UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549




FORM
10-K/A


AMENDMENT
NO. 1





(Mark
One)


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







For the
fiscal year ended October 31, 2008




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




For the
transition period from _____________ to ______________




Commission
File No. 000-50956




PHARMA-BIO
SERV, INC.


(Exact
Name of Registrant as Specified in Its Charter)




Delaware
              20-0653570(State
      or Other Jurisdiction of
                Incorporation
      or Organization)
              (IRS  Employer
                Identification
      No.)





Pharma-Bio
      Serv Building,
                    Industrial
      Zone Lot 14, Barrio Higuillar,
                    Dorado,
      Puerto Rico
                  00646
                    (Zip
      Code)(Address
      of Principal Executive Offices)




Registrant’s
Telephone Number, Including Area Code 787-278-2709




Securities
registered under Section 12(b) of the Exchange Act: None




Securities
registered under Section 12(g) of the Exchange Act: Common Stock, par value
$0.0001 per share




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes  ̈ No ý




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes  ̈ No ý




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
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. YesýNo ̈









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




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large
      accelerated filer  ̈
              Accelerated
      filer  ̈Non-accelerated
      filer  ̈
              Smaller
      reporting companyý




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes  ̈ No ý




The
approximate aggregate market value of common stock held by non-affiliates of the
registrant, based on the closing price for the registrant’s common stock on
April 30, 2008 (the last business day of the second quarter of the registrant’s
current fiscal year), was $11,769,323.




The
number of shares of the registrant’s common stock outstanding as of February 27,
2009 was 20,751,215.










PHARMA-BIO SERV,
INC.


FORM
10-K/A


FOR
THE YEAR ENDED OCTOBER 31, 2008




TABLE
OF CONTENTS




PART
III




Item
      10.
                              Directors,
      Executive Officers and Corporate Governance.
                              1Item
      11.
                              Executive
      Compensation.
                              3Item
      12.
                              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                              7Item
      13.
                              Certain
      Relationships and Related Transactions, and Director
      Independence.
                              10Item
      14.
                              Principal
      Accountant Fees and Services.
                              11PART
      IVItem
      15.
                              Exhibits
      and Financial Statement Schedules.
                              12




i





Item
      10.
            Directors,
      Executive Officers and Corporate
Governance.




Directors
and Executive Officers




The
following table sets forth certain information with respect to our directors and
executive officers.




Name
                  
                  Age
                  
                  PositionElizabeth
      Plaza
                  
                  45
                  
                  President,
      Chairman of the Board and DirectorNélida Plaza
                  
                  41
                  
                  Vice
      President and SecretaryPedro
      J. Lasanta
                  
                  49
                  
                  Chief
      Financial Officer and Vice President - Finance and
      AdministrationDov
      Perlysky (2)
                  
                  46
                  
                  DirectorKirk
      Michel (1)
      (2)
                  
                  54
                  
                  DirectorHoward
      Spindel (1)
                  
                  64
                  
                  DirectorIrving
      Wiesen (1)
      (2)
                  
                  53
                  
                  Director






1
              Member
      of the audit and compensation committees.2
              Member
      of the mergers and acquisition
committee.




Elizabeth Plaza has been the
president and sole director of Pharma-PR since 1997, when the Company was
incorporated after operating as a sole proprietorship since 1993, and she has
been our president, chief executive officer and a director since January 25,
2006. Ms. Plaza holds a B.S. in Pharmaceutical Sciences, magna cum laude, from
the School of Pharmacy of the University of Puerto Rico. She was a “40 under 40
Caribbean Business Award” recipient in 2002, the 2003 recipient of Ernst &
Young’s “Entrepreneur of the Year Award” in Health Science, one of the 2003
recipients of the Puerto Rico Powerful Business Women Award, elected as Puerto
Rico Manufacturers Association 2004 (Metropolitan-West Region) Executive of the
Year, and Puerto Rico 2008 Executive of the Year.




Nélida Plaza has been the vice
president of operations of Pharma-PR since January 2004 and has been our vice
president and secretary since January 25, 2006. In July 2000, Ms. Plaza joined
Pharma-PR as a project management consultant. In the past, Ms. Plaza was a unit
operations leader and safety manager at E.I. DuPont De Nemours where she was
involved with the development, support and audit of environmental, safety and
occupational health programs. Ms. Plaza holds a M.S. in Environmental Management
from the University of Houston in Clear Lake and a B.S. in Chemical Engineering
from the University of Puerto Rico. Nélida Plaza was recognized by Casiano
Communications as one of the 40 under 40 distinguished executives in Puerto
Rico.




Pedro J. Lasanta has been our
chief financial officer and vice president - finance and administration since
November 2007. From 2006 until October 2007, Mr. Lasanta was in private practice
as an accountant, tax and business counselor. From 1999 until 2006, Mr. Lasanta
was the Chief Financial Officer for Pearle Vision Center PR, Inc. In the past,
Mr. Lasanta was also an audit manager for Ernst & Young, formerly Arthur
Young & Company. He is a cum laude graduate in business administration
(accounting) from the University of Puerto Rico.  Mr. Lasanta is a
certified public accountant.




Dov Perlyskyhad been our
president, has been a director since 2004 and has been the managing member of
Nesher, LLC a private investment firm since 2000. On January 25, 2006, in
connection with the reverse acquisition, Mr. Perlysky resigned as president and
became a consultant to us. From 1998 until 2002, Mr. Perlysky was a vice
president in the private client group of Laidlaw Global Securities, a registered
broker-dealer. He received his B.S. in Mathematics and Computer Science from the
University of Illinois in 1985 and a Masters in Management from the JL Kellogg
Graduate School of Northwestern University in 1991. Mr. Perlysky is a director
of Engex, Inc., a closed-end mutual fund and he is also a director for Highlands
State Bank.




1




Kirk Michel, a director since
January 25, 2006, has been a managing director of KEMA Advisors, Inc., a
boutique financial advisory firm located in Hillsborough, North Carolina since
2002. KEMA Advisors provides financial advisory services to middle market
companies and governmental agencies. From 1995 to 2002, Mr. Michel was the
co-founder and a managing director of Bahia Group Holdings, LLC which provided
corporate finance, public finance and merger and acquisition services to middle
market companies and governmental agencies. Mr. Michel holds a M.B.A. degree
from the Columbia University Graduate School of Business and a B.A. in Economics
from Northwestern University.




Howard Spindel, a director
since January 25, 2006, has been a consultant with Integrated Management
Solutions, a securities industry consulting and recruitment firm which he
founded, since 1985. In this capacity, he has also acted as a financial and
operations principal, general securities principal, registered representative
and options principal for several broker-dealers during this period. He is also
a director of Engex, Inc., a closed-end mutual fund. Mr. Spindel received a B.S.
in accounting from Hunter College.




Irving Wiesen, a director
since January 25, 2006, has practiced as an attorney specializing in food and
drug law and regulation in the pharmaceutical and medical device industries for
more than twenty-five years. For more than the past five years he has been of
counsel to the New York law firms, Ullman, Shapiro and Ullman, LLP and Cohen,
Tauber, Spievack & Wagner. Prior to that, Mr. Wiesen was a partner in the
New York food and drug law firm, Bass & Ullman, and also served as division
counsel of Boehringer Ingelheim Pharmaceuticals, Inc. Mr. Wiesen represents
pharmaceutical, medical device and biotechnology companies in all aspects of FDA
regulation, corporate practice and compliance, litigation and allied commercial
transactions. Mr. Wiesen received his J.D. degree from the New York University
School of Law and holds an M.A. in English Literature from Columbia University
and a B.A., cum laude, from Yeshiva University.




Elizabeth
Plaza and Nélida Plaza are sisters. There is no other family relationship among
our officers and directors.




Section
16(a) Beneficial Ownership Reporting Compliance




Section
16(a) of the Securities Exchange Act requires our executive officers and
directors, and persons who own more than 10% of our common stock, to file
reports regarding ownership of, and transactions in, our securities with the
Securities and Exchange Commission and to provide us with copies of those
filings. Based solely on our review of the copies of such forms received by us,
or written representations from certain reporting persons, the following
officers, directors and 10% stockholders were late in filing a Form 3 or 4
during 2008:  Elizabeth Plaza did not timely file a Form 4 for one
transaction that occurred on December 20, 2007.  The Form 4 was filed
on March 2, 2009.  Nelida Plaza did not timely file a Form 4 for one
transaction occurring on December 20, 2007.  The Form 4 was filed on
March 2, 2009.  Pedro Lasanta did not timely file his Form 3 in
connection with his appointment as an executive officer on November 5,
2007.  The Form 3 was filed on February 23, 2009.  Howard
Spindel, Irving Wiesen and Kirk Michel did not timely file a Form 4 reporting
one transaction each that occurred on January 2, 2008. The Form 4s were filed by
these persons on March 2, 2009. Dov Perlysky has not filed a Form 4 for
one transaction that occurred on January 10, 2008.




2




Code
of Ethics




We have
adopted a Code of Ethics that applies to all our senior management, including
our principal executive officer, principal financial officer and principal
accounting officer, and our directors.




Audit
Committee




The
members of the Audit Committee are Howard Spindel, Chairman, Kirk Michel and
Irving Wiesen, all of whom are independent directors as determined by the Nasdaq
Rules. The responsibilities and duties of the Audit Committee consist of but are
not limited to: (1) overseeing the financial reporting process; (2) meeting with
our external auditors regarding audit results; (3) engaging and ensuring
independence of our outside audit firm and (4) reviewing the effectiveness of
the Company’s internal controls.  Our Board has determined that Mr.
Spindel qualifies as an “Audit Committee financial expert” within the meaning of
applicable regulations of the SEC, promulgated pursuant to the Sarbanes-Oxley
Act of 2002.




Item
      11.
            Executive
      Compensation.




Executive
Compensation




Summary
Compensation Table




Set forth
below is information for our Chief Executive Officer and the other officers
whose total compensation exceeded $100,000 for the fiscal year ended October 31,
2008.





Name and Principal Position
                                                            
                                                            Fiscal Year
                                                            
                                                            
                                                            Salary
                                                            
                                                            
                                                            Bonus
                                                            
                                                            
                                                            Option
                                                              Awards ($)(1)
                                                            
                                                            
                                                            Other
                                                              Compensation
                                                            
                                                            
                                                            TotalElizabeth
      Plaza, President and
                                                              Chief
      Executive Officer
                                                            
                                                            
                                                            2008
      2007
                                                            
                                                            
                                                            $
                                                            250,000250,000
                                                            
                                                            
                                                            $
                                                            ——
                                                            
                                                            
                                                            $
                                                            12,972—
                                                            
                                                            
                                                            $
                                                            24,82824,828
                                                            
                                                            
                                                            $
                                                            287,800274,828Nélida
      Plaza, Vice President
                                                            
                                                            
                                                            2008
      2007
                                                            
                                                            
                                                            $
                                                            150,000150,000
                                                            
                                                            
                                                            $
                                                            ——
                                                            
                                                            
                                                            $
                                                            11,5956,481
                                                            
                                                            
                                                            $
                                                            11,59211,592
                                                            
                                                            
                                                            $
                                                            173,187168,073Pedro
      Lasanta, Chief Financial Officer
                                                            
                                                            
                                                            2008
                                                            
                                                            
                                                            $
                                                            100,000
                                                            
                                                            
                                                            $
                                                            —
                                                            
                                                            
                                                            $
                                                            —
                                                            
                                                            
                                                            $
                                                            6,000
                                                            
                                                            
                                                            $
                                                            106,000





(1)
              Amount
      shown do not reflect compensation received by the officers. Instead, the
      amounts shown are the compensation costs recognized by us for option
      grants as determined by the provisions of  FAS
    123R.





Other
compensation for Elizabeth Plaza and Nelida Plaza correspond to company lease
payments for vehicles under their use, while for Pedro Lasanta represents a car
allowance.




3




Outstanding
Equity Awards at Fiscal Year-End Table




The
following Outstanding Equity Awards at fiscal year end table summarizes the
holdings held by our Named Executive Officers as of October 31,
2008.




Name
                  
                  Number
      of Securities Underlying Unexercised Options
      Exercisable
                  
                  
                  Number
      of Securities Underlying Unexercised Options
      Unexercisable
                  
                  
                  Option
      Exercise Price
                  
                  
                  Option
      Expiration DateElizabeth
      Plaza (1)
                  
                  
                  —
                  
                  
                  
                  125,000
                  
                  
                  
                  $0.6500
                  
                  
                  Dec.
      20, 2012Nelida
      Plaza (2)(3)
                  
                  
                  31,361
                    —
                    —
                  
                  
                  
                  62,722
                    37,372
                    75,000
                  
                  
                  
                  $0.7344
                    $0.7344
                    $0.6500
                  
                  
                  Jan.
      27, 2011
                    Jan.
      27, 2011
                    Dec.
      20, 2012Pedro
      Lasanta
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —




(1)  Options
to purchase 125,000 shares of common stock were granted on December 20, 2007 and
vest in three equal annual installments beginning on December 20,
2008.




(2)  Prior
to the reverse acquisition, Pharma-PR, which was then wholly owned by Elizabeth
Plaza, had granted Nélida Plaza an option to purchase 500 shares of its common
stock at an exercise price of $138.19 per share. At the consummation of the
reverse merger in January 2006, we granted Ms. Nélida Plaza options to purchase
131,455 shares of common stock at an exercise price of $0.7344 per share, the
fair market value on the date of grant, of which an option to purchase 94,083
shares of our common stock was issued to replace options granted prior to the
reverse acquisition.




(3)
Options to purchase 94,083 share of common stock were granted on January 27,
2006 and vest in three equal annual installments beginning on January 27,
2008.  Options to purchase 37,372 shares of common stock were granted
on January 27, 2006 and vest in three equal installments thirty-six, forty-eight
and fifty-four months from January 27, 2006.  Options to purchase
75,000 shares of common stock were granted on December 20, 2007 and vest in
three equal annual installments beginning on December 20, 2008.




Employment
Agreements




On
January 25, 2006, we entered into employment agreements with Elizabeth Plaza and
Nélida Plaza. Our agreement with Elizabeth Plaza, recently extended
to January 1, 2010, provides that Ms. Plaza will serve as our president and
chief executive officer for which she will receive a salary at the annual rate
of $250,000. The Company will also provide Ms. Plaza with an automobile
allowance at the annual rate of $24,828, discretionary bonuses and stock options
or other equity-based incentives as shall be determined by our compensation
committee, except that her bonus shall not be less than 4% or more than 50% of
her salary. If we terminate Ms. Plaza’s employment other than for cause or as a
result of her death or disability, we are required to pay Ms. Plaza the balance
of her compensation for her employment terms and her consulting term and other
benefits, including a pro rata portion of the bonus that would have been paid to
her, and her obligations under her non-competition provision terminate. Since
the bonus is discretionary, with a minimum bonus of 4% of Ms. Plaza’s salary,
unless the compensation committee shall have provided for a greater bonus prior
to the termination of Ms. Plaza’s employment without cause, Ms. Plaza would not
be entitled to a bonus greater than $10,000, which is 4% of $250,000, the amount
of the bonus to be based on the remaining employment term. Upon termination of
the agreement Ms. Plaza will serve as a consultant under terms to be
negotiated.




4




Our
agreement with Nélida Plaza provides that Ms. Plaza will serve as vice president
for a term of three years for which she will receive annual compensation at the
annual rate of $150,000. She is also entitled to bonus compensation as is
determined by the compensation committee, not to exceed 50% of her salary. We
also agreed to make the lease payments on the automobile she currently leases.
Such payments are at the annual rate of approximately $11,592. If we terminate
Ms. Plaza’s employment other than for cause or as a result of her death or
disability, we are required to pay Ms. Plaza her compensation for the balance of
the term and other benefits, including a pro rata portion of the bonus that
would have been paid to her, and her obligations under her non-competition
provision terminate. Since Ms. Plaza’s employment contract provides for a
discretionary bonus, unless the compensation committee shall have provided for a
bonus to Ms. Plaza prior to the termination of her employment without cause, Ms.
Plaza would not be entitled to any bonus payment.




The
employment agreements with both Elizabeth Plaza and Nélida Plaza provide that
during the term of the agreement and for two years thereafter, the executive
will not, directly or indirectly engage in a competing business or solicit any
customer or seek to persuade any customer to reduce the amount of business it
does with us or seek to persuade any employee to leave our employ.




On
November 5, 2007, we entered into an employment agreement with Pedro Lasanta,
our chief financial officer, pursuant to which we pay Mr. Lasanta an annual
salary of $100,000 plus a monthly car allowance of $500. The agreement had a
one-year term, which we could extend subject to the approval of the president
and chief executive officer and the audit committee. Mr. Lasanta’s employment
agreement has a non-competition provision pursuant to which he agrees that
during the term of the agreement and for one year thereafter, Mr. Lasanta will
not, directly or indirectly, engage in a competing business or solicit any
customer or seek to persuade any customer to reduce the amount of business it
does with us or seek to persuade any employee to leave our employ.




On
December 17, 2008, we entered into an amendment to the employment agreement with
Pedro Lasanta pursuant to which the term of the contract was extended
indefinitely.  The amended employment agreement provides that we will
pay Mr. Lasanta an annual salary of $110,000 and an annual bonus in cash or
Company stock options to be granted based on performance metrics to be
established.  Pursuant to the amended employment agreement, we will
grant Mr. Lasanta options to purchase 30,000 shares of Company stock having an
exercise price equal to fair market value on the date of grant and vesting in
three equal annual installments beginning one year from November 1,
2008.  In addition, upon termination of Mr. Lasanta’s employment for
reasons other than those set forth in his amended employment agreement, Mr.
Lasanta will receive a lump-sum severance payment in an amount equivalent to six
months of his salary at the time of the termination, less legal withholdings, or
the severance established by PR labor law No. 80 of May 30, 1976 known as the
“Wrongful Discharge Act” (“Ley de Despido Injustificado”), whichever amount is
higher.  All other terms and conditions of Mr. Lasanta’s employment
agreement remain the same.




2005
Long-Term Incentive Plan




In
October 2005, our board of directors adopted, and in April 2006, our
stockholders approved, the 2005 Long-Term Incentive Plan, covering 2,500,000
shares of common stock. The 2005 plan provides for the grant of incentive and
non-qualified options, stock grants, stock appreciation rights and other
equity-based incentives to employees, including officers, and consultants. The
2005 Plan is to be administered by a committee of independent directors. In the
absence of a committee, the plan is administered by the board of directors.
Independent directors are not eligible for discretionary options. However, each
newly elected independent director receives at the time of his or her election,
a five-year option to purchase 25,000 shares of common stock at the market price
on the date of his or her election. In addition, the plan provided for the
annual grant of an option to purchase 5,000 shares of common stock on the first
trading day of January of each year, commencing January 2007; however, on April
19, 2007, the stockholders amended the plan to increase the number of options
granted to its independent directors annually from 5,000 to 10,000 shares of
common stock. On April 19, 2007, the stockholders also amended the plan to
provide for a grant to purchase 5,000 shares of common stock at the market price
to each advisory board member on the date of his or her election and a grant of
5,000 options to each of them annually. The options to directors have a term of
five years and become exercisable cumulatively as to 50% of the shares subject
to the option six months from the date of grant and, as to the remaining 50%, 18
months from the date of grant. Pursuant to this provision, on January 25, 2006,
options to purchase 25,000 shares at $0.7344 per share, being the fair market
value on the date of grant, were automatically granted to our independent
directors Messrs. Kirk Michel, Howard Spindel and Irving Wiesen.  As
authorized under the 2005 Plan as amended, in addition to the options granted at
the date of the independent directors election, we made options grants on
January 3, 2007, April 19, 2007, January 2, 2008 and January 2, 2009
in the amount of 5,000, 5,000, 10,000 and 10,000 options to each independent
director, respectively. The exercise price of the options granted on January 3,
2007, April 17,2007, January 2, 2008 and January 2, 2009 was $0.75, $0.65, $0.74
and $0.50 per share, respectively. On January 10, 2008 the board of directors
granted a discretionary 10,000 stock options award with an exercise price of
$0.698 per share to Dov Perlysky, a non independent board of directors’ member
Except for the exercise price, these option grants have the same terms as the
options granted to our independent directors on January 26, 2006.




5




Options
intended to be incentive stock options must be granted at an exercise price per
share which is not less than the fair market value of the common stock on the
date of grant and may have a term which is not longer than ten years. If the
option holder holds 10% of our common stock, the exercise price must be at least
110% of the fair market value on the date of grant and the term of the option
cannot exceed five years. As of February 13, 2009, there were outstanding
options to purchase 1,4666,772 shares of common stock at a weighted-average
exercise price of approximately $0.7047 per share.




Option
holders do not recognize taxable income upon the grant of either incentive or
non-qualified stock options under the Internal Revenue Code of 1986. When
employees exercise incentive stock options, they will not recognize taxable
income upon exercise of the option, although the difference between the exercise
price and the fair market value of the common stock on the date of exercise is
included in income for purposes of computing their alternative minimum tax
liability, if any. If certain holding period requirements are met, their gain or
loss on a subsequent sale of the stock will be taxed at capital gain rates.
Generally, long-term capital gains rates will apply to their full gain at the
time of the sale of the stock, provided that they do not dispose of the stock
made within two years from the date of grant of the option or within one year
after your acquisition of such stock, and the option is exercised while they are
employed by us or within three months of the termination of their employment or
one year in the event of death or disability, as defined in the Internal Revenue
Code. Employees who are residents of Puerto Rico are subject to the Puerto Rico
Code, which may be different from tax treatment under the Internal Revenue
Code.




In
general, upon the exercise a non-qualified option, the option holder will
recognize ordinary income in an amount equal to the difference between the
exercise price of the option and the fair market value of the shares on the date
he or she exercises the option. Subject to certain limitations, we may deduct
that amount as an expense for federal income tax purposes. In general, when the
holders of shares issued on exercise of a nonqualified stock option sell their
shares, any profit or loss is short-term or long-term capital gain or loss,
depending upon the holding period for the shares and their basis in the shares
will be the fair market value on the date of exercise.




Director
Compensation




Effective
as of May 6, 2008, we approved a plan to nominally compensate our directors for
their attendance at various meetings. Non-employee directors will receive (1)
$1,000 for attendance at each meeting of the Board of Directors and (ii) $500
for attendance at each Committee meeting. Pursuant to our 2005 Long Term
Incentive Plan, as amended (“Plan”), each independent director receives an
option to purchase 25,000 shares of the Company’s common stock on the date of
his or her election, and, on the first trading day of January in each year
thereafter, the independent director receives an option to purchase 10,000
shares of the Company’s common stock. Prior to April 2007, the automatic option
grant to each independent director had been 5,000 options per year. As described
above, Mr. Michel, Spindel and Wiesen are considered “independent
directors.”




6




The
following table sets forth information concerning the compensation of directors
for the year ended October 31, 2008.




Name
              
              Fiscal
      Year
              
              Fees Earned
                or Paid
                in Cash
              
              Option
                Awards (1)
      (2)
              
              TotalKirk
      Michel
              
              2008
              
              $
              5,500
              
              $
              2,517
              
              $
              8,017Howard
      Spindel
              
              2008
              
              $
              5,500
              
              $
              2,517
              
              $
              8,017Irving
      Wiesen
              
              2008
              
              $
              5,500
              
              $
              2,517
              
              $
              8,017Dov
      Perlysky
              
              2008
              
              $
              5,000
              
              $
              1,938
              
              $
              6,938






(1)
Amounts shown do not reflect compensation actually received by the directors.
Instead, the amounts shown are the compensation costs recognized by us in fiscal
year 2008 for option grants that were made to directors as determined pursuant
to FAS 123R. The assumptions used to calculate the value of option awards are
set forth under Note I of the Notes to Consolidated Financial Statements
included in this Prospectus.


(2) As of
October 31, 2008, each of our non-employee directors held the following number
of options: Kirk Michel 45,000; Howard Spindel 45,000; Irving Wiesen 45,000; and
Dov Perlysky 10,000.




Item
      12.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters




Principal Stockholders




The
following table provides information as to shares of common stock beneficially
owned as of February 13, 2009 by:




·
              each
      director;·
              each
      officer named in the summary compensation table (“Named Executive
      Officers”);·
              each
      person owning of record or known by us, based on information provided to
      us by the persons named below, to own beneficially at least 5% of our
      common stock; and·
              all
      directors and Named Executive Officers as a
  group.




As used
herein, the term beneficial ownership with respect to a security is defined by
Rule 13d-3 under the Securities Exchange Act of 1934 as consisting of sole or
shared voting power (including the power to vote or direct the vote) and/or sole
or shared investment power (including the power to dispose or direct the
disposition of) with respect to the security through any contract, arrangement,
understanding, relationship or otherwise, including a right to acquire such
power(s) during the next 60 days. Unless otherwise noted, beneficial ownership
consists of sole ownership, voting and investment rights and the address for
each person is c/o Pharma-Bio Serv, Inc., Industrial Zone, Lot 14, Barrio
Higuillar, Dorado, Puerto Rico 00646. A person is deemed to beneficially own the
total number of shares of common stock which he or she owns plus the number of
shares of common stock which are issuable upon exercise of currently exercisable
securities. The percentage ownership of each person is the percentage that the
number of shares beneficially owned by that person bears to the sum of (a) the
outstanding common stock plus (b) the shares of common stock issuable upon
exercise or conversion of those currently convertible securities that are owned
by that stockholder.




7




Name
                      
                      
                      Shares
      of
                        Common
      Stock Beneficially
                        Owned
      at
                        February
      13, 2009
                      
                      
                      PercentageDirectors and Named Executive
      OfficersElizabeth
      Plaza(1)
                      
                      
                      6,728,781
                      
                      
                      32.36
                      %Dov
      Perlysky(2)
                      
                      
                      2,328,393
                      
                      
                      11.01
                      %Kirk
      Michel(3)
                      
                      
                      550,906
                      
                      
                      2.63
                      %Howard
      Spindel(4)
                      
                      
                      40,000
                      
                      
                      *Irving
      Wiesen(4)
                      
                      
                      40,000
                      
                      
                      *Nelida
      Plaza(4)
                      
                      
                      100,179
                      
                      
                      *All
      Directors and Named Executive Officers as a group
                        (six persons)(5)
                      
                      
                      9,788,259
                      
                      
                      45.37
                      %5%
      or Greater Shareholders
                        Venturetek,
      L.P.(6)
                      
                      
                      4,697,990
                      
                      
                      21.05
                      %San
      Juan Holdings, Inc.(7)
                      
                      
                      4,686,443
                      
                      
                      20.23
                      %Barron
      Partners LP(8)
                      
                      
                      3,899,174
                      
                      
                      17.63
                      %Pentland
      USA, Inc.(9)
                      
                      
                      1,532,719
                      
                      
                      7.21
                      %Fame
      Associates(10)
                      
                      
                      1,532,719
                      
                      
                      7.21
                      %


________________


*
                Less
      than 1%.





(1)
              Includes
      41,666 shares of common stock issuable upon exercise of options, which are
      vested as of February 13, 2009, 1,616,667 shares owned by Ms. Plaza
      directly and 5,070,448 shares subject to a voting proxy in favor of Ms.
      Plaza. In conjunction with certification as a minority controlled
      business, Ms. Plaza received irrevocable proxies (“Voting Proxies”) to
      vote an aggregate of 5,070,448 shares of the Company’s common stock from
      Venturetek LP, Krovim, LLC and LDP Family Partnership. These Voting
      Proxies are effective until July 1, 2009, unless the business
      certification expires sooner.




(2)
              The
      shares of common stock beneficially owned by Mr. Perlysky include (i)
      1,164,554 shares of common stock owned by Krovim, LLC, (ii) 772,791 shares
      owned by LDP Family Partnership and 386,048 shares issuable upon exercise
      of warrants held by the LDP Family Partnership (iii) options issued to Mr.
      Perlysky to purchase 5,000 shares of common stock, which are vested as of
      February 13, 2009. Elizabeth Plaza exercises voting power over the shares
      owned by Krovim pursuant to a Voting Proxy and Mr. Perlysky as the manager
      of Nesher, LLC, which is the manager of Krovim, may be deemed to exercise
      dispositive power over these shares. Mr. Perlysky disclaims beneficial
      interest in the shares owned by Krovim. Elizabeth Plaza exercises voting
      power over the shares owned by the LDP Family Partnership pursuant to a
      Voting Proxy and Mr. Perlysky’s wife, the general partner of LDP Family
      Partnership, is deemed to exercise dispositive power over these shares.
      Mr. Perlysky disclaims beneficial ownership in the securities owned by his
      wife.(3)
              The
      shares of common stock beneficially owned by Mr. Michel consist of 40,000
      shares of common stock issuable upon exercise of options, which are vested
      as of February 13, 2009, 340,706 shares of common stock owned by KEMA
      Advisors, of which Mr. Michel is managing director, and 170,200 shares
      issuable upon exercise of warrants held by KEMA
  Advisors.




8




(4)
              The
      shares of common stock owned by each of Ms. Nelida Plaza, Mr. Spindel and
      Mr. Wiesen represent shares issuable upon exercise of options, which are
      vested as of February 13,
2009.




(5)
              Includes
      266,845 shares issuable upon the exercise of options, which are vested as
      of February 13, 2009 and 170,200 shares issuable upon exercise of
      warrants.




(6)
              This
      information was obtained from a Schedule 13D filed by Venturetek, L.P.
      (“Venturetek”) on July 10, 2008. Includes 1,565,058 shares issuable upon
      currently exercisable warrants. Mr. David Selengut, the manager of
      TaurusMax LLC, which is the general partner of Venturetek has sole
      dispositive power and Elizabeth Plaza has sole voting power over these
      shares pursuant to a Voting Proxy. The shares beneficially owned by
      Venturetek do not include 200 shares of common stock held by Mr. Selengut
      and 200 shares held by Mr. Selengut’s wife. Mr. Selengut disclaims
      beneficial ownership of the shares held by his wife. The mailing address
      for Venturetek, L.P. is 370 Lexington Avenue, New York, NY
      10017.




(7)
              This
      information was obtained from a Schedule 13D filed by San Juan Holdings,
      Inc. on July 11, 2008. Includes 2,417,315 shares of common stock issuable
      upon exercise of warrants. Messrs. Ramon Dominguez and Addison M. Levi III
      have voting and dispositive power over these shares. The mailing address
      for San Juan Holdings, Inc. is 255 Ponce de Leon Ave., Hato Rey, PR
      00917.




(8)
              This
      information was obtained from a Form 4 filed by Baron Partners on March
      27, 2007. Includes 1,361,600 shares issuable upon exercise of currently
      exercisable warrants. Mr. Andrew B. Worden, president of the general
      partner of Barron Partners, has sole voting and dispositive power over
      these shares. The mailing address for Barron Partners LP is 730 Fifth
      Avenue, New York, NY 10019.




(9)
              This
      information was obtained from a Schedule 13D filed by Pentland USA, Inc.
      on May 15, 2006. Includes 510,600 shares issuable upon exercise of
      currently exercisable
warrants.




(10)
              This
      information was obtained from a Schedule 13D filed by Fame Associates on
      May 17, 2006. Includes 510,600 shares issuable upon exercise of currently
      exercisable warrants.




Equity
Compensation Plan Information






The
following table summarizes the equity compensation plans under which our
securities may be issued as of October 31, 2008.




Plan Category
                                  
                                  Number of securities
                                    to be issued upon
                                    exercise of
                                    outstanding options
                                    and warrants
                                  
                                  Weighted-average exercise
                                    price of
                                    outstanding options and
                                    warrants
                                  
                                  Number of securities
                                    remaining available for
                                    future issuance under
                                    equity compensation
                                    plans (excluding securities
      reflected in the 1stcolumn)Equity
      compensation plans approved by security holders
                                  
                                  
                                  1,356,772
                                  
                                  
                                  $0.7213
                                  
                                  
                                  1,143,228Equity
      compensation plans not approved by security holders
                                  
                                  
                                  2,804,216
                                  
                                  
                                  $0.2941
                                  
                                  
                                  16,500Total:
                                  
                                  
                                  4,160,988
                                  
                                  
                                  
                                  
                                  
                                  1,159,728




9




The
securities issuable pursuant to the equity plan that was approved by
stockholders is the 2005 long-term incentive plan, which was approved by
stockholders in April 2006, and amended by stockholder approval in April
2007.




The
equity compensation plans not approved by security holders are (i) warrants to
purchase 973,225 shares of common stock which were issued to brokers in
connection with the January 2006 private placement, (ii) warrants to purchase
1,830,991 shares of common stock issued to San Juan Holdings for services
relating to the acquisition of Pharma-PR, and (iii) approximately 16,500 shares
of common stock issuable to employees.




Item
      13.
            Certain
      Relationships and Related Transactions, and Director
      Independence.




Certain Relationships and Related
Transactions




On
January 25, 2006, we acquired Pharma-PR from Elizabeth Plaza, as the sole
stockholder of Pharma-PR. At the closing, we paid Ms. Plaza $10,000,000 and
issued to Ms. Plaza 1,150,000 shares of common stock. In addition, pursuant to
agreement Ms. Plaza was entitled to three payments, each in the amount of
$2,750,000, on January 25, 2007, 2008 and 2009. As of February 13, 2009, we have
made two full payments and a partial payment to Ms. Plaza. During fiscal year
2009, we expect to pay from working capital the remaining balance owed of
$500,000 to Ms. Plaza.




San Juan
Holdings represented Pharma-PR and Elizabeth Plaza in connection with the
reverse acquisition. For such services, we issued 600,000 shares of common stock
and warrants to purchase 2,500,000 shares of common stock, with an exercise
price of $0.06 per share, to San Juan Holdings. In our private placement of
series A preferred stock and warrants, San Juan Holdings purchased three units.
The purchase price for the three units was $750,000. The broker, which is an
affiliate of San Juan Holdings, waived the commission and the non-accountable
expense allowance with respect to such sales, and as a result, San Juan Holdings
purchased the three units for a net payment of $652,500. The three units were
comprised of 75,000 shares of series A preferred stock and warrants to purchase
510,600 shares of common stock. The shares of series A preferred stock became
converted into 1,021,200 shares of common stock. We also issued 919 shares of
common stock to San Juan Holdings as a result of our failure to file the
registration statement of which this prospectus is a part in a timely manner. We
also paid an affiliate of San Juan Holdings a broker’s commission and
non-accountable expense allowance of $195,000 for sales made to other purchasers
in the private placement, and we issued to the affiliate three-year warrants to
purchase an aggregate of 275,724 shares of common stock at an exercise price of
$0.7344 per share. On July 2008, San Juan Holdings exercised 669,009 of the
warrants exercisable at $0.06.




KEMA
Advisors, Inc., of which Kirk Michel, a director, is managing director,
purchased one unit, consisting of 25,000 shares of series A preferred stock and
warrants to purchase an aggregate of 170,200 shares of common stock for
$250,000. The shares of series A preferred stock became converted into 340,400
shares of common stock. We also issued 306 shares of common stock to KEMA
Advisors for our failure to file the registration statement in a timely
manner.




On July
1, 2008, the Company received certification as a “minority-controlled company”
as defined by the National Minority Supplier Development Council and Growth
Initiative (“NMSDC”). As part of the certification process, Ms. Plaza agreed to
purchase an aggregate of 466,667 warrants from six warrant holders, one of which
was San Juan Holdings, at a purchase price of $0.77 per warrant pursuant to a
Securities Purchase Agreement dated December 12, 2007, as amended, and to
immediately exercise the warrants at an exercise price of $.7344 per share, with
proceeds to the Company of $342,720.24 per share. Ms. Plaza purchased the
warrants from the six warrant holders and exercised the warrants effective as of
July 9, 2008. The effective price per share to Ms. Plaza was $1.5044 per share
in this transaction.




10




Board
Independence




The board
of directors has determined that the following directors are independent
pursuant to Nasdaq Rule 4200 (“Nasdaq Rules”) (even though the Company’s
securities are not traded on the Nasdaq market) and the Exchange Act: Kirk
Michel, Howard Spindel and Irving Wiesen.




Item
      14.
            Principal
      Accountant Fees and Services.




Horwath
Velez & Co. PSC  ("Horwath") has served as the Company's
independent certified public accounting firm since September 25,
2006.




We were
billed by Horwath in 2008 and 2007 as follows:




Description
      of services:
                      
                      Fiscal
      2008
                      
                      
                      Fiscal
      2007Audit
      fees
                      
                      $
                      41,000
                      
                      
                      $
                      39,900Audit
      related fees
                      
                      
                      25,820
                      
                      
                      
                      24,624Tax
      fees
                      
                      
                      —
                      
                      
                      
                      —All
      other fees
                      
                      
                      8,050
                      
                      
                      
                      5,295$
                      74,870
                      
                      
                      $
                      69,819




Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Auditors




The Audit
Committee’s policy is to pre-approve all audit and permissible non-audit
services provided by the independent public accountants. These services may
include audit services, audit-related services, tax services and other services.
Pre-approval is generally provided for up to one year and any pre-approval is
detailed as to the particular service or category of services and is generally
subject to a specific budget. Horwath and management are required to
periodically report to the Audit Committee regarding the extent of services
provided by the independent public accountants in accordance with this
pre-approval, and the fees for the services performed to date. The Audit
Committee may also pre-approve particular services on a case by case basis. The
Audit Committee approved one hundred percent (100%) of all such professional
services provided by Horwath during fiscal 2008 and 2007.





The Audit
Committee has considered the nature and amount of the fees billed by Horwath,
and believes that the provision of the services for activities unrelated to the
audit is compatible with maintaining Horwath’s independence.




11




Item
      15.
            Exhibits
      and Financial Statement Schedules.





Incorporated By
ReferenceExhibit Number
                                                Exhibit Description
                                                Form
                                                File Number
                                                Exhibit
                                                Filing Date3.1
                                                Restated
      Certificate of Incorporation
                                                8-K
                                                000-50956
                                                99.1
                                                5/1/20063.2
                                                By-laws
                                                10-SB12G
                                                000-50956
                                                3.2
                                                9/24/20043.3
                                                Amendment
      No. 1 to the By-laws
                                                8-K
                                                000-50956
                                                3.1
                                                6/6/20084.1
                                                Form
      of warrant issued to Investors in January 2006 private
      placement
                                                8-K
                                                000-50956
                                                4.2
                                                1/31/20064.2
                                                Form
      of warrant held by initial warrant holders
                                                8-K
                                                000-50956
                                                4.3
                                                1/31/20064.3
                                                Form
      of warrant held by San Juan Holdings
                                                8-K
                                                000-50956
                                                4.4
                                                1/31/20064.4
                                                Form
      of warrants issued to broker-dealers in January 2006 private
      placement
                                                8-K
                                                000-50956
                                                4.5
                                                1/31/200610.1
                                                Form
      of subscription agreement for January 2006 private
    placement
                                                8-K
                                                000-50956
                                                99.1
                                                1/31/200610.2
                                                Registration
      rights provisions for the subscription agreement relating to January 2006
      private placement
                                                8-K
                                                000-50956
                                                99.2
                                                1/31/200610.3
                                                Registration
      rights provisions for Elizabeth Plaza and San Juan Holdings,
      Inc.
                                                8-K
                                                000-50956
                                                99.3
                                                1/31/200610.4
                                                Employment
      Agreement dated January 2, 2008 between the Registrant and Elizabeth
      Plaza
                                                10-KSB
                                                000-50956
                                                10.5
                                                1/31/200810.5
                                                Amendment
      to Employment Agreement dated June 9, 2008 between the Registrant and
      Elizabeth Plaza
                                                10-K
                                                000-50956
                                                10.5
                                                1/29/200910.6
                                                Employment
      Agreement dated December 4, 2007 between the Registrant and Juan P.
      Gutierrez
                                                10-KSB
                                                000-50956
                                                10.6
                                                1/31/200810.7
                                                Employment
      Agreement dated January 25, 2006 between the Registrant and Nélida
      Plaza
                                                8-K
                                                000-50956
                                                99.5
                                                1/31/200610.8
                                                Employment
      Agreement dated November 5, 2007 between the Registrant and Pedro
      Lasanta
                                                10-K
                                                000-50956
                                                10.8
                                                1/29/200910.9
                                                Amendment
      to Employment Agreement dated December 17, 2008 between the Registrant and
      Pedro Lasanta
                                                8-K
                                                000-50956
                                                99.1
                                                12/23/2008
  12
  10.10
                                        Employment
      Agreement dated March 24, 2006 between the Registrant and Manuel
      Morera
                                        8-K
                                        000-50956
                                        99.1
                                        4/10/200610.11
                                        2005
      Long-term incentive plan, as amended
                                        DEF
      14A
                                        000-50956
                                        Appendix
      C
                                        3/26/200710.12
                                        Lease
      dated March 16, 2004 between Plaza Professional Center, Inc. and the
      Registrant
                                        SB-2
                                        333-132847
                                        10.9
                                        3/30/200610.13
                                        Lease
      dated November 1, 2004 between Plaza Professional Center, Inc. and the
      Registrant
                                        SB-2
                                        333-132847
                                        10.10
                                        3/30/200610.14
                                        Vendor
      Agreement dated May 4, 2006 between the Registrant and Schering-Plough
      Products, L.L.C.
                                        SB-2/A
                                        333-132847
                                        10.12
                                        11/8/200610.15
                                        Agreement
      dated January 17, 2006 between Lilly del Caribe, Inc. and Plaza Consulting
      Group, Inc.
                                        SB-2/A
                                        333-132847
                                        10.13
                                        11/8/200610.16
                                        Agreement
      effective as of November 1, 2005 between SB Pharmco Puerto Rico Inc. d/b/a
      GlaxoSmithKline
                                        SB-2/A
                                        333-132847
                                        10.14
                                        10/27/200614.1
                                        Code
      of business conduct and ethics for senior management
                                        10-KSB
                                        000-50956
                                        14.1
                                        2/2/200721.1
                                        List
      of Subsidiaries
                                        10-K
                                        000-50956
                                        21.1
                                        1/29/200931.1*
                                        Certification
      of chief executive officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 200231.2*
                                        Certification
      of chief financial officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 200232.1**
                                        Certification
      of chief executive officer and chief financial officer pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002




_________


*   Filed
herewith


**  Furnished
herewith





Exhibits
10.4 through 10.11 are management contracts or compensatory plans, contracts or
arrangements.




13





SIGNATURES




Pursuant
to the requirements of Section 13 or 15 (d) of the Securities Exchange Act
of 1934, the registrant has duly caused this Amendment on Form 10-K/A to be
signed on its behalf by the undersigned, thereunto duly authorized.




Dated:March 2,
2009




PHARMA-BIO
      SERV, INC./s/
      Elizabeth PlazaElizabeth
      PlazaPresident
      and Chief Executive Officer
  14