During the six-month period ended December 31, 2002, cash and
cash equivalents increased by $182,000. The increase is due to the issuance of
notes payable of approximately $583,000 offset by cash used in operations in the
amount of $363,000, principally due to the net loss of $954,000 offset by an
increase in working capital of $349,000 and a non-cash charge of $242,000 for
depreciation and amortization, and cash used in investing activities of
approximately $38,000.

The operating environment confronting PKLB raises substantial doubt about PKLB's
ability to continue as a going concern. PKLB's near term and long-term operating
strategies focus on its sales and marketing efforts to gain new as well as
previous customers. In addition, PKLB has and is pursuing cost cutting measures
and is taking other appropriate steps to manage PKLB's cash balances. However,
there can be no assurance that these strategies and measures will be effective.

On June 20, 2002, PKLB entered into an Agreement and Plan of Merger with BASi,
as amended by Amendment No. 1 to Agreement and Plan of Merger dated as of July
24, 2002, and as amended by Amendment No.2 to Agreement and Plan of merger dated
as of November 21, 2002 ( the "Merger Agreement"), that provides for the merger
of PKLB with a wholly-owned subsidiary of BASi, with PKLB being the survivor of
the merger. Shares of PKLB common stock outstanding at the effective time of the
merger contemplated by the Merger Agreement will be converted into shares of
BASi common stock at a rate of one BASi share for each 12 PKLB shares; shares of
PKLB Class A Convertible Preferred Stock will be converted into 6% subordinated
convertible promissory notes issued by BASi in an aggregate principal amount of
$4,000,000 and shares of PKLB Class B Convertible Preferred Stock will be
converted into shares of BASi common stock at a rate of one BASi share for every
12 PKLB common shares into which the shares of PKLB Class B Convertible
Preferred Stock are convertible. The convertible promissory notes issued to
holders of PKLB Class A Convertible Preferred Stock in the merger will mature on
January 1, 2008, will not bear interest for the first year following the
effective time of the merger, and will be convertible at the option of the
holder into BASi common stock at a conversion price of $16 per share, after the
expiration of one year following the date of the merger.


                                       8
<PAGE>

The proposed transaction is subject to the satisfaction of certain closing
conditions, including, among others, PKLB shareholder approval.

On November 14, 2002, PKLB executed a Secured Convertible Revolving Note (the
"Note") in the principal amount of up to $925,000 to BASi to replace the
existing notes payable to BASi and to allow PKLB to borrow additional amounts
from BASi to cover short-term operating requirements. As of December 31, 2002,
$783,000 was outstanding under this Note. The Note carries an annual interest
rate of 8% and is due May 1, 2003. The outstanding principal amount of the Note
is convertible by BASi at any time into PKLB common stock at a price of $0.1585
per PKLB common share, the fair market value on the date of issuance. The loans
provided for by the Note are secured by a security interest in favor of BASi in
all of the assets of PKLB. PKLB Limited Partnership has guaranteed the repayment
of the Note to BASi and has pledged the real property located at 302 W. Fayette
Street, Baltimore, Maryland to BASi as security for its guaranty.

On November 13, 2002, the Board of Directors of PKLB approved the grant of a
debt conversion option similar to that granted to BASi with respect to the
principal balance of the outstanding notes payable to Leslie B. Daniels, a
director of PKLB. On November 22, 2002, PKLB issued a Convertible Promissory
Note payable to Mr. Daniels in the original principal amount of $350,000, which
note was issued in replacement of the outstanding notes payable to Mr. Daniels.
The Note carries an annual interest rate of 8% and is due May 1, 2003. The
outstanding principal amount of the Convertible Promissory Note is convertible
at any time into PKLB common stock at a price of $0.1585 per PKLB common share,
the fair market value on the date of issuance.

The issuance of the Note to BASi and the Convertible Promissory Note to Mr.
Daniels trigger adjustments to the conversion prices of the PKLB Class A
Convertible Preferred Stock and the PKLB Class B Convertible Preferred Stock.

PKLB has obtained a waiver from the sole holder of PKLB Class B Convertible
Preferred Stock of the adjustments to its conversion rate resulting from the
issuance of the Note to BASi and the Convertible Promissory Note to Mr. Daniels.
PKLB and BASi have amended the Merger Agreement to allow BASi to terminate the
Merger Agreement in the event that any of the holders of the Class A Convertible
Preferred Stock exercise their conversion rights prior to the consummation of
the merger. However, there can be no assurance that no holders of PKLB Class A
Convertible Preferred Stock will exercise their conversion rights.

PKLB cannot guarantee that the results from operations will be sufficient to
support PKLB's liquidity requirements through December 31, 2003 and beyond.
There can be no assurance that the proposed transaction with BASi will be
completed or the strategies underlying the merger will be accomplished or
whether, if accomplished, they will be adequate to allow PKLB to meet its cash
needs.

Results of Operations

Revenues

Revenues consisted of the following:

                                     Three Months Ended       Six Months Ended
                                        December 31,            December 31,
                                        ------------            ------------
                                      2002        2001        2002        2001
                                      ----        ----        ----        ----

Phase I Services                     $  892      $  653      $1,958      $1,019
Bioanalytical Laboratory
Services                                146         101         257         354
Clinical Trial Mgt and
Monitoring                               41         902          41       2,383
Licensing                                 5          21          10          23
Consulting Services                      --          49          12         129
                                     ------      ------      ------      ------
       Total                         $1,084      $1,726      $2,278      $3,908
                                     ======      ======      ======      ======

Total revenues were $1.1 million and $1.7 million for the three-month periods
ended December 31, 2002 and 2001, respectively. Clinical trial management and
monitoring services decreased by $0.9 million due to i) the postponement and
cancellation of certain studies in fiscal year 2002 negatively impacting current
and future periods, and ii) the conclusion of certain studies in fiscal year
2002. Recent contracted studies are relatively smaller in patient population,
duration and contract value. Phase I services increased by $0.2 million
primarily in the area of Phase I clinical trials.


                                       9
<PAGE>

Total revenues were $2.3 million and $3.9 million for the six-month periods
ended December 31, 2002 and 2001, respectively. Clinical trial management and
monitoring services decreased by $2.3 million due to i) the postponement and
cancellation of certain studies in fiscal year 2002 negatively impacting current
and future periods, and ii) the conclusion of certain studies in fiscal year
2002. Phase I services increased by $0.9 million. Demand for Phase I services
has increased since the second half of fiscal year 2002 as evidenced by the
increase in the number of contracts for both clinical trials and bioequivalence
testing.

Cost of Contracts

Cost of contracts were $1.2 million and $1.4 million for the three-month periods
ended December 31, 2002 and 2001, respectively. As a percentage of revenue, cost
of contracts increased to 107% for the three-month period ended December 31,
2002, compared to 80% for the three-month period ended December 31, 2001. This
increase as a percentage of revenue is due primarily to lower sales levels in
relation to fixed labor and overhead costs.

Cost of contracts were $2.4 million and $3.7 million for the six-month periods
ended December 31,2002 and 2001, respectively. As a percentage of revenue, cost
of contracts increased to 107% for the six-month period ended December 31, 2002,
compared to 94% for the six-month period ended December 31, 2001. This increase
as a percentage of revenue is due primarily to lower sales levels in relation to
fixed labor and overhead costs.

Selling, General and Administrative

Selling, general and administrative ("SG&A") expenses were $369,000 and $429,000
for the three-month periods ended December 31, 2002 and 2001, respectively. The
decrease in SG&A expenses is primarily due to a reduction in certain SG&A
expenses such as employee related costs ($54,000), allowance for doubtful
accounts ($18,000) and routine operating expenses ($39,000) offset by an
increase in outside services ($51,000), primarily legal and accounting fees.

Selling, general and administrative ("SG&A") expenses were $767,000 and $873,000
for the six-month periods ended December 31, 2002 and 2001, respectively. The
decrease in SG&A expenses is primarily due to a reduction in certain SG&A
expenses such as employee related costs ($79,000), allowance for doubtful
accounts ($36,000) and routine operating expenses ($71,000) offset by an
increase in outside services ($80,000), primarily legal and accounting fees.

Research and Development

Research and development ("R&D") expenses were $-0- and $29,000 for the
three-month periods ended December 31, 2002 and 2001, respectively, and $1,000
and $73,000 for the six-month periods ended December 31, 2002 and 2001,
respectively. The decrease in R&D expenses are attributable to the utilization
of certain of PKLB's R&D personnel for activities necessary to meet project
deadlines for clients, including contracted development work. R&D expenses will
fluctuate from time to time as PKLB re-allocates existing scientific personnel
whenever practical to focus on developing methods for utilization in current and
future studies related primarily to its LC/MS/MS instrumentation.

Other Income and Expenses

Other income and expenses consists primarily of interest income earned on
overnight investments and interest expense related to the Convertible Promissory
Note and Secured Convertible Revolving Note. Interest income was approximately
$1,000 and $6,000 for the three-month periods ended December 31, 2002 and 2001,
respectively, and $2,000 and $12,000 for the six-month periods ended December
31, 2002 and 2001, respectively. The decrease in interest income is primarily
related to a reduction in the average invested cash balances. Interest expense
was approximately $20,000 and$1,000 for the three-month periods ended December
31, 2002 and 2001, respectively, $34,000 and $2,000 for the six-month periods
ended December 31, 2002 and 2001, respectively. The increase in interest expense
is due to the borrowings related to the Convertible Promissory Note and the
Secured Convertible Revolving Note.

Income Taxes

No benefit for income taxes was recorded for the three-month and six-month
periods ended December 31, 2002 and 2001, due to the uncertainty of utilizing
such benefits.


                                       10
<PAGE>

Item 3. Quantitative and Qualitative Disclosure About Market Risk Interest Rate
Risks

The exposure to market risk for changes in interest rates is not material.

Foreign Currency Risk

PKLB does not have exposure to foreign currency exchange rate fluctuations since
PKLB's contracts require payment to PKLB in U.S. dollars.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.

Our Chief Executive Officer (CEO) and Principal Financial Officer evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rules
13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934, as amended)
within 90 days prior to the filing date of this quarterly report. Based upon
their evaluation, the CEO and Principal Financial Officer concluded that the
disclosure controls and procedures are effective in ensuring all required
information relating to PKLB is included in this quarterly report.

Changes in Internal Controls.

There have been no significant changes in our internal controls or in other
factors that could significantly affect the disclosure controls and procedures
subsequent to the date of evaluation.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings:

      None

Item 2. Changes In Securities:

      None

Item 3. Defaults Upon Senior Securities:

      None

Item 4. Submission of Matters to a Vote of Security Holders:

      None

Item 5. Other Information:

      None


                                       11
<PAGE>

Item 6. Exhibits and Reports on Form 8-K:

      A. Exhibits

            10(j) Convertible Promissory Note dated November 22, 2002, between
                  and PKLB and Leslie B. Daniels (filed herewith).

            99.1  Certification pursuant to 18 U.S.C. Section 1350, as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

            99.2  Certification 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

                  (1)   On November 15, 2002, PKLB filed a Current Report on
                        Form 8-K, the purpose of which was to file the Secured
                        Convertible Revolving Note dated November 14, 2002,
                        payable by the Registrant to Bioanalytical Systems, Inc.
                        in the original principal amount of up to $925,000.

                  (2)   On November 21, 2002, PKLB filed a Current Report on
                        Form 8-k the purpose of which was to file the Amendment
                        No. 2 to Agreement and Plan of Merger dated as of
                        November 21, 2002, by and among the Registrant,
                        Bioanalytical Systems, Inc. and PI Acquisition Corp. and
                        the related Press Release dated November 22, 2002.


                                       12
<PAGE>

                                   SIGNATURES

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

                                    PHARMAKINETICS LABORATORIES, INC.

Date: February 14, 2003             By: /s/James M. Wilkinson, II, Ph.D.
                                        ----------------------------------------
                                        James M. Wilkinson, II, Ph.D.
                                        President and Chief Executive Officer


Date: February 14, 2003                 /s/Jeffrey A. Scheidt
                                        ----------------------------------------
                                        Jeffrey A. Scheidt
                                        Vice President and
                                        Chief Financial Officer
                                        (Principal Financial Officer
                                        and Principal Accounting Officer)


                                       13
<PAGE>

                                 CERTIFICATIONS

I, James M. Wilkinson, II, Ph.D., certify that:

1. I have reviewed this quarterly report on Form 10-Q of PharmaKinetics
Laboratories, 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 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:

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: February 14, 2003            By: /s/James M. Wilkinson, II, Ph.D.
                                       --------------------------------
                                       James M. Wilkinson, II, Ph.D.
                                       President and Chief Executive Officer


                                       14
<PAGE>

I, Jeffrey A. Scheidt, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PharmaKinetics
Laboratories, 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 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:

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: February 14, 2003            By: /s/Jeffrey A. Scheidt
                                       ---------------------
                                       Jeffrey A. Scheidt
                                       Vice President and
                                       Chief Financial Officer
                                       (Principal Financial Officer
                                       and Principal Accounting Officer)


                                       15