8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): December 1, 2019

BIOANALYTICAL SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Indiana	0-23357	35-1345024
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

2701 KENT AVENUE WEST LAFAYETTE, INDIANA	47906-1382
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (765) 463-4527

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act(17CFR240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17CFR240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act(17CFR240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Ticker symbol(s)	Name of each exchange on which registered
Common Shares	BASi	NASDAQ Capital Market

Item 1.01 Entry into a Material Definitive Agreement.

The information set forth in Item 2.01 regarding the Credit Agreement Amendment (as defined below) is incorporated by reference into this Item 1.01.

Item 2.01 Completion of Acquisition or Disposition of Assets.

As previously disclosed, on November 8, 2019, Bioanalytical Systems, Inc. (the “Company”), and Bronco Research Services LLC, a wholly owned subsidiary of the Company (the “Purchaser”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Pre-Clinical Research Services, Inc., a Colorado corporation (the “Seller”), and its shareholder (the “Shareholder”). On December 1, 2019, the Company closed the transactions contemplated by the Purchase Agreement, indirectly acquiring (the “Acquisition”) substantially all of the assets of Seller used or useful by Seller in connection with Seller's provision of good laboratory practice ("GLP") and non-GLP preclinical testing for the pharmaceutical and medical device industries. The consideration for the Acquisition consisted of $1,500,000 in cash, subject to certain adjustments, 240,000 of the Company’s common shares and an unsecured promissory note in the initial principal amount of $800,000 made by Purchaser.

In addition to the previously announced terms of the Acquisition, Purchaser also purchased from an affiliate of Shareholder certain real property located in Fort Collins, Colorado, comprising the main facility for the Seller’s business and additional property located next to the facility available for future expansion, for $2,500,000. As contemplated by the Purchase Agreement, the Purchaser also entered into a lease arrangement for an ancillary property used by Seller’s business, located in Livermore, Colorado.

In order to finance the Acquisition and the real property purchase, as well as provide additional capital to fund growth efforts, the Company amended and restated its credit arrangements with First Internet Bank (the “Credit Agreement Amendment”) to, among other things, (i) increase the principal amount of the Company’s amended and restated revolving note from $3,500,000 to $5,000,000 with a maturity of January 31, 2021 and interest payments only until maturity at a floating per annum rate equal to the greater of (a) four percent (4%), or (b) the sum of the Prime Rate plus Zero Basis Points (0.0%), which rate shall change concurrently with the Prime Rate, (ii) add a capital expenditure line of credit in the principal amount of $3,000,000 with a maturity of December 31, 2020 and interest payments only until maturity at a floating per annum rate equal to the greater of (a) four percent (4%), or (b) the sum of the Prime Rate plus Fifty Basis Points (0.5%), which rate shall change concurrently with the Prime Rate, (iii) add a new term loan in the principal amount of $1,500,000 with a maturity of June 1, 2025, interest at a fixed per annum rate equal to four percent (4%) and with interest payments only commencing January 1, 2020 through June 1, 2020, with monthly payments of principal and interest thereafter through maturity and (iv) add an additional new term loan in the principal amount of $1,939,000 with a maturity of December 1, 2024 and interest at a fixed per annum rate equal to four percent (4%), with payments of principal and interest due monthly through maturity.

Following the Credit Agreement Amendment, the Company’s obligations under the Amended and Restated Credit Agreement are guaranteed by BAS Evansville, Inc. (“BASEV”), Seventh Wave Laboratories, LLC (“Seventh Wave”), BASi Gaithersburg LLC (“BG”), as well as the Purchaser (collectively, the "Guarantors"), each a wholly owned subsidiary of the Company. The Company’s obligations under the Credit Agreement and the Guarantor's obligations under their respective guaranties are secured by first priority security interests in substantially all of the assets of the Company the Guarantors, respectively, as well as mortgages on the Company’s, BASEV’s and the Purchaser’s facilities in West Lafayette, Indiana, Evansville, Indiana, and Fort Collins, Colorado, respectively, and pledges of the Company’s ownership interests in its subsidiaries.

The Amended and Restated Credit Agreement includes financial covenants consisting of (i) a Fixed Charge Coverage Ratio (as defined in the Amended and Restated Credit Agreement) of not less than 1.25 to 1.0, tested quarterly and measured on a trailing twelve (12) month basis and (ii) beginning March 31, 2020 a Cash Flow Leverage Ratio (as defined in the Amended and Restated Credit Agreement), tested quarterly, as follows: not to exceed (a) as of March 31, 2020, 5.00 to 1.00, (b) as of June 30, 2020, 4.50 to 1.00, (c) as of September 30, 2020, 4.25 to 1.00 and (d) as of December 31, 2020 and each quarter thereafter, 4.00 to 1.00.

The foregoing description of the Credit Agreement Amendment does not purport to be complete and is qualified in its entirety by the terms and conditions of the Company’s Amended and Restated Credit Agreement, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarterly period ending December 31, 2019.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 2.01 regarding the Credit Agreement Amendment is incorporated by reference into this Item 2.03.

Item 3.02 Unregistered Sales of Equity Securities.

Pursuant to the Purchase Agreement, the Company issued 240,000 of the Company’s common shares to the Seller. The shares were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(a)(2) of the Securities Act as sales by an issuer not involving any public offering.

Item 7.01 Regulation FD Disclosure.

On December 3, 2019, the Company issued a press release announcing the completion of the Acquisition, a copy of which is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

The Company intends to file the financial statements of Seller required by Item 9.01(a) as part of an amendment to this Current Report on Form 8-K not later than 71 calendar days after the date that this Current Report on Form 8-K is required to be filed.

(b) Pro Forma Financial Information.

The Company intends to file the pro forma financial information required by Item 9.01(b) as part of an amendment to this Current Report on Form 8-K not later than 71 calendar days after the date that this Current Report on Form 8-K is required to be filed.

(d) Exhibits.

99.1 Press Release dated December 3, 2019

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 hereunto duly authorized.

	Bioanalytical Systems, Inc.
Date: December 3, 2019	By:	/s/ Robert Leasure, Jr.
		Robert Leasure, Jr.
		President and Chief Executive Officer

EX-99.1

Exhibit 99.1

 

NEWS RELEASE

FOR MORE INFORMATION:	Company Contact:
	Jill C. Blumhoff
	Chief Financial Officer
	Phone: 765.497.8381
	jblumhoff@inotivco.com

Inotiv, a BASi Company, Announces Closing of Pre-Clinical Research Services Transaction, Including New Financing to Fund the Transaction and Expand Discovery and DMPK Business 

WEST LAFAYETTE, Ind., December 3, 2019 -- Bioanalytical Systems, Inc. (NASDAQ:BASI) (“BASi” or the “Company”) doing business as Inotiv, a leading provider of nonclinical and analytical contract research services, announced today the closing of the previously announced agreement to purchase substantially all of the assets of Pre-Clinical Research Services, Inc. (“PCRS”), a premier provider of surgical and medical device contract research services. In connection with the closing, the Company also closed on additional funding, which positions the Company to make future investments in organic growth in the drug metabolism and pharmacokinetics arena. 

The Company, which recently announced the rebranding of the Company’s contract research services business under the name Inotiv, closed on the PCRS business on December 1, 2019. In addition to the previously announced terms of the transaction, the Company purchased real property comprising the main facility, and additional property located next to the facility which can be available for future expansion, for the PCRS business for $2,500,000. In order to finance the transaction, as well as provide additional capital to fund growth efforts, the Company amended and restated its credit arrangements with First Internet Bank to, among other things, increase a current line of credit under the facility from $3.5 million to $5 million, to add a capital expenditure line of credit in the principal amount of $3 million, and to add two new term loans in the amounts of approximately $1.5 million and $1.9 million, respectively, the proceeds of which were used to fund a portion of the purchase price for the PCRS business and acquired real property. A Current Report on Form 8-K containing further details regarding the transaction and financing will be filed with the U.S. Securities & Exchange Commission.

“I am pleased to announce the completion of our strategic agreement with PCRS and the new funding for our DMPK business, as we wrap up an exciting year of growth and evolution as a Company,” said Robert Leasure, Jr., the Company’s President and Chief Executive Officer. “Becoming one with PCRS allows us to provide broader services by further expanding our toxicology business and allowing us to offer surgical services for pharmaceutical and medical device clients. We’re looking to the new year with optimism, as we continue to focus on providing our clients with the broad scope and right-sized solutions essential to their success, and an experience of high-touch care and collaboration.”

 

Dr. Donald Maul, founder and president of PCRS, added, “We are very optimistic about the positive impact of joining Inotiv. This allows us the opportunity to provide more complete services to our clients, it creates opportunities for growth for our staff, and it provides a broader, more stable platform from which to operate. Since announcing the agreement a few weeks ago, feedback from our clients has been overwhelmingly positive, which serves to validate our strategy.”

With this closing, the Company’s clients will have the ability to work with one provider having expertise in a broad range of scientific disciplines, including:

· Pharmacology

· Toxicology

· Drug Metabolism

· Pharmacokinetics

· Bioanalysis

· Intravascular Device and Structural Heart Models

· Surgical and Medical Devices

· Scientific and Regulatory Consulting

About Inotiv, A Bioanalytical Systems, Inc., Company

Inotiv, a BASi Company, is a pharmaceutical development company providing contract research services and monitoring instruments to emerging pharmaceutical companies and the world's leading drug development companies and medical research organizations. The Company focuses on developing innovative services supporting its clients’ discovery and development objectives for improved decision-making and accelerated goal attainment. BASi’s products focus on increasing efficiency, improving data, and reducing the cost of taking new drugs to market. Visit inotivco.com  for more information about Inotiv, A BASi Company.

This release may contain forward-looking statements that are subject to risks and uncertainties including, but not limited to, risks and uncertainties related to changes in the market and demand for our products and services, the development, marketing and sales of products and services, changes in technology, industry and regulatory standards, the timing of acquisitions and the successful closing, integration and business and financial impact thereof, and various market and operating risks, including those detailed in the Company's filings with the U.S. Securities and Exchange Commission.