**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 theSecurities Exchange Act of 1934**

** **

**For the quarterly period ended March 31, 2003or**

** **

**o****        Transition Report Pursuant to Section 13 or 15(d) of theSecurities 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 itsCharter)

 

| **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 areacode

**(508) 580-1900**

 

Indicate by check mark whether theRegistrant: (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 whether theregistrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

 

oYes      ýNo

 

The number ofshares outstanding of the Registrant’s common stock as of May 1, 2003 was6,793,382.

 

 

----

 

**PartI. Financial Information**

** **

**Item1. Financial Statements**

** **

**BOSTONBIOMEDICA, INC. AND SUBSIDIARIES**

 

**CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS**

 

**(Unaudited)**

** **

|                                                                      |   | **For the three months ended  March 31,** |      |
|---------------------------------------------------------------------------|--------|-------------------------------------------|-----------|
|                                                                      |   | **2003**                                  |      | **2002** |   |
|                                                                      |   |                                      |      |   |   |
| REVENUE:                                                                  |   |                                      |      |   |   |
| Products                                                                  |   | $                                         | 3,288,257 |   | $ | 2,975,625 |   |
| Services                                                                  |   | 2,354,617                                 |      | 1,977,490 |   |
| Total  revenue                                                            |   | 5,642,874                                 |      | 4,953,115 |   |
|                                                                      |   |                                      |      |   |   |
| COSTS  AND EXPENSES:                                                      |   |                                      |      |   |   |
| Cost  of products                                                         |   | 1,618,631                                 |      | 1,507,040 |   |
| Cost  of services                                                         |   | 1,838,151                                 |      | 1,561,434 |   |
| Research  and development                                                 |   | 400,680                                   |      | 757,711 |   |
| Selling  and marketing                                                    |   | 808,294                                   |      | 915,704 |   |
| General  and administrative                                               |   | 1,167,194                                 |      | 1,046,442 |   |
| Total  operating costs and expenses                                       |   | 5,832,950                                 |      | 5,788,331 |   |
|                                                                      |   |                                      |      |   |   |
| Operating  loss                                                           |   | (190,076                                  | )         | (835,216 | ) |
|                                                                      |   |                                      |      |   |   |
| Interest  income                                                          |   | 12,617                                    |      | 13,656 |   |
| Interest  expense                                                         |   | (73,008                                   | )         | (65,306 | ) |
| Loss  before income taxes                                                 |   | (250,467                                  | )         | (886,866 | ) |
|                                                                      |   |                                      |      |   |   |
| Provision  for income taxes                                               |   | (3,080                                    | )         | — |   |
| Net  loss                                                                 |   | $                                         | (253,547  | ) | $ | (886,866 | ) |
|                                                                      |   |                                      |      |   |   |
| Net  loss per share, basic & diluted                                  |   | $                                         | (0.04     | ) | $ | (0.14 | ) |
| Number  of shares used to calculate net loss per share, basic and diluted |   | 6,789,389                                 |      | 6,297,408 |   |

 

The accompanying notes are an integral part of these condensedconsolidated financial statements.

 

2

----

 

**BOSTONBIOMEDICA, INC. AND SUBSIDIARIES**

 

**CONDENSEDCONSOLIDATED BALANCE SHEETS**

 

**(Unaudited)**

** **
|                                                                                                                                                                           |   | **March 31,  2003** |       | **December 31,  2002** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|------------|------------------------|--------|
|                                                                                                                                                                           |   |                |       |                   |   |
| ASSETS                                                                                                                                                                         |   |                |       |                   |   |
| CURRENT  ASSETS:                                                                                                                                                               |   |                |       |                   |   |
| Cash  and cash equivalents                                                                                                                                                     |   | $                   | 1,613,160  |                   | $      | 975,649 |   |
| Accounts  receivable, less allowances of $119,171 in 2003 and $117,671 in 2002                                                                                                 |   | 3,089,097           |       | 3,701,105              |   |
| Inventories                                                                                                                                                                    |   | 6,924,952           |       | 7,094,053              |   |
| Prepaid  expenses and other current assets                                                                                                                                     |   | 448,452             |       | 303,396                |   |
| Restricted  cash (Note 6)                                                                                                                                                      |   | —              |       | 1,000,000              |   |
| Total  current assets                                                                                                                                                          |   | 12,075,661          |       | 13,074,203             |   |
|                                                                                                                                                                           |   |                |       |                   |   |
| Property  and equipment, net                                                                                                                                                   |   | 5,529,917           |       | 5,826,817              |   |
|                                                                                                                                                                           |   |                |       |                   |   |
| OTHER  ASSETS:                                                                                                                                                                 |   |                |       |                   |   |
| Goodwill  and other intangible assets, net                                                                                                                                     |   | 786,771             |       | 798,542                |   |
| Other  long-term assets                                                                                                                                                        |   | 195,807             |       | 143,807                |   |
| Total  other assets                                                                                                                                                            |   | 982,578             |       | 942,349                |   |
| TOTAL  ASSETS                                                                                                                                                                  |   | $                   | 18,588,156 |                   | $      | 19,843,369 |   |
|                                                                                                                                                                           |   |                |       |                   |   |
| LIABILITIES AND  STOCKHOLDERS’ EQUITY                                                                                                                                     |   |                |       |                   |   |
|                                                                                                                                                                           |   |                |       |                   |   |
| CURRENT  LIABILITIES:                                                                                                                                                          |   |                |       |                   |   |
| Accounts  payable                                                                                                                                                              |   | $                   | 1,781,529  |                   | $      | 1,970,517 |   |
| Accrued  employee compensation                                                                                                                                                 |   | 1,029,499           |       | 898,449                |   |
| Other  accrued expenses                                                                                                                                                        |   | 658,769             |       | 506,823                |   |
| Net  liabilities from discontinued operations (Note 8)                                                                                                                         |   | 289,923             |       | 302,436                |   |
| Current  maturities of long term debt (Note 9)                                                                                                                                 |   | 71,062              |       | 79,875                 |   |
| Deferred  rent and other current liabilities                                                                                                                                   |   | 114,307             |       | 118,609                |   |
| Total  current liabilities                                                                                                                                                     |   | 3,945,089           |       | 3,876,709              |   |
|                                                                                                                                                                           |   |                |       |                   |   |
| LONG-TERM  LIABILITIES:                                                                                                                                                        |   |                |       |                   |   |
| Long  term debt, less current maturities (Note 9)                                                                                                                              |   | 2,322,309           |       | 2,337,874              |   |
| Net  liabilities from discontinued operations (Note 8)                                                                                                                         |   | 349,349             |       | 408,005                |   |
| Other  liabilities                                                                                                                                                             |   | 583,753             |       | 593,735                |   |
|                                                                                                                                                                           |   |                |       |                   |   |
| STOCKHOLDERS’  EQUITY:                                                                                                                                                    |   |                |       |                   |   |
| Common  stock, $.01 par value; authorized 20,000,000 shares authorized, 6,793,382 and  6,786,335 issued and outstanding at March 31, 2003 and December 31, 2002,  respectively |   | 67,934              |       | 67,863                 |   |
| Additional  paid-in capital                                                                                                                                                    |   | 21,825,348          |       | 21,811,262             |   |
| Accumulated  deficit                                                                                                                                                           |   | (9,505,626          | )          | (9,252,079             | )      |
| Loan  receivable from Director and former CEO (Note 6)                                                                                                                         |   | (1,000,000          | )          | —                 |   |
| Total  stockholders’ equity                                                                                                                                               |   | 11,387,656          |       | 12,627,046             |   |
| TOTAL  LIABILITIES & STOCKHOLDERS’ EQUITY                                                                                                                             |   | $                   | 18,588,156 |                   | $      | 19,843,369 |   |

 

Theaccompanying notes are an integral part of these condensed consolidatedfinancial statements.

 

3

----

 

**BOSTON BIOMEDICA,INC. AND SUBSIDIARIES**

 

###### **CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS**

 

**(Unaudited)**

 
|                                                                                                                                            |   | **For the three months ended  March 31,** |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|-----------|
|                                                                                                                                            |   | **2003**                                  |      | **2002** |   |
| **CASH FLOWS FROM OPERATING ACTIVITIES:**                                                                                                       |   |                                      |      |   |   |
| Net  loss                                                                                                                                       |   | $                                         | (253,547  | ) | $ | (886,866 | ) |
| Adjustments  to reconcile net loss to net cash provided by (used in) operating activities:                                                      |   |                                      |      |   |   |
| Depreciation  and amortization                                                                                                                  |   | 328,975                                   |      | 320,841 |   |
| Changes  in operating assets and liabilities:                                                                                                   |   |                                      |      |   |   |
| Accounts  receivable                                                                                                                            |   | 612,008                                   |      | 1,051,992 |   |
| Inventories                                                                                                                                     |   | 169,100                                   |      | (340,055 | ) |
| Prepaid  expenses and other assets                                                                                                              |   | (145,056                                  | )         | (70,136 | ) |
| Other  long-term assets                                                                                                                         |   | (51,615                                   | )         | 3,066 |   |
| Accounts  payable                                                                                                                               |   | (188,988                                  | )         | (180,773 | ) |
| Accrued  compensation                                                                                                                           |   | 131,051                                   |      | 135,188 |   |
| Other  accrued expenses                                                                                                                         |   | 151,945                                   |      | (55,778 | ) |
| Deferred  revenue                                                                                                                               |   | (4,302                                    | )         | (41,178 | ) |
| Other  liabilities                                                                                                                              |   | (10,366                                   | )         | 17,044 |   |
| Net  cash provided by (used in) operating activities                                                                                            |   | 739,205                                   |      | (46,655 | ) |
| **CASH FLOWS FROM INVESTING ACTIVITIES:**                                                                                                       |   |                                      |      |   |   |
| Payments  for additions to property and equipment                                                                                               |   | (20,304                                   | )         | (174,470 | ) |
| Net  cash used in investing activities                                                                                                          |   | (20,304                                   | )         | (174,470 | ) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:**                                                                                                       |   |                                      |      |   |   |
| Proceeds  from issuance of common stock                                                                                                         |   | 14,157                                    |      | 68,445 |   |
| Repayments  of long-term debt                                                                                                                   |   | (24,378                                   | )         | (18,098 | ) |
| 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                                                            |   | —                                    |      | (1,003,002 | ) |
| Net  cash used in financing activities                                                                                                          |   | (10,221                                   | )         | (427,655 | ) |
| **INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS:**                                                                                           |   | 708,680                                   |      | (648,780 | ) |
| Cash  used in discontinued operations                                                                                                           |   | (71,169                                   | )         | (129,305 | ) |
| Cash  and cash equivalents, beginning of year                                                                                                   |   | 975,649                                   |      | 2,857,916 |   |
| Cash  and cash equivalents at end of period, excluding restricted cash of  $1,003,002 at March 31, 2002                                         |   | $                                         | 1,613,160 |   | $ | 2,079,831 |   |
| **NON-CASH ACTIVITIES:**                                                                                                                        |   |                                      |      |   |   |
| Issuance  of 600,000 shares associated with prepaid stock subscription (Note 5)                                                                 |   | $                                         | —    |   | $ | 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 an integral partof these condensed consolidated financial statements.

 

4

----

 

**BOSTON BIOMEDICA, INC, AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS**

 

**(1)   Basisof Presentation**

 

The accompanyingunaudited consolidated financial statements have been prepared in accordancewith generally accepted accounting principles for the interim financialinformation and with the instructions to Form 10-Q and Article 10 of RegulationS-X. Accordingly, they do not include all of the information and footnotesrequired by generally accepted accounting principles for complete financialstatements. In the opinion of management, all adjustments (consisting of onlynormal recurring adjustments) considered necessary for a fair presentation havebeen included. Operating results for the three months ended March 31, 2003 arenot 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 Form 10-K filing forthe fiscal year ended December 31, 2002 for Boston Biomedica, Inc. andSubsidiaries (“the Company” or “Boston Biomedica”).

 

***Stock-Based Compensation***

 

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 March 31, 2003, the Company has six stock-based compensation plans,which are described in further detail in the Company’s Annual Report on Form10-K to the United States Securities and Exchange Commission for the year endedDecember 31, 2002. The Company accounts for those plans under the recognitionand measurement principles of Accounting Principles Board Opinion No. 25“Accounting for Stock Issued to Employees” (APB 25) and relatedinterpretations.  Accordingly, nocompensation cost has been recognized under SFAS 123 for the Company’s employeestock option plans. Had compensation cost for awards under those plans beendetermined based on the grant date fair values, consistent with the methodrequired under SFAS 123, the Company’s net (loss) and net (loss) per sharewould have been adjusted to the pro forma amounts indicated below:

 

|                                                                                                                                     |   | **For the Three Months Ended March 31,** |     |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|----------|
|                                                                                                                                     |   | **2003**                                 |     | **2002** |   |
| Net  loss - as reported                                                                                                                  |   | $                                        | (253,547 | ) | $ | (886,866 | ) |
| Add  back: Stock-based compensation in net loss, as reported                                                                             |   | —                                   |     | — |   |
| Deduct:  Stock-based employee compensation expense determined under fair value based  methods for all awards, net of related tax effects |   | (129,120                                 | )        | (312,912 | ) |
| Net  loss - pro forma                                                                                                                    |   | $                                        | (382,667 | ) | $ | (1,199,778 | ) |
| Basic  and Diluted net loss per share - as reported                                                                                      |   | $                                        | (0.04    | ) | $ | (0.14 | ) |
| Basic  and Diluted net loss per share - pro forma                                                                                        |   | $                                        | (0.06    | ) | $ | (0.19 | ) |

 

The Company has elected tofollow APB 25 and related interpretations in accounting for its employee stockoptions. Under APB 25, because the exercise price of employee stock optionsequals the market price of the underlying stock on the date of grant, nocompensation expense is recorded. The Company has adopted the disclosure-onlyprovisions of SFAS 123, as amended by SFAS No. 148. Pro forma informationregarding net income and earnings per share is required by SFAS 123 and hasbeen determined as if the Company had accounted for its employee stock optionsunder the fair value method of that statement. The fair value of these optionswas estimated at the date of grant using a Black-Scholes option pricing model.

 

5

----

 

Forpurposes of pro forma disclosures, the estimated fair value of the options isamortized to expense over the options’ vesting period.

 

**(2) Recent AccountingStandards **

 

In June 2002, the FASB issued SFAS No. 146, “Accounting for CostsAssociated with Exit or Disposal Activities,” which supersedes Emerging IssuesTask Force Issue (EITF) 94-3, “Liability Recognition for Certain EmployeeTermination Benefits and Other Costs to Exit an Activity (Including CertainCosts Incurred in a Restructuring).” The standard affects the accounting forrestructuring charges and related activities and generally will lengthen thetimeframe for reporting of expenses relating to restructuring activities beyondthe period in which a plan is initiated. The provisions of this statement arerequired to be adopted for exit or disposal activities that are initiated after2002. The provisions of EITF 94-3 will continue to apply with regard to theCompany’s previously announced restructuring plans.

 

In November 2002, the FASB issued FASB Interpretation No. 45,“Guarantor’s Accounting and Disclosure Requirements for Guarantees, IncludingIndirect Guarantees of Indebtedness of Others,” (An interpretation of FASBStatements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34”)(“FIN 45”). FIN 45 requires that a guarantor recognize, at the inception of aguarantee, a liability for the fair value of the obligation undertaken byissuing the guarantee. The Interpretation also requires additional disclosuresto be made by a guarantor in its interim and annual financial statements aboutits obligations under certain guarantees it has issued. The accountingrequirements for the initial recognition of guarantees are applicable on aprospective basis for guarantees issued or modified after December 31, 2002.The disclosure requirements are effective for all guarantees outstanding,regardless of when they were issued or modified, for annual periods that endafter December 15, 2002. The adoption of FIN No. 45 did not have a materialeffect on the Company’s consolidated financial statements.   SeeNote 6 of Notes to Consolidated Financial Statements hereunder for additionalinformation on the Company’s limited guaranty and pledge of a $1,000,000interest bearing deposit, as of December 31, 2002, at a financial institutionto provide additional security for loans in the aggregate amount of $2,418,000from the financial institution to an entity controlled by the former Chairmanand 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 

 

6

----

 

“VIEs”) and how to determine when and which business enterprise shouldconsolidate the VIE. This new model for consolidation applies to an entity forwhich either: (a) the equity investors (if any) do not have a controllingfinancial interest; or (b) the  equityinvestment at risk is insufficient to finance that entity’s activities withoutreceiving additional subordinated financial support from other parties. Inaddition, FIN No. 46 requires that both the primary beneficiary and all otherenterprises with a significant variable interest in a VIE make additionaldisclosures. The Company is required to apply FIN No. 46 to all new variableinterest entities created or acquired after January 31, 2003. For variableinterest entities created or acquired prior to February 1, 2003, the Company isrequired to apply FIN No. 46 on July 1, 2003. The Company does not have any VIE’s.

 

In November 2002,the EITF reached a final consensus on EITF Issue No. 00-21, “Accounting forRevenue Arrangements with Multiple Deliverables.” The provisions of EITF 00-21are required 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 is evaluating the timing andimpact of adoption of EITF 00-21.

 

**(3)  Inventories**

 

Inventories, whichinclude component parts used in the manufacture of laboratory instrumentationand PCT products, consisted of the following:

 
|            |   | **March 31,  2003** |      | **December 31,  2002** |   |
|-----------------|--------|---------------------|-----------|------------------------|--------|
|            |   |                |      |                   |   |
| Raw  materials  |   | $                   | 2,986,500 |                   | $      | 3,170,988 |   |
| Work-in-process |   | 2,110,475           |      | 1,988,585              |   |
| Finished  goods |   | 1,827,977           |      | 1,934,480              |   |
|            |   | $                   | 6,924,952 |                   | $      | 7,094,053 |   |

 

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

 

Operating segments arecomponents of an enterprise for which separate financial information isavailable that is evaluated regularly by senior management in deciding how toallocate resources and in assessing the performance of each segment. TheCompany is organized into segments along business lines and senior management regularlyreviews financial results for all business lines, focusing primarily on revenueand operating income.

 

TheCompany had four operating segments as of March 31, 2003.  The Diagnostics segment serves the worldwidein vitro diagnostics industry, including users and regulators of their testkits, with quality control products, and test kit components. The Biotechsegment is a research and development center providing support for the otherBBI business units, as well as contract research, molecular and cell biologyservices, and repository services for the government and life sciencesindustry.   The LaboratoryInstrumentation segment sells diagnostic instruments primarily to the worldwidein vitro diagnostic industry on an OEM basis, and also performs in-houseinstrument servicing.   The PCT segmentconsists of research and development primarily in pressure cycling technology(“PCT”).  The Company performs researchin the development of PCT, with particular focus in the areas of nucleic acidextraction and pathogen inactivation. The Company announced the availability for commercial sale of its PCTproducts in late September 2002. PCT revenue to date consists primarily of bothprivate and public (National Institutes of Health) funding of segment researchand commencing in late 2002, from the sale of PCT products.  Most of the expenditures incurred by thissegment are for research and development expenses, general management expensesand patent costs.  See also Note 8 ofNotes to Consolidated Financial Statements with respect to discontinuedoperations, which are no longer classified as an operating segment of theCompany.

 

The Company’s underlyingaccounting records are maintained on a legal entity basis for government andpublic reporting requirements.  Inter-segmentsales are recorded on a “third party best price” basis and are significant

 

7

----

 

in measuring segmentoperating results. The following segment information has been prepared inaccordance with the internal accounting policies of the Company, as describedabove.

 

Operating segment revenue was as follows:

 
|                        |   | **Three  Months Ended March 31,** |      |
|-----------------------------|--------|-----------------------------------|-----------|
| **Segment revenue:**        |   | **2003**                          |      | **2002** |   |
| Diagnostics                 |   | $                                 | 2,869,000 |   | $ | 2,677,000 |   |
| Biotech                     |   | 2,470,000                         |      | 2,091,000 |   |
| Laboratory  Instrumentation |   | 514,000                           |      | 782,000 |   |
| PCT                         |   | 70,000                            |      | 129,000 |   |
| Eliminations                |   | (280,000                          | )         | (726,000 | ) |
| Total  Revenue              |   | $                                 | 5,643,000 |   | $ | 4,953,000 |   |

 

Operating segment income(loss) was as follows:

 
|                                 |   | **Three  Months Ended March 31,** | ** ** |
|--------------------------------------|--------|-----------------------------------|------------|
| **Segment operating income (loss):** |   | **2003**                          | ** ** | **2002** | ** ** |
| Diagnostics                          |   | $                                 | 458,000    |   | $ | 138,000 |   |
| Biotech                              |   | (124,000                          | )          | (133,000 | ) |
| Laboratory  Instrumentation          |   | (208,000                          | )          | (49,000 | ) |
| PCT                                  |   | (316,000                          | )          | (791,000 | ) |
| Operating  loss                      |   | $                                 | (190,000   | ) | $ | (835,000 | ) |

 

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

 
|                                           |   | **March 31,** |       | **December  31,** | ** ** |
|------------------------------------------------|--------|---------------|------------|-------------------|------------|
| **Identifiable corporate and segment assets:** |   | **2003**      | ** ** | **2002**          | ** ** |
| Corporate                                      |   | $             | 1,842,000  |              | $          | 2,141,000 |   |
| Diagnostics                                    |   | 9,909,000     |       | 10,281,000        |       |
| Biotech                                        |   | 4,285,000     |       | 4,844,000         |       |
| Laboratory  Instrumentation                    |   | 1,392,000     |       | 1,359,000         |       |
| PCT                                            |   | 1,160,000     |       | 1,218,000         |       |
| Total  assets                                  |   | $             | 18,588,000 |              | $          | 19,843,000 |   |

 

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

 

**(5)  Computation of Net Income (Loss) perShare**

 

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 7 common shares for the three monthsended March 31, 2003 and 151,230 for the three months ended March 31, 2002 werenot included in the computation of diluted earnings (loss) per share because todo so would have been antidilutive.

 

8

----

 

The net loss per share computation for thefirst three months of 2003 and 2002 reflects the issuance of 7,047 and 4,654,respectively, additional shares of common stock 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 March 31,** |     |
|-------------------------------------------------------------------------------------------------------------|--------|----------------------------------|----------|
|                                                                                                        |   | **2003**                         |     | **2002** |   |
| Weighted  Average Shares Outstanding, basic                                                                 |   | 6,789,389                        |     | 6,297,408 |   |
| Net  effect of dilutive common stock equivalents-based on treasury stock method  using average market price |   | —                           |     | — |   |
| Weighted  Average Shares Outstanding, diluted                                                               |   | 6,789,389                        |     | 6,297,408 |   |
| Net  loss                                                                                                   |   | $                                | (253,547 | ) | $ | (886,866 | ) |
| Net  loss per share, basic & diluted                                                                    |   | $                                | (0.04    | ) | $ | (0.14 | ) |

 

**(6)  RelatedParty Transaction**

 

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 arepersonally 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. 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 to satisfy the Company’s limited guarantyobligation to the financial institution. The Company has now satisfied itsobligation under the limited guaranty and pledge with the financial institutionthrough the financial institution’s calling of the Company’s pledged cash. TheCompany continues to maintain its junior interest in the collateral pledged byMr. 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 of March31, 2003, the Company reevaluated the recoverability of the loan receivablefrom Mr. Schumacher. The Company’s review included an evaluation of theadequacy of the collateral associated with the loan. As described above, thecollateral consists of real estate holdings and common stock of the Company andthe Company’s security interest in the collateral is a junior interestsubordinated to the financial institution that provided the loan to the entitycontrolled by Mr. Schumacher.  Inevaluating 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

 

9

----

 

the assets underlying thecollateral. The Company’s analysis assumes transaction costs to sell theproperties, and applies a liquidity discount to the trading value of the commonstock.   The ultimate value that may berecovered by the Company is dependent on numerous factors including marketconditions relative to the real estate, the value of and ability to sell theCompany’s common stock, and the financial status of Mr. Schumacher. At December31, 2002, the Company performed a test for impairment of the restricted cash byanalyzing the value of the collateral, and determined that the restricted cashwas not impaired. While the restricted cash was not impaired as of December 31,2002, the termination of Mr.Schumacher as the Company’s Chairman and Chief Executive Officer by theBoard of Directors in February 2003, together with the decline in the quotedmarket 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 March 31, 2003 and through May 13, 2003. While the value ofthe collateral declined below the amount of the Company’s recorded loan as ofMarch 31, 2003 as compared to December 31, 2002, this decline has partiallyreversed subsequent to March 31, 2003 based primarily on the changing marketvalue of the Company’s common stock which is pledged as collateral.Accordingly, the Company believes the decline is temporary at the present time,and has not recorded any permanent impairment of loan value in the firstquarter of 2003. If actual market conditions are less favorable or otherfactors arise in the future that are significantly different than thoseanticipated by management, the establishment of a valuation reserve againstthis asset might be required. Mr. Schumacher has indicated his intention tomake a payment to the financial institution against the loan during the secondquarter of 2003 utilizing personal assets that have not been pledged ascollateral, thereby increasing 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 anunsolicited attempt to acquire the Company. The Rights Plan was not adopted inresponse to any effort to acquire the Company, and the Board is not aware ofany such effort. The Rights will expire on February 27, 2013 unless earlierredeemed or exchanged.  Each Rightentitles the registered holder, subject to the terms of a Rights Agreement, topurchase from the Company one one-thousandth of a share of the Company’s SeriesA Junior Participating Preferred Stock at a purchase price of $45.00 per oneone-thousandth of a share, subject to adjustment. In general, the Rights willnot be exercisable until a subsequent distribution date which will only occurif a person or group acquires beneficial ownership of 15% or more of theCompany’s Common Stock or announces a tender or exchange offer that wouldresult in such person or group owning 15% or more of the Common Stock. Withrespect to any person or group who currently beneficially owns 15% or more ofthe Company’s Common Stock, the Rights will not become exercisable unless anduntil such person or group acquires beneficial ownership of additional sharesof Common Stock.

 

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.

 

10

----

 

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.

 

**(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 $639,000 as of March 31, 2003.  The major component of this accrual isestimated lease exit and facility related costs ($447,000), 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 gain may be subject to future adjustments as the Companycompletes the process of exiting this business and permanently closing thefacility.  The remaining closing costsinclude an estimate to dispose of any remaining assets and retire all existingliabilities including the facility lease. The Company utilized in 2001 certain prior period net operating losscarryforwards, previously reserved for by the Company, to partially offset theincome tax effect of this gain.

 

**(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 $2,356,000 remainsoutstanding as of March 31, 2003. The Company used the funds to reduce theoutstanding balance of its existing line of credit. The principal amount of thenote issued in connection with the mortgage is due on March 31, 2010. Duringthe first five years the note carries an interest rate of 9.75%; after fiveyears the rate charged will be .75% greater than the Corporate Base Rate then in effect. The mortgage precludes thepayment of dividends on the Company’s common stock and contains certain otherrestrictive covenants.  Under thismortgage agreement the Company is subject to certain financial covenants. TheCompany failed to meet its debt service coverage covenant for the year endedDecember 31, 2002, but in the first quarter of 2003 the financial institutionwaived this default and other defaults relating to reports and the terminationof the Company’s former Chairman and Chief Executive Officer.  Monthly payments on this mortgage are basedon a twenty year amortization schedule with a balloon payment representing theremaining balance due in full on March 10, 2010.  The mortgage is collateralized by the Company’s West Bridgewater,MA facility, which has a net book value of approximately $2,011,000 as of March31, 2003.

 

11

----

 

**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 aDirector of the Company.  William A.Wilson, a Director, was named Chairman of the Board.  Kevin W. Quinlan, President and Chief Operating Officer,continues to lead day-to-day operations. A Special Oversight 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.

 

**CRITICALACCOUNTING POLICIES**

 

The critical accountingpolicies utilized by the Company in the preparation of the accompanying financialstatements are set forth in Part I, Item 7 of the Company’s Form 10-K for theyear ended December 31, 2002, under the heading “Management’s Discussion andAnalysis of Financial Condition and Results of Operations”.  There havebeen no material changes to these policies since December 31, 2002.

 

**RESULTSOF OPERATIONS**

 

**THREEMONTHS ENDED MARCH 31, 2003 AND 2002**

 

*Revenue*

 

Total revenue increased13.9%, or $690,000, to $5,643,000 in the first quarter of 2003 from $4,953,000in the first quarter of 2002. The increase in revenue was the result of anincrease in product revenue of 10.5% or $313,000, to $3,289,000 in the firstquarter of 2003 from $2,975,000 in the first quarter of 2002, coupled with a19.1% or $377,000 increase in service revenue to $2,354,000 in the firstquarter of 2003 as compared to service revenue of $1,977,000 in the firstquarter of 2002.

 

Product Revenue.  The increase in product revenue occurred in the Diagnosticssegment and was due primarily to sales associated with newly released Accurunproducts and custom (OEM) panels.  Inthe first quarter of 2002, product revenues were adversely impacted by delaysfrom several customers at the Diagnostics segment in getting final customerapproval for shipment, and the impact of the Company’s increased focus oncommercializing pressure cycling technology (“PCT”), which diverted resourcesfrom other projects.

 

Service Revenue.  The $377,000 increase in service revenue was primarily related toincreased contract service work associated with repository and clinical trialactivities performed at the Biotech segment.

 

G*ross Profit*

 

Overall grossprofit increased 16%, or $301,000, to $2,186,000 in the first quarter of 2003from $1,885,000 in the first quarter of 2002. Product gross profit increased 13.7%, or $201,000, to $1,669,000 in thefirst quarter of 2003 from $1,469,000 in the first quarter of 2002; productgross margin increased to 50.8% in the first quarter of 2003 from 49.4% in thefirst quarter of 2002.  Services grossprofit increased $100,000 or 24.0% to $516,000 in the first quarter of 2003from $416,000 in the first quarter of 2002, while service gross marginincreased to 21.9% in the first quarter of 2003 from 21.0% in the first quarterof 2002.

 

Product Gross Margin.                       The increase in product grossmargin was primarily due to a favorable product mix shift of higher marginproducts sold by the Diagnostics segment.

 

Service Gross Margin                             The service gross marginincrease was primarily due to increased service revenues at the Biotech segmentand PCT related grant revenue combined with an increased level of billablehours associated with government contract reimbursable work.

 

12

----

 

*Research and Development*

 

Research anddevelopment expenditures declined 47%, or $357,000, to $401,000 in the firstquarter of 2003 from $758,000 in the first quarter 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.   TheCompany expects to incur reduced levels of additional PCT related research anddevelopment costs in the remainder of year 2003.

 

*Selling and Marketing*

 

Selling andmarketing expenses decreased by 11.7%, or $107,000, to $808,000 in the firstquarter of 2003 from $916,000 in the first quarter of 2002.  The Company incurred significant marketing and promotion related costsin the first quarter of 2002 associated with its introduction of the PCTBarocyclerTM at anindustry trade show. The Company expects to incur future increases associatedwith ongoing PCT sales and marketing efforts.

 

*General and Administrative*

 

General andadministrative costs increased 11.5%, or $121,000, to $1,167,000 in the firstquarter of 2003 from $1,046,000 in the first quarter of 2002. The increase isassociated with legal and director fees incurred by the Special OversightCommittee of the Company’s Board of Directors, formed in February 2003, in conjunctionwith the termination of the Company’s Chairman and Chief Executive Officer, forthe purpose of overseeing the management of the affairs of the Company untilsuch time as a new Chief Executive Officer is employed. The costs incurred bythe Special Oversight Committee of the Board of Directors were partially offsetby reduced compensation costs due to the elimination of the salary that wouldhave been paid to the Company’s former Chairman and Chief Executive Officer whowas terminated in February 2003.  TheCompany also incurred increased legal fees associated with the March 2003adoption of a Shareholders Purchase Rights Plan.

# ** **

*Operating Loss*

 

Operating lossamounted to $(190,000) in the first quarter of 2003 compared to an operatingloss of $(835,000) in the first quarter of 2002. The Diagnostics segment’soperating income increased to $458,000 in the first quarter of 2003 from$138,000 in the first quarter of 2002, associated with a 13.2% increase inproduct revenue at the Diagnostics segment as explained above.  The Biotech segment’s operating lossdecreased to $(124,000) in the first quarter of 2003 from $(133,000) in thefirst quarter of 2002, due to higher revenues associated with work on tworesearch contracts.  The operating lossof the PCT segment decreased to $(316,000) in the first quarter of 2003 from$(791,000) in the first quarter of 2002 primarily due to reduced patents, tradeshow and research and development costs. The Laboratory Instrumentation segment’s operating loss increased to $(208,000)in the first quarter of 2003 from $(49,000) in the first quarter of 2002. Thissegment recorded a 34% decline in revenue due to a lower level of instrumentdevelopment services for PCT coupled with increased costs associated with afacility lease renewal effective February 1, 2002.

 

*Interest Expense*

 

Net interestexpense, primarily from the Company’s outstanding mortgage, was relativelyunchanged in the first quarter of 2003 as compared to the first quarter of2002.

 

*Evaluation of Financial Asset*

 

As of March31, 2003, the Company reevaluated the recoverability of the loan receivablefrom Mr. Richard T. Schumacher, the Company’s former Chairman and ChiefExecutive Officer as discussed further in Note 6 of Notes to ConsolidatedFinancial Statements.  The Company’sreview included an evaluation of the adequacy of the collateral associated withthe loan.  The Company’s securityinterest in 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

 

13

----

 

by Mr. Schumacher and the factthat the Company has a junior position in the collateral, as well as the liquidity and net realizable value of theassets underlying the collateral. The Company’s analysis assumes transactioncosts to sell the properties, and applies a liquidity discount to the tradingvalue of the common stock.   Theultimate value that may be recovered by the Company is dependent on numerousfactors including market conditions relative to the real estate, the value ofand ability 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 by the Board of Directors in February 2003, togetherwith the decline in the quoted market value of the Company’s common stocksubsequent to December 31, 2002, which comprises a major element of thecollateral, are indicators of impairment. The Company has reevaluated theadequacy of the value of the collateral as of March 31, 2003 and through May13, 2003. While the value of the collateral declined below the amount of theCompany’s recorded loan as of March 31, 2003 as compared to December 31, 2002,this decline has partially reversed subsequent to March 31, 2003 basedprimarily on the changing market value of the Company’s common stock which ispledged as collateral. Accordingly, the Company believes the decline istemporary at the present time, and has not recorded any permanent impairment ofloan value in the first quarter of 2003. If actual market conditions are lessfavorable or other factors arise in the future that are significantly differentthan those anticipated by management, the establishment of a valuation reserveagainst this asset might be required. Mr. Schumacher has indicated hisintention to make a payment to the financial institution against the loanduring the second quarter of 2003 utilizing personal assets that have not beenpledged as collateral, thereby increasing the collateral to loan ratio. 

 

*Income Taxes*

 

In the year2000, the Company established a full valuation allowance for its deferred taxassets in accordance with Statement of Financial Accounting Standards No. 109and in consideration of three consecutive years of losses; accordingly, theCompany has not recognized an income tax benefit associated with the loss fromoperations in the first quarter of 2003 and the first quarter of 2002.

#### ** **

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

 

The Companyhad a net loss of $(254,000) in the first quarter of 2003 as compared to a netloss of $(887,000) in the first quarter of 2002.

 

**LIQUIDITYAND FINANCIAL CONDITION**

 

The Company’sworking capital position decreased to $8,131,000 as of March 31, 2003 from$9,197,000 as of December 31, 2002.

 

Net cashprovided by operations for the three months ended March 31, 2003 was $739,000as compared to net cash used by operations of $47,000 for the three monthsended March 31, 2002.   Cash provided byoperations during the first three months of 2003 was primarily the result offavorable cash collections of certain governmental contract receivables as wellas reduced inventory purchases.  Theoperational use of cash during the first three months of 2002 was primarily theresult of the quarterly loss and the buildup of raw materials inventorypartially offset by favorable cash collections of receivables.

 

Net cash usedin investing activities for the three months ended March 31, 2003 was $20,000compared to $174,000 for the three months ended March 31, 2002.  The Company has curtailed current yearcapital expenditures in conjunction with its efforts to seek additional capitalas discussed further hereunder.

 

Net cash usedin financing activities for the three months ended March 31, 2003 was $10,000compared to cash used of $428,000 during the three months ended March 31, 2002. As discussed further under “RelatedParty Transaction” below, the Company pledged $1,000,000 via a deposit in aninterest bearing account at a financial institution in early 2002; this waspartially offset by a $525,000 repayment to the Company of a loan by its formerChief Executive Officer (“CEO”).

 

Based oncurrent forecasts, management believes that the company has sufficientliquidity to finance operations for the next twelve months.  Management’sforecasts involve assumptions that could prove to be incorrect. If the Companycontinues to incur operating losses or negative cash flows, it may need toraise additional funds.  There can be no assurance that these funds willbe available when required on terms acceptable to the Company, if at all.  Ifadequate funds are not available when needed, the Company may be required tofurther reduce certain of its costs and

 

14

----

 

delay, scale back, or eliminatecertain of its activities, any of which could have a material adverse long termeffect on its business, financial condition and results of operations. The Company is considering various sources of additional financing,including but not limited to, sale of business segments, strategic alliancesand private placements of debt or equity securities, which could result indilution to the Company’s stockholders.  On October 25, 2002, the Companyretained an investment banking firm to advise the Company in the evaluation ofstrategic opportunities aimed at increasing shareholder value and liquidity byincreasing the capital needed for growth; their engagement continues at thisdate.

 

*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 Company.  The Company’soriginal loan and subsequent pledge of $1,000,000 were made to assist Mr.Schumacher in refinancing indebtedness related to, among other things, hisdivorce settlement and to enable him to avoid the need to sell his common stockholdings in the Company on the open market to satisfy his debts.  The Company’s Board of Directors and, withrespect to the decision to pledge the $1,000,000 cash collateral, a specialcommittee of the independent directors, evaluated a number of options andconcluded that the original loan to Mr. Schumacher and the subsequent pledgewere the best option and in the best interests of the Company’s stockholders inthe belief that it would, among other things, avoid selling pressure on theCompany’s common stock and relieve the financial pressures on Mr. Schumacherthat 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 March 31, 2003 and throughMay 13, 2003. While the value of the collateral declined below the amount ofthe Company’s recorded loan as of March 31, 2003 as compared to December 31,2002, this decline has partially reversed subsequent to March 31, 2003 basedprimarily on the changing market value of the Company’s common stock which ispledged as collateral. Accordingly, the Company believes the decline istemporary at the present time, and has not recorded any permanent impairment ofloan value in the first quarter of 2003. If actual market conditions are lessfavorable or other factors arise in the future that are significantly differentthan those anticipated by management, the establishment of a valuation reserveagainst this asset might be required. Mr. Schumacher has indicated hisintention to make a payment to the financial institution against the loanduring the second quarter of 2003 utilizing personal assets that have not beenpledged as collateral, 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.

 

**CONTRACTUALOBLIGATIONS**

 

As of March31, 2003, there have been no significant changes in the Company’s contractualobligations previously disclosed as of December 31, 2002.

 

15

----

 

**FORWARD-LOOKINGSTATEMENTS**

 

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 statements include,without limitation, statements made regarding the expected recovery and valueof the loan receivable from the Company’s former Chairman and Chief ExecutiveOfficer, the Company’s belief that it has sufficient liquidity to financeoperations over the next twelve months, and the anticipated future financialperformance of the Company and its products. These forward-looking statements are only predictions and involve knownand unknown risks, uncertainties, and other factors that may cause theCompany’s actual results, levels of activity, performance, or achievements tobe materially different from any future results, levels of activity,performance, or achievements expressed or implied by such forward-lookingstatements. Also, these forward-looking statements represent the Company’s bestestimates and assumptions only as of the date of this Report.  Except as otherwise required by law, theCompany expressly disclaims any obligation or undertaking to release publiclyany updates or revisions to any forward-looking statement contained in theReport 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 whichmight cause actual results to differ materially from those projected in theforward-looking statements contained herein include the following: due tooperational, scientific or technical difficulties in the implementation of theCompany’s strategies and changes in customer demand, the Company’s sales to IVDtest kit manufacturers and sales of ACCURUN and other quality control productsmay decline; the Company may not be successful in commercializing its PressureCycling Technology (“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; the Company may be unable todevelop the end-user market for its quality control products; the Company’s maybe unable to  grow the sales of SourceScientific, Inc. to the extent anticipated; the uncertainty of the renewal andfull funding of contracts with National Institutes of Health (NIH);  the Company’s may be unable to obtain anadequate supply of the unique and rare specimens of plasma and serum necessaryfor certain of its products; the potential for significant reductions inpurchases by any of the Company’s major customers; the Company may be unable toobtain the necessary government approvals for certain of its products; theCompany may be unable to compete effectively due to rapid changes intechnology; the Company may be unable to attract and retain a qualifiedindividual to serve as Chief Executive Officer; the collateral securing theCompany’s loan receivable from its former Chairman and Chief Executive Officermay be impaired,  and the Company maynot be able to fully collect the principal and interest due on a $1,000,000receivable from the former Chairman and Chief Executive Officer; and ifexpenses 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 and otherfactors 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 to the United States Securities and Exchange Commissionon Form 10-K for the year ended December 31, 2002.

 

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

 

There have been no materialchanges in the reported market risks since December 31, 2002.

 

**ITEM4.  CONTROLS AND PROCEDURES**

##### ** **

##### **Withinthe 90-day period prior to the filing date of this report, the Company’sPrincipal Executive and Financial Officer performed an evaluation of theeffectiveness of the Company’s disclosure controls and procedures (as definedin Securities Exchange Act Rules 13a-14(c) and 15d-14(c), which have beendesigned to ensure that  informationrequired to be disclosed by the Company in the reports it files under theExchange Act is timely disclosed.  Basedupon that evaluation, the Principal Executive and Financial Officer concludedthat the disclosure controls and procedures were effective.  Since that evaluation, the Company has madeno significant changes in its**

##### ** **

16

----

 

internal controls andprocedures or in other factors that could significantly affect the Company’sinternal controls and procedures for financial reporting.

 

17

----

 

**PARTII.  OTHER INFORMATION**

 

**ITEM1. LEGAL PROCEEDINGS**

 

None.

 

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

 

*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 anunsolicited attempt to acquire the Company. The Rights Plan was not adopted inresponse to any effort to acquire the Company, and the Board is not aware ofany such effort. The Rights will expire on February 27, 2013 unless earlierredeemed or exchanged.  Each Rightentitles the registered holder, subject to the terms of a Rights Agreement, topurchase from the Company one one-thousandth of a share of the Company’s SeriesA Junior Participating Preferred Stock at a purchase price of $45.00 per oneone-thousandth of a share, subject to adjustment. In general, the Rights willnot be exercisable until a subsequent distribution date which will only occurif a person or group acquires beneficial ownership of 15% or more of theCompany’s Common Stock or announces a tender or exchange offer that wouldresult in such person or group owning 15% or more of the Common Stock. Withrespect to any person or group who currently beneficially owns 15% or more ofthe Company’s Common Stock, the Rights will not become exercisable unless anduntil such person or group acquires beneficial ownership of additional sharesof Common Stock.

 

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% or ** **more of the Company’s CommonStock, the Company is acquired in a merger or other business combinationtransaction or 50% or more of its consolidated assets or earning power aresold, each holder of a Right will thereafter have the right to purchase, uponpayment of the purchase price of the Right, that number of shares of commonstock of the acquiring company which at the time of such transaction will have amarket value of two times the purchase price of the 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.

 

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

 

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 $2,356,000 remainsoutstanding as of March 31, 2003. Pursuant to 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 the Company’s other defaultsrelating to reports and the termination of the Company’s former Chairman andChief Executive Officer.

 

18

----

 

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

 

Notapplicable.

 

**ITEM 5.  OTHERINFORMATION**

 

Not Applicable.

 

#### **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                                                                                                                                          |   | R** |
|             |   |                                                                                                                                                                                              |   |   |
| 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** |

 

19

----

 
| 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**    |
|   |   |                                                                                                                                                                                                                                                                                   |   |   |
| 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**    |

 

20

----

 
| 10.26  |   | 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 RichardT.  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**            |
|   |   |                                                                                                                                                                                                              |   |           |
| 99.1   |   | Certification  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                          |   | Filed Herewith |

 

----

A                          Incorporatedby reference to the registrant’s Registration Statement on Form S-1(Registration No. 333-10759) (the “Registration Statement”). The number setforth herein is the number of the Exhibit in said Registration Statement.

B                            Incorporatedby reference to Exhibit No. 10.17 of the Registration Statement.

C                            Incorporatedby reference to the registrant’s Annual Report on Form 10-K for the fiscal yearended December 31, 2002.

D                           Incorporatedby reference to the registrant’s Quarterly Report on Form 10-Q for the fiscalquarter ended March 31, 1997.

E                             Incorporatedby reference to the registrant’s Quarterly Report on Form 10-Q for the fiscalquarter ended June 30, 1997.

F                             Incorporatedby reference to the registrant’s Annual Report on Form 10-K for the fiscal yearended December 31, 1997.

G                            Incorporatedby reference to the registrant’s Quarterly Report on Form 10-Q for the fiscalquarter ended June 30, 1998.

H                           Incorporatedby reference to the registrant’s Quarterly Report on Form 10-Q for the fiscalquarter ended September 30, 1999.

I                                Incorporatedby reference to the registrant’s proxy statement, filed with the Securities andExchange Commission on June 14, 1999.

J                               Incorporatedby reference to the registrant’s Annual Report on Form 10-K/A for the fiscalyear ended December 31, 1999.

K                           Incorporatedby reference to the registrant’s Report on Form 8-K filed September 8, 2000.

L                             Incorporatedby reference to the registrant’s Quarterly Report on Form 10-Q for the fiscalquarter ended June 30, 2000.

M                        Incorporatedby reference to the registrant’s Report on Form 8-K filed March 8, 2001.

N                           Incorporatedby reference to the registrant’s Quarterly Report on Form 10-Q for the fiscalquarter ended September 30, 2001.

O                           Incorporatedby reference to the registrant’s Annual Report on Form 10-K for the fiscal yearended December 31, 2001.

P                             Incorporatedby reference to the registrant’s Quarterly Report on Form 10-Q for the fiscalquarter ended March 31, 2002.

Q                           Incorporatedby reference to Exhibit 4 of the registrant’s Current Report on Form 8-K filedMarch 12, 2003.

 

21

----

 

*                             Managementcontract or compensatory plan or arrangement.

**                      Inaccordance with Rule 12b-32 under the Securities Exchange Act of 1934, asamended, reference is made to the documents previously filed with theSecurities and Exchange Commission, which documents are hereby incorporated byreference.

 

**(b) Reportson Form 8-K.**

 

The Company filed a Form 8-K,dated February 24, 2003, relative to the Company’s termination of its Chairmanand Chief Executive Officer.  TheCompany filed a Form 8-K, dated March 11, 2003, relative to the Company’sadoption of a shareholders’ rights agreement. The Company filed a Form 8-K, dated April 2, 2003, relative to theCompany’s issuance of a press release on March 31, 2003 announcing itsfinancial results for the fourth quarter and year ended December 31, 2002.

 

 

**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:  | May 14, 2003                                         |   | By | */s/ Kevin  W. Quinlan* |   |
|   | Kevin W. Quinlan,                                    |   |
|   | President and Chief Operating  Officer and Treasurer |   |
|   | (Principal Accounting and  Financial Officer)        |   |
|        |                                                      |        |  |  |  |  |  |

 

22

----

 

**CERTIFICATION**

 

I, Kevin W. Quinlan, President, ChiefOperating Officer and Treasurer of Boston Biomedica, Inc., certify that:

 

1. I have reviewed this quarterly report onForm 10-Q of Boston Biomedica, Inc.;

 

2. Based on my knowledge, this quarterlyreport does not contain any untrue statement of a material fact or omit tostate a material fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading withrespect to the period covered by this quarterly report;

 

3. Based on my knowledge, the financialstatements, and other financial information included in this quarterly report,fairly present in all material respects the financial condition, results ofoperations and cash flows of the registrant as of, and for, the periodspresented in this quarterly report;

 

4. The registrant’s other certifying officersand I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for theregistrant and have:

 

a) designed such disclosure controls andprocedures to ensure that material information relating to the registrant,including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this quarterly reportis being prepared;

 

b) evaluated the effectiveness of theregistrant’s disclosure controls and procedures as of a date within 90 daysprior to the filing date of this quarterly report (the “Evaluation Date”); and

 

c) presented in this quarterly report ourconclusions about the effectiveness of the disclosure controls and proceduresbased on our evaluation as of the Evaluation Date;

 

5. The registrant’s other certifying officersand I have disclosed, based on our most recent evaluation, to the registrant’sauditors and the audit committee of registrant’s board of directors (or personsperforming the equivalent function):

 

a) all significant deficiencies in the designor operation of internal controls which could adversely affect the registrant’sability to record, process, summarize and report financial data and haveidentified for the registrant’s auditors any material weaknesses in internalcontrols; and

 

b) any fraud, whether or not material, thatinvolves management or other employees who have a significant role in theregistrant’s internal controls; and

 

6. The registrant’s other certifying officersand I have indicated in this quarterly report whether there were significantchanges in internal controls or in other factors that could significantlyaffect internal controls subsequent to the date of our most recent evaluation,including any corrective actions with regard to significant deficiencies andmaterial weaknesses.

 
| Date: May 14, 2003                                |
|---------------------------------------------------|
|                                              |
| /s/ *Kevin W. Quinlan*                            |   |
| Kevin W. Quinlan                                  |
| President, Chief Operating  Officer and Treasurer |
| (Principal Executive and  Financial Officer)      |

 

23

----