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,December 31, 2000

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


                          BIOANALYTICAL SYSTEMS, INC.
                          ---------------------------
           (Exact name of the registrant as specified in its charter)


          INDIANA                                     35-1345024
          ---------------                                     ----------
 (State or other jurisdiction                      of                            (I.R.S. Employer
incorporationof corporation or organization)                   Identification No.)


           2701 KENT AVENUE
          WEST LAFAYETTE, IN                           47906
          --------------------------------------                           -----
(Address of principal executive offices             (Zip code)
     executive offices)

                                 (765) 463-4527
                                 --------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

YES     [X]     NO

As of  June 30,December  31,  2000,  4,562,6454,563,397  Common  Shares  of the  registrant  were
outstanding.

1

                                                                           PAGE
                                                                          NUMBER
                                                                          ------
PART I      FINANCIAL INFORMATION

Item 1      Financial Statements (Unaudited):

            Consolidated Balance Sheets as of June 30,December 31, 2000 and
            September 30, 1999                                              42000 ...............................................3

            Consolidated Statements of Operations for the Three
            5
           Months and Nine Months ended June 30,December 31, 2000 and 1999 ..........................5

            Consolidated Statements of Cash Flows for the NineThree
            Months 6
           Ended June 30,December 31, 2000 and 1999 ..........................7

            Notes to Consolidated Financial Statements 6.......................8

Item 2      Management's Discussion and Analysis of Financial
            7
         Condition and Results of Operations ..............................9

Item 3      Quantitative and Qualitative Disclosures About Market Risk 9......11


PART II     OTHER INFORMATION

Item 1      Legal Proceedings 9...............................................11

Item 6      Exhibits and Reports on Form 8-K 10................................12

SIGNATURES 11..................................................................13


                                      - 2 -


PART I -- FINANCIAL INFORMATION

ITEM 1.          FINANCIAL STATEMENTS

BIOANALYTICAL SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS in(in thousands, except share data) June 30,December 31, 2000 September 30, 19992000 (Unaudited) (Note) ------------- ----------------------------- ------ ASSETS Current Assets: Cash and cash equivalents $ 676391 $ 1,924477 Accounts receivable, net 2,861 3,6833,495 3,128 Inventories 2,077 1,7912,337 2,235 Other current assets 84 81141 56 Refundable income taxes 313 313 Deferred income taxes 242 242 -------- --------411 411 ------- ------- Total Current Assets 5,940 7,7217,088 6,620 Property and equipment: Land and improvements 260 171$ 496 496 Buildings and improvements 13,774 11,63813,379 13,340 Machinery and equipment 10,631 9,1449,622 9,536 Office furniture and fixtures 1,386 1,3191,076 1,072 Construction in process 7 107 -------- --------7 ------- ------- Total Property and Equipment 26,058 22,37924,580 $24,451 Less accumulated depreciation (7,191) (5,024) -------- -------- 18,867 17,355(5,960) (5,538) ------- ------- 18,620 18,913 Goodwill, less accumulated amortization of $191$231 and $143 1,005 1,053$213 972 990 Other assets 157 192 -------- --------135 139 ------- ------- Total Assets $ 25,969 $ 26,321 ======== ========$26,815 $26,662 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,4381,318 $ 2,0201,398 Income taxes payable (36)--- 2 Accrued expenses 505 816500 619 Customer advances 825 155846 929 Revolving line of credit 2,496 2,267 Current portion of capital lease obligation 220 220240 240 Current portion of long-term debt 235 233 Lines of credit 1,751 -- -------- --------234 Total current liabilities 4,938 3,4465,633 5,689 Capital lease obligation, less current portion 740 903605 663 Long-term debt, less current portion 3,033 3,2092,917 2,975 Deferred income taxes 761 1,3421,408 1,273 Shareholders equity: Preferred Shares: 1,000,000 shares authorized; no shares issued and outstanding -- ----- --- Common Shares: 19,000,000 shares authorized; 4,562,6454,563,397 and 4,514,3494,562,645 shares issued and outstanding 1,011 1,0001,011 Additional paid-in capital 10,497 10,496 10,482 Retained earnings 5,022 5,9604,773 4,578 Accumulated other comprehensive loss Currency translation adjustment (32) (21) -------- --------(29) (23) ------- ------- Total shareholders' equity 16,497 17,421 -------- --------16,252 16,062 ------- ------- Total liabilities and shareholders' equity $ 25,969 $ 26,321 ======== ========$26,815 $26,662 ======= ======= Note: The balance sheet at September 30, 19992000 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.
- 3 -
BIOANALYTICAL SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (Unaudited) Three Months Three Months Nine Months Nine Months Ended Jun 30,Dec 31, 2000 Ended Jun 30, Ended Jun 30, Ended Jun 30, 2000Dec 31, 1999 2000 1999 ------------- ------------- ------------- ------------------------------- ------------------ Services revenue $ 2,5283,096 $ 2,561 $ 7,910 $ 7,5922,773 Product revenue 2,924 2,412 6,077 7,036 ----------- ----------- ----------- -----------2,330 1,673 ---------- ---------- Total revenue 5,452 4,973 13,987 14,6285,426 4,446 Cost of services revenue 2,278 1,795 6,862 4,9942,241 2,418 Cost of product revenue 1,013 901 2,157 2,724 ----------- ----------- ----------- -----------763 619 ---------- ---------- Total cost of revenue 3,291 2,696 9,019 7,7183,004 3,037 Gross profit 2,161 2,277 4,968 6,9102,422 1,409 Operating expenses: Selling 1,009 1,011 2,539 2,952776 804 Research and development 471 463 1,367 1,498394 448 General and administrative 769 675 2,147 1,974 ----------- ----------- ----------- -----------761 629 ---------- ---------- Total Operating Expenses 2,249 2,149 6,053 6,424 ----------- ----------- ----------- -----------operating expenses 1,931 1,881 ---------- ---------- Operating income (loss) (88) 128 (1,085) 486491 (472) Interest income 8 4 21 11--- 12 Interest expense (135) (47) (377) (112)(136) (121) Other income (expense) 2 15 15 631 17 Loss on sale of property and equipment (1)--- (8) (17) (12) ----------- ----------- ----------- --------------------- ---------- Income (loss) before income taxes (214) 92 (1,443) 436356 (572) Income taxes (75) 25 (505) 175 ----------- ----------- ----------- -----------(benefit) 161 (200) ---------- ---------- Net income (loss) $ (139)195 $ 67 $ (938) $ 261 =========== =========== =========== ===========(372) ========== ========== Basic net income (loss) per common share $ (.03).04 $ .01 $ (.21) $ .06(.08) Diluted net income (loss) per common and $ (.03).04 $ .01 $ (.21) $ .06(.08) common equivalent share Basic weighted average common shares 4,562,645 4,507,893 4,546,203 4,503,432$4,563,242 $4,515,825 outstanding Diluted weighted average common and common 4,562,645 4,693,878 4,546,203 4,672,914$4,577,365 $4,515,825 equivalent shares outstanding See accompanying notes notes.
- 4 -
BIOANALYTICAL SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) NineThree Months Ended NineThree Months Ended June 30,December 31, 2000 June 30,December 31, 1999 ----------------- ----------------------------------- ------------------ Operating activities: Net income (loss) $ (938)195 $ 261(372) Adjustments to reconcile net income (loss) to net cash provided (used)used by operating activities: Depreciation and amortization 893 843440 338 Loss on sale of property and equipment 17 12--- 8 Deferred income taxes (581) 37135 (227) Changes in operating assets and liabilities: Accounts receivable 1,036 232(367) 1,218 Inventories (283)(102) (129) Other assets 63 (5)(81) 49 Accounts payable (748) (618)(80) (997) Income taxes payable (38) (151)(2) (2) Accrued expenses and customer advances (159) (268) ------- -------(202) (628) ------ ------ Net cash provided (used)used by operating activities (738) 214(64) (742) Investing activities: Capital expenditures (753) (2,874)(129) (408) Payments for purchase of net assets of TPS, Inc. net of cash acquired (446) -- ------- ---------- (429) ------ ------ Net cash used by investing activities (1,199) (2,874)(129) (837) Financing activities: Borrowings of long-term debt -- 3,500 Payments of long-term debt (792) (216)(117) (564) Borrowings on lines of credit 2,201 2,850481 1,101 Payments on lines of credit (733) (2,850)(252) (283) Net proceeds from the exercise of stock options 25 14 ------- -------1 13 ------ ------ Net cash provided by financing activities 701 3,298113 267 Effects of exchange rate changes (12) 14 ------- -------(6) (15) ------ ------ Net (decrease)decrease in cash and cash equivalents (1,248) 652(86) (1,327) Cash and cash equivalents at beginning of period 477 1,924 1,208 ------- ---------- ------ Cash and cash equivalents at end of period $ 676391 $ 1,860 ======= ======= 597 ====== ====== See accompanying notes.
- 5 - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) DESCRIPTION OF THE BUSINESS Bioanalytical Systems, Inc. and its subsidiaries (the "Company") engage in laboratory services, consulting and research related to analytical chemistry and chemical instrumentation. The Company also manufactures 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's customers are located in the United States and throughout the world. (2) INTERIM FINANCIAL STATEMENT 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 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, 1999.2000. In the opinion of management, the consolidated financial statements for the three month periods and the nine month periods ended June 30,December 31, 2000 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,December 31, 2000 are not necessarily indicative of the results for the year ending September 30, 2000.2001. (3) INVENTORIES Inventories consisted of (in thousands): June 30, 2000 September 30, 1999 ------------- ------------------ Raw materials $ 1,043 $ 1,050 Work in progress 319 253 Finished goods 822 595 ------- ------- 2,184 1,898 LIFO reserve (107) (107) ------- ------- $ 2,077 $ 1,791 =======
December 31, 2000 September 30, 2000 ----------------- ------------------ Raw materials $ 1,163 $ 1,288 Work in progress 356 375 Finished goods 918 672 ------- -------- 2,437 2,335 LIFO reserve (100) (100) ------- -------- $ 2,337 $ 2,235 ======= ========
(4) DEBT The Company has a working capital line of credit, which expires April 1, 2001 and allows borrowings of up to $3,500,000. Interest accrues monthly on the outstanding balance at the bank's prime rate minus 50plus 75 basis points (9.00%(10.25% at June 30,December 31, 2000) or at the London Interbank Offered Rate (LIBOR) plus 2% as elected by the Company.. The line is collateralized by inventories and accounts receivable and requires the Company to maintain certain financial ratios. There was $1,751,000$2,495,934 outstanding on this line of credit at June 30,December 31, 2000. On June 24, 1999 the Company obtained a $3,500,000 commercial mortgage with a bank. The mortgage note requires 59 monthly principal payments of $19,444 plus interest followed by a final payment for the unpaid principal amount of $2,352,804 due June 24, 2004. Interest is charged at the one-month LIBOR rate plus 200 basis points (8.68%(8.56% at June 30,December 31, 2000). - 6 - (5) 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. During the quarter ended December 31, 2000, the Company settled this case for an immaterial amount. (6) SEGMENT INFORMATION The Company has filed an answeroperated in which it denied infringementtwo principal segments - analytical services and in which it asserted that the patentproducts. The Company's analytical services unit provides chemistry support on which CMA relies is invalid.a contract basis directly to pharmaceutical companies. 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,Company's products unit provides liquid chromatography, electrochemical 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. (6) ACQUISITION Effective October 1, 1999 the Company acquired all of the capital stock of Toxicology Pathology Services, Inc. (TPS), a provider of preclinical servicesphysiological monitoring products to pharmaceutical companies, universities, government research centers and medical research institutions. The Company evaluates performance and allocates resources based on these segments.
Operating Income (Loss) Three Months Ended Three Months Ended (In thousands) December 31, 2000 December 30, 1999 ----------------- ----------------- Services $ 282 $ (70) Products 209 (402) ----- ----- Total operating income (loss) 491 (472) Corporate income (expenses) (135) 100 ----- ----- Income (loss) before income taxes $ 356 $(572) ===== =====
(7) NEW ACCOUNTING PRONOUNCEMENTS In June 1998, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 is effective for all fiscal quarters of all fiscal years beginning after June 15, 2000 (October 1, 2000 for the Company). SFAS No. 133 requires that all derivative instruments be recorded on the balance sheet at their fair value. Changes in the United States. The purchase price was approximately $430,000fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, was financed throughif it is, the Company's linetype of credit (Note 4). Thehedge transaction. Currently, the Company also refinanced approximately $750,000 of TPS debt utilizing the Company's line of credit. The purchase agreement provides for a 5 year incentive to be paid to the former shareholders of TPS, up to a maximum aggregate amount based upon certain performance targets, as defined in the agreement. The acquisition was accounted for using the purchase method of accounting and the results of operations have been included in the consolidated financial statements since the date of acquisition.does not use derivatives. 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 based 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. - 7 - RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30,DECEMBER 31, 2000 COMPARED WITH THREE MONTHS ENDED JUNE 30,DECEMBER 31, 1999 Total revenue for the three months ended June 30,December 31, 2000 increased 9.6%22.0% to $5.5$5.4 million from $5.0$4.4 million for the three months ended June 30,December 31, 1999. The net increase of $500,000$1.0 million was primarily due to increased revenue from the sale of the Culex automated blood sampling devices and related products, which increased product sales to $2.9 million in the three months ended June 30, 2000 from $2.4$2.3 million for the three months ended June 30, 1999 as a result of increases in microdialysis and electrochemistry product sales. 7 December 31, 2000 from $1.7 million for the three months ended December 31, 1999. Total cost of revenue for the three months ended June 30,December 31, 2000 increased 22.1%decreased 1.1% to $3.3$3.00 million from $2.7$3.04 million for the three months ended June 30,December 31, 1999. This increase of $600,000 was primarily due to the additional cost of revenue related to the unit acquired to provide preclinical services. Cost of services revenue increaseddecreased to 90.1%72.4% of services revenue for the three months ended June 30,December 31, 2000 from 70.1%87.2% of services revenue for the three months ended June 30,December 31, 1999 primarily due to an increase in the level of staffing related to preclinical services.and bioanalytical service revenue. Cost of product revenue decreased to 34.6%32.7% of product revenue for the three months ended June 30,December 31, 2000 from 37.4%37.0% of product revenue for the three months ended June 30,December 31, 1999, primarily due to a change in product mix. Selling expenses for the three months ended June 30,December 31, 2000 of $1,009,000 were approximatelydecreased 3.5% to $776,000 from $804,000 for the same as three months ended June 30,December 31, 1999. Research and development expenses for the three months ended June 30,December 31, 2000 increased 1.7%decreased 12.1% to $ 471,000$394,000 from $463,000$448,000 for the three months ended June 30, 1999.December 31, 1999, primarily as a result of an increase in grant reimbursements. General and administrative expenses for the three months ended June 30,December 31, 2000 increased 13.9%21.0% to $769,000$761,000 from $675,000$629,000 for the three months ended June 30,December 31, 1999, primarily as a result of the addition ofincrease in staff at the preclinical services unit. Other expense was $126,000 in$135,000 for the three months ended June 30,December 31, 2000, as compared to other expense of $36,000 in$100,000 for the three months ended June 30,December 31, 1999, primarily as a result of increased interest expense due to the increase in debt. The Company's effective tax rate for the three months ended June 30,December 31, 2000 was 35.0%45.1% as compared to 27.2%34.5% for the three months ended June 30, 1999. The higher rate for the three months ended June 30, 2000 was due in part to the impact of foreign income in 1999. NINE MONTHS ENDED JUNE 30, 2000 COMPARED WITH NINE MONTHS ENDED JUNE 30, 1999 Total revenue for the nine months ended June 30, 2000 decreased 4.4% to $14.0 million from $14.6 million for the nine months ended June 30, 1999. The net decrease of $600,000 was primarily due to decreased revenue from products, which decreased to $6.0 million in the nine months ended June 30, 2000 from $7.0 million for the nine months ended June 30, 1999 as a result of the ongoing lag in demand from Asia. Service revenue increased to $7.9 million for the nine months ended June 30, 2000 from $7.6 million for the nine months ended June 30, 1999 primarily as a result of the addition of the preclinical services unit acquired in Evansville, Indiana effective October 1, 1999. Total cost of revenue for the nine months ended June 30, 2000 increased 16.9% to $9.0 million from $7.7 million for the nine months ended June 30, 1999. This increase of $1.3 million was primarily due to the additional cost of revenue related to the preclinical services unit acquired in Evansville effective October 1, 1999. Cost of services revenue increased to 86.8% of services revenue for the nine months ended June 30, 2000 from 65.8% of services revenue for the nine months ended June 30,December 31, 1999, primarily due to the addition of the preclinical services unit acquired in Evansville, Indiana effective October 1, 1999. Cost of product revenue decreased to 35.5% of product revenue for the nine months ended June 30, 2000 from 38.7% of product revenue for the nine months ended June 30, 1999, primarily due to a change in product mix. Selling expenses for the nine months ended June 30, 2000 decreased 14.0% to $2,539,000 from $2,952,000 for the nine months ended June 30, 1999 primarily due to reduced distributor commissions. Research and development expenses for the nine months ended June 30, 2000 decreased 8.8% to $1,366,000 from $1,498,000 for the nine months ended June 30, 1999 primarily due to the decrease of grant projects. General and administrative expenses for the nine months ended June 30, 2000 increased 8.8% to $2,148,000 from $1,974,000 for the nine months ended June 30, 1999, primarily as a result of the addition of the preclinical services unit acquired in Evansville, Indiana effective October 1, 1999. Other income (expense), net, was approximately $(358,000) in the nine months ended June 30, 2000, as compared to approximately $(50,000) in the nine months ended June 30, 1999 as a result of an increase in interest expense due to the increase in debt. 8 The Company's effective tax rate for the nine months ended June 30, 2000 was 35.0% as compared to 40.1% for the nine months ended June 30, 1999. The lower rate for the nine months ended June 30, 2000 was due in part to the impact of the Indiana gross receipts tax.nondeductible foreign losses. LIQUIDITY AND CAPITAL RESOURCES At June 30,December 31, 2000, the Company had cash and cash equivalents of $676,000$391,000 compared to cash and cash equivalents of $1,924,000$477,000 at September 30, 1999.2000. The decrease in cash resulted primarily from the Company's investing activities. The Company's net cash provided (used)used by operating activities was $(738,000)$64,000 for the ninethree months ended June 30,December 31, 2000 as compared to $ 214,000$742,000 for the first ninethree months of fiscal 1999 primarily due to the reduction in accounts payable in the quarter ended December 31, 1999 and the effect of the consolidation of financial results with the acquisition of T.P.S., Inc. on October 1, 1999. The negative cash flow from operations during the ninethree months ended June 30,December 31, 2000 was partially the result of a net lossincome of $938,000 offset by$195,000 plus non-cash charges of $329,000 plus$575,000 offset by a net change of $(129,000)$(834,000) in operating assets and liabilities. The most significant decreaseincrease in operating liabilitiesassets related to accounts payable,receivable, which decreased $748,000increased $367,000 to $1,438,000$3,495,000 at June 30, 2000.December 31, 2000 primarily due to the increase in revenue. - 8 - Cash provided (used)used by investing activities was $(1,199,000)$129,000 for the ninethree months ended June 30,December 31, 2000 as compared to $(2,874,000)$837,000 for the ninethree months ended June 30,December 31, 1999 primarily due to the acquisition of T.P.S., Inc. in the quarter ended December 31, 1999. Cash provided by financing activities for the ninethree months ended June 30,December 31, 2000 was $701,000$113,000, primarily due to the increase of debt to complete the acquistion and refinancing of the preclinical services unit.debt. Total expenditures by the Company for property and equipment were $753,000$129,000 and $2,874,000$408,000 for the ninethree months ended June 30,December 31, 2000 and 1999, respectively. Expenditures made in connection with the expansion of the Company's operating facilities and purchases of laboratory equipment accountaccounted for the largest portions of these expenditures. The Company anticipates reduced levels of capital expenditures during the remainder of fiscal 2000 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. The Company also 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 linesline of credit will be sufficient to fund its anticipated working capital and capital expenditure requirements. The Company has a working capital line of credit, which expires April 1, 2001 and allows borrowings of up to $3,500,000. Interest accrues monthly on the outstanding balance at the bank's prime rate minus 50plus 75 basis points (9.0(10.25 % at June 30,December 31, 2000) or at the London Interbank Offered Rate (LIBOR) plus 2% as elected by the Company.. The line is collateralized by inventories and accounts receivable and requires the Company to maintain certain financial ratios. There was $1,751,000$2,495,934 outstanding on this line of credit at June 30,December 31, 2000. On June 24, 1999 the Company obtained a $3,500,000 commercial mortgage with a bank. The mortgage note requires 59 monthly principal payments of $19,444 plus interest followed by a final payment for the unpaid principal amount of $2,352,804 due June 24, 2004. Interest is charged at the one-month LIBOR rate plus 200 basis points (8.68%(8.56% at June 30,December 31, 2000). 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 9 Jersey in which CMA alleged that the Company's microdialysis probes infringe U.S. Patent No. 4,694,832. TheDuring the quarter ended December 31, 2000, the Company has filedsettled this case for 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 1999 and for the first nine months of fiscal 2000. 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 will continue to have an adverse effect on earnings.immaterial amount. - 9 - ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 3.1 Second Amended and Restated Articles of Incorporation of Bioanalytical Systems, Inc. (Incorporated by reference to Exhibit 3.1 to Quarterly report on Form 10-Q for the quarter ended December 31, 1997, File No. 000-23357)1997). 3.2 Second Restated Bylaws of Bioanalytical Systems, Inc. (Incorporated by reference to Exhibit 3.2 to Quarterly report on Form 10-Q for the quarter ended December 31, 1997, File No. 000-23357)1997). 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 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). 10.7 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). 10.8 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). 10.9 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) 10.10 Business Loan Agreement by and between Bioanalytical Systems, Inc., and Bank One, Indiana, N.A. dated April 1, 2000. 10 (Incorporated by reference to Exhibit 10.10 to Form 10-Q for the quarter ended June 30, 2000). 10.11 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 on Form 10-Q for the quarter ended March 31, 1998). - 10 - 10.12 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 on Form 10-Q for the quarter ended June 30,March 31, 1998). 10.13 Promissory Note by and between Bioanalytical Systems, Inc. and Bank One, Indianapolis,Indiana, NA, dated June 24, 1999 related to loan in the amount of $3,500,000 (Incorporated by reference to exhibit 10.18 to Quarterly report on Form 10-Q for the quarter ended June 30, 1999). 10.14 Promissory Note for $3,500,000 executed by Bioanalytical Systems, Inc. in favor of Bank One, Indiana, N.A. dated April 1, 2000. (Incorporated by reference to Exhibit 10.19 to Form 10-Q for the quarter ended June 30, 2000). 11.1 Statement Regarding Computation of Per Share Earnings. 27.1 Financial Data Schedule (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 15, 2000February 9, 2001 By /s/ DOUGLAS P. WIETEN - ---------------------------------------------------------------------------- Douglas P. Wieten Vice President-Finance, Chief Financial Officer, and Treasurer (Principal Financial and Accounting Officer) Date: August 15, 2000February 9, 2001 - 11 -
BIOANALYTICAL SYSTEMS, INC. FORM 10-Q INDEX TO EXHIBITS 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 Quarterly report on Form 10-Q for the quarter ended December 31, 1997, File No. 000-23357)1997). 3.2 Second Restated Bylaws of Bioanalytical Systems, Inc. (Incorporated by reference to Exhibit 3.2 to Quarterly report on Form 10-Q for the quarter ended December 31, 1997, File No. 000-23357)1997). (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 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). 10.7 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). 10.8 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). 10.9 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). 12 10.10 Business Loan Agreement by and between Bioanalytical Systems, Inc., and Bank One, Indiana, N.A. dated April 1, 2000.2000 (Incorporated by reference to Exhibit 10.10 to Form 10-Q for the quarter ended June 30, 2000). 10.11 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 on Form 10-Q for the quarter ended June 30,March 31, 1998). - 12 - 10.12 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 on Form 10-Q for the quarter ended June 30,March 31, 1998). 10.13 Promissory Note by and between Bioanalytical Systems, Inc. and Bank One, Indiana, NA, dated June 24, 1999 related to loan in the amount of $3,500,000 (Incorporated by reference to Exhibit 10.18 to Quarterly report on Form 10-Q for the quarter ended June 30,1999)30, 1999). 10.14 Promissory Note for $3,500,000 executed by Bioanalytical Systems, Inc. in favor of Bank One, Indiana, N.A. dated April 1, 2000.2000 (Incorporated by reference to Exhibit 10.19 to Form 10-Q for the quarter ended June 30, 2000). (11) 11.1 Statement Regarding Computation of Per Share Earnings. (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) No Exhibit
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