x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2011
|
OR
|
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ___________ to _____________.
|
INDIANA
(State or other jurisdiction of incorporation or
organization)
|
35-1345024
(I.R.S. Employer Identification No.)
|
|
2701 KENT AVENUE
WEST LAFAYETTE, INDIANA
(Address of principal executive offices)
|
47906
(Zip code)
|
|
(765) 463-4527
(Registrant's telephone number, including area code)
|
Page
|
||
PART I
|
FINANCIAL INFORMATION
|
|
Item 1
|
Condensed Consolidated Financial Statements (Unaudited):
|
|
Condensed Consolidated Balance Sheets as of June 30, 2011 and September 30, 2010
|
3
|
|
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2011 and 2010
|
4
|
|
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2011 and 2010
|
5
|
|
Notes to Condensed Consolidated Financial Statements
|
6
|
|
Item 2
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
13
|
Item 4
|
Controls and Procedures
|
25
|
PART II
|
OTHER INFORMATION
|
|
Item 1A
|
Risk Factors
|
25
|
Item 6
|
Exhibits
|
26
|
Signatures
|
27
|
June 30,
2011
|
September 30,
2010
|
|||||||
(Unaudited)
|
||||||||
Assets
|
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 4,632 | $ | 1,422 | ||||
Accounts receivable
|
||||||||
Trade
|
3,712 | 3,670 | ||||||
Unbilled revenues and other
|
1,520 | 1,298 | ||||||
Inventories
|
1,647 | 1,673 | ||||||
Refundable income taxes
|
16 | 16 | ||||||
Prepaid expenses
|
652 | 555 | ||||||
Total current assets
|
12,179 | 8,634 | ||||||
Property and equipment, net
|
20,517 | 19,439 | ||||||
Goodwill
|
1,383 | 1,383 | ||||||
Intangible assets, net
|
61 | 84 | ||||||
Debt issue costs
|
106 | 123 | ||||||
Other assets
|
64 | 80 | ||||||
Total assets
|
$ | 34,310 | $ | 29,743 | ||||
Liabilities and shareholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 1,696 | $ | 1,911 | ||||
Accrued expenses
|
1,752 | 1,848 | ||||||
Customer advances
|
4,432 | 4,582 | ||||||
Income tax accruals
|
22 | 30 | ||||||
Revolving line of credit
|
1,501 | 1,195 | ||||||
Fair value of interest rate swaps
|
— | 31 | ||||||
Current portion of capital lease obligation
|
608 | 524 | ||||||
Current portion of long-term debt
|
750 | 1,855 | ||||||
Total current liabilities
|
10,761 | 11,976 | ||||||
Capital lease obligation, less current portion
|
1,286 | 623 | ||||||
Long-term debt, less current portion
|
6,010 | 6,477 | ||||||
Shareholders’ equity:
|
||||||||
Preferred shares, authorized 1,000,000 shares, no par value:
|
||||||||
2,135 Series A shares at $1,000 stated value issued and outstanding at June 30, 2011 and none at September 30, 2010
|
2,135 | — | ||||||
Common shares, no par value:
|
||||||||
Authorized 19,000,000 shares; 6,912,511 issued and outstanding at June 30, 2011 and 4,915,318 at September 30, 2010
|
1,690 | 1,191 | ||||||
Additional paid-in capital
|
19,370 | 13,357 | ||||||
Accumulated deficit
|
(7,038 | ) | (3,981 | ) | ||||
Accumulated other comprehensive income
|
96 | 100 | ||||||
Total shareholders’ equity
|
16,253 | 10,667 | ||||||
Total liabilities and shareholders’ equity
|
$ | 34,310 | $ | 29,743 |
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Service revenue
|
$ | 6,737 | $ | 6,034 | $ | 19,326 | $ | 16,092 | ||||||||
Product revenue
|
1,741 | 2,030 | 5,665 | 5,284 | ||||||||||||
Total revenue
|
8,478 | 8,064 | 24,991 | 21,376 | ||||||||||||
Cost of service revenue
|
5,043 | 4,538 | 14,544 | 13,863 | ||||||||||||
Cost of product revenue
|
690 | 855 | 2,189 | 2,161 | ||||||||||||
Total cost of revenue
|
5,733 | 5,393 | 16,733 | 16,024 | ||||||||||||
Gross profit
|
2,745 | 2,671 | 8,258 | 5,352 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Selling
|
816 | 589 | 2,275 | 2,057 | ||||||||||||
Research and development
|
127 | 124 | 350 | 434 | ||||||||||||
General and administrative
|
1,321 | 1,400 | 3,964 | 4,830 | ||||||||||||
Total operating expenses
|
2,264 | 2,113 | 6,589 | 7,321 | ||||||||||||
Operating income (loss)
|
481 | 558 | 1,669 | (1,969 | ) | |||||||||||
Interest expense
|
(70 | ) | (270 | ) | (473 | ) | (786 | ) | ||||||||
Other income
|
7 | — | 15 | — | ||||||||||||
Income (loss) before income taxes
|
418 | 288 | 1,211 | (2,755 | ) | |||||||||||
Income tax benefit
|
— | — | — | (344 | ) | |||||||||||
Net income (loss)
|
418 | 288 | 1,211 | (2,411 | ) | |||||||||||
Less: Deemed dividend on Series A preferred shares
|
(3,277 | ) | — | (3,277 | ) | — | ||||||||||
Less: Preferred stock dividends
|
(991 | ) | (991 | ) | ||||||||||||
Net income (loss) attributable to common shareholders
|
$ | (3,850 | ) | $ | 288 | $ | (3,057 | ) | $ | (2,411 | ) | |||||
Basic net income (loss) per share
|
$ | (0.65 | ) | $ | 0.06 | $ | (0.58 | ) | $ | (0.49 | ) | |||||
Diluted net income (loss) per share
|
$ | (0.65 | ) | $ | 0.06 | $ | (0.58 | ) | $ | (0.49 | ) | |||||
Weighted common shares outstanding:
|
||||||||||||||||
Basic
|
5,911 | 4,915 | 5,247 | 4,915 | ||||||||||||
Diluted
|
5,911 | 4,915 | 5,247 | 4,915 |
Nine Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Operating activities:
|
||||||||
Net income (loss)
|
$ | 1,211 | $ | (2,411 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
1,574 | 1,777 | ||||||
Employee stock compensation expense
|
123 | 174 | ||||||
Provision for doubtful accounts
|
11 | 50 | ||||||
Liability incurred on settlement of lease
|
— | 216 | ||||||
Gain on interest rate swaps
|
(31 | ) | (54 | ) | ||||
Gain on sale of property and equipment
|
(9 | ) | — | |||||
Deferred income taxes
|
(8 | ) | — | |||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(275 | ) | 853 | |||||
Inventories
|
26 | 133 | ||||||
Refundable income taxes
|
— | (4 | ) | |||||
Prepaid expenses and other assets
|
(79 | ) | 128 | |||||
Accounts payable
|
(599 | ) | (179 | ) | ||||
Accrued expenses
|
(96 | ) | (249 | ) | ||||
Customer advances
|
(150 | ) | 1,333 | |||||
Net cash provided by operating activities
|
1,698 | 1,767 | ||||||
Investing activities:
|
||||||||
Capital expenditures
|
(635 | ) | (215 | ) | ||||
Net cash used by investing activities
|
(635 | ) | (215 | ) | ||||
Financing activities:
|
||||||||
Net proceeds from registered direct offering
|
4,639 | — | ||||||
Payments of long-term debt
|
(1,572 | ) | (398 | ) | ||||
Payments on revolving line of credit
|
(23,293 | ) | (21,818 | ) | ||||
Borrowings on revolving line of credit
|
23,598 | 21,399 | ||||||
Proceeds from sale and leaseback
|
— | 431 | ||||||
Payments on capital lease obligations
|
(1,218 | ) | (554 | ) | ||||
Net cash provided (used) by financing activities
|
2,154 | (940 | ) | |||||
Effect of exchange rate changes
|
(7 | ) | 17 | |||||
Net increase in cash and cash equivalents
|
3,210 | 629 | ||||||
Cash and cash equivalents at beginning of period
|
1,422 | 870 | ||||||
Cash and cash equivalents at end of period
|
$ | 4,632 | $ | 1,499 | ||||
Supplemental disclosure of non-cash financing activities:
|
||||||||
Preferred stock dividends accrued, but not paid
|
$ | 991 | $ | — | ||||
Preferred stock dividends paid in common shares
|
$ | (607 | ) | $ | — | |||
Equipment financed under capital leases
|
$ | 1,966 | $ | — |
1.
|
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION
|
2.
|
STOCK-BASED COMPENSATION
|
Options
(shares)
|
Weighted-
Average
Exercise Price
|
Weighted-
Average
Grant Date
Fair Value
|
||||||||||
Outstanding - October 1, 2010
|
705 | $ | 2.66 | $ | 1.82 | |||||||
Exercised
|
- | - | - | |||||||||
Granted
|
27 | 2.24 | 1.84 | |||||||||
Terminated
|
(42 | ) | 2.68 | 1.82 | ||||||||
Outstanding - June 30, 2011
|
690 | 2.64 | 1.82 |
3.
|
SALE OF PREFERRED SHARES AND WARRANTS
|
Warrant A
|
Warrant B
|
|||||||
Risk-free interest rate
|
1.87 | % | 0.18 | % | ||||
Dividend yield
|
0.00 | % | 0.00 | % | ||||
Volatility of the Company's common stock
|
106.91 | % | 116.01 | % | ||||
Expected life of the options (years)
|
5.0 | 1.0 | ||||||
Fair value per share
|
$ | 1.433 | $ | 0.779 |
Accumulated
|
||||||||||||||||||||||||
other
|
Total
|
|||||||||||||||||||||||
Preferred
|
Common
|
Additional paid-
|
Accumulated
|
comprehensive
|
shareholders'
|
|||||||||||||||||||
shares
|
shares
|
in capital
|
deficit
|
income
|
equity
|
|||||||||||||||||||
Balance at September 30, 2010
|
$ | - | $ | 1,190,572 | $ | 13,357,782 | $ | (3,981,220 | ) | $ | 99,542 | $ | 10,666,676 | |||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
- | - | - | 1,211,290 | - | 1,211,290 | ||||||||||||||||||
Foreign Currency translation adjustments
|
- | - | - | - | (3,659 | ) | (3,659 | ) | ||||||||||||||||
Total Comprehensive Income
|
1,207,631 | |||||||||||||||||||||||
Stock based compensation expense
|
- | - | 123,353 | - | - | 123,353 | ||||||||||||||||||
Issuance of preferred shares, net of issuance costs of $866,855
|
5,506,000 | - | (866,855 | ) | - | - | 4,639,145 | |||||||||||||||||
Fair value attributed to warrants
|
(1,831,182 | ) | - | 1,831,182 | - | - | - | |||||||||||||||||
Preferred stock - beneficial conversion feature
|
(1,445,762 | ) | - | 1,445,762 | - | - | - | |||||||||||||||||
Preferred stock - deemed dividend
|
3,276,944 | - | - | (3,276,944 | ) | - | - | |||||||||||||||||
Preferred stock dividend
|
- | - | - | (991,080 | ) | - | (991,080 | ) | ||||||||||||||||
Conversion of preferred shares to common shares
|
(3,371,000 | ) | 499,298 | 3,478,482 | - | - | 606,780 | |||||||||||||||||
Balance at June 30, 2011
|
$ | 2,135,000 | $ | 1,689,870 | $ | 19,369,706 | $ | (7,037,954 | ) | $ | 95,883 | $ | 16,252,505 |
4.
|
INCOME (LOSS) PER SHARE
|
Three Months Ended June 30,
|
Nine Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Basic net income (loss) per share:
|
||||||||||||||||
Net income (loss)
|
$ | 418 | $ | 288 | $ | 1,211 | $ | (2,411 | ) | |||||||
Less: Deemed dividend for Series A Preferred Shares
|
(3,277 | ) | — | (3,277 | ) | — | ||||||||||
Less: Preferred dividend
|
(991 | ) | — | (991 | ) | — | ||||||||||
Net income (loss) applicable to common shareholders
|
$ | (3,850 | ) | $ | 288 | $ | (3,057 | ) | $ | (2,411 | ) | |||||
Weighted average common shares outstanding
|
5,911 | 4,915 | 5,247 | 4,915 | ||||||||||||
Basic net income (loss) per share
|
$ | (0.65 | ) | $ | 0.06 | $ | (0.58 | ) | $ | (0.49 | ) | |||||
Diluted net income (loss) per share:
|
||||||||||||||||
Net income (loss) applicable to common shareholders
|
$ | (3,850 | ) | $ | 288 | $ | (3,057 | ) | $ | (2,411 | ) | |||||
Weighted average common shares outstanding
|
5,911 | 4,915 | 5,247 | 4,915 | ||||||||||||
Diluted net income (loss) per share
|
$ | (0.65 | ) | $ | 0.06 | $ | (0.58 | ) | $ | (0.49 | ) |
5.
|
INVENTORIES
|
June 30, 2011
|
September 30,
2010
|
|||||||
Raw materials
|
$ | 1,437 | $ | 1,534 | ||||
Work in progress
|
317 | 283 | ||||||
Finished goods
|
285 | 218 | ||||||
2,039 | 2,035 | |||||||
Obsolescence reserve
|
(392 | ) | (362 | ) | ||||
$ | 1,647 | $ | 1,673 |
6.
|
SEGMENT INFORMATION
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenue:
|
||||||||||||||||
Service
|
$ | 6,737 | $ | 6,034 | $ | 19,326 | $ | 16,092 | ||||||||
Product
|
1,741 | 2,030 | 5,665 | 5,284 | ||||||||||||
$ | 8,478 | $ | 8,064 | $ | 24,991 | $ | 21,376 | |||||||||
Operating income (loss):
|
||||||||||||||||
Service
|
$ | 376 | $ | 227 | $ | 1,088 | $ | (2,320 | ) | |||||||
Product
|
105 | 331 | 581 | 351 | ||||||||||||
$ | 481 | $ | 558 | $ | 1,669 | $ | (1,969 | ) |
7.
|
INCOME TAXES
|
8.
|
DEBT
|
9.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
10.
|
COMPREHENSIVE INCOME
|
Three Months ended
June 30,
|
Nine Months ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net income (loss) as reported
|
$ | 418 | $ | 288 | $ | 1,211 | $ | (2,411 | ) | |||||||
Foreign currency translation adjustments
|
(17 | ) | 33 | (4 | ) | (16 | ) | |||||||||
Comprehensive income (loss)
|
$ | 401 | $ | 321 | $ | 1,207 | $ | (2,427 | ) |
11.
|
SETTLEMENT OF CONTINGENT LIABILITY
|
12.
|
NEW ACCOUNTING PRONOUNCEMENTS
|
Three
Months
Ended
June 30,
2011
|
Nine
Months
Ended
June 30,
2011
|
|||||||
GAAP basic net income (loss):
|
||||||||
Net income
|
$ | 418 | $ | 1,211 | ||||
Less: Deemed dividend for Series A preferred shares
|
(3,277 | ) | (3,277 | ) | ||||
Less: Preferred dividends
|
(991 | ) | (991 | ) | ||||
GAAP net loss applicable to common shareholders
|
$ | (3,850 | ) | $ | (3,057 | ) | ||
Basic net income (loss) per share, exclusive of the deemed dividend:
|
||||||||
GAAP net loss applicable to common shareholders
|
$ | (3,850 | ) | $ | (3,057 | ) | ||
Plus: Deemed dividend for Series A preferred shares
|
3,277 | 3,277 | ||||||
Net income (loss) applicable to common shareholders
|
$ | (573 | ) | $ | 220 | |||
GAAP weighted average common shares outstanding
|
5,911 | 5,247 | ||||||
Basic net income (loss) per share, exclusive of the deemed dividend
|
$ | (0.10 | ) | $ | 0.04 | |||
Diluted net income per share, exclusive of the deemed dividend:
|
||||||||
Net income (loss) applicable to common shareholders, exclusive of deemed dividend
|
$ | (573 | ) | $ | 220 | |||
Plus: Preferred dividend
|
991 | 991 | ||||||
$ | 418 | $ | 1,211 | |||||
GAAP diluted weighted average common shares outstanding
|
5,911 | 5,247 | ||||||
Plus: Incremental shares from assumed conversions
|
||||||||
Series A preferred shares
|
841 | 280 | ||||||
Warrants
|
124 | — | ||||||
Stock options
|
92 | 90 | ||||||
Adjusted diluted weighted average common shares outstanding
|
6,968 | 5,617 | ||||||
Diluted net income per share, exclusive of the deemed dividend
|
$ | 0.06 | $ | 0.22 |
|
·
|
Risk-free interest rate. The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant for the expected term of the option.
|
|
·
|
Expected volatility. We use our historical stock price volatility on our common stock for our expected volatility assumption.
|
|
·
|
Expected term. The expected term represents the weighted-average period the stock options are expected to remain outstanding. The expected term is determined based on historical exercise behavior, post-vesting termination patterns, options outstanding and future expected exercise behavior.
|
|
·
|
Expected dividends. We assumed that we will pay no dividends.
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Service revenue
|
79.5 | % | 74.8 | % | 77.3 | % | 75.3 | % | ||||||||
Product revenue
|
20.5 | 25.2 | 22.7 | 24.7 | ||||||||||||
Total revenue
|
100.0 | 100.0 | 100.0 | 100.0 | ||||||||||||
Cost of service revenue (a)
|
74.9 | 75.2 | 75.3 | 86.1 | ||||||||||||
Cost of product revenue (a)
|
39.6 | 42.1 | 38.6 | 40.9 | ||||||||||||
Total cost of revenue
|
67.6 | 66.9 | 67.0 | 75.0 | ||||||||||||
Gross profit
|
32.4 | 33.1 | 33.0 | 25.0 | ||||||||||||
Total operating expenses
|
26.7 | 26.2 | 26.4 | 34.2 | ||||||||||||
Operating income (loss)
|
5.7 | 6.9 | 6.6 | (9.2 | ) | |||||||||||
Other expense
|
0.7 | 3.3 | 1.8 | 3.7 | ||||||||||||
Income (loss) before income taxes
|
5.0 | 3.6 | 4.8 | (12.9 | ) | |||||||||||
Income tax benefit
|
— | — | — | (1.6 | ) | |||||||||||
Net income (loss)
|
5.0 | % | 3.6 | % | 4.8 | % | (11.3 | )% |
|
(a)
|
Percentage of service and product revenues, respectively.
|
Three Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
2011
|
2010
|
Change
|
%
|
|||||||||||||
Bioanalytical analysis
|
$ | 3,387 | $ | 3,635 | $ | (248 | ) | -6.8 | % | |||||||
Toxicology
|
2,785 | 2,168 | 617 | 28.5 | % | |||||||||||
Other laboratory services
|
565 | 231 | 334 | 144.6 | % |
Three Months Ended
June 30,
|
||||||||||||||||
2011
|
2010
|
Change
|
%
|
|||||||||||||
Culex®, in-vivo sampling systems
|
$ | 734 | $ | 1,129 | $ | (395 | ) | -35.0 | % | |||||||
Analytical instruments
|
849 | 826 | 23 | 2.8 | % | |||||||||||
Other instruments
|
158 | 75 | 83 | 110.7 | % |
Nine Months Ended
June 30,
|
||||||||||||||||
2011
|
2010
|
Change
|
%
|
|||||||||||||
Bioanalytical analysis
|
$ | 10,683 | $ | 9,626 | $ | 1,057 | 11.0 | % | ||||||||
Toxicology
|
7,186 | 5,291 | 1,895 | 35.8 | % | |||||||||||
Other laboratory services
|
1,457 | 1,175 | 282 | 24.0 | % |
Nine Months Ended
June 30,
|
||||||||||||||||
2011
|
2010
|
Change
|
%
|
|||||||||||||
Culex®, in-vivo sampling systems
|
$ | 3,002 | $ | 2,482 | $ | 520 | 21.0 | % | ||||||||
Analytical instruments
|
2,297 | 2,211 | 86 | 3.9 | % | |||||||||||
Other instruments
|
366 | 591 | (225 | ) | -38.1 | % |
Number
|
Description of Exhibits
|
|||
(3)
|
3.1
|
Second Amended and Restated Articles of Incorporation of Bioanalytical Systems, Inc. as amended through May 9, 2011 (filed herewith).
|
||
3.2
|
Amended and Restated Bylaws of Bioanalytical Systems, Inc., as subsequently amended (incorporated by reference to Exhibit 3.2 of Form 10-K for the fiscal year ended September 30, 2009).
|
|||
(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
|
Form of Warrant (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-1, Registration No. 333-172508).
|
|||
4.3
|
Certificate of Designation of Preferences, Rights, and Limitations of Convertible Preferred Shares (incorporated by reference to Exhibit 3.1 on Form 8-K, dated May 12, 2011).
|
|||
4.4
|
Specimen Certificate for 6% Series A Convertible Preferred Shares (incorporated by reference to Exhibit 4.3 to Registration Statement on Form S-1, Registration No. 333-172508).
|
|||
(10)
|
10.1
|
Form of Securities Purchase Agreement between Bioanalytical Systems, Inc. and certain purchasers, dated May 5, 2011 (incorporated by reference to Exhibit 10.27 to Registration Statement on Form S-1, Registration No. 333-172508).
|
||
10.2
|
Placement Agency Agreement between Bioanalytical Systems, Inc. and Ladenburg Thalmann & Co. Inc, dated May 5, 2011 (incorporated by reference to Exhibit 10.1 on Form 8-K, dated May 9, 2011).
|
|||
(31)
|
31.1
|
Certification of Anthony S. Chilton (filed herewith).
|
||
31.2
|
Certification of Michael R. Cox (filed herewith).
|
|||
(32)
|
32.1
|
Written Statement of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) (filed herewith)..
|
||
101
|
XBRL data file (filed herewith).
|
BIOANALYTICAL SYSTEMS, INC.
|
||
(Registrant)
|
||
Date: August 15, 2011
|
By:
|
/s/ Anthony S. Chilton
|
Anthony S. Chilton
|
||
President and Chief Executive Officer
|
||
Date: August 15, 2011
|
By:
|
/s/ Michael R. Cox
|
Michael R. Cox
|
||
Vice President, Finance and Administration, Chief Financial Officer and Treasurer
|
Number
|
Description of Exhibits
|
|||
(3)
|
3.1
|
Second Amended and Restated Articles of Incorporation of Bioanalytical Systems, Inc. as amended through May 9, 2011 (filed herewith).
|
||
3.2
|
Amended and Restated Bylaws of Bioanalytical Systems, Inc., as subsequently amended (incorporated by reference to Exhibit 3.2 of Form 10-K for the fiscal year ended September 30, 2009).
|
|||
(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
|
Form of Warrant (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-1, Registration No. 333-172508).
|
|||
4.3
|
Certificate of Designation of Preferences, Rights, and Limitations of Convertible Preferred Shares (incorporated by reference to Exhibit 3.1 on Form 8-K, dated May 12, 2011).
|
|||
4.4
|
Specimen Certificate for 6% Series A Convertible Preferred Shares (incorporated by reference to Exhibit 4.3 to Registration Statement on Form S-1, Registration No. 333-172508).
|
|||
(10)
|
10.1
|
Form of Securities Purchase Agreement between Bioanalytical Systems, Inc. and certain purchasers, dated May 5, 2011 (incorporated by reference to Exhibit 10.27 to Registration Statement on Form S-1, Registration No. 333-172508).
|
||
10.2
|
Placement Agency Agreement between Bioanalytical Systems, Inc. and Ladenburg Thalmann & Co. Inc, dated May 5, 2011 (incorporated by reference to Exhibit 10.1 on Form 8-K, dated May 9, 2011).
|
|||
(31)
|
31.1
|
Certification of Anthony S. Chilton (filed herewith).
|
||
31.2
|
Certification of Michael R. Cox (filed herewith).
|
|||
(32)
|
32.1
|
Written Statement of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) (filed herewith)..
|
||
101
|
XBRL data file (filed herewith).
|
(a)
|
Dividends in Cash or in Kind.
|
Date to Effect Conversion: _____________________________________________
|
Number of shares of Preferred Stock owned prior to Conversion: _______________
|
Number of shares of Preferred Stock to be Converted: ________________________
|
Stated Value of shares of Preferred Stock to be Converted: ____________________
Applicable Conversion Price: ____________________________________________
|
Number of shares of Common Stock to be Issued: ___________________________
|
Number of shares of Preferred Stock subsequent to Conversion: ________________
|
Address for Delivery: ______________________
or
DWAC Instructions:
Broker no: _________
Account no: ___________
|
[HOLDER]
|
||
By:
|
||
Name:
|
||
Title:
|
|
1.
|
I have reviewed this report on Form 10-Q of Bioanalytical Systems, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions);
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Anthony S. Chilton
|
|
Anthony S. Chilton
|
|
Date: August 15, 2011
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this report on Form 10-Q of Bioanalytical Systems, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Michael R. Cox
|
|
Michael R. Cox
|
|
Date: August 15, 2011
|
Chief Financial Officer
|
|
(a)
|
the Form 10-Q Quarterly Report of the Company for the three and ninemonths ended June 30, 2011 filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company..
|
By:
|
/s/ Anthony S. Chilton
|
|
Anthony S. Chilton
|
||
President and Chief Executive Officer
|
||
Date: August 15, 2011
|
By:
|
/s/ Michael R. Cox
|
|
Michael R. Cox
|
||
Vice President, Finance and Administration
|
||
and Chief Financial Officer
|
||
Date: August 15, 2011
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
|
Jun. 30, 2011
|
Sep. 30, 2010
|
---|---|---|
Preferred shares, authorized | 1,000,000 | 1,000,000 |
Preferred shares, no par value | $ 0 | $ 0 |
Common shares, no par value | $ 0 | $ 0 |
Common shares, Authorized | 19,000,000 | 19,000,000 |
Common shares, issued | 6,912,511 | 4,915,318 |
Common shares, outstanding | 6,912,511 | 4,915,318 |
Series A Preferred Stock
|
 |  |
Series A shares, stated value | $ 1,000 | Â |
Series A shares, issued | 2,135 | 0 |
Series A shares, outstanding | 2,135 | 0 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Service revenue | $ 6,737 | $ 6,034 | $ 19,326 | $ 16,092 |
Product revenue | 1,741 | 2,030 | 5,665 | 5,284 |
Total revenue | 8,478 | 8,064 | 24,991 | 21,376 |
Cost of service revenue | 5,043 | 4,538 | 14,544 | 13,863 |
Cost of product revenue | 690 | 855 | 2,189 | 2,161 |
Total cost of revenue | 5,733 | 5,393 | 16,733 | 16,024 |
Gross profit | 2,745 | 2,671 | 8,258 | 5,352 |
Operating expenses: | Â | Â | Â | Â |
Selling | 816 | 589 | 2,275 | 2,057 |
Research and development | 127 | 124 | 350 | 434 |
General and administrative | 1,321 | 1,400 | 3,964 | 4,830 |
Total operating expenses | 2,264 | 2,113 | 6,589 | 7,321 |
Operating income (loss) | 481 | 558 | 1,669 | (1,969) |
Interest expense | (70) | (270) | (473) | (786) |
Other income | 7 | Â | 15 | Â |
Income (loss) before income taxes | 418 | 288 | 1,211 | (2,755) |
Income tax benefit | Â | Â | Â | (344) |
Net income (loss) | 418 | 288 | 1,211 | (2,411) |
Less: Deemed dividend on Series A preferred shares | (3,277) | Â | (3,277) | Â |
Less: Preferred stock dividends | (991) | Â | (991) | Â |
Net income (loss) attributable to common shareholders | $ (3,850) | $ 288 | $ (3,057) | $ (2,411) |
Basic net income (loss) per share | $ (0.65) | $ 0.06 | $ (0.58) | $ (0.49) |
Diluted net income (loss) per share | $ (0.65) | $ 0.06 | $ (0.58) | $ (0.49) |
Weighted common shares outstanding: | Â | Â | Â | Â |
Basic | 5,911 | 4,915 | 5,247 | 4,915 |
Diluted | 5,911 | 4,915 | 5,247 | 4,915 |
Document and Entity Information
|
9 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Aug. 09, 2011
|
|
Document Type | 10-Q | Â |
Amendment Flag | false | Â |
Document Period End Date | Jun. 30, 2011 | |
Document Fiscal Year Focus | 2011 | Â |
Document Fiscal Period Focus | Q3 | Â |
Trading Symbol | BASI | Â |
Entity Registrant Name | BIOANALYTICAL SYSTEMS INC | Â |
Entity Central Index Key | 0000720154 | Â |
Current Fiscal Year End Date | --09-30 | Â |
Entity Filer Category | Smaller Reporting Company | Â |
Entity Common Stock, Shares Outstanding | Â | 6,912,511 |
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INCOME TAXES
|
9 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
|||
INCOME TAXES |
We
use the asset and liability method of accounting for income
taxes. We recognize deferred tax assets and liabilities for
the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and
tax credit carry forwards. We measure deferred tax assets and
liabilities using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. We recognize the effect on
deferred tax assets and liabilities of a change in tax rates in
income in the period that includes the enactment
date. We record valuation allowances based on a
determination of the expected realization of tax
assets.
We
recognize the tax benefit from an uncertain tax position only if it
is more likely than not to be sustained upon examination based on
the technical merits of the position. We measure the amount of the
accrual for which an exposure exists as the largest amount of
benefit determined on a cumulative probability basis that we
believe is more likely than not to be realized upon ultimate
settlement of the position. At June 30, 2011 and
September 30, 2010, we had a $30 liability for other uncertain
income tax positions.
We
record interest and penalties related to income tax matters as a
component of income tax expense. Over the next twelve months
we do not expect the total amount of unrecognized tax benefits to
change significantly. Interest and penalties are included in
the reserve.
We
file income tax returns in the U.S., several U.S. States, and the
United Kingdom. We remain subject to examination by
taxing authorities in the jurisdictions in which we have filed
returns for years after 2006.
We
have an accumulated net deficit in our UK
subsidiary. Therefore, we continue to maintain a full
valuation allowance on the UK subsidiary deferred income tax
balance. Also, a valuation allowance was established in fiscal 2009
against the US deferred income tax balance. Due to the
utilization of operating loss carry forwards, we have a 0%
effective tax rate for the three and nine months ended June 30,
2011.
|
NEW ACCOUNTING PRONOUNCEMENTS
|
9 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
|||
NEW ACCOUNTING PRONOUNCEMENTS |
In
October 2009, the FASB issued an Accounting Standards Update
on the accounting for revenue recognition to specifically address
how to determine whether an arrangement involving multiple
deliverables contains more than one unit of accounting. This
guidance was effective for revenue arrangements entered into or
materially modified beginning October 1, 2010. This update has
not impacted revenue in the periods presented, and we do not expect
a material change from the methods in which we have historically
reported revenues.
|
SALE OF PREFERRED SHARES AND WARRANTS
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SALE OF PREFERRED SHARES AND WARRANTS |
On
May 11, 2011, we completed a registered public offering of 5,506
units at a price of $1,000 per unit. Each unit consisted of
one 6% Series A convertible preferred share which is convertible
into 500 common shares, one Class A Warrant to purchase 250 common
shares at an exercise price of $2.00 per share, and one Class
B Warrant to purchase 250 common shares at an exercise price of
$2.00 per share.
The
designation, rights, preferences and other terms and provisions of
the Series A preferred shares are set forth in the Certificate of
Designation. Until May 11, 2014, the Series A preferred shares
have a stated dividend rate of 6% per annum, payable quarterly in
cash or, subject to certain conditions, in common shares or a
combination of cash and common shares, at our
election. After May 11, 2014, the Series A preferred
shares will participate in any dividends payable upon our common
shares on an "as converted" basis. If the preferred shares are
converted prior to May 11, 2014, we must also pay to the converting
holder in cash, or subject to certain conditions, in common shares
or a combination of cash and common shares, $180 per $1,000 of the
stated value of the preferred shares less any dividends paid prior
to conversion. Class A Warrants are exercisable
immediately and expire in May 2016. Class B Warrants are
exercisable immediately and expire in May 2012. The net proceeds
from the sale of the units, after deducting the fees and expenses
of the placement agent and other expenses were $4.6
million. We intend to use the proceeds for the purchase
of laboratory equipment and for working capital and general
corporate purposes.
The
Series A preferred shares are entitled to participate in any
dividends declared and paid on our common shares on an as-converted
basis, and the holders of the preferred shares are not entitled to
vote together with common shareholders unless converted to common
shares. The Series A preferred shares are considered to be an
equity instrument. The warrants have been accounted for as equity
and valued using the Black Scholes pricing model. The
weighted-average assumptions used to compute the fair value of
the warrants at the time of issuance were as
follows:
The
Series A preferred shares were valued using the common shares
available upon conversion of all preferred shares of 2,753,000 and
the closing market price of our stock on May 11, 2011 of
$1.86. Adding in the total possible dividend for the
preferred shares of 18% over three years, or $991, the total fair
value of the preferred shares was calculated as $6.112
million. We then allocated the total value of the
offering of $5.506 million based on the fair values for the
preferred shares and warrants described above.
We
have also recognized a beneficial conversion feature related
to the Series A preferred shares, to the extent that the conversion
feature, based on the proceeds allocated to the Series A preferred
shares, was in-the-money at the time they were issued. Such
beneficial conversion feature amounted to approximately $1.446
million. Because the Series A preferred shares do not have a stated
redemption date and may be converted by the holder at any time, the
discount recognized by the allocation of proceeds to the beneficial
conversion feature has been immediately charged through
accumulated deficit as a deemed dividend to the holders of the
Series A preferred shares in the amount of $3.277
million. This will be the only deemed distribution recorded
for the Series A preferred shares included in this
offering. Further, because the preferred dividends are
payable on the day of closing on May 11, 2011, we recognized the
full value, $991, as a liability included in accounts payable and
charged immediately through accumulated deficit. There
will be no other dividends recorded for the Series A preferred
shares included in this offering.
As
of June 30, 2011, 3,371 preferred shares have been converted into
1,997,193 common shares. No warrants have been exercised
as of June 30, 2011. At June 30, 2011, 2,135 preferred
shares and 2,753,000 warrants remained outstanding. Also
at June 30, 2011, $384 of the $991 in preferred dividends remains
accrued in accounts payable for future preferred
dividends. The table below details the changes in
shareholders’ equity due to this registered public
offering. Amounts in the table are not in
thousands.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
9 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
|||
FAIR VALUE OF FINANCIAL INSTRUMENTS |
The
carrying amounts for cash and cash equivalents, accounts receivable
and other assets, accounts payable and other accruals approximate
their fair values because of their nature and respective
duration. The fair value of the revolving credit
facility and certain long-term debt is equal to their carrying
values due to the variable nature of their interest
rates. Our long-term fixed rate debt was adjusted to
market rate on June 30, 2010, which we believe approximates market
rates for similar debt instruments at June 30, 2011 based on our
analysis of debt instruments with similar terms and
conditions.
|
COMPREHENSIVE INCOME
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME |
Total
comprehensive income is comprised of the total net income (loss) as
well as the change in foreign currency translation. The table
below presents comprehensive income (loss) for the three and nine
months ended June 30, 2011 and 2010, respectively.
|
DEBT
|
9 Months Ended | ||
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Jun. 30, 2011
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DEBT |
Mortgages and note payable
We
have notes payable to Regions Bank (“Regions”)
aggregating approximately $6,600.
Regions
notes payable currently include two outstanding mortgages on our
facilities in West Lafayette and Evansville, Indiana, which total
$5,362. The mortgages mature in November 2012 with an
interest rate fixed at 7.1% and monthly principal payments of
approximately $38 plus interest. Another mortgage
matured in February 2011 with an interest rate of
6.1%.
In
addition to the mortgages, we also had a note payable with Regions,
which matured on December 18, 2010. The annual interest
rate on this term loan was equal to 6.1% with monthly payments of
$9 plus interest. The note payable was collateralized by real
estate at our West Lafayette and Evansville, Indiana locations. On
November 29, 2010, we executed amendments on two loans with
Regions. Regions agreed to accept a $500 principal
payment on the note payable maturing on December 18, 2010 and a
$500 principal payment on one mortgage maturing on February 11,
2011. The principal payments were made on December 17,
2010 and February 11, 2011, respectively. Upon receipt
of these two payments, Regions incorporated the two loans into a
replacement note payable for $1,341 maturing on November 1,
2012. The replacement note payable bears interest at a per
annum rate equal to the 30-day LIBOR plus 300 basis points (minimum
of 4.5%) with monthly principal payments of approximately $14 plus
interest. The replacement note payable is secured
by real estate at our West Lafayette and Evansville, Indiana
locations. At June 30, 2011, the note payable had a balance
of $1,286.
As
part of the amendment, Regions also agreed to amend the loan
covenants for the related debt to be more favorable to us.
Provided we comply with the revised covenant ratios, the amendment
removes limitations on the Company’s purchase of fixed
assets. The covenants, which are common to such
agreements, include maintenance of certain financial ratios
including a fixed charge coverage ratio of 1.25 to 1.0 and
total liabilities to tangible net worth ratio of no greater than
2.1 to 1.0. At June 30, 2011, we were in compliance with
these ratios.
The
Regions loans contain both cross-default provisions with each other
and with the revolving line of credit with Entrepreneur Growth
Capital described below.
Revolving Line of Credit
On January 13, 2010, we entered into a new
$3,000 revolving line of credit agreement (“Credit
Agreement”) with Entrepreneur Growth Capital LLC
(“EGC”), which we use for working capital and other
purposes, to replace the PNC Bank line of credit that expired on
January 15, 2010. The initial term of the Credit
Agreement was set to expire on January 31, 2011. If we
prepay prior to the expiration of the initial term (or any renewal
term), then we are subject to an early termination fee equal to the
minimum interest charges of $15 for each of the months remaining
until expiration.
Borrowings
bear interest at an annual rate equal to the Prime Rate plus five
percent (5%), or 8.25% as of June 30, 2011, with minimum monthly
interest of $15. Interest is paid monthly. The line of
credit also carries an annual facilities fee of 2% and a 0.2%
collateral monitoring fee. Borrowings under the Credit
Agreement are secured by a blanket lien on our personal property,
including certain eligible accounts receivable, inventory, and
intellectual property assets, a second mortgage on our West
Lafayette and Evansville real estate and all common stock of our
U.S. subsidiaries and 65% of the common stock of our non-United
States subsidiary. Borrowings are calculated based on 75% of
eligible accounts receivable. Under the Credit
Agreement, the Company has agreed to restrict advances to
subsidiaries, limit additional indebtedness and capital
expenditures and comply with certain financial covenants outlined
in the Credit Agreement.
On
December 23, 2010, we negotiated an amendment to this Credit
Agreement. As part of the amendment, the maturity date
was extended to January 31, 2013. The Amendment reduced
the minimum tangible net worth covenant requirement from $9,000 to
$8,500 and waived all non-compliances with this covenant through
the date of the Amendment. The Credit Agreement also contains
cross-default provisions with the Regions loans and any future EGC
loans. At June 30, 2011, we were in compliance with the minimum
tangible net worth covenant requirement.
At
June 30, 2011, we had available borrowing capacity of $2,346 on
this line, of which $1,501 was outstanding.
|
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION
|
9 Months Ended | ||
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Jun. 30, 2011
|
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DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION |
Bioanalytical
Systems, Inc. and its subsidiaries (“We,” the
“Company” or “BASi”) engage in contract
laboratory research services and other services related to
pharmaceutical development. We also manufacture scientific
instruments for life sciences research, which we sell with related
software for use in industrial, governmental and academic
laboratories. Our customers are located throughout the
world.
We
have prepared the accompanying unaudited interim condensed
consolidated financial statements 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
(“GAAP”), and therefore should be read in conjunction
with our audited consolidated financial statements, and the notes
thereto, for the year ended September 30, 2010. In the
opinion of management, the condensed consolidated financial
statements for the three and nine months ended June 30, 2011
and 2010 include all adjustments which are necessary for a fair
presentation of the results of the interim periods and of our
financial position at June 30, 2011. The results of operations for
the three and nine months ended June 30, 2011 are not
necessarily indicative of the results for the year ending
September 30, 2011.
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INCOME (LOSS) PER SHARE
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Jun. 30, 2011
|
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INCOME (LOSS) PER SHARE |
We
compute basic income (loss) per share using the weighted average
number of common shares outstanding. The net income (loss)
applicable to common shareholders for fiscal 2011 is the net of the
net income (loss) for the period less the deemed dividend for the
Series A preferred shares from the May 2011 registered direct
offering described in Note 3 and less the dividends earned on the
outstanding Series A preferred shares.
The
Company has three categories of dilutive potential common shares:
the Series A preferred shares issued in May 2011 in connection with
the registered direct offering, the Warrants issued in connection
with same offering in May 2011, and shares issuable upon exercise
of options. We compute diluted earnings per share using the
if-converted method for preferred stock and the treasury stock
method for stock options and warrants. Shares issuable upon
exercise of options were not considered in computing diluted
earnings per share for the three and nine months ended June 30,
2011 and for the nine months ended June 30, 2010 because they were
antidilutive. Warrants for 2,753,000 common
shares and preferred shares for 2,753,000 common shares were not
considered in computing diluted earnings per share for the three
and nine months ended June 30, 2011 because they were
antidilutive. For the three months ended June 30,
2010, shares issuable upon exercise of options were immaterial to
the computation of net income (loss) per share.
(Rest of page intentionally left blank)
The
following table reconciles our computation of basic income (loss)
per share to diluted income (loss) per share:
|
INVENTORIES
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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INVENTORIES |
Inventories
consisted of the following:
|
SEGMENT INFORMATION
|
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Jun. 30, 2011
|
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SEGMENT INFORMATION |
We
operate in two principal segments - research services and research
products. Our Services segment provides research and development
support on a contract basis directly to pharmaceutical companies.
Our Products segment provides liquid chromatography,
electrochemical and physiological monitoring products to
pharmaceutical companies, universities, government research centers
and medical research institutions. Our accounting
policies in these segments are the same as those described in the
summary of significant accounting policies found in Note 2 to
Consolidated Financial Statements in our annual report on Form 10-K
for the year ended September 30, 2010.
|
STOCK-BASED COMPENSATION
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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STOCK-BASED COMPENSATION |
The
2008 Stock Option Plan (“the Plan”) is used to promote
our long-term interests by providing a means of attracting and
retaining officers, directors and key employees and aligning their
interests with those of our shareholders. The Plan is
described more fully in Note 8 in the Notes to the Consolidated
Financial Statements in our Form 10-K for the year ended September
30, 2010. All options granted under the plan had an
exercise price equal to the market value of the underlying common
shares on the date of grant. We expense the estimated
fair value of stock options over the vesting periods of the
grants. We recognize expense for awards subject to
graded vesting using the straight-line attribution method, reduced
for estimated forfeitures. Forfeitures are revised, if necessary,
in subsequent periods if actual forfeitures differ from those
estimates and an adjustment is recognized at that
time. The assumptions used are detailed in Note 8 to the
Consolidated Financial Statements in our Form 10-K for the year
ended September 30, 2010. Stock based compensation
expense for the three and nine months ended June 30, 2011 was $48
and $123, respectively, with no tax benefits. Stock
based compensation expense for the three and nine months ended June
30, 2010 was $47 and $174, respectively, with no tax
benefits.
A
summary of our stock option activity for the nine months ended
June 30, 2011 is as follows (in thousands except for share
prices):
|
SETTLEMENT OF CONTINGENT LIABILITY
|
9 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
|||
SETTLEMENT OF CONTINGENT LIABILITY |
In
June of 2008, as part of selling our Baltimore Clinical
Pharmacology Research Unit, we subleased the building space it
occupied to the purchaser of the assets. We remained
contingently liable for the rent payments of $800 per year through
2015 in the event the sublessor did not perform. In
2009, the purchaser ceased operations in Baltimore and sought to
renegotiate the terms of its sublease. In March of 2010,
we reached a settlement with the landlord of the building which
canceled the sublessor’s and our obligations under the lease
in exchange for a cash payment from the sublessor. We
agreed to contribute $250 to the settlement, payable in twenty-five
monthly installments of $10 without interest. We
recorded the discounted liability of $216 in March 2010, and
recognized the related expense in general and administrative
expenses.
|
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