<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 000-19720
ABAXIS, INC.
(Exact name of registrant as specified in its charter)
California 77-0213001
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1320 Chesapeake Terrace
Sunnyvale, California 94089
(Address of principal executive offices)
Telephone: (408) 734-0200
Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by Section 13 or 15(d)
Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such
reports), Yes X No
------ ------
and
(2) has been subject to such filing requirements for the 90 days.
Yes X No
------ ------
At February 10, 1997, 11,886,153 shares of common stock, no par value, were
outstanding.
This report consists of 10 pages.
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FORM 10-Q/A
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items of its Quarterly
Report on Form 10-Q for the fiscal quarter ended December 31, 1996, as set forth
in the pages attached hereto:
Part I-Financial Information
Item 1. Financial Statements
Condensed Statements of Operations
Condensed Balance Sheets
Condensed Statements of Cash Flows
Notes to Condensed Financial Statements
Part II-Other Information
Item 6. Exhibits and Reports on Form 8-K
Exhibit 11.1
Exhibit 27.1
2
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PART 1-FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ABAXIS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Product sales, net $ 1,842,000 $ 716,000 $ 4,459,000 $ 1,690,000
Development and licensing revenue 49,000 176,000 456,000 241,000
---------------------------------------------------------------------------
Total revenues 1,891,000 892,000 4,915,000 1,931,000
---------------------------------------------------------------------------
Costs and operating expenses:
Cost of product sales 1,860,000 1,334,000 5,471,000 3,514,000
Research and development 327,000 402,000 1,036,000 965,000
Selling, general, and administrative 1,088,000 859,000 3,682,000 2,417,000
---------------------------------------------------------------------------
Total costs and operating expenses 3,275,000 2,595,000 10,189,000 6,896,000
---------------------------------------------------------------------------
Loss from operations (1,384,000) (1,703,000) (5,274,000) (4,965,000)
Interest income, net 112,000 147,000 254,000 429,000
Other income (expense) 12,000 -- 26,000 --
---------------------------------------------------------------------------
Net loss $ (1,260,000) $ (1,556,000) $ (4,994,000) $ (4,536,000)
===========================================================================
Loss per share (a) (As restated - Note 11) $ (0.23) $ (0.16) $ (0.64) $ (0.49)
===========================================================================
Shares used in calculating
loss per share 10,410,177 9,803,417 10,051,830 9,339,473
===========================================================================
</TABLE>
(a) Loss attributable to common shareholders used in the computation of loss per
share for the three and nine months ended December 31, 1996 was $2,366,000 and
$6,400,000, respectively (See Note 2)
See notes to condensed financial statements.
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ABAXIS, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, 1996 MARCH 31, 1996
----------------- --------------
(unaudited) (note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,343,000 $ 1,591,000
Short-term investments 4,934,000 6,187,000
Trade and other receivables 915,000 731,000
Inventories 2,498,000 1,456,000
Prepaid expenses 136,000 92,000
---------------------------------
Total current assets 10,826,000 10,057,000
Property and equipment - net 2,534,000 2,427,000
Long-term investments -- 500,000
Deposits and other assets 60,000 62,000
---------------------------------
Total assets $ 13,420,000 $ 13,046,000
=================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,097,000 $ 1,017,000
Accrued payroll and related expenses 550,000 417,000
Other accrued liabilities 378,000 225,000
Warranty reserve 463,000 249,000
Deferred rent 41,000 94,000
Deferred revenue 168,000 143,000
---------------------------------
Total current liabilities 2,697,000 2,145,000
Customer deposits 170,000 175,000
Shareholders' equity: (As restated - Note 11)
Common stock, no par value: authorized shares -
35,000,000; 11,854,153 issued and outstanding on
December 31, 1996 and 9,857,628 issued and
outstanding on March 31, 1996 59,785,000 53,556,000
Accumulated deficit (49,232,000) (42,830,000)
---------------------------------
Total shareholders' equity 10,553,000 10,726,000
---------------------------------
Total liabilities and shareholders' equity $ 13,420,000 $ 13,046,000
=================================
</TABLE>
See notes to condensed financial statements.
Note: The balance sheet at March 31, 1996, has been derived from the audited
financial statements at that date but does not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
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ABAXIS, INC
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED DECEMBER 31
1996 1995
-------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $(4,994,000) $(4,536,000)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 701,000 720,000
Amortization of deferred compensation -- 47,000
Changes in assets and liabilities:
Trade and other receivables (184,000) (354,000)
Inventories (1,042,000) (4,000)
Prepaid expenses (44,000) (45,000)
Deposits and other assets 2,000 --
Accounts payable 80,000 267,000
Accrued payroll and related expenses 133,000 28,000
Other accrued liabilities 153,000 (55,000)
Warranty reserve 214,000 47,000
Deferred rent (53,000) (72,000)
Deferred revenue 25,000 4,000
Customer deposits (5,000) (15,000)
-------------------------------
Net cash used in operating activities (5,014,000) (3,968,000)
-------------------------------
INVESTING ACTIVITIES:
Purchase of "available-for-sale" securities (6,447,000) (1,963,000)
Maturities of "available-for-sale" securities 7,700,000 1,798,000
Sales of "available-for-sale" securities 500,000 --
Purchase of property and equipment (808,000) (273,000)
-------------------------------
Net cash provided (used) by investing activities 945,000 (438,000)
-------------------------------
FINANCING ACTIVITIES :
Proceeds from issuance of common stock 67,000 6,337,000
Proceeds from issuance of Series A Preferred Stock (Note 4) 4,780,000 --
Preferred stock dividend (26,000) --
-------------------------------
Net cash provided by financing activities 4,821,000 6,337,000
Increase in cash and cash equivalents 752,000 1,931,000
Cash and cash equivalents at beginning of period 1,591,000 3,460,000
-------------------------------
Cash and cash equivalents at end of period $ 2,343,000 $ 5,391,000
===============================
Non cash financing activity:
Conversion of Series A Preferred Stock to Common Stock $ 4,118,000 $ --
</TABLE>
See notes to condensed financial statements.
5
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ABAXIS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS RESTATED
1. BASIS OF PRESENTATION
The condensed financial statements for the three and nine-months ended December
31, 1996 and 1995 are unaudited, but include all adjustments (consisting only of
normal recurring adjustments) that the management of Abaxis, Inc. believes to be
necessary for the fair presentation of the financial position, results of
operations and cash flows for the periods presented. Interim results are not
necessarily indicative of results to be expected for the full year. The
financial statements should be read in conjunction with the audited financial
statements for the year ended March 31, 1996, included in the Company's annual
report on Form 10-K filed with the Securities and Exchange Commission.
Through March 31, 1996, the Company was in the development stage and its
financial statements were presented in accordance with Statement of Financial
Accounting Standards No. 7 "Accounting and Reporting by Development Stage
Enterprises." During the quarter ended June 30, 1996, the Company completed the
launch of its Piccolo System. Based on the commercial launch of this product
combined with sales of previously offered products, management believes that it
no longer meets the definition of a development stage enterprise.
2. PER SHARE INFORMATION
Per share information for the three and nine months ended December 31, 1996 and
1995 is based solely on weighted average shares of common stock outstanding
during the period. Common equivalent shares have not been considered in the
computation since their inclusion would have an antidilutive effect. In the
computation of loss per share, loss attributable to common shareholders includes
the accretion of preferred stock and preferred stock dividends totaling
$1,106,000 and $1,406,000 for the three and nine month periods ended December
31, 1996, respectively (see Note 4).
3. INVENTORY
Inventories are stated at the lower of cost (first-in, first-out) or market and
consisted of the following:
<TABLE>
<CAPTION>
December 31, 1996 March 31, 1996
<S> <C> <C>
Raw materials $1,766,000 $ 829,000
Work-in-process 182,000 467,000
Finished goods 550,000 160,000
-----------------------------------
$2,498,000 $1,456,000
===================================
</TABLE>
4. PRIVATE EQUITY FINANCING
In September 1996, the Company completed a private equity financing in which it
issued 500,000 shares of its convertible Series A Preferred Stock for an
aggregate net purchase price of $4,780,000 to certain off-shore investors.
Holders of preferred stock were entitled to receive cumulative dividends of
$0.15 per share in stock or cash, at the discretion of the Board of Directors,
on each of the 90th, 180th and 270th day after the issuance date. The preferred
stock could be converted at any time after the 45th day after the issuance date
to common stock at certain discounts to the market price for common stock
varying from 20% to 29% ratably over a period of nine months. During the quarter
ended December 31, 1996, all 500,000 shares of the convertible Series A
Preferred Stock were converted into 1,975,600 shares of common stock. Prior to
conversion, the Company paid a cash dividend of approximately $26,000 to Series
A Preferred Stock holders. The
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calculated imbedded yield representing the discount on the assumed potential
conversion of the preferred stock was allocated to common stock and was accreted
to preferred stock over the preferred stock holding period.
5. RESTATEMENT
Subsequent to the issuance of the Company's financial statements for the year
ended March 31, 1997, the Company's management determined that the calculated
imbedded yield representing the discount on the assumed potential conversion of
the preferred stock issued by the Company should have been accreted to preferred
stock and included in the loss per share computation. The effect of the
restatement for the three and nine months ended December 31, 1996 was to
increase loss attributable to common shareholders by $1,080,000 and $1,380,000
respectively, and to increase loss per share by $0.11 and $0.14, respectively.
PART II-OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits included herein (numbered in accordance with Item 601 of
Regulation S-K)
Exhibit Number Description
3.3 Amendments to Articles of Incorporation
11.1 Computation of Earnings per Share
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
7
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FORM 10-Q/A
AMENDMENT NO. 1
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
ABAXIS, INC.
By: /s/ Ting W. Lu
--------------------------
Ting W. Lu
Vice President of Finance and
Administration and Chief
Financial Officer
Date: October 27, 1997
8
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EXHIBIT INDEX
Exhibit
Number Exhibit Title
- ------- -------------
11.1 Computation of Earnings Per Share
27.1 Financial Data Schedule
<PAGE> 1
EXHIBIT 11.1
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three months ended Nine months ended
December 31, December 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net loss $ (1,260,000) $ (1,556,000) $ (4,994,000) $ (4,536,000)
Cumulative preferred stock dividends 26,000 -- 26,000 --
Value assigned to accretion of preferred stock 1,080,000 -- 1,380,000 --
------------------------------------------------------------------
Loss attributable to common shareholders $ (2,366,000) $ (1,556,000) $ (6,400,000) $ (4,536,000)
==================================================================
Loss per share $ (0.23) $ (0.16) $ (0.64) $ (0.49)
==================================================================
Weighted average common shares outstanding 10,410,177 9,803,417 10,051,830 9,339,473
</TABLE>
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed statement of operations and condensed balance sheet and is qualified
in its entirety to such Company's quarterly report on form 10Q for the quarter
ended December 31, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 2,343,000
<SECURITIES> 4,934,000
<RECEIVABLES> 970,000
<ALLOWANCES> (55,000)
<INVENTORY> 2,498,000
<CURRENT-ASSETS> 10,826,000
<PP&E> 6,612,000
<DEPRECIATION> (4,078,000)
<TOTAL-ASSETS> 13,420,000
<CURRENT-LIABILITIES> 2,697,000
<BONDS> 0
0
0
<COMMON> 59,785,000
<OTHER-SE> (49,232,000)
<TOTAL-LIABILITY-AND-EQUITY> 13,420,000
<SALES> 1,842,000
<TOTAL-REVENUES> 1,891,000
<CGS> 1,860,000
<TOTAL-COSTS> 1,860,000
<OTHER-EXPENSES> 1,403,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,260,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,260,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,260,000)
<EPS-PRIMARY> (0.23)
<EPS-DILUTED> (0.23)
</TABLE>
