April 15, 2005 - 10KSB: Optional form for annual and transition reports of small business issuers [Section 13 or 15(d), not S-B Item 405]

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459

FORM 10-KSB

(X) Annual Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934.

For the Year Ended December 31, 2004

( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.

For the transition period from __________ to __________.

Commission File Number: 333-72097

NEOGENOMICS, INC.
(Exact name of Registrant as specified in its charter)

NEVADA 74-2897368
(State or other jurisdiction of (IRS Employer I.D. No.)
incorporation or organization)

12701 Commonwealth Drive, Suite 9, Fort Myers, FL 33913
Address of Principal Executive Offices:

(239) 768-0600
Registrant's telephone number, including area code:

Securities registered pursuant to Section 12(b) of the Act:
NONE

Securities registered pursuant to Section 12(g) of the Act:
NONE

Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such other 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. X - Yes _ No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained herein and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by referencing Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. X -

The issuer's revenues for the most recent fiscal year were approximately
$558,000.

The aggregate market value of the voting stock held by non-affiliates of the
registrant at April 15, 2005 was approximately $3,717,626 (Based on 8,449,149
shares held by non-affiliates and a closing share price of $0.44/share on April
13, 2005). Shares of common stock held by each officer and director and by each
person who owns more than 10% of the outstanding common stock have been excluded
in that such persons may be deemed to be affiliates. This determination of
affiliate status is not necessarily a conclusive determination for other
purposes.

As of April 15, 2005, 22,017,657 shares of common stock were outstanding.

Documents Incorporated By Reference - NONE

Transitional small business disclosure format. _ Yes X No

PART I

FORWARD-LOOKING STATEMENTS

This Form 10-KSB contains "forward-looking statements" relating to
NeoGenomics, Inc., a Nevada corporation (referred to individually as the "Parent
Company" or collectively with all of its subsidiaries as the "Company" in this
Form 10-KSB), which represent the Company's current expectations or beliefs
including, but not limited to, statements concerning the Company's operations,
performance, financial condition and growth. For this purpose, any statements
contained in this Form 10-KSB that are not statements of historical fact are
forward-looking statements. Without limiting the generality of the foregoing,
words such as "may", "anticipation", "intend", "could", "estimate", or
"continue" or the negative or other comparable terminology are intended to
identify forward-looking statements. These statements by their nature involve
substantial risks and uncertainties, such as credit losses, dependence on
management and key personnel, variability of quarterly results, and the ability
of the Company to continue its growth strategy and competition, certain of which
are beyond the Company's control. Should one or more of these risks or
uncertainties materialize or should the underlying assumptions prove incorrect,
actual outcomes and results could differ materially from those indicated in the
forward-looking statements.

Any forward-looking statement speaks only as of the date on which such
statement is made, and the Company undertakes no obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time and it is not
possible for management to predict all of such factors, nor can it assess the
impact of each such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

ITEM 1. DESCRIPTION OF BUSINESS

NeoGenomics, Inc., a Nevada corporation (referred to individually as the
"Parent Company" or collectively with all of its subsidiaries as the "Company"
in this Form 10-KSB) is the registrant for SEC reporting purposes. The Parent
Company was originally incorporated as American Communications, Enterprises,
Inc. in October 1998. In November 2001, following a reverse acquisition of
NeoGenomics, Inc, a Florida corporation (referred to as "NeoGenomics" or the
"Operating Subsidiary" in this Form 10-KSB), the Parent Company changed its name
to NeoGenomics, Inc. as well.

The Company operates a medical testing laboratory and research facility
based in Fort Myers, Florida that is targeting the rapidly growing genetic and
molecular testing segment of the medical laboratory market. Our common stock is
listed on the NASDAQ Over-the Counter Bulletin Board (the "OTCBB") under the
symbol "NGNM." Our business plan features two concurrent objectives:

1. Development of a clinical laboratory to offer cytogenetics, FISH, Flow
Cytometry and molecular biology testing services; and

2. Development of a research laboratory to offer sponsored research
services to other companies that are seeking to develop genomic
products that will determine the genetic basis for female and neonatal
diseases, cancers and other forms of disease.

NeoGenomics' vision is to merge a high-end genetics and molecular testing
laboratory with ongoing research activities to help bridge the gap between
clinical medicine and genomic research. We believe that this combination could
allow the Company to speed the process of discovery and innovation and develop
new advanced testing methods to identify the genetic and molecular causes of
disease. Over the last 5 years, advances in technology and genetic research,
including the complete sequencing of the human genome, have made possible a
whole new set of tools to diagnose and treat diseases. This has opened up a vast
opportunity for laboratory companies that are positioned to address this growing
market segment.

We believe genetic/molecular testing is the newest and fastest growing
subset of the laboratory market. Genetic testing or "cytogenetics" involves
analyzing chromosomes taken from the nucleus of cells and looking for
abnormalities in a process called karyotyping. A karyotype evaluates the entire
46 human chromosomes by number and banding patterns to identify abnormalities
associated with disease. Examples of cytogenetic testing include bone marrow
testing to diagnose various types of leukemia and lymphoma, and amniocentesis
testing of pregnant women to diagnose genetic anomalies such as Down syndrome in
a fetus. Molecular biology involves testing for even more specific causes of
diseases based on very small alterations in cellular biology and DNA. Examples
of common molecular biology testing include screening for paternity, cystic
fibrosis or Tay-Sachs disease.

Both cytogenetics and molecular biology have become important and
highly-accurate diagnostic tools over the last five years. New tests are being
developed rapidly, thus this market segment is expanding rapidly.
Genetic/molecular testing requires very specialized equipment and credentialed
individuals (typically PhD level) to certify the results. The following chart
shows the differences between the genetic/molecular segment and other segments
of the medical laboratory testing market. Up until about five years ago, the
genetic/molecular segment was considered to be part of the Anatomic Pathology
segment, but given its rapid growth, many industry veterans now break
genetic/molecular testing out into its own segment.

COMPARISON OF THE MEDICAL LABORATORY MARKET SEGMENTS (1)

Attributes Clinical Anatomic Pathology Genetic/Molecular
Testing Performed On Blood, Urine Tissue/Cells Chromosomes/Molecules
Volume High Low Low
Physician Involvement Low High - Pathologist Low
Malpractice Ins. Required Low High Low
Other Professionals Req. None None Cyto/Molecular geneticist
Level of Automation High Low-Moderate Moderate
Diagnostic in Nature Usually Not Yes Yes
Types of Diseases Tested Many Possible Primarily to Rule out Rapidly Growing
Cancer
Typical per Price/Test $5 - $35/Test $25 - $500/Test $200 - $1,000/Test
Estimated Size of Market $25 - $30 Billion $8.0 - $10.0 Billion $3.0 - $4.0 Billion
Est. Growth Rate of Market 4.0 -5.0% 6.0 - 7.0% Annually 25.0 - 40+% Annually

Established Competitors Quest Diagnostics Quest Diagnostics Genzyme Genetics
LabCorp LabCorp/US Labs Quest Diagnostics
Bio Reference Lab Genzyme/Impath LabCorp/Esoterics
Specialty Labs Ameripath Major Universities
DSI Laboratories Local Pathologists
Hospital Labs
Regional Labs

(1) Derived from industry analyst reports and Company estimates

Our initial focus is on the oncology and advanced natology testing markets.
We target oncologists that perform bone marrow sampling and obstetricians and
perinatologists that perform amniocentesis testing and other natology screening
tests. Historically, our clients have been predominantly located in Florida.
Beginning in January 2005, based on the experience of our new President, we
began targeting large institutional clients in the Eastern United States. As we
grow, we anticipate offering additional tests that will allow us to more broadly
penetrate the oncology and advanced natology testing markets as well as broaden
our focus from genetic and molecular biology testing to more traditional types
of anatomic pathology testing that are complementary to our current test
offerings. We estimate our current and total potential market for each of the
above mentioned geographies and sectors is as follows:

Florida Southeast U.S. Total U.S.
Total Oncology Testing Market
Population over 55 years old (millions) (1) (2) 4.6 11.5 60.6
Total Cancer Testing Market ($, MMs) (3) $ 583.7 $ 1,588.2 $ 8,208.2

Approx % of Market NGNM Currently Addresses (4) 40% 40% 40%
NGNM Current Addressable Market ($, MMs) $ 233.5 $ 635.3 $ 3,283.3

Advanced Natology Testing Market (5)
Total # of New Births (1) 210,122 704,163 4,026,538
Total Natology Advanced Testing Market ($, MMs) (3) $ 42.0 $ 140.8 $ 805.3

Approx % of Market NGNM Currently Addresses (4) 35% 35% 35%
NGNM Current Addressable Market ($, MMs) $ 14.7 $ 49.3 $ 281.9

_______________________________________
1. US Census Bureau estimates for 2002
2. 76% of all new cancers are reported in people age 55 or older. Source:
American Cancer Society.
3. Company estimate
4. NeoGenomics intends to increase the % of the overall market it can address
by offering more types of tests.
5. Does not include all prenatal testing, just those tests that are applicable
to NeoGenomics strategy.

We compete in the marketplace based on the quality and accuracy of our test
results, our turn-around times and our ability to provide after-test support to
those physicians requesting consultation. We believe our average 3-5 day
turn-around time on oncology-related cytogenetics tests is helping to increase
the usage patterns of cytogenetics tests by our referring oncologists and
hematopathologists. Based on anecdotal information, we believe that cyotgenetics
labs typically have 10-21 day turn-around times on average with some labs
running as high as 21 days. Traditionally, longer turn-around times for
cytogenetics tests have resulted in fewer tests being ordered since there is an
increased chance that the test results will not be returned within an acceptable
diagnostic window when other adjunctive diagnostic test results are available.
We believe our turn-around times result in our referring physicians requesting
more of our testing services in order to augment or confirm other diagnostic
tests, thereby giving us a significant competitive advantage in marketing our
services against those of other competing laboratories.

We have an opportunity to add additional types of tests to our product
offering. We believe that by doing so we may be able to capture increases in our
testing volumes through our existing customer base as well as more easily
attract new customers via the ability to bundle our testing services more
appropriately to the needs of the market. For instance, initial testing for most
hematological cancers yields total revenue ranging from approximately $1,500 -
$2,500/case and is generally comprised of cytogenetic, flouresence in-situ
hybridization (FISH), flow cytometry, and morphology testing. Until recently, we
only performed cytogenetic testing in-house, which averaged approximately $500
of revenue per case. In December 2004, we added FISH testing to our product
offering, and in February 2005, we began offering flow cytometry testing
services. We believe that with the addition of these two new testing platforms,
we will nearly double our average revenue per oncology case.

We believe this bundled offering approach could drive large increases in
our revenue and afford the Company significant synergies and efficiencies in our
operations, sales and marketing activities.

Avg. Rev/Test

Cytogenetics $400-$600
Fluorescence In Situ Hybridization (FISH) $200-$400

Flow cytometry
- Technical component $400-$600
- Professional component $100-$200
Morphology $400-$700
Total $1,500-$2,500

In addition to clinical testing, we also engage in sponsored research
activities. Our planned research initiatives are focused on the underlying
genetic causes of female diseases. Cancers and other diseases of the ovary,
uterus, cervix, and breast all have an underlying genetic basis. Identifying the
genetic changes unique to these diseases will allow us to develop tests to
identify which individuals are at increased genetic risk of developing these
diseases. We plan to collaborate with pharmaceutical and other healthcare
companies to develop intellectual property that can be a source of revenue. In
addition, we hope to develop proprietary tests that will allow for accurate
screening and early detection of various female and other genetic diseases.

NeoGenomics was founded by Dr. Michael T. Dent in June of 2001. Dr. Dent is
the founder and primary physician of an OB/GYN practice in Southwest Florida. In
November of 2001, NeoGenomics became a publicly-traded company by reverse
merging into American Communications Enterprises, Inc, which was a shell
corporation at the time. During 2002, we assembled our initial staff and began
clinical testing operations. In 2003, we obtained new venture capital
sponsorship through Medical Venture Partners, LLC, a related entity, and moved
to a much larger, state-of-the art laboratory facility in Fort Myers, Florida.
In January 2005, we hired our President, Robert Gasparini. Mr. Gasparini has
considerable experience in building genetic and molecular laboratory companies.

Business of NeoGenomics

Services

We operate a medical testing and research laboratory located in Fort Myers,
Florida. We provide genetic and molecular testing services for the following
purposes:

o To find out if a person is a carrier of a certain disease.

o To learn if a person has an inherited predisposition to a certain
disease, like breast or ovarian cancer (also known as susceptibility
testing).

o To help expecting parents identify whether their unborn child will
have a genetic disease or disorder (prenatal testing).

o To confirm the diagnosis of certain diseases or disorders (for
example, leukemia and Down Syndrome).

We currently offer three types of services: cytogenetics testing, molecular
biology testing and sponsored research services:

Cytogenetics Testing. Cytogenetics testing is routinely used to identify
genetic abnormalities in pregnancy, as well as hematologic cancers. Most of our
cytogenetics testing is chromosome analysis done through a process called
karyotyping, which is an analysis of the chromosomes in a single cell from one
individual. Currently, we offer the following types of cytogenetics tests, each
of which is performed on different types of biological samples: bone marrow

tests to assist in the diagnosis of leukemia and lymphoma, amniocentesis tests
to assist in the diagnosis of prenatal genetic anomalies such as Down syndrome,
products of conception tests to assist in determining the causes of miscarriage
during pregnancy, and various other specialty tests.

We believe that historically cytogenetics testing by large national
laboratories and other competitors has taken anywhere from 10-14 days on average
to obtain a complete diagnostic report. We believe that as a result of this,
many practitioners have refrained from ordering such tests because the results
traditionally were not returned within an acceptable diagnostic window. We have
designed our business operations in order to complete our cytogenetics tests for
most types of biological samples and produce a complete diagnostic report and
make it available electronically within 3-5 days. We believe these turnaround
times are among the best in the industry. Furthermore, we believe that as we
continue to demonstrate these turnaround times to customers and the awareness of
the benefits of cytogenetics testing continues to increase, more and more
practitioners will incorporate cytogenetics testing into their diagnostic
regimes and thus drive incremental growth in our business.

As an adjunct to traditional chromosome analysis, we offer Fluorescence In
Situ Hybridization (FISH) testing and flow cytometry testing to expand the
capabilities of routine chromosome analysis in cancer and prenatal testing. FISH
testing permits preliminary identification of the most frequently occurring
numerical chromosomal abnormalities in a relatively rapid manner. FISH, was
originally used as an additional staining method (the colorization of
chromosomes to highlight markers and abnormalities) for metaphase analysis
(cells in a divided state after they are cultured), but is now being applied to
interphase chromosome analysis (uncultured, single cells). During the past 5
years, FISH testing has begun to demonstrate its considerable diagnostic
potential. The development of molecular probes by using DNA sequences of
differing sizes, complexity, and specificity, coupled with technological
enhancements (direct labeling, multicolor probes, computerized signal
amplification, and image analysis) make FISH a powerful investigative and
diagnostic tool. Although FISH has great potential in a variety of cytogenetics
studies, particular attention has been focused on its use in prenatal diagnosis
of chromosomal anomalies, because of the speed with which results are attainable
(traditional amniocentesis tests take 7-10 days to complete).

Molecular Biology Testing. Molecular biology testing involves testing DNA
and other molecular structures to screen for and diagnose single gene disorders
such as cystic fibrosis and Tay-Sachs disease as well as hematological cancers.
Today there are tests for about 450 genetic diseases. However, the majority of
these tests remain available only to research laboratories and are only offered
on a limited basis to family members of someone who has been diagnosed with a
genetic condition. About 50 genetic tests are more widely available for clinical
use. We currently provide these tests on an outsourced basis. We anticipate in
the near future performing these tests within our facility as the number of
requests we receive for these types of tests continues to increase and we expand
our clinical staff. Molecular biology testing is a growing market with many new
diagnostic tests being developed every year. The Company is committed to
providing the latest and most accurate testing to its clients, where demand
warrants it.

Sponsored Research. The planned focus of our research initiatives is on the
underlying genetic causes of female diseases. Cancers and other diseases of the
ovary, uterus, cervix, and breast all have an underlying genetic basis.
Identifying the genetic sequences unique to these diseases will allow us to
develop tests to identify which individuals are at increased genetic risk of
developing these diseases. We plan to collaborate with pharmaceutical and other

healthcare companies to develop intellectual property that can be a source of
revenue. In addition, we hope to develop proprietary tests that will allow for
accurate screening and early detection of various female and other genetic
diseases. In order to facilitate our research initiatives, we have formed
alliances with Naples Women's Center, Naples Community Hospital, and Florida
Gynecologic Oncology for the purpose of collecting blood and tissue study
samples to perform research projects and help identify bio-markers for the
underlying presence of disease states. We plan to begin collecting such samples
during 2005.

Bio-markers are unique sequences of proteins which categorically indicate
the presence of a disease condition and provide a mechanism for measuring the
severity of the condition. In the event we are able to discover disease specific
bio-markers, we believe that we can develop tests that will verify and quantify
the relevant disease states. We believe such tests would have a potentially wide
application for obstetricians and gynecologists worldwide to help them reduce
risks to both mother and baby. We have purchased a protein chip mass
spectrometer to facilitate our discovery of potential proteins that may be
associated with such female diseases.

Target Markets and Customers

We have initially targeted all oncologists in southern and central Florida
that perform bone marrow sampling. Recently, we started serving clients outside
of Florida. In addition, we are currently servicing a few select obstetricians
that perform amniocentesis testing. We intend to continue to expand our client
base in this area over the next six months and to gradually expand our market
presence into northern Florida and continue our expansion along the East Coast.
Within this geography, we currently serve the following types of testing
markets:

Cancer Testing: Historically, the majority of cytogenetics testing has been
performed on bone marrow samples in testing for leukemia and lymphomas. Cells
obtained from bone marrow are grown in culture and used to determine if certain
genetic anomalies exist in patients with leukemia. This information is used to
determine the nature of the cancer and determine an appropriate treatment
regimen. In addition to cytogenetics testing, oncologists routinely use flow
cytometry of bone marrow samples to diagnose cancers. Flow cytometry is a method
of separating blood into its different cell types. This methodology is used to
determine what cell types within the blood of leukemia and cancer patients is
abnormal. Flow cytometry is important in developing an accurate diagnosis and
defining what treatment options are best for specific patients. The combination
of the two types of tests allows the findings from one test to confirm the
findings of another test, which leads to an even more accurate diagnosis.

The Company currently offers cytogenetics testing and flow cytometry
testing. Management believes that by offering both of these tests together as a
bundled product while maintaining its industry leading turnaround times, the
Company can increase its testing volumes and its average revenue per case.
Management estimates that flow cytometry tests are performed on approximately
2-3 times as many bone marrow samples as are cytogenetics tests. Furthermore, we
believe that many of the local oncologists that send samples to us for
cytogenetics testing would welcome the convenience of having a local laboratory
perform both types of tests. Thus we believe that by offering flow cytometry we
can derive significant increases in our testing volumes through our existing
customer base, thereby affording the Company significant synergies and
efficiencies in our sales and marketing process.

Prenatal Testing: A prenatal genetic test is an optional medical test
available to women who are considered to be at increased risk for having
children with a chromosomal abnormality or an inherited genetic condition.
Prenatal testing is often used to look for conditions such as Down Syndrome,
spina bifida, cystic fibrosis, Tay-Sachs disease and others that would show up

in early childhood. Two procedures are used in prenatal testing. Amniocentesis,
which involves taking a sample of amniotic fluid from the womb for analysis, can
be done during the 16th through 20th weeks of pregnancy. Another procedure,
chorionic villus sampling (CVS), can be done earlier, at nine to 12 weeks.
Currently these tests carry a risk of miscarriage. Depending on the mother's age
and other factors, amniocentesis causes miscarriage in between 1 in 200 and 1 in
400 cases, and CVS has a risk of 1 in 100. We believe that new non-invasive
genetic tests will be developed over the next 3-5 years that will significantly
reduce this risk of miscarriage and that prenatal genetic testing will increase
as a result. In fact, as part of the Company's planned research initiatives, we
are exploring whether to conduct research in support of developing a
non-invasive amniocentesis test, which we believe could virtually eliminate
miscarriage as a result of this type of test.

Historically, prenatal testing is offered to pregnant women over age 35
they have increased risks of having children with chromosomal abnormalities. For
example, a 35-year-old woman has about a 1 in 200 chance of having a baby with a
chromosomal abnormality like Down syndrome. A 40-year-old woman has closer to 1
in 50 chance. Current advances in genetic research make it possible to determine
more and more conditions through prenatal testing, and we expect more
institutional sponsorship of such prenatal testing in the coming years.

In addition to oncologists and obstetricians, we have identified the
following other potential customers for our cytogenetics and molecular biology
testing services:

1. Local perinatologists (specialists in high-risk pregnancies) and
genetic counselors;
2. Hospitals needing karyotyping performed on tissue and blood samples;
3. Hematologists who need the use of diagnostic molecular biology,
cytogenetics testing and flow cytometry testing.
4. Regional reference labs or other larger laboratory companies that can
benefit by our industry leading turnaround times and/or by bundling
our services with their own in order to offer a more complete menu of
services.

Distribution Methods

The Company performs all of its genetic testing at its clinical laboratory
facility located in Fort Myers, Florida, and then produces a report for the
requesting practitioner. The Company currently out sources all of its molecular
biology testing to third parties, but expects to begin bringing some of this
testing in-house during the coming year.

Competition

We are engaged in segments of the medical testing laboratory industry that
are competitive. Competitive factors in the genetic and molecular biology
testing business generally include reputation of the laboratory, range of
services offered, pricing, convenience of sample collection and pick-up, quality
of analysis and reporting and timeliness of delivery of completed reports.

Our competitors in the United States are numerous and include major medical
testing laboratories and biotechnology research companies. Many of these
competitors have more extensive research and development, regulatory, and
production capabilities. Many competitors have greater financial resources.

These companies may succeed in developing products and services that are more
effective than any that we have or may develop and may also prove to be more
successful than we are in marketing such products and services. In addition,
technological advances or different approaches developed by one or more of our
competitors may render our products obsolete, less effective or uneconomical.

We estimate that the United States market for cytogenetics and molecular
biology testing is divided among approximately 300 laboratories, many of which
offer both types of testing. Of this total group, less than 20 laboratories
market their services nationally. We believe that the industry as a whole is
still quite fragmented, with the top 20 laboratories accounting for
approximately 50% of market revenues.

Currently there are no other cytogenetics and molecular biology testing
facilities in the Southwest Florida region. Most large labs currently have their
customers in this area send their samples via an express mail service to
regional centers, which can be as far away as California. We intend to gain a
significant market presence in the Southwest Florida region by offering faster
turnaround times due to the proximity to our customers and high-quality test
reports. In addition, we are in the process of developing a fully integrated and
interactive web site that will enable us to report real time results to
customers in a secure environment.

Suppliers

The Company orders its laboratory and research supplies from large national
laboratory supply companies such as Fisher Scientific, Inc. and Physicians Sales
and Service Corp. and does not believe any disruption from any one supplier
would have a material effect on its business.

Dependence on Major Customers

We currently market our services to major hospitals and doctor's practices
in southern and central Florida as well as selected other accounts on the East
Coast. During 2004, we performed 1,152 individual cytogenetics and molecular
biology tests. Approximately 91% of these tests were performed on bone marrow
specimens. In addition, approximately 16.6% of our total tests were ordered by
Doctors with patients in the Naples Community Hospital system. In the event the
Naples Community Hospital system started offering a competing cytogenetics test
capability in-house that could match our turnaround times at a competitive
price, we would potentially lose a significant percentage of our revenues. -

Trademarks

Our NeoGenomics logo has been trademarked with the United States Patent and
Trademark Office.

Number of Employees

As of March 31, 2005, we had nine employees, all of which were full-time
employees. In addition, our principal financial officer, acting chief operating
officer, laboratory director and our pathologist serve as consultants to the
Company on a part-time basis. Unions represent none of our employees and we
believe our employee relations are good.

Government Regulation

Our business is subject to government regulation at the federal, state and
local levels, some of which regulations are described under "Laboratory
Operations," "Anti-Fraud and Abuse," "Confidentiality of Health Information,"
"Food and Drug Administration" and "Other" below.

Laboratory Operations

Cytogenetics and, Molecular Biology Testing. The Company's laboratory is
located in the state of Florida. Our laboratory has obtained certification under
the federal Medicare program, the Clinical Laboratories Improvement Act of 1967,
as amended by the Clinical Laboratory Improvement Amendments of 1988
(collectively, "CLIA `88"), and the respective clinical laboratory licensure
laws of the state of Florida, where such licensure is required. The Clinical
Laboratories Improvement Act provides for the regulation of clinical
laboratories by the U.S. Department of Health and Human Services. Regulations
promulgated under the federal Medicare guidelines, the CLIA and the clinical
laboratory licensure laws of the state of Florida affect our genetics
laboratory.

The federal and state certification and licensure programs establish
standards for the operation of medical laboratories, including, but not limited
to, personnel and quality control. Compliance with such standards is verified by
periodic inspections by inspectors employed by federal or state regulatory
agencies. In addition, federal regulatory authorities require participation in a
proficiency testing program approved by HHS for many of the specialties and
subspecialties for which a laboratory seeks approval from Medicare or Medicaid
and certification under CLIA `88. Proficiency testing programs involve actual
testing of specimens that have been prepared by an entity running an approved
program for testing by a laboratory.

A final rule implementing CLIA `88, published by HHS on February 28, 1992,
became effective September 1, 1992. This rule has been revised on several
occasions and further revision is expected. The CLIA `88 rule applies to
virtually all clinical laboratories in the United States, including our
laboratory. We have reviewed our operations as they relate to CLIA `88,
including, among other things, the CLIA `88 rule's requirements regarding
laboratory administration, participation in proficiency testing, patient test
management, quality control, quality assurance and personnel for the types of
testing we undertake, and believe we are in compliance with these requirements.
Our laboratory may not pass inspections conducted to ensure compliance with CLIA
`88 or with any other applicable licensure or certification laws. The sanctions
for failure to comply with CLIA `88 or state licensure requirements might
include the inability to perform services for compensation or the suspension,
revocation or limitation of the labs' CLIA `88 certificate or state license, as
well as civil and/or criminal penalties.

Regulation of Genetic Testing. In 2000, the Secretary of Health and Human
Services Advisory Committee on Genetic Testing published recommendations for
increased oversight by the Centers for Disease Control and the FDA for all
genetic testing. This committee continues to meet and discuss potential
regulatory changes, but no additional formal recommendations have been issued.

With respect to genetic therapies, which may become part of our business in
the future, in addition to FDA requirements, the National Institutes of Health
has established guidelines providing that transfers of recombinant DNA into
human subjects at NIH laboratories or with NIH funds must be approved by the NIH
Director. The NIH has established the Recombinant DNA Advisory Committee to
review gene therapy protocols. Although we do not currently offer any gene
therapy services, if we decide to enter this business in the future, we would
expect that all of our gene therapy protocols will be subject to review by the
Recombinant DNA Advisory Committee.

Anti-Fraud and Abuse Laws

Existing federal laws governing Medicare and Medicaid, as well as some
other state and federal laws, also regulate certain aspects of the relationship
between healthcare providers, including clinical and anatomic laboratories, and
their referral sources, including physicians, hospitals and other laboratories.
One provision of these laws, known as the "anti-kickback law," contains
extremely broad proscriptions. Violation of this provision may result in
criminal penalties, exclusion from Medicare and Medicaid, and significant civil
monetary penalties.

In January 1990, following a study of pricing practices in the clinical
laboratory industry, the Office of the Inspector General ("OIG") of HHS issued a
report addressing how these pricing practices relate to Medicare and Medicaid.
The OIG reviewed the industry's use of one fee schedule for physicians and other
professional accounts and another fee schedule for patients/third-party payers,
including Medicare, in billing for testing services, and focused specifically on
the pricing differential when profiles (or established groups of tests) are
ordered.

Existing federal law authorizes the Secretary of HHS to exclude providers
from participation in the Medicare and Medicaid programs if they charge state
Medicaid programs or Medicare fees "substantially in excess" of their "usual
charges." On September 2, 1998, the OIG issued a final rule in which it
indicated that this provision has limited applicability to services for which
Medicare pays under a Prospective Payment System or a fee schedule, such as
anatomic pathology services and clinical laboratory services. In several
Advisory Opinions, the OIG has provided additional guidance regarding the
possible application of this law, as well as the applicability of the
anti-kickback laws to pricing arrangements. The OIG concluded in a 1999 Advisory
Opinion that an arrangement under which a laboratory offered substantial
discounts to physicians for laboratory tests billed directly to the physicians
could potentially trigger the "substantially in excess" provision and might
violate the anti-kickback law, because the discounts could be viewed as being
provided to the physician in exchange for the physician's referral to the
laboratory of non-discounted Medicare business, unless the discounts could
otherwise be justified. The Medicaid laws in some states also have prohibitions
related to discriminatory pricing.

Under another federal law, known as the "Stark" law or "self-referral
prohibition," physicians who have an investment or compensation relationship
with an entity furnishing clinical laboratory services (including anatomic
pathology and clinical chemistry services) may not, subject to certain
exceptions, refer clinical laboratory testing for Medicare patients to that
entity. Similarly, laboratories may not bill Medicare or Medicaid or any other
party for services furnished pursuant to a prohibited referral. Violation of
these provisions may result in disallowance of Medicare and Medicaid claims for
the affected testing services, as well as the imposition of civil monetary
penalties. Some states also have laws similar to the Stark law.

We will seek to structure our arrangements with physicians and other
customers to be in compliance with the anti-kickback, Stark and state laws, and
to keep up-to-date on developments concerning their application by various
means, including consultation with legal counsel. However, we are unable to
predict how these laws will be applied in the future, and the arrangements into
which we enter could become subject to scrutiny thereunder.

In February 1997 (as revised in August 1998), the OIG released a model
compliance plan for laboratories that is based largely on corporate integrity
agreements negotiated with laboratories that had settled enforcement action
brought by the federal government related to allegations of submitting false
claims. We have adopted aspects of the model plan that we deem appropriate to
the conduct of our business. This adoption may have an impact on the utilization
of our services.

Confidentiality

The Health Insurance Portability and Accountability Act of 1996 ("HIPAA")
contains provisions that affect the handling of claims and other patient
information that are, or have been, transmitted electronically. These
provisions, which address security and confidentiality of patient information as
well as the administrative aspects of claims handling, have very broad
applicability and they specifically apply to healthcare providers, which include
physicians and clinical laboratories. Rules implementing various aspects of
HIPAA are continuing to be developed. National standards for electronic
healthcare transactions were published by HHS on August 17, 2000. The
regulations establish standard data content and formats for submitting
electronic claims and other administrative health transactions. All healthcare
providers will be able to use the electronic format to bill for their services
and all health plans and providers will be required to accept standard
electronic claims, referrals, authorizations, and other transactions. Under the
regulation, all electronic claims transactions must follow a single standardized
format. All health plans, providers and clearinghouses had to comply with the
standards by October 2003. Failure to comply with this rule could result in
significant civil and/or criminal penalties. Despite the initial costs, the use
of uniform standards for all electronic transactions is leading to greater
efficiency in processing claims and in handling health care information.

On December 28, 2000, HHS published rules governing the use of individually
identifiable health information. The regulation protects certain health
information ("protected health information" or "PHI") transmitted or maintained
in any form or medium, and requires specific patient consent for the use of PHI
for purposes of treatment, payment or health care operations. For most other
uses or disclosures of PHI, the rule requires that covered entities (healthcare
plans, providers and clearinghouses) obtain a valid patient authorization. For
purposes of the criminal and civil penalties imposed under Title XI of the
Social Security Act, the current date for compliance is 2003. Complying with the
Standards, Security and Privacy rules under HIPAA requires significant effort

and expense for virtually all entities that conduct healthcare transactions
electronically and handle patient health information. We believe we are in
compliance with applicable HIPAA regulations regarding the confidentiality of
protected health information.

In addition to the HIPAA rules described above, we are subject to state
laws regarding the handling and disclosure of patient records and patient health
information. These laws vary widely, and many states are passing new laws in
this area. Penalties for violation include sanctions against a laboratory's
licensure as well as civil or criminal penalties. We believe we are in
compliance with applicable state law regarding the confidentiality of health
information.

Food and Drug Administration

The FDA does not currently regulate laboratory testing services, which is
our principal business. However, we plan to perform some testing services using
test kits purchased from manufacturers for which FDA premarket clearance or
approval for commercial distribution in the United States has not been obtained
by the manufacturers ("investigational test kits"). Under current FDA
regulations and policies, such investigational test kits may be sold by
manufacturers for investigational use only if certain requirements are met to
prevent commercial distribution. The manufacturers of these investigational test
kits are responsible for marketing them under conditions meeting applicable FDA
requirements. In January 1998, the FDA issued a revised draft Compliance Policy
Guide ("CPG") that sets forth FDA's intent to undertake a heightened enforcement
effort with respect to investigational test kits improperly commercialized prior
to receipt of FDA premarket clearance or approval. That draft CPG is not
presently in effect but, if implemented as written, would place greater
restrictions on the distribution of investigational test kits. If we were to be
substantially limited in or prevented from purchasing investigational test kits
by reason of the FDA finalizing the new draft CPG, there could be an adverse
effect on our ability to access new technology, which could have a material
adverse effect on our business.

We also may perform some testing services using reagents, known as analyte
specific reagents ("ASRs"), purchased from companies in bulk rather than as part
of a test kit. In November 1997, the FDA issued a new regulation placing
restrictions on the sale, distribution, labeling and use of ASRs. Most ASRs are
treated by the FDA as low risk devices, requiring the manufacturer to register
with the agency, list it's ASRs (and any other devices), conform to good
manufacturing practice requirements, and comply with medical device reporting of
adverse events.

A smaller group of ASRs, primarily those used in blood banking and/or
screening for fatal contagious diseases (e.g., HIV/AIDS), are treated as higher
risk devices requiring premarket clearance or approval from the FDA before
commercial distribution is permitted. The imposition of this regulatory
framework on ASR sellers may reduce the availability or raise the price of ASRs
purchased by laboratories like ours. In addition, when we perform a test
developed in-house, using reagents rather than a test kit cleared or approved by
the FDA, we are required to disclose those facts in the test report. However, by
clearly declining to impose any requirement for FDA premarket approval or
clearance for most ASRs, the rule removes one barrier to reimbursement for tests
performed using these ASRs. We have no plans to perform testing in these high
risk areas.

Other

Our operations currently are, or may be in the future, subject to various
federal, state and local laws, regulations and recommendations relating to data
protection, safe working conditions, laboratory and manufacturing practices and
the purchase, storage, movement, use and disposal of hazardous or potentially
hazardous substances used in connection with our research work and manufacturing
operations, including radioactive compounds and infectious disease agents.
Although we believe that our safety procedures comply with the standards
prescribed by federal, state and local regulations, the risk of contamination,
injury or other accidental harm cannot be eliminated completely. In the event of
an accident, we could be held liable for any damages that result and any
liabilities could exceed our resources. Failure to comply with such laws could
subject an entity covered by these laws to fines, criminal penalties and/or
other enforcement actions.

Pursuant to the Occupational Safety and Health Act, laboratories have a
general duty to provide a work place to their employees that is safe from
hazard. Over the past few years, the Occupational Safety and Health
Administration ("OSHA") has issued rules relevant to certain hazards that are
found in the laboratory. In addition, OSHA has promulgated regulations
containing requirements healthcare providers must follow to protect workers from
blood borne pathogens. Failure to comply with these regulations, other
applicable OSHA rules or with the general duty to provide a safe work place
could subject employers, including a laboratory employer such as the Company, to
substantial fines and penalties.

Risk Factors

We are subject to various risks that may materially harm our business,
financial condition and results of operations. An investor should carefully
consider the risks and uncertainties described below and the other information
in this filing before deciding to purchase our common stock. If any of these
risks or uncertainties actually occurs, our business, financial condition or
operating results could be materially harmed. In that case, the trading price of
our common stock could decline or we may be forced to cease operations.

We Have A Limited Operating History Upon Which You Can Evaluate Our Business

The Company commenced revenue operations in 2002 and is just beginning to
generate meaningful revenue. Accordingly, the Company has a limited operating
history upon which an evaluation of the Company and its prospects can be based.
The Company and its prospects must be considered in light of the risks, expenses
and difficulties frequently encountered by companies in the rapidly evolving
market for healthcare and medical laboratory services. To address these risks,
the Company must, among other things, respond to competitive developments,
attract, retain and motivate qualified personnel, implement and successfully
execute its sales strategy, develop and market additional services, and upgrade

its technological and physical infrastructure in order to scale its revenues.
The Company may not be successful in addressing such risks. The limited
operating history of the Company makes the prediction of future results of
operations difficult or impossible. The Company currently expects to
significantly increase its operating expenses to expand its operations. As a
result of the foregoing factors, the Company expects that it may incur losses
for at least the next twelve months and, depending on the success of the
Company's products and services in the marketplace, for potentially an even
longer period.

We May Not Be Able To Implement The Company's Business Strategies Which Could
Impair Our Ability to Continue Operations

Implementation of the Company's business strategies will depend in large
part on the Company's ability to (i) attract a significant number of customers;
(ii) effectively introduce acceptable products and services to the Company's
customers; (iii) obtain adequate financing on favorable terms to fund the
Company's business strategies; (iv) maintain appropriate procedures, policies,
and systems; (v) hire, train, and retain skilled employees; (vi) continue to
operate with increasing competition in the medical laboratory industry; (vii)
establish, develop and maintain name recognition; and (viii) establish and
maintain beneficial relationships with third-party insurance providers and other
third party payers. The Company's inability to obtain or maintain any or all
these factors could impair its ability to implement its business strategies
successfully, which could have material adverse effect on its results of
operations and financial condition.

We May Be Unsuccessful In Managing Our Growth Which Could Prevent the Company
From Becoming Profitable

While it may not be realized, the Company is planning for significant
growth for the foreseeable future. The Company's growth may place a significant
strain on the Company's management, financial, and operating resources. Failure
to manage this growth effectively could have a material adverse effect on the
Company's financial condition or results of operations. Part of the Company's
business strategy may be to acquire assets or other companies that will
complement the Company's existing business. The Company is unable to predict
whether or when any material transaction will be completed should negotiations
commence. If the Company proceeds with any such transaction, the Company may not
effectively integrate the acquired operations with the Company's own operations.
The Company may also seek to finance any such acquisition by debt financings or
issuances of equity securities and such financing may not be available on
acceptable terms or at all.

We May Incur Greater Costs Than Anticipated, Which Could Result in Sustained
Losses

The Company used reasonable efforts to assess and predict the expenses
necessary to pursue its business plan. However, implementing the Company's
business plan may require more employees, capital equipment, supplies or other
expenditure items than management has predicted. Similarly, the cost of
compensating additional management, employees and consultants or other operating
costs may be more than Company estimates, which could result in sustained
losses.

We May Face Fluctuations in Results of Operations Which Could Negatively Affect
Our Business Operations and We are Subject to Seasonality in our Business

As a result of the Company's limited operating history and the relatively
limited information available on the Company's competitors, the Company may not
have sufficient internal or industry-based historical financial data upon which
to calculate anticipated operating expenses. Management expects that the
Company's results of operations may also fluctuate significantly in the future
as a result of a variety of factors, including, but not limited to, (i) the
continued rate of growth, usage and acceptance of the Company's products and
services; (ii) demand for the Company's products and services; (iii) the
introduction and acceptance of new or enhanced products or services by us or by
competitors; (iv) the Company's ability to anticipate and effectively adapt to
developing markets and to rapidly changing technologies; (v) the Company's
ability to attract, retain and motivate qualified personnel; (vi) the
initiation, renewal or expiration of significant contracts with the Company's
major clients; (vii) pricing changes by us, our suppliers or our competitors;
(viii) seasonality; and (ix) general economic conditions and other factors.
Accordingly, future sales and operating results are difficult to forecast. The
Company's expenses are based in part on the Company's expectations as to future
revenues and to a significant extent are relatively fixed, at least in the
short-term. The Company may not be able to adjust spending in a timely manner to
compensate for any unexpected revenue shortfall. Accordingly, any significant
shortfall in relation to the Company's expectations would have an immediate
adverse impact on the Company's business, results of operations and financial
condition. In addition, the Company may determine from time to time to make
certain pricing or marketing decisions or acquisitions that could have a
short-term material adverse effect on the Company's business, results of
operations and financial condition and may not result in the long-term benefits
intended. Furthermore, in Florida, currently our primary referral market for lab
tests, a meaningful percentage of the population returns to homes in the
Northern U.S. to avoid the hot summer months. This results in seasonality in our
business. We estimate that our operating results during the second and third
quarter of each year will be somewhat impacted by these seasonality factors
until such time as we can generate more clients from outside of Florida. Because
of all of the foregoing factors, the Company's operating results could be less
than the expectations of investors in future periods.

We Substantially Depend Upon Third Parties for Payment of Services, Which Could
Have A Material Adverse Affect On Our Cash Flows And Results Of Operations

The Company is a clinical medical laboratory that provides medical testing
services to doctors and hospitals on patient specimens that are sent to the
Company. In the case of most specimen referrals that are received from patients
that are not in-patients at a hospital or institution, the Company generally has
to bill the patient's insurance company or a government program for its
services. As such it relies on the cooperation of numerous third party payers,
including but not limited to Medicare, Medicaid and various insurance companies,
in order to get paid for performing services on behalf of the Company's clients.
Wherever possible, the amount of such third party payments is governed by
contractual relationships in cases where the Company is a participating provider
for a specified insurance company or by established government reimbursement
rates in cases where the Company is an approved provider for a government
program such as Medicare. However, the Company does not have a contractual

relationship with many of the insurance companies with whom it deals, nor is it
necessarily able to become an approved provider for all government programs. In
such cases, the Company is deemed to be a non-participating provider and there
is no contractual assurance that the Company is able to collect the amounts
billed to such insurance companies or government programs. Currently, the
Company is not a participating provider with the majority of the insurance
companies it bills for its services. Until such time as the Company becomes a
participating provider with such insurance companies, there can be no
contractual assurance that the Company will be paid for the services it bills to
such insurance companies, and such third parties may change their reimbursement
policies for non-participating providers in a manner that may have a material
adverse affect on the Company's cash flow or results of operations.

Our Business Is Subject To Rapid Scientific Change, Which Could Have A Material
Adverse Affect On Our Operations

The market for genetic and molecular biology testing products and services
is characterized by rapid scientific developments, evolving industry standards
and customer demands, and frequent new product introductions and enhancements.
The Company's future success will depend in significant part on its ability to
continually improve its offerings in response to both evolving demands of the
marketplace and competitive product offerings, and the Company may be
unsuccessful in doing so.

The Market For Our Services Is Highly Competitive, Which Could Have A Material
Adverse Affect On Our Business, Results Of Operations And Financial Condition

The market for genetic and molecular biology testing services is highly
competitive and competition is expected to continue to increase. The Company
competes with other commercial medical laboratories in addition to the in-house
laboratories of many major hospitals. Many of the Company's existing competitors
have significantly greater financial, human, technical and marketing resources
than the Company. The Company's competitors may develop products and services
that are superior to those of the Company or that achieve greater market
acceptance than the Company's offerings. The Company may not be able to compete
successfully against current and future sources of competition or that the
competitive pressures faced by the Company will not have a material adverse
effect on the Company's business, results of operations and financial condition.

Our Failure to Manage Potential Growth May Impair Our Ability To Become
Profitable

The Company's recent growth has placed, and is expected to continue to
place, a significant strain on its managerial, operational and financial
resources. To manage its potential growth, the Company must continue to
implement and improve its operational and financial systems and to expand, train
and manage its employee base. Most of the Company's management has joined the
Company within the last twelve months or plans to join the Company shortly.
These individuals have not previously worked together and are in the process of
integrating as a management team. The Company may not be able to effectively
manage the expansion of its operations and the Company's systems, procedures or
controls may not be adequate to support the Company's operations. The Company's
management may not be able to achieve the rapid execution necessary to fully
exploit the market opportunity for the Company's products and services. Any
inability to manage growth could have a material adverse effect on the Company's
business, results of operations potential profitability and financial condition.

We Face The Risk of Capacity Constraints, Which Could Have A Material Adverse
Affect On Our Business, Results Of Operations And Financial Condition

We compete in the market place primarily on three factors: a) the quality
and accuracy of our test results; b) the speed or turn-around times of our
testing services; and c) our ability to provide after-test support to those
physicians requesting consultation. Any unforeseen increase in the volume of
customers could strain the capacity of our personnel and systems, which could

lead to inaccurate test results, unacceptable turn-around times, or customer
service failures. In addition, as the number of customers and cases increases,
the Company's products, services, and infrastructure may not be able to scale
accordingly. Any failure to handle higher volume of requests for the Company's
products and services could lead to the loss of established customers and have a
material adverse effect on the Company's business, results of operations and
financial condition.

If we produce inaccurate test results, our customers may choose not to use
us in the future. This could severally harm our operations. In addition, based
on the importance of the subject matter of our tests, inaccurate results could
result in improper treatment of patients, and potential liability for the
Company.

We May Fail to Deliver Timely Results to Customers, Which Could Have A Material
Adverse Affect On Our Business, Results Of Operations And Financial Condition

The Company's operations are dependent in part upon its ability to protect
its laboratory operations against physical damage from fire, floods, hurricanes,
earthquakes, power loss, telecommunications failures, break-ins and similar
events. The Company does not presently have redundant, multiple site capacity in
the event of any such occurrence, nor does it have an emergency back-up
generator in place at its main laboratory location that can mitigate the effects
of a prolonged power outage. The occurrence of any of these events could result
in interruptions, delays or cessations in service to Customers, which could have
a material adverse effect on the Company's business, results of operations and
financial condition.

The Steps Taken By The Company To Protect Its Proprietary Rights May Not Be
Adequate

The Company regards its copyrights, trademarks, trade secrets and similar
intellectual property as critical to its success, and the Company relies upon
trademark and copyright law, trade secret protection and confidentiality and/or
license agreements with its employees, customers, partners and others to protect
its proprietary rights. The steps taken by the Company to protect its
proprietary rights may not be adequate or that third parties will not infringe
or misappropriate the Company's copyrights, trademarks, trade dress and similar
proprietary rights. In addition, other parties may assert infringement claims
against the Company.

We are Dependent on Key Personnel and Need to Hire Additional Qualified
Personnel

The Company's performance is substantially dependent on the performance of
its senior management and key technical personnel. In particular, the Company's
success depends substantially on the continued efforts of its senior management
team, which currently is composed of a small number of individuals who only
recently joined the Company. The Company does not carry key person life
insurance on any of its senior management personnel. The loss of the services of
any of its executive officers, its laboratory director or other key employees
could have a material adverse effect on the business, results of operations and
financial condition of the Company.

The Company's future success also depends on its continuing ability to
attract and retain highly qualified technical and managerial personnel.
Competition for such personnel is intense and the Company may not be able to
retain its key managerial and technical employees or that it will be able to
attract and retain additional highly qualified technical and managerial

personnel in the future. The inability to attract and retain the necessary
technical and managerial personnel could have a material and adverse effect upon
the Company's business, results of operations and financial condition.

The Failure to Obtain Necessary Additional Capital to Finance Growth and Capital
Requirements, Could Adversely Affect The Company's Business, Financial Condition
and Results of Operations

The Company anticipates that it will require additional capital to meet its
business plan. Additionally, the Company may seek to exploit business
opportunities that require more capital than what is currently planned. In the
event the Company's existing credit facility is not sufficient to meet its
capital needs, the Company may be forced to raise additional capital from equity
or debt sources. The Company may not be able to raise such capital on favorable
terms or at all. If the Company is unable to obtain such additional capital, the
Company may be required to reduce the scope of its anticipated expansion, which
could adversely affect the Company's business, financial condition and results
of operations.

The Failure to Comply With Significant Government Regulation and Laboratory
Operations May Subject The Company to Liability, Penalties or Limitation of
Operations

As discussed in the Government Regulation section of our business
description, the Company is subject to extensive state and federal regulatory
oversight. Our laboratory may not pass inspections conducted to ensure
compliance with CLIA `88 or with any other applicable licensure or certification
laws. The sanctions for failure to comply with CLIA `88 or state licensure
requirements might include the inability to perform services for compensation or
the suspension, revocation or limitation of the labs' CLIA `88 certificate or
state license, as well as civil and/or criminal penalties. In addition, any new
legislation or regulation or the application of existing laws and regulations in
ways that we don't anticipate could have a material adverse effect on the
Company's business, results of operations and financial condition.

In addition, existing federal laws governing Medicare and Medicaid, as well
as some other state and federal laws, also regulate certain aspects of the
relationship between healthcare providers, including clinical and anatomic
laboratories, and their referral sources, including physicians, hospitals and
other laboratories. Certain provision of these laws, known as the "anti-kickback
law" and the "Stark Laws", contain extremely broad proscriptions. Violation of
these laws may result in criminal penalties, exclusion from Medicare and
Medicaid, and significant civil monetary penalties. We will seek to structure
our arrangements with physicians and other customers to be in compliance with
the anti-kickback, Stark and state laws, and to keep up-to-date on developments
concerning their application by various means, including consultation with legal
counsel. However, we are unable to predict how these laws will be applied in the
future and the arrangements into which we enter may become subject to scrutiny
thereunder.

Furthermore, the Health Insurance Portability and Accountability Act of
1996 ("HIPAA") and other state laws contains provisions that affect the handling
of claims and other patient information that are, or have been, transmitted
electronically and regulate the general disclosure of patient records and
patient health information. These provisions, which address security and
confidentiality of patient information as well as the administrative aspects of
claims handling, have very broad applicability and they specifically apply to
healthcare providers, which include physicians and clinical laboratories. While
we believe we have complied with the Standards, Security and Privacy rules under
HIPAA and state laws, an audit of our procedures and systems could find

deficiencies. Such deficiencies, if found, could have a material adverse effect
on the Company's business, results of operations and financial condition and
subject us to liability.

We Are Subject to Security Risks Which Could Harm Our Operations

Despite the implementation of various security measures by the Company, the
Company's infrastructure is vulnerable to computer viruses, break-ins and
similar disruptive problems caused by its customers or others. Computer viruses,
break-ins or other security problems could lead to interruption, delays or
cessation in service to the Company's customers. Further, such break-ins whether
electronic or physical could also potentially jeopardize the security of
confidential information stored in the computer systems of the Company's
customers and other parties connected through the Company, which may deter
potential customers and give rise to uncertain liability to parties whose
security or privacy has been infringed. A significant security breach could
result in loss of customers, damage to the Company's reputation, direct damages,
costs of repair and detection, and other expenses. The occurrence of any of the
foregoing events could have a material adverse effect on the Company's business,
results of operations and financial condition.

The Company Is Controlled by Existing Shareholders And Therefore Other
Shareholders Will Not Be Able to Direct The Company

The majority of the Company's shares and thus voting control of the Company
is held by a relatively small group of shareholders. Because of such ownership,
those shareholders will effectively retain control of the Company's Board of
Directors and determine all of the Company's corporate actions. In addition, the
Company and shareholders owning 15,651,030 shares, or approximately 71% of the
Company's shares outstanding as of April 15, 2005 have executed a Shareholders'
Agreement that, among other provisions, gives Aspen Select Healthcare, LP, our
largest shareholder, the right to elect three out of the seven directors
authorized for our Board, and nominate one mutually acceptable independent
director. Accordingly, it is anticipated that Aspen Select Healthcare, LP and
other parties to the Shareholders' Agreement will continue to have the ability
to elect a controlling number of the members of the Company's Board of Directors
and the minority shareholders of the Company may not be able to elect a
representative to the Company's Board of Directors. Such concentration of
ownership may also have the effect of delaying or preventing a change in control
of the Company.

No Foreseeable Dividends

The Company does not anticipate paying dividends on its common shares in
the foreseeable future. Rather, the Company plans to retain earnings, if any,
for the operation and expansion of Company business.

There Is No Guarantee of Registration Exemption for Recently Completed Sales of
Unregistered Stock, Which Could Result In The Liquidation of the Company

Over the last twelve months, the Company has sold approximately 3.5 million
shares of unregistered stock in various private placements to accredited
investors. These sales were made in reliance upon the "private placement"
exemption from registration provided by Section 4(2) of the Securities Act of
1933, as amended, and Rule 506 of Regulation D promulgated pursuant thereto.
Reliance on this exemption does not, however, constitute a representation or
guarantee that such exemption is indeed available.

If for any reason these sales are deemed to be a public offering of the
Company's shares (and if no other exemption from registration is available), the
sale of the offered shares would be deemed to have been made in violation of the
applicable laws requiring registration of the offered shares and the delivery of
a prospectus. As a remedy in the event of such violation, each purchaser of the
offered shares would have the right to rescind his or her purchase of the
offered shares and to have his or her purchase price returned. If such a
purchaser requests a return of his or her purchase price, funds might not be
available for that purpose. In that event, liquidation of the Company might be
required. Any refunds made would reduce funds available for the Company's
working capital needs. A significant number of requests for rescission would
probably cause the Company to be without funds sufficient to respond to such
requests or successfully to proceed with the Company's activities successfully.

The Company Does Not Have Any Specific Plans to Use Proceeds of Recently Sold
Securities And Therefore The Funds May Not Improve The Company's Operations

The Company has not designated any specific use for the net proceeds from
the recent sales by the Company of restricted equity securities or for the
proceeds received by the Company from advances under the Company's revolving
credit facility. Rather, the Company intends to use the net proceeds primarily
for general corporate purposes, including working capital and potential
investments in new revenue producing activities. Accordingly, management will
have significant flexibility in applying the net proceeds of such equity sales
or advances under the revolving credit facility and this application may not
increase revenue or otherwise lead to profitability.

ITEM 2. DESCRIPTION OF PROPERTY

Our laboratory and executive offices are located in a 5,200 square foot
facility at 12701 Commonwealth Drive, Suite 9, Fort Myers, FL 33913. We lease
this space from an unaffiliated third party under a three year lease agreement
on a month to month basis at a cost of approximately $6,300/month.

ITEM 3. LEGAL PROCEEDINGS

The Company is currently a defendant in one lawsuit from a former employee
relating to compensation related claims. The Company does not believe this
lawsuit is material to its operations or financial results and intends to
vigorously pursue its defense of the matter.

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

Not applicable.

PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is quoted on the OTC Bulletin Board. Set forth below is a table
summarizing the high and low bid quotations for our common stock during its last

two fiscal years adjusted for the 1:100 reverse stock split consummated on April
16, 2003. All other share references in this Form 10-KSB have also been adjusted
to reflect this 1:100 reverse stock split.

QUARTER HIGH BID LOW BID

1st Quarter 2004 $1.22 $0.05
2nd Quarter 2004 $0.74 $0.30
3rd Quarter 2004 $0.45 $0.20
4th Quarter 2004 $0.70 $0.18

1st Quarter 2003 $1.00 $0.35
2nd Quarter 2003 $0.55 $0.04
3rd Quarter 2003 $0.10 $0.06
4th Quarter 2003 $0.13 $0.045

The above table is based on over-the-counter quotations. These quotations
reflect inter-dealer prices, without retail mark-up, markdown or commissions,
and may not represent actual transaction. All historical data was obtained from
the BigCharts.com web site.

As of March 31, 2004 there were 359 stockholders of record of the common
stock. We have never declared or paid cash dividends on our common stock. We
intend to retain all future earnings to finance future growth and therefore, do
not anticipate paying any cash dividends in the foreseeable future.

Sales of Unregistered Securities

On January 3, 2005, we issued 27,288 shares of common stock under the
Company's 2003 Equity Incentive Plan to two employees of the Company in
satisfaction of $6,822 of accrued, but unpaid vacation.

On March 23, 2005, the Company entered into a Loan Agreement with Aspen
Select Healthcare, LP ("Aspen") to provide up to $1.5 million of indebtedness
pursuant to a credit facility (the "Credit Facility"). As part of the Credit
Facility transaction, the Company also issued to Aspen a five year Warrant to
purchase up to 2,500,000 shares of its common stock at an exercise price of
$0.50/share.

During the period January 1, 2005 to March 31, 2005, we sold 450,950 shares
of our common stock in a series of private placements at $0.30/share and
$0.35/share to unaffiliated third party investors. These transactions generated
net proceeds to the Company of approximately $146,000. These transactions
involved the issuance of unregistered stock to accredited investors in
transactions that we believed were exempt from registration under Rule 506
promulgated under the Securities Act of 1933.

Securities Authorized for Issuance Under Equity Compensation Plans (a)

Number of securities to be Weighted average exercise Number of securities
issued upon exercise of price of outstanding remaining available
Plan Category outstanding options, warrants options, warrants and for future issuance
and rights rights

Equity compensation plans
approved by security holders 882,329 $0.16 1,221,613

Equity compensation plans
not approved by security
holders N/A N/A N/A

Total 882,329 N/A 1,221,613

(a) As of December 31, 2004. Currently, the Company's 2003 Equity Incentive Plan
is the only equity compensation plan in effect.

ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Introduction.

The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements, and the Notes thereto included herein.
The information contained below includes statements of Company's or management's
beliefs, expectations, hopes, goals and plans that, if not historical, are
forward-looking statements subject to certain risks and uncertainties that could
cause actual results to differ materially from those anticipated in the
forward-looking statements. For a discussion on forward-looking statements, see
the information set forth in the Introductory Note to this Annual Report under
the caption "Forward Looking Statements", which information is incorporated
herein by reference.

Critical Accounting Policies

The preparation of financial statements in conformity with United States
generally accepted accounting principles requires our management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Our management routinely makes judgments and estimates about the effects of
matters that are inherently uncertain.

Our critical accounting policies are those where we have made difficult,
subjective or complex judgments in making estimates, and/or where these
estimates can significantly impact our financial results under different
assumptions and conditions. Our critical accounting policies are:

o Revenue Recognition
o Accounts Receivable

Revenue Recognition

Net revenues are recognized in the period when tests are performed and consist
primarily of net patient revenues that are recorded based on established billing
rates less estimated discounts for contractual allowances principally for
patients covered by Medicare, Medicaid and managed care and other health plans.
These revenues also are subject to review and possible audit by the payers. We
believe that adequate provision has been made for any adjustments that may
result from final determination of amounts earned under all the above
arrangements. There are no known material claims, disputes or unsettled matters
with any payers that are not adequately provided for in the accompanying
consolidated financial statements.

Accounts Receivable

We record accounts receivable net of estimated and contractual discounts. We
provide for accounts receivable that could become uncollectible in the future by
establishing an allowance to reduce the carrying value of such receivables to
their estimated net realizable value. We estimate this allowance based on the
aging of our accounts receivable and our historical collection experience for

each type of payer. Bad debts are charged off to the allowance account at the
time they are deemed uncollectible.

Results of Operations for the twelve months ended December 31, 2004 as compared
to the twelve months ended December 31, 2003

During the fiscal year ended December 31, 2004, our revenues increased
approximately 51% to $558,000 from $370,000 during the fiscal year ended
December 31, 2003, primarily as a result of attracting new customers to our
services and increasing the volume of services sold to existing customers.
During 2004, our cost of revenue increased approximately 20% to $577,000 from
$482,000 in 2003, primarily as a result of additional costs associated with
hiring more laboratory personnel to support our increased testing volumes as
well as increased costs as a result of opening new lines of business. This
resulted in a gross margin deficit of approximately $19,000 in 2004 versus a
gross margin deficit of approximately $112,000 for 2003. In percentage terms,
our gross margin deficit decreased from negative 30% of revenue in 2003 to
negative 3% of revenue in 2004. We expect our gross margin to improve
significantly and turn positive in 2005 as a result of our expected increase in
sales and as we begin to experience the benefit of economies of scale on our
costs.

During 2004, our general and administrative expenses increased by
approximately 86% to $711,000 from approximately $383,000 in 2003, primarily as
a result of higher personnel and personnel-related expenses associated with
increased levels of staffing. General and administrative expenses include all of
our overhead and technology expenses as well as the cost of our management and
sales personnel. Interest expense increased approximately 117% during 2004 to
$89,000 from $41,000 in 2003. Interest expense is mainly comprised of interest
payable on advances from our credit facility from MVP 3, LP, which have
increased to fund our losses.

As a result of the foregoing, our net loss increased by 53% or $283,000 to
$819,000 in 2004 from $536,000 in 2003. Our net loss per share was $0.04 for the
year ended December 31, 2004 and the year ended December 31, 2003.

During the twelve months ended December 31, 2004, our average revenue per
test increased by 8% from approximately $448 to approximately $484. Revenues per
test are a function of both the nature of the test and the payer (Medicare,
Medicaid, third party insurer, institutional client etc.). Our policy is to
record as revenue the amounts that we expect to collect based on published or
contracted amounts and/or prior experience with the payer. We have established a
reserve for uncollectible amounts based on estimates of what we will collect
from a) third-party payers with whom we do not have a contractual arrangement or
sufficient experience to accurately estimate the amount of reimbursement we will
receive, b) co-payments directly from patients, and c) those procedures that are
not covered by insurance or other third party payers. On December 31, 2004, our
Allowance for Doubtful Accounts reserve was approximately $8,700.

Liquidity and Capital Resources

During the fiscal year ended December 31, 2004, our operating activities
used approximately $658,000 in cash. This amount primarily represented cash used
to pay the expenses associated with our operations as well as fund our working
capital needs. We also spent approximately $86,000 on new equipment We were able

to finance operations and equipment purchases primarily through net advances on
our credit facility of approximately $91,000 and equity sales to third parties,
net of transaction expenses, of approximately $740,000. This resulted in net
cash from financing activities of approximately $832,000 for the year ended
December 31, 2004. At December 31, 2004 and April 13, 2005, we had cash or cash
equivalents of approximately $113,000, and $102,000 respectively.

On April 15, 2003, we entered into a revolving credit facility with MVP 3,
LP ("MVP 3"), a partnership controlled by certain of our shareholders. Under the
terms of the agreement MVP 3, LP agreed to make available up to $1.5 million of
debt financing with a stated interest rate of prime + 8% and such credit
facility had an initial maturity of March 31, 2005. At December 31, 2004, we
owed MVP 3, approximately $740,000 under this loan agreement, which is
classified as "Due to affiliates" under the current liabilities section of our
balance sheet. This obligation was repaid in full on March 23, 2005

On March 23, 2005, we entered into an agreement with Aspen Select
Healthcare, LP (formerly known as MVP 3, LP) to refinance our existing
indebtedness of $740,000 and provide for additional liquidity of up to $760,000
to the Company. Under the terms of the agreement, Aspen Select Healthcare, LP
("Aspen"), a Naples, Florida-based private investment fund will make available
up to $1.5 million of debt financing in the form of a revolving credit facility
(the "Credit Facility") with an initial maturity of March 31, 2007. Aspen is
managed by its General Partner, Medical Venture Partners, LLC, which is
controlled by a director of NeoGenomics.

Under the terms of the Credit Facility, we are able to borrow up to 80% of
"eligible" accounts receivable, 50% of our net furniture and equipment balance,
secured by substantially all of our assets, and up to $500,000 on an unsecured
basis until April 30, 2005 and up to $1,000,000 on an unsecured basis after
April 30, 2005. The interest rate on the Credit Facility is prime + 6.0%,
payable monthly in arrears. With respect to this agreement, we are subject to
the following restrictive covenants: (i) we are not to incur indebtedness
outside of this agreement in excess of $50,000 without written authorization of
Aspen, (ii) we cannot declare or pay any dividend on our common stock, and (iii)
we are also subject to other general covenants typical of an instrument of this
kind. As part of the Credit Facility transaction, the Company also issued to
Aspen a five year Warrant to purchase up to 2,500,000 shares of its common stock
at an exercise price of $0.50/share.

At the present time, we have limited cash resources. We do not anticipate
that we will generate significant cash flow from operating activities until late
2005. As a result, we anticipate that we will require approximately $200,000 to
$300,000 of additional working capital financing during the next twelve months
in order to meet our working capital requirements during this period. We
currently plan to finance our operations through borrowings under our Credit
Facility with Aspen. Advances under this Credit Facility are limited, at any
given time, based on a formula contained in the loan agreement. The Company may
not be eligible to obtain all of its working capital funding needs from Aspen or
another source. If the Company is unable to obtain such funding, the Company
will be required to curtail or discontinue operations.

Capital Expenditures

We currently forecast capital expenditures for the coming year in order to
execute on our business plan. The amount and timing of such capital expenditures
will be determined by the volume of business, but we currently anticipate that
we will need to purchase approximately $200,000 to $300,000 of additional
capital equipment during the next twelve months. We plan to fund these
expenditures through borrowings under our Credit Facility with Aspen and through

traditional lease financing from equipment lessors. We may not be eligible to
obtain all of our capital equipment funding needs from Aspen or another source.
If we are unable to obtain such funding, we will be required to curtail our
equipment purchases, which may have an impact on our ability to generate
revenues.

Recent Accounting Pronouncements - SFAS 123(R) `Share-Based Payments'

In December 2004, the Financial Accounting Standards Board issued Statement
Number 123 ("FAS 123 (R)"), Share-Based Payments. FAS 123 (R) requires all
entities to recognize compensation expense in an amount equal to the fair value
of shared-based payments such as stock options granted to employees. We will be
required to apply FAS 123 (R) on a modified prospective method. Under this
method, we are required to record compensation expense (as previous awards
continue to vest) for the unvested portion of previously granted awards that
remain outstanding at the date of adoption. In addition, we may elect to adopt
FAS 123 (R) by restating previously issued financial statements, basing the
amounts on the expense previously calculated and reported in the pro forma
disclosures that had been required by FAS 123. FAS 123 (R) is effective for the
first reporting period beginning after June 15, 2005, unless such date of
adoption is delayed by the SEC. We intend to adopt FAS 123(R) when it becomes
required to do so. Since the majority of options and warrants outstanding as of
December 31, 2004 were vested, we believe that the biggest impact from this
change in accounting treatment will come from expensing newly awarded options
and warrants.

Staffing

Currently, we have nine full-time employees and four part-time consultants.
During 2005, we plan to add additional laboratory technologists and laboratory
assistants to assist us in handling a greater volume of tests and to perform
sponsored research projects. In addition, we intend to continue building our
sales force in an effort to sustain our sales growth, as well as add personnel
in management, accounting, and administrative functions. The number of such
additional personnel and their salaries will be determined by the volume of
business we are generating and the availability of adequate financial resources
to pay the salaries of such personnel.

ITEM 7. FINANCIAL STATEMENTS

NEOGENOMICS, INC.

Consolidated Financial Statements as of
December 31, 2004 and for the years ended
December 31, 2004 and 2003 and
Report of Independent Registered Public Accounting Firm

INDEX TO FINANCIAL STATEMENTS

Page

Report of Independent Registered Public Accounting Firm 31

Consolidated Financial Statements:

Balance Sheet as of December 31, 2004. 32

Statements of Operations for the years ended December 31, 2004
and 2003. 33

Statements of Stockholders' Equity (Deficit) for the years ended
December 31, 2004 and 2003. 34

Statements of Cash Flows for the years ended December 31, 2004
and 2003. 35

Notes to Financial Statements 36

[Letterhead of Kingery & Crouse, P.A.]

REPORT INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and stockholders of NeoGenomics, Inc. and subsidiary:

We have audited the accompanying consolidated balance sheet of NeoGenomics, Inc.
and subsidiary (collectively the "Company"), as of December 31, 2004, and the
related consolidated statements of operations, stockholders' equity (deficit)
and cash flows for the years ended December 31, 2004 and 2003. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of December 31,
2004, and the results of its operations and its cash flows for the years ended
December 31, 2004 and 2003, in conformity with accounting principles generally
accepted in the United States of America.

Kingery & Crouse, P.A.

April 14, 2005
Tampa, FL

NEOGENOMICS, INC.

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2004
________________________________________________________________________________

ASSETS

CURRENT ASSETS:
Cash $ 112,548
Accounts receivable (net of allowance for doubtful
accounts of $8,707) 56,491
Inventory 15,122
Other 12,121
Total current assets 196,282

FURNITURE AND EQUIPMENT (net of accumulated depreciation of
$137,313) 393,036

OTHER ASSETS - Deposits 2,681

TOTAL $ 591,999
==============

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable $ 96,210
Accrued and other liabilities 72,444
Deferred revenue 110,000
Due to affiliates 740,000
Total current liabilities 1,018,654

STOCKHOLDERS' DEFICIT:
Common stock, $.001 par value, (100,000,000 shares
authorized; 21,539,416 shares issued and outstanding) 21,539
Additional paid-in capital 9,603,664
Deferred stock compensation (28,620)
Accumulated deficit (10,023,238)
Total stockholders' deficit (426,655)

TOTAL $ 591,999
==============

________________________________________________________________________________

See notes to consolidated financial statements.

NEOGENOMICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
_________________________________________________________________________________

2004 2003

NET REVENUE $ 558,074 $ 369,972

COST OF REVENUE 576,867 481,593

GROSS MARGIN (DEFICIT) (18,793) (111,621)

OTHER OPERATING EXPENSES:
General and administrative 710,771 382,711
Interest expense 89,421 41,431
Total other operating expenses 800,192 424,142

NET LOSS $ (818,985) $ (535,763)
=============== ==============

NET LOSS PER SHARE - Basic and
Diluted $ (0.04) $ (0.04)
=============== ==============

WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING -
Basic and Diluted 19,901,028 14,385,009
=============== ==============

_________________________________________________________________________________

See notes to consolidated financial statements.

NEOGENOMICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

____________________________________________________________________________________________________________________________________

Common Common Additional Deferred
Stock Stock Paid-In Stock Accumulated
Shares Amount Capital Compensation Deficit Total

BALANCES, DECEMBER 31, 2002 4,482,354 $ 4,482 $ 8,687,353 $ - $ (8,668,490) $ 23,345

Contribution of services and office space - - 30,345 - - 30,345
Common stock issuances 13,927,062 13,927 125,344 - - 139,271
Transaction fees and expenses - - (27,800) - - (27,800)
Common stock issuance for service 40,000 40 2,760 - - 2,800
Net loss - - - - (535,763) (535,763)

BALANCES, DECEMBER 31, 2003 18,449,416 18,449 8,818,002 - (9,204,253) (367,802)

Common stock issuances 3,040,000 3,040 756,960 - - 760,000
Transaction fees and expenses - - (23,272) - - (23,272)
Options exercised 50,000 50 3450 - - 3,500
Warrants issued for services - - 6,224 - - 6,224
Deferred stock compensation related to
warrants issued for services - - 42,300 (42,300) - -
Amortization of deferred stock compensation - - - 13,680 - 13,680
Net loss - - - - (818,985) (818,985)

BALANCES, DECEMBER 31, 2004 21,539,416 $ 21,539 $ 9,603,664 $ 28,620 $ (10,023,238) $ (426,655)
============ ========= ============ ========= =============== ============
____________________________________________________________________________________________________________________________________

See notes to consolidated financial statements.

NEOGENOMICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
________________________________________________________________________________

2004 2003

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (818,985) $ (535,763)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 90,583 48,037
Amortization of deferred stock compensation 13,680 -
Stock based compensation and consulting 6,224 -
Provision for bad debts 28,959 16,378
Other non-cash expenses - 30,346
Changes in assets and liabilities, net:
(Increase) Decrease in accounts receivable, net (21,589) (40,158)
(Increase) Decrease in Inventory (4,529) 8,713
(Increase) Decrease in other current assets (9,495) (627)
(Increase) Decrease in deposits 4,540 (3,305)
Increase (Decrease) in due to bank - (13,518)
Increase (Decrease) in deferred revenues - 10,000
Increase (Decrease) in accounts payable and
accrued and other liabilities 52,479 (52,469)

NET CASH USED IN OPERATING ACTIVITIES (658,133) (532,366)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net (85,932) (63,188)

NET CASH USED IN INVESTING ACTIVITIES (85,932) (63,188)

CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from affiliates, net 91,334 506,334
Issuances of common stock for cash, net of
transaction expenses 740,228 114,271

NET CASH PROVIDED BY FINANCING ACTIVITIES 831,562 620,605

NET INCREASE IN CASH AND CASH EQUIVALENTS 87,497 25,051

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 25,051 -

CASH AND CASH EQUIVALENTS, END OF YEAR $ 112,548 $ 25,051
=========== ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid $ 119,777 $ 9,456
=========== ===========

Income taxes paid $ - $ -
=========== ===========
________________________________________________________________________________

See notes to consolidated financial statements.

NEOGENOMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
________________________________________________________________________________

NOTE A - FORMATION AND OPERATIONS OF THE COMPANY

NeoGenomics, Inc. ("NEO" or the "Subsidiary") was incorporated under the laws of
the state of Florida on June 1, 2001 and on November 14, 2001 agreed to be
acquired by American Communications Enterprises, Inc. ("ACE", or the "Parent").
ACE was formed in 1998 and succeeded to NEO's name on January 3, 2002 (NEO and
ACE collectively referred to as "we", "us", "our" or the "Company").

Through December 31, 2002, we were considered to be a development stage (as
defined in Financial Accounting Standards Board Statement No. 7), company
organized for the principal purpose of developing a genetic and molecular
biology testing and genomic research center. We commenced our planned principal
operations in 2003, which include operating a medical testing and research
laboratory in Fort Myers, Florida. We currently market our services to major
hospitals and doctors' practices principally in southern and central Florida.
However, we also have customers outside of the state of Florida.

On April 4, 2003, we amended our articles of incorporation to (1) effect a
one-for-100 reverse split, (2) reduce the authorized number of common shares
from 500,000,000 to 100,000,000, and (3) authorize 10,000,000 shares of
preferred stock for future issuance, with such terms, restrictions and
limitations as may be established by the Board of Directors.

As a result of the above, all references to the number of shares and par value
in the accompanying consolidated financial statements and notes thereto have
been adjusted to reflect the April 2003 reverse stock split as though all such
changes had been completed as of June 1, 2001.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Parent and the Subsidiary. All significant intercompany accounts and balances
have been eliminated in consolidation.

Revenue Recognition

Accounts Receivable

their estimated net realizable value. We estimate this allowance based on the
aging of our accounts receivable and our historical collection experience for
each type of payer. Bad debts are charged off to the allowance account at the
time they are deemed uncollectible.

Concentrations of Credit Risk

We grant credit without collateral to our customers, most of whom are either
covered by Medicare or insured under third-party payer agreements or are
patients at hospitals whom we institutionally bill for services. As of December
31, 2004, approximately 37% and 13% of our receivables were from Medicare and
Naples Community Hospital System ("NCHS"), respectively.

Use of Estimates

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires us to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements. The reported
amounts of revenues and expenses during the reporting period may be affected by
the estimates and assumptions we are required to make. Estimates that are
critical to the accompanying consolidated financial statements include estimates
related to contractual adjustments, and the allowance for doubtful accounts. It
is at least reasonably possible that our estimates could change in the near term
with respect to these matters.

Financial Instruments

We believe the book value of our financial instruments included in our current
assets and liabilities approximates their fair values due to their short-term
nature.

Furniture and equipment

Furniture and equipment are stated at cost. Major additions are capitalized,
while minor additions and maintenance and repairs, which do not extend the
useful life of an asset, are expensed as incurred. Depreciation is provided
using the straight-line method over the assets' estimated useful lives.

Long-Lived Assets

Statement of Financial Accounting Standards (SFAS) 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" requires that long-lived assets,
including certain identifiable intangibles, be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying value of the
assets in question may not be recoverable. We evaluated our long-lived assets
during 2004 and determined that they were not impaired at of December 31, 2004.

Income Taxes

We compute income taxes in accordance with Financial Accounting Standards
Statement No. 109 "Accounting for Income Taxes" ("SFAS 109"). Under SFAS 109,
deferred taxes are recognized for the tax consequences of temporary differences
by applying enacted statutory rates applicable to future years to differences
between the financial statement carrying amounts and the tax basis of existing
assets and liabilities. Also, the effect on deferred taxes of a change in tax

rates is recognized in income in the period that included the enactment date.
Temporary differences between financial and tax reporting arise primarily from
the use of different depreciation methods for furniture and equipment.

Stock-Based Compensation

We account for equity instruments issued to employees for services based on the
intrinsic value of the equity instruments issued and account for equity
instruments issued to those other than employees based on the fair value of the
consideration received or the fair value of the equity instruments, whichever is
more reliably measurable.

We have adopted Statement of Financial Accounting Standards No. 148 "Accounting
for Stock-Based Compensation - Transition and Disclosure" (SFAS No. 148). This
statement amends FASB statement No. 123, "Accounting for Stock Based
Compensation". It provides alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for employee
stock based compensation. It also amends the disclosure provisions of FASB
statement No. 123 to require prominent disclosure about the effects on reported
net income of an entity's accounting policy decisions with respect to
stock-based employee compensation. As permitted by SFAS No. 123 and amended by
SFAS No. 148, we continue to apply the intrinsic value method under Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees," to account for our stock-based employee compensation arrangements.

Statement of Cash Flows

For purposes of the statement of cash flows, we consider all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

Net Loss Per Common Share

We compute loss per share in accordance with Financial Accounting Standards
Statement No. 128 "Earnings per Share" ("SFAS 128") and SEC Staff Accounting
Bulletin No. 98 ("SAB 98"). Under the provisions of SFAS No. 128 and SAB 98,
basic net loss per share is computed by dividing the net loss available to
common stockholders by the weighted average number of common shares outstanding
during the period. Diluted net loss per share is computed by dividing the net
loss for the period by the weighted average number of common and common
equivalent shares outstanding during the period. Common equivalent shares
outstanding as of December 31, 2004 and December 31, 2003, which consisted of
employee stock options and certain warrants issued to consultants, were excluded
from diluted net loss per common share calculations as of such date because they
were anti-dilutive.

Recent Pronouncements

FIN 46 - Consolidation of Variable Interest Entities

In January 2003, the FASB issued FIN 46, (revised in December 2003 as FIN46R)
"Consolidation of Variable Interest Entities," which clarifies the application
of Accounting Research Bulletin ("ARB") 51, Consolidated Financial Statements,
to certain entities (called variable interest entities) in which equity
investors do not have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. The
disclosure requirements of this Interpretation are effective for all financial
statements issued after January 31, 2003. The consolidation requirements apply

to all variable interest entities created after January 31, 2003. In addition,
public companies must apply the consolidation requirements to variable interest
entities that existed prior to February 1, 2003 and remain in existence as of
the beginning of annual or interim periods beginning after June 15, 2003. The
adoption of FIN 46R had no impact on our financial statements as we do not have
any variable interests in variable interest entities.

SFAS 150 - Accounting for Certain `Financial Instruments with Characteristics of
Both Liabilities and Equity

In May 2003, SFAS No. 150 "Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity," was issued to establish new
standards for how an entity classifies and measures certain financial
instruments with characteristics of both liabilities and equity. It requires
that an entity classify a financial instrument that is within its scope as a
liability (or an asset in some circumstances). Many of these instruments were
previously classified as equity. This statement was effective when issued for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective for calendar year public companies for the third quarter of 2003.
The adoption of SFAS 150 had no impact on our financial statements.

SFAS 132 - Employers' Disclosures about Pensions and Other Postretirement
Benefits

In December 2003, FASB Statement No. 132 (revised) was issued which prescribes
the required employers' disclosures about pension plans and other postretirement
benefit plans; but it does not change the measurement or recognition of those
plans. The Statement retains and revises the disclosure requirements contained
in the original Statement 132. It also requires additional disclosures about the
assets, obligations, cash flows, and net periodic benefit cost of defined
benefit pension plans and other postretirement benefit plans. The Statement
generally is effective for fiscal years ending after December 15, 2003. Since we
do have any types of pension plans or other postretirement benefits, the
adoption of this Statement did not have an effect on our financial statements.

SFAS 123(R) `Share-Based Payments'

SFAS 153 - Exchanges of Nonmonetary Assets an Amendment of APB Opinion No. 29

In December 2004, FASB Statement No. 153 was issued amending APB Opinion No. 29
to eliminate the exception allowing nonmonetary exchanges of similar productive
assets to be measured based on the carrying value of the assets exchanged as
opposed to at their fair values. This exception was replaced with a general
exception for exchanges of nonmonetary assets that do not have commercial
substance. A nonmonetary exchange has commercial substance if the future cash
flows of the entity are expected to change significantly as a result of the
exchange. The provisions of this statement are effective for nonmonetary asset
exchanges occurring in fiscal periods beginning after the June 15, 2005. The
adoption of this statement did not have a material impact on our financial
statements.

SFAS - 146 Accounting for Costs Associated with Exit or Disposal Activities

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 nullifies Emerging Issues Task
Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity," under which a
liability for an exit cost was recognized at the date of an entity's commitment
to an exit plan. SFAS No. 146 requires that a liability for a cost associated
with an exit or disposal activity be recognized at fair value when the liability
is incurred. The provisions of this statement are effective for exit or disposal
activities that are initiated after December 31, 2002. SFAS 146 had no impact on
our financial statements.

FIN- 45 Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others

In November 2002, the FASB issued FASB Interpretation ("FIN") 45 "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others," which elaborates on the disclosures to be
made by a guarantor in its interim and annual financial statements about its
obligations under certain guarantees that it has issued. It also clarifies that
a guarantor is required to recognize, at the inception of the guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and initial measurement provisions of this
Interpretation are applied prospectively to guarantees issued or modified after
December 31, 2002. The adoption of these recognition provisions will result in
recording liabilities associated with certain guarantees provided by us. The
disclosure requirements of this Interpretation are effective for financial
statements of interim or annual periods ending after December 15, 2002. FIN 45
has no impact on the Company's financial statements

NOTE B - LIQUIDITY

Our consolidated financial statements were prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. At December 31, 2004, we had
working capital and stockholders' deficits of approximately $822,000 and
$426,000 respectively. However, subsequent to December 31, 2004, we enhanced our
working capital as we replaced the due to affiliate of $740,000 included in
current liabilities with indebtedness that does not mature until March 31, 2007
(see Note I). We believe this debt facility, which allows for unsecured
borrowings of $1,000,000 after April 30, 2005, and improving operations, will
provide adequate capital to fund our operations and growth for 2005 and beyond.
As such, our consolidated financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
the amounts and classification of liabilities that might be necessary should we
be unable to continue as a going concern.

NOTE C - PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following at December 31, 2004:

Equipment $ 486,739
Furniture & Fixtures 33,110
Leasehold Improvements 10,500
Subtotal 530,349

Less accumulated depreciation and amortization (137,313)
Property and Equipment, net $ 393,036
==========

NOTE D - INCOME TAXES

We recognized losses for both financial and tax reporting purposes during each
of the periods in the accompanying consolidated statements of operations.
Accordingly, no provision for income taxes and/or deferred income taxes payable
have been provided for in the accompanying consolidated financial statements.

Since our incorporation, we have incurred net operating losses for income tax
purposes of approximately $2,150,000 (the significant difference between this
amount, and our deficit of $10,023,000, arises primarily from certain stock
based compensation that is considered to be a permanent difference). Because of
certain "change in control" provisions of the Internal Revenue Code, a portion
of these net operating loss carryforwards will be limited as they expire in
various years through the year ended December 31, 2024. However, we have
established a valuation allowance to fully reserve the related deferred income
tax asset as such asset did not meet the required asset recognition standard
established by SFAS 109.

At December 31, 2004 our net non-current deferred income tax asset (assuming an
effective income tax rate of approximately 39%) consisted of the following:

Net non-current deferred income tax asset: Amounts

Net operating loss carryforwards $ 841,000
Accumulated depreciation (76,000)
Less valuation allowance (765,000)

Total $ -
============

The income tax benefit consists of the following for the years ended December
31, 2004 and 2003:

2004 2003

Current $ - $ -
Deferred 274,000 208,800
Change in valuation allowance (274,000) (208,800)
$ - $ -
=========== ==========

NOTE E - INCENTIVE STOCK OPTIONS AND AWARDS

Our 2003 Equity Incentive Plan provides for the granting of stock options and
awards to officers, directors, employees and consultants. We are authorized to
grant awards for up to 10% of our issued and outstanding common stock, which
equated to 2,153,942 shares of our common stock as of December 31, 2004. As of
December 31, 2004, option and stock awards totaling 882,329 shares were
outstanding and there were commitments to grant additional awards totaling
1,027,288 shares. Vesting and exercise price provisions are determined by the
board of directors at the time the awards are granted.

The status of our stock options is summarized as follows:

Number Weighted
Of Average
Shares Exercise Price

Outstanding at December 31, 2002 - $ -

Granted 1,100,000 0.07
Exercised - -
Canceled - -
Outstanding at December 31, 2003 1,100,000 0.07

Granted 810,000 0.17
Exercised (50,000) 0.07
Canceled (977,671) 0.07
Outstanding at December 31, 2004 882,329 $ 0.16
=========== ==========

Exercisable at December 31, 2004 432,329 $ 0.07
=========== ==========

The following table summarizes information about the Company's options
outstanding at December 31, 2004:

Weighted Average
Remaining Contractual Weighted
Exercise Number Life (in years) Options Average
Price Outstanding Exercisable Exercise Price
$ 0.07 432,329 0.3 432,329 $ 0.07
$ 0.23 50,000 9.9 - $ 0.23
$ 0.25 400,000 9.6 100,000 $ 0.25

882,329 532,329
========= =========

We account for our stock-based compensation using the intrinsic value method
prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees". Had our compensation expense for stock-based compensation
plans been determined based upon fair values at the grant dates for awards under
this plan in accordance with SFAS No. 123, "Accounting for Stock-Based

Compensation," our net loss and pro forma net loss per share amounts would have
been reflected as follows:

2004> 2003

Net loss:
As reported $ (818,985) $ (535,763)
============ ============
Pro forma $ (848,777) $ (557,763)
============ ============

Loss per share:
As reported $ (0.04) $ (0.04)
============ ============
Pro forma $ (0.04) $ (0.04)
============ ============

The weighted average fair value of options granted during 2004, estimated on the
date of grant using the Black-Scholes option-pricing model, was approximately
$0.05 per option share. The fair value of options granted was estimated on the
date of the grants using the following approximate assumptions: dividend yield
of 0 %, expected volatility of 20.0%, risk-free interest rate of 3.5 to 4.0%
(depending on the date of issue), and an expected life of 5 years.

NOTE F - COMMITMENTS

During September 2002, we entered into an agreement to perform collaborative
research with Ciphergen Biosystems ("Ciphergen"). If a patented product or
service results from this research, the patenting party will be obligated to pay
a 4% royalty to the other party. In addition, each of us are to own 50% of any
inventions developed jointly as a result of this research. In October 2002,
Ciphergen awarded us with a $100,000 research grant, which we have agreed to use
to purchase supplies, labor and equipment for the research. As of December 31,
2004, we have not performed any of the testing, or spent any of the $100,000;
accordingly, such amount has been recorded as deferred revenue in the
accompanying consolidated balance sheet.

In August 2003, we entered into a three year lease for our laboratory facility.
The lease, which commenced on August 8, 2003, requires average monthly rental
payments of approximately $6,000 during the lease term (including estimated
operating and maintenance expenses and sales tax). The lease contains a
provision that allows us to extend the lease for two terms of three years each.

Future minimum payments required are approximately as follows:

Years ending December 31, Amounts

2005 $ 72,000
2006 48,000
2007 0
Total $ 120,000
=========

Rent expense for 2004 and 2003 approximated $73,103 and $46,350, respectively.

In October 2003, we entered into an employment agreement with Thomas H. White to
be our Chief Executive Officer. The employment agreement had an initial term of
three years; provided, however that either party could terminate the agreement
by giving the other party sixty days written notice. The employment agreement
specified an initial base salary of $100,000/year with salary increases and
bonuses at the discretion of the compensation committee of the Board of

Directors. In addition, Mr. White was granted 900,000 Incentive Stock Options
that had a ten year term so long as Mr. White remains an employee of the
Company. Mr. White's employment agreement also specified that in the event that
Mr. White was terminated without cause by the Company, the Company would pay Mr.
White's base salary and maintain his employee benefits for a period that is
equal to one month for every full year of his employment by the Company (subject
to a minimum of two months and a maximum of six months). On December 14, 2004,
the Company notified Mr. White that it was terminating his employment and was
providing the 60 day notice period specified in his agreement. Mr. White's
effective date of termination with the Company was February 15, 2005, however,
pursuant to his Employment Agreement, he is entitled to receive base pay and
benefits through April 15, 2005. As a result of this termination, the Company
has accrued $33,418 of severance expense on its financial statements as of
December 31, 2004. This accrual represents three and a half months of additional
base pay and benefits up to April 15, 2005.

In December 2003, we received a $10,000 research grant from the Ovarian Cancer
Alliance of Florida. As part of this grant we have agreed to research the
potential causes of Ovarian Cancer in a limited number of tissue samples. As of
December 31, 2004, we had not performed any of the research; accordingly, such
amount has been recorded as deferred revenue in the accompanying consolidated
balance sheet.

On December 14, 2004, we entered into an employment agreement with Robert P.
Gasparini to serve as our President and Chief Science Officer. The employment
agreement has an initial term of three years, effective January 3, 2005;
provided, however that either party may terminate the agreement by giving the
other party sixty days written notice. The employment agreement specifies an
initial base salary of $150,000/year, with specified salary increases to
$185,000/year over the first 18 months of the contract. Mr. Gasparini is also
entitled to receive cash bonuses for any given fiscal year in an amount equal to
15% of his base salary if he meets certain targets established by the Board of
Directors. In addition, Mr. Gasparini was granted 1,000,000 Incentive Stock
Options that have a ten year term so long as Mr. Gasparini remains an employee
of the Company (these options, which vest according to the passage of time and
other performance-based milestones,will result in us recording stock based
compensation expense beginning in 2005). Mr. Gasparini's employment agreement
also specifies that he is entitled to four weeks of paid vacation per year and
other health insurance and relocation benefits. In the event that Mr. Gasparini
is terminated without cause by the Company, the Company has agreed to pay Mr.
Gasparini's base salary and maintain his employee benefits for a period of six
months.

NOTE G- OTHER RELATED PARTY TRANSACTIONS

During the first eight months of 2003, the executive offices of the Company
shared space, on a rent-free basis, with Naples Women's Center ("NWC"), a
company owned by Dr. Michael Dent, our Chairman of the Board. In addition, NWC
provided bookkeeping services to the Company free of charge. An estimate of the
fair market value of these services has been expensed and added to paid-in
capital as a capital contribution.

During 2001 and 2002, we borrowed approximately $117,332 from the Naples
Women's Center to meet our short-term cash needs. In 2003, we repaid
approximately $58,666 of this amount, and in 2004, we repaid the remaining
$58,666, plus accrued interest at a rate of 8.0% per annum.

During the period from December 2002 to April 2003, Steven C. Jones, one of
our directors, advanced $32,000 under a short term bridge loan agreement. Mr.

Jones is a principal of Aspen Select Healthcare, LP (formerly known as MVP 3,
LP), which consummated debt and equity financing transactions with the Company
on April 15, 2003 and refinanced the debt portion of the transaction on March
23, 2005. These advances, plus accrued interest at a rate of 8.0% per annum,
were repaid to Mr. Jones on April 17, 2003.

During 2004 and 2003, the Company paid a director $72,500 and $52,000,
respectively, in cash for various consulting work performed connection with
assisting in organizing and managing the financial affairs of the Company.

NOTE H - EQUITY FINANCING TRANSACTIONS

During 2004, we sold 3,040,000 shares of our common stock in a series of private
placements at $0.25/share to unaffiliated third party investors. These
transactions generated net proceeds to the Company of approximately $740,000
after deducting certain transaction expenses. Under the terms of the stock
purchase agreements used in these transactions, the Company agreed to use its
reasonable best efforts to file with the SEC within 180 days of any transaction,
and to cause to be declared effective thereafter, a resale registration
statement which includes the shares purchased by such third party investors. As
of March 31, 2005, the Company had not filed such resale registration statement
with the SEC and is in breach of such provision under certain of the stock
purchase agreements executed with third party investors. There were no penalties
stipulated for failing to meet this registration deadline. The Company currently
anticipates filing such resale registration statement shortly.

NOTE I - SUBSEQUENT EVENTS

On March 23, 2005, we entered into an agreement with Aspen Select Healthcare, LP
(formerly known as MVP 3, LP) to refinance our existing indebtedness of $740,000
and provide for additional liquidity of up to $760,000 to the Company. Under the
terms of the agreement, Aspen Select Healthcare, LP ("Aspen"), a Naples,
Florida-based private investment fund will make available up to $1.5 million of
debt financing in the form of a revolving credit facility (the "Credit
Facility") with an initial maturity of March 31, 2007. Aspen is managed by its
General Partner, Medical Venture Partners, LLC, which is controlled by a
director of NeoGenomics.

Under the terms of the Credit Facility, we are able to borrow up to 80% of
"eligible" accounts receivable, 50% of our net furniture and equipment balance,
secured by substantially all of our assets, and up to $500,000 on an unsecured
basis until April 30, 2005 and up to $1,000,000 on an unsecured basis after
April 30, 2005. The interest rate on the Credit Facility is prime + 6.0%,
payable monthly in arrears. With respect to this agreement, we are subject to
the following restrictive covenants: (i) we are not to incur indebtedness
outside of this agreement in excess of $50,000 without written authorization of
Aspen, (ii) we cannot declare or pay any dividend on our common stock, and (iii)
we are also subject to other general covenants typical of an instrument of this
kind. In addition, as a condition to these transactions, the Company, Aspen and

certain individual shareholders agreed to amend and restate their shareholders'
agreement to provide that Aspen will have the right to appoint up to three of
seven of our directors and one mutually acceptable independent director. We also
amended and restated the Registration Rights Agreement with MVP 3 LP and certain
individual shareholders, which grants to Aspen certain demand registration
rights and which grants to all parties to the agreement, piggyback registration
rights. As part of the Credit Facility transaction, the Company also issued to
Aspen a five year Warrant to purchase up to 2,500,000 shares of its common stock
at an exercise price of $0.50/share (which we anticipate will result in us
recording stock based interest expense in 2005 and beyond).

During the period January 3, 2005 to March 31, 2005, we sold 450,953 shares of
our common stock in a series of private placements at $0.30/share and
$0.35/share to unaffiliated third party investors. These transactions generated
net proceeds to the Company of approximately $146,000. Under the terms of the
stock purchase agreements used in these transactions, the Company agreed to use
its reasonable best efforts to file with the SEC within 180 days of any
transaction, and to cause to be declared effective thereafter, a resale
registration statement which includes the shares purchased by such third party
investors.

On January 3, 2005, we issued 27,288 shares of common stock under the Company's
2003 Equity Incentive Plan to two employees of the Company in satisfaction of
$6,822 of accrued, but unpaid vacation.

End of Financial Statements

________________________________________________________________________________

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

ITEM 8A. CONTROLS AND PROCEDURES

(A) Evaluation Of Disclosure Controls And Procedures

As of the end of the period covered by this report, the Company carried out
an evaluation, under the supervision and with the participation of the Company's
Principal Executive Officer and Acting Principal Financial Officer of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. The Company's disclosure controls and procedures are designed to
provide a reasonable level of assurance of achieving the Company's disclosure
control objectives. The Company's Principal Executive Officer and Acting
Principal Financial Officer have concluded that the Company's disclosure
controls and procedures are, in fact, effective at this reasonable assurance
level as of the period covered. In addition, the Company reviewed its internal
controls, and there have been no significant changes in its internal controls or
in other factors that could significantly affect those controls subsequent to
the date of their last evaluation or from the end of the reporting period to the
date of this Form 10-KSB.

(B) Changes In Internal Controls Over Financial Reporting

In connection with the evaluation of the Company's internal controls during
the Company's fourth fiscal quarter ended December 31, 2004, the Company's
Principal Executive Officer and Acting Principal Financial Officer have
determined that there are no changes to the Company's internal controls over
financial reporting that has materially affected, or is reasonably likely to
materially effect, the Company's internal controls over financial reporting.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTORS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

The following table sets forth certain information regarding our executive
officers and directors as of March 31, 2005:

Name Age Position

Robert P Gasparini 50 President and Chief Science Officer, Director
Michael T. Dent 40 Chairman of the Board
Steven C. Jones 41 Director and Acting Principal Financial Officer

There are no family relationships between or among the directors, executive
officers or any other person. The directors and executive officers of the
Company are not directors or executive officers of any company that files
reports with the SEC, nor has he been involved in any bankruptcy proceedings,
criminal proceedings, any proceeding involving any possibility of enjoining or

suspending the Company's directors and officers from engaging in any business,
securities or banking activities, and has not been found to have violated, nor
been accused of having violated, any federal or state securities or commodities
laws.

The Company's directors are elected at the annual meeting of stockholders
and hold office until their successors are elected. The Company's officers are
appointed by the Board of Directors and serve at the pleasure of the Board and
are subject to employment agreements, if any, approved and ratified by the
Board.

Robert P. Gasparini, M.S. - President and Chief Science Officer

Mr. Gasparini is the President and Chief Science Officer of NeoGenomics.
Prior to assuming the role of President and Chief Science Officer, Mr. Gasparini
was a consultant to the Company since August 2004. Prior to NeoGenomics, Mr.
Gasparini was the Director of the Genetics Division for US Pathology Labs, Inc.
("US Labs") from January 2001 to December 2003. During this period, Mr.
Gasparini started the Genetics Division for US Labs and grew annual revenues of
this division to $30 million over a 30 month period. Prior to US Labs, Mr.
Gasparini was the Molecular Marketing Manager for Ventana Medical Systems from
1999 to 2001. Prior to Ventana, Mr. Gasparini was the Assistant Director of the
Cytogenetics Laboratory for the Prenatal Diagnostic Center from 1993 to 1998 an
affiliate of Mass General Hospital and part of Harvard University. While at the
Prenatal Diagnostic Center, Mr. Gasparini was also an Adjunct Professor at
Harvard University. Mr. Gasparini is a licensed Clinical Laboratory Director and
an accomplished author in the field of Cytogenetics. He received his BS degree
from University of Connecticut in Biological Sciences and his Master of Health
Science degree from Quinnipiac College in Medical Laboratory Sciences.

Michael T. Dent M.D. - Chairman of the Board

Dr. Dent is our founder and Chairman of the Board. Dr. Dent was our
President and Chief Executive Officer from June 2001, when he founded
NeoGenomics, to April 2003. From April 2003 until April 2004, Dr. Dent served as
our President and Chief Medical Officer. Dr. Dent founded the Naples Women's
Center in 1996 and continues his practice to this day. He received his training
in Obstetrics and Gynecology at the University of Texas in Galveston. He
received his M.D. degree from the University of South Carolina in Charleston,
S.C. in 1992 and a B.S. degree from Davidson College in Davidson, N.C. in 1986.
He is a member of the American Association of Cancer Researchers and a Diplomat
and fellow of the American College of Obstetricians and Gynecologists. He sits
on the Board of the Florida Life science Biotech Initiative.

Steven C. Jones - Director and Acting Principal Financial Officer

Mr. Jones has served as a director since October 2003. He is a Managing
Director in Medical Venture Partners, LLC, a venture capital firm established in
2003 for the purpose of making investments in the healthcare industry. Mr. Jones
has also been President and a Managing Director of Aspen Capital Advisors since
January 2001. Prior to that Mr. Jones was Executive Vice President and Chief
Financial Officer of The Fiera Group, Inc., a technology-based, commerce
enabling company. Prior to that, among other positions, Mr. Jones was a Vice
President in the Telecommunications, Media and Technology Investment Banking
Group at Merrill Lynch & Co. Mr. Jones received his B.S. degree in Computer
Engineering from the University of Michigan in 1985 and his MBA from the Wharton
School of the University of Pennsylvania in 1991. He is also a founder and on
the Board of Directors of T3 Communications, LLC, a privately held
telecommunications company.

Audit Committee

Currently, the Company's Audit Committee of the Board of Directors is
comprised of all the Directors. The Board of Directors believes that Steven
Jones is a "financial expert" (as defined in Regulation 228.401(e)(1)(i)(A) of
Regulation S-B) serving on its Audit Committee. Mr. Jones is a Managing Member
of Medical Venture Partners, LLC, which serves as the general partner of Aspen
Select Healthcare LP, a partnership which controls 45.4% of the voting stock of
the Company. Thus Mr. Jones would not be considered an "independent" director
under Item 7(d)(3)(iv) of Schedule 14A of the Securities Exchange Act of 1934.

Code of Ethics

The Company has adopted the Code of Ethics attached as Exhibit 14 to this
Form 10-KSB for its senior financial officers and the principal executive
officer.

ITEM 10. EXECUTIVE COMPENSATION

The following table provides certain summary information concerning
compensation paid by the Company to or on behalf of our most highly compensated
executive officers for the fiscal years ended December 31, 2004, 2003, and 2002:

Summary Compensation Table

Name and Principal Capacity Year Salary Other Compensation

Thomas H. White 2004 $125,000 (2) $27,150 (2)
Chief Executive Officer (1) 2003 $ 20,139 $6,330
2002 - --

Robert P. Gasparini 2004 $ 22,500 (3) -
President & Chief Science Officer 2003 - -
2002 - -

Dr. Michael T. Dent 2004 $ 37,334 (5) -
Chairman, President and 2003 - -
Chief Medical Officer (4) 2002 $130,669 (6) -

(1) Mr. White became the Company's Chief Executive Officer on October 20, 2003
but was subsequently terminated as CEO on December 31, 2004.
(2) 2004 amounts for Mr. White reflect $29,167 and $1,500 of accrued severance
compensation as of December 31, 2004.
(3) Mr. Gasparini was appointed as President and Chief Science Officer on
January 3, 2005. During 2004, he acted as a consultant to the Company and
the amounts indicated represent his consulting income.
(4) Dr. Dent served as the Company's Chief Executive Officer from June 2001
until April 2003. From April 2003 until April 2004, Dr. Dent served as the
President and Chief Medical Officer. Dr. Dent has been Chairman of the
Board since October 2003.
(5) During 2004, Dr. Dent acted as a consultant to the Company. The amounts
indicated, represent his consulting income.
(6) During 2002, Dr. Dent Received 105,636 shares of the Company's common stock
in lieu of cash salary payments due to him for salary earned in 2001 and
the first nine months of 2002. Such shares were collectively valued at
$109,021 at the various times of issue and were issued pursuant to a

Registration Statement on Form S-8. The remaining $31,248 of salary earned
by Dr. Dent was earned in the fourth quarter of 2002 and was accrued as a
cash obligation of the Company on its financial statements. As of December
31, 2004, all of these amounts had been paid.

Employment Agreements

Robert P. Gasparini

We entered into an employment agreement with Robert P. Gasparini December
14, 2004, to serve as our President and Chief Science Officer. The employment
agreement has an initial term of three years, effective January 3, 2005;
provided, however that either party may terminate the agreement by giving the
other party sixty days written notice. The employment agreement specifies an
initial base salary of $150,000/year, with specified salary increases to
$185,000/year over the first 18 months of the contract. Mr. Gasparini is also
entitled to receive cash bonuses for any given fiscal year in an amount equal to
15% of his base salary if he meets certain targets established by the Board of
Directors. In addition, Mr. Gasparini was granted 1,000,000 Incentive Stock
Options that have a ten year term so long as Mr. Gasparini remains an employee
of the Company. Such options vest according to the following schedule:

Time-Based Vesting

75,000 on the Effective Date;
100,000 on the first anniversary of the Effective Date;
125,000 on the second anniversary of the Effective Date;
12,500 per month from the 25th to 36th month from the Effective Date;

Performance-Based Vesting

25,000 revenues generated from FISH by December 15, 2004
25,000 revenues generated from FLOW by January 31, 2005
25,000 revenues generated from Amniocentesis by January 31, 2005
25,000 hiring a lab director by September 30, 2005
25,000 bringing in 4 new clients to the lab by June 30, 2005
25,000 closing on first acquisition by December 31, 2005

In addition:
50,000 if the Company achieves the consolidated revenue for FY 2005 of $2.5 million;
50,000 if the Company achieves the net income projections for FY 2005 of $150,000;
50,000 if the Company achieves the consolidated revenue goal for FY 2006 outlined by
the Board of Directors as part of the Employee's FY 2006 bonus plan;
50,000 if the Company achieves the consolidated net income goal for FY 2006 outlined
by the Board of Directors as part of the Employee's FY 2006 bonus plan;
50,000 if the Company achieves the consolidated revenue goal for FY 2007 outlined by
the Board of Directors as part of the Employee's FY 2007 bonus plan;
50,000 if the Company achieves the consolidated net income goal for FY 2007 outlined
by the Board of Directors as part of the Employee's FY 2007 bonus plan;

50,000 when the Company's stock maintains an average closing bid price (as quoted on
NASDAQ Bulletin Board) of $0.75/share over the previous 30 trading days;
50,000 when the Company's stock maintains an average closing bid price (as quoted on
NASDAQ Bulletin Board) of $1.50/share over the previous 30 trading days;

Mr. Gasparini's employment agreement also specifies that he is entitled to
four weeks of paid vacation per year and other health insurance and relocation
benefits. In the event that Mr. Gasparini is terminated without cause by the
Company, The Company has agreed to pay Mr. Gasparini's base salary and maintain
his employee benefits for a period of six months.

Thomas H. White

We entered into an employment agreement with Thomas H. White on October 14,
2003, to serve as our Chief Executive Officer. The employment agreement had an
initial term of three years; provided, however that either party could terminate
the agreement by giving the other party sixty days written notice. The
employment agreement specified an initial base salary of $100,000/year with
salary increases and bonuses at the discretion of the compensation committee of
the Board of Directors. In addition, Mr. White was granted 900,000 Incentive
Stock Options that had a ten year term so long as Mr. White remains an employee
of the Company. Mr. White's employment agreement also specified that in the
event that Mr. White was terminated without cause by the Company, the Company
would pay Mr. White's base salary and maintain his employee benefits for a
period that is equal to one month for every full year of his employment by the
Company (subject to a minimum of two months and a maximum of six months). On
December 14, 2004, the Company notified Mr. White that it was terminating his
employment and was providing the 60 day notice period specified in his
agreement. Mr. White's effective date of termination with the Company was
February 15, 2005, however, pursuant to his Employment Agreement, he is entitled
to receive base pay and benefits through April 15, 2005.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of April 11, 2005, with
respect to each person known by the Company to own beneficially more than 5% of
the Company's outstanding common stock, each director and officer of the Company
and all directors and executive officers of the Company as a group. The Company
has no other class of equity securities outstanding other than common stock.

Title of Name And Address Of Beneficial Owner Amount and Nature Of Percent Of Class(1)
Class Beneficial Ownership

Aspen Select Healthcare, LP (2) 11,395,698 48.5%
Common 1740 Persimmon Drive
Naples, Florida 34109

Steven C. Jones (3)
Common 1740 Persimmon Drive
Naples, Florida 34109 12,570,293 53.5%

Michael T. Dent M.D.
Common 1726 Medical Blvd.
Naples, Florida 34110 2,490,634 11.3%

Common Directors and Officers as a Group (2 15,060,927 64.1%
persons)

(1) Applicable percentage of ownership for Aspen Select Healthcare, LP and
Steven C. Jones is based on 22,017,657 shares of common stock outstanding and
1,492,419 currently exercisable warrant shares as of April 14, 2005.. Applicable
percentage of ownership for Michael T. Dent is based on 22,017,657 shares of
common stock outstanding as of April 14, 2005. Beneficial ownership is
determined in accordance within the rules of the Commission and generally
includes voting of investment power with respect to securities. Shares of common
stock subject to securities exercisable or convertible into shares of common
stock that are currently exercisable or exercisable within 60 days of April 14,
2005 are deemed to be beneficially owned by the person holding such options for
the purpose of computing the percentage of ownership of such persons, but are
not treated as outstanding for the purpose of computing the percentage ownership
of any other person.

(2) Aspen Select Healthcare, LP ("Aspen") has direct ownership of 9,903,279
shares and has a warrant with 1,492,419 shares currently exercisable. The
general partner of Aspen is Medical Venture Partners, LLC, an entity controlled
by Steven C. Jones.

(3) Steven C. Jones has direct ownership of 1,174,595 shares, but as a member of
the general partner of Aspen, he has the right to vote all shares held by Aspen,
thus 9,903,279 shares and 1,492,419 currently exercisable warrant shares have
been added to his total.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the period from December 2002 to April 2003, Steven C. Jones
advanced $32,000 under a short term bridge loan agreement. Mr. Jones is a
principal of Aspen Select Healthcare, LP (formerly known as MVP 3, LP), which
consummated debt and equity financing transactions with the Company on April 15,
2003 and refinanced the debt portion of the transaction on March 23, 2005. These
advances, plus accrued interest at a rate of 8.0% per annum, were repaid to Mr.
Jones on April 17, 2003.

During 2004 and 2003, the Company paid Mr. Jones $72,500 and $52,000,
respectively, in cash for various consulting work in performed connection with
assisting in organizing and managing the financial affairs of the Company.

debt financing with a stated interest rate of prime + 8% and such credit
facility had an initial maturity of March 31, 2005. At December 31, 2004, we
owed MVP 3, approximately $740,000 under this loan agreement, which is
classified as "Due to affiliates" under the current liabilities section of our
balance sheet. This obligation was repaid in full on March 23, 2005.

PART IV

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) Exhibits

The following exhibits are filed (or incorporated by reference herein) as
part of this Form 10-KSB.

EXHIBIT NO. DESCRIPTION LOCATION

3.1 Articles of Incorporation, as amended Incorporated by reference to the Company's
Registration Statement on Form SB-2 as filed with the
United States Securities and Exchange Commission on
February 10, 1999

EXHIBIT NO. DESCRIPTION LOCATION

3.2 Amendment to Articles of Incorporation filed with Incorporated by reference to the Company's on Form
the Nevada Secretary of State on January 3, 2002. 10-KSB as filed with the United States Securities and
Exchange Commission on May 20, 2003

3.3 Amendment to Articles of Incorporation filed with Incorporated by reference to the Company's on Form
the Nevada Secretary of State on April 11, 2003. 10-KSB as filed with the United States Securities and
Exchange Commission on May 20, 2003

3.4 Amended and Restated Bylaws, dated April 15, 2003. Incorporated by reference to the Company's on Form
10-KSB as filed with the United States Securities and
Exchange Commission on May 20, 2003

10.1 Loan Agreement between NeoGenomics, Inc. and Incorporated by reference to the Company's on Form 8-K
Aspen Select Healthcare, L.P. dated March 23, 2005 as filed with the United States Securities and
Exchange Commission on March 30, 2005

10.2 Amended and Restated Registration Rights Incorporated by reference to the Company's on Form 8-K
Agreement between NeoGenomics, Inc. and Aspen as filed with the United States Securities and
Select Healthcare, L.P. and individuals dated Exchange Commission on March 30, 2005
March 23, 2005

10.3 Guaranty of NeoGenomics, Inc., dated March 23, Incorporated by reference to the Company's on Form 8-K
2005 as filed with the United States Securities and
Exchange Commission on March 30, 2005

10.4 Stock Pledge Agreement between NeoGenomics, Inc.
and Aspen Select Healthcare, L.P., dated March Incorporated by reference to the Company's on Form 8-K
23, 2005 as filed with the United States Securities and
Exchange Commission on March 30, 2005

10.5 Warrants issued to Aspen Select Healthcare, L.P.,
dated March 23, 2005 Incorporated by reference to the Company's on Form 8-K
as filed with the United States Securities and
Exchange Commission on March 30, 2005

10.6 Security Agreement between NeoGenomics, Inc. and
Aspen Select Healthcare, L.P., dated March 23, Incorporated by reference to the Company's on Form 8-K
2005 as filed with the United States Securities and
Exchange Commission on March 30, 2005

10.7 Employment Agreement, dated December 14, 2004,
between Mr. Robert P. Gasparini and the Company Provided herewith

EXHIBIT NO. DESCRIPTION LOCATION

14.1 NeoGenomics, Inc. Code of Ethics for Senior
Financial Officers and the Principal Executive Provided herewith
Officer

31.1 Certification by Principal Executive Officer
pursuant to 15 U.S.C. Section 7241, as adopted Provided herewith
pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002

31.2 Certification by Principal Financial Officer
pursuant to 15 U.S.C. Section 7241, as adopted Provided herewith
pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002

32.1 Certification by Principal Executive Officer and
Principal Financial Officer pursuant to 18 U.S.C. Provided herewith
Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K.

On March 30, 2005, we filed a report on Form 8-K announcing that the
Company had obtained a $1.5 million revolving credit facility with Aspen Select
Healthcare, LP. All of the related transaction documents were filed as
attachments to this Form 8-K.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Summarized below is the aggregate amount of various professional fees
billed by our principal accountants with respect to our last two fiscal years:

2004 2003

Audit fees $ 13,620 $ 11,028
Audit-related fees $ -- $ --
Tax fees $ 4,460 $ --
All other fees, including tax consultation $ -- $ --
and preparation

All audit fees are approved by our audit committee and board of directors.
Other than income tax preparation services, Kingery & Crouse, P.A. does not
provide any non-audit services to the Company.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized April 15, 2005.

NeoGenomics, Inc.

By: /s/ Robert P. Gasparini
Robert P. Gasparini
President and
Principal Executive Officer

Date: April 15, 2005

By: /s/ Steven C. Jones
Steven C. Jones
Acting Principal Financial Officer

Date: April 15, 2005

In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

SIGNATURE TITLE DATE

/s/ Michael T. Dent Chairman of the Board April 15, 2005
Michael T. Dent, M.D.

/s/ Robert P. Gasparini President and Director April 15, 2005
Robert P. Gasparini

/s/ Steven C. Jones Director April 15, 2005
Steven C. Jones