According to NCI and ACS, there were approximately 800,000 patients in the United States living with malignancies or pre-malignant diseases of the blood and bone marrow in 2004, with more than 140,000 new cases being diagnosed each year. A 2005 survey by the AMA reports that these patients are served through approximately 11,000 practicing hem/oncs, and that approximately 79% of these hem/oncs practice in the community setting. Since 1998, according to the AMA, the number of practicing hem/oncs has been growing at an annual rate of approximately 3.8%, significantly outpacing the overall annual growth in physicians in the United States of approximately 2.5%.

In order for hem/oncs to make the correct diagnosis, choose or modify appropriate therapeutic regimens and monitor the effectiveness of these regimens, they require highly specialized diagnostic services. Serial blood and bone marrow examinations are typically performed to follow the progress of the disease and the patient\'s response to therapy.

The typical bone marrow case consists of histopathology, flow cytometry and cytogenetic assessments. Based on 2007 Medicare reimbursement rates for these procedures, the average bone marrow case generates service revenues of approximately $3,000.

The typical blood-based case does not require the same degree of complexity as a bone marrow case and generally consists of only one or more of the assessments typically performed in a bone marrow case, a Polymerase Chain Reaction, or PCR, test or a Circulatory Tumor Cell, or CTC, test.

The Company introduced CHART in the first quarter of 2007.

The following diagnostic services and non-proprietary technologies, each of which includes professional interpretation by the Company’s hempaths and utilizes complex and sophisticated instrumentation operated by highly trained personnel, can be ordered individually or as part of its COMPASS or CHART service offerings:

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Histopathology—expert microscopic evaluation of blood or bone marrow material in order to identify the nature and extent of disease;

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Flow Cytometry—a quantitative method to characterize maturation level of cells and measure the type and amount of leukemia/lymphoma via automated assessment of cellular surface characteristics;

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Cytogenetics—a suite of methods designed to reveal changes and/or abnormalities at the level of the chromosome in order to identify malignant processes and to assist in the prognosis of a malignancy;

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PCR—a quantitative method to follow progression of disease and response to therapy at the genetic level (DNA sequence); and

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CTC—identification and enumeration of tumor cells circulating in the blood of metastatic breast cancer patients.

Cost of revenues increased 81% to $10 million for the six months ended June 30, 2007 from $5.5 million for the six months ended June 30, 2006.

Sales and marketing expenses increased 89% to $4.7 million for the six months ended June 30, 2007 from $2.5 million for the six months ended June 30, 2006.

Interest income decreased 8% to $127,000 for the six months ended June 30, 2007 from $138,000 for the six months ended June 30, 2006.

Interest expense decreased 17% to $159,000 for the six months ended June 30, 2007 from $192,000 for the six months ended June 30, 2006.