-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RfJdX+atNExEcAn6NKbQXMPXwA6c9hzxViXw4vmaPtLzPYbFGU/4LBgqQtVFksU8 JIkaleudfmKV4Zd1tX06ng== 0000927946-99-000121.txt : 19990817 0000927946-99-000121.hdr.sgml : 19990817 ACCESSION NUMBER: 0000927946-99-000121 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIOANALYTICAL SYSTEMS INC CENTRAL INDEX KEY: 0000720154 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY APPARATUS & FURNITURE [3821] IRS NUMBER: 351345024 STATE OF INCORPORATION: IN FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-23357 FILM NUMBER: 99693619 BUSINESS ADDRESS: STREET 1: 2701 KENT AVE CITY: WEST LAFAYETT STATE: IN ZIP: 47906-1382 BUSINESS PHONE: 3174634527 MAIL ADDRESS: STREET 1: 2701 KENT AVENUE CITY: WEST LAFAYETTE STATE: IN ZIP: 47906-1382 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1999 OR [ ] 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 333-36429
BIOANALYTICAL SYSTEMS, INC. - --------------------------- (Exact name of the registrant as specified in its charter) INDIANA 35-1345024 - ------- ---------- (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 2701 KENT AVENUE WEST LAFAYETTE, IN 47906 - ------------------ ----- (Address of principal executive offices) (Zip code) (765) 463-4527 - -------------- (Registrant's telephone number, including area code)
Indicate by check mark 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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO As of June 30, 1999, 4,507,893 Common Shares of the registrant were outstanding. 1
PAGE NUMBER PART I FINANCIAL INFORMATION Item 1 - Financial Statements (Unaudited): Consolidated Balance Sheets as of September 30, 1998 and June 30, 1999 3 Consolidated Statements of Income for the Three Months and Nine Months ended June 30, 1998 and 1999 4 Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 1998 and 1999 5 Notes to Consolidated Financial Statements 6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Item 3 - Quantitative and Qualitative Disclosures About Market Risk 10 PART II OTHER INFORMATION Item 1 - Legal Proceedings Item 2 - Changes in Securities and Use of Proceeds 10 Item 5 - Other Information 10 Item 6 - Exhibits and Reports on Form 8-K 10 SIGNATURES 12
2 PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
BIOANALYTICAL SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) September 30, June 30, 1998 1999 Note (Unaudited) ------------- ----------- ASSETS Current Assets: Cash and cash equivalents $ 1,208 $ 1,860 Accounts receivable, net 3,045 2,814 Inventories 1,881 2,010 Other current assets 60 92 Deferred income taxes 169 169 -------- -------- Total Current Assets 6,363 6,945 Goodwill, less accumulated amortization of $62 and $124 1,134 1,073 Other assets 232 204 Property and equipment: Land and improvements 171 171 Buildings and improvements 8,355 11,536 Machinery and equipment 7,463 8,228 Office furniture and fixtures 1,074 1,283 Construction in process 1,464 171 -------- -------- 18,527 21,389 Less accumulated depreciation (3,976) (4,757) -------- -------- 14,551 16,632 -------- -------- Total Assets $22,280 $24,854 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,941 $ 1,323 Income taxes payable 156 4 Accrued expenses 352 351 Customer advances 319 54 Current portion of long-term debt 308 477 -------- -------- Total current liabilities 3,076 2,209 Long-term debt, less current portion 1,124 4,239 Deferred income taxes 1,236 1,273 Shareholders' equity: Common Shares: 19,000,000 shares authorized; 4,495,319 and 4,507,893 shares issued and outstanding 996 999 Additional paid-in capital 10,468 10,479 Retained earnings 5,390 5,651 Accumulated other comprehensive income- Currency translation adjustment (10) 4 -------- -------- Total shareholders' equity 16,844 17,133 -------- -------- Total liabilities and shareholders' equity $22,280 $24,854 ======== ======== The balance sheet at September 30, 1998 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See accompanying notes.
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BIOANALYTICAL SYSTEMS, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (Unaudited) Three Months Three Months Nine Months Nine Months Ended June 30, Ended June 30, Ended June 30, Ended June 30, 1998 1999 1998 1999 -------------- -------------- -------------- -------------- Product revenue $ 2,481 $2,412 $ 7,982 $ 7,036 Services revenue 2,040 2,561 5,319 7,592 -------- ------- -------- -------- Total revenue 4,521 4,973 13,301 14,628 Cost of product revenue 875 901 2,754 2,724 Cost of services revenue 1,135 1,795 3,002 4,994 -------- ------- -------- -------- Total cost of revenue 2,010 2,696 5,756 7,718 Gross profit 2,511 2,277 7,545 6,910 Operating expenses: Selling 1,101 1,011 3,272 2,952 Research and development 639 463 1,713 1,498 General and administrative 525 675 1,662 1,974 -------- ------- -------- -------- Total Operating Expenses 2,265 2,149 6,647 6,424 -------- ------- -------- -------- Operating income 246 128 898 486 Interest income 25 4 75 11 Interest expense (8) (47) (46) (112) Other income (expense) (10) 15 (20) 63 Gain (loss) on sale of property and equipment 1 (8) 45 (12) -------- ------- -------- -------- Income before income taxes 254 92 952 436 Income taxes 124 25 395 175 -------- ------- -------- -------- Net income $ 130 $ 67 $ 557 $ 261 ======== ======= ======== ======== Basic net income per common share $ .03 $ .01 $ .14 $ .06 Diluted net income per common and common equivalent share $ .03 $ .01 $ .13 $ .06 Basic weighted average common shares outstanding 4,469,902 4,507,893 3,989,776 4,503,432 Diluted weighted average common and common equivalent shares outstanding 4,637,521 4,693,878 4,324,587 4,672,914 See accompanying notes.
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BIOANALYTICAL SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Nine Months Ended Nine Months Ended June 30, 1998 June 30, 1999 ----------------- ----------------- Operating activities: Net income $ 557 $ 261 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 546 843 Deferred income taxes 126 37 Changes in operating assets and liabilities: Accounts receivable (184) 232 Inventories (206) (129) Other assets 90 (5) Accounts payable (182) (618) Income taxes payable (49) (151) Accrued expenses and customer advances 351 (268) -------- -------- Net cash provided by operating activities 1,049 202 Investing activities: Capital expenditures (2,048) (2,862) Payments for purchase of net assets of Vetronics, Inc. net of cash acquired (326) --- -------- -------- Net cash used by investing activities (2,374) (2,862) Financing activities: Borrowings of long-term debt 0 3,500 Payments of long-term debt (5,006) (216) Borrowings on lines of credit 860 2,850 Payments on lines of credit (1,573) (2,850) Net proceeds from initial public offering 9,362 --- Net proceeds from the exercise of stock options 190 14 Other (13) 14 -------- -------- Net cash provided by financing activities 3,820 3,312 -------- -------- Net increase in cash and cash equivalents 2,495 652 Cash and cash equivalents at beginning of period 161 1,208 -------- -------- Cash and cash equivalents at end of period $ 2,656 $ 1,860 ======== ======== See accompanying notes.
5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) DESCRIPTION OF THE BUSINESS Bioanalytical Systems, Inc. and its subsidiaries (the "Company") manufacture scientific instruments for use in the determination of trace amounts of organic compounds in biological, environmental and industrial materials. The Company sells its equipment and software for use in industrial, governmental and academic laboratories. The Company also engages in laboratory services, consulting and research related to analytical chemistry and chemical instrumentation. The Company's customers are located in the United States and throughout the world. (2) RECENTLY ISSUED ACCOUNTING STANDARDS In June 1997, the FASB issued Statement of Financial Accounting Standards No. 130 (SFAS 130), "Reporting Comprehensive Income." SFAS 130 establishes standards for reporting and display of comprehensive income in the financial statements. SFAS 130 is effective for fiscal years beginning after December 15, 1997. The Company has adopted SFAS 130 effective October 1, 1998. (3) INTERIM FINANCIAL STATEMENTS PRESENTATION The accompanying interim financial statements are unaudited and have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements, and therefore these interim consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements, and the notes thereto, for the year ended September 30, 1998. In the opinion of management, the consolidated financial statements for the three month periods and the nine month periods ended June 30, 1998 and 1999 include all normal and recurring adjustments which are necessary for a fair presentation of the results of the interim periods. The results of operations for the three month period and the nine month period ended June 30, 1999 are not necessarily indicative of the results for the year ending September 30, 1999. (4) INVENTORIES Inventories consisted of (in thousands):
September 30, 1998 June 30, 1999 ------------------ -------------- Raw materials $ 966 $1,030 Work in progress 317 338 Finished goods 677 722 ------- ------- 1,960 2,090 LIFO reserve (79) (80) ------- ------- Total LIFO cost $1,881 $2,010 ======= =======
(5) DEBT On June 24, 1999 the Company obtained a $3,500,000 commercial mortgage. The mortgage note has a 5 year term, while the principal will be amortized assuming a 20 year amortization period with a balloon payment at maturity. Interest is charged at the one month LIBOR rate plus 200 basis points ( 7.02% at June 30, 1999). The Company has a working capital line of credit agreement which expires April 1, 2000 and allows borrowings of up to $3,500,000. Interest is charged at the prime rate minus 25 basis points ( 7.50% at June 30, 1999). This line of credit was unused at June 30, 1999. The line is collateralized by inventories and accounts receivable. The Company has an acquisition line of credit agreement which expires April 1, 2000 and allows borrowings of up to $4,000,000. Interest is charged at the prime rate ( 7.75% at June 30, 1999). This line of credit was unused at June 30, 1999. 6 (6) LITIGATION In April 1997, CMA Microdialysis Holding A.B. ("CMA") filed an action against the Company in the United States District Court for the District of New Jersey in which CMA alleged that the Company's microdialysis probes infringe U.S. Patent No. 4,694,832. The Company has filed an answer in which it denied infringement and in which it asserted that the patent on which CMA relies is invalid. The matter is now awaiting a trial date. Although an estimate of the possible loss has not been made, management intends to continue a vigorous defense of CMA's claims, and believes that the ultimate outcome of this matter will not have a material adverse effect on the Company's financial condition or results of operations. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Form 10-Q may contain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and/or Section 21E of the Securities Exchange Act of 1934, as amended. Those statements may include, but are not limited to, discussions regarding the Company's intent, belief or current expectations with respect to (i) the Company's strategic plans; (ii) the Company's future profitability; (iii) the Company's capital requirements; (iv) industry trends affecting the Company's financial condition or results of operations; (v) the Company's sales or marketing plans; or (vi) the Company's growth strategy. Investors in the Company's Common Shares are cautioned that reliance on any forward-looking statement involves risks and uncertainties, including the risk factors contained in the Company's Registration Statement on Form S-1, File No. 333-36429. Although the Company believes that the assumptions on which the forward-looking statements contained herein are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based upon those assumptions also could be incorrect. In light of the uncertainties inherent in any forward-looking statement, the inclusion of a forward-looking statement herein should not be regarded as a representation by the Company that the Company's plans and objectives will be achieved. RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1999 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1998 Total revenue for the three months ended June 30, 1999 increased 10.0% to approximately $5.0 million from approximately $4.5 million for the three months ended June 30, 1998. The net increase of approximately $500,000 was primarily due to increased revenue from services, which increased to approximately $2.6 million in the three months ended June 30, 1999 from approximately $2.0 million for the three months ended June 30, 1998. This increase of approximately $600,000 was primarily due to the additional revenue related to the services unit acquired in the UK on July 1, 1998. Product revenue decreased to approximately $2.4 million for the three months ended June 30, 1999 from approximately $2.5 million for the three months ended June 30, 1998, primarily as a result of the negative impact of reduced sales in Asia due to the currency situation. Total cost of revenue for the three months ended June 30, 1999 increased 34.1% to approximately $2.7 million from approximately $2.0 million for the three months ended June 30, 1998. This increase of approximately $700,000 was primarily due to the additional cost of revenue related to the services unit acquired in the UK on July 1, 1998. Cost of product revenue increased to 37.4% as a percentage of product revenue for the three months ended June 30, 1999 from 35.3% of product revenue for the three months ended June 30, 1998, primarily due to a change in product mix. Cost of services revenue increased to approximately 70.1% as a percentage of services revenue for the three months ended June 30, 1999 from approximately 55.6% of services revenue for the three months ended June 30, 1998 primarily due to an increase in the level of services staffing. 7 Selling expenses for the three months ended June 30, 1999 decreased 8.2% to approximately $1,011,000 from approximately $1,101,000 for the three months ended June 30, 1998 primarily due to reduced distributor commissions. Research and development expenses for the three months ended June 30, 1999 decreased 27.5% to approximately $ 463,000 from approximately $639,000 for the three months ended June 30, 1998 primarily due to the expiration of certain grant projects. General and administrative expenses for the three months ended June 30, 1999 increased 28.6% to approximately $675,000 from approximately $525,000 for the three months ended June 30, 1998, primarily as a result of increased benefits expenses related to the Company's enhanced vacation policy. Other income (expense), net, was approximately $(36,000) in the three months ended June 30, 1999, as compared to approximately $8,000 in the three months ended June 30, 1998, primarily as a result of increased interest expense. The Company's effective tax rate for the three months ended June 30, 1999 was 27.1% as compared to 48.8% for the three months ended June 30, 1998. The lower rate for the three months ended June 30, 1999 was due in part to the increase in the relative size of the Company's net favorable permanent differences to book income. NINE MONTHS ENDED JUNE 30, 1999 COMPARED WITH NINE MONTHS ENDED JUNE 30, 1998 Total revenue for the nine months ended June 30, 1999 increased 10.0% to approximately $14.6 million from approximately $13.3 million for the nine months ended June 30, 1998. The net increase of approximately $ 1,300,000 was primarily due to increased revenue from services, which increased to approximately $7.6 million in the nine months ended June 30, 1999 from approximately $5.3 million for the nine months ended June 30, 1998. This increase of approximately $2,300,000 was primarily due to the additional revenue related to the services unit acquired in the UK on July 1, 1998. Product revenue decreased to approximately $7.0 million for the nine months ended June 30, 1999 from approximately $8.0 million for the nine months ended June 30, 1998 primarily as a result of the negative impact of reduced sales in Asia due to the currency situation. Total cost of revenue for the nine months ended June 30, 1999 increased 34.1% to approximately $7.7 million from approximately $5.8 million for the nine months ended June 30, 1998. This increase of approximately $1.9 million was primarily due to the additional cost of revenue related to the services unit acquired in the UK on July 1, 1998. Cost of product revenue increased to 38.7% as a percentage of product revenue for the nine months ended June 30, 1999 from 34.5% of product revenue for the nine months ended June 30, 1998, primarily due to a change in product mix. Cost of services revenue increased to approximately 65.8% as a percentage of services revenue for the nine months ended June 30, 1999 from approximately 56.4% of services revenue for the nine months ended June 30, 1998 primarily due to an increase in the level of services staffing. Selling expenses for the nine months ended June 30, 1999 decreased 9.8% to approximately $2,952,000 from approximately $3,272,000 for the nine months ended June 30, 1998 primarily due to reduced distributor commissions. Research and development expenses for the nine months ended June 30, 1999 decreased 12.6% to approximately $1,498,000 from approximately $1,713,000 for the nine months ended June 30, 1998 primarily due to the expiration of certain grant projects. General and administrative expenses for the nine months ended June 30, 1999 increased 18.8% to approximately $1,974,000 from approximately $1,662,000 for the nine months ended June 30, 1998, primarily as a result of increased expenses related to the Company's efforts to address potential Y2K exposure. Other income (expense), net, was approximately $(50,000) in the nine months ended June 30, 1999, as compared to approximately $55,000 in the nine months ended June 30, 1998 as a result of a reduction in net interest income due to the decrease in cash and cash equivalents. 8 The Company's effective tax rate for the nine months ended June 30, 1999 was 40.1% as compared to 41.5% for the nine months ended June 30, 1998. The lower rate for the nine months ended June 30, 1999 was due in part to the increase in the relative size of the Company's net favorable permanent differences to book income. LIQUIDITY AND CAPITAL RESOURCES At June 30, 1999, the Company had cash and cash equivalents of approximately $1,860,000 compared to cash and cash equivalents of approximately $1,208,000 at September 30, 1998. The increase in cash resulted primarily from the Company's increase of long term debt. The Company's net cash provided (used) by operating activities was approximately $202,000 for the nine months ended June 30, 1999 as compared to approximately $1,049,000 for the first nine months of fiscal 1998. The positive cash flow from operations during the nine months ended June 30, 1999 was partially the result of net income of approximately $261,000 plus non-cash charges of approximately $880,000 offset by a net change of approximately $(939,000) in operating assets and liabilities. The most significant decrease in operating liabilities related to accounts payable, which decreased to approximately $1,323,000 at June 30, 1999 from approximately $1,941,000 at September 30, 1998. Cash used by investing activities increased to approximately $2,862,000 for the nine months ended June 30, 1999 from approximately $2,374,000 for the nine months ended June 30, 1998, primarily as a result of the Company's move toward completion of construction of certain additional facilities. Cash provided by financing activities for the nine months ended June 30, 1999 was approximately $3,312,000 primarily due to the increase of debt. Total expenditures by the Company for property and equipment were approximately $2,862,000 and $2,048,000 for the nine months ended June 30, 1999 and 1998, respectively. Expenditures made in connection with the expansion of the Company's operating facilities and purchases of laboratory equipment account for the largest portions of these expenditures. The Company anticipates decreased levels of capital expenditures during the remainder of fiscal 1999 in connection with the renovation and construction of additional facilities and the purchase of additional laboratory equipment. The Company currently has no firm commitments for capital expenditures other than in connection with the expansion of the Company's facilities. The Company expects to make other investments to expand its operations through internal growth and, as attractive opportunities arise, through strategic acquisitions, alliances and joint ventures. Based on its current business activities, the Company believes that cash generated from its operations and amounts available under its existing bank relationships will be sufficient to fund its anticipated working capital and capital expenditure requirements. On June 24, 1999 the Company obtained a $3,500,000 commercial mortgage. The mortgage note has a 5 year term, while the principal will be amortized assuming a 20 year amortization period with a balloon payment at maturity. Interest is charged at the one month LIBOR rate plus 200 basis points ( 7.02% at June 30, 1999). The Company has a working capital line of credit agreement which expires April 1, 2000 and allows borrowings of up to $3,500,000. Interest is charged at the prime rate minus 25 basis points ( 7.50% at June 30, 1999). This line of credit was unused at June 30, 1999. The line is collateralized by inventories and accounts receivable. The Company has an aquisition line of credit agreement which expires April 1, 2000 and allows borrowings of up to $4,000,000. Interest is charged at the prime rate ( 7.75% at June 30, 1999). This line of credit was unused at June 30, 1999. YEAR 2000 The Company undertook in fiscal 1998 to identify those information technology and other systems which may not be Year 2000 compliant. The Company has identified that its primary computer hardware and software systems will require modifications, and the Company has developed and commenced implementation of a plan to modify such systems to recognize the Year 2000. Management currently expects this project to be substantially complete by the end of the summer of 1999, and management estimates that the project will involve capital expenditures (excluding normal system upgrades and replacements) of less than $100,000. Management has initiated discussions with significant suppliers, customers and financial institutions to ensure that those parties have appropriate plans to remediate Year 2000 issues where their systems interface with the Company's systems or otherwise impact its operations. The Company is also assessing the extent to which its operations are vulnerable should those organizations fail to properly remediate their computer systems. The cost of the Year 2000 initiatives in the aggregate is not expected to be material to the Company's results of operations or financial position. 9 EFFECT OF NEW ACCOUNTING PRONOUNCEMENT In June 1997, the FASB issued Statement of Financial Accounting Standards No. 130 (SFAS 130), "Reporting Comprehensive Income." SFAS 130 establishes standards for reporting and display of comprehensive income in the financial statements. SFAS 130 is effective for fiscal years beginning after December 15, 1997. The Company has adopted SFAS 130 effective October 1, 1998. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not Applicable PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In April, 1997, CMA Microdialysis Holding A.B. ("CMA") filed an action against the Company in the United States District Court for the District of New Jersey in which CMA alleged that the Company's microdialysis probes infringe U.S. Patent No. 4,694,832. The Company has filed an answer in which it denied infringement and asserted that the patent on which CMA relies is invalid. Sales of the product in question accounted for less than one percent of the Company's revenues in fiscal 1998 and for the first three quarters of fiscal 1999. The matter is now awaiting a trial date. Management intends to continue a vigorous defense against CMA's claims, and believes that the ultimate outcome of this matter will not have a material adverse effect on the Company's financial condition or results of operations. However, legal expenses associated with the defense of this suit have had and may continue to have an adverse effect on earnings. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. Not Applicable. ITEM 5. OTHER INFORMATION On August 12, 1999, the Company announced that it had entered into a non-binding letter of intent to acquire Toxicology Pathology Services, Inc. of Mt. Vernon, Indiana, pending a detailed business and legal review. TPS is a provider of pre-clinical research services to pharmaceutical, medical device and other markets. The press release issued by the Company has been filed as an exhibit to this Form 10-Q. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 10 3.1 Second Amended and Restated Articles of Incorporation of Bioanalytical Systems, Inc. (Incorporated by reference to Exhibit 3.1 to Form 10-Q, File No. 000-23357) 3.2 Second Restated Bylaws of Bioanalytical Systems, Inc. (Incorporated by reference to Exhibit 3.2 to Form 10-Q, File No. 000-23357). 4.1 Specimen Certificate for Common Shares (Incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-1, Registration No. 33-36429) 10.1 Form of Employee Confidentiality Agreement (Incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-1, Registration No. 333-36429). 10.2 Bioanalytical Systems, Inc. Outside Director Stock Option Plan (Incorporated by reference to Exhibit 10.2 to Registration Statement on Form S-1, Registration No. 333-36429). 10.3 Form of Bioanalytical Systems, Inc. Outside Director Stock Option Agreement (Incorporated by reference to Exhibit 10.3 to Registration Statement on Form S-1, Registration No. 333-36429). 10.4 Bioanalytical Systems, Inc. 1990 Employee Incentive Stock Option Plan (Incorporated by reference to Exhibit 10.4 to Registration Statement on Form S-1, Registration No. 333-36429). 10.5 Form of Bioanalytical Systems, Inc. 1990 Employee Incentive Stock Option Agreement (Incorporated by reference to Exhibit 10.5 to Registration Statement on Form S-1, Registration No. 333-36429). 10.6 Security Agreement by and between Bioanalytical Systems, Inc. and Bank One, Lafayette, N.A., dated August 22, 1996 (Incorporated by reference to Exhibit 10.17 to Registration Statement on Form S-1, Registration No. 333-36429). 10.7 Master Lease Agreement by and between Bioanalytical Systems, Inc. and Bank One Leasing Corporation dated November 9, 1994 (Incorporated by reference to Exhibit 10.18 to Registration Statement on Form S-1, Registration No. 333-36429). 10.8 Financing Lease by and between Bioanalytical Systems, Inc. and Bank One Leasing Corporation, dated November 9, 1994 (Incorporated by reference to Exhibit 10.19 to Registration Statement on Form S-1, Registration No. 333-36429). 10.9 Credit Agreement by and between Bioanalytical Systems, Inc. and Bank One, Indiana, N.A., dated August 30, 1996 (Incorporated by reference to Exhibit 10.24 to Registration Statement on Form S-1, Registration No. 333-36429). 10.10 Bioanalytical Systems, Inc. 1997 Employee Incentive Stock Option Plan (Incorporated by reference to Exhibit 10.26 to Registration Statement on Form S-1, Registration No. 333-36429). 11 10.11 Form of Bioanalytical Systems, Inc. 1997 Employee Incentive Stock Option Agreement (Incorporated by reference to Exhibit 10.27 to Registration Statement on Form S-1, Registration No. 333-36429). 10.12 1997 Bioanalytical Systems, Inc. Outside Director Stock Option Plan (Incorporated by reference to Exhibit 10.28 to Registration Statement on Form S-1, Registration No. 333-36429). 10.13 Form of Bioanalytical Systems, Inc. 1997 Outside Director Stock Option Agreement (Incorporated by reference to Exhibit 10.29 to Registration Statement on Form S-1, Registration No. 333-36429) 10.14 Business Loan Agreement by and between Bioanalytical Systems, Inc., and Bank One, Indiana, N.A. dated March 1, 1998 (Incorporated by reference to Exhibit 10.14 to Quarterly Report Form 10-Q for the quarter ended June 30, 1998). 10.15 Commercial Security Agreement by and between Bioanalytical Systems, Inc. and Bank One, Indiana, N.A., dated March 1, 1998 (Incorporated by reference to Exhibit 10.15 to Quarterly Report Form 10-Q for the quarter ended March 31, 1998). 10.16 Negative Pledge Agreement by and between Bioanalytical Systems, Inc. and Bank One, Indiana, N.A., dated March 1, 1998 (Incorporated by reference to Exhibit 10.16 to Quarterly Report Form 10-Q for the quarter ended June 30, 1998). 10.17 Promissory Note for $7,500,000 executed by Bioanalytical Systems, Inc. in favor of Bank One, N.A., dated March 1, 1998 (Incorporated by reference to Exhibit 10.17 to Quarterly Report Form 10-Q for the quarter ended June 30, 1998). 10.18 Business Loan Agreement by and between Bioanalytical Systems, Inc. and Bank One, Indianapolis, NA, dated June 24, 1999 related to loan in the amount of $3,500,000. 11.1 Statement Regarding Computation of Per Share Earnings. 27.1 Financial Data Schedule 99.1 Press release announcing non-binding letter of intent with Toxicology Pathology Services, Inc. (b) Reports on Form 8-K No report on Form 8-K was filed during the quarter for which this report is filed. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized: BIOANALYTICAL SYSTEMS, INC. By /s/ PETER T. KISSINGER - ----------------------------- Peter T. Kissinger President and Chief Executive Officer Date: August 16, 1999 By /s/ DOUGLAS P. WIETEN - ---------------------------- Douglas P. Wieten Vice President of Finance, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) Date: August 16, 1999 12
BIOANALYTICAL SYSTEMS, INC. FORM 10-Q INDEX TO EXHIBITS Number Assigned in Regulation S-K Exhibit Item 601 Number Description of Exhibit ------------------ ------- ---------------------- (2) No Exhibit. (3) 3.1 Second Amended and Restated Articles of Incorporation of Bioanalytical Systems, Inc. (Incorporated by reference to Exhibit 3.1 to Form 10-Q, File No. 000-23357) 3.2 Second Restated Bylaws of Bioanalytical Systems, Inc. (Incorporated by reference to Exhibit 3.2 to Form 10-Q, File No. 000-23357). (4) 4.1 Specimen Certificate for Common Shares (Incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-1, Registration No. 333-36429) 4.2 See Exhibits 3.1 and 3.2 (10) 10.1 Form of Employee Confidentiality Agreement (Incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-1, Registration No. 333-36429). 10.2 Bioanalytical Systems, Inc. Outside Director Stock Option Plan (Incorporated by reference to Exhibit 10.2 to Registration Statement on Form S-1, Registration No. 333-36429). 10.3 Form of Bioanalytical Systems, Inc. Outside Director Stock Option Agreement (Incorporated by reference to Exhibit 10.3 to Registration Statement on Form S-1, Registration No. 333-36429). 10.4 Bioanalytical Systems, Inc. 1990 Employee Incentive Stock Option Plan (Incorporated by reference to Exhibit 10.4 to Registration Statement on Form S-1, Registration No. 333-36429). 10.5 Form of Bioanalytical Systems, Inc. 1990 Employee Incentive Stock Option Agreement (Incorporated by reference to Exhibit 10.5 to Registration Statement on Form S-1, Registration No. 333-36429). 10.6 Security Agreement by and between Bioanalytical Systems, Inc. and Bank One, Lafayette, N.A., dated August 22, 1996 (Incorporated by reference to Exhibit 10.17 to Registration Statement on Form S-1, Registration No. 333-36429). 10.7 Master Lease Agreement by and between Bioanalytical Systems, Inc. and Bank One Leasing Corporation dated November 9, 1994 (Incorporated by reference to Exhibit 10.18 to Registration Statement on Form S-1, Registration No. 333-36429). 10.8 Financing Lease by and between Bioanalytical Systems, Inc. and Bank One Leasing Corporation, dated November 9, 1994 (Incorporated by Reference to Exhibit 10.19 to Registration Statement on Form S-1, Registration No. 333-36429). 10.9 Credit Agreement by and between Bioanalytical Systems, Inc. and Bank One, Indiana, N.A., dated August 30, 1996 (Incorporated by reference to Exhibit 10.24 to Registration Statement on Form S-1, Registration No. 333-36429). 13 10.10 Bioanalytical Systems, Inc. 1997 Employee Incentive Stock Option Plan (Incorporated by reference to Exhibit 10.26 to Registration Statement on Form S-1, Registration No. 333-36429). 10.11 Form of Bioanalytical Systems, Inc. 1997 Employee Incentive Stock Option Agreement (Incorporated by reference to Exhibit 10.27 to Registration Statement on Form S-1, Registration No. 333-36429). 10.12 1997 Bioanalytical Systems, Inc. Outside Director Stock Option Plan (Incorporated by reference to Exhibit 10.28 to Registration Statement on Form S-1, Registration No. 333-36429). 10.13 Form of Bioanalytical Systems, Inc. 1997 Outside Director Stock Option Agreement (Incorporated by reference to Exhibit 10.29 to Registration Statement on Form S-1, Registration No. 333-36429). 10.14 Business Loan Agreement by and between Bioanalytical Systems, Inc., and Bank One, Indiana, N.A. dated March 1, 1998 (Incorporated by reference to Exhibit 10.14 to Quarterly report Form 10-Q for the quarter ended June 30, 1998). 10.15 Commercial Security Agreement by and between Bioanalytical Systems, Inc. and Bank One, Indiana, N.A., dated March 1, 1998 (Incorporated by reference to Exhibit 10.15 to Quarterly report Form 10-Q for the quarter ended June 30, 1998). 10.16 Negative Pledge Agreement by and between Bioanalytical Systems, Inc. and Bank One, Indiana, N.A., dated March 1, 1998 (Incorporated by reference to Exhibit 10.16 to Quarterly report Form 10-Q for the quarter ended June 30, 1998). 10.17 Promissory Note for $7,500,000 executed by Bioanalytical Systems, Inc. in favor of Bank One, N.A., dated March 1, 1998 (Incorporated by reference to Exhibit 10.17 to Quarterly report Form 10-Q for the quarter ended June 30, 1998). 10.18 Business Loan Agreement by and between Bioanalytical Systems, Inc. and Bank One, Indianapolis, NA, dated June 24, 1999 related to loan in the amount of $3,500,000. (11) 11.1 Statement Regarding Computation of Per Share Earnings. (12) No Exhibit (13) No Exhibit (15) No Exhibit (18) No Exhibit (19) No Exhibit (22) No Exhibit (23) No Exhibit (24) No Exhibit (27) 27.1 Financial Data Schedule (99) 99.1 Press release announcing non-binding letter of intent with Toxicology Pathology Services, Inc.
14 EX-10.18 2 BUSINESS LOAN AGREEMENT
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials $3,500,000.00 06-24-1999 06-24-2004 404 3209009006 00002 References in the above area are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
BORROWER: BIOANALYTICAL SYSTEMS, INC. LENDER: BANK ONE, INDIANA, NA 2701 KENT AVE. COMMERCIAL/BUSINESS BANKING- WEST LAFAYETTE, IN 47906 LAFAYETTE 111 MONUMENT CIRCLE INDIANAPOLIS, IN 46277 THIS BUSINESS LOAN AGREEMENT between BIOANALYTICAL SYSTEMS, INC. ("Borrower") and Bank One, Indiana, NA ("Lender") is made and executed as of June 24, 1999. This Agreement governs all loans, credit facilities and/or other financial accommodations described herein and, unless otherwise agreed to in writing by Lender and Borrower, all other present and future loans, credit facilities and other financial accommodations provided by Lender to Borrower. All such loans, credit facilities and other financial accommodations, together with all renewals, amendments and modifications thereof, are referred to in this Agreement individually as the "Loan" and collectively as the "Loans." Borrower understands and agrees that: (a) in granting, renewing, or extending any Loan, Lender is relying upon Borrower's representations, warranties, and agreements, as set forth in this Agreement; and (b) all such Loans shall be and shall remain subject to the following terms and conditions of this Agreement. TERM. This Agreement shall be effective as of June 24, 1999, and shall continue thereafter until all Loans and other obligations owing by Borrower to Lender hereunder have been paid in full and Lender has no commitments or obligations to make further advances under the Loans to Borrower. DEFINITIONS. The following words shall have the following meanings when used in this Agreement. Terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code as adopted in the State of Indiana. All references to dollar amounts shall mean amounts in lawful money of the United States of America. Agreement. The word "Agreement" means this Business Loan Agreement, as may be amended or modified from time to time, together with all exhibits and schedules attached hereto from time to time. Borrower. The word "Borrower" means BIOANALYTICAL SYSTEMS, INC.. Collateral. The word "Collateral" means and includes without limitation all property and assets granted as collateral for any Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise. ERISA. The word "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. Grantor. The word "Grantor" means and includes each and all of the persons or entities granting a Security Interest in any Collateral for any of the Loans. Guarantor.The word "Guarantor" means and includes each and all of the guarantors, sureties, and accommodation parties for any of the Loans. Indebtedness. The word "indebtedness" means the indebtedness evidenced by the Note, including all principal and accrued interest thereon, together with all other liabilities, costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents. In addition, the word "Indebtedness" includes all other obligations, debts and liabilities, plus any accrued interest thereon, owing by Borrower, or any one or more of them, to Lender of any kind or character, now existing or hereafter arising, as well as all present and future claims by Lender against Borrower, or any one or more of them, and all renewals, extensions, modifications, substitutions and rearrangements of any of the foregoing; whether such Indebtedness arises by note, draft, acceptance, guaranty, endorsement, letter of credit, assignment; overdraft, indemnity agreement or otherwise; whether such Indebtedness is voluntary or involuntary, due or not due, direct or indirect, absolute or contingent, liquidated or unliquidated; whether such Indebtedness is voluntary or involuntary, due or not due, direct or indirect, absolute or contingent, liquidated or unliquidated; whether Borrower may be liable individually or jointly with others; whether Borrower may be liable primarily or secondarily or as debtor, maker, comaker, drawer, endorser, guarantor, surety, accommodation party or otherwise. Lender. The word "Lender" means Bank One, Indiana, NA, it successors and assigns. Note. The word "Note" means any and all promissory note or notes which evidence Borrower's Loans in favor of Lender, as well as any amendment, modification, renewal or replacement thereof. Permitted Liens. The words "Permitted Liens" mean: (a) liens and security interests securing Indebtedness owed by Borrower to Lender; (b) liens for taxes, assessments, or similar charges either (i) not yet due, or (ii) being contested in good faith by appropriate proceedings for and which Borrower has established adequate reserves; (c) purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course of business to secure any indebtedness permitted under this Agreement; and (d) liens and security interests which, as of the date of this Agreement, have been disclosed to and approved by the Lender in writing. Related Documents. The words "Related Documents" mean and include without limitation the Note and all credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Note. Security Agreement. The words "Security Agreement" mean and include without limitation any agreements, promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest. Security Interest. The words "Security Interest" mean and include without limitation any type of security interest, whether in the form of a lien, charge, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each request for an advance or disbursement of Loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any indebtedness exists hereafter: Organization. Borrower is a corporation which is duly organized, validly existing, and in good standing under the laws of the State of Indiana and is duly qualified and in good standing in all other states in which Borrower is doing business. Borrower has the full power and authority to own its properties and to transact the businesses in which it is presently engaged or presently proposes to engage. Authorization. The execution, delivery, and performance of this Agreement and all Related Documents to which Borrower is a party have been duly authorized by all necessary action; do not require the consent or approval of any other person, regulatory authority or governmental body; and do not conflict with, result in a violation of, or constitute a default under (a) any provision of its articles of incorporation or organization, or bylaws, or any agreement or other instrument binding upon Borrower or (b) any law, governmental regulation, court decree, or order applicable to Borrower. Borrower has all requisite power and authority to execute and deliver this Agreement and all other Related Documents to which Borrower is a party. Financial Information. Each financial statement of Borrower supplied to Lender truly and completely discloses Borrower's financial condition as of the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements. Legal Effect. This Agreement and all other Related Documents to which Borrower is a party constitute legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms, except as limited by bankruptcy, insolvency or similar laws of general application relating to the enforcement of creditors' rights and except to the extent specific remedies may generally be limited by equitable principles. Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower is the sole owner of, and has good title to, all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower's properties are titled in Borrower's legal name, and Borrower has not used, or filed a financing statement under, any other name for at least the last six (6) years. Compliance. Except as disclosed in writing to Lender (a) Borrower is conducting Borrower's businesses in material compliance with all applicable federal, state and local laws, statutes, ordinances, rules, regulations, orders, determinations and court decisions, including without limitation, those pertaining to health or environmental matters, and (b) Borrower otherwise does not have any known material contingent liability in connection with the release into the environment, disposal or the improper storage of any toxic or hazardous substance or solid waste. Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened, and no other event has occurred which may in any one case or in the aggregate materially adversely affect Borrower's financial condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing. Taxes. All tax returns and reports of Borrower that are or were required to be filed, have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those that have been disclosed in writing to Lender which are presently being or to be contested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided. Lien Priority. Unless otherwise previously disclosed to and approved by Lender in writing, Borrower has not entered into any Security Agreements, granted a Security Interest or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral, except in favor of Lender. Licenses, Trademarks and Patents. Borrower possesses and will continue to possess all permits, licenses, trademarks, patents and rights thereto which are needed to conduct Borrower's business and Borrower's business does not conflict with or violate any valid rights of others with respect to the foregoing. Commercial Purposes. Borrower intends to use the Loan proceeds solely for business or commercial related purposes approved by Lender and such proceeds will not be used for the purchasing or carrying of "margin stock" as defined in Regulation U issued by the Board of Governors of the Federal Reserve System. Ineligible Securities. No portion or any advance or Loan made hereunder shall be used directly or indirectly to purchase ineligible securities, as defined by applicable regulations of the Federal Reserve Board, underwritten by Lender or any other affiliate of Banc One Corporation during the underwriting period and for 30 days thereafter. Employee Benefit Plans. Each employee benefit plan as to which Borrower may have any liability complies in all material respects with all applicable requirements of law and regulations, and (i) no Reportable Event nor Prohibited Transaction (as defined in ERISA) has occurred with respect to any such plan, (ii) Borrower has not withdrawn from any such plan or initiated steps to do so, (iii) no steps have been taken to terminate any such plan, and (vi) there are no unfunded liabilities other than those previously disclosed to Lender in writing. Location of Borrower's Offices and Records. Borrower's place of business, or Borrower's chief executive office if Borrower has more than one place of business, is located at 2701 KENT AVE., WEST LAFAYETTE, IN 47906. Unless Borrower has designated otherwise in writing this location is also the office or offices where Borrower keeps its records concerning the Collateral. Information. All information heretofore or contemporaneously herewith furnished by Borrower to Lender for the purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all Information hereafter furnished by or on behalf of Borrower to Lender will be, true and accurate in every material respect on the date as of which such information is dated or certified; and none of such information is or will be incomplete by omitting to state any material fact necessary to make such information not misleading. Survival of Representations and Warranties. Borrower understands and agrees that Lender, without independent investigation, is relying upon the above representations and warranties in extending Loan advances to Borrower. Borrower further agrees that the foregoing representations and warranties shall be continuing in nature and shall remain in full force and effect during the term of this Agreement. AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while this Agreement is in effect, Borrower will: Depository Relationship. Establish and maintain its primary operating account(s) with Lender. Litigation. Promptly inform Lender in writing of (a) all material adverse changes in Borrower's financial condition, (b) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor, and (c) the creation, occurrence or assumption by Borrower of any actual or contingent liabilities not permitted under this Agreement. Financial Records. Maintain its books and records in accordance with generally accepted accounting principles, applied on a consistent basis, and permit Lender to examine, audit and make and take away copies or reproductions of Borrower's books and records at all reasonable times. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense. Financial Statements. Furnish Lender with, as soon as available, but in no event later than one hundred twenty (120) days after the end of each fiscal year, Borrower's balance sheet, income statement, and statement of changes in financial position for the year ended, audited by a certified public accountant satisfactory to Lender, together with the management letter, if any, prepared by such accountants promptly upon receipt, and, as soon as available, but in no event later than forty-five (45) days after the end of each fiscal quarter, Borrower's balance sheet, income statement, and statement of changes in financial position for the period ended, prepared and certified, subject to year-end review adjustments, as correct to the best knowledge and belief by Borrow's chief financial officer or other officer or person acceptable to Lender. All financial reports required to be provided under this Agreement shall be prepared in accordance with generally accepted accounting principles, applied on a consistent basis, and certified by Borrower as being true and correct. Additional Information. Furnish such additional information and statements, lists of assets and liabilities, agings of receivables and payables, inventory schedules, budgets, forecasts, tax returns, and other reports with respect to Borrower's financial condition and business operations as Lender may request from time to time. Insurance. Maintain fire and other risk insurance, public liability insurance, business interruption insurance and such other insurance as Lender may require with respect to Borrower's properties and operations, in form, amounts, coverages and with insurance companies reasonably acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days' prior written notice to Lender. In connection with all policies covering assets in which Lender holds or is offered a Security Interest for the Loans, Borrower will provide Lender with such lender loss payable or other endorsements as Lender may require. Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following: (a) the name of the insurer; (b) the risks insured; (c) the amount of the policy; (d) the properties insured; (e) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (f) the expiration date of the policy. Other Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements. Loan Proceeds. Use all Loan proceeds solely for Borrower's business operations, unless specifically consented to the contrary by Lender in writing. Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits; provided however, Borrower will not be required to pay and discharge any such assessment, tax, charge, levy, lien or claim so long as (a) the legality of the same shall be contested in good faith by appropriate proceedings, and (b) Borrower shall have established on its books adequate reserves with respect to such contested assessment, tax, charge, levy, lien, or claim in accordance with generally accepted accounting principles. Borrower, upon demand of Lender, will furnish to Lender evidence of payment of the assessments, taxes, charges, levies, liens and claims and will authorize the appropriate governmental official to deliver to Lender at any time a written statement of any assessments, taxes, charges, levies, liens and claims against Borrower's properties, Income, or profits. Performance. Perform and comply with all terms, conditions, and provisions set forth in this Agreement and in the Related Documents in a timely manner, and promptly notify Lender if Borrower learns of the occurrence of any event which constitutes an Event of Default under this Agreement or under any of the Related Documents. Operations. Conduct its business affairs in a reasonable and prudent manner and in compliance with all applicable federal, state and municipal laws, ordinances, rules and regulations respecting its properties, charters, businesses and operations, including without limitation, compliance with the Americans With Disabilities Act, all applicable environmental statutes, rules, regulations and ordinances with all minimum funding standards and other requirements of ERISA and other laws applicable to Borrower's employee benefit plans. Compliance Certificate. Unless waived in writing by Lender, provide Lender quarterly within forty-five (45) days with a certificate executed by Borrower's chief financial officer, or other officer or person acceptable to Lender, (a) certifying that the representations and warranties set forth in this Agreement are true and correct as of the date of the certificate and that, as of the date of the certificate, no Event of Default exists under this Agreement, and (b) demonstrating compliance with all financial covenants set forth in this Agreement. Environmental Compliance and Reports. Borrower shall comply in all respects with all federal, state and local environmental laws, statutes, regulations and ordinances; not cause or permit to exist, as a result of an intentional or unintentional action or omission on its part or on the part of any third party, on properly owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental authorities; and furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower's part in connection with any environmental activity whether or not there is damage to the environment and/or other natural resources. Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, financing statements, instruments, documents and other agreements as lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security Interests. NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender: Maintain Basic Business. Engage in any business activities substantially different than those in which Borrower is presently engaged. Continuity of Operations. Cease operations, liquidate, dissolve or merge or consolidate with or into any other entity. Indebtednes. Create, incur or assume additional indebtedness for borrowed money, including capital leases, or guarantee any indebtedness owning by others, other than (a) current unsecured trade debt incurred in the ordinary course of business, (b) indebtedness owing to Lender, (c) borrowings outstanding as of the date hereof and disclosed to Lender in writing, and (d) any borrowings otherwise approved by Lender in writing. Liens. Mortgage, assign, pledge, grant a security interest in or otherwise encumber Borrower's assets, except as allowed as a Permitted Lien. Transfer of Assets. Transfer, sell or otherwise dispose of any of Borrower's assets other than in the ordinary course of business. Investments. Invest in, or purchase, create, form or acquire any interest in, any other enterprise or entity. Affiliates. Enter into any transaction, including, without limitation, the purchase, sale, or exchange of property or the rendering of any service, with any Affiliate of Borrower, except in the ordinary course of and pursuant to the reasonable requirements of Borrower's business and upon fair and reasonable terms no less favorable than would be obtained in a comparable arm's length transaction with a person or entity not an Affiliate of Borrower. As used herein, the term "Affiliate" means any individual or entity directly or indirectly controlling, controlled by or under common control with, another entity or individual. CONDITIONS PRECEDENT TO ADVANCES. If Lender is obligated to make any Loan advances or to otherwise disburse any Loan proceeds to Borrower, such obligation shall be subject to the conditions precedent that as of the date of such advance or disbursement and after giving effect thereto (a) all representations and warranties made to Lender in this Agreement and the Related Documents shall be true and correct as of the most recent financial statements furnished to Lender, or in the value of any Collateral, shall have occurred and be continuing, (c) no event has occurred and is continuing, or would result from the requested advance or disbursement, which with notice or lapse of time, or both, would constitute an Event of Default, (d) no Guarantor has sought, claimed or otherwise attempted to limit, modify or revoke such Guarantor's guaranty of any Loan, and (e) Lender has received all Related Documents appropriately executed by Borrower and all other proper parties. ADDITIONAL AFFIRMATIVE COVENANT-FIXED CHARGE RATIO. Borrower further covenants and agrees with Lender that, while this Agreement is in effect, Borrower will comply at all times with the following ratio: Maintain as of the end of each fiscal quarter, a ratio of (a) net maturities of long term debt, taxes, cash capital expenditures (capital expenditures net of external financing) and dividends for the same such twelve month period, of not less than 1.05 to 1.00. ADDITIONAL AFFIRMATIVE COVENANT-FUNDED DEBT. Borrower further covenants and agrees with Lender that, while this Agreement is in effect, Borrower will maintain as of each fiscal quarter and, a ratio of Funded Debt on such date, to its net income before interest, depreciation, and amortization for the twelve month period then ending of not greater than 3.0 to 1.0. The term "Funded Debt" means, as of the date of any determination, outstanding Indebtedness plus any other outstanding interest-bearing debt of Borrower. RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render a nontaxable account taxable, Borrower grants to Lender a contractual security interest in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender all Borrower's right, title and interest in and to, Borrower's accounts with Lender (whether checking, savings, or any other account), including without limitation all accounts held jointly with someone else and all accounts Borrower may open in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts. EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Default on Indebtedness. Failure of Borrower to make any payment when due on any of the Indebtedness. Other Defaults. Failure of Borrower, any Guarantor or any Grantor to comply with or to perform when due any other term, obligation, covenant or condition contained in this Agreement, the Note or in any of the other Related Documents, or failure of Borrower to comply with or to perform any other term, obligation, covenant or condition contained in any other agreement now existing or hereafter arising between Lender and Borrower. False Statements. Any warranty, representation or statement made or furnished to Lender under this Agreement or the Related Documents is false or misleading in any material respect. Default to Third Party. The occurrence of any event which permits the acceleration of the maturity of any indebtedness owing by Borrower, Grantor or any Guarantor to any third party under any agreement or undertaking. Bankruptcy or Insolvency. If the Borrower, Grantor or any Guarantor: (i) becomes insolvent, or makes a transfer in fraud of creditors, or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts as they become due; (ii) generally is not paying its debts as such debts become due; (iii) has a receiver, trustee or custodian appointed for, or take possession of, all or substantially all of the assets of such party or any of the Collateral, either in a proceeding brought by such party or in a proceeding brought against such party and such appointment is not discharged or such possession is not terminated within sixty (60) days after the effective date thereof or such party consents to or acquiesces in such appointment or possession; (iv) files a petition for relief under the United States Bankruptcy Code or any other present or future federal or state insolvency, bankruptcy or similar laws (all of the foregoing hereinafter collectively called "Applicable Bankruptcy Law") or an involuntary petition for relief is filed against such party under any Applicable Bankruptcy Law and such involuntary petition is not dismissed within sixty (60) days after the filing thereof, or an order for relief naming such party is entered under any Applicable Bankruptcy Law, or any composition, rearrangement, extension, reorganization or other relief of debtors now or hereafter existing is requested or consented to by such party; (v) fails to have discharged within a period of sixty (60) days any attachment, sequestration or similar writ levied upon any property of such party; or (vi) fails to pay within thirty (30) days any final money judgment against such party. Liquidation, Death and Related Events. If Borrower, Grantor or any Guarantor is an entity, the liquidation, dissolution, merger or consolidation of any such entity or, if any of such parties is an individual, the death or legal incapacity of any such individual. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower, any creditor of any Grantor against any collateral securing the Indebtedness, or by any governmental agency. EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, Lender may, at its option, without further notice or demand, (a) terminate all commitments and obligations of Lender to make Loans to Borrower, if any, (b) declare all Loans and any other Indebtedness immediately due and payable, (c) refuse to advance any additional amounts under the Note, or (d) exercise all the rights and remedies provided in the Note or in any of the Related Documents or available at law, in equity, or otherwise; provided, however, if any Event of Default of the type described in the "Bankruptcy or Insolvency" subsection above shall occur, all Loans and any other Indebtedness shall automatically become due and payable, without any notice, demand or action by Lender. Except as may be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedies shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or any Grantor shall not affect Lender's right to declare a default and to exercise its rights and remedies. MISCELLANEOUS PROVISIONS Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Applicable Law. This Agreement has been delivered to Lender and accepted by Lender in the State of Indiana. Subject to the provisions on arbitration, this Agreement shall be governed by and construed in accordance with the laws of the State of Indiana without regard to any conflict of laws or provisions thereof. JURY WAIVER. THE UNDERSIGNED AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT, AND ANY OTHER RELATED DOCUMENT, OR ANY RELATIONSHIP BETWEEN LENDER AND THE BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING DESCRIBED HEREIN OR IN THE OTHER RELATED DOCUMENTS. Arbitration. Lender and Borrower agree that upon the written demand of either party, whether made before or after the institution of any legal proceedings, but prior to the rendering of any judgment in that proceeding, all disputes, claims and controversies between them, whether individual, joint, or class in nature, arising from this Agreement, any Related Document or otherwise, including without limitation contract disputes and tort claims, shall be resolved by binding arbitration pursuant to the Commercial Rules of the American Arbitration Association ("AAA"). Any arbitration proceeding held pursuant to this arbitration provision shall be conducted in the city nearest the Borrower's address having an AAA regional office, or at any other place selected by mutual agreement of the parties. No act to take or dispose of any Collateral shall constitute a waiver of this arbitration agreement or be prohibited by this arbitration agreement. This arbitration provision shall not limit the right of either party during any dispute, claim or controversy to seek, use, and employ ancillary, or preliminary rights and/or remedies, judicial or otherwise, for the purposes of realizing upon, preserving, protecting, foreclosing upon or proceeding under forcible entry and detainer for possession of, any real or personal property, and any such action shall not be deemed an election of remedies. Such remedies include, without limitation, obtaining injunctive relief or a temporary restraining order, invoking a power of sale under any deed of trust or mortgage, obtaining a writ of attachment or imposition of a receivership, or exercising any rights relating to personal property, including exercising the right of set-off, or taking or disposing of such property with or without judicial process pursuant to the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of an act, or exercise of any right or remedy, concerning any Collateral, including any claim to rescind, reform, or otherwise modify any agreement relating to the Collateral, shall also be arbitrated; provided, however that no arbitrator shall have the right or the power to enjoin or restrain any act of either party. Judgment upon any award rendered by any arbitrator may be entered in any court having jurisdiction. The statute of limitations, estoppel, waiver, laches and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any arbitration proceeding, and the commencement of an arbitration proceeding shall be deemed the commencement of any action for these purposes. The Federal Arbitration Act (Title 9 of the United States Code) shall apply to the construction, interpretation, and enforcement of this arbitration provision. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. Consent to Loan Participation. Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation interests in the Loans to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy it may have with respect to such matters. Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Costs and Expenses. Borrower agrees to pay upon demand all of Lender's expenses, including attorneys' fees, incurred in connection with the preparation, execution, enforcement, modification and collection of this Agreement or in connection with the Loans made pursuant to this Agreement. Lender may hire one or more attorneys to help collect the indebtedness if Borrower does not pay, and Borrower will pay Lender's reasonable attorneys' fees. Notices. All notices required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered or when deposited with a nationally recognized overnight courier or deposited in the United States mail, first class, postage prepaid, addressed to the party to whom the notice is to be given at the address shown above. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties; specifying that the purpose of the notice is to change the party's address. For notice purposes, Borrower will keep Lender informed at all times of Borrower's current address(es). Severability. If a court of competent jurisdiction finds any provision of this Agreement to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute the same document. Signature pages may be detached from the counterparts to a single copy of this Agreement to physically form one document. Successors and Assigns. All covenants and agreements contained by or on behalf of Borrower shall bind its successors and assigns and shall inure to the benefit of Lender, its successors and assigns. Borrower shall not, however, have the right to assign its rights under this Agreement or any interest therein, without the prior written consent of Lender. Survival. All warranties, representations, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement shall be considered to have been relied upon by Lender and will survive the making of the Loan and delivery to Lender of the Related Documents, regardless of any investigation made by Lender or on Lender's behalf. Time is of the Essence. Time is of the essence in the performance of this Agreement. Waiver. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any Grantor or Guarantor, shall constitute a waiver of any of Lender's rights or of any obligations of Borrower or of any Grantor as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent in subsequent instances where such consent is required, and in all cases such consent may be granted or withheld in the sole discretion of Lender. BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS EXECUTED AS OF THE DATE SET FORTH ABOVE. BORROWER: BIOANALYTICAL SYSTEMS, INC. By: --------------------------------------- Doug Wieten, Vice President of Finances LENDER: Bank One, Indiana, NA By: --------------------------------------- Authorized Officer EX-11.1 3 Statement Regarding Computation of Per share Earnings (Unaudited) (in thousands except per share data)
Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended June 30, 1998 June 30, 1999 June 30, 1998 June 30, 1999 ------------------ ------------------- ---------------- ---------------- Basic Average Common Shares outstanding 4,470 4,508 3,990 4,503 Net income $ 130 $ 67 $ 557 $ 261 Per Share Amount $ .03 $ .01 $ .14 $ .06 Diluted Average Common Shares outstanding 4,470 4,508 3,990 4,503 Net effect of dilutive stock options based on the treasury stock method using the average market price 168 186 182 170 Assumed conversion of Preferred Shares --- --- 153 --- Total 4,638 4,694 4,325 4,673 Net income $ 130 $ 67 $ 557 $ 261 Per share amount $ .03 $ .01 $ .13 $ .06
EX-27 4
5 This schedule contains summary financial information extracted from the Bioanalytical Systems, Inc. consolidated financial statements contained in the company's annual report on Form 10-Q and is qualified in its entirety by reference to such financial statements. 1000 3-MOS 9-MOS SEP-30-1999 SEP-30-1999 APR-01-1999 OCT-01-1999 JUN-30-1999 JUN-30-1999 1,860 1,860 0 0 2,814 2,814 0 0 2,010 2,010 6,945 6,945 21,389 21,389 4,757 4,757 24,854 24,854 2,209 2,209 0 0 0 0 0 0 999 999 16,134 16,134 24,854 24,854 2,412 7,036 4,973 14,628 901 2,724 2,696 7,718 2,149 6,424 0 0 47 112 92 436 25 175 67 261 0 0 0 0 0 0 67 261 .01 .06 .01 .06
EX-99.1 5 Bioanalytical Systems, Inc. and Toxicology Pathology Services Sign Letter of Intent Bioanalytical Systems, Inc. (NASDAQ: BASI) announced today that it has signed a letter of intent to purchase Toxicology Pathology Services, Inc. (TPS) of Mt. Vernon, IN, pending a detailed business and legal review. TPS has provided high quality pre-clinical research services to pharmaceutical, medical device and other markets for more than 20 years. The company's reputation for scientific excellence, customer focus and on-time reporting is exemplary. "Shareholders expect us to build our BAS contract research services business. We made substantial investments in our staff, analytical equipment and lab space last year. That growth focused on analytical chemistry in support of clinical trials for major ethical pharmaceutical companies. It will continue in 2000," commented BAS President and CEO, Peter T. Kissinger. "Acquiring TPS is an important element of our growth strategy. Our balanced development plan demands that we step upstream in pharmaceutical development to support pre-clinical drug development for key pharmaceutical accounts. The proposed acquisition of TPS will give us new technologies, people and facilities near our core labs to satisfy clients' pre-clinical trial dosing and sampling needs and clinical trial analysis and reporting requirements." BAS is also an industry leader in the development and sales of instrument systems for monitoring in vivo biochemistry and physiology. These systems have been used by clients in new drug development, toxicology, cancer research, addiction and behavioral research. TPS technology, facilities and skill base will enable BAS to explore new products, uses and services for in vivo systems. The 50,000-square-foot TPS facility includes 40 custom designed study rooms. Many meet US Food and Drug Administration's GLP guidelines. The facility is fully accredited by AAALAC. TPS founder, Vice President of Research and principal shareholder Dr. James A. Botta has agreed to extend his tenure with BAS. Dr. Botta's credentials include degrees in Veterinary Medicine, Physiology and Toxicology from Auburn and Purdue Universities. He taught courses in Pharmacology, Toxicology and Anesthesiology at Auburn and was Principal Investigator in charge of the toxicology section at Bristol Myers Squibb Mead Johnson prior to founding TPS. BAS serves pharmaceutical and medical device industries, clinical laboratories and the basic research community with a wide variety of contract research services, research equipment and diagnostic kits. Visit http://www.bioanalytical.com to learn more about BAS. This release contains forward-looking statements that are subject to risks and uncertainties, including but not limited to risks and uncertainties related to the development of products and services, changes in technology, industry standards and regulatory standards, and various market and operating risks detailed in the company's filings with the Securities and Exchange Commission. -----END PRIVACY-ENHANCED MESSAGE-----