<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 September 30, 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 November 4, 1996, 9,878,553 shares of common stock, no par value, were
outstanding.
This report consists of 10 pages.
1
<PAGE> 2
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 September 30, 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
<PAGE> 3
PART 1-FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ABAXIS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995
--------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Product sales, net $ 1,776,000 $ 434,000 $ 2,949,000 $ 974,000
Development and licensing revenue 37,000 3,000 75,000 65,000
--------------------------------------------------------
Total revenues 1,813,000 437,000 3,024,000 1,039,000
--------------------------------------------------------
Costs and operating expenses:
Cost of product sales 1,789,000 1,053,000 3,611,000 2,180,000
Research and development 318,000 287,000 709,000 563,000
Selling, general, and administrative 1,329,000 783,000 2,590,000 1,558,000
--------------------------------------------------------
Total costs and operating expenses 3,436,000 2,123,000 6,910,000 4,301,000
--------------------------------------------------------
Loss from operations (1,623,000) (1,686,000) (3,886,000) (3,262,000)
Interest income, net 61,000 161,000 153,000 282,000
========================================================
Net loss (1,562,000) (1,525,000) (3,733,000) (2,980,000)
========================================================
Loss per share (a) (As restated - Note 11) $ (0.19) $ (0.16) $ (0.41) $ (0.33)
========================================================
Shares used in calculating
loss per share 9,868,596 9,465,615 9,873,554 9,106,233
========================================================
</TABLE>
(a) Loss attributable to common shareholders used in the computation of loss per
share for the three and six months ended September 30, 1996 was $1,862,000 and
$4,033,000, respectively (See Note 2).
See notes to condensed financial statements.
3
<PAGE> 4
ABAXIS, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 MARCH 31, 1996
--------------------------------------------
(unaudited) (note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 5,272,000 $ 1,591,000
Short-term investments 3,946,000 6,187,000
Trade and other receivables 1,183,000 690,000
Interest receivable 8,000 41,000
Inventories 1,533,000 1,456,000
Prepaid expenses 70,000 92,000
----------------------------------------
Total current assets 12,012,000 10,057,000
Property and equipment - net 2,332,000 2,427,000
Long-term investments -- 500,000
Deposits and other assets 62,000 62,000
----------------------------------------
Total assets $ 14,406,000 $ 13,046,000
========================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 992,000 $ 1,017,000
Accrued payroll and related expenses 520,000 417,000
Other accrued liabilities 391,000 225,000
Warranty reserve 330,000 249,000
Deferred rent 20,000 94,000
Deferred revenue 142,000 143,000
----------------------------------------
Total current liabilities 2,395,000 2,145,000
Customer deposits 170,000 175,000
Commitments and contingencies -- --
Shareholders' equity: (As restated - Note 11)
Convertible preferred stock, no par value: authorized
shares - 5,000,000; 500,000 issued and outstanding
on September 30, 1996 and none issued on
March 31, 1996 3,038,000 --
Common stock, no par value: authorized shares -
20,000,000; 9,878,553 issued and outstanding on
September 30, 1996 and 9,857,628 on March 31, 1996 55,666,000 53,556,000
Accumulated deficit (46,863,000) (42,830,000)
----------------------------------------
Total shareholders' equity 11,841,000 10,726,000
----------------------------------------
Total liabilities and shareholders' equity $ 14,406,000 $ 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.
4
<PAGE> 5
ABAXIS, INC
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED SEPTEMBER 30,
1996 1995
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $(3,733,000) $(2,980,000)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 474,000 478,000
Amortization of deferred compensation -- 40,000
Changes in assets and liabilities:
Trade and other receivables (493,000) (128,000)
Interest receivable 33,000 --
Inventories (77,000) (91,000)
Prepaid expenses 22,000 (13,000)
Deposits and other assets -- --
Accounts payable (25,000) 69,000
Accrued payroll and related expenses 103,000 48,000
Other accrued liabilities 173,000 (67,000)
Deferred revenue (1,000) 10,000
Customer deposits (5,000) (5,000)
-----------------------------
Net cash used in operating activities (3,529,000) (2,639,000)
-----------------------------
INVESTING ACTIVITIES:
Purchase of "available-for-sale" securities (5,409,000) (1,963,000)
Maturities of "available-for-sale" securities 7,650,000 687,000
Sales of "available-for-sale" securities 500,000 --
Purchase of property and equipment (379,000) (127,000)
-----------------------------
Net cash provided (used) by investing activities 2,362,000 (1,403,000)
-----------------------------
FINANCING ACTIVITIES :
Proceeds from issuance of common stock 68,000 6,183,000
Proceeds from issuance of Series A Preferred Stock (Note 4) 4,780,000 --
-----------------------------
Net cash provided by financing activities 4,848,000 6,183,000
Increase in cash and cash equivalents 3,681,000 2,141,000
Cash and cash equivalents at beginning of period 1,591,000 3,460,000
-----------------------------
Cash and cash equivalents at end of period $ 5,272,000 $ 5,601,000
=============================
</TABLE>
See notes to condensed financial statements.
5
<PAGE> 6
ABAXIS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS RESTATED
1. BASIS OF PRESENTATION
The condensed financial statements for the periods ended September 30, 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 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 State
Enterprises". During the quarter ended June 30, 1996, the Company completed the
launch of its Piccolo Systems. 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 periods ended September 30, 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 for the periods ended September 30, 1996, loss attributable to
common shareholders includes the accretion of preferred stock of $300,000 (see
Note 4).
3. INVENTORY
Inventories are stated at the lower of cost (first-in, first-out) or market and
consisted of the following on the dates indicated.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 MARCH 31, 1996
<S> <C> <C>
Raw materials $ 851,000 $ 829,000
Work-in-process 282,000 467,000
Finished goods 400,000 160,000
-----------------------------------
$1,533,000 $1,456,000
===================================
</TABLE>
4. EQUITY FINANCING
In September 1996, the Company completed a private equity financing, raising a
total of $4,780,000 from off-shore investors. The Company issued 500,000 shares
of convertible Series A Preferred Stock at $10.00 per share. The preferred stock
may 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. Holders of record of
preferred stock are entitled to receive dividends of $0.15 per share on the
90th, 180th and 270th day after the first date the stock was issued. The
calculated imbedded yield representing the discount on the assumed potential
conversion of the preferred stock was allocated to common stock and accreted to
preferred stock over the preferred stock holding period.
6
<PAGE> 7
5. RESTATEMENT
Subsequent to the issuance of the Company's financial statements for the year
ended March 31, 1997, 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 six months ended September 30, 1996 was to increase loss
attributable to common shareholders by $300,000 and $300,000, respectively, and
to increase loss per share by $.03 and $.03, 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
Exhibit 11.1 Computation of Earnings per Share
Exhibit 27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
7
<PAGE> 8
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
<PAGE> 9
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 Six months ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net loss $(1,562,000) $(1,525,000) $(3,733,000) $(2,980,000)
Value assigned to accretion of preferred stock 300,000 -- 300,000 --
-----------------------------------------------------------------------
Loss attributable to common shareholders $(1,862,000) $(1,525,000) $(4,033,000) $(2,980,000)
=======================================================================
Loss per share $ (0.19) $ (0.16) $ (0.41) $ (0.33)
=======================================================================
Weighted average common shares outstanding 9,868,596 9,465,615 9,873,554 9,106,233
</TABLE>
<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 September 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 5,272,000
<SECURITIES> 3,946,000
<RECEIVABLES> 1,183,000
<ALLOWANCES> (55,000)
<INVENTORY> 1,553,000
<CURRENT-ASSETS> 12,012,000
<PP&E> 6,177,000
<DEPRECIATION> (3,845,000)
<TOTAL-ASSETS> 14,406,000
<CURRENT-LIABILITIES> 2,395,000
<BONDS> 0
0
3,638,000
<COMMON> 55,666,000
<OTHER-SE> (46,863,000)
<TOTAL-LIABILITY-AND-EQUITY> 14,406,000
<SALES> 1,776,000
<TOTAL-REVENUES> 1,813,000
<CGS> 1,789,000
<TOTAL-COSTS> 1,789,000
<OTHER-EXPENSES> 1,647,000
<LOSS-PROVISION> 14,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,562,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,562,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,562,000)
<EPS-PRIMARY> (0.19)
<EPS-DILUTED> (0.19)
</TABLE>
