**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C.20549**

 

**Form 10-Q**

 

| **(Mark One)**                                      |
|-----------------------------------------------------|
|                                                |
| **ý**                                          |   | **Quarterly  Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** |
|                                                |   |   |
| **For the quarterly period ended June 30, 2003 or** |
|                                                |   |   |
| **o**                                               |   | **Transition  Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** |
|                                                |   |   |
|                                                |   | **For the transition period from                              to                           ** |
|                                                |   |   |
| **Commission  file number 0-21615**            |

 

| **BOSTON  BIOMEDICA, INC.**                                     |
|-----------------------------------------------------------------|
| (Exact Name of Registrant as Specified in its Charter)          |
|                                                            |   |   |
| **Massachusetts**                                               |   | **04-2652826** |
| (State or Other Jurisdiction of  Incorporation or Organization) |   | (I.R.S. Employer  Identification No.) |
|                                                            |   |   |
| **375 West Street,  West Bridgewater, Massachusetts**           |   | **02379-1040** |
| (Address of Principal Executive Offices)                        |   | (Zip Code) |
|                                                            |   |   |
| Registrant’s telephone number, including area code         |
| **(508) 580-1900**                                              |

 

Indicate by check mark whetherthe Registrant: (1) has filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the Registrant was required to file such reports),and (2) has been subject to such filing requirements for the past 90 days.

 

ýYes    oNo

 

Indicate by check mark whetherthe registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

 

oYes    ýNo

 

The number of sharesoutstanding of the Registrant’s common stock as of July 31, 2003 was 6,822,537.

 

 

----

 

**Part I. Financial Information**

**Item 1. Financial Statements**

 

**BOSTON BIOMEDICA,INC. AND SUBSIDIARIES**

**CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

 
|                                                                      |   | **For the three months ended  June 30,** |      | **For the six months ended  June 30,** |   |
|---------------------------------------------------------------------------|--------|------------------------------------------|-----------|----------------------------------------|--------|
|                                                                      |   | **2003**                                 |      | **2002**                               |   | **2003** |   | **2002** |   |
|                                                                      |   |                                     |      |                                   |   |   |   |   |   |
| REVENUE:                                                                  |   |                                     |      |                                   |   |   |   |   |   |
| Products                                                                  |   | $                                        | 3,373,614 |                                   | $      | 3,587,980 |   | $ | 6,661,871 |   | $ | 6,563,605 |   |
| Services                                                                  |   | 2,649,373                                |      | 2,268,116                              |   | 5,003,990 |   | 4,245,606 |   |
| Total revenue                                                             |   | 6,022,987                                |      | 5,856,096                              |   | 11,665,861 |   | 10,809,211 |   |
|                                                                      |   |                                     |      |                                   |   |   |   |   |   |
| COSTS AND EXPENSES:                                                       |   |                                     |      |                                   |   |   |   |   |   |
| Cost of products                                                          |   | 1,895,577                                |      | 1,783,483                              |   | 3,514,208 |   | 3,290,523 |   |
| Cost of services                                                          |   | 1,981,817                                |      | 1,694,506                              |   | 3,819,969 |   | 3,255,940 |   |
| Research and development                                                  |   | 419,887                                  |      | 631,089                                |   | 820,567 |   | 1,388,800 |   |
| Selling and marketing                                                     |   | 782,201                                  |      | 814,637                                |   | 1,590,495 |   | 1,730,341 |   |
| General and administrative                                                |   | 1,099,843                                |      | 1,179,868                              |   | 2,267,036 |   | 2,226,310 |   |
| Total operating costs and  expenses                                       |   | 6,179,325                                |      | 6,103,583                              |   | 12,012,275 |   | 11,891,914 |   |
|                                                                      |   |                                     |      |                                   |   |   |   |   |   |
| Operating loss                                                            |   | (156,338                                 | )         | (247,487                               | )      | (346,414 | ) | (1,082,703 | ) |
|                                                                      |   |                                     |      |                                   |   |   |   |   |   |
| Interest income                                                           |   | 3,014                                    |      | 11,122                                 |   | 15,631 |   | 24,778 |   |
| Interest expense                                                          |   | (71,629                                  | )         | (57,528                                | )      | (144,637 | ) | (122,834 | ) |
| Loss before income taxes                                                  |   | (224,953                                 | )         | (293,893                               | )      | (475,420 | ) | (1,180,759 | ) |
|                                                                      |   |                                     |      |                                   |   |   |   |   |   |
| Provision for income taxes                                                |   | (351                                     | )         | —                                 |   | (3,431 | ) | — |   |
| Net loss                                                                  |   | $                                        | (225,304  | )                                      | $      | (293,893 | ) | $ | (478,851 | ) | $ | (1,180,759 | ) |
|                                                                      |   |                                     |      |                                   |   |   |   |   |   |
| Net loss per share, basic  & diluted                                  |   | $                                        | (0.03     | )                                      | $      | (0.04 | ) | $ | (0.07 | ) | $ | (0.18 | ) |
| Number of shares used to  calculate net loss per share, basic and diluted |   | 6,801,157                                |      | 6,770,103                              |   | 6,795,262 |   | 6,535,061 |   |

 

The accompanying notes are anintegral part of these condensed consolidated financial statements.

 

2

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**BOSTON BIOMEDICA,INC. AND SUBSIDIARIES**

**CONDENSEDCONSOLIDATED BALANCE SHEETS**

**(Unaudited)**

 
|                                                                                                                                                              |   | **June 30,  2003** |       | **December 31,  2002** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|------------|------------------------|--------|
|                                                                                                                                                              |   |               |       |                   |   |
| ASSETS                                                                                                                                                            |   |               |       |                   |   |
| CURRENT ASSETS:                                                                                                                                                   |   |               |       |                   |   |
| Cash and cash equivalents                                                                                                                                         |   | $                  | 710,348    |                   | $      | 975,649 |   |
| Accounts receivable, less  allowances of $124,283 in 2003 and $117,671 in 2002                                                                                    |   | 3,918,611          |       | 3,701,105              |   |
| Inventories                                                                                                                                                       |   | 6,651,203          |       | 7,094,053              |   |
| Prepaid expenses and other  current assets                                                                                                                        |   | 321,995            |       | 303,396                |   |
| Restricted cash (Note 6)                                                                                                                                          |   | —             |       | 1,000,000              |   |
| Total current assets                                                                                                                                              |   | 11,602,157         |       | 13,074,203             |   |
|                                                                                                                                                              |   |               |       |                   |   |
| Property and equipment, net                                                                                                                                       |   | 5,226,225          |       | 5,826,817              |   |
|                                                                                                                                                              |   |               |       |                   |   |
| OTHER ASSETS:                                                                                                                                                     |   |               |       |                   |   |
| Goodwill and other  intangible assets, net (Note 10)                                                                                                              |   | 774,612            |       | 798,542                |   |
| Other long-term assets                                                                                                                                            |   | 213,807            |       | 143,807                |   |
| Total other assets                                                                                                                                                |   | 988,419            |       | 942,349                |   |
| TOTAL ASSETS                                                                                                                                                      |   | $                  | 17,816,801 |                   | $      | 19,843,369 |   |
|                                                                                                                                                              |   |               |       |                   |   |
| LIABILITIES AND STOCKHOLDERS’  EQUITY                                                                                                                        |   |               |       |                   |   |
|                                                                                                                                                              |   |               |       |                   |   |
| CURRENT LIABILITIES:                                                                                                                                              |   |               |       |                   |   |
| Accounts payable                                                                                                                                                  |   | $                  | 1,696,228  |                   | $      | 1,970,517 |   |
| Accrued employee  compensation                                                                                                                                    |   | 907,855            |       | 898,449                |   |
| Other accrued expenses                                                                                                                                            |   | 487,878            |       | 506,823                |   |
| Net liabilities from  discontinued operations (Note 8)                                                                                                            |   | 207,587            |       | 302,436                |   |
| Current maturities of long  term debt (Note 9)                                                                                                                    |   | 61,740             |       | 79,875                 |   |
| Deferred rent and other  current liabilities                                                                                                                      |   | 127,825            |       | 118,609                |   |
| Total current liabilities                                                                                                                                         |   | 3,489,113          |       | 3,876,709              |   |
|                                                                                                                                                              |   |               |       |                   |   |
| LONG-TERM LIABILITIES:                                                                                                                                            |   |               |       |                   |   |
| Long term debt, less  current maturities (Note 9)                                                                                                                 |   | 2,295,216          |       | 2,337,874              |   |
| Net liabilities from  discontinued operations (Note 8)                                                                                                            |   | 297,705            |       | 408,005                |   |
| Other liabilities                                                                                                                                                 |   | 572,415            |       | 593,735                |   |
| Total liabilities                                                                                                                                                 |   | 6,654,449          |       | 7,216,323              |   |
|                                                                                                                                                              |   |               |       |                   |   |
| STOCKHOLDERS’ EQUITY:                                                                                                                                        |   |               |       |                   |   |
| Common stock, $.01 par  value; 20,000,000 shares authorized, 6,822,537 and 6,786,335 issued and  outstanding at June 30, 2003 and December 31, 2002, respectively |   | 68,225             |       | 67,863                 |   |
| Additional paid-in capital                                                                                                                                        |   | 21,825,057         |       | 21,811,262             |   |
| Accumulated deficit                                                                                                                                               |   | (9,730,930         | )          | (9,252,079             | )      |
| Loan receivable from  Director and former CEO (Note 6)                                                                                                            |   | (1,000,000         | )          | —                 |   |
| Total stockholders’ equity                                                                                                                                   |   | 11,162,352         |       | 12,627,046             |   |
| TOTAL LIABILITIES &  STOCKHOLDERS’ EQUITY                                                                                                                |   | $                  | 17,816,801 |                   | $      | 19,843,369 |   |

 

The accompanying notes are anintegral part of these condensed consolidated financial statements.

 

3

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**BOSTON BIOMEDICA,INC. AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS**

**(Unaudited)**

 
|                                                                                                                                            |   | **For the six months ended  June 30,** |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|-----------|
|                                                                                                                                            |   | **2003**                               |      | **2002** |   |
| **CASH FLOWS  FROM OPERATING ACTIVITIES:**                                                                                                      |   |                                   |      |   |   |
| Net loss                                                                                                                                        |   | $                                      | (478,851  | ) | $ | (1,180,759 | ) |
| Adjustments to reconcile  net loss to net cash provided by (used in) operating activities:                                                      |   |                                   |      |   |   |
| Depreciation and  amortization                                                                                                                  |   | 653,020                                |      | 655,338 |   |
| (Gain) on disposal of  property and equipment                                                                                                   |   | (548                                   | )         | — |   |
| Changes in operating assets  and liabilities:                                                                                                   |   |                                   |      |   |   |
| Accounts receivable                                                                                                                             |   | (217,506                               | )         | 518,101 |   |
| Inventories                                                                                                                                     |   | 442,850                                |      | (368,253 | ) |
| Prepaid expenses and other  assets                                                                                                              |   | (18,601                                | )         | 104,887 |   |
| Other long-term assets                                                                                                                          |   | (70,000                                | )         | 7,996 |   |
| Accounts payable                                                                                                                                |   | (274,289                               | )         | (206,261 | ) |
| Accrued compensation                                                                                                                            |   | 9,406                                  |      | (36,626 | ) |
| Other accrued expenses                                                                                                                          |   | (18,945                                | )         | 65,645 |   |
| Deferred revenue                                                                                                                                |   | 9,178                                  |      | (37,494 | ) |
| Other liabilities                                                                                                                               |   | (21,320                                | )         | 22,914 |   |
| Net cash provided by (used  in) operating activities                                                                                            |   | 14,394                                 |      | (454,512 | ) |
| **CASH FLOWS  FROM INVESTING ACTIVITIES:**                                                                                                      |   |                                   |      |   |   |
| Payments for additions to  property and equipment                                                                                               |   | (41,910                                | )         | (405,816 | ) |
| Proceeds from sale of  property and equipment                                                                                                   |   | 14,000                                 |      | — |   |
| Net cash used in investing  activities                                                                                                          |   | (27,910                                | )         | (405,816 | ) |
| **CASH FLOWS  FROM FINANCING ACTIVITIES:**                                                                                                      |   |                                   |      |   |   |
| Proceeds from issuance of  common stock                                                                                                         |   | 14,157                                 |      | 135,227 |   |
| Repayments of long-term  debt                                                                                                                   |   | (60,793                                | )         | (43,247 | ) |
| Repayment of Loan by  Director and former CEO                                                                                                   |   | —                                 |      | 525,000 |   |
| Pledge of restricted cash  as security for loan from bank to Director and former CEO                                                            |   | —                                 |      | (1,006,760 | ) |
| Net cash used in financing  activities                                                                                                          |   | (46,636                                | )         | (389,780 | ) |
| **DECREASE  IN CASH AND CASH EQUIVALENTS:**                                                                                                     |   | (60,152                                | )         | (1,250,108 | ) |
| Cash used in discontinued  operations                                                                                                           |   | (205,149                               | )         | (482,866 | ) |
| Cash and cash equivalents,  beginning of year                                                                                                   |   | 975,649                                |      | 2,857,916 |   |
| Cash and cash equivalents  at end of period, excluding restricted cash of $1,006,760 at June 30, 2002                                           |   | $                                      | 710,348   |   | $ | 1,124,942 |   |
| **NON-CASH  ACTIVITIES:**                                                                                                                       |   |                                   |      |   |   |
| Issuance of 29,155 and  600,000 common shares, respectively, associated with prepaid stock  subscriptions                                       |   | $                                      | 175,000   |   | $ | 1,500,000 |   |
| Conversion of Pledge of  Restricted Cash as Security for Loan from Bank to Director to a Loan  Receivable from Director and former CEO (Note 6) |   | $                                      | 1,000,000 |   | — |   |

 

The accompanying notes are anintegral part of these condensed consolidated financial statements.

 

4

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**BOSTON BIOMEDICA,INC. AND SUBSIDIARIES**

**NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

 

**(1)****         Basis of Presentation**

 

The accompanyingunaudited consolidated financial statements have been prepared in accordancewith generally accepted accounting principles for interim financial informationand with the instructions to Form 10-Q and Article 10 of Regulation S-X.Accordingly, they do not include all of the information and footnotes requiredby generally accepted accounting principles for complete financial statements.In the opinion of management, all adjustments (consisting of only normalrecurring adjustments) considered necessary for a fair presentation have beenincluded. Operating results for the three and six months ended June 30, 2003are not necessarily indicative of the results that may be expected for the yearending December 31, 2003. For further information, refer to the consolidatedfinancial statements and footnotes thereto included in the Annual Report onForm 10-K filing for the fiscal year ended December 31, 2002 for Boston Biomedica,Inc. and Subsidiaries (“the Company” or “Boston Biomedica”) and the Company’sForm 10-Q filing for the three months ended March 31, 2003.

 

***Stock-BasedCompensation***

 

Statement of Financial Accounting Standards No.123, “Accounting for Stock-Based Compensation” (SFAS 123), requires thatcompanies either recognize compensation expense for grants of stock options andother equity instruments based on fair value or provide pro forma disclosure ofnet income (loss) and net income (loss) per share in the notes to the financialstatements.  Statement of FinancialAccounting Standards No. 148, “Accounting for Stock-based Compensation –Transition and Disclosure – an amendment of FASB Statement No. 123,” (SFAS 148)amends SFAS 123 to provide alternative methods of transition for a voluntarychange to the fair-value-based method of accounting for stock-based employeecompensation. In addition, SFAS 148 amends the disclosure requirements of SFAS123 to require disclosures in both annual and interim financial statementsabout the method of accounting for stock-based employee compensation and theeffect of the method used on reported results. At June 30, 2003, the Company has six stock-based compensation plans,which are described in further detail in the Company’s Annual Report on Form10-K for the year ended December 31, 2002. The Company accounts for those plansunder the recognition and measurement principles of Accounting Principles BoardOpinion No. 25 “Accounting for Stock Issued to Employees” (APB 25) and related interpretations.  Accordingly, no compensation cost has beenrecognized under SFAS 123 for the Company’s employee stock option plans. Hadcompensation cost for awards under those plans been determined based on the grantdate fair values, consistent with the method required under SFAS 123, theCompany’s net (loss) and net (loss) per share would have been adjusted to thepro forma amounts indicated below:

 
|                                                                                                                                     |   | **For the Three Months Ended June 30,** |     | **For the Six Months Ended June 30,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|----------|---------------------------------------|--------|
|                                                                                                                                     |   | **2003**                                |     | **2002**                              |   | **2003** |   | **2002** |   |
| Net loss - as reported                                                                                                                   |   | $                                       | (225,304 | )                                     | $      | (293,893 | ) | $ | (478,851 | ) | $ | (1,180,759 | ) |
|                                                                                                                                     |   |                                    |     |                                  |   |   |   |   |   |
| Deduct: Stock-based  employee compensation expense determined under fair value based methods for  all awards, net of related tax effects |   | (106,478                                | )        | (213,886                              | )      | (235,598 | ) | (526,798 | ) |
| Net loss - pro forma                                                                                                                     |   | $                                       | (331,782 | )                                     | $      | (507,779 | ) | $ | (714,449 | ) | $ | (1,707,557 | ) |
| Basic and Diluted net loss  per share - as reported                                                                                      |   | $                                       | (0.03    | )                                     | $      | (0.04 | ) | $ | (0.07 | ) | $ | (0.18 | ) |
|                                                                                                                                     |   |                                    |     |                                  |   |   |   |   |   |
| Basic and Diluted net loss  per share - pro forma                                                                                        |   | $                                       | (0.05    | )                                     | $      | (0.08 | ) | $ | (0.11 | ) | $ | (0.26 | ) |

 

Pro forma information regarding net income(loss) and earnings (loss) per share is required by SFAS 123 and has beendetermined as if the Company had accounted for its employee stock options underthe fair value method of SFAS 123. The fair value of these options wasestimated at the date of grant using the Black-Scholes option pricing model.

 

For purposes of pro forma disclosures, theestimated fair value of the options is amortized to expense over the options’vesting period.

 

5

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**(2)****         Recent AccountingStandards**

 

In May 2003, the FASB issued SFAS No. 150,“Accounting for Certain Financial Instruments with Characteristics of bothLiabilities and Equity,” which establishes standards for how an issuerclassifies and measures certain financial instruments with characteristics ofboth liabilities and equity. It requires that an issuer classify a financialinstrument that is within its scope as a liability (or an asset in some circumstances).The Company does not expect the adoption of this new standard to have amaterial impact on its financial statements.

 

In April 2003, the FASB issued SFAS No. 149,“Amendment of Statement 133 on Derivative Instruments and Hedging Activities,”which amends and clarifies financial accounting and reporting for derivativeinstruments, including certain derivative instruments embedded in othercontracts and for hedging activities under FASB Statement No. 133, “Accountingfor Derivative Instruments and Hedging Activities.”  The Company does not expect the adoption of this new standard tohave a material impact on its financial statements.

 

In June 2002, the FASB issued SFAS No. 146,“Accounting for Costs Associated with Exit or Disposal Activities,” whichsupersedes Emerging Issues Task Force Issue (EITF) 94-3, “Liability Recognitionfor Certain Employee Termination Benefits and Other Costs to Exit an Activity(Including Certain Costs Incurred in a Restructuring).” The standard affectsthe accounting for restructuring charges and related activities and generallywill lengthen the timeframe for reporting of expenses relating to restructuringactivities beyond the period in which a plan is initiated. The provisions ofthis statement are required to be adopted for exit or disposal activities thatare initiated after 2002. The provisions of EITF 94-3 will continue to applywith regard to the Company’s previously announced restructuring plans.

 

In November 2002, the FASB issued FASB Interpretation No. 45, “Guarantor’sAccounting and Disclosure Requirements for Guarantees, Including IndirectGuarantees of Indebtedness of Others,” (An interpretation of FASB StatementsNo. 5, 57, and 107 and rescission of FASB Interpretation No. 34”) (“FIN 45”).FIN 45 requires that a guarantor recognize, at the inception of a guarantee, aliability for the fair value of the obligation undertaken by issuing theguarantee. The Interpretation also requires additional disclosures to be madeby a guarantor in its interim and annual financial statements about itsobligations under certain guarantees it has issued. The accounting requirementsfor the initial recognition of guarantees are applicable on a prospective basisfor guarantees issued or modified after December 31, 2002. The disclosurerequirements are effective for all guarantees outstanding, regardless of whenthey were issued or modified, for annual periods that end after December 15,2002. The adoption of FIN No. 45 did not have a material effect on theCompany’s consolidated financial statements. See Note 6 of Notes to Consolidated Financial Statements hereunder foradditional information on the Company’s limited guaranty and pledge of a$1,000,000 interest bearing deposit, as of December 31, 2002, at a financialinstitution to provide additional security for loans in the aggregate amount of$2,418,000 from the financial institution to an entity controlled by the formerChairman and Chief Executive Officer of the Company.  In addition, BBI Clinical Laboratories, a discontinued operation,operated from a 15,000 square foot facility in New Britain CT pursuant to alease which expires in July 2005 and which was guaranteed by the Company.  In connection with the Company’s decision toexit this business segment, the Company has assumed the obligation to make theremaining lease payments, which is included in the Company’s estimate ofremaining liabilities associated with discontinued operations.  See Note 8 of Notes to Consolidated  Financial Statements.

 

In January2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities,an Interpretation of ARB 51.” The primary objectives of FIN No. 46 are toprovide guidance on the identification of entities for which control isachieved through means other than through voting rights (“variable interestentities” or “VIEs”)and how to determine when and which business enterprise should consolidate theVIE. This new model for consolidation applies to an entity for which either:(a) the equity investors (if any) do not have a controlling financial interest;or (b) the  equity investment at risk isinsufficient to finance that entity’s activities without receiving additionalsubordinated financial support from other parties. In addition, FIN No. 46requires that both the primary beneficiary and all other enterprises with asignificant variable interest in a VIE make additional disclosures. The Companyis required to apply FIN No. 46 to all new variable interest entities createdor acquired after January 31, 2003. For variable interest entities created oracquired prior to February 1, 2003, the Company is required to apply FIN No. 46on July 1, 2003.  The Company does nothave any VIE’s.

 

6

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In November 2002, theEITF reached a final consensus on EITF Issue No. 00-21, “Accounting for RevenueArrangements with Multiple Deliverables.” The provisions of EITF 00-21 arerequired to be adopted for revenue arrangements entered into by the Companyafter June 28, 2003, although early adoption is permitted. EITF 00-21 addressesarrangements with customers that have multiple deliverables such as equipmentand installation and provides guidance as to when recognition of revenue foreach deliverable is appropriate. The Company adopted  EITF 00-21 as of July 1, 2003 on a prospective basis and doesnot, at the present time, expect EITF 00-21 to have a material impact on ourfinancial position or results of operations.

 

**(3)****         Inventories**

 

Inventories, which include component parts used in themanufacture of laboratory instrumentation and PCT products, consisted of thefollowing:

 

|            |   | **June 30,  2003** |      | **December 31,  2002** |   |
|-----------------|--------|--------------------|-----------|------------------------|--------|
|            |   |               |      |                   |   |
| Raw materials   |   | $                  | 2,992,784 |                   | $      | 3,170,988 |   |
| Work-in-process |   | 1,901,087          |      | 1,988,585              |   |
| Finished goods  |   | 1,757,332          |      | 1,934,480              |   |
|            |   | $                  | 6,651,203 |                   | $      | 7,094,053 |   |

 

**(4)****         Segment Reporting and Related Information**

 

Operating segments are components of an enterprise forwhich separate financial information is available that is evaluated regularlyby senior management in deciding how to allocate resources and in assessing theperformance of each segment. The Company is organized into segments alongbusiness lines and senior management regularly reviews financial results forall business lines, focusing primarily on revenue and operating income.

 

The Company had fouroperating segments as of June 30, 2003. The Diagnostics segment serves the worldwide in vitro diagnosticsindustry, including users and regulators of their test kits, with qualitycontrol products, and test kit components. The Biotech segment is a researchand development center providing support for the other BBI business units, aswell as contract research, molecular and cell biology services, and repositoryservices for the government and life sciences industry.   The Laboratory Instrumentation segmentsells diagnostic instruments primarily to the worldwide in vitro diagnosticindustry on an OEM basis, and also performs in-house instrument servicing.   The PCT segment consists of research and developmentprimarily in pressure cycling technology (“PCT”).  The Company performs research in the development of PCT, withparticular focus in the areas of nucleic acid extraction and pathogeninactivation.  The Company announced theavailability for commercial sale of its PCT products in late September 2002.PCT revenue to date consists primarily of both private and public (NationalInstitutes of Health) funding of segment research and, commencing in late 2002,the sale of PCT products.  Most of theexpenditures incurred by this segment are for research and developmentexpenses, general management expenses and patent costs.  See also Note 8 of Notes to ConsolidatedFinancial Statements with respect to discontinued operations, which are nolonger classified as an operating segment of the Company.

 

The Company’sunderlying accounting records are maintained on a legal entity basis forgovernment and public reporting requirements. Inter-segment sales are recorded on a “third party best price” basis andare significant in measuring segment operating results. The following segmentinformation has been prepared in accordance with the internal accountingpolicies of the Company, as described above.

 

7

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Operating segment revenue was as follows:

 
|                       |   | **Three Months Ended June 30,** |      | **Six Months Ended June 30,** |   |
|----------------------------|--------|---------------------------------|-----------|-------------------------------|--------|
| **Segment  revenue:**      |   | **2003**                        |      | **2002**                      |   | **2003** |   | **2002** |   |
| Diagnostics                |   | $                               | 3,037,000 |                          | $      | 3,300,000 |   | $ | 5,906,000 |   | $ | 5,977,000 |   |
| Biotech                    |   | 2,591,000                       |      | 2,235,000                     |   | 4,878,000 |   | 4,326,000 |   |
| Laboratory Instrumentation |   | 440,000                         |      | 572,000                       |   | 954,000 |   | 1,354,000 |   |
| PCT                        |   | 155,000                         |      | 251,000                       |   | 408,000 |   | 381,000 |   |
| Eliminations               |   | (200,000                        | )         | (502,000                      | )      | (480,000 | ) | (1,229,000 | ) |
| Total Revenue              |   | $                               | 6,023,000 |                          | $      | 5,856,000 |   | $ | 11,666,000 |   | $ | 10,809,000 |   |

 

Operating segment income(loss) was as follows:

 
|                                  |   | **Three Months Ended June 30,** |     | **Six Months Ended June 30,** |   |
|---------------------------------------|--------|---------------------------------|----------|-------------------------------|--------|
| **Segment  operating income (loss):** |   | **2003**                        |     | **2002**                      |   | **2003** |   | **2002** |   |
| Diagnostics                           |   | $                               | 402,000  |                          | $      | 549,000 |   | $ | 859,000 |   | $ | 687,000 |   |
| Biotech                               |   | (12,000                         | )        | (243,000                      | )      | (45,000 | ) | (376,000 | ) |
| Laboratory Instrumentation            |   | (269,000                        | )        | (106,000                      | )      | (477,000 | ) | (155,000 | ) |
| PCT                                   |   | (301,000                        | )        | (447,000                      | )      | (683,000 | ) | (1,239,000 | ) |
| Operating loss                        |   | $                               | (156,000 | )                             | $      | (247,000 | ) | $ | (346,000 | ) | $ | (1,083,000 | ) |

 

Identifiable corporate andoperating segment assets are all located in the United States as follows:

 
| **Identifiable  corporate and segment assets:** |   | **June 30,  2003** |       | **December 31,  2002** |   |
|-------------------------------------------------|--------|--------------------|------------|------------------------|--------|
| Corporate                                       |   | $                  | 1,010,000  |                   | $      | 2,141,000 |   |
| Diagnostics                                     |   | 9,789,000          |       | 10,281,000             |   |
| Biotech                                         |   | 4,699,000          |       | 4,844,000              |   |
| Laboratory Instrumentation                      |   | 1,267,000          |       | 1,359,000              |   |
| PCT                                             |   | 1,052,000          |       | 1,218,000              |   |
| Total assets                                    |   | $                  | 17,817,000 |                   | $      | 19,843,000 |   |

 

Certain amounts includedin the prior period’s financial statements have been reclassified to conform tothe current period’s presentation.

 

**(5)****         Computation of Net Income(Loss) per Share**

 

Basic earnings (loss) per share is computed bydividing net income (loss) by the weighted average number of common sharesoutstanding.  Diluted earnings (loss)per share is computed by dividing net income (loss) by the weighted averagenumber of common shares outstanding plus additional common shares that wouldhave been   outstanding if potentiallydilutive common shares had been issued. For the purposes of this calculation, stock options are consideredcommon stock equivalents in periods in which they have a dilutive effect. Stockoptions that are antidilutive are excluded from the calculation. Potentiallydilutive securities having a net effect of 28,778 and 4 common shares for thethree and six months ended June 30, 2003 and 336,682 and 250,354 common sharesfor the three and  six months ended June30, 2002 were not included in the computation of diluted earnings (loss) pershare because to do so would have been antidilutive.

 

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The net loss per share computation for thefirst six months of 2003 and 2002 reflects the issuance of 7,047 and 4,654additional shares of common stock, respectively, purchased by employees throughtheir participation in the Company’s employee stock purchase plan.  In December 2001, an additional 600,000shares of common stock were subscribed to and paid for by a group of investorsfor $1,500,000 (before expenses). These shares were issued in the first quarterof 2002.

 
|                                                                                                        |   | **Three Months Ended June 30,** |     | **Six Months Ended June 30,** |   |
|-------------------------------------------------------------------------------------------------------------|--------|---------------------------------|----------|-------------------------------|--------|
|                                                                                                        |   | **2003**                        |     | **2002**                      |   | **2003** |   | **2002** |   |
| Weighted Average Shares  Outstanding, basic                                                                 |   | 6,801,157                       |     | 6,770,103                     |   | 6,795,262 |   | 6,535,061 |   |
| Net effect of dilutive  common stock equivalents-based on treasury stock method using average market  price |   | —                          |     | —                        |   | — |   | — |   |
| Weighted Average Shares  Outstanding, diluted                                                               |   | 6,801,157                       |     | 6,770,103                     |   | 6,795,262 |   | 6,535,061 |   |
| Net loss                                                                                                    |   | $                               | (225,304 | )                             | $      | (293,893 | ) | $ | (478,851 | ) | $ | (1,180,759 | ) |
| Net loss per share, basic  & diluted                                                                    |   | $                               | (0.03    | )                             | $      | (0.04 | ) | $ | (0.07 | ) | $ | (0.18 | ) |

 

**(6)****         Related PartyTransaction**

 

As of December31, 2001, the Company had entered into a one-year loan of $525,000 to RichardT. Schumacher, the Company’s former Chairman and Chief Executive Officer and acurrent Director of the Company, renewable at the Company’s option, andcollateralized by 90,000 of Mr. Schumacher’s shares of Boston Biomedica commonstock. This loan constituted an increase from the $350,000 that had been loanedas of September 30, 2001.  Interest onthe loan was payable monthly at the annual rate of 7%.   In January 2002, the principal of the loanwas repaid in full with a portion of the proceeds of the loans described in thenext sentence. The Company’s loan was replaced by the Company’s limitedguaranty and pledge of a $1,000,000 interest bearing deposit at a financialinstitution to secure the Company’s limited guaranty of loans in the aggregateamount of $2,418,000 from the financial institution to an entity controlled byMr. Schumacher.  The loans are personallyguaranteed by Mr. Schumacher.  TheCompany’s pledge is secured by a junior subordinated interest in the collateralprovided by Mr. Schumacher to the financial institution. Such collateralincludes certain of his real property and all of his Company common stock.  The Company’s original loan and subsequentpledge of $1,000,000 were made to assist Mr. Schumacher in refinancingindebtedness related to, among other things, his divorce settlement and toenable him to avoid the need to sell his Company common stock on the openmarket to satisfy his debts.  TheCompany’s Board of Directors and, with respect to the decision to pledge the$1,000,000 cash collateral, a special committee of the independent directors,evaluated a number of options and concluded that the original loan to Mr.Schumacher and the subsequent pledge were the best option and in the bestinterests of the Company’s stockholders in the belief that it would, amongother things, avoid selling pressure on the Company’s common stock and relievethe financial pressures on Mr. Schumacher that could otherwise divert hisattention from the Company.  In January2003, the $1,000,000 account was used by the financial institution to satisfythe Company’s limited guaranty obligation to the financial institution. TheCompany has now satisfied its obligation under the limited guaranty and pledgewith the financial institution through the financial institution’s calling ofthe Company’s pledged cash. The Company continues to maintain its juniorinterest in the collateral pledged by Mr. Schumacher to the financialinstitution.  The Company reflected the$1,000,000 pledge as restricted cash on its balance sheet until the cash wasused to satisfy the Company’s limited guaranty in January 2003 and through June30, 2003 has recorded a $1,000,000 loan receivable on its balance sheet as areduction of stockholders’ equity.

 

At the end ofeach fiscal quarter, the Company reevaluates the recoverability of the loanreceivable from Mr. Schumacher. The Company’s review included an evaluation ofthe adequacy of the collateral associated with the loan. As described above,the collateral consists of certain real estate holdings and common stock of theCompany and the Company’s security interest in the collateral is a juniorinterest subordinated to the financial institution that provided the loan tothe entity controlled by Mr. Schumacher. In evaluating the adequacy of the collateral, the Company considered theoutstanding balance of the financial institution’s  loan to the entity controlled by Mr. Schumacher and the fact thatthe Company has a junior position in the collateral, as well as the liquidityand net realizable value of the assets underlying the collateral. The Company’sanalysis assumes transaction costs to sell the properties, and applies aliquidity discount to the trading value of the common stock.   The ultimate value that may be recovered bythe Company is dependent on numerous factors including market conditionsrelative to the real

 

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estate, the value of andability to sell the Company’s common stock, and the financial status of Mr.Schumacher. At December 31, 2002, the Company performed a test for impairmentof the restricted cash by analyzing the value of the collateral, and determinedthat the restricted cash was not impaired. While the restricted cash was notimpaired as of December 31, 2002, the terminationof Mr. Schumacher as the Company’s Chairman and Chief Executive Officerby the Board of Directors in February 2003, together with the decline in thequoted market value of the Company’s common stock subsequent to December 31,2002, which comprises a major element of the collateral, are indicators ofimpairment. The Company reevaluated the adequacy of the value of the collateralas of June 30, 2003 and through July 21, 2003. The value of the collateral asof July 21, 2003 approximates the amount of the Company’s recorded loan(including interest) as of June 30, 2003; the value of the collateral is basedprimarily on the changing market value of the Company’s common stock which ispledged as collateral. Accordingly, the Company has not recorded any permanentimpairment of loan value in the first half of 2003. If actual market conditionsare less favorable or other factors arise in the future that are significantlydifferent than those anticipated by management, the establishment of avaluation reserve against this asset might be required.  Mr. Schumacher has notified the Company of apayment to the financial institution against the loan during the second quarterof 2003 utilizing personal assets that were not pledged as collateral, therebyincreasing the collateral to loan ratio.

 

**(7)****        ****Stockholders’ Equity**

 

*Shareholders Purchase Rights Plan*

 

On March 3, 2003, theCompany’s Board of Directors adopted a shareholder purchase rights plan and hasdeclared a distribution of one Right for each outstanding share of theCompany’s Common Stock to shareholders of record at the close of business onMarch 21, 2003. Initially, the Rights will trade automatically with the CommonStock and separate Right Certificates will not be issued.

 

The Rights Plan is designedto deter coercive or unfair takeover tactics and to ensure that all of theCompany’s shareholders receive fair and equal treatment in the event of an unsolicitedattempt to acquire the Company. The Rights Plan was not adopted in response toany effort to acquire the Company, and the Board is not aware of any sucheffort. The Rights will expire on February 27, 2013 unless earlier redeemed orexchanged.  Each Right entitles theregistered holder, subject to the terms of a Rights Agreement, to purchase fromthe Company one one-thousandth of a share of the Company’s Series A JuniorParticipating Preferred Stock at a purchase price of $45.00 per one one-thousandthof a share, subject to adjustment. In general, the Rights will not beexercisable until a subsequent distribution date which will only occur if aperson or group acquires beneficial ownership of 15% or more of the Company’sCommon Stock or announces a tender or exchange offer that would result in suchperson or group owning 15% or more of the Common Stock. With respect to anyperson or group who currently beneficially owns 15% or more of the Company’sCommon Stock, the Rights will not become exercisable unless and until suchperson or group acquires beneficial ownership of additional shares of CommonStock.

 

Subject to certain limitedexceptions, if a person or group acquires beneficial ownership of 15% or moreof the Company’s outstanding Common Stock or if a current 15% beneficial owneracquires additional shares of Common Stock, each holder of a Right (other thanthe 15% holder whose Rights become void once such holder reaches the 15%threshold) will thereafter have a right to purchase, upon payment of thepurchase price of the Right, that number of shares of the Company’s CommonStock which at the time of such transaction will have a market value equal totwo times the purchase price of the Right  In the event that, at any time after a person or group acquires 15% ormore of the Company’s Common Stock, the Company is acquired in a merger orother business combination transaction or 50% or more of its consolidatedassets or earning power are sold, each holder of a Right will thereafter havethe right to purchase, upon payment of the purchase price of the Right, thatnumber of shares of common stock of the acquiring company which at the time ofsuch transaction will have a market value of two times the purchase price ofthe Right.

 

The Board of Directors ofthe Company may exchange the Rights (other than Rights owned by such person orgroup which have become void), in whole or in part, at an exchange ratio of oneshare of Common Stock per Right (subject to adjustment).  At any time prior to the time any person orgroup acquires 15% or more of the Company’s Common Stock, the Board ofDirectors of the Company may redeem the Rights in whole, but not in part, at aprice of $0.001 per Right.

 

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**(8)****        ****Disposition of Assets**

 

In December 2000, theCompany made a decision to exit the clinical laboratory testing servicessegment and in February 2001, BBI Clinical Laboratories, Inc., a wholly-ownedsubsidiary of the Company, sold the business and certain assets and liabilitiesof its clinical laboratory business to a third party for an adjusted purchaseprice of $8,958,000.  The escrow accountwas terminated in December 2001 by mutual agreement between the buyer and theCompany, resulting in approximately $358,000 being received by the Company fromthe escrow account.   The Company hasretained certain other assets and liabilities of BBICL, primarily property,plant and equipment, together with the facility lease subsequent to the closingdate, which the Company is attempting to sublease.  The Company has written down all of the retained assets nototherwise redistributed to other business units to their estimated netrealizable value.  In accordance with atransition services agreement, the Company operated the business until December2001; substantially all costs associated with operating the business subsequentto the closing date were borne by the purchaser.

 

The Company’s estimate ofremaining short and long term accrued liabilities to exit the clinicallaboratory testing business is $505,000 as of June 30, 2003.  The major component of this accrual isestimated lease exit and facility related costs ($400,000), with the remainderfor other miscellaneous costs associated with exiting this business segment.The Company recorded an after-tax gain of $4,334,000 in 2001, and an additional$225,000 in 2002; the remaining accrual may be subject to future adjustments asthe Company completes the process of exiting this business and permanentlyclosing the facility.

 

**(9)****        ****Debt**

 

On April 5, 2000, theCompany borrowed $2,447,000, net of related costs, under a mortgage agreementon its West Bridgewater, MA facility, of which approximately $2,342,000 remainsoutstanding as of June 30, 2003.  The Companyused the funds to reduce the outstanding balance of its existing line ofcredit. The principal amount of the note issued in connection with the mortgageis due on March 31, 2010. During the first five years the note carries aninterest rate of 9.75%; after five years the rate charged will be .75% greater than the Corporate Base Rate then in effect.The mortgage precludes the payment of dividends on the Company’s common stockand contains certain other restrictive covenants.  Under this mortgage agreement the Company is subject to certain financialcovenants. The Company failed to meet its debt service coverage covenant forthe year ended December 31, 2002, but in the first quarter of 2003 thefinancial institution waived this default and other defaults relating toreports and the termination of the Company’s former Chairman and ChiefExecutive Officer.  Monthly payments onthis mortgage are based on a twenty year amortization schedule with a balloonpayment representing the remaining balance due in full on March 10, 2010.  The mortgage is collateralized by theCompany’s West Bridgewater, MA facility, which has a net book value ofapproximately $1,977,000 as of June 30, 2003.

 

**(10)**** ****Subsequent Event**

 

On July 9, 2003, the Company announced Mr.Richard T. Schumacher, the Company’s former Chairman and Chief ExecutiveOfficer, agreed to accept an engagement with the Company as an ExecutiveConsultant to advise the Company with respect to the strategic direction of theCompany’s PCT and BBI Source Scientific activities and the Company’s ownershipinterest in Panacos Pharmaceuticals, Inc. BBI Source Scientific is the Company’s California-based instrumentsubsidiary, which developed and manufactures the PCT Barocyclerinstrument.  As part of this engagement,Mr. Schumacher is expected to reevaluate the ongoing business prospects forboth the Laboratory Instrumentation segment and PCT activities prior to the endof year 2003.

 

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**ITEM2.   MANAGEMENT’S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.**

 

**RECENT DEVELOPMENTS**

 

On February 14, 2003, theCompany announced that the Company’s Board of Directors had terminated Mr.Richard T. Schumacher as Chairman and Chief Executive Officer, effectiveimmediately.  Mr. Schumacher remains a Directorof the Company.  William A. Wilson, aDirector, was named Chairman of the Board. Kevin W. Quinlan, President and Chief Operating Officer, continues tolead day-to-day operations. A Special Oversight Committee of the Board ofDirectors was appointed for the purpose of overseeing the management of theaffairs of the Company until such time as a new Chief Executive Officer isemployed.

 

On July 9, 2003, the Companyannounced Mr. Richard T. Schumacher, the Company’s former Chairman and ChiefExecutive Officer, agreed to accept an engagement with the Company as anExecutive Consultant to advise the Company with respect to the strategicdirection of the Company’s PCT and BBI Source Scientific activities and theCompany’s ownership interest in Panacos Pharmaceuticals, Inc.  BBI Source Scientific is the Company’sCalifornia-based instrument subsidiary which developed and manufactures the PCTBarocycler instrument.  As part of thisengagement, Mr. Schumacher is expected to reevaluate the ongoing business prospectsfor both the Laboratory Instrumentation segment and PCT activities prior to theend of year 2003.

 

**CRITICALACCOUNTING POLICIES**

 

The critical accountingpolicies utilized by the Company in the preparation of the accompanyingfinancial statements are set forth in Part I, Item 7 of the Company’s Form 10-Kfor the year ended December 31, 2002, under the heading “Management’sDiscussion and Analysis of Financial Condition and Results of Operations”. There have been no material changes to these policies since December 31,2002.

 

**RESULTSOF OPERATIONS**

 

**THREEMONTHS ENDED JUNE 30, 2003 AND 2002**

 

*Revenue*

 

Total revenue increased 2.9%,or $167,000, to $6,023,000 in the second quarter of 2003 from $5,856,000 in thesecond quarter of 2002. The increase in revenue was the result of an increasein service revenue of 16.8% or $381,000 to $2,649,000 in the second quarter of2003 from $2,268,000 in the second quarter of 2002, partially offset by adecline in product revenue of 6.0% or $214,000 to $3,374,000 in the secondquarter of 2003 as compared to product revenue of $3,588,000 in the secondquarter of 2002.

 

Product Revenue.  The decrease in product revenue at theDiagnostics segment was due primarily to a lower level of diagnostic componentproduct sales, partially offset by an increase in sales associated with newlyreleased AccuRun products and custom (OEM) panels, which included one largeorder from an international distributor. In addition, the Laboratory Instrumentation segment experienced a lowerlevel of contract manufacturing orders.

 

Service Revenue.  The increase in service revenue was primarily related toincreased contract service work associated with government and commercialrepository activities performed at the Biotech segment.

 

G*ross Profit*

 

Overall grossprofit decreased 9.8%, or $232,000, to $2,146,000 in the second quarter of 2003from $2,378,000 in the second quarter of 2002. Product gross profit decreased 18.1%, or $326,000, to $1,478,000 in thesecond quarter of 2003 from $1,804,000 in the second quarter of 2002; productgross margin decreased to 43.8% in the second quarter of 2003 from 50.3% in thesecond quarter of 2002.  Services grossprofit increased $94,000 or 16.4% to $668,000 in the second quarter of 2003from $574,000 in the second quarter of 2002; service gross margin wasrelatively unchanged at 25.2% in the second quarter of 2003 as compared to25.3% in the second quarter of 2002.

 

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Product Gross Margin.    The decline in product gross margin wasassociated with an unfavorable mix shift to lower margin products and increasedmanufacturing processing costs at the Diagnostics segment coupled with a lowerproduct sales volume at both the BioTech and Laboratory Instrumentation segments,both of which have a relatively fixed cost structure.  This decrease was partially offset by a large high margin productorder to an international distributor in the second quarter of 2003.

 

Service Gross Margin.    Service gross margin was relatively unchanged;increases in wages, facilities and freight costs were offset by an increasedlevel of billable hours associated with government contract reimbursable workat the BioTech segment.

 

*Research and Development*

 

Research and developmentexpenditures declined 33.4%, or $211,000, to $420,000 in the second quarter of2003 from $631,000 in the second quarter of 2002.  The decreased level of expenditures was associated primarily witha reduced level of work associated with PCT related projects. The Company announcedthe availability for commercial sale of its PCT products in late September2002.   

 

*Sellingand Marketing*

 

Selling and marketingexpenses decreased by 4.0%, or $33,000, to $782,000 in the second quarter of2003 from $815,000 in the second quarter of 2002.  The Companyincurred a higher level of marketing and promotion related costs in the secondquarter of 2002 associated with its year 2002 introduction of the PCTBarocyclerTM.

 

*Generaland Administrative*

 

General andadministrative expenses decreased 6.8%, or $80,000, to $1,100,000 in the secondquarter of 2003 from $1,180,000 in the second quarter of 2002. The decrease isdue to a decline in employee health care costs coupled with reducedcompensation costs associated with the elimination of the salary that wouldhave been paid to the Company’s former Chairman and Chief Executive Officer whowas terminated in February 2003.  Thisdecrease was offset by approximately $100,000 of increased legal, audit anddirector fees incurred by the Special Oversight Committee of the Company’sBoard of Directors, formed in February 2003, in conjunction with thetermination of the Company’s Chairman and Chief Executive Officer, for thepurpose of overseeing the management of the affairs of the Company until suchtime as a new Chief Executive Officer is employed.

 

*Operating Loss*

 

Operating lossamounted to $(156,000) in the second quarter of 2003 compared to an operatingloss of $(247,000) in the second quarter of 2002. The Diagnostics segment’soperating income decreased to $402,000 in the second quarter of 2003 from$549,000 in the second quarter of 2002, associated with a 4.2% decline inproduct revenue at the Diagnostics segment as explained above.  The Biotech segment's operating profitamounted to $12,000 in the second quarter of 2003 as compared to an operatingloss of $(243,000) in the second quarter of 2002, due to higher revenuesassociated with work on contract research services and government repositoryservices.  The operating loss of the PCTsegment decreased to $(301,000) in the second quarter of 2003 from $(447,000)in the second quarter of 2002 primarily due to reduced patents, trade show andresearch and development costs. The PCT segment, which includes both privateand public (National Institutes of Health) funding of segment research,continues to experience lower than expected product sales since commerciallaunch in September 2002 associated with a longer than expected sellingcycle.  The Laboratory Instrumentationsegment’s operating loss increased to $(269,000) in the second quarter of 2003from $(106,000) in the second quarter of 2002. This segment recorded a 23.1%decline in revenue due to a lower level of both contract manufacturing work andinstrument development services for PCT coupled with increased costs associatedwith a facility lease renewal effective February 1, 2002.

 

*Interest Expense*

 

Interestexpense, primarily from the Company’s outstanding mortgage, increased $14,000as compared to the second quarter of 2002, associated with increased fees dueto the Company’s default of a mortgage covenant.  The Company failed to meet its debt service coverage covenant forthe year ended December 31, 2002, but in the first quarter of 2003 thefinancial institution waived this default and the Company’s other defaultsrelating to reports and

 

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the termination ofthe Company’s former Chairman and Chief Executive Officer. The fees wereincurred to waive these defaults.

 

*Evaluation of Financial Asset*

 

As of June 30,2003, the Company reevaluated the recoverability of the loan receivable fromMr. Richard T. Schumacher, the Company’s former Chairman and Chief ExecutiveOfficer as discussed further in Note 6 of Notes to Consolidated FinancialStatements.  The Company’s reviewincluded an evaluation of the adequacy of the collateral associated with theloan.  The Company’s security interestin this collateral is a junior interest subordinated to the financialinstitution that provided the loan to the entity controlled by Mr.Schumacher.  The collateral consists ofreal estate holdings and common stock of the Company.  In evaluating the adequacy of the collateral, the Companyconsidered the outstanding balance of the financial institution’s loan to theentity controlled by Mr. Schumacher and the fact that the Company has a juniorposition in  the collateral, as well asthe liquidity and net realizable value of the assets underlying the collateral.The Company’s analysis assumes transaction costs to sell the properties, andapplies a liquidity discount to the trading value of the common stock.   The ultimate value that may be recovered bythe Company is dependent on numerous factors including market conditionsrelative to the real estate, the value of and ability to sell the Company’scommon stock, and the financial status of Mr. Schumacher. At December 31, 2002,the Company performed a test for impairment of the restricted cash by analyzingthe value of the collateral, and determined that the restricted cash was notimpaired. While the restricted cash was not impaired as of December 31, 2002,the termination of Mr. Schumacherby the Board of Directors in February 2003, together with the decline in thequoted market value of the Company’s common stock subsequent to December 31,2002, which comprises a major element of the collateral, are indicators ofimpairment. The Company has reevaluated the adequacy of the value of thecollateral as of June 30, 2003 and through July 21, 2003. The value of thecollateral as of July 21, 2003 approximates the amount of the Company’srecorded loan (including interest) as of June 30, 2003; the value of thecollateral is based primarily on the changing market value of the Company’scommon stock which is pledged as collateral. Accordingly, the Company has notrecorded any permanent impairment of loan value in the first half of 2003. Ifactual market conditions are less favorable or other factors arise in thefuture that are significantly different than those anticipated by management,the establishment of a valuation reserve against this asset might berequired.  Mr. Schumacher has notifiedthe Company of a payment to the financial institution against the loan duringthe second quarter of 2003 utilizing personal assets that were not pledged ascollateral, thereby increasing the collateral to loan ratio.

 

*Income Taxes*

 

In 2000, theCompany established a full valuation allowance for its deferred tax assets inaccordance with Statement of Financial Accounting Standards No. 109 and inconsideration of three consecutive years of losses; accordingly, the Companyhas not recognized an income tax benefit associated with the loss fromoperations in the second quarter of 2003 and the second quarter of 2002.

 

#### ***Net Loss***

 

The Company had a net loss of $(225,000) in the secondquarter of 2003 as compared to a net loss of $(294,000) in the second quarterof 2002.

 

**RESULTSOF OPERATIONS**

 

**SIXMONTHS ENDED JUNE 30, 2003 AND 2002**

 

*Revenue*

 

Total revenue increased 7.9%,or $857,000, to $11,666,000 in the first six months of 2003 from $10,809,000 inthe first six months of 2002. The increase in revenue was the result of anincrease in product revenue of 1.5% or $98,000, to $6,662,000 in the first sixmonths of 2003 from $6,564,000 in the first six months of 2002, coupled with a17.9% or $758,000 increase in service revenue to $5,004,000 in the first sixmonths of 2003 as compared to service revenue of $4,246,000 in the first sixmonths of 2002.

 

Product Revenue.  The increase in product revenue occurred inthe Diagnostics segment and was due primarily to sales associated with newlyreleased AccuRun products and custom (OEM) panels, which included one

 

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large order from an international distributor. In thefirst half of 2002 however, product revenues were offset and adversely impactedby delays from several customers at the Diagnostics segment in getting finalcustomer approval for shipment, and the impact of the Company’s increased focuson commercializing PCT, which diverted resources from other projects.  The increase in product revenues was alsopartially offset by a lower level of contract manufacturing orders at theLaboratory Instrumentation segment.

 

Service Revenue.  The $758,000 increase in service revenue wasprimarily related to increased contract service work associated with repositoryactivities performed at the Biotech segment.

 

G*ross Profit*

 

Overall gross profit increased 1.6%, or$69,000 to $4,332,000 in the first six months of 2003 from $4,263,000 in thefirst six months of 2002.  Product grossprofit decreased 3.8%, or $126,000, to $3,147,000 in the first six months of2003 from $3,273,000 in the first six months of 2002; product gross margindecreased to 47.3% in the first six months of 2003 from 49.9% in the first sixmonths of 2002.  Services gross profitincreased $194,000 or 19.6% to $1,184,000 in the first six months of 2003 from$990,000 in the first six months of 2002, while service gross margin increasedslightly to 23.7% in the first six months of 2003 from 23.3% in the first sixmonths of 2002.

 

Product Gross Margin.     The decline in product gross margin wasprimarily due to an unfavorable product sales mix shift to lower marginproducts coupled with increased manufacturing processing costs at theDiagnostics segment.

 

Service Gross Margin.    The service gross margin increase wasprimarily due to increased service revenues at the Biotech segment and PCTrelated grant revenue combined with an increased level of billable hoursassociated with government contract reimbursable work.

 

*Research and Development*

 

Research and developmentexpenditures declined 40.9%, or $568,000, to $821,000 in the first six monthsof 2003 from $1,389,000 in the first six months of 2002.  The decreased level of expenditures wasassociated primarily with a reduced level of work associated with PCT relatedprojects. The Company announced the availability for commercial sale of its PCTproducts in late September 2002.   

 

*Sellingand Marketing*

 

Selling and marketingexpenses decreased by 8.1%, or $140,000, to $1,590,000 in the first six monthsof 2003 from $1,730,000 in the first six months of 2002.  The Company incurred significant marketing and promotion related costsin the first six months of 2002 associated with its introduction of the PCTBarocyclerTM at anindustry trade show.  

 

*Generaland Administrative*

 

General andadministrative costs increased 1.8%, or $41,000, to $2,267,000 in the first sixmonths of 2003 from $2,226,000 in the first six months of 2002. The increase isassociated with legal, audit and director fees incurred by the SpecialOversight Committee of the Company’s Board of Directors, formed in February2003, in conjunction with the termination of the Company’s Chairman and ChiefExecutive Officer, for the purpose of overseeing the management of the affairsof the Company until such time as a new Chief Executive Officer is employed.The Company also incurred increased legal fees associated with the March 2003adoption of a Shareholder Purchase Rights Plan.   These increases were partially offset by reduced compensationcosts due to the elimination of the salary that would have been paid to theCompany’s former Chairman and Chief Executive Officer who was terminated inFebruary 2003, and lower employee health care costs.

 

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*Operating Loss*

 

Operating loss amounted to $(346,000) in the first sixmonths of 2003 compared to an operating loss of $(1,083,000) in the first sixmonths of 2002. The Diagnostics segment’s operating income increased to$859,000 in the first six months of 2003 from $687,000 in the first six monthsof 2002, due to an increase in product sales associated with newly releasedAccuRun products and custom (OEM) panels, which included one large order froman international distributor in the first six months of 2003.  The Biotech segment’s operating lossdecreased to $(45,000) in the first six months of 2003 from $(376,000) in thefirst six months of 2002; higher revenues associated with work on two researchcontracts and increased repository services combined with an increased level ofbillable hours associated with government contract reimbursable work waspartially offset by higher wages, supplies and facility costs.  The operating loss of the PCT segmentdecreased to $(683,000) in the first six months of 2003 from $(1,239,000) inthe first six months of 2002 primarily due to reduced patents, trade show andresearch and development costs. The PCT segment, which includes both privateand public (National Institutes of Health) funding of segment research,continues to experience lower than expected product sales since commerciallaunch in September 2002 associated with a longer than expected selling cycle.The Laboratory Instrumentation segment’s operating loss increased to $(477,000)in the first six months of 2003 from $(155,000) in the first six months of2002. This segment recorded a 29.5% decline in revenue due to a lower level ofboth contract manufacturing work and instrument development services for PCTcoupled with increased costs associated with a facility lease renewal effectiveFebruary 1, 2002.

 

*Interest Expense*

 

Interestexpense, primarily on the Company’s outstanding mortgage, increased $22,000 inthe first six months of 2003 as compared to the first six months of 2002, dueto increased fees associated with the Company’s default of a mortgagecovenant.  The Company failed to meet its debt servicecoverage covenant for the year ended December 31, 2002, but in the firstquarter of 2003 the financial institution waived this default and the Company’sother defaults relating to reports and the termination of the Company’s formerChairman and Chief Executive Officer. The fees were incurred to waive thesedefaults.

 

*Evaluation of Financial Asset*

 

As of June 30,2003, the Company reevaluated the recoverability of the loan receivable fromMr. Richard T. Schumacher, the Company’s former Chairman and Chief ExecutiveOfficer as discussed further in Note 6 of Notes to Consolidated FinancialStatements.  The Company’s reviewincluded an evaluation of the adequacy of the collateral associated with theloan.  The Company’s security interestin this collateral is a junior interest subordinated to the financialinstitution that provided the loan to the entity controlled by Mr.Schumacher.  The collateral consists ofreal estate holdings and common stock of the Company.  In evaluating the adequacy of the collateral, the Company consideredthe outstanding balance of the financial institution’s loan to the entitycontrolled by Mr. Schumacher and the fact that the Company has a juniorposition in  the collateral, as well asthe liquidity and net realizable value of the assets underlying the collateral.The Company’s analysis assumes transaction costs to sell the properties, andapplies a liquidity discount to the trading value of the common stock.   The ultimate value that may be recovered bythe Company is dependent on numerous factors including market conditionsrelative to the real estate, the value of and ability to sell the Company’scommon stock, and the financial status of Mr. Schumacher. At December 31, 2002,the Company performed a test for impairment of the restricted cash by analyzingthe value of the collateral, and determined that the restricted cash was notimpaired. While the restricted cash was not impaired as of December 31, 2002,the termination of Mr. Schumacherby the Board of Directors in February 2003, together with the decline in thequoted market value of the Company’s common stock subsequent to December 31,2002, which comprises a major element of the collateral, are indicators ofimpairment. The Company has reevaluated the adequacy of the value of thecollateral as of June 30, 2003 and through July 21, 2003. The value of thecollateral as of July 21, 2003 approximates the amount of the Company’srecorded loan (including interest) as of June 30, 2003; the value of thecollateral is based primarily on the changing market value of the Company’scommon stock which is pledged as collateral. Accordingly, the Company has notrecorded any permanent impairment of loan value in the first half of 2003. Ifactual market conditions are less favorable or other factors arise in thefuture that are significantly different than those anticipated by management,the establishment of a valuation reserve against this asset might berequired.  Mr. Schumacher has notifiedthe Company of a payment to the financial institution against the loan duringthe second quarter of 2003 utilizing personal assets that were not pledged ascollateral, thereby increasing the collateral to loan ratio.

 

*Income Taxes*

 

In 2000, theCompany established a full valuation allowance for its deferred tax assets inaccordance with

 

16

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Statement of FinancialAccounting Standards No. 109 and in consideration of three consecutive years oflosses; accordingly, the Company has not recognized an income tax benefitassociated with the loss from operations in the first six months of 2003 andthe first six months of 2002.

 

*Net Loss*

 

The Company had a net loss of $(479,000) in the firstsix months of 2003 as compared to a net loss of $(1,181,000) in the first sixmonths of 2002.

 

**LIQUIDITY AND FINANCIAL CONDITION**

 

The Company’sworking capital position decreased slightly to $8,113,000 as of June 30, 2003from $8,197,000 (excluding $1,000,000 of restricted cash) as of December 31,2002.

 

Net cashprovided by operations for the six months ended June 30, 2003 was $14,000 ascompared to net cash used by operations of $454,000 for the six months endedJune 30, 2002.   Cash provided byoperations during the first six months of 2003 was primarily the result of asignificantly reduced level of inventory purchases, partially offset by anincrease in accounts receivable, a reduction in accounts payable coupled with alower year to date loss from operations as compared to the same period lastyear.  The operational use of cashduring the first six months of 2002 was primarily the result of the year todate loss and the buildup of raw materials inventory partially offset byfavorable cash collections of receivables.

 

Net cash used in investing activities for the six months ended June 30,2003 was $28,000 compared to $406,000 for the six months ended June 30,2002.  The Company has significantlycurtailed current year capital expenditures in conjunction with its efforts toseek additional capital as discussed further hereunder.

 

Net cash used in financing activities for the six months ended June 30,2003 was $47,000 compared to cash used of $390,000 during the six months endedJune 30, 2002.  In the first six monthsof 2002, as discussed further under “Related Party Transaction” below, theCompany pledged $1,000,000 via a deposit in an interest bearing account at afinancial institution in early 2002; this was partially offset by a $525,000repayment in 2002 to the Company of a loan by its former Chief ExecutiveOfficer (“CEO”).

 

Based on current forecasts, management believes the Company hassufficient liquidity to finance operations for the next twelve months. Management’s forecasts involve assumptions that could prove to beincorrect. If the Company continues to incur operating losses or negative cashflows, it may need to raise additional funds.  There can be no assurance thatthese funds will be available when required on terms acceptable to the Company,if at all.  If adequate funds are not available when needed, the Companymay be required to further reduce certain of its  costs and delay, scale back, or eliminate certain of itsactivities, any of which could have a material adverse long term effect on itsbusiness, financial condition and results of operations.  The Company isconsidering various sources of additional financing, including but not limitedto, sale of business segments, strategic alliances and private placements ofdebt or equity securities, which could result in dilution to the Company’sstockholders.  On    October 25,2002, the Company retained an investment banking firm to advise the Company inthe evaluation of strategic opportunities aimed at increasing shareholder valueand liquidity by increasing the capital needed for growth; their engagementcontinues at this date.

 

*Related Party Transaction*

 

As of December 31, 2001, theCompany had entered into a one year loan of $525,000 to Mr. Richard T.Schumacher, the Company’s former Chairman and Chief Executive Officer and acurrent Director of the Company, renewable at the Company’s option, and collateralized by 90,000 of Mr.Schumacher’s shares of the Company’s common stock. This loan constituted anincrease from the $350,000 that had been loaned as of September 30, 2001.  Interest on the loan was payable monthly atthe annual rate of 7%.   In January2002, the principal of these loans was repaid in full with a portion of theproceeds of the loans described in the following sentence. The Company’s loanswere replaced by the Company’s pledge of a $1,000,000 interest bearing depositat a financial institution to secure the Company’s limited guaranty of loans inthe aggregate amount of $2,418,000 from the financial institution to an entitycontrolled by Mr. Schumacher.  The loansare personally guaranteed by Mr. Schumacher. The Company’s pledge is secured by a junior subordinated interest in thecollateral provided by Mr. Schumacher to the financial institution. Suchcollateral includes certain of his real property and all of his common stockholdings in the

 

17

----

 

Company. The Company’s original loan and subsequent pledge of $1,000,000 weremade to assist Mr. Schumacher in refinancing indebtedness related to, amongother things, his divorce settlement and to enable him to avoid the need tosell his common stock holdings in the Company on the open market to satisfy hisdebts.  The Company’s Board of Directorsand, with respect to the decision to pledge the $1,000,000 cash collateral, aspecial committee of the independent directors, evaluated a number of optionsand concluded that the original loan to Mr. Schumacher and the subsequentpledge were the best option and in the best interests of the Company’sstockholders in the belief that it would, among other things, avoid sellingpressure on the Company’s common stock and relieve the financial pressures onMr. Schumacher that could otherwise divert his attention from the Company.  In January 2003, the $1,000,000 account wasused to satisfy the Company’s limited guaranty obligation. The Company has nowsatisfied its obligation under the limited guaranty and pledge with thefinancial institution.  The Companycontinues to maintain its junior interest in the collateral pledged by Mr.Schumacher to the financial institution. The Company reflected the $1,000,000 pledge as restricted cash on itsbalance sheet until the cash was used to satisfy the Company’s limited guarantyin January 2003 and since then has recorded a $1,000,000 loan receivable on itsbalance sheet as a reduction of stockholders’ equity.  As discussed further above, the Company has reevaluatedthe adequacy of the value of the collateral as of June 30, 2003 and throughJuly 21, 2003. The value of the collateral as of July 21, 2003 approximates theamount of the Company’s recorded loan (including interest) as of June 30, 2003;the value of the collateral is based primarily on the changing market value ofthe Company’s common stock which is pledged as collateral. Accordingly, theCompany has not recorded any permanent impairment of loan value in the firsthalf of 2003. If actual market conditions are less favorable or other factorsarise in the future that are significantly different than those anticipated bymanagement, the establishment of a valuation reserve against this asset mightbe required.  Mr. Schumacher has notifiedthe Company of a payment to the financial institution against the loan duringthe second quarter of 2003 utilizing personal assets that were not pledged ascollateral, thereby increasing the collateral to loan ratio.

 

On February 14, 2003, theCompany announced that the Company’s Board of Directors had terminated Mr.Schumacher as Chairman and Chief Executive Officer, effective immediately.  Mr. Schumacher remains a Director of theCompany.  William A. Wilson, a Director,was named Chairman of the Board.  KevinW. Quinlan, President and Chief Operating Officer, continues to lead day-to-dayoperations.  A special committee of theBoard of Directors was appointed for the purpose of overseeing the managementof the affairs of the Company until such time as a new Chief Executive Officeris employed.

 

On July 9, 2003, the Companyannounced Mr. Richard T. Schumacher, the Company’s former Chairman and ChiefExecutive Officer, agreed to accept an engagement with the Company as anExecutive Consultant to advise the Company with respect to the strategic directionof the Company’s PCT and BBI Source Scientific activities and the Company’sownership interest in Panacos Pharmaceuticals, Inc.  BBI Source Scientific is the Company’s California-basedinstrument subsidiary, which developed and manufactures the PCT Barocyclerinstrument.  As part of this engagement,Mr. Schumacher is expected to reevaluate the ongoing business prospects forboth the Laboratory Instrumentation segment and PCT activities prior to the endof year 2003.

 

**CONTRACTUAL OBLIGATIONS**

 

As of June 30, 2003, there have been no significant changes in theCompany’s contractual obligations previously disclosed as of December 31, 2002.

 

**FORWARD-LOOKING STATEMENTS**

 

This QuarterlyReport on Form 10-Q contains forward-looking statements which involve risks anduncertainties, including statements regarding the Company’s plans, objectives,expectations and intentions.  In somecases, forward-looking statements are identified by terms such as “may”,“will”, “should”, “could”, “would”, “expects”, “plans”, “anticipates”,“believes”, “estimates”, “projects”, “predicts”, “potential”, and similarexpressions intended to identify forward-looking statements. Such statementsinclude, without limitation, statements made regarding the expected recoveryand value of the loan receivable from the Company’s former Chairman and ChiefExecutive Officer, the Company’s belief that it has sufficient liquidity tofinance operations over the next twelve months, and the anticipated futurefinancial performance of the Company and its products.  These forward-looking statements are onlypredictions and involve known and unknown risks, uncertainties, and otherfactors that may cause the Company’s actual results, levels of activity,performance, or achievements to be materially different from any futureresults, levels of activity, performance, or achievements expressed or impliedby such forward-looking statements. Also, these forward-looking statementsrepresent the Company’s best estimates and assumptions only as

 

18

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of the date of thisReport.  Except as otherwise required bylaw, the Company expressly disclaims any obligation or undertaking to releasepublicly any updates or revisions to any forward-looking statement contained inthe Report to reflect any change in the Company’s expectations or any change inevents, conditions, or circumstances on which any of the Company’sforward-looking statements are based.

 

Factors which might cause actual results todiffer materially from those projected in the forward-looking statementscontained herein include the following: the Company may not be successful incommercializing its PCT products and services, or such activities  may take longer than currently expected; theCompany may not have sufficient resources to develop new or improved PCTproducts; demand for commercial applications of PCT may not materialize asexpected or may take longer than expected to materialize; PCT may also not beadaptable to any other commercially viable applications; certain PCTapplications may not fall within the claims of the Company’s nine issued U.S.patents; individuals and groups utilizing PCT may be able to license suchtechnology from entities other than the Company; due to operational, scientificor technical difficulties in the implementation of the Company’s strategies andchanges in customer demand, the Company’s sales to IVD test kit manufacturersand sales of ACCURUN and other quality control products may decline; theCompany may be unable to develop the end-user market for its quality controlproducts; the Company may be unable to grow the sales of Source Scientific, Inc. to the extent anticipated; theuncertainty of the renewal and full funding of contracts with NationalInstitutes of Health (NIH);  the Companymay be unable to obtain an adequate supply of the unique and rare specimens ofplasma and serum necessary for certain of its products; the potential forsignificant reductions in purchases by any of the Company’s major customers;the Company may be unable to obtain the necessary government approvals forcertain of its products; the Company may be unable to compete effectively dueto rapid changes in technology; the Company may be unable to attract and retaina qualified individual to serve as Chief Executive Officer; the collateralsecuring the Company’s loan receivable from its former Chairman and ChiefExecutive Officer may be impaired,  andthe Company may not be able to fully collect the principal and interest due ona $1,000,000 receivable from the former Chairman and Chief Executive Officer;and if expenses are higher than anticipated, or if revenues are lower thananticipated, the Company may require additional capital sooner than expectedand  there can be no assurance that theCompany will be able to obtain additional financing or capital on acceptableterms, or that it will be successful in eliminating or scaling back certain ofits activities.  Certain of these andother factors which might cause actual results to differ materially from thoseprojected are more fully set forth under the caption “Risk Factors” in theCompany’s Annual Report on Form 10-K for the year ended December 31, 2002.

 

**ITEM3.  QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK**

 

There have been no material changesin the reported market risks since December 31, 2002.

 

**ITEM4.  CONTROLS AND PROCEDURES**

 

Wemaintain disclosure controls and procedures that are designed to ensure thatinformation required to be disclosed in our Securities Exchange Act reports isrecorded, processed, summarized and reported within the time periods specifiedin the SEC’s rules and forms, and that such information is accumulated andcommunicated to our management, including our Principal ExecutiveOfficer/Principal Financial Officer, as appropriate, to allow timely decisionsregarding required disclosure. In designing and evaluating the disclosurecontrols and procedures, management recognized that any controls andprocedures, no matter how well designed and operated, can provide only reasonableassurance of achieving the desired control objectives, as ours are designed todo, and management necessarily was required to apply its judgment in evaluatingthe cost-benefit relationship of possible controls and procedures.

 

Asof June 30, 2003, we carried out an evaluation, under the supervision and withthe participation of our management, including our Principal ExecutiveOfficer/Principal Financial Officer, of the effectiveness of the design andoperation of our disclosure controls and procedures, as defined inRules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934.Based upon that evaluation, our Principal Executive Officer/Principal FinancialOfficer concluded that our disclosure controls and procedures are effective inenabling us to record, process, summarize and report information required to beincluded in our periodic SEC filings within the required time period.

 

Therehave been no changes in our internal control over financial reporting thatoccurred during the period covered by this report that have materiallyaffected, or are reasonably likely to materially affect, our internal controlover financial reporting.

 

19

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##### **PART II. OTHER INFORMATION**

 

**ITEM 1. LEGAL PROCEEDINGS**

 

None.

 

#### **ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS**

 

None.

 

#### **ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

 

None.

 

##### **ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

 

Notapplicable.

 

**ITEM 5.  OTHER INFORMATION**

 

NotApplicable.

 

#### **ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K**

 

**(a)  Exhibits:**

 
|   | **Exhibit No.** |   |                                                                                                                                                                                             |   | **Reference** |
|--------|-----------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 3.1             |   | Amended and Restated Articles of Organization of the Company                                                                                                                                     |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 3.2             |   | Amended and Restated Bylaws of the Company                                                                                                                                                       |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 3.3             |   | Amendment to Amended and Restated Bylaws of the Company                                                                                                                                          |   | (C)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.1             |   | Specimen Certificate for Shares of the Company’s Common Stock                                                                                                                               |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.2             |   | Description of Capital Stock (contained in the Restated Articles of  Organization of the Company filed as Exhibit 3.1)                                                                           |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.3             |   | Form of warrants issued in connection with Paradigm Group                                                                                                                                        |   | (H)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.4             |   | 3% Senior Subordinated Convertible Debenture issued to GCA Strategic  Investment Fund Limited                                                                                                    |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.5             |   | Warrant issued to GCA Strategic Investment Fund Limited                                                                                                                                          |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.6             |   | Warrant issued to Wharton Capital Partners, Ltd.                                                                                                                                                 |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.7             |   | Warrant issued to DP Securities, Inc.                                                                                                                                                            |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.8             |   | Registration Rights Agreement, dated as of August 25, 2000, by and  among Boston Biomedica, Inc., Wharton Capital Partners, Ltd., DP Securities,  Inc. and GCA Strategic Investment Fund Limited |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.9             |   | 3% Senior Subordinated Convertible Debenture issued to Richard P.  Kiphart                                                                                                                       |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.10            |   | 3% Senior Subordinated Convertible Debenture issued to Shoreline  Micro-Cap Fund, L.P.                                                                                                           |   | (K)**         |

 

20

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|   | 4.11   |   | Warrant issued to Richard P. Kiphart                                                                                                                                                                                                                                                  |   | (K)**  |
|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 4.12   |   | Warrant issued to Shoreline Micro-Cap Fund, L.P.                                                                                                                                                                                                                                      |   | (K)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 4.13   |   | Registration Rights Agreement dated as of August 25, 2000, by and  among Boston Biomedica, Inc., Richard P. Kiphart and Shoreline Micro-Cap  Fund, L.P.                                                                                                                               |   | (K)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 4.14   |   | Rights Agreement dated as of February 27, 2003 between Boston  Biomedica, Inc., and Computershare Trust Company, Inc.                                                                                                                                                                 |   | (Q)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.1   |   | Agreement, dated January 17, 1994, between Roche Molecular Systems,  Inc. and the Company                                                                                                                                                                                             |   | (A)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.2   |   | Exclusive License Agreement, dated April 28, 1999, between the  University of North Carolina at Chapel Hill and the Company                                                                                                                                                           |   | (A)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.3   |   | Agreement, dated October 1, 1995, between Ajinomoto Co., Inc. and the  Company                                                                                                                                                                                                        |   | (A)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.4   |   | Lease Agreement, dated July 28, 1995, for New Britain, Connecticut  Facility between MB Associates and the Company                                                                                                                                                                    |   | (A)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.5   |   | 1987 Non-Qualified Stock Option Plan*                                                                                                                                                                                                                                                 |   | (A)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.6   |   | Employee Stock Option Plan*                                                                                                                                                                                                                                                           |   | (A)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.7   |   | 1999 Non-Qualified Stock Option Plan*                                                                                                                                                                                                                                                 |   | (I)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.8   |   | 1999 Employee Stock Purchase Plan*                                                                                                                                                                                                                                                    |   | (I)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.9   |   | Underwriters Warrants, each dated November 4, 1996, between the  Company and each of Oscar Gruss & Son Incorporated and Kaufman Bros.,  L.P.                                                                                                                                      |   | (B)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.10  |   | Loan Agreement dated March 31, 2000                                                                                                                                                                                                                                                   |   | (C)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.11  |   | Contract, dated March 1, 1997, between National Cancer Institute and  the Company                                                                                                                                                                                                     |   | (D)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.12  |   | Lease Agreement, dated May 16, 1997, for Gaithersburg, Maryland  facility between B.F. Saul Real Estate Investment Trust and the Company                                                                                                                                              |   | (E)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.13  |   | Lease Agreement dated January 30, 1995 for Garden Grove, California  facility between TR Brell, Cal Corp. and Source Scientific, Inc., and  Assignment of Lease, dated July 2, 1997, for Garden Grove, California  facility between Source Scientific, Inc. and BBI Source Scientific |   | (F)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.14  |   | Contract, dated July 1, 1998, between the National Institutes of  Health and the Company (NO1-A1-85341)                                                                                                                                                                               |   | (G)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.15  |   | Contract, dated July 1, 1998, between the National Heart Lung and  Blood Institute and the Company (NO1-HB-87144)                                                                                                                                                                     |   | (G)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.16  |   | Agreement with Paradigm Group for the purchase of warrants dated  August 18, 1999                                                                                                                                                                                                     |   | (H)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.17  |   | Agreement with MDBio for the purchase of common stock and common  stock warrants, dated September 30, 1999                                                                                                                                                                            |   | (J)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.18  |   | Lease Agreement dated September 30, 1999, for Frederick, Maryland  facility, between MIE Properties, Inc., and the Company.                                                                                                                                                           |   | (J)**  |
|   |   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.19  |   | Sponsored Research Agreement with the University of North Carolina,  Chapel Hill and the Company, dated, April 28, 1999 and the Company.                                                                                                                                              |   | (J)**  |

 

21

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|   | 10.20  |   | Repository Contract with National Institute of Allergy and Infectious  Disease, Division of AIDS (NO1-A1-95381), dated August 16, 1999.                                                                           |   | (J)**          |
|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 10.21  |   | Securities Purchase Agreement dated as of August 25, 2000, by and  among Boston Biomedica, Inc., and GCA Strategic Investment Fund Limited.                                                                       |   | (K)**          |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 10.22  |   | Securities Purchase Agreement dated as of August 25, 2000, by and  among Boston Biomedica, Inc., Richard P. Kiphart and Shoreline Micro-Cap  Fund, L.P.                                                           |   | (K)**          |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 10.23  |   | Mortgage and Security Agreement dated March 31, 2000                                                                                                                                                              |   | (L)**          |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 10.24  |   | Asset Purchase Agreement dated February 20, 2001, by and between BBI  Clinical Laboratories, Inc., Boston Biomedica, Inc., and Specialty  Laboratories, Inc.                                                      |   | (M)**          |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 10.25  |   | Promissory Note dated July 10, 2001, as amended on October 4, 2001,  by and among Boston Biomedica, Inc. and Richard T. Schumacher.                                                                               |   | (N)**          |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 10.26  |   | Subscription Agreement dated as of December 6, 2001 by and between  Boston Biomedica, Inc., Richard P. Kiphart, Andrew Gluck, David Valentine,  Rebecca Kiphart and Arthur Hill.                                  |   | (O)**          |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 10.27  |   | Junior Participation Agreement dated as of January 15, 2002, by and  between Commerce Bank and Trust Company, Resorts Accommodations  International, LLC,  Richard T.  Schumacher and Boston Biomedica, Inc. |   | (O)**          |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 10.28  |   | Pledge and Security Agreement dated as of January 15, 2002, by and  between Richard T. Schumacher, Boston Biomedica, Inc., and Commerce Bank and  Trust Company.                                                  |   | (O)**          |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 10.29  |   | Pledge Agreement effective as of January 15, 2002, by and between  Boston Biomedica, Inc. and Commerce Bank and Trust Company.                                                                                    |   | (O)**          |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 10.30  |   | Limited Guaranty dated as of January 15, 2002, by and between Boston  Biomedica, Inc. and Commerce Bank and Trust Company.                                                                                        |   | (O)**          |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 10.31  |   | Description of Compensation for Certain Directors*                                                                                                                                                                |   | (P)**          |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 10.32  |   | First Amendment to lease dated as of December 12, 2001 by and between  Cabot Industrial Properties, L. P. and BBI Source Scientific, Inc.                                                                         |   | (P)**          |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 31.1   |   | Certification Pursuant to Item 601(b)(31) of Regulation S-K, as  adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                |   | Filed Herewith |
|   |   |   |                                                                                                                                                                                                              |   |           |
|   | 32.1   |   | Certification Pursuant to Item 601(b)(32) of Regulation S-K, as  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                |   | Filed Herewith |

 

----

(A)      Incorporated by reference tothe registrant’s Registration Statement on Form S-1 (Registration No.333-10759) (the “Registration Statement”). The number set forth herein is thenumber of the Exhibit in said Registration Statement.

(B)        Incorporated by referenceto Exhibit No. 10.17 of the Registration Statement.

(C)        Incorporated by referenceto the registrant’s Annual Report on Form 10-K for the fiscal year endedDecember 31, 2002.

(D)       Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedMarch 31, 1997.

(E)         Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedJune 30, 1997.

(F)         Incorporated by referenceto the registrant’s Annual Report on Form 10-K for the fiscal year endedDecember 31, 1997.

(G)        Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedJune 30, 1998.

 

22

----

 

(H)       Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedSeptember 30, 1999.

(I)            Incorporated byreference to the registrant’s proxy statement, filed with the Securities andExchange Commission on June 14, 1999.

(J)           Incorporated byreference to the registrant’s Annual Report on Form 10-K/A for the fiscal yearended December 31, 1999.

(K)       Incorporated by referenceto the registrant’s Report on Form 8-K filed September 8, 2000.

(L)         Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedJune 30, 2000.

(M)    Incorporated by reference tothe registrant’s Report on Form 8-K filed March 8, 2001.

(N)       Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedSeptember 30, 2001.

(O)       Incorporated by referenceto the registrant’s Annual Report on Form 10-K for the fiscal year endedDecember 31, 2001.

(P)         Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedMarch 31, 2002.

(Q)       Incorporated by referenceto Exhibit 4 of the registrant’s Current Report on Form 8-K filed March 12,2003.

 

*                 Managementcontract or compensatory plan or arrangement.

**          In accordance with Rule12b-32 under the Securities Exchange Act of 1934, as amended, reference is madeto the documents previously filed with the Securities and Exchange Commission,which documents are hereby incorporated by reference.

 

**(b)  Reports on Form8-K.**

 

The Company filed a Form 8-K,dated April 2, 2003, relative to the Company’s issuance of a press release onMarch 31, 2003 announcing its financial results for the fourth quarter and yearended December 31, 2002. The Company filed a Form 8-K, dated May 19, 2003,relative to the Company’s issuance of a press release on May 16, 2003announcing its financial results for the first quarter ended March 31, 2003.

 

 

**SIGNATURES**

 

Pursuant tothe requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

 

 
|   | BOSTON  BIOMEDICA, INC.                              |
|--------|------------------------------------------------------|
|   | (Registrant)                                         |
|   |                                                 |
|   |                                                 |
| Date:  | August  14, 2003                                     |   | By: | */s/ Kevin W. Quinlan* |   |
|   | Kevin  W. Quinlan                                    |
|   | President  and Chief Operating Officer and Treasurer |
|   | (Principal  Accounting and Financial Officer)        |
|        |                                                      |  |  |  |  |

 

23

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**EXHIBITINDEX**

 
|   | **Exhibit No.** |   |                                                                                                                                                                                             |   | **Reference** |
|--------|-----------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 3.1             |   | Amended and Restated Articles of Organization of the Company                                                                                                                                     |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 3.2             |   | Amended and Restated Bylaws of the Company                                                                                                                                                       |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 3.3             |   | Amendment to Amended and Restated Bylaws of the Company                                                                                                                                          |   | (C)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.1             |   | Specimen Certificate for Shares of the Company’s Common Stock                                                                                                                               |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.2             |   | Description of Capital Stock (contained in the Restated Articles of  Organization of the Company filed as Exhibit 3.1)                                                                           |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.3             |   | Form of warrants issued in connection with Paradigm Group                                                                                                                                        |   | (H)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.4             |   | 3% Senior Subordinated Convertible Debenture issued to GCA Strategic  Investment Fund Limited                                                                                                    |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.5             |   | Warrant issued to GCA Strategic Investment Fund Limited                                                                                                                                          |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.6             |   | Warrant issued to Wharton Capital Partners, Ltd.                                                                                                                                                 |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.7             |   | Warrant issued to DP Securities, Inc.                                                                                                                                                            |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.8             |   | Registration Rights Agreement, dated as of August 25, 2000, by and  among Boston Biomedica, Inc., Wharton Capital Partners, Ltd., DP Securities,  Inc. and GCA Strategic Investment Fund Limited |   | K**           |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.9             |   | 3% Senior Subordinated Convertible Debenture issued to Richard P.  Kiphart                                                                                                                       |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.10            |   | 3% Senior Subordinated Convertible Debenture issued to Shoreline  Micro-Cap Fund, L.P.                                                                                                           |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.11            |   | Warrant issued to Richard P. Kiphart                                                                                                                                                             |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.12            |   | Warrant issued to Shoreline Micro-Cap Fund, L.P.                                                                                                                                                 |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.13            |   | Registration Rights Agreement dated as of August 25, 2000, by and  among Boston Biomedica, Inc., Richard P. Kiphart and Shoreline Micro-Cap  Fund, L.P.                                          |   | (K)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 4.14            |   | Rights Agreement dated as of February 27, 2003 between Boston  Biomedica, Inc., and Computershare Trust Company, Inc.                                                                            |   | (Q)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 10.1            |   | Agreement, dated January 17, 1994, between Roche Molecular Systems,  Inc. and the Company                                                                                                        |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 10.2            |   | Exclusive License Agreement, dated April 28, 1999, between the  University of North Carolina at Chapel Hill and the Company                                                                      |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 10.3            |   | Agreement, dated October 1, 1995, between Ajinomoto Co., Inc. and the  Company                                                                                                                   |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 10.4            |   | Lease Agreement, dated July 28, 1995, for New Britain, Connecticut  Facility between MB Associates and the Company                                                                               |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 10.5            |   | 1987 Non-Qualified Stock Option Plan*                                                                                                                                                            |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 10.6            |   | Employee Stock Option Plan*                                                                                                                                                                      |   | (A)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 10.7            |   | 1999 Non-Qualified Stock Option Plan*                                                                                                                                                            |   | (I)**         |
|   |            |   |                                                                                                                                                                                             |   |          |
|   | 10.8            |   | 1999 Employee Stock Purchase Plan*                                                                                                                                                               |   | (I)**         |

 

24

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|   | 10.9   | Underwriters Warrants, each dated November 4, 1996, between the  Company and each of Oscar Gruss & Son Incorporated and Kaufman Bros.,  L.P.                                                                                                                                      |   | (B)**  |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.10  | Loan Agreement dated March 31, 2000                                                                                                                                                                                                                                                   |   | (C)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.11  | Contract, dated March 1, 1997, between National Cancer Institute and  the Company                                                                                                                                                                                                     |   | (D)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.12  | Lease Agreement, dated May 16, 1997, for Gaithersburg, Maryland  facility between B.F. Saul Real Estate Investment Trust and the Company                                                                                                                                              |   | (E)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.13  | Lease Agreement dated January 30, 1995 for Garden Grove, California  facility between TR Brell, Cal Corp. and Source Scientific, Inc., and  Assignment of Lease, dated July 2, 1997, for Garden Grove, California  facility between Source Scientific, Inc. and BBI Source Scientific |   | (F)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.14  | Contract, dated July 1, 1998, between the National Institutes of  Health and the Company (NO1-A1-85341)                                                                                                                                                                          |   | (G)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.15  | Contract, dated July 1, 1998, between the National Heart Lung and  Blood Institute and the Company (NO1-HB-87144)                                                                                                                                                                     |   | (G)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.16  | Agreement with Paradigm Group for the purchase of warrants dated  August 18, 1999                                                                                                                                                                                                     |   | (H)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.17  | Agreement with MDBio for the purchase of common stock and common  stock warrants, dated September 30, 1999                                                                                                                                                                            |   | (J)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.18  | Lease Agreement dated September 30, 1999, for Frederick, Maryland  facility, between MIE Properties, Inc., and the Company.                                                                                                                                                           |   | (J)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.19  | Sponsored Research Agreement with the University of North Carolina,  Chapel Hill and the Company, dated, April 28, 1999 and the Company.                                                                                                                                              |   | (J)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.20  | Repository Contract with National Institute of Allergy and Infectious  Disease, Division of AIDS (NO1-A1-95381), dated August 16, 1999.                                                                                                                                               |   | (J)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.21  | Securities Purchase Agreement dated as of August 25, 2000, by and  among Boston Biomedica, Inc., and GCA Strategic Investment Fund Limited.                                                                                                                                           |   | (K)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.22  | Securities Purchase Agreement dated as of August 25, 2000, by and  among Boston Biomedica, Inc., Richard P. Kiphart and Shoreline Micro-Cap  Fund, L.P.                                                                                                                               |   | (K)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.23  | Mortgage and Security Agreement dated March 31, 2000                                                                                                                                                                                                                                  |   | (L)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.24  | Asset Purchase Agreement dated February 20, 2001, by and between BBI  Clinical Laboratories, Inc., Boston Biomedica, Inc., and Specialty  Laboratories, Inc.                                                                                                                          |   | (M)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.25  | Promissory Note dated July 10, 2001, as amended on October 4, 2001,  by and among Boston Biomedica, Inc. and Richard T. Schumacher.                                                                                                                                                   |   | (N)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.26  | Subscription Agreement dated as of December 6, 2001 by and between  Boston Biomedica, Inc., Richard P. Kiphart, Andrew Gluck, David Valentine,  Rebecca Kiphart and Arthur Hill.                                                                                                      |   | (O)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.27  | Junior Participation Agreement dated as of January 15, 2002, by and  between Commerce Bank and Trust Company, Resorts Accommodations  International, LLC,  Richard T.  Schumacher and Boston Biomedica, Inc.                                                                     |   | (O)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.28  | Pledge and Security Agreement dated as of January 15, 2002, by and  between Richard T. Schumacher, Boston Biomedica, Inc., and Commerce Bank and  Trust Company.                                                                                                                      |   | (O)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.29  | Pledge Agreement effective as of January 15, 2002, by and between  Boston Biomedica, Inc. and Commerce Bank and Trust Company.                                                                                                                                                        |   | (O)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.30  | Limited Guaranty dated as of January 15, 2002, by and between Boston  Biomedica, Inc. and Commerce Bank and Trust Company.                                                                                                                                                            |   | (O)**  |
|   |   |                                                                                                                                                                                                                                                                                  |   |   |
|   | 10.31  | Description of Compensation for Certain Directors*                                                                                                                                                                                                                                    |   | (P)**  |

 

25

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|   | 10.32  | First Amendment to lease dated as of December 12, 2001 by and between  Cabot Industrial Properties, L. P. and BBI Source Scientific, Inc.          |   | (P)**          |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
|   |   |                                                                                                                                               |   |           |
|   | 31.1   | Certification Pursuant to Item 601(b)(31) of  Regulation S-K, as adopted pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002 |   | Filed Herewith |
|   |   |                                                                                                                                               |   |           |
|   | 32.1   | Certification Pursuant to Item 601(b)(32) of Regulation S-K, as  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                 |   | Filed Herewith |

 

----

(A)      Incorporated by reference tothe registrant’s Registration Statement on Form S-1 (Registration No.333-10759) (the “Registration Statement”). The number set forth herein is thenumber of the Exhibit in said Registration Statement.

(B)        Incorporated by referenceto Exhibit No. 10.17 of the Registration Statement.

(C)        Incorporated by referenceto the registrant’s Annual Report on Form 10-K for the fiscal year endedDecember 31, 2002.

(D)       Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedMarch 31, 1997.

(E)         Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedJune 30, 1997.

(F)         Incorporated by referenceto the registrant’s Annual Report on Form 10-K for the fiscal year endedDecember 31, 1997.

(G)        Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedJune 30, 1998.

(H)       Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedSeptember 30, 1999.

(I)            Incorporated byreference to the registrant’s proxy statement, filed with the Securities andExchange Commission on June 14, 1999.

(J)           Incorporated byreference to the registrant’s Annual Report on Form 10-K/A for the fiscal yearended December 31, 1999.

(K)       Incorporated by referenceto the registrant’s Report on Form 8-K filed September 8, 2000.

(L)         Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedJune 30, 2000.

(M)    Incorporated by reference tothe registrant’s Report on Form 8-K filed March 8, 2001.

(N)       Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedSeptember 30, 2001.

(O)       Incorporated by referenceto the registrant’s Annual Report on Form 10-K for the fiscal year endedDecember 31, 2001.

(P)         Incorporated by referenceto the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter endedMarch 31, 2002.

(Q)       Incorporated by referenceto Exhibit 4 of the registrant’s Current Report on Form 8-K filed March 12,2003.

 

*                 Managementcontract or compensatory plan or arrangement.

**          In accordance with Rule12b-32 under the Securities Exchange Act of 1934, as amended, reference is madeto the documents previously filed with the Securities and Exchange Commission,which documents are hereby incorporated by reference.

 

26

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