##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    September 30, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file
    number: 0-33045
 SeraCare Life Sciences,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

33-0056054(State or other jurisdiction
    of incorporation or organization)

(I.R.S. Employer
    Identification No.)37 Birch Street
    Milford, Massachusetts(Address of principal
    executive offices)

01757(Zip Code)   Registrants telephone number, including area code:
 (508) 244-6400
  Securities registered pursuant to Section 12(b) of the
    Exchange Act:
 None
  Securities registered pursuant to Section 12(g) of the
    Exchange Act:
  Common stock, $.001 Par Value Per Share
  o þ
  o þ
  o þ
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ
  o þ




---



##### 





TABLE OF
    CONTENTS
  PART IItem 1.


Business


1Item 1A.


Risk Factors


11Item 1B.


Unresolved Staff Comments


21Item 2.


Properties


21Item 3.


Legal Proceedings


22Item 4.


Submission of Matters to a Vote of Security
    Holders


22PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


23Item 6.


Selected Financial Data


26Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


27Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


37Item 8.


Financial Statements and Supplementary Data


38Changes in and Disagreements with Accountants on
    Accounting andItem 9.


Financial Disclosure


38Item 9A.


Controls and Procedures


38Item 9B.


Other Information


39PART IIIItem 10.


Directors and Executive Officers of the
    Registrant


39Item 11.


Executive Compensation


43Security Ownership of Certain Beneficial Owners
    and Management andItem 12.


Related Stockholder Matters


58Item 13


Certain Relationships and Related Transactions
    and Director Independence


60Item 14


Principal Accounting Fees and Services


61PART IVItem 15.


Exhibits, Financial Statement Schedules


63Signatures


65Index to Financial Statements


F-1EX-10.1.3 Employment Agreement, dated January 13, 2006EX-10.3 Fiscal 2008 Directors Compensation PlanEX-10.4 Management Incentive PlanEX-10.8 Lease Agreement dated as of May 16, 1997EX-10.8.1 First Amendment to the Lease AgreementEX-10.8.2 Second Amendment to the Lease AgreementEX-10.8.3 Third Amendment to the Lease AgreementEX-10.8.4 Landlord's Lien Subordination AgreementEX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO




---



PART I  CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  We caution you that this document contains disclosures that
    are forward-looking statements within the meaning of the Private
    Securities Litigation Reform Act of 1995 about SeraCare Life
    Sciences, Inc. (SeraCare or the
    Company). All statements regarding our expected
    future financial position, results of operations, cash flows,
    dividends, financing plans, business strategy, budget, projected
    costs or cost savings, capital expenditures, competitive
    positions, growth opportunities for existing products or
    products under development, plans and objectives of management
    for future operations and markets for stock are forward-looking
    statements. In addition, forward-looking statements include
    statements in which we use words such as expect,
    believe, anticipate, intend,
    or similar expressions. Although we believe the expectations
    reflected in such forward-looking statements are based on
    reasonable assumptions, we cannot assure you that these
    expectations will prove to have been correct, and actual results
    may differ materially from those reflected in the
    forward-looking statements. Factors that could cause our actual
    results to differ from the expectations reflected in the
    forward-looking statements in this document include those set
    forth in Risk Factors in Item 1A. Many of these
    factors are beyond our ability to control or predict.
  Item 1.
    BUSINESS  Overview
    of the Company
    in vitro
    Company
    History
    
    Reagents and bioprocessing products of BioMedical Resources,
    Inc. and Simply Diagnostics, Inc. in 2003; 1




---



##### Table of Contents




    Human clinical specimens and their accompanying medical
    information from Genomics Collaborative, Inc. (GCI)
    in 2004, some assets of which were then sold in March 2007;
    Control and panel products as well as biobanking and contract
    research services of the BBI Diagnostics and BBI Biotech
    Research Laboratories divisions of Boston Biomedica, Inc. in
    2004; and
    Diagnostic manufacturing facilities and some of the product
    lines in the areas of molecular diagnostic reagents, diagnostic
    intermediates and plasma substitutes of the Celliance division
    of Serologicals Corporation in 2006.    Events
    Leading to Our Chapter 11 Filing
  Form 10-K
       2




---



##### Table of Contents



Chapter 11
    Bankruptcy Filing
  debtor-in-possession
      Emergence
    from Bankruptcy
    
    Hired a new management team (See Item 10 
    Directors and Executive Officers of the
    Registrant  Executive Officers and Directors);
    Appointed a new Board of Directors, which included one
    continuing Board member (See Item 10 
    Directors and Executive Officers of the
    Registrant  Executive Officers and Directors);
    Reorganized operations, closed the California and Pennsylvania
    facilities and relocated those operations and the Company
    headquarters to Massachusetts (See Item 2 
    Properties);
    Raised $20.2 million through a Rights Offering (See Item
    1  Business-Company History);
    Secured a $10.0 million line of credit (See Item
    7  Managements Discussion and Analysis of
    Financial Condition and Results of Operations 
    Debt); 3




---



##### Table of Contents




    Hired consultants to prepare for Sarbanes-Oxley compliance (See
    Item 9A  Controls and Procedures);
    Sold an unprofitable business line (See Item 1 
    Business-Discontinued Operations);
    Completed a rebranding strategy which reflects the new strategic
    and business direction and focus of the Company (See Item
    7  Managements Discussion and Analysis of
    Financial Condition and Results of Operations 
    Comparison of years ended September 30, 2007 and
    2006  Impairment of Trade Name); and
    Announced plans to build-out a 60,000 square-foot
    cutting-edge manufacturing and research facility in Milford,
    Massachusetts to house all current manufacturing operations and
    our corporate headquarters (See Item 2 
    Properties).  Our
    Strategy
    
    Repositioning SeraCare from being a distributor with low margins
    to a value added partner focusing on customers and products with
    higher margins;
    Accelerating growth through expansion opportunities in high
    growth/high value market segments organically and through
    acquisitions;
    Achieving operating income leverage through growth, cost
    reduction and operating efficiencies; and
    Re-shaping our portfolio to focus on differentiated products and
    services that create barriers to competition.  Industry
    Overview
      Competitive
    Advantages
   4




---



##### Table of Contents




    Broad product portfolio.  SeraCare offers a
    comprehensive portfolio of biological materials and services for
    diagnostic and biopharmaceutical applications. The breadth of
    our product portfolio enhances our ability to establish and
    maintain relationships with both large and small companies.
    These relationships lead to additional opportunities to develop
    new products and provide scientific, manufacturing and
    biobanking services, and thus to position ourselves as the
    one stop shop for many of these companies
    biological products and service needs.
    Expertise and experience.  We continue to
    explore innovative solutions to meet the needs of evolving
    technology. SeraCare scientists developed and manufactured the
    first and for many years the only Food and Drug Administration
    (FDA) licensed confirmatory test for HIV and
    produced the first commercially available seroconversion panels
    for HIV, hepatitis B virus (HBV), HCV and West Nile
    Virus (WNV). These panels are important tools for
    studying early infection and the human immune response.
    SeraCares biobanking and repository services have set the
    standard in this expanding field. The Company continues to
    innovate, producing the first quality control product for the
    rapidly expanding tests for human papilloma virus
    (HPV) in 2006.
    Extensive quality assurance programs.  Our
    customers often require vendor pre-approval and certification to
    purchase biological materials and often perform audits of vendor
    facilities with extensive review of quality documentation.
    SeraCare is a vendor-approved supplier to many large
    pharmaceutical and IVD companies, and these relationships
    provide access to sell additional products and services. To
    build on these relationships, SeraCare continues to develop and
    maintain its quality assurance programs. Our West Bridgewater,
    Massachusetts facility has International Organization for
    Standardization (ISO) 13485 and 9001 certifications.
    We currently have ISO 9001 certification and are in the process
    of obtaining ISO 13485 certification for our Milford,
    Massachusetts facility. SeraCares manufacturing facilities
    operate under Food and Drug Administrations current Good
    Manufacturing Practices (cGMP) and its research
    facilities operate under Good Laboratory Practices
    (GLP).
    Comprehensive manufacturing
    capabilities.  SeraCare has fully integrated its
    manufacturing capabilities, which allows us to control our
    processes from acquisition of raw materials to shipment of
    finished products. Our fluid processing capabilities range from
    a few milliliters to hundreds of liters, all managed with the
    same attention to quality. In addition to our own branded
    products, the Company can rapidly manufacture customized
    products that meet a wide range of specifications. Customers
    purchase products and services from us instead of sourcing them
    internally largely because these products involve processing
    plasma or other biological fluids, or require complex
    manufacturing processes, unique or isolated facilities,
    specialized test requirements to meet specifications and
    enhanced quality control procedures. SeraCare can safely and
    efficiently manufacture high quality products that incorporate
    cultured cells or viruses, reduce infectivity, involve high
    throughput processing of DNA samples or isolation of specific
    cells from human blood.
    Extensive raw material sourcing capabilities and
    relationships.  Many products we develop and
    manufacture require raw materials such as human tissue samples
    or human plasma. We have established relationships with plasma
    center operators, blood banks, hospitals, clinical laboratories
    and physicians that facilitate continued access to these
    necessary biological materials. Through an innovative outreach
    program (idonateplasma.com), we recruit plasma donors who have
    rare antibodies or DNA variations to provide these plasma
    components for specialized products. SeraCare protects the
    privacy of its donors and adheres to all federal and local
    regulations.  Principal
    Business Segments
   5




---



##### Table of Contents



Diagnostic &
    Biopharmaceutical Products
    Controls
    and Panels
           6




---



##### Table of Contents



Reagents
    and Bioprocessing Products
        BioServices
  Biobanking
    Contract
    Research
  in vitro
 7




---



##### Table of Contents



Product
    Development
      Suppliers
    Sales and
    Distribution
      Customers
      Discontinued
    Operations
   8




---



##### Table of Contents



Domestic
    and Foreign Sales
      Licensing
    Arrangements
      Intellectual
    Property
      Regulatory
    Environment
  Regulation
    of Health Care Industry
   9




---



##### Table of Contents



Regulation
    of Products
          Regulation
    of Laboratory Operations
    Environmental
    Occupational
    Safety and Health Administration (OSHA)
    State
    Governments
   10




---



##### Table of Contents



Competitors
    Diagnostic & Biopharmaceutical
    Products:
  BioServices:
  Employees
    Available
    Information
  (508) 244-6400. Form 10-K. Form 10-K Form 10-K, Form 10-Q, Form 8-K
  Item 1A.
    RISK
    FACTORS    RISKS
    RELATED TO OUR BUSINESS
  Quarterly
    revenue and operating results may fluctuate in future periods,
    and the Company may fail to meet investor
    expectations.
   11




---



##### Table of Contents




    changes in demand for the Companys products and services,
    and the ability to attain the required resources to satisfy
    customer demand on a cost-effective basis or even to attain the
    required resources at all;
    ability to develop, introduce, market and gain market acceptance
    of new products or services in a timely manner;
    ability to manage inventories, accounts receivable and cash
    flows; and
    ability to control costs.    We
    depend on contracts with government agencies, which if
    terminated or reduced, would have a material adverse effect on
    our business.
    We
    derive a substantial amount of our revenue from a limited number
    of customers.
    An
    interruption in the supply of diagnostic and therapeutic
    products at competitive prices that we purchase from third
    parties could cause a decline in our revenue.
   12




---



##### Table of Contents



We may
    be unable to realize our growth strategy if we cannot identify
    suitable acquisition opportunities in the future or if we cannot
    integrate acquired businesses or technologies into our
    business.
  and/or
    
    successfully managing and assimilating the operations,
    facilities and technology of the acquired businesses;
    maintaining and increasing the customer base for the acquired
    products;
    demonstrating to customers and suppliers that the acquisitions
    will not result in adverse changes in service standards or
    business focus;
    minimizing the diversion of management attention from ongoing
    business concerns;
    maintaining employee morale and retaining key employees,
    integrating cultures and management structures and accurately
    forecasting employee benefit costs;
    consolidating our management information, inventory, accounting
    and other systems;
    our ability to assess accurately the value, strengths,
    weaknesses, contingent and other liabilities and potential
    profitability of acquisition candidates;
    the potential loss of key personnel of an acquired business;
    our ability to integrate acquired businesses and to achieve
    identified financial and operating synergies anticipated to
    result from an acquisition;
    increased pressure on our staff and on our operating
    systems; and
    unanticipated changes in business and economic conditions
    affecting an acquired business.    Our
    success depends in large part upon the continued services of our
    senior executives and other key employees, including certain
    sales, consulting and technical personnel.
   13




---



##### Table of Contents



We may
    face additional expenses and disruption due to the relocation
    and eventual sale of our manufacturing facility in West
    Bridgewater, Massachusetts.
      Lack
    of early success with our pharmaceutical and biotechnology
    customers can shut us out of future business with those
    customers.
    Our
    profits will likely decline if we are unable to pass price
    increases on to customers or obtain necessary raw materials at
    their current prices.
   14




---



##### Table of Contents



Our
    failure to improve our product offerings and develop and
    introduce new products may negatively impact our
    business.
    We are
    subject to the risks associated with international
    sales.
    
    political and economic instability;
    export controls;
    changes in legal and regulatory requirements;
    United States and foreign government policy changes affecting
    the markets for our products; and
    changes in tax laws and tariffs.      Our
    financial condition could suffer if we experience unanticipated
    costs or enforcement action as a result of the Securities and
    Exchange Commission investigation, the Department of Justice
    investigation and other lawsuits and claims.
    We may
    need additional capital.
     15




---



##### Table of Contents



If we
    fail to maintain adequate quality standards for our products and
    services, our business may be adversely affected and our
    reputation harmed.
    Our
    principal shareholders may exert significant influence on
    us.
    We
    heavily rely on air cargo carriers and other third party package
    delivery services, and a significant disruption in these
    services or significant increases in prices may disrupt our
    ability to import or export materials, increase our costs and
    lower our profitability.
   16




---



##### Table of Contents



We
    have limited manufacturing capabilities, and if our
    manufacturing capabilities are insufficient to produce an
    adequate supply of products at appropriate quality levels, our
    growth could be limited and our business could be
    harmed.
    The
    cost of compliance or failure to comply with the Sarbanes-Oxley
    Act of 2002 may adversely affect our
    business.
    A
    disaster at our facilities could substantially impact our
    business.
  back-up
  Our
    inability to protect our intellectual property rights could
    prevent us from selling our products and hinder our financial
    performance.
   17




---



##### Table of Contents



Product
    liability claims could have a material adverse effect on our
    reputation, business, results of operations and financial
    condition.
    Foreign
    restrictions on importation and exportation of blood
    derivatives.
    RISKS
    RELATED TO OUR INDUSTRY
  The
    industries and market segments in which we operate are highly
    competitive, and we may not be able to compete effectively with
    larger companies with greater financial resources than we
    have.
        We are
    subject to significant regulation by the government and other
    regulatory authorities.
   18




---



##### Table of Contents



Failure
    to comply with environmental, health and safety laws and
    regulations, including the federal Occupational Safety and
    Health Administration Act, may result in fines and penalties and
    loss of licensure, and have a material adverse effect upon the
    Companys business.
  follow-up,
  and/or
  Changes
    in demand for plasma-derived products and the availability of
    donated plasma could affect profitability.
    We are
    subject to governmental reforms and the adequacy of
    reimbursement.
   19




---



##### Table of Contents



RISKS
    RELATED TO OUR STOCK
  Stocks
    traded on the Pink Sheets are subject to greater market risks
    than those of exchange-traded and NASDAQ stocks since they are
    less liquid.
    Stock
    price could be volatile.
    We may
    issue preferred stock in the future.
    Anti-takeover
    effects of certain charter and bylaw provisions.
    
    eliminate cumulative voting rights;
    authorize the issuance of blank check preferred
    stock having such designations, rights and preferences as may be
    determined from time to time by the Board of Directors, without
    any vote or further action by our shareholders; and
    eliminate the right of shareholders to act by written consent.  Lack
    of dividend payments.
   20




---



##### Table of Contents



Our
    shareholders ability to sell shares of the Companys
    stock may be limited.
    Additional
    risk factors
    
    our ability to maintain favorable supplier agreements and
    relationships with major customers and suppliers;  
    the loss of any significant customers or reduced orders from
    significant customers;
    our ability to maintain and expand our customer base;
    increased competition for donors, which may affect our ability
    to attract and retain qualified donors;
    our ability to meet future customer demand for plasma
    products; and
    changes in industry trends, customer specifications and demand,
    market demand in general and potential foreign restrictions of
    the importation of our products.  Item 1B.
    UNRESOLVED
    STAFF COMMENTS    Item 2.
    PROPERTIES    Approximate FloorLocation

Facility Use

Industry Segment

Owned or Leased

Space in Sq. Ft.Frederick, MD

Repository

BioServices

Leased


65,000Milford, MA

Manufacturing, warehouse and office

Diagnostic & Biopharmaceutical Products

Leased


37,000Gaithersburg, MD

Manufacturing, repository, laboratory and office

BioServices

Leased


36,000West Bridgewater, MA

Manufacturing, warehouse and office

Diagnostic & Biopharmaceutical Products

Owned


32,000    21




---



##### Table of Contents



Item 3.
    LEGAL
    PROCEEDINGS  Chapter 11
    Bankruptcy
    Shareholder
    Litigation
  In re SeraCare Life Sciences,
    Inc. Securities Litigation No. C-05-2335-H. and/or
  Department
    of Justice/Securities and Exchange Commission
    CTL
    Analyzers, LLC
    Item 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   22




---



##### Table of Contents



PART II  Item 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    2007 Quarter Ended

High


LowSeptember 30, 2007

$
7.00


$
5.00June 30, 2007

$
7.55


$
6.31March 31, 2007

$
7.00


$
5.50December 31, 2006

$
6.80


$
5.80   2006 Quarter Ended

High


LowSeptember 30, 2006

$
6.00


$
4.50June 30, 2006

$
7.60


$
3.15March 31, 2006

$
11.83


$
1.75December 31, 2005

$
23.17


$
7.88   Holders
    Dividends
    Securities
    Authorized for Issuance under Equity Compensation
    Plans
   Number of SecuritiesRemaining Available forNumber of Securities





Future Issuance Underto be Issued Upon


Weighted Average


Equity Compensation PlansExercise of


Exercise Price of


(Excluding SecuritiesPlan Category

Outstanding Options


Outstanding Options ($)


Reflected in First Column)Equity compensation plans approved by security holders:Amended and Restated 2001 Stock Incentive Plan


741,500


$
9.11



847,008Equity compensation not pursuant to the Plan


700,000
(1)

$
5.93



N/ATotal


1,441,500


$
7.57    (1)
    
    450,000 options were issued to Ms. Vogt on August 25,
    2006 at an exercise price of $6.00 per share and 250,000 options
    were issued to Mr. Gould on October 3, 2006 at an
    exercise price of $5.80 per share. 23




---



##### Table of Contents



Stock
    Performance Graph
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
   
      9/02


9/03


9/04


9/05


9/06


9/07SeraCare Life Sciences, Inc.



100.00




137.00




250.00




355.20




116.00




115.00NASDAQ Composite



100.00




150.59




162.76




185.69




196.70




236.91NASDAQ Biotechnology



100.00




112.76




123.32




156.41




175.00




216.69   Recent
    Sales of Unregistered Securities
     24




---



##### Table of Contents



25




---



##### Table of Contents



Item 6.
    SELECTED
    FINANCIAL DATA    Year Ended September 30,2007


2006


2005


2004


2003In thousands, except for per share dataSTATEMENT OF OPERATIONS DATA:Revenue

$
47,304


$
49,176


$
50,300


$
28,441


$
23,203Cost of revenue


33,930



32,552



50,784



17,701



16,075Gross profit (loss)


13,374



16,624



(484
)


10,740



7,128Research and development expense


566



496



410







Selling, general and administrative expenses


14,527



13,308



11,958



5,097



4,234Impairment of intangible assets


5,220















Reorganization items


5,224



9,408











Operating (loss) income


(12,163
)


(6,588
)


(12,852
)


5,643



2,894Interest (expense) income


(697
)


(2,114
)


(1,762
)


(250
)


37Interest expense to related parties


(313
)


(493
)


(490
)


(23
)


(31
)Other income (expense), net


194



286



(96
)


26



(Loss) income before income taxes


(12,979
)


(8,909
)


(15,200
)


5,396



2,900Income tax expense (benefit)


76



(31
)


(513
)


1,241



284Net (loss) income from continuing operations


(13,055
)


(8,878
)


(14,687
)


4,155



2,616Loss from discontinued operations, net of income tax


(110
)


(15,400
)


(6,410
)






Net (loss) income

$
(13,165
)

$
(24,278
)

$
(21,097
)

$
4,155


$
2,616(LOSS) INCOME PER COMMON SHARE:Basic net (loss) income per common share:Continuing operations

$
(0.82
)

$
(0.64
)

$
(1.32
)

$
0.51


$
0.35Discontinued operations


(0.01
)


(1.10
)


(0.58
)






Net (loss) income

$
(0.83
)

$
(1.74
)

$
(1.90
)

$
0.51


$
0.35Diluted net (loss) income per common share:Continuing operations

$
(0.82
)

$
(0.64
)

$
(1.32
)

$
0.45


$
0.31Discontinued operations


(0.01
)


(1.10
)


(0.58
)






Net (loss) income

$
(0.83
)

$
(1.74
)

$
(1.90
)

$
0.45


$
0.31   As of September 30,2007


2006


2005


2004


2003In thousandsSELECTED BALANCE SHEET DATA:Working capital

$
20,084


$
7,777


$
30,978


$
23,923


$
12,308Total assets

$
58,440


$
71,108


$
96,112


$
89,128


$
27,852Long-term obligations(1)

$
2,111


$
5,718


$
17,865


$
25,967


$
Stockholders equity

$
50,524


$
41,566


$
64,586


$
45,764


$
20,423     (1)
    
    Includes debt, notes payable to related parties and capital
    leases. 26




---



##### Table of Contents



Item 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  This Managements Discussion and Analysis of Financial
    Condition and Results of Operations should be read together with
    the financial statements, related notes and other financial
    information included elsewhere in this Annual Report on Form
    10-K.
  Reorganization
  debtor-in-possession
    Business
    Overview
       27




---



##### Table of Contents



Results
    of Operations
    Year Ended September 30,2007


2006


2005STATEMENT OF OPERATIONS DATA:


%



%



%Revenue


100.0



100.0



100.0Cost of revenue


71.7



66.2



101.0Gross profit (loss)


28.3



33.8



(1.0
)Research and development expense


1.2



1.0



0.8Selling, general and administrative expenses


30.7



27.1



23.8Impairment of intangible assets


11.0







Reorganization items


11.1



19.1



Operating loss


(25.7
)


(13.4
)


(25.6
)Interest expense


(1.5
)


(4.3
)


(3.5
)Interest expense to related parties


(0.6
)


(1.0
)


(1.0
)Other income (expense), net


0.4



0.6



(0.1
)Loss before income taxes


(27.4
)


(18.1
)


(30.2
)Income tax expense (benefit)


0.2







(1.0
)Net loss from continuing operations


(27.6
)


(18.1
)


(29.2
)Loss from discontinued operations, net of income tax


(0.2
)


(31.3
)


(12.7
)Net loss


(27.8
)


(49.4
)


(41.9
)   Comparison
    of years ended September 30, 2007 and September 30,
    2006
  Revenue
    September 30,


September 30,


Percent2007


2006


changeDiagnostic & Biopharmaceutical Products

$
35.0


$
37.8



(7.4
)%BioServices


12.3



11.4



7.9
%Total revenue

$
47.3


$
49.2



(3.9
)%  28




---



##### Table of Contents



Gross
    Profit
  debtor-in-possession.
  Research
    and Development Expense
  in vitro
  Selling,
    General and Administrative Expenses
    Impairment
    of Trade Name
    Reorganization
    Items
   29




---



##### Table of Contents



Interest
    Expense
    Income
    Tax Expense
    Net
    Loss from Continuing Operations
    Loss
    from Discontinued Operations
    Net
    Loss and Net Loss Per Share
    Comparison
    of years ended September 30, 2006 and September 30,
    2005
  Revenue
    September 30,


September 30,


Percent2006


2005


changeDiagnostic & Biopharmaceutical Products

$
37.8


$
36.8



2.7
%BioServices


11.4



13.5



(15.6
)%Total revenue

$
49.2


$
50.3



(2.2
)%     Gross
    Profit
   30




---



##### Table of Contents



Research
    and Development Expense
    Selling,
    General and Administrative Expenses
    Reorganization
    Items
    Interest
    Expense
    Income
    Tax Expense
    Net
    Loss from Continuing Operations
    Loss
    from Discontinued Operations
    Net
    Loss and Net Loss Per Share
    Critical
    Accounting Policies and Estimates
   31




---



##### Table of Contents



Revenue Recognition. Revenue
    Recognition in Financial Statements
  
    evidence of an arrangement exists;
    delivery or performance has occurred;
    prices are fixed or determinable; and
    collection of the resulting receivable is reasonably assured.    Inventory valuation.
  Valuation of Long-Lived and Intangible Assets and
    Goodwill. non-amortizable
    
    significant underperformance related to historical or expected
    projected future operating results; or
    significant changes or developments in strategy or operations
    which affect our long-lived assets.     32




---



##### Table of Contents



Contingencies and Litigation Reserves.
  
    interpretation of contractual rights and obligations;
    the status of government regulatory initiatives, interpretations
    and investigations;
    the status of settlement negotiations;
    prior experience with similar types of claims;
    whether there is available insurance; and
    advice of counsel.  Stock-Based Compensation. Share-Based Payments Accounting for Stock Issued to
    Employees
    Simplified
    Method for Estimating the Expected Term
  Accounting for Income Taxes.
 33




---



##### Table of Contents



Liquidity
    and Capital Resources
  Cash
    Flows
    September 30,


September 30,


September 30,2007


2006


2005Net cash used in operating activities

$
(10.6
)

$
(6.2
)

$
(2.2
)Net cash provided by (used in) investing activities


1.5



(4.8
)


(1.4
)Net cash provided by (used in) financing activities


5.1



(5.0
)


31.7Net (decrease) increase in cash and cash equivalents

$
(4.0
)

$
(16.0
)

$
28.1         Operating
    Cash Flows
   34




---



##### Table of Contents



Investing
    Cash Flows
    Financing
    Cash Flows
    Off-Balance
    Sheet Arrangements
    Debt
  and/or
    Recent
    Accounting Pronouncements
  SFAS No. 157,
    Fair Value Measurements
  Fair Value
    Measurements
 35




---



##### Table of Contents



SFAS No. 141
    (Revised 2007), Business
    Combinations
  Business Combinations
  
    acquisition costs will be generally expensed as incurred;
    noncontrolling interests will be valued at fair value at the
    acquisition date;
    acquired contingent liabilities will be recorded at fair value
    at the acquisition date and subsequently measured at either the
    higher of such amount or the amount determined under existing
    guidance for non-acquired contingencies;
    in-process research and development will be recorded at fair
    value as an indefinite-lived intangible asset at the acquisition
    date until the completion or abandonment of the associated
    research and development efforts;
    restructuring costs associated with a business combination will
    be generally expensed subsequent to the acquisition
    date; and
    changes in deferred tax asset valuation allowances and income
    tax uncertainties after the acquisition date generally will
    affect income tax expense.   36




---



##### Table of Contents



SFAS No. 160,
    Noncontrolling Interests in Consolidated Financial
    Statements   An Amendment of ARB
    No. 51
  Noncontrolling Interests in
    Consolidated Financial Statements  An Amendment of
    ARB No. 51
  Contractual
    Obligations and Commitments
    Payments Due by PeriodContractual Obligations

Total


Less Than 1 Year


1-3 Years


3-5 Years


More Than 5 YearsLong-term debt obligations(1)

$
2,299


$
188


$
2,081


$
30


$
Interest payments(2)


515



239



274



2



Operating lease obligations(3)


15,799



1,985



3,267



3,426



7,121Purchase obligations


222



182



40







TOTAL

$
18,835


$
2,594


$
5,662


$
3,458


$
7,121     (1)
    
    Long-term debt obligations include capital leases.(2)
    
    Interest payment amounts include unused line fees owed to
    Merrill Lynch Capital under the Credit and Security Agreement.(3)
    
    Excludes a new operating lease for space in Milford,
    Massachusetts entered into on October 1, 2007. The total
    rental obligation under this lease is $8.9 million over a
    10 plus year period. This new lease supersedes the rental
    obligation reflected in the table of $0.5 million, which
    otherwise would have expired in October 2009.  Item 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Interest Rate and Market Risk.
  Foreign Currency Exchange Risk.
 37




---



##### Table of Contents



Item 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Form 10-K page F-1.
  Item 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    Item 9A.
    CONTROLS
    AND PROCEDURES      Disclosure
    Controls and Procedures
  Rule 13a-15(b) Regulation S-K
  Form 10-K
 38




---



##### Table of Contents



Changes
    in Internal Control
  Rule 13a-15(d) Form 10-K
  Item 9B.
    OTHER
    INFORMATION   PART III  Item 10.
    DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANT  Executive
    Officers and Directors
      Name

Age

PositionExecutive OfficerSusan L.N. Vogt


53


President and Chief Executive Officer, DirectorGregory A. Gould


41


Chief Financial Officer, Treasurer and SecretaryRonald R. Dilling


52


Vice President, Manufacturing OperationsKatheryn E. Shea


38


Vice President, BioServices OperationsWilliam J. Smutny


57


Vice President, Sales and MarketingDirectorEugene I. Davis


52


Chairman of the Board of DirectorsSamuel D. Anderson


71


DirectorSarah L. Murphy


31


DirectorJill Tillman


56


Director   Susan L.N. Vogt
  Gregory A. Gould
 39




---



##### Table of Contents



Ronald R. Dilling
  Katheryn E. Shea
  William J. Smutny
  Eugene I. Davis
  Samuel D. Anderson
  Sarah L. Murphy
  Jill Tillman
 40




---



##### Table of Contents



Board of
    Directors and Committees of our Board of Directors
      
    Pursuant to the Plan of Reorganization, members of the Ad Hoc
    Committee, including Harbinger and Black Horse, appointed
    directors to the Board. Harbinger appointed Mr. Davis and
    Ms. Tillman to the Companys Board of Directors and
    Black Horse appointed Ms. Murphy to the Companys
    Board of Directors.  Audit
    Committee
  http://www.seracare.com.
  Compensation
    Committee
   41




---



##### Table of Contents



http://www.seracare.com.
  Nominating
    and Corporate Governance Committee
  http://www.seracare.com.
  Code of
    Ethics
  http://www.seracare.com 8-K Form 8-K.
  Section 16(a)
    Beneficial Ownership Reporting Compliance
      
    Bernard L. Kasten, a former director, filed a Form 4 on
    May 16, 2007 for the acquisition of 25,000 shares from
    the exercise of options on May 11, 2007.
    Eugene I. Davis, Samuel D. Anderson, Sarah L. Murphy and Jill
    Tillman each filed a Form 4 on November 20, 2007 for
    options granted on May 18, 2007 and stock and options
    granted November 14, 2007.
    Susan L.N. Vogt, Gregory A. Gould, Ronald R. Dilling, William J.
    Smutny, Kathleen W. Benjamin and David Olsen each filed a
    Form 4 on November 20, 2007 for options received
    November 14, 2007.
    Katheryn E. Shea and Mark Manak each filed a Form 4 on
    November 26, 2007 for options received on November 20,
    2007. 42




---



##### Table of Contents



Item
    11.
    EXECUTIVE
    COMPENSATION  COMPENSATION
    DISCUSSION & ANALYSIS
  Executive
    Compensation Philosophy
  Primary
    Objectives
    Benchmarking
    for Compensation
    Pay-for-Performance
    Philosophy
    
    The individuals particular background and circumstances,
    including training and prior relevant work experience;
    The individuals role with the Company and the compensation
    paid to similar persons in the companies represented in the peer
    group data that the Compensation Committee reviews;
    The demand for individuals with the individuals specific
    expertise and experience;
    Performance goals and other expectation for the position;
    Comparison to other executives within the Company having similar
    levels of expertise and experience; and
    Uniqueness of industry skills.  Setting
    and Assessment of Performance Goals
   43




---



##### Table of Contents



Executive
    Compensation Components
    Base
    Salary
     44




---



##### Table of Contents



Annual
    Bonus
  10-75%
    60-200%
 45




---



##### Table of Contents



Stock
    Options
        Other
    Compensation
   46




---



##### Table of Contents



Relationship
    among the Primary Components of Compensation
      Termination-Based
    Compensation
      Tax
    Deductibility of Compensation
   47




---



##### Table of Contents



Conclusion
    Compensation
    Committee Report
  Regulation S-K,
  
  Summary
    Compensation Table
    SUMMARY
    COMPENSATION TABLE
  Non-EquityName and Principal







Option

Incentive Plan

All OtherPosition

Year

Salary

Bonus (2)

Awards (3)

Compensation (4)

Compensation

TotalSusan L.N. Vogt


2007


$
350,000


$



$
1,108,888


$
258,563


$
971
(5)

$
1,718,422President and Chief
    Executive OfficerGregory A. Gould


2007


$
250,000


$



$
624,185


$
128,437


$
134,165
(6)

$
1,136,787Chief Financial OfficerRonald R. Dilling


2007


$
194,038


$
18,500


$
72,097


$
24,255


$
2,306
(5)

$
311,196Vice President,
    Manufacturing
    OperationsKatheryn E. Shea


2007


$
161,705


$
12,000


$
8,863


$
18,855


$
1,903
(5)

$
203,326Vice President,
    BioServices OperationsWilliam J. Smutny(1)


2007


$
169,346


$



$
145,194


$
30,990


$
55,807
(6)

$
401,337Vice President, Sales
    and Marketing     (1)
    
    William J. Smutny joined SeraCare in November 2006.(2)
    
    Represents retention bonuses paid in March 2007.(3)
    
    The Option Awards value set forth in the table
    represents the stock-based compensation expense recorded by us
    in 2007 for all outstanding stock options held by the named
    executive officer measured using the Black-Scholes option
    pricing model at the grant date based on the fair value of the
    option award. The stock-based compensation expense associated
    with each option award is recognized on graded vesting method
    over the requisite service period, net of estimated forfeitures.
    In calculating the stock-based compensation expense disclosed in
    the table, we used the assumptions described in Note 2 and
    Note 12 of the Financial Statements included as part of
    this Annual Report on
    Form 10-K
    for the fiscal year ended September 30, 2007. 48




---



##### Table of Contents



(4)
    
    Bonus amounts for performance during the fiscal year ended
    September 30, 2007 were approved by the Board of Directors
    and paid in November 2007.(5)
    
    Represents our contributions to executive officer 401(k)
    accounts.(6)
    
    Represents relocation benefits.  Grants of
    Plan-Based Awards
    GRANTS OF
    PLAN-BASED AWARDS
  All Other OptionAwards: Number ofDate Board of

Securities

Exercise Price of

Grant Date FairDirectors Approved

Underlying

Option Awards

Value of OptionName

Grant Date

Grant

Options (#)

($/Share)

AwardsWilliam J. Smutny


11/1/06



10/25/06



70,000


$
6.18


$
260,563Vice President,
    Sales and Marketing   Fiscal
    Year 2007 Equity Awards
    Employment
    Arrangements
  Susan
    L.N. Vogt, President and Chief Executive Officer
     49




---



##### Table of Contents



gross-up
    Gregory
    A. Gould, Chief Financial Officer
     50




---



##### Table of Contents



gross-up
    Ronald
    R. Dilling, Vice President, Manufacturing
    Operations
      Katheryn
    E. Shea, Vice President, BioServices Operations
    William
    J. Smutny, Vice President, Sales and Marketing
   51




---



##### Table of Contents



Outstanding
    Equity Awards at Fiscal Year-End
    OUTSTANDING
    EQUITY AWARDS AT FISCAL YEAR-END
    OPTION AWARDS
  Number ofSecurities  UnderlyingUnexercised Options (#)

Option Exercise

Option ExpirationName

Exercisable

Unexercisable

Price ($)

DateSusan L.N. Vogt


150,000



300,000
(1)

$
6.00



8/25/2016President and Chief Executive
    OfficerGregory A. Gould






250,000
(2)

$
5.80



10/3/2016Chief Financial OfficerRonald R. Dilling


13,333



26,667
(3)

$
5.45
(5)


2/7/2011Vice President, Manufacturing
    OperationsKatheryn E. Shea


6,000






$
5.45
(5)


1/31/2010Vice President, BioServices Operations


10,000






$
5.45
(5)


9/19/2008William J. Smutny






70,000
(4)

$
6.18



11/1/2011Vice President, Sales and Marketing     (1)
    
    The option is scheduled to vest as to one-third of the shares on
    each of the first, second and third anniversaries of
    August 25, 2006.(2)
    
    The option is scheduled to vest as to one-third of the shares on
    each of the first, second and third anniversaries of
    October 3, 2006.(3)
    
    The option is scheduled to vest as to one-third of the shares on
    each of the first, second and third anniversaries of
    February 8, 2006.(4)
    
    The option is scheduled to vest as to one-third of the shares on
    each of the first, second and third anniversaries of
    November 1, 2006.(5)
    
    On May 8, 2006, the Compensation Committee approved a
    repricing of all outstanding options previously granted to
    employees. Such repricing was contingent upon approval by the
    Bankruptcy Court. Mr. Dillings shares were originally
    priced at $9.24/share. Ms. Sheas grant of 6,000
    options was originally priced at $13.02/share and her grant of
    10,000 options was originally priced at $17.85/share.  Options
    Exercised and Stock Vested
    Pension
    Benefits
    Nonqualified
    Defined Contribution Plan
    Potential
    Payments Upon Termination or Change in Control
   52




---



##### Table of Contents



Susan
    L.N. Vogt, President and Chief Executive Officer
  Termination Not forCause or Resignationfor Good Reason inTermination Not for


Connection With orCause or Resignation


Following a Changefor Good Reason


in Control EventBase salary

$
350,000
(3)

$
525,000
(8)Bonus

$
262,500
(4)

$
393,750
(9)Benefits

$
16,867
(5)

$
16,867
(5)Number of Stock Options


450,000
(6)


450,000
(6)Value Upon Termination(1)

$



$
Excise Tax Gross Up(2)

$



$
Other Benefits

$
50,000
(7)

$
50,000
(7)Total

$
679,367


$
985,617     (1)
    
    Assuming the options do not continue following a Change in
    Control Event, the options would have no value upon termination
    as the fair market value of the Companys common stock was
    $5.75 as of September 30, 2007 and the exercise price of
    Ms. Vogts option is $6.00.(2)
    
    For purposes of these computations, we have assumed that regular
    salary and bonus under Ms. Vogts employment agreement
    are not included as contingent upon a change in control event
    even though paid pursuant to agreements entered into by the
    Company within one year of September 30, 2007.(3)
    
    Last monthly base salary prior to the termination for a period
    of 12 months following the date of termination.(4)
    
    Amount of pro-rated target incentive bonus for the period from
    October 1, 2006 to September 30, 2007. Pursuant to
    Ms. Vogts employment agreement, the incentive bonus
    shall be equal to least 75% of Ms. Vogts base salary.(5)
    
    Payment of premium cost of participation in our health and/or
    dental insurance plans for 12 months. 53




---



##### Table of Contents



(6)
    
    All options held by Ms. Vogt will become fully vested in
    the event of termination by us not for Cause, termination by
    Ms. Vogt for Good Reason or involuntary termination in
    connection with or following a Change in Control Event.(7)
    
    Reimbursement of up to $50,000 for executive outplacement
    services.(8)
    
    Last monthly base salary prior to the termination for a period
    of 18 months following the date of termination.(9)
    
    Amount of pro-rated target incentive bonus for the period from
    October 1, 2006 to September 30, 2007 multiplied by
    1.5.  Gregory
    A. Gould, Chief Financial Officer
  Termination Not forCause or Resignationfor Good Reason inTermination Not for


Connection With orCause or Resignation


Following a Changefor Good Reason


in Control EventBase salary

$
250,000
(3)

$
375,000
(8)Bonus

$
187,500
(4)

$
281,250
(9)Benefits

$
16,867
(5)

$
16,867
(5)Number of Stock Options


250,000
(6)


250,000
(6)Value Upon Termination(1)

$



$
Excise Tax Gross Up(2)

$



$
Other Benefits

$
36,000
(7)

$
36,000
(7)Total

$
490,367


$
709,117     (1)
    
    Assuming the options do not continue following a Change in
    Control Event, the options would have no value upon termination
    as the fair market value of the Companys common stock was
    $5.75 as of September 30, 2007 and the exercise price of
    Mr. Goulds option is $5.80.(2)
    
    For purposes of these computations, we have assumed that regular
    salary and bonus under Mr. Goulds employment
    agreement are not included as contingent upon a change in
    control event even though paid pursuant to agreements entered
    into by the Company within one year of September 30, 2007.(3)
    
    Last monthly base salary prior to the termination for a period
    of 12 months following the date of termination.(4)
    
    Amount of pro-rated target incentive bonus for the period from
    October 1, 2006 to September 30, 2007. Pursuant to
    Mr. Goulds employment agreement, the incentive bonus
    shall be equal to at least 75% of Mr. Goulds base
    salary.(5)
    
    Payment of premium cost of participation in our health and/or
    dental insurance plans for 12 months.(6)
    
    All options held by Mr. Gould will become fully vested in
    the event of termination by us not for Cause, termination by
    Mr. Gould for Good Reason or involuntary termination in
    connection with or following a Change in Control Event.(7)
    
    Reimbursement of up to $36,000 for executive outplacement
    services.(8)
    
    Last monthly base salary prior to the termination for a period
    of 18 months following the date of termination.(9)
    
    Amount of pro-rated target incentive bonus for the period from
    October 1, 2006 to September 30, 2007 multiplied by
    1.5. 54




---



##### Table of Contents



Ronald
    R. Dilling, Vice President, Manufacturing
    Operations
  Termination Not for CauseBase salary

$
56,594
(1)Total

$
56,594     (1)
    
    Last monthly base salary prior to the termination for a period
    of three months and 14 days (represents the period from
    September 30, 2007 until January 13, 2008 (the
    termination date of Mr. Dillings employment
    agreement)).  Stock
    Option Plan
             55




---



##### Table of Contents



split-up
    Option
    Agreements
      Director
    Compensation
    Cash


OptionCompensation


Awards(6)


TotalName(1)

($)


($)


($)Eugene I. Davis(2)

$
23,000


$
129,651
(7)

$
152,651Samuel D. Anderson(3)

$
17,000


$
64,826
(8)

$
81,826Sarah L. Murphy(4)

$
19,000


$
75,630
(9)

$
94,630Jill Tillman(5)

$
22,500


$
75,630
(10)

$
98,130     (1)
    
    Our directors prior to May 17, 2007 did not receive any
    compensation in fiscal 2007, nor did the Company recognize any
    expense related to option awards for such former directors in
    fiscal 2007. 56




---



##### Table of Contents



(2)
    
    As of September 30, 2007, the last day of our fiscal year,
    there are options for the purchase of 30,000 shares of
    common stock, all of which have vested, issued to Eugene I.
    Davis.(3)
    
    As of September 30, 2007, the last day of our fiscal year,
    there are options for the purchase of 55,000 shares of
    common stock, all of which have vested, issued to Samuel D.
    Anderson. Samuel D. Anderson participated in the rights offering
    in May 2007 conducted as part of the Companys emergence
    from bankruptcy and received 226,310 shares of common stock.(4)
    
    As of September 30, 2007, the last day of our fiscal year,
    there are options for the purchase of 17,500 shares of
    common stock, all of which have vested, issued to Sarah L.
    Murphy.(5)
    
    As of September 30, 2007, the last day of our fiscal year,
    there are options for the purchase of 17,500 shares of
    common stock, all of which have vested, issued to Jill Tillman.
    Jill Tillman participated in the rights offering in May 2007
    conducted as part of the Companys emergence from
    bankruptcy and received 446 shares of common stock.(6)
    
    The Option Awards value set forth in the table
    represents the stock-based compensation expense recorded by us
    in 2007 for all outstanding stock options held by the named
    executive officer measured using the Black-Scholes option
    pricing model at the grant date based on the fair value of the
    option award. The stock-based compensation expense associated
    with each option award is recognized on graded vesting method
    over the requisite service period, net of estimated forfeitures.
    In calculating the stock-based compensation expense disclosed in
    the table, we used the assumptions described in
    Note 2 and Note 12 of the Financial Statements
    included as part of this Annual Report on
    Form 10-K
    for the fiscal year ended September 30, 2007.(7)
    
    Represents the compensation expense in fiscal year 2007 in
    connection with an option grant to purchase 30,000 shares
    of common stock on May 18, 2007 at an original exercise
    price of $7.50.(8)
    
    Represents the compensation expense in fiscal year 2007 in
    connection with an option grant to purchase 15,000 shares
    of common stock on May 18, 2007 at an original exercise
    price of $7.50.(9)
    
    Represents the compensation expense in fiscal year 2007 in
    connection with an option grant to purchase 17,500 shares
    of common stock on May 18, 2007 at an original exercise
    price of $7.50.(10)
    
    Represents the compensation expense in fiscal year 2007 in
    connection with an option grant to purchase 17,500 shares
    of common stock on May 18, 2007 at an original exercise
    price of $7.50.    Cash
    Compensation
    Stock
    Awards and Options
   57




---



##### Table of Contents



Reimbursement
    of Expenses
    Compensation
    Committee Interlocks and Insider Participation
    Indemnification
    of Officers and Directors
    Item
    12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS      c/o SeraCare
  58




---



##### Table of Contents



Percentage ofNumber of Shares


Common StockBeneficial Owner

Beneficially Owned


Beneficially Owned5% or Greater StockholdersFunds managed by Harbinger(1)


4,321,372



23.3
%Ashford Capital Management, Inc.(2)


2,271,298



12.2
%Funds managed by Black Horse Capital(3)


1,517,367



8.2
%Named Executive Officers and DirectorsSusan L.N. Vogt(4)


150,000



*Gregory A. Gould(5)


83,333



*Ronald R. Dilling(6)


26,666



*Katheryn E. Shea(7)


16,485



*William J. Smutny(8)


23,333



*Eugene I. Davis(9)


36,666



*Samuel D. Anderson(10)


285,476



1.5
%Sarah L. Murphy(11)


21,666



*Jill Tillman(12)


23,612



*All current executive officers and directors as a group
    (9 persons)(13)


667,237



3.5
%     *
    
    Indicates beneficial ownership of less than one percent.(1)
    
    The address for Harbinger Capital Partners Master Fund I,
    Ltd. is
    c/o International
    Fund Services (Ireland) Limited, Third Floor, Bishops
    Square, Redmonds Hill, Dublin 2, Ireland. The address for
    Harbinger Capital Partners Special Situations Fund, L.P. is 555
    Madison Avenue, 16th Floor, New York, New York, 10022. According
    to a Schedule 13D/A filed by Harbinger on May 17,
    2007, Harbinger Capital Partners Master Fund I Ltd. has the
    shared power to vote or direct the vote and the shared power to
    dispose or direct the disposition of 3,670,843 shares and
    Harbinger Capital Partners Special Situations Fund L.P. has
    the shared power to vote or direct the vote and the shared power
    to dispose or direct the disposition of 650,529 shares.(2)
    
    The address for Ashford Capital Management, Inc. is
    P.O. Box 4172, Wilmington, DE 19807. According to a
    Schedule 13F filed with the SEC by Ashford Capital
    Management, Inc. on November 15, 2007,
    2,271,298 shares of common stock are held of record by
    clients of Ashford Capital Management, Inc.
    (Ashford), and Ashford, in its capacity as
    investment advisor, may be deemed to have beneficial ownership
    of all the shares.(3)
    
    The address for Black Horse Capital LP and Black Horse Capital
    (QP) LP is 338 Sharon Amity Rd., #202, Charlotte, NC 28211 and
    the address for Black Horse Capital Offshore Ltd. is
    c/o M&C
    Corporate Services Limited, P.O. Box 309GT, Ugland
    House, South Church Street, George Town, Grand Cayman, Cayman
    Islands. According to a Schedule 13D/A filed by Black Horse
    Capital on May 17, 2007, Black Horse Capital LP has the
    shared power to vote or direct the vote of 981,578 shares
    beneficially owned by such fund, Black Horse Capital (QP) LP has
    the shared power to vote or direct the vote of
    299,474 shares beneficially owned by such fund and Black
    Horse Capital Offshore Ltd. has the shared power to vote or
    direct the vote of 236,315 shares beneficially owned by
    such fund.(4)
    
    Consists of 150,000 shares of common stock underlying
    options exercisable within 60 days of January 4, 2008.(5)
    
    Consists of 83,333 shares of common stock underlying
    options exercisable within 60 days of January 4, 2008.(6)
    
    Consists of 26,666 shares of common stock underlying
    options exercisable within 60 days of January 4, 2008. 59




---



##### Table of Contents



(7)
    
    Consists of 485 shares of common stock and
    16,000 shares of common stock underlying options
    exercisable within 60 days of January 4, 2008.(8)
    
    Consists of 23,333 shares of common stock underlying
    options exercisable within 60 days of January 4, 2008.(9)
    
    Consists of 416 shares of common stock and
    36,250 shares of common stock underlying options
    exercisable within 60 days of January 4, 2008.(10)
    
    Consists of 226,726 shares of common stock and
    58,750 shares of common stock underlying options
    exercisable within 60 days of January 4, 2008.(11)
    
    Consists of 416 shares of common stock and
    21,250 shares of common stock underlying options
    exercisable within 60 days of January 4, 2008.(12)
    
    Consists of 2,362 shares of common stock and
    21,250 shares of common stock underlying options
    exercisable within 60 days of January 4, 2008.(13)
    
    See footnotes 4-12 above.  Item
    13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE  Certain
    Relationships and Related Transactions
    
    Harbinger, a greater than 5% beneficial owner of the Company,
    has appointed two directors to the Companys Board of
    Directors pursuant to the Plan of Reorganization approved by the
    Bankruptcy Court.
    Black Horse Capital, a greater than 5% beneficial owner of the
    Company, has appointed one director to the Companys Board
    of Directors pursuant to the Plan of Reorganization approved by
    the Bankruptcy Court.
    Barry D. Plost and Bernard L. Kasten, two former directors, were
    parties to the subordinated note agreement between the Company
    and other note holders. The debt was paid in full with the
    proceeds of a rights offering which was held in May 2007 and the
    agreement has been terminated.  Executive
    Compensation
    Director
    Compensation
  Compensation-Director
  Review
    and Approval of Related Party Transactions
   60




---



##### Table of Contents



Director
    Independence
    Item
    14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES  Accounting
    Fees and Services
    2007


2006Audit Fees(1)

$
300,000


$
331,176Audit-Related Fees






Tax Fees






All Other Fees(2)






66,000Total

$
300,000


$
397,176     (1)
    
    The 2007 and 2006 audit fees relate to professional services
    performed for the audit of the Companys annual financial
    statements.(2)
    
    The 2006 other fees are for services related to the events
    leading up to the Companys bankruptcy and related
    investigations by the Securities and Exchange Commission and the
    Department of Justice.  Policy on
    Audit Committee Pre-Approval of Audit and Permissible Non-Audit
    Services of Independent Auditors
        AUDIT
    COMMITTEE REPORT
   61




---



##### Table of Contents



Form 10-K
  
 62




---



##### Table of Contents



PART IV  Item 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES  Exhibit



Incorporated by Reference

FiledNumber

Exhibit Description

Form

Date

Number

Herewith2
.1

Asset Purchase Agreement, dated March 29, 2007, between
    SeraCare Life Sciences, Inc. and BioServe Biotechnologies
    Limited.

8-K

3/29/07


10
.12
.2

First Amended Joint Plan of Reorganization of the Debtor and Ad
    Hoc Equity Committee, as Modified.

8-K

2/23/07


2
.12
.3

Order on Confirmation of First Amended Joint Plan of
    Reorganization of the Debtor and The Ad Hoc Equity Committee, as
    Modified.

8-K

2/23/07


2
.22
.4

Merger Agreement between SeraCare Life Sciences, Inc. and
    Reorganized SeraCare, dated May 17, 2007.

8-K

5/17/07


2
.33
.1

Certificate of Incorporation.

8-A

5/17/07


3
.13
.2

Amended and Restated Bylaws.

8-A

5/17/07


3
.23
.3

Certificate of Merger, dated May 17, 2007, filed with
    Delaware Secretary of State.

8-K

5/17/07


3
.14
.1

Form of SeraCare Life Sciences, Inc. common stock certificate.

8-A

5/17/07


4
.110
.1.1

Employment Agreement, dated July 14, 2006, between SeraCare
    Life Sciences, Inc. and Susan L.N. Vogt.

8-K

5/17/07


10
.110
.1.2

Employment Agreement, dated August 16, 2006, between
    SeraCare Life Sciences, Inc. and Gregory A. Gould.

8-K/A

5/18/07


10
.210
.1.3

Employment Agreement, dated January 13, 2006, between
    SeraCare Life Sciences, Inc. and Ronald R. Dilling.









X10
.2.1

2001 Stock Incentive Plan (Amended and Restated As of
    May 18, 2007).

8-K

5/21/07


99
.110
.2.2

Form of Nonqualified Stock Option Agreement.

8-K

5/21/07


99
.210
.2.3

Form of Incentive Stock Option Agreement.

8-K

5/21/07


99
.310
.3

SeraCare Life Sciences, Inc. Fiscal 2008 Director Compensation
    Plan.









X10
.4

SeraCare Life Sciences, Inc. Management Incentive Plan.









X10
.5

Award/Contract, dated September 30, 2005, by and between
    SeraCare Life Sciences, Inc. d/b/a SeraCare BioServices and the
    National Cancer Institute.

8-K

10/6/05


10
.110
.6

Contract No. HHSN272200700060C among Office of
    Acquisitions, DEA, National Institute of Allergy and Infections
    Diseases, National Institute of Health, DHHS and SeraCare Life
    Sciences, Inc. dated September 30, 2007.

8-K

10/3/07


10
.110
.7

Lease Agreement dated as of October 1, 2007 by and between
    Birchwood Fortune  SPVEF, LLC and SeraCare Life
    Sciences, Inc.

8-K

10/4/07


10
.110
.8

Lease Agreement dated as of May 16, 1997 by and between
    BBI-Biotech Research Laboratories, Inc. and B.F. Saul Real
    Estate Investment Trust.









X10
.8.1

First Amendment to the Lease Agreement dated October 14,
    1997 by and between BBI-Biotech Research Laboratories, Inc. and
    B.F. Saul Real Estate Investment Trust.









X10
.8.2

Second Amendment to the Lease Agreement dated December 9,
    1997 by and between BBI-Biotech Research Laboratories, Inc. and
    B.F. Saul Real Estate Investment Trust.









X 63




---



##### Table of Contents



Exhibit



Incorporated by Reference

FiledNumber

Exhibit Description

Form

Date

Number

Herewith10
.8.3

Third Amendment to the Lease Agreement dated June 14, 2007
    by and between SeraCare Life Sciences, Inc. and B.F. Saul Real
    Estate Investment Trust.









X10
.8.4

Landlords Lien Subordination Agreement dated July 9,
    2007 by and between Saul Holdings Limited Partnership and
    Merrill Lynch Business Financial Services, Inc.









X10
.9

Credit and Security Agreement, dated as of June 4, 2007,
    between SeraCare Life Sciences, Inc. and Merrill Lynch Capital
    as a lender and the Administrative Agent, excluding the annexes,
    exhibits, riders and schedules thereto.

8-K

6/11/07


10
.110
.10

Assumption and Modification Agreement, dated as of
    September 14, 2004, between SeraCare Life Sciences, Inc.
    and Commerce Bank & Trust Company.

8-K

9/16/04


10
.310
.11

Guaranty, dated as of September 14, 2004, made by SeraCare
    Life Sciences, Inc. in favor of Commerce Bank &
    Trust Company.

8-K

9/16/04


10
.410
.12

Loan Agreement, dated March 31, 2000, between Boston
    Biomedica, Inc. and Commerce Bank &
    Trust Company.

8-K

9/16/04


10
.510
.13

Allonge to Loan Agreement, dated August 15, 2002, between
    Boston Biomedica, Inc. and Commerce Bank &
    Trust Company.

8-K

9/16/04


10
.610
.14

Agreement, dated March 27, 2003, between Boston Biomedica,
    Inc. and Commerce Bank & Trust Company.

8-K

9/16/04


10
.710
.15

$2,900,000 Note, dated March 31, 2000, issued by Boston
    Biomedica, Inc. and payable to the order of Commerce
    Bank & Trust Company.

8-K

9/16/04


10
.810
.16

Mortgage and Security Agreement, dated March 31, 2000,
    granted by Boston Biomedica, Inc. to Commerce Bank &
    Trust Company.

8-K

9/16/04


10
.910
.17

Joint Plan of Reorganization with the Ad Hoc Debtor Committee,
    dated November 10, 2006.

8-K

11/14/06


10
.110
.18

Plan Support Agreement between SeraCare Life Sciences, Inc. and
    the Ad Hoc Debtor Committee, dated November 10, 2006.

8-K

11/14/06


10
.214
.1

Code of Ethics for Chief Executive Officer and Senior Financial
    Officers.

8-K

5/21/07


99
.431
.1

Sarbanes-Oxley Act Section 302 Certification of Susan
    L.N. Vogt.









X31
.2

Sarbanes-Oxley Act Section 302 Certification of
    Gregory A. Gould.









X32
.1

Sarbanes-Oxley Act Section 906 Certification of Susan L.N.
    Vogt.









X32
.2

Sarbanes-Oxley Act Section 906 Certification of Gregory A.
    Gould.









X       
    In accordance with the terms of the Assumption and Modification
    Agreement, dated as of September 14, 2004, between SeraCare
    Life Sciences, Inc. and Commerce Bank &
    Trust Company, SeraCare Life Sciences, Inc. agreed to
    assume certain of the obligations of Boston Biomedica, Inc. 64




---



##### Table of Contents



SIGNATURES      /s/  Susan
    L.N. Vogt   Title:
    President and Chief Executive Officer    Signature

Title

Date/s/  Susan
    L.N. VogtSusan
    L.N. Vogt

President and Chief Executive Officer Director

January 31, 2008/s/  Gregory
    A. GouldGregory
    A. Gould

Chief Financial Officer, Treasurer and Secretary

January 31, 2008/s/  Eugene
    I. DavisEugene
    I. Davis

Chairman

January 31, 2008/s/  Samuel
    D. AndersonSamuel
    D. Anderson

Director

January 31, 2008/s/  Sarah
    L. MurphySarah
    L. Murphy

Director

January 31, 2008/s/  Jill
    TillmanJill
    Tillman

Director

January 31, 2008  65




---



##### 



SERACARE
    LIFE SCIENCES, INC.
 INDEX TO
    FINANCIAL STATEMENTS  Report of Independent Registered Public
    Accounting Firm


F-2Financial StatementsStatements of Operations, Years Ended
    September 30, 2007, 2006 and 2005


F-3Balance Sheets, As of September 30, 2007 and
    2006


F-4Statements of Stockholders Equity, Years
    Ended September 30, 2007, 2006 and 2005


F-5Statements of Cash Flows, Years Ended
    September 30, 2007, 2006 and 2005


F-6Notes to Financial Statements


F-8   F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM              F-2




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.



STATEMENTS
    OF OPERATIONS  Year Ended September 30,2007


2006


2005Revenue

$
47,303,595


$
49,175,857


$
50,299,665Cost of revenue


33,929,232



32,551,533



50,784,147Gross profit (loss)


13,374,363



16,624,324



(484,482
)Research and development expense


566,634



496,064



409,324Selling, general and administrative expenses


14,526,718



13,308,077



11,957,834Impairment of intangible assets


5,220,000







Reorganization items


5,223,896



9,408,052



Operating loss


(12,162,885
)


(6,587,869
)


(12,851,640
)Interest expense


(697,787
)


(2,114,248
)


(1,762,890
)Interest expense to related parties


(312,862
)


(492,917
)


(490,000
)Other income (expense), net


194,062



286,361



(95,959
)Loss before income taxes


(12,979,472
)


(8,908,673
)


(15,200,489
)Income tax expense (benefit)


75,971



(30,878
)


(513,728
)Net loss from continuing operations


(13,055,443
)


(8,877,795
)


(14,686,761
)Loss from discontinued operations, net of income tax


(109,438
)


(15,400,107
)


(6,410,147
)Net loss

$
(13,164,881
)

$
(24,277,902
)

$
(21,096,908
)Loss per common shareBasic and diluted net loss per common shareContinuing operations

$
(0.82
)

$
(0.64
)

$
(1.32
)Discontinued operations


(0.01
)


(1.10
)


(0.58
)Net loss

$
(0.83
)

$
(1.74
)

$
(1.90
)Weighted average shares outstandingBasic and diluted


15,876,236



13,986,413



11,099,841    F-3




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.



BALANCE
    SHEETS  As of September 30,2007


2006ASSETSCurrent assetsCash and cash equivalents

$
9,523,950


$
13,560,768Accounts receivable, less allowance for doubtful accounts of
    $175,000 and $216,941 in 2007 and 2006, respectively


6,590,602



8,385,292Taxes receivable


1,726,386



1,801,927Inventory


7,316,515



5,737,836Prepaid expenses and other current assets


333,305



1,797,908Total current assets


25,490,758



31,283,731Property and equipment, net


4,245,716



4,798,298Assets held for sale






917,414Goodwill


27,362,559



27,362,559Other intangible assets


446,489



5,930,993Other assets


894,223



815,302Total assets

$
58,439,745


$
71,108,297LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
2,201,256


$
1,543,322Prepetition liabilities


198,612



9,108,613Accrued expenses


2,818,700



2,263,508Current portion of long-term debt


187,771



10,591,420Total current liabilities


5,406,339



23,506,863Long-term debt


2,111,368



2,218,297Long-term notes payable to related parties






3,500,000Other liabilities


397,544



317,122Total liabilities


7,915,251



29,542,282Commitments and contingenciesStockholders equityPreferred stock  2007, $.001 par value,
    5,000,000 shares authorized, no shares issued or
    outstanding; 2006, no par value, 25,000,000 shares
    authorized, no shares issued or outstanding






Common stock  2007, $.001 par value,
    35,000,000 shares authorized, 18,557,948 issued and
    outstanding; 2006, no par value, 25,000,000 shares
    authorized, 14,282,948 issued and outstanding


18,558



66,884,081Additional paid-in capital


99,736,794



10,747,911Retained earnings


(49,230,858
)


(36,065,977
)Total stockholders equity


50,524,494



41,566,015Total liabilities and stockholders equity

$
58,439,745


$
71,108,297    F-4




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.



STATEMENTS
    OF STOCKHOLDERS EQUITY  Additional


RetainedCommon Stock


paid-in


earnings


TotalShares


Amount


capital


(deficit)


amountBalance, September 30, 2004


9,757,336


$
22,935,466


$
13,519,422


$
9,308,833


$
45,763,721Net loss














(21,096,908
)


(21,096,908
)Exercise of warrants and options


284,828



717,271











717,271Public offering of common stock


3,477,600



42,600,600



(3,749,753
)






38,850,847Stock-based compensation expense










183,000







183,000Employee stock purchase plan


15,097



167,754











167,754Balance, September 30, 2005


13,534,861



66,421,091



9,952,669



(11,788,075
)


64,585,685Net loss














(24,277,902
)


(24,277,902
)Exercise of warrants and options


744,819



410,409











410,409Stock-based compensation expense










795,242







795,242Employee stock purchase plan


3,268



52,581











52,581Balance, September 30, 2006


14,282,948



66,884,081



10,747,911



(36,065,977
)


41,566,015Net loss














(13,164,881
)


(13,164,881
)Exercise of options


25,000



148,250











148,250Change in par value due to Delaware corporation merger, par $.001






(67,018,023
)


67,018,023







Rights Offering of common stock


4,250,000



4,250



20,183,250







20,187,500Rights Offering of common stock, cost










(610,729
)






(610,729
)Stock-based compensation expense










2,398,339







2,398,339Balance, September 30, 2007


18,557,948


$
18,558


$
99,736,794


$
(49,230,858
)

$
50,524,494    F-5




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.



STATEMENTS
    OF CASH FLOWS  Year Ended September 30,2007


2006


2005Cash flows from operating activities:Net loss

$
(13,164,881
)

$
(24,277,902
)

$
(21,096,908
)Adjustments to reconcile net loss to cash provided by (used in)
    operating activities:Depreciation and amortization


1,389,087



1,989,232



2,266,513Amortization of deferred financing expenses


59,959



419,667



112,168Bad debt expense


95,299



202,945



59,340Write-down of inventory


699,139



802,111



17,767,344Impairment of trade name


5,220,000







Impairment of goodwill






13,384,849



Loss on disposal of fixed assets






182,393



313,771Gain on disposition of certain assets of Genomics Collaborative
    division


(791,661
)






Deferred income tax provision, net










241,766Stock-based compensation


2,398,339



795,242



183,000(Increase) decrease from changes, net of effects from
    acquisitions:Accounts receivable


1,684,391



1,524,951



2,127,915Taxes receivable


75,541



(291,822
)


(1,751,871
)Inventory


(2,277,818
)


(2,907,649
)


(454,477
)Prepaid expenses and other current assets


1,463,608



(1,279,175
)


779,168Other assets


105,747



(258,339
)


135,674Increase (decrease) from changes, net of effects from
    acquisitions:Accounts payable


657,934



(3,599,570
)


(1,942,042
)Accounts payable to related parties










583,984Prepetition liabilities


(8,910,001
)


6,824,963



Accrued expenses and other liabilities


640,684



317,880



(1,523,698
)Net cash (used in) operating activities


(10,654,633
)


(6,170,224
)


(2,198,353
)Cash flows from investing activities:Purchases of property and equipment


(492,001
)


(987,859
)


(1,403,525
)Acquisition of certain assets of BioMedical Resources, Inc.






(290,463
)


(794,339
)Acquisition of certain assets of Boston Biomedica, Inc.










(552,473
)Settlement of closing items related to Boston Biomedica,
    Inc.










1,412,192Acquisition of certain assets of Celliance division






(3,588,796
)


Acquisition of certain assets of Genomics Collaborative,
    Inc.










(65,503
)Proceeds from the disposition of certain assets of Genomics
    Collaborative division


2,000,000







Proceeds from the disposal of property and equipment


15,000



18,000



Net cash provided by (used in) investing activities


1,522,999



(4,849,118
)


(1,403,648
)Cash flows from financing activities:Repayments of long-term debt


(10,590,578
)


(20,436,527
)


(30,080,896
)Repayment of related party debt


(3,500,000
)






Deferred financing expenses


(539,627
)






(28,098
)Proceeds from long term debt






15,000,000



21,700,000Funding received from capital lease










352,901Funding received from Rights Offering, net of issue costs


19,576,771







Proceeds from issuance of common shares, net of issue costs










38,850,847Proceeds from exercise of options, warrants and ESPP transactions


148,250



462,990



885,025Net cash provided by (used in) financing activities


5,094,816



(4,973,537
)


31,679,779Net (decrease) increase in cash and cash equivalents


(4,036,818
)


(15,992,879
)


28,077,778Cash and cash equivalents,beginning of year


13,560,768



29,553,647



1,475,869Cash and cash equivalents,end of year

$
9,523,950


$
13,560,768


$
29,553,647    F-6




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  STATEMENTS
    OF CASH FLOWS  (Continued)
  Year Ended September 30,2007


2006


2005Supplemental disclosure of cash flow information:(a) Cash paid for:Interest

$
1,859,600


$
1,773,180


$
2,160,805Federal income taxes

$
18,763


$
530,000


$
1,308,000State income taxes

$
2,636


$
40,912


$
400,643(b) Cash received for:State income taxes

$
20,169


$
309,968


$
(c) Non-cash items disclosure:Earn out accrued relating to BioMedical Resources, Inc.

$



$



$
90,463Capital lease agreement

$
80,000


$



$
(d) AcquisitionsAssets acquired:Purchase of certain net assets of Celliance divisionInventory

$



$
781,945


$
Prepaids






29,080



Property and equipment






517,788



Deposits






23,820



Goodwill (including $276,731 in transaction costs)






2,236,163



Total cash paid, including transaction costs

$



$
3,588,796


$
    F-7




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.



NOTES TO
    FINANCIAL STATEMENTS  1.
    Background  (a)
    Background
    and Organization  in vitro
    (b)
    Reorganization    2.
    Summary
    of Significant Accounting Policies  Use of Estimates in the Preparation of Financial
    Statements.
 F-8




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Revenue Recognition. Revenue Recognition in Financial
    Statements
  
    evidence of an arrangement exists;
    delivery or performance has occurred;
    prices are fixed or determinable; and
    collection of the resulting receivable is reasonably assured.    Returns.
  Shipping and Handling Costs.
  Advertising.
  Cash and Cash Equivalents.
  Fair Value of Financial Instrument.
  Accounts Receivable.
  Inventory.
 F-9




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Long-Lived Assets.
    Building and improvements

10 to 30 yearsFurniture and equipment

7 yearsComputer equipment and software

3 yearsLeasehold improvements

Shorter of the life of the improvement or the remaining term of
    the lease   Deferred Tax Asset.
  Contingencies and Litigation Reserves.
  
    interpretation of contractual rights and obligations;
    the status of government regulatory initiatives, interpretations
    and investigations;
    the status of settlement negotiations;
    prior experience with similar types of claims;
    whether there is available insurance; and
    advice of counsel.  Purchase Price Allocations for
    Acquisitions.
 F-10




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Goodwill and Other Intangible Assets. Goodwill and Other
    Intangible Assets
  non-amortizable non-amortizable non-amortizable
    Balance as of September 30, 2004

$
33,197,442Goodwill purchase accounting adjustment for Genomics
    Collaborative, Inc.


7,450,116Goodwill purchase accounting adjustment for Boston Biomedica,
    Inc.


(2,962,349
)Goodwill earn-out to BioMedical Resources, Inc.


626,036Balance as of September 30, 2005


38,311,245Goodwill impairment Genomics Collaborative division


(13,384,849
)Goodwill earn-out to BioMedical Resources, Inc.


200,000Goodwill acquired Celliance division


2,236,163Balance as of September 30, 2006


27,362,559Goodwill adjustments during year


Balance as of September 30, 2007

$
27,362,559     Income taxes.
   F-11




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Fresh-Start Accounting.
  Earnings Per Share. Earnings per Share
  Deferred Financing Costs.
  Stock-Based Compensation. Share-Based Payments Accounting for Stock-Based Compensation, Accounting
    for Stock Issued to Employees,
   F-12




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Simplified
    Method for Estimating the Expected Term.
  Recent
    Accounting Pronouncements
  SFAS No. 157,
    Fair Value Measurements
  Fair Value
    Measurements
    SFAS No. 141
    (Revised 2007), Business Combinations
  Business Combinations
  
    acquisition costs will be generally expensed as incurred;
    noncontrolling interests will be valued at fair value at the
    acquisition date;
    acquired contingent liabilities will be recorded at fair value
    at the acquisition date and subsequently measured at either the
    higher of such amount or the amount determined under existing
    guidance for non-acquired contingencies; F-13




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   
    in-process research and development will be recorded at fair
    value as an indefinite-lived intangible asset at the acquisition
    date until the completion or abandonment of the associated
    research and development efforts;
    restructuring costs associated with a business combination will
    be generally expensed subsequent to the acquisition
    date; and
    changes in deferred tax asset valuation allowances and income
    tax uncertainties after the acquisition date generally will
    affect income tax expense.    SFAS No. 160,Noncontrolling
    Interests in Consolidated Financial Statements  An
    Amendment of ARB No. 51
  Noncontrolling Interests in
    Consolidated Financial Statements  An Amendment of
    ARB No. 51
  FIN No. 48,
    Accounting for Uncertainty in Income Taxes  An
    Interpretation of FASB Statement No. 109
  Accounting for
    Uncertainty in Income Taxes  An Interpretation of
    FASB Statement No. 109 Accounting for Income
    Taxes
   F-14




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  3.
    Reorganization  debtor-in-possession
      4.
    Inventory    At September 30,2007


2006Raw materials and supplies

$
1,244,399


$
1,525,196Work-in process


1,126,113



1,249,992Finished goods


7,156,639



4,757,046Gross inventory


9,527,151



7,532,234Reserve for obsolete inventory


(2,210,636
)


(1,794,398
)Net inventory

$
7,316,515


$
5,737,836  F-15




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  5.
    Property
    and Equipment    At September 30,2007


2006Land and building

$
2,393,924


$
2,357,849Furniture and equipment


1,985,519



1,577,847Computer equipment and software


592,277



545,805Leasehold improvements


2,147,110



1,803,4307,118,830



6,284,931Construction in progress


113,962



375,860Less: accumulated depreciation and amortization


(2,987,076
)


(1,862,493
)Property and equipment, net

$
4,245,716


$
4,798,298     6.
    Long-Term
    Debt    At September 30,2007


2006Revolving credit facility

$



$
9,950,000Real property mortgage note


2,052,209



2,119,083Notes payable






500,000Capital leases


246,930



240,634Total debt


2,299,139



12,809,717Less current portion


(187,771
)


(10,591,420
)Total long-term debt

$
2,111,368


$
2,218,297   Revolving
    Credit Facility and Term Notes
  and/or
 F-16




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
          and/or
    Real
    Property Mortgage Note
   F-17




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Subordinated
    Notes
  four-and-one-half-year
       F-18




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Aggregate
    Maturities
    2008

$
187,7712009


2,050,3322010


30,7432011


17,9312012


12,362Thereafter


$
2,299,139   7.
    Commitments
    and Contingencies  Chapter 11
    Bankruptcy
    Shareholder
    Litigation
  In re SeraCare Life Sciences,
    Inc. Securities Litigation No. C-05-2335-H. and/or
  Department
    of Justice/Securities and Exchange Commission
   F-19




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    CTL
    Analyzers, LLC
      Purchase
    Commitments and Suppliers
    30-45 days.
  Risks
    and Uncertainties, Significant Customers and Sales
    Commitments
       F-20




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Year Ended September 30,2007


2006


2005United States

$
37,143,056


$
34,573,454


$
34,521,593Europe


8,190,674



11,422,163



9,364,789Asia


998,169



2,438,994



5,682,388Other


971,696



741,246



730,895Total

$
47,303,595


$
49,175,857


$
50,299,665       8.
    Leases     F-21




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Capital Leases


Operating Leases


Total LeasesFiscal years ended September 30,2008

$
106,984


$
1,985,056


$
2,092,0402009


106,984



1,627,589



1,734,5732010


34,439



1,638,762



1,673,2012011


19,930



1,687,919



1,707,8492012


12,766



1,738,554



1,751,320Thereafter






7,120,898



7,120,898Total minimum lease payments


281,103


$
15,798,778


$
16,079,881Less: amounts representing interest


(34,173
)Present value of future minimum capital lease payments

$
246,930       9.
    Income
    Taxes    Year Ended September 30,2007


2006


2005Current provision (credit):Federal

$
18,763


$



$
(759,981
)State


57,208



(30,878
)


4,487Total current provision (credit)


75,971



(30,878
)


(755,494
)Deferred tax provision (benefit):Federal


(4,662,418
)


(2,871,087
)


(4,295,327
)State


(1,325,667
)


(878,805
)


(1,147,937
)Total deferred provision (credit)


(5,988,085
)


(3,749,892
)


(5,443,264
)Total provision (credit)


(5,912,114
)


(3,780,770
)


(6,198,758
)Increase in valuation allowance


5,988,085



3,749,892



5,685,030Total income tax expense (benefit)

$
75,971


$
(30,878
)

$
(513,728
)  F-22




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Year Ended September 30,2007


2006


2005Computed provision for taxes


34.0
%


34.0
%


34.0
%State taxes


(0.3
)%


0.2
%


(1.6
)%General business credits


3.7
%


2.6
%


0.0
%Other, net


(3.5
)%


(5.1
)%


(1.3
)%Change in valuation allowance


(34.5
)%


(31.4
)%


(27.7
)%Total provision, net of valuation allowance


(0.6
)%


0.3
%


3.4
%   As of September 30,2007


2006


2005Net operating loss carryforwards:Federal

$
45,300,000


$
31,400,000


$
22,200,000State


49,100,000



36,300,000



26,900,000   As of September 30,2007


2006


2005Deferred tax assets

$
26,381,601


$
19,828,083


$
10,790,769Less: valuation allowances


(25,358,013
)


(19,228,826
)


(9,040,715
)Net deferred tax asset


1,023,588



599,257



1,750,054Deferred tax liability


(1,023,588
)


(599,257
)


(1,750,054
)Net deferred tax asset

$



$



$
     10.
    Related
    Party Transactions    
    Harbinger Capital Partners Master Fund I Ltd. and Harbinger
    Capital Partners Special Situations Fund L.P. (collectively,
    Harbinger), a greater than 5% beneficial owner of
    the Company, has appointed two directors to the Companys
    Board of Directors pursuant to the Plan of Reorganization.
    Black Horse Capital LP, Black Horse Capital (QP) LP, Black Horse
    Capital Offshore Ltd. (collectively, Black Horse
    Capital), a greater than 5% beneficial owner, has
    appointed one director to the Companys Board of Directors
    pursuant to the Plan of Reorganization.
    Barry Plost and Bernard L. Kasten, two former directors, were
    parties to the Subordinated Note Agreement between the Company
    and other note holders. During the years ended
    September 30, 2007, 2006 and 2005, the Company incurred
    related party interest expense of $312,862, $492,917 and F-23




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  $490,000, respectively. As of September 30, 2006, the
    Company had $3,500,000 of long-term notes payable to related
    parties and $288,742 of accrued interest expense included in
    prepetition liabilities related to these subordinated notes. The
    debt was paid in full with the proceeds of the Rights Offering
    and the agreement was terminated in May 2007. The Company
    therefore had no liability for these notes at September 30,
    2007.              11.
    Stockholders
    Equity   F-24




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
              12.
    Stock-Based
    Compensation Plans      Options
    Granted Outside of the Plan
   F-25




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      Weighted-


Weighted-averageaverage


remainingNumber of


exercise


contractual term


AggregateOptions

options


price


(In years)


intrinsic valueOutstanding September 30, 2006


1,534,335


$
7.44Granted


400,000



6.21Exercised


(25,000
)


5.93Cancelled/Forfeited


(467,835
)


6.08Outstanding September 30, 2007


1,441,500


$
7.57



5.49


$
89,950Exercisable at September 30, 2007


794,833


$
8.90



3.29


$
81,950   Accounting for Stock Issued to
    Employees Accounting for Stock Based Compensation
  No. FAS 123R-3, Transition Election Related to Accounting for the Tax
    Effects of Share-Based Payment Awards
     F-26




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      Year EndedSeptember 30, 2005Net loss as reported

$
(21,096,908
)Add: Stock-based compensation expense included in net loss, net
    of tax


Deduct: Total stock based employee compensation expense
    determined under fair value based method for all awards


(2,129,462
)Pro forma net loss

$
(23,226,370
)Basic and dilutive loss per share:As reported

$
(1.90
)Pro forma

$
(2.09
)      F-27




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Year Ended September 30,2007

2006

2005Expected stock volatility

79.70-95.44%

61.85-78.95%

45.62-57.61%Weighted-average volatility

83.61%

77.56%

53.78%Risk free interest rate

4.55-4.79%

4.60-4.76%

3.03-4.21%Expected term of options (years)

2.50-6.00

3.50-6.00

1.50-4.75Expected annual dividend per share

0%

0%

0%           2006

$
70,7372007

$
47,6562008

$
4,6622009

$
1,064     Expected stock volatility

83.19-174.66%Risk free interest rate

4.87-5.03%Expected life of options (years)

0.41-3.21Expected annual dividend per share

0%  F-28




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  13.
    Earnings
    Per Share      Year Ended September 30,2007


2006


2005Numerator:Net loss from continuing operations

$
(13,055,443
)

$
(8,877,795
)

$
(14,686,761
)Loss from discontinued operations, net of income tax


(109,438
)


(15,400,107
)


(6,410,147
)Net loss

$
(13,164,881
)

$
(24,277,902
)

$
(21,096,908
)Denominator:Weighted average common shares outstanding


15,876,236



13,986,413



11,099,841Effect of dilutive securities:Stock options(1)










Diluted weighted average common shares outstanding


15,876,236



13,986,413



11,099,841Basic and diluted net loss per common share:Continuing operations

$
(0.82
)

$
(0.64
)

$
(1.32
)Discontinued operations


(0.01
)


(1.10
)


(0.58
)Net loss

$
(0.83
)

$
(1.74
)

$
(1.90
)     (1)
    Excluded from the calculation of diluted net income per common
    share for the years ended September 30, 2007, 2006 and 2005
    were 1,441,500, 1,534,335 and 2,377,350 shares,
    respectively, related to stock options because their effect was
    anti-dilutive.  14.
    Segment
    Information     F-29




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      2007


2006


2005Revenue:Diagnostic & Biopharmaceutical Products

$
34,998,141


$
37,805,224


$
36,801,513BioServices


12,305,454



11,370,633



13,498,152Total revenue

$
47,303,595


$
49,175,857


$
50,299,665Gross profit (loss):Diagnostic & Biopharmaceutical Products

$
11,554,296


$
15,007,803


$
(2,737,783
)BioServices


1,820,067



1,616,521



2,253,301Total gross profit (loss)

$
13,374,363


$
16,624,324


$
(484,482
)Identifiable assets:Diagnostic & Biopharmaceutical Products

$
14,722,701


$
14,860,671


$
13,073,645BioServices


3,430,132



4,060,755



4,140,612Total identifiable assets

$
18,152,833


$
18,921,426


$
17,214,257Depreciation:Diagnostic & Biopharmaceutical Products

$
639,651


$
607,539


$
631,636BioServices


484,932



518,377



609,048Total depreciation

$
1,124,583


$
1,125,916


$
1,240,684Capital expenditures:Diagnostic & Biopharmaceutical Products

$
309,701


$
613,433


$
343,828BioServices


182,295



254,874



1,056,405Total capital expenditures

$
491,996


$
868,307


$
1,400,233   15.
    Acquisitions  Celliance
    Acquisition
   F-30




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      Assets acquiredInventory

$
781,945Prepaid assets


29,080Property and equipment, net


517,788Deposits


23,820Goodwill


2,236,163Total assets acquired

$
3,588,796     GCI
    Acquisition
     F-31




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Assets acquiredCash

$
347,000Accounts receivable


667,000Inventory


Prepaid and other current assets


312,000Property and equipment


1,945,000Deposits and other assets


370,000Intangibles (amortizable over 2 to 5 years)


370,000Goodwill


13,384,000Total assets acquired


17,395,000Liabilities assumedAccounts payable


141,000Accrued and other deferred liabilities


299,000Notes payable


2,252,000Total liabilities assumed


2,692,000Total net assets acquired

$
14,703,000     BBI
    Acquisition
     F-32




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      Assets acquiredAccounts receivable

$
3,492,000Inventory


3,434,000Prepaid expenses


102,000Property and equipment


3,761,000Other assets


102,000Contracts (weighted average useful life  4 years)


330,000Customer relations (weighted average useful life 
    5 years)


340,000Technology (weighted average useful life 
    5 years)


150,000Shared customers (weighted average useful life 
    5 years)


420,000Trade name (weighted average useful life  indefinite)


5,220,000Goodwill


17,140,000Total assets acquired


34,491,000Liabilities assumedAccounts payable


1,166,000Accrued expenses


792,000Other liabilities


65,000Mortgage payable


2,280,000Total liabilities assumed


4,303,000Total net assets acquired

$
30,188,000     BMR
    Acquisition
     F-33




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    16.
    Discontinued
    Operations  GCI
    Disposition
    Accounting
    for the Impairment or Disposal of Long-lived Assets
    Year Ended September 30,2007


2006


2005Revenue

$
965,938


$
3,569,420


$
3,825,628Goodwill impairment

$



$
(13,384,849
)

$
Pretax losses

$
(901,099
)

$
(15,400,107
)

$
(6,619,283
)Income tax benefit

$



$



$
209,136Gain on disposal

$
791,661


$



$
Income tax on disposal

$



$



$
Net loss from discontinued operations

$
(109,438
)

$
(15,400,107
)

$
(6,410,147
)   17.
    Intangibles  September 30,
    2007
  Estimateduseful life


Gross cost


Accumulated


Net intangible(years)


intangible asset


amortization


assetDeveloped product technology


5


$
150,000


$
90,000


$
60,000Customer relationships


4-5



1,090,000



703,511



386,489BBI trade name


indefinite











$
1,240,000


$
793,511


$
446,489  F-34




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  September 30,
    2006
  Estimateduseful life


Gross cost


Accumulated


Net intangible(years)


intangible asset


amortization


assetDeveloped product technology


5


$
150,000


$
60,000


$
90,000Customer relationships


4-5



1,090,000



469,007



620,993BBI Diagnostics trade name


indefinite



5,220,000







5,220,000$
6,460,000


$
529,007


$
5,930,993       2008

$
264,5042009


181,985Thereafter


$
446,489   18.
    Employee
    Benefit Plans        19.
    Subsequent
    Events   F-35




---



##### Table of Contents



SERACARE
    LIFE SCIENCES, INC.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      Fiscal Year Ended September 30,2008

$
637,6372009


713,7192010


770,6642011


857,9812012


880,759Thereafter


5,079,549$
8,940,309   20.
    Summarized
    Quarterly Financial Data (Unaudited)    For the Three Months EndedDecember 31


March 31


June 30


September 30(1)


Total YearYear ended September 30, 2007:Revenue

$
9,910,372


$
13,989,309


$
11,961,463


$
11,442,451


$
47,303,595Gross profit


2,470,384



3,331,338



3,769,940



3,802,701



13,374,363Operating loss


(2,168,144
)


(3,823,355
)


(497,491
)


(5,673,895
)


(12,162,885
)Loss from continuing operations


(2,510,254
)


(4,124,893
)


(669,998
)


(5,750,298
)


(13,055,443
)Discontinued operations


(300,197
)


207,717



(16,958
)






(109,438
)Net loss


(2,810,451
)


(3,917,176
)


(686,956
)


(5,750,298
)


(13,164,881
)Loss per common share:Basic and diluted


(0.20
)


(0.27
)


(0.04
)


(0.31
)


(0.83
)Year ended September 30, 2006:Revenue

$
13,073,619


$
12,433,625


$
12,859,891


$
10,808,722


$
49,175,857Gross profit


4,292,979



3,281,386



5,654,987



3,394,972



16,624,324Operating loss


(484,884
)


(4,325,877
)


(100,936
)


(1,676,172
)


(6,587,869
)Loss from continuing operations


(873,448
)


(5,145,928
)


(641,306
)


(2,217,113
)


(8,877,795
)Discontinued operations


(486,654
)


(13,183,914
)


(474,851
)


(1,254,688
)


(15,400,107
)Net loss


(1,360,102
)


(18,329,842
)


(1,116,157
)


(3,471,801
)


(24,277,902
)Loss per common share:Basic and diluted


(0.10
)


(1.30
)


(0.08
)


(0.25
)


(1.74
)     (1)
    
    In the fourth quarter of fiscal 2007, SeraCare wrote-off
    $5,220,000 related to the BBI Diagnostics trade name, an
    intangible asset. F-36