10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(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, 2012
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 000-23357

BIOANALYTICAL SYSTEMS, INC.

 (Exact name of the registrant as specified in its charter)

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)

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 ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x  NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    YES ¨ NO x

As of August 8, 2012, 7,307,864 of the registrant's common shares were outstanding.

EXPLANATORY NOTE

The purpose of this Amendment No. 1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed with the Securities and Exchange Commission on August 14, 2012, is solely to furnish Exhibit 101 to the Form 10-Q.  Exhibit 101 provides the financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language). Except as set forth in the immediately preceding sentence, this Amendment does not alter or restate any of the information set forth in the Original Filing. In addition, this Amendment No. 1 does not reflect any subsequent events occurring after August 14, 2012, the original filing date of our Form 10-Q.

As required by Rule 12b-15 under the Securities and Exchange Act of 1934, as amended, new certifications by our interim principal executive officer and principal financial officer are filed as exhibits to this Amendment No. 1 to the Company’s Form 10-Q under Item 6 of Part II.

2

PART II

ITEM 6 - EXHIBITS

(a) Exhibits:

Number		Description of Exhibits
(31)	31.1	Certification of Jacqueline M. Lemke (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).

3

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.
	(Registrant)
Date:  September 11, 2012	By:  /s/   Jacqueline M. Lemke
	Jacqueline M. Lemke
	Interim President and Chief Executive Officer and Vice President of Finance and Chief Financial Officer

4

EX-31.1

CERTIFICATIONS

I, Jacqueline M. Lemke, Interim President and Chief Executive Officer and Vice President of Finance and Chief Financial Officer, certify that:

1. I have reviewed this report on Form 10-Q/A 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/ Jacqueline M. Lemke
	Jacqueline M. Lemke
Date:  September 11, 2012	Interim President and Chief Executive Officer and Vice President of Finance and Chief Financial Officer

EX-32.1

Certifications 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)

The undersigned, the Interim President and Chief Executive Officer and Vice President of Finance and Chief Financial Officer of Bioanalytical Systems Inc. (the “Company”), hereby certifies that, to the best of her knowledge:

(a) the Form 10-Q/A Quarterly Report of the Company for the three and nine months ended June 30, 2012 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/  Jacqueline M. Lemke

Jacqueline M. Lemke

Interim President and  Chief Executive Officer and Vice

President of Finance and Chief Financial Officer
Date:   September 11, 2012

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Subsequent Events - Additional Information (Detail) (Subsequent Event, USD $) In Thousands, unless otherwise specified	1 Months Ended
	Jul. 31, 2012	Jul. 12, 2012 acre sqft	Jun. 30, 2012
Subsequent Event
Subsequent Event [Line Items]
Land listed for sale		7.25
Facility listed for sale		120,000
Percentage of facility with intent to leaseback	80.00%
Asking price of the assets	$ 12,500
Book value of the facility and land			$ 9,798

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Reconciliation of Computation of Basic Income or Loss Per Share to Diluted Income or Loss Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Basic net income (loss) per share:
Net income (loss)	$ (704)	$ 418	$ (4,079)	$ 1,211
Less: Deemed dividend for Series A Preferred Shares		(3,277)		(3,277)
Less: Preferred dividend		(991)		(991)
Net income (loss) applicable to common shareholders	(704)	(3,850)	(4,079)	(3,057)
Weighted average common shares outstanding	7,259	5,911	7,079	5,247
Basic net income (loss) per share	$ (0.10)	$ (0.65)	$ (0.58)	$ (0.58)
Diluted net income (loss) per share:
Diluted net income (loss) applicable to common shareholders	$ (704)	$ (3,850)	$ (4,079)	$ (3,057)
Weighted average common shares outstanding	7,259	5,911	7,079	5,247
Dilutive stock options/shares
Diluted weighted average common shares outstanding	7,259	5,911	7,079	5,247
Diluted net income (loss) per share	$ (0.10)	$ (0.65)	$ (0.58)	$ (0.58)

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INVENTORIES

9 Months Ended

Jun. 30, 2012

INVENTORIES

4. INVENTORIES

Inventories consisted of the following:

	June 30, 2012			September 30, 2011
Raw materials	$	1,559		$	1,352
Work in progress		260			379
Finished goods		309			309
	$	2,128		$	2,040
Obsolescence reserve		(383	)		(404	)
	$	1,745		$	1,636

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Income Taxes - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Sep. 30, 2011
Income Taxes [Line Items]
Liability for other uncertain income tax positions	$ 16	$ 16

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Segment Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Segment Reporting Information [Line Items]
Service	$ 5,200	$ 6,737	$ 16,090	$ 19,326
Product	1,986	1,741	5,578	5,665
Total revenue	7,186	8,478	21,668	24,991
Operating income (loss)	(540)	481	(3,547)	1,669
Services
Segment Reporting Information [Line Items]
Operating income (loss)	(734)	376	(3,439)	1,088
Products Segment
Segment Reporting Information [Line Items]
Operating income (loss)	$ 194	$ 105	$ (108)	$ 581

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Debt - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	1 Months Ended	9 Months Ended	1 Months Ended	9 Months Ended						9 Months Ended		9 Months Ended
	Nov. 30, 2010 Loan	Jun. 30, 2012	Mar. 31, 2010 Lease Agreements	Jun. 30, 2012 Lease Agreements	Jun. 30, 2012 Minimum	Jun. 30, 2012 Early termination Minimum	Jun. 30, 2012 Amended Line of Credit Facility	Jun. 30, 2012 Revolving Credit Facility	Jun. 30, 2012 Revolving Credit Facility Foreign Subsidiaries	Jun. 30, 2012 Debt Instrument Amended And Restated	Nov. 29, 2010 Debt Instrument Amended And Restated	Jun. 30, 2012 Mortgages Loan	Dec. 17, 2010 Mortgages Debt Instrument Amended And Restated	Nov. 29, 2010 Mortgages Debt Instrument Amended And Restated	Jun. 30, 2012 Mortgages Period 1	Feb. 11, 2011 Secured Debt Debt Instrument Amended And Restated	Nov. 29, 2010 Secured Debt Debt Instrument Amended And Restated
Debt Instrument [Line Items]
Notes Payable to Regions Bank		$ 6,007								$ 1,117	$ 1,341
Number of outstanding mortgages												2
Outstanding mortgages amount												4,889
Mortgage maturity															2012-11
Outstanding mortgage, interest rate fixed												4.10%
Debt, monthly principal payments amount										14		38
Number of loans amended	2
Loan with Regions, agreed principal payment amount														500			500
Loan with Regions, principal paid amount													500			500
Debt, maturity date										Nov. 01, 2012
Debt, annual interest rate on LIBOR										3.00%
Debt, minimum interest rate										4.50%
Loan covenants, fixed charge coverage ratio		1.25
Loan covenants, total liabilities to tangible net worth ratio		2.10
Revolving Line of credit agreement date		Jan. 13, 2010
Revolving Line of credit, maximum borrowing capacity		3,000
Revolving Line of credit, expiration date							Jan. 31, 2013
Revolving Line of credit, minimum interest charge for each months remaining until expiration					15	15
Revolving Line of credit, interest rate above Prime Rate								5.00%
Debt, interest rate								8.25%
Revolving Line of credit, annual facilities fee		2.00%
Revolving Line of credit, collateral monitoring fee								0.20%
Revolving Line of credit, collateral percentage of non-United states subsidiary									65.00%
Revolving Line of credit, borrowing base percentage of eligible accounts receivable		75.00%
Revolving Line of credit, minimum tangible net worth covenant requirement		9,000					8,500
Revolving Line of credit, current borrowing capacity		2,315
Revolving Line of credit, borrowing outstanding		1,263
Subleased building, contingently liable for rent payments				800
Lease expiration date				2015
Settlement date with landlord of subleased building				2010-03
Settlement agreement for cancellation of obligations under lease, agreed contribution amount			250
Settlement agreement for cancellation of obligations under lease, number monthly installments				25
Settlement agreement for cancellation of obligations under lease, installments payments amount			10
Settlement agreement for cancellation of obligations under lease, discounted liability			$ 216	$ 0

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Restructuring - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jun. 30, 2012 sqft
Restructuring Cost and Reserve [Line Items]
Acres of headquarters facility	120,000
Restructuring cost incurred	$ 687

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INCOME (LOSS) PER SHARE

9 Months Ended

Jun. 30, 2012

INCOME (LOSS) PER SHARE

3. INCOME (LOSS) PER SHARE

We compute basic income (loss) per share using the weighted average number of common shares outstanding.

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 the 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, 2012 because they were anti-dilutive. Warrants for 1,377 common shares and 982 common shares issuable upon conversion of preferred shares were not considered in computing diluted earnings per share for the three and nine months ended June 30, 2012 because they were also anti-dilutive.

The following table reconciles our computation of basic income (loss) per share to diluted income (loss) per share:

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
Basic net income (loss) per share:
Net income (loss)	$	(704	)	$	418		$	(4,079	)	$	1,211
Less:  Deemed dividend for Series A Preferred Shares		—			(3,277	)		—			(3,277	)
Less:  Preferred dividend		—			(991	)		—			(991	)
Net income (loss) applicable to common shareholders	$	(704	)	$	(3,850	)	$	(4,079	)	$	(3,057	)
Weighted average common shares outstanding		7,259			5,911			7,079			5,247
Basic net income (loss) per share	$	(0.10	)	$	(0.65	)	$	(0.58	)	$	(0.58	)
Diluted net income (loss) per share:
Diluted net income (loss) applicable to common shareholders	$	(704	)	$	(3,850	)	$	(4,079	)	$	(3,057	)
Weighted average common shares outstanding		7,259			5,911			7,079			5,247
Dilutive stock options/shares		—			—			—			—
Diluted weighted average common shares outstanding		7,259			5,911			7,079			5,247
Diluted net income (loss) per share	$	(0.10	)	$	(0.65	)	$	(0.58	)	$	(0.58	)

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Restructuring Costs (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jun. 30, 2012
Restructuring Cost and Reserve [Line Items]
Total Costs Expected to be Incurred	$ 1,015
Total Incurred as of June 30, 2012	687
Estimated future expense	328
One-time Termination Benefits
Restructuring Cost and Reserve [Line Items]
Total Costs Expected to be Incurred	802
Total Incurred as of June 30, 2012	539
Estimated future expense	263
Equipment Moving Costs and Method Transfers
Restructuring Cost and Reserve [Line Items]
Total Costs Expected to be Incurred	82
Total Incurred as of June 30, 2012	82
Employee Relocation
Restructuring Cost and Reserve [Line Items]
Total Costs Expected to be Incurred	68
Total Incurred as of June 30, 2012	41
Estimated future expense	27
Other Restructuring
Restructuring Cost and Reserve [Line Items]
Total Costs Expected to be Incurred	36
Total Incurred as of June 30, 2012	6
Estimated future expense	30
Gains (Losses) on Sales of Assets
Restructuring Cost and Reserve [Line Items]
Total Costs Expected to be Incurred	27
Total Incurred as of June 30, 2012	19
Estimated future expense	$ 8

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Sep. 30, 2011
Current assets:
Cash and cash equivalents	$ 409	$ 2,963
Accounts receivable
Trade	3,672	4,073
Unbilled revenues and other	1,077	1,116
Inventories	1,745	1,636
Refundable income taxes	6
Prepaid expenses	328	585
Total current assets	7,237	10,373
Property and equipment, net	20,021	20,399
Goodwill	1,383	1,383
Intangible assets, net	31	54
Debt issue costs	53	75
Other assets	56	62
Total assets	28,781	32,346
Current liabilities:
Accounts payable	2,520	1,764
Accrued expenses	2,036	1,762
Customer advances	3,632	3,571
Income tax accruals	16	56
Revolving line of credit	1,263	1,346
Current portion of capital lease obligation	494	613
Current portion of long-term debt	6,007	735
Total current liabilities	15,968	9,847
Capital lease obligation, less current portion	1,062	1,071
Long-term debt, less current portion		5,842
Shareholders' equity:
Common shares, no par value: Authorized 19,000,000 shares; 7,276,976 issued and outstanding at June 30, 2012 and 6,945,631 at September 30, 2011	1,781	1,698
Additional paid-in capital	20,015	19,408
Accumulated deficit	(11,785)	(7,706)
Accumulated other comprehensive income	55	51
Total shareholders' equity	11,751	15,586
Total liabilities and shareholders' equity	28,781	32,346
Series A Preferred Stock
Shareholders' equity:
1,685 Series A shares at $1,000 stated value issued and outstanding at June 30, 2012 and 2,135 at September 30, 2011	$ 1,685	$ 2,135

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DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

9 Months Ended

Jun. 30, 2012

DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Bioanalytical Systems, Inc. and its subsidiaries (“We,” “us”, 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, 2011. In the opinion of management, the condensed consolidated financial statements for the three and nine months ended June 30, 2012 and 2011 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, 2012. The results of operations for the three and nine months ended June 30, 2012 are not necessarily indicative of the results for the year ending September 30, 2012.

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Stock Based Compensation - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 46	$ 48	$ 119	$ 123

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Income or Loss Per Share - Additional Information (Detail) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Warrant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares not considered in computing diluted earnings per share	1,377	1,377
Series A Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares not considered in computing diluted earnings per share	982	982

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STOCK BASED COMPENSATION

9 Months Ended

Jun. 30, 2012

STOCK BASED COMPENSATION

2. 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 9 in the Notes to the Consolidated Financial Statements in our Form 10-K for the year ended September 30, 2011. 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 9 to the Consolidated Financial Statements in our Form 10-K for the year ended September 30, 2011. Stock based compensation expense for the three and nine months ended June 30, 2012 was $46 and $119, respectively. Stock based compensation expense for the three and nine months ended June 30, 2011 was $48 and $123, respectively.

A summary of our stock option activity for the nine months ended June 30, 2012 is as follows (in thousands except for share prices):

	Options (shares)			Weighted- Average Exercise Price		Weighted- Average Grant Date Fair Value
Outstanding - October 1, 2011		673		$	2.65	$	1.83
Exercised		-			-		-
Granted		170			1.38		1.12
Terminated		(172	)		4.17		2.59
Outstanding - June 30, 2012		671		$	1.94	$	1.45

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2012	Sep. 30, 2011
Preferred shares, authorized	1,000,000	1,000,000
Preferred shares, no par value
Common shares, no par value
Common shares, Authorized	19,000,000	19,000,000
Common shares, issued	7,276,976	6,945,631
Common shares, outstanding	7,276,976	6,945,631
Series A Preferred Stock
Series A shares, stated value	$ 1,000	$ 1,000
Series A shares, issued	1,685	2,135
Series A shares, outstanding	1,685	2,135

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STOCK BASED COMPENSATION (Tables)

9 Months Ended

Jun. 30, 2012

Summary of Stock Option Activity

A summary of our stock option activity for the nine months ended June 30, 2012 is as follows (in thousands except for share prices):

	Options (shares)			Weighted- Average Exercise Price		Weighted- Average Grant Date Fair Value
Outstanding - October 1, 2011		673		$	2.65	$	1.83
Exercised		-			-		-
Granted		170			1.38		1.12
Terminated		(172	)		4.17		2.59
Outstanding - June 30, 2012		671		$	1.94	$	1.45

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Document and Entity Information	9 Months Ended
	Jun. 30, 2012	Aug. 08, 2012
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Trading Symbol	BASI
Entity Registrant Name	BIOANALYTICAL SYSTEMS INC
Entity Central Index Key	0000720154
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		7,307,864

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INCOME (LOSS) PER SHARE (Tables)

9 Months Ended

Jun. 30, 2012

Reconciliation of Computation of Basic Income (Loss) Per Share to Diluted Income (Loss) Per Share

The following table reconciles our computation of basic income (loss) per share to diluted income (loss) per share:

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
Basic net income (loss) per share:
Net income (loss)	$	(704	)	$	418		$	(4,079	)	$	1,211
Less:  Deemed dividend for Series A Preferred Shares		—			(3,277	)		—			(3,277	)
Less:  Preferred dividend		—			(991	)		—			(991	)
Net income (loss) applicable to common shareholders	$	(704	)	$	(3,850	)	$	(4,079	)	$	(3,057	)
Weighted average common shares outstanding		7,259			5,911			7,079			5,247
Basic net income (loss) per share	$	(0.10	)	$	(0.65	)	$	(0.58	)	$	(0.58	)
Diluted net income (loss) per share:
Diluted net income (loss) applicable to common shareholders	$	(704	)	$	(3,850	)	$	(4,079	)	$	(3,057	)
Weighted average common shares outstanding		7,259			5,911			7,079			5,247
Dilutive stock options/shares		—			—			—			—
Diluted weighted average common shares outstanding		7,259			5,911			7,079			5,247
Diluted net income (loss) per share	$	(0.10	)	$	(0.65	)	$	(0.58	)	$	(0.58	)

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Service revenue	$ 5,200	$ 6,737	$ 16,090	$ 19,326
Product revenue	1,986	1,741	5,578	5,665
Total revenue	7,186	8,478	21,668	24,991
Cost of service revenue	4,270	5,043	14,592	14,544
Cost of product revenue	857	690	2,392	2,189
Total cost of revenue	5,127	5,733	16,984	16,733
Gross profit	2,059	2,745	4,684	8,258
Operating expenses:
Selling	741	816	2,735	2,275
Research and development	113	127	453	350
General and administrative	1,122	1,321	4,356	3,964
Total operating expenses	1,976	2,264	7,544	6,589
Restructuring charges	623		687
Operating income (loss)	(540)	481	(3,547)	1,669
Interest expense	(172)	(70)	(540)	(473)
Other income	8	7	8	15
Income (loss) before income taxes	(704)	418	(4,079)	1,211
Income taxes
Net income (loss)	(704)	418	(4,079)	1,211
Other comprehensive income (loss):
Foreign currency translation adjustment	(17)	(17)	4	(4)
Comprehensive income (loss)	$ (721)	$ 401	$ (4,075)	$ 1,207
Basic net income (loss) per share	$ (0.10)	$ (0.65)	$ (0.58)	$ (0.58)
Diluted net income (loss) per share	$ (0.10)	$ (0.65)	$ (0.58)	$ (0.58)
Weighted common shares outstanding:
Basic	7,259	5,911	7,079	5,247
Diluted	7,259	5,911	7,079	5,247

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DEBT

9 Months Ended

Jun. 30, 2012

DEBT

7. DEBT

Mortgages and note payable

We have notes payable to Regions Bank (“Regions”) aggregating approximately $6,007. Regions notes payable currently include two outstanding mortgages on our facilities in West Lafayette and Evansville, Indiana, which total $4,889. The mortgages mature in November 2012 with an interest rate fixed at 4.1% and monthly principal payments of approximately $38 plus interest.

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, 2012, the replacement note payable had a balance of $1,117.

As part of the amendment, Regions also agreed to amend the loan covenants for the related debt to be more favorable to us. Regions requires us to maintain certain ratios including a fixed charge coverage ratio and total liabilities to tangible net worth ratio. The fixed charge coverage ratio calculation has been adjusted with a ratio required of not less than 1.25 to 1.00. Also, the total liabilities to tangible net worth ratio has been adjusted to not greater than 2.10 to 1.00. Provided we comply with the revised covenant ratios, which are common to such agreements, the amendment removes limitations on the Company’s purchase of fixed assets. We were not in compliance with the fixed charge coverage covenant at June 30, 2012 due to the net losses in the first nine months of fiscal 2012. Regions waived compliance with this covenant on August 13, 2012. As a result of our results in the first nine months of fiscal 2012, we will likely be out of compliance with the fixed charge coverage covenant for the fourth fiscal quarter ending September 30, 2012, as our covenants are calculated on a fiscal year cumulative basis. We intend to seek a waiver of this covenant from Regions prior to September 30, 2012. Failure to obtain such waiver could accelerate the maturity of the loans and cause a cross default with our other lender.

The Regions loans both contain cross-default provisions with each other and with the revolving line of credit with Entrepreneur Growth Capital LLC (“EGC”) described below.

The mortgages and replacement note payable with Regions mature in the first quarter of fiscal 2013, and, thus, we have reported the full balance as current. We intend to refinance the amounts in lieu of making balloon payments for the remaining principal balances. We may be unsuccessful in renegotiating the terms of the debt or those terms may be unfavorable to us. For these reasons, if we are unsuccessful at refinancing our long-term debt, our operating results and financial condition could be adversely affected.

Revolving Line of Credit

On January 13, 2010, we entered into a $3,000 revolving line of credit agreement (“Credit Agreement”) with EGC, which we use for working capital and other purposes. On December 23, 2010, we negotiated an amendment to this Credit Agreement. The term of the Credit Agreement, as amended, expires on January 31, 2013. If we prepay prior to the expiration of the 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 Citibank’s Prime Rate plus five percent (5%), or 8.25% as of June 30, 2012, 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, and 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. The December 2010 amendment reduced the minimum tangible net worth covenant requirement from $9,000 to $8,500. The Credit Agreement also contains cross-default provisions with the Regions loans and any future EGC loans. At June 30, 2012, we were in compliance with the minimum tangible net worth covenant requirement.

At June 30, 2012, we had available borrowing capacity of $2,315 on this line, of which $1,263 was outstanding.

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, a settlement was reached 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. At June 30, 2012, the balance of this liability was zero.

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INCOME TAXES

9 Months Ended

Jun. 30, 2012

INCOME TAXES

6. 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 carryforwards. 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, 2012 and September 30, 2011, we had a $16 liability for uncertain income tax positions.

We record interest and penalties accrued in relation to uncertain income tax positions as a component of income tax expense. Any changes in the liability for uncertain tax positions would impact our effective tax rate. We do not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months.

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 2008.

We have an accumulated net deficit in our UK subsidiary. Consequently, United States deferred tax assets on such earnings have not been recorded. Also, a valuation allowance was established in fiscal 2009 against the U.S. deferred income tax balance. We had previously recorded a valuation allowance on the UK subsidiary deferred income tax balance.

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Summary of Stock Option Activity (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Jun. 30, 2012
Options (shares)
Beginning Balance	673
Exercised
Granted	170
Terminated	(172)
Ending Balance	671
Weighted Average Exercise Price
Beginning Balance	$ 2.65
Exercised
Granted	$ 1.38
Terminated	$ 4.17
Ending Balance	$ 1.94
Weighted Average Grant Date Fair Value
Beginning Balance	$ 1.83
Exercised
Granted	$ 1.12
Terminated	$ 2.59
Ending Balance	$ 1.45

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INVENTORIES (Tables)

9 Months Ended

Jun. 30, 2012

Inventories

Inventories consisted of the following:

	June 30, 2012			September 30, 2011
Raw materials	$	1,559		$	1,352
Work in progress		260			379
Finished goods		309			309
	$	2,128		$	2,040
Obsolescence reserve		(383	)		(404	)
	$	1,745		$	1,636

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NEW ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Jun. 30, 2012

NEW ACCOUNTING PRONOUNCEMENTS

10. NEW ACCOUNTING PRONOUNCEMENTS

In September 2011, the FASB issued an accounting standards update that amends the two-step goodwill impairment test by permitting an entity to first assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step goodwill impairment test is unnecessary. The amendment is effective for fiscal years and interim periods beginning on or after December 15, 2011 on a prospective basis, an early adoption is permitted. The Company elected to bypass the qualitative assessment aspect of this guidance due to the restructuring circumstances and performed a quantitative analysis in the third quarter. The quantitative analysis resulted in no impairment to the goodwill valuation as currently recorded on the books.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

9 Months Ended

Jun. 30, 2012

FAIR VALUE OF FINANCIAL INSTRUMENTS

8. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts for cash and cash equivalents, accounts receivable, inventories, prepaid expenses 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. The other long-term fixed rate debt agreements were initiated in February 2011. Our interest rate swap expired under its terms in fiscal 2011.

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RESTRUCTURING

9 Months Ended

Jun. 30, 2012

RESTRUCTURING

9. RESTRUCTURING

In March 2012, we announced a plan to restructure our bioanalytical laboratory operations. We have consolidated our laboratory in McMinnville, Oregon into our 120,000 square foot headquarters facility in West Lafayette, Indiana. This plan has been implemented to dramatically reduce operating costs and strengthen our ability to meet clients’ needs by improving laboratory utilization.

As part of the overall evaluation of our business, personnel reductions in the Selling, R&D and General and Administrative functions have been implemented at both of our Indiana locations during the third quarter of fiscal 2012.

For the nine months ended June 30, 2012, we have incurred $687 in restructuring costs as outlined in the table below. The remaining charges will be recorded predominantly in the fourth fiscal quarter ending September 30, 2012.

	Total Costs		Total Incurred for Nine Months
	Expected to be		Ending June 30,		Estimated
	Incurred		2012		future expense
One-time termination benefits	$	802	$	539	$	263
Equipment moving costs and method transfers		82		82		-
Travel and relocation costs		68		41		27
Other costs		36		6		30
Loss Sale of Equipment		27		19		8
	$	1,015	$	687	$	328

Upon careful evaluation of the financial performance of our bioanalytical laboratory in Warwickshire, UK and analysis of our strategic alternatives, the decision was made in fourth quarter 2012 to initiate the closure of our UK facility. We will continue to sell our products globally while further consolidating delivery of our CRO services into our Indiana locations. We expect to incur one-time employee termination costs, ongoing lease payments, and proceeds from the sales of laboratory equipment. We anticipate that these charges will be recorded predominantly in the fourth fiscal quarter ending September 30, 2012.

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SUBSEQUENT EVENTS

9 Months Ended

Jun. 30, 2012

SUBSEQUENT EVENTS

11. SUBSEQUENT EVENTS

On July 4, 2012, Anthony S. Chilton, Ph.D., notified the Board of Directors of the Company of his intent to resign as President and Chief Executive Officer of the Company effective as of July 5, 2012 in order to pursue other opportunities. The Company elected Jacqueline M. Lemke to serve as Interim President and Chief Executive Officer of the Company in addition to her position as Chief Financial Officer and Vice President – Finance.

On July 12, 2012, the Company listed for sale our 7.25 acres and 120,000 square foot facility at 2701 Kent Avenue, West Lafayette, Indiana with the intent to leaseback 80% of that square footage in which to continue our laboratory and manufacturing operations. The asking price was $12,500. As of June 30, 2012 the net book value of the facility and land was $9,798.

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RESTRUCTURING (Tables)

9 Months Ended

Jun. 30, 2012

Restructuring Costs

For the nine months ended June 30, 2012, we have incurred $687 in restructuring costs as outlined in the table below. The remaining charges will be recorded predominantly in the fourth fiscal quarter ending September 30, 2012.

	Total Costs		Total Incurred for Nine Months
	Expected to be		Ending June 30,		Estimated
	Incurred		2012		future expense
One-time termination benefits	$	802	$	539	$	263
Equipment moving costs and method transfers		82		82		-
Travel and relocation costs		68		41		27
Other costs		36		6		30
Loss Sale of Equipment		27		19		8
	$	1,015	$	687	$	328

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Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Sep. 30, 2011
Schedule of Inventory [Line Items]
Raw materials	$ 1,559	$ 1,352
Work in progress	260	379
Finished goods	309	309
Inventory, Gross, Total	2,128	2,040
Obsolescence reserve	(383)	(404)
Inventories	$ 1,745	$ 1,636

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating activities:
Net income (loss)	$ (4,079)	$ 1,211
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	1,724	1,574
Employee stock compensation expense	119	123
Provision for doubtful accounts	46	11
Gain on interest rate swaps		(31)
Loss (gain) on sale of property and equipment	22	(9)
Deferred income taxes		(8)
Changes in operating assets and liabilities:
Accounts receivable	394	(275)
Inventories	(109)	26
Refundable income taxes	(46)
Prepaid expenses and other assets	280	(79)
Accounts payable	877	(599)
Accrued expenses	275	(96)
Customer advances	60	(150)
Net cash (used in) provided by operating activities	(437)	1,698
Investing activities:
Capital expenditures	(980)	(635)
Net cash used in investing activities	(980)	(635)
Financing activities:
Net proceeds from registered direct offering		4,639
Payments of long-term debt	(569)	(1,572)
Payments on revolving line of credit	(21,238)	(23,293)
Borrowings on revolving line of credit	21,155	23,598
Payments on capital lease obligations	(487)	(1,218)
Net cash (used in) provided by financing activities	(1,139)	2,154
Effect of exchange rate changes	2	(7)
Net (decrease) increase in cash and cash equivalents	(2,554)	3,210
Cash and cash equivalents at beginning of period	2,963	1,422
Cash and cash equivalents at end of period	$ 409	$ 4,632

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SEGMENT INFORMATION

9 Months Ended

Jun. 30, 2012

SEGMENT INFORMATION

5. 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, 2011.

	Three Months Ended June 30,					Nine Months Ended June 30,
	2012			2011		2012			2011
Revenue:
Service	$	5,200		$	6,737	$	16,090		$	19,326
Product		1,986			1,741		5,578			5,665
	$	7,186		$	8,478	$	21,668		$	24,991
Operating income (loss):
Service	$	(734	)	$	376	$	(3,439	)	$	1,088
Product		194			105		(108	)		581
	$	(540	)	$	481	$	(3,547	)	$	1,669

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Segment Information - Additional Information (Detail)	9 Months Ended
	Jun. 30, 2012 Segment
Segment Reporting Information [Line Items]
Number of principal segments	2

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SEGMENT INFORMATION (Tables)

9 Months Ended

Jun. 30, 2012

Segment Information

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, 2011.

	Three Months Ended June 30,					Nine Months Ended June 30,
	2012			2011		2012			2011
Revenue:
Service	$	5,200		$	6,737	$	16,090		$	19,326
Product		1,986			1,741		5,578			5,665
	$	7,186		$	8,478	$	21,668		$	24,991
Operating income (loss):
Service	$	(734	)	$	376	$	(3,439	)	$	1,088
Product		194			105		(108	)		581
	$	(540	)	$	481	$	(3,547	)	$	1,669