Consolidated Financial Statements for the nine months ended June 30, 1997

• Consolidated Balance Sheet
• Consolidated Statements of Income
• Consolidated Statements of Retained Earnings
• Consolidated Statements of Changes in Financial Position

Consolidated Balance Sheet
	June 30
	1997	1996
ASSETS
Current Assets
Accounts Receivable	$ 11,575,955	$ 7,613,362
Laboratory supplies	289,370	401,042
Prepaid expenses and deposits	973,601	474,053
	12,838,926	8,488,457
Capital assets	3,438,944	2,280,655
Licenses	54,726,257	36,975,452
Goodwill	7,315,041	---
Other assets	108,714	501,629
Deferred income taxes	1,217,400	120,000
	$ 79,645,282	$48,366,193
LIABILITIES
Current liabilities
Bank indebtedness	$ 2,258,951	$ 3,366,573
Accounts payable and accrued liabilities	7,025,895	5,479,477
Income taxes payable	1,070,038	1,251,084
Due to shareholder	---	474,121
Current portion of long-term debt	3,600,000	3,600,000
	13,954,884	14,171,255
Long-term debt	16,300,000	28,500,000
SHAREHOLDERS' EQUITY
Share capital and warrants	38,130,503	181,921
Retained earnings	11,259,895	5,514,017
	49,390,398	5,694,938
	$79,645,282	$48,366,193

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Consolidated Statements of Income
	For the three months ended June 30		For the nine months ended June 30
	1997	1996	1997	1996
Revenue	$ 20,471,139	$13,744,799	$ 53,363,485	$40,454,528
Expenses
Operating, general and administrative	13,701,126	9,137,126	38,367,899	27,633,210
Amortization	829,194	452,299	2,211,163	1,369,092
	14,530,320	9,589,425	40,579,062	29,002,302
Income from partnership	---	(15,725)	( 5,350)	(47,175)
	14,530,320	9,573,700	40,573,712	28,955,127
Operating income before interest expense and the undernoted item	5,940,819	4,171,099	12,789,773	11,499,401
Interest expense
Long-term	271,188	623,528	1,032,299	1,755,224
Other	20,368	63,363	39,978	520,382
	291,556	686,891	1,072,277	2,275,606
Income before the undernoted item	---	---	11,717,496	9,223,795
Provision for lease termination	---	---	1,140,000	---
Income before income taxes	5,649,263	3,484,208	10,577,496	9,223,795
Provision for income taxes	3,059,000	1,1,713,000	5,710,789	4,530,000
Net income	$ 2,590,263	$ 1,771,208	$ 4,866,707	$ 4,693,795
Net income per share	$ 0.16	$ 0.18	$ 0.33	$ 0.45

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Consolidated Statements of Retained Earnings
	For the nine months ended June 30
	1997	1996
Retained earnings beginning of period	$ 7,012,466	$ 1,474,287
Net income	4,866,707	4,693,795
Gain on sale of capital assets to related parties	274,722	---
Dividends	( 894,000)	---
Redemption proceeds in excess of stated capital	---	(654,065)
Retained earnings, end of period	$ 11,259,895	$ 5,514,017

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Consolidated Statements of Changes in Financial Position
	For the nine months ended June 30
	1997	1996
Operating activities
Net income	$ 4,866,707	$ 4,693,795
Items not involving cash:
Amortization of licenses	1,343,636	867,686
Amortization of goodwill	287,649	---
Amortization of capital assets	571,204	466,297
Amortization of other assets	8,674	35,109
Deferred income taxes	(1,499,400)	(10,000)
Income from partnership	( 5,350)	(47,715)
	5,573,120	6,005,172
Net increase in non-cash working capital items	(3,209,513)	(245,998)
Cash provided by operating activities	2,363,607	5,759,174
Investing activities
Purchase of capital assets	(634,273)	(181,358)
Increase in other assets	(103,638)	---
Withdrawals from partnership	19,250	60,983
Sale of capital assets to related parties	894,000	1,340,586
Acquisition of subsidiary	(3,785,722)	---
Cash provided by (used in) investing activities	(3,610,383)	(1,220,211)
Financing activities
Decrease in long-term debt	(34,544,536)	(4,651,926)
Issuance of share capital and warrants	37,949,582	551,100
Redemption of share capital, net	---	(1,205,348)
Dividends	(894,000)	---
Cash provided by (used in) financing activities	2,511,046	(5,306,174)
Decrease in bank indebtedness	1,264,270	1,673,211
Bank indebtedness, beginning of period	(3,523,221)	(5,039,784)
Bank indebtedness, end of period	$( 2,258,951)	$ (3,366,573)

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