8-K/A

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 8-K/A

(Amendment No. 1)

CURRENT REPORT

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

July 27, 2012 (May 15, 2012)
Date of Report (Date of earliest event Reported)

MESA LABORATORIES, INC.

(Exact Name of Small Business Issuer as Specified in its Charter)

Commission File Number: 0-11740

COLORADO
(State or other Jurisdiction of
Incorporation or Organization) 84-0872291
(I.R.S. Employer
Identification No.)

12100 WEST SIXTH AVENUE, LAKEWOOD,
COLORADO
(Address of Principal Executive Offices) 80228
(Zip Code)

Issuer’s telephone number, including area code: (303) 987-8000

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

On May 21, 2012, the Registrant filed a Current Report on Form 8-K disclosing that on May 15, 2012, it entered into an Asset Acquisition Agreement to acquire the assets used or held for use and specific liabilities of Bios International Corporation.  This first amendment provides the historical financial statements of Bios International Corporation and the pro forma financial information required by Item 9.01 of the Form 8-K The Current Report on Form 8-K filed on May 21, 2012, is hereby amended to include the required historical financial statements of Bios International Corporation and the required pro forma financial information.  No other amendments to the Current Report on Form 8-K filed on May 21, 2012, are being made by this Form 8-K/A.

Item 9.01 Financial Statements and Exhibits

(a)Financial Statements of Businesses Acquired.

The Audited Financial Statements of Bios International Corporation as of and for the years ended December 31, 2011 and 2010, are attached as Exhibit 99.1.  The Unaudited Financial Statements of Bios International Corporation as of and for the three months ended March 31, 2012 and 2011, are attached as Exhibit 99.2.

(b)Pro Forma Financial Information.

The Unaudited Pro Forma Condensed Combined Balance Sheet of Registrant as of March 31, 2012 and 2011, and the Unaudited Pro Forma Condensed Combined Statements of Income of Registrant for the years ended March 31, 2012 and 2011, are attached as Exhibit 99.3.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MESA LABORATORIES, INC.
(Issuer)
DATED: July 27, 2012	BY:	/s/ John J. Sullivan
		John J. Sullivan, Ph.D.
		Chief Executive Officer, President, Treasurer and Director

2

INDEX TO EXHIBITS

Exhibit No.	Description	Method of Filing
99.1	The Audited Financial Statements of Bios International Corporation as of and for the years ended December 31, 2011 and 2010.	Filed Herewith
99.2	The Unaudited Financial Statements of Bios International Corporation as of and for the three months ended March 31, 2012 and 2011.	Filed Herewith
99.3	Unaudited pro forma condensed combined balance sheets as of March 31, 2012 and 2011, and the unaudited pro forma condensed combined statements of operations for the years ended March 31, 2012 and 2011.	Filed Herewith

3

EX-99.1

Exhibit 99.1

BIOS INTERNATIONAL CORPORATION

Financial Statements

and

Independent Auditors’ Report

December 31, 2011 and 2010

BIOS INTERNATIONAL CORPORATION

Table of Contents

	Page
Independent Auditors’ Report	1
Financial Statements
Balance Sheets	2
Statements of Income	3
Statement of Changes in Stockholders’ Equity	4
Statements of Cash Flows	5
Notes to Financial Statements	6

INDEPENDENT AUDITORS’ REPORT

Stockholders

Bios International Corporation

Butler, New Jersey

We have audited the accompanying balance sheets of Bios International Corporation (the “Company”) as of December 31, 2011 and 2010, and the related statements of income, changes in stockholders’ equity, and cash flows for the years then ended.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bios International Corporation as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Ehrhardt Keefe Steiner & Hottman PC

Ehrhardt Keefe Steiner & Hottman PC

July 27, 2012

Denver, Colorado

BIOS INTERNATIONAL CORPORATION

Balance Sheets

	December 31,
	2011		2010
Assets
Current assets
Cash and cash equivalents	$	40,320	$	368,172
Accounts receivable	806,491		649,778
Inventory, net	962,804		798,057
Other current assets	16,146		—
Total current assets	1,825,761		1,816,007
Non-current assets
Property and equipment, net	67,637		33,920
Other long-term assets	28,993		26,763
Total non-current assets	96,630		60,683
Total assets	$	1,922,391	$	1,876,690
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	107,168	$	95,164
Accrued expenses	146,577		136,627
Total current liabilities	253,745		231,791
Total liabilities	253,745		231,791
Commitments and contingencies (Note 6)
Stockholders’ equity
Common stock, $10 par value, 1,000 shares authorized, issued, and outstanding	10,000		10,000
Retained earnings	1,658,646		1,634,899
Total stockholders’ equity	1,668,646		1,644,899
Total liabilities and stockholders’ equity	$	1,922,391	$	1,876,690

See notes to financial statements.

2

BIOS INTERNATIONAL CORPORATION

Statements of Income

	For the Years Ended
	December 31,
	2011			2010
Revenues	$	6,786,460		$	6,273,404
Cost of revenue	2,277,491			2,037,135
Gross profit	4,508,969			4,236,269
Operating expenses
General and administrative	1,240,643			1,037,658
Research and development	492,860			489,409
Selling	806,248			850,577
Total operating expenses	2,539,751			2,377,644
Other income
Other income	(862		)	577
Total other income	(862		)	577
Net income	$	1,970,080		$	1,858,048

See notes to financial statements.

3

BIOS INTERNATIONAL CORPORATION

Statement of Changes in Stockholders’ Equity

For the Years Ended December 31, 2011 and 2010

							Total
	Common Stock			Retained			Stockholders’
	Shares	Amount		Earnings			Equity
Balance - December 31, 2009	1,000	$	10,000	$	1,268,904		$	1,278,904
Net income	—	—		1,858,048			1,858,048
Distributions	—	—		(1,492,053		)	(1,492,053		)
Balance - December 31, 2010	1,000	10,000		1,634,899			1,644,899
Net income	—	—		1,970,080			1,970,080
Distributions	—	—		(1,946,333		)	(1,946,333		)
Balance - December 31, 2011	1,000	$	10,000	$	1,658,646		$	1,668,646

See notes to financial statements.

4

BIOS INTERNATIONAL CORPORATION

Statements of Cash Flows

	For the Years Ended
	December 31,
	2011			2010
Cash flows from operating activities
Net income	$	1,970,080		$	1,858,048
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities
Depreciation and amortization	8,499			5,925
Provision for inventory reserve	8,330			30
Changes in assets and liabilities
Accounts receivable	(156,713		)	(59,089		)
Inventory	(183,077		)	(114,769		)
Other current assets	(16,146		)	—
Other long-term assets	(2,230		)	7,000
Accounts payable	12,004			(17,772		)
Accrued expenses	9,950			10,006
	(319,383		)	(168,669		)
Net cash and cash equivalents provided by operating activities	1,650,697			1,689,379
Cash flows from investing activities
Purchase of property and equipment	(32,216		)	—
Net cash and cash equivalents used in investing activities	(32,216		)	—
Cash flows from financing activities
Distributions to owners	(1,946,333		)	(1,492,053		)
Stockholder loan repayment	—			(11,286		)
Net cash and cash equivalents used in financing activities	(1,946,333		)	(1,503,339		)
Net (decrease) increase in cash and cash equivalents	(327,852		)	186,040
Cash and cash equivalents - beginning of year	368,172			182,132
Cash and cash equivalents - end of year	$	40,320		$	368,172

Supplemental disclosure of non-cash activity:

The Company traded $10,000 of inventory for $10,000 of fixed assets during the year ended  December 31, 2011.

See notes to financial statements.

5

BIOS INTERNATIONAL CORPORATION

Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies

Bios International Corporation (“Bios” or the “Company”) was established in 1991.  Bios is a recognized manufacturer of gas flow measurement, providing the industry’s most reliable products, service, and solutions for professionals in environmental protection, workplace safety, industrial process control, and laboratory calibration.  The Company serves its customers directly and through a vast network of distributors across the globe.

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.  The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests.

Accounts Receivable

The Company estimates an allowance for doubtful accounts based on overall historic write-offs, the age of receivable balances, and the payment history and creditworthiness of the customer.  The losses ultimately incurred could differ materially in the near term from the amounts estimated in determining the allowance.  As of December 31, 2011 and 2010, the Company determined that no allowance was necessary as all accounts were deemed fully collectible.

Concentrations of Credit Risk

The Company grants credit in the normal course of business to customers. The Company periodically performs credit analysis and monitors the financial condition of its customers to reduce credit risk.

Inventory

Inventory consists of raw materials and finished products, which are stated at the lower of cost or market, determined using the first-in, first-out method.  The Company’s policy is to periodically evaluate the market value of the inventory and the stage of product lifecycle and record a reserve for any inventory considered slow-moving or obsolete.

Property and Equipment

Property and equipment are stated at cost.  Depreciation is provided utilizing the straight-line method over the estimated useful lives for owned assets, ranging from 3 to 20 years, and the related lease terms for leasehold improvements.

Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, when title and risk of ownership passes, the sales price is fixed or determinable, and collectibility is probable.  The Company recognizes revenues at the time products are shipped and risk of loss has transferred. Revenue from ongoing product service and repair is fully recognized upon completion and shipment of serviced product.

6

BIOS INTERNATIONAL CORPORATION

Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Revenue Recognition (continued)

Other than normal and customary ongoing customer service, the Company does not have any post-shipment contractual obligations to its customers, such as installation or training.

Advertising Costs

The Company expenses advertising costs as incurred.  Advertising expense for the years ended December 31, 2011 and 2010 was $54,290 and $24,509, respectively.

Research and Development Costs

Expenditures made for research and development are charged to expense as incurred.

Shipping and Handling Costs

For product sold, payments by customers to the Company for shipping and handling costs are included in revenue on the statements of income, while the Company’s expense is included in cost of revenue.  Shipping and handling for inventory and materials purchased by the Company is included as a component of inventory on the balance sheets, and in cost of revenue when the product is sold.

Income Taxes

The Company has elected to be treated as an S corporation for income tax purposes.  Accordingly, taxable income and losses of the Company are reported on the income tax returns of the Company’s stockholders, and no provision for federal income taxes has been recorded in the accompanying financial statements.

The Company applies guidance on accounting for uncertainty in income taxes.  If taxing authorities were to disallow any tax positions taken by the Company, the additional income taxes, if any, would be imposed on the stockholders rather than the Company.  Accordingly, there would be no effect on the Company’s financial statements.  If the Company were deemed to be other than an S corporation, additional taxes may be the responsibility of the Company.

Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses.  No interest or penalties have been assessed as of December 31, 2011.  The Company’s informational returns for tax years subject to examination by tax authorities included 2007 and 2008 through the current year for state and federal tax reporting purposes, respectively.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

7

BIOS INTERNATIONAL CORPORATION

Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Warranties

The Company provides limited product warranty on its products and, accordingly, accrues an estimate of the related warranty expense at the time of sale.  The Company recorded $21,000 for warranty reserve as of December 31, 2011 and 2010, which is included in accrued expenses on the balance sheets.

Commission

The Company paid $500,000 of commissions to a separate entity, owned by a common shareholder of the Company, during the years ended December 31, 2011 and 2010.  This commission is included in selling expense in the accompanying statements of income.

Note 2 - Related Party Transactions

The Company pays its sole owner $200,000 in royalties annually for the use of patented technology.    The related expense is recorded as cost of revenue within the statements of income for the years ended December 31, 2011 and 2010.

Note 3 - Inventory

Inventories are summarized as follows:

	December 31,
	2011			2010
Finished goods and raw materials	$	971,324		$	798,247
Inventory reserve	(8,520		)	(190		)
	$	962,804		$	798,057

Finished goods include raw materials, direct labor, and manufacturing overhead at December 31, 2011 and 2010.

8

BIOS INTERNATIONAL CORPORATION

Notes to Financial Statements

Note 4 - Property and Equipment

Property and equipment consist of the following:

	December 31,
	2011			2010
Machinery	$	32,980		$	10,480
Computer equipment	8,374			6,194
Furniture	10,870			10,870
Leasehold improvements	29,713			29,713
Office equipment	17,536			—
	99,473			57,257
Less accumulated depreciation	(31,836		)	(23,337		)
	$	67,637		$	33,920

Depreciation expense for the years ended December 31, 2011 and 2010 was $8,499 and $5,925, respectively.

Note 5 - Accrued Expenses

Accrued expenses consist of the following:

	December 31,
	2011		2010
Profit-sharing contribution	$	50,249	$	48,000
Payroll and benefits	38,644		29,920
Warranty liability	21,000		21,000
Customer deposits	10,089		24,271
Other	26,595		13,436
	$	146,577	$	136,627

Note 6 - Commitments and Contingencies

Operating Leases

The Company leases equipment, storage, and vehicles under non-cancelable operating leases.  Rent expense for the years ended December 31, 2011 and 2010 was $160,349 and $174,214, respectively.

9

BIOS INTERNATIONAL CORPORATION

Notes to Financial Statements

Note 6 - Commitments and Contingencies (continued)

Operating Leases (continued)

Future minimum lease payments under these leases are approximately as follows:

Year Ending December 31,
2012	$	180,000
2013	180,000
2014	180,000
2015	15,000
	$	555,000

Litigation

In the normal course of business, the Company is party to litigation from time to time.  The Company maintains insurance to cover certain actions and believes that resolution of such litigation will not have a material adverse effect on the Company.

Note 7 - Employee Benefit Plan

The Company sponsors a Section 401(k) retirement plan (the “Plan”).  Eligible employees may make voluntary contributions to the Plan.  In addition, the Company may make discretionary matching contributions to the Plan.  The Company made matching contributions of $65,659 and $50,200 during the years ended December 31, 2011 and 2010, respectively.

Note 8 - Stockholders’ Equity

Stockholders’ Equity

Bios was incorporated in the state of New Jersey on January 2, 1991.  The Company authorized 1,000 shares for issuance.  As of  December 31, 2011 and 2010, there were 1,000 shares issued and outstanding.

Note 9 - Subsequent Events

On May 15, 2012, substantially all of the assets and liabilities of the Company were acquired by Mesa Laboratories, Inc. (“Mesa”).  Under the terms of the acquisition, certain assets and liabilities of the Company were acquired for a cash payment of $16,660,000, which includes $1 million held in escrow and contingent consideration of up to $6,710,000, depending on the results of a three-year earn period.

The Company has evaluated all subsequent events through July 27, 2012, which is the date the financial statements were available to be issued.

10

EX-99.2

Exhibit 99.2

BIOS INTERNATIONAL CORPORATION

Condensed Financial Statements

March 31, 2012 and 2011

BIOS INTERNATIONAL CORPORATION

Table of Contents

	Page
Condensed Financial Statements
Condensed Balance Sheets (Unaudited)	1
Condensed Statements of Income (Unaudited)	2
Condensed Statements of Cash Flows (Unaudited)	3
Notes to Condensed Financial Statements (Unaudited)	4

BIOS INTERNATIONAL CORPORATION

Condensed Balance Sheets (Unaudited)

	March 31,
	2012		2011
Assets
Current assets
Cash and cash equivalents	$	271,630	$	603,908
Accounts receivable	649,688		586,493
Inventory, net	792,683		694,798
Total current assets	1,714,001		1,885,199
Non-current assets
Property and equipment, net	72,643		32,337
Other long term assets	28,506		26,763
Total non-current assets	101,149		59,100
Total assets	$	1,815,150	$	1,944,299
Liabilities and Stockholder’s Equity
Current liabilities
Accounts payable	$	81,652	$	84,111
Accrued expenses	87,718		215,127
Total current liabilities	169,370		299,238
Total liabilities	169,370		299,238
Commitments and contingencies (Note 4)
Stockholder’s equity
Common stock, $10 par value, 1,000 shares authorized, issued, and outstanding	10,000		10,000
Retained earnings	1,635,780		1,635,061
Total stockholder’s equity	1,645,780		1,645,061
Total liabilities and stockholder’s equity	$	1,815,150	$	1,944,299

See notes to financial statements.

1

BIOS INTERNATIONAL CORPORATION

Condensed Statements of Income (Unaudited)

	For the Three Month Period Ended
	March 31,
	2012			2011
Revenues	$	1,527,597		$	1,365,796
Cost of revenue	741,151			575,540
Gross profit	786,446			790,256
Operating expenses
General and administrative	288,740			309,889
Research and development	110,701			140,556
Selling	67,591			50,967
Total operating expenses	467,032			501,412
Other income
Other income	(408		)	(992		)
Total other income	(408		)	(992		)
Net income	$	319,822		$	289,836

See notes to financial statements.

2

BIOS INTERNATIONAL CORPORATION

Condensed Statements of Cash Flows (Unaudited)

	For the Three Month Period Ended
	March 31,
	2012			2011
Cash flows from operating activities
Net income	$	319,822		$	289,836
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities
Depreciation and amortization	2,395			1,583
Changes in assets and liabilities
Accounts receivable	156,803			63,285
Inventory	127,433			46,585
Other current assets	16,146			—
Other long term assets	487			—
Accounts payable	(25,516		)	(11,053		)
Accrued expenses	(58,859		)	78,500
	218,889			178,900
Net cash and cash equivalents provided by operating activities	538,711			468,736
Cash flows from investing activities
Purchase of property and equipment	(7,401		)	—
Net cash and cash equivalents used in investing activities	(7,401		)	—
Cash flows from financing activities
Distributions to owners	(300,000		)	(233,000		)
Stockholder loan repayment	—			—
Net cash and cash equivalents used in financing activities	(300,000		)	(233,000		)
Net increase in cash and cash equivalents	231,310			235,736
Cash and cash equivalents - beginning of year	40,320			368,172
Cash and cash equivalents - end of year	$	271,630		$	603,908

See notes to financial statements.

3

BIOS INTERNATIONAL CORPORATION

Notes to Condensed Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies

Bios International Corp (“Bios”) was established in 1991.  Bios International is a recognized manufacturer of gas flow measurement, providing the industry’s most reliable products, service and solutions for professionals in environmental protection, workplace safety, industrial process control and laboratory calibration.  The Company serves its customers directly and through a vast network of distributors across the globe.

Accounts Receivable

The Company estimates an allowance for doubtful accounts based on overall historic write-offs, the age of receivable balances, and the payment history and creditworthiness of the customer.  The losses ultimately incurred could differ materially in the near term from the amounts estimated in determining the allowance.  As of March 31, 2012 and 2011, the Company determined that no allowance was necessary as all accounts were deemed fully collectible.

For product sold, payments by customers to the Company for shipping and handling costs are included in revenue on the statements of income, while the Company’s expense is included in cost of revenue.  Shipping and handling for inventory and materials purchased by the Company is included as a component of inventory on the balance sheets, and in cost of revenue when the product is sold.

Note 2 - Related Party Transactions

The Company pays the owner of the Company royalties for the use of patented technology.  The related expense is recorded as cost of revenue within the statements of income for the three month period ended March 31, 2012.

Note 3 - Inventory

Inventories are summarized as follows:

	March 31,
	2012			2011
Finished goods and raw materials	$	798,684		$	698,516
Inventory reserve	(6,001		)	(3,718		)
	$	792,683		$	694,798

Finished goods include raw materials, direct labor, and manufacturing overhead at March 31, 2012 and 2011.

4

BIOS INTERNATIONAL CORPORATION

Notes to Condensed Financial Statements

Note 4 - Commitments and Contingencies

Operating Leases

The Company leases equipment, storage and vehicles under non-cancelable operating leases.  Rent expense for the three month period ended March 31, 2012 and 2011 was $61,279 and $44,032, respectively.

Future minimum lease payments under these leases are approximately as follows:

Year Ending March 31,
2012	$	135,000
2013	180,000
2014	180,000
2015	15,000
	$	510,000

Litigation

In the normal course of business, the Company is party to litigation from time to time.  The Company maintains insurance to cover certain actions and believes that resolution of such litigation will not have a material adverse effect on the Company.

Note 5 - Subsequent Events

On May 15, 2012, the Company was acquired by Mesa Laboratories, Inc. (“Mesa”).  Under the terms of the acquisition, certain assets and liabilities of the Company were acquired for a cash payment of $16,660,000, which includes $1 million held in escrow, and contingent consideration of up to $6,710,000 depending on the results of a three-year earn period.

The Company has evaluated all subsequent events through July 20, 2012, which is the date the financial statements were available to be issued.

5

EX-99.3

Exhibit 99.3

UNAUDITED MESA LABORATORIES, INC. PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

As used in this report, we, us, our, Mesa or Company refer to Mesa Laboratories, Inc.  The unaudited pro forma condensed combined financial statements present the impact on our financial position and results of operations from our asset acquisition of Bios International Corporation, or Bios.  We paid a purchase price of $16,660,000, subject to customary purchase price adjustments.  We may pay up to an additional $6,710,000 to the sellers depending on the revenue growth after a three-year period.  We acquired the assets used or held for use in connection with Bios and specific liabilities of Bios.  We borrowed $11,000,000 under our Credit Facility to finance the acquisition, with the balance being paid from available cash.

The unaudited pro forma condensed combined financial statements as of and for the years ended March 31, 2012 and 2011, have been prepared based on certain pro forma adjustments to our historical financial statements as set forth in our Annual Report on Form 10-K for the years ended March 31, 2012 and 2011, as filed with the Securities and Exchange Commission, and are qualified in their entirety by reference to such historical financial statements and related notes contained in those reports.  The historic financial statements for Bios were derived from the audited financial statements for Bios as of and for the years ended December 31, 2011 and 2010.  The unaudited pro forma condensed combined financial statements should be read in conjunction with the accompanying notes and with the historical financial statements and related notes thereto.

The unaudited pro forma condensed combined balance sheets as of March 31, 2012 and 2011, have been prepared as if the transaction had occurred on that date. The unaudited pro forma condensed combined statements of operations have been prepared as if this transaction had occurred on April 1, 2010.

These unaudited pro forma condensed combined financial statements are presented for illustrative purposes only, and the pro forma adjustments are based on a preliminary valuation of the estimated fair value of the net assets acquired and the contingent consideration.  Such information is not necessarily indicative of the operating results or financial position that would have occurred had the acquisition been completed at the dates indicated or what results would be for any future periods.

1

MESA LABORATORIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

March 31, 2012

(Dollars in thousands)

	Mesa Laboratories, Inc.		Bios International Corporation (a)		Combined – Before Pro Forma Adjustments		Pro Forma Adjustments			Mesa Laboratories, Inc. Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	7,191	$	40	$	7,231	$	(16,700	)(b)	$	1,531
							11,000		(c)
Accounts receivable, net	6,486		807		7,293		(267		)(b)	7,026
Inventory, net	4,438		963		5,401		(52		)(b)	5,349
Other	1,046		16		1,062		(16		)(b)	1,046
Total current assets	19,161		1,826		20,987		(6,035		)	14,952
Property, plant and equipment, and other	7,266		97		7,363		(6		)(b)	7,357
Intangibles, net	9,819		—		9,819		8,228		(b)	18,047
Goodwill	14,450		—		14,450		9,200		(b)	23,650
	$	50,696	$	1,923	$	52,619	$	11,387		$	64,006
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	4,262	$	254	$	4,516	$	(184	)(b)	$	4,332
Long-term debt	—		—		—		11,000		(c)	11,000
Contingent purchase price	—		—		—		2,240		(b)	2,240
Other long-term liabilities	2,519		—		2,519		—			2,519
Total liabilities	6,781		254		7,035		13,056			20,091
Equity:
Common stock	6,303				6,303		—			6,303
Members’ equity	—		10		10		(10		)(b)	—
Retained earnings	37,612		1,659		39,271		(1,659		)(b)	37,612
Total equity	43,915		1,669		45,584		(1,669		)	43,915
	$	50,696	$	1,923	$	52,619	$	11,387		$	64,006

See accompanying notes to unaudited pro forma condensed combined financial statements.

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MESA LABORATORIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

March 31, 2011

(Dollars in thousands)

	Mesa Laboratories, Inc.		Bios International Corporation (a)		Combined – Before Pro Forma Adjustments		Pro Forma Adjustments			Mesa Laboratories, Inc. Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	3,546	$	368	$	3,914	$	(17,028	)(b)	$	(2,114	)
							11,000		(c)
Accounts receivable, net	7,017		650		7,667		(110		)(b)	7,557
Inventory, net	5,714		798		6,512		113		(b)	6,625
Other	1,041		—		1,041		—			1,041
Total current assets	17,318		1,816		19,134		(6,025		)	13,109
Property, plant and equipment, and other	7,308		61		7,369		30		(b)	7,399
Intangibles, net	11,484		—		11,484		8,228		(b)	19,712
Goodwill	14,450		—		14,450		9,200		(b)	23,650
	$	50,560	$	1,877	$	52,437	$	11,433		$	63,870
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	9,931	$	232	$	10,163	(162		)(b)	$	10,001
Long-term debt	—		—		—		11,000		(c)	11,000
Contingent purchase price	—		—		—		2,240		(b)	2,240
Other long-term liabilities	4,212		—		4,212		—			4,212
Total liabilities	14,143		232		14,375		13,078			27,453
Equity:
Common stock	5,068		—		5,068		—			5,068
Members’ equity	—		10		10		(10		)(b)	—
Retained earnings	31,349		1,635		32,984		(1,635		)(b)	31,349
Total equity	36,417		1,645		38,062		(1,645		)	36,417
	$	50,560	$	1,877	$	52,437	$	11,433		$	63,870

See accompanying notes to unaudited pro forma condensed combined financial statements.

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MESA LABORATORIES, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

Year Ended March 31, 2012

(Amounts in thousands except earnings per share)

(Amounts in Thousands except  per share)	Mesa Laboratories, Inc.			Bios International Corporation (a)		Combined – Before Pro Forma Adjustments			Pro Forma Adjustments			Mesa Laboratories, Inc. Pro Forma
Revenue	$	39,616		$	6,786	$	46,402		$	—		$	46,402
Cost of revenue	16,105			2,277		18,382			—			18,382
Gross profit	23,511			4,509		28,020			—			28,020
Operating expenses:
Selling	3,909			806		4,715			—			4,715
General and administrative	5,416			1,241		6,657			1,108		(d)	7,765
Research and development	1,359			493		1,852			—			1,852
Impairment of intangible	350			—		350			—			350
Total operating expense	11,034			2,540		13,574			1,108			14,682
Operating income	12,477			1,969		14,446			(1,108		)	13,338
Other income (expense)	(146		)	1		(145		)	(165		)(e)	(310		)
Earnings before taxes	12,331			1,970		14,301			(1,273		)	13,028
Income taxes	4,412			—		4,412			485		(f)	4,897
Net income	$	7,919		$	1,970	$	9,889		$	(1,758	)	$	8,131
Net income per share:
Basic	$	2.41										$	2.48
Diluted	2.29											2.35
Shares outstanding
Basic	3,285											3,285
Diluted	3,462											3,462

See accompanying notes to unaudited pro forma condensed combined financial statements.

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MESA LABORATORIES, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

Year Ended March 31, 2011

(Amounts in thousands except earnings per share)

(Amounts in Thousands except per share)	Mesa Laboratories, Inc.			Bios International Corporation (a)			Combined – Before Pro Forma Adjustments			Pro Forma Adjustments			Mesa Laboratories, Inc. Pro Forma
Revenue	$	34,227		$	6,273		$	40,500		$	—		$	40,500
Cost of revenue	14,659			2,037			16,696			—			16,696
Gross profit	19,568			4,236			23,804			—			23,804
Operating expenses:
Selling	3,687			850			4,537			—			4,537
General and administrative	4,576			1,038			5,614			1,108		(d)	6,722
Research and development	1,441			489			1,930			—			1,930
Total operating expense	9,704			2,377			12,081			1,108			13,189
Operating income	9,864			1,859			11,723			(1,108		)	10,615
Other income (expense)	(113		)	(1		)	(114		)	(165		)(e)	(279		)
Earnings before taxes	9,751			1,858			11,609			(1,273		)	10,336
Income taxes	3,568			—			3,568			455		(f)	4,023
Net income	$	6,183		$	1,858		$	8,041		$	(1,728	)	$	6,313
Net income per share:
Basic	$	1.91											$	1.95
Diluted	1.86												1.90
Shares outstanding
Basic	3,231												3,231
Diluted	3,330												3,330

See accompanying notes to unaudited pro forma condensed combined financial statements.

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NOTES TO UNAUDITED MESA LABORATORIES, INC.

PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1.  Basis of Presentation

The historical financial information is derived from our historical financial statements and the historical financial statements of Bios International Corporation, or Bios.  The pro forma adjustments have been prepared as if we acquired Bios on March 31, 2012 and 2011, for the balance sheets, and on April 1, 2010, for the statements of operations.

The pro forma combined financial statements reflect the following transactions:

·the acquisition of assets used or held for use in connection with Bios and specific liabilities of Bios; and

·the borrowing of $11,000,000 under our Credit Facility.

The unaudited pro forma condensed combined financial statements do not reflect any cost savings, operating synergies or revenue enhancements that the combined company may achieve.

Note 2.  Pro Forma Adjustments and Assumptions

(a)Reflects 100% of the assets, liabilities, income and expenses of Bios.

(b)The following reflects the allocation of the consideration, subject to customary purchase price adjustments (dollars in thousands):

Cash consideration	$	16,660
Preliminary contingent purchase price liability	2,240
Aggregate consideration	$	18,900
The purchase price was allocated as follows:
Accounts receivable, net	$	540
Inventory	911
Property, plant and equipment	63
Other long-term assets	28
Intangibles	8,228
Goodwill	9,200
Current liabilities	(70		)
Total purchase price allocation	$	18,900

The acquisition of Bios was accounted for under the purchase method of accounting.  The purchase price allocation was based on preliminary estimated fair values of the assets and liabilities acquired, including the preliminary contingent purchase price liability, which was estimated based on historic revenue growth rates.  Our acquisition constitutes the acquisition of a business and was recognized at fair value.  The allocation of purchase price is preliminary and subject to adjustments.  Upon completing our valuation analysis, the preliminary contingent purchase price liability, and the allocation between intangibles and goodwill may change.

(c)Reflects $11,000,000 from borrowing against our Credit Facility.

(d)Reflects amortization of intangibles acquired over an estimated weighted-average useful life of 8 years.  Since our valuation is preliminary, we have not completed an allocation of intangibles between the various categories of intellectual property, trade names, customer relationships, and non-compete agreements, which have different lives.

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(e)Reflects the interest expense on the debt incurred to finance the acquisition, at 1.5%, based on the prevailing rate under our Credit Facility at the time of the transaction.  As of March 31, 2012 and 2011, the effect of a 0.125% variance in the interest rates on pro forma interest expense would have been approximately $14,000 annually.

(f)To reflect income tax expense, because Bios was a pass-through entity for income tax purposes.  Since this was an asset acquisition for tax purposes, the acquired intangibles and goodwill are deductible for tax purposes over 15 years.  Estimated tax rates of 35.8% and 36.6%, respectively, were used for the years ended March 31, 2012 and 2011.  These rates are based on Mesa’s effective tax rate and the impact of the asset acquisition of Bios.

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