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