Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2019 | May 10, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | BIOANALYTICAL SYSTEMS INC | |
Entity Central Index Key | 0000720154 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | BASI | |
Entity Common Stock, Shares Outstanding | 10,290,531 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 520 | $ 773 |
Accounts receivable | ||
Trade, net of allowance of $1,891 at March 31, 2019 and $1,948 at September 30, 2018 | 4,149 | 4,128 |
Unbilled revenues and other | 716 | 1,012 |
Inventories, net | 1,103 | 1,182 |
Prepaid expenses | 1,194 | 966 |
Total current assets | 7,682 | 8,061 |
Property and equipment, net | 17,787 | 16,610 |
Goodwill | 3,072 | 3,072 |
Other intangible assets, net | 3,060 | 3,318 |
Lease rent receivable | 124 | 115 |
Deferred tax asset | 31 | 62 |
Other assets | 27 | 30 |
Total assets | 31,783 | 31,268 |
Current liabilities: | ||
Accounts payable | 3,525 | 3,192 |
Restructuring liability | 503 | 1,117 |
Accrued expenses | 1,230 | 1,571 |
Customer advances | 5,583 | 4,925 |
Revolving line of credit | 409 | 0 |
Current portion of capital lease obligation | 20 | 87 |
Current portion of long-term debt | 930 | 909 |
Total current liabilities | 12,200 | 11,801 |
Capital lease obligation, less current portion | 28 | 37 |
Long-term debt, less current portion, net of debt issuance costs | 9,265 | 8,546 |
Total liabilities | 21,493 | 20,384 |
Shareholders' equity: | ||
Preferred shares, authorized 1,000,000 shares, no par value: 35 Series A shares at $1,000 stated value issued and outstanding at March 31, 2019 and at September 30, 2018 | 35 | 35 |
Common shares, no par value: Authorized 19,000,000 shares; 10,290,531 issued and outstanding at March 31, 2019 and 10,245,277 at September 30, 2018 | 2,534 | 2,523 |
Additional paid-in capital | 24,682 | 24,557 |
Accumulated deficit | (16,961) | (16,231) |
Total shareholders' equity | 10,290 | 10,884 |
Total liabilities and shareholders' equity | $ 31,783 | $ 31,268 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Allowance for Doubtful Accounts Receivable, Current | $ 1,891 | $ 1,948 |
Common Stock, No Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | 19,000,000 | 19,000,000 |
Common Stock, Shares, Issued | 10,290,531 | 10,245,277 |
Common Stock, Shares, Outstanding | 10,290,531 | 10,245,277 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, No Par Value | $ 0 | $ 0 |
Preferred Stock, Shares Issued | 35 | 35 |
Preferred Stock, Shares Outstanding | 35 | 35 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Total revenue | $ 9,344 | $ 5,944 | $ 17,969 | $ 11,321 |
Total cost of revenue | 6,783 | 4,204 | 12,989 | 8,000 |
Gross profit | 2,561 | 1,740 | 4,980 | 3,321 |
Operating expenses: | ||||
Selling | 655 | 303 | 1,308 | 597 |
Research and development | 145 | 149 | 269 | 288 |
General and administrative | 2,210 | 1,178 | 3,811 | 2,315 |
Total operating expenses | 3,010 | 1,630 | 5,388 | 3,200 |
Operating (loss) income | (449) | 110 | (408) | 121 |
Interest expense | (122) | (48) | (248) | (100) |
Other income | 3 | 4 | 4 | 4 |
Net (loss) income before income taxes | (568) | 66 | (652) | 25 |
Income taxes (benefit) expense | 1 | 11 | 2 | (56) |
Net (loss) income | (569) | 55 | (654) | 81 |
Comprehensive (loss) income | $ (569) | $ 55 | $ (654) | $ 81 |
Basic net (loss) income per share | $ (0.06) | $ 0.01 | $ (0.06) | $ 0.01 |
Diluted net (loss) income per share | $ (0.06) | $ 0.01 | $ (0.06) | $ 0.01 |
Weighted common shares outstanding: | ||||
Basic | 10,290 | 8,245 | 10,268 | 8,245 |
Diluted | 10,290 | 8,789 | 10,268 | 8,793 |
Service [Member] | ||||
Total revenue | $ 8,131 | $ 5,030 | $ 15,866 | $ 9,555 |
Total cost of revenue | 5,951 | 3,662 | 11,548 | 6,935 |
Product [Member] | ||||
Total revenue | 1,213 | 914 | 2,103 | 1,766 |
Total cost of revenue | $ 832 | $ 542 | $ 1,441 | $ 1,065 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Preferred Shares [Member] | Common Shares [Member] | Additional paid-in capital [Member] | Accumulated deficit [Member] |
Balance at Sep. 30, 2017 | $ 8,467 | $ 1,035 | $ 2,023 | $ 21,446 | $ (16,037) |
Balance (in shares) at Sep. 30, 2017 | 1,035 | 8,243,896 | |||
Comprehensive income (loss): | |||||
Net (loss) income | 26 | 26 | |||
Stock based compensation | 34 | 34 | |||
Stock option exercises | 1 | 1 | |||
Stock option exercises (in shares) | 305 | ||||
Balance at Dec. 31, 2017 | 8,528 | $ 1,035 | $ 2,023 | 21,481 | (16,011) |
Balance (in shares) at Dec. 31, 2017 | 1,035 | 8,244,201 | |||
Balance at Sep. 30, 2017 | 8,467 | $ 1,035 | $ 2,023 | 21,446 | (16,037) |
Balance (in shares) at Sep. 30, 2017 | 1,035 | 8,243,896 | |||
Comprehensive income (loss): | |||||
Net (loss) income | 81 | ||||
Balance at Mar. 31, 2018 | 8,618 | $ 1,035 | $ 2,023 | 21,516 | (15,956) |
Balance (in shares) at Mar. 31, 2018 | 1,035 | 8,245,201 | |||
Balance at Dec. 31, 2017 | 8,528 | $ 1,035 | $ 2,023 | 21,481 | (16,011) |
Balance (in shares) at Dec. 31, 2017 | 1,035 | 8,244,201 | |||
Comprehensive income (loss): | |||||
Net (loss) income | 55 | 55 | |||
Stock based compensation | 34 | 34 | |||
Stock option exercises | 1 | 1 | |||
Stock option exercises (in shares) | 1,000 | ||||
Balance at Mar. 31, 2018 | 8,618 | $ 1,035 | $ 2,023 | 21,516 | (15,956) |
Balance (in shares) at Mar. 31, 2018 | 1,035 | 8,245,201 | |||
Balance at Sep. 30, 2018 | 10,884 | $ 35 | $ 2,523 | 24,557 | (16,231) |
Balance (in shares) at Sep. 30, 2018 | 35 | 10,245,277 | |||
Adoption of accounting standard | (76) | (76) | |||
Comprehensive income (loss): | |||||
Net (loss) income | (85) | (85) | |||
Stock based compensation | 25 | 25 | |||
Balance at Dec. 31, 2018 | 10,748 | $ 35 | $ 2,523 | 24,582 | (16,392) |
Balance (in shares) at Dec. 31, 2018 | 35 | 10,245,277 | |||
Balance at Sep. 30, 2018 | 10,884 | $ 35 | $ 2,523 | 24,557 | (16,231) |
Balance (in shares) at Sep. 30, 2018 | 35 | 10,245,277 | |||
Comprehensive income (loss): | |||||
Net (loss) income | (654) | ||||
Balance at Mar. 31, 2019 | 10,290 | $ 35 | $ 2,534 | 24,682 | (16,961) |
Balance (in shares) at Mar. 31, 2019 | 35 | 10,290,531 | |||
Balance at Dec. 31, 2018 | 10,748 | $ 35 | $ 2,523 | 24,582 | (16,392) |
Balance (in shares) at Dec. 31, 2018 | 35 | 10,245,277 | |||
Comprehensive income (loss): | |||||
Net (loss) income | (569) | (569) | |||
Stock based compensation | 110 | $ 11 | 99 | ||
Stock based compensation (in shares) | 44,615 | ||||
Stock option exercises | 1 | 1 | |||
Stock option exercises (in shares) | 639 | ||||
Balance at Mar. 31, 2019 | $ 10,290 | $ 35 | $ 2,534 | $ 24,682 | $ (16,961) |
Balance (in shares) at Mar. 31, 2019 | 35 | 10,290,531 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities: | ||
Net (loss) income | $ (654) | $ 81 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,324 | 782 |
Stock based compensation | 124 | 68 |
Provision for doubtful accounts | (20) | (4) |
Gain on disposal of property and equipment | (3) | (1) |
Unrealized foreign currency gains | (136) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 286 | (3) |
Inventories | 79 | (87) |
Income tax accruals | 29 | (61) |
Prepaid expenses and other assets | (227) | 73 |
Accounts payable | (145) | (214) |
Accrued expenses | (329) | 81 |
Customer advances | 583 | 127 |
Net cash provided by operating activities | 911 | 842 |
Investing activities: | ||
Capital expenditures | (2,218) | (433) |
Proceeds from sale of equipment | 0 | 2 |
Net cash used by investing activities | (2,218) | (431) |
Financing activities: | ||
Payments of long-term debt | (451) | (111) |
Payments of debt issuance costs | (22) | 0 |
Payments on revolving line of credit | (11,505) | (5,085) |
Borrowings on revolving line of credit | 11,914 | 5,085 |
Borrowing on construction loan | 908 | 0 |
Borrowing on equipment loan | 285 | 0 |
Proceeds from exercise of stock options | 1 | 1 |
Payments on capital lease obligations | (76) | (63) |
Net cash provided (used in) by financing activities | 1,054 | (173) |
Net increase (decrease) in cash and cash equivalents | (253) | 238 |
Cash and cash equivalents at beginning of period | 773 | 434 |
Cash and cash equivalents at end of period | 520 | 672 |
Supplemental disclosure of non-cash financing activities: | ||
Cash paid for interest | $ 225 | $ 94 |
DESCRIPTION OF THE BUSINESS AND
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | 6 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | 1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION Bioanalytical Systems, Inc. and its subsidiaries (“We,” “Our,” “Us,” the “Company” or “BASi”) engage in contract laboratory research services and other services related to pharmaceutical development. We also manufacture scientific instruments for life sciences research, which we sell with related software for use by pharmaceutical companies, universities, government research centers and medical research institutions. Our customers are located throughout the world. We have prepared the accompanying unaudited interim condensed consolidated financial statements 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 (“GAAP”), and therefore should be read in conjunction with our audited consolidated financial statements, and the notes thereto, included in the Company’s annual report on Form 10-K for the year ended September 30, 2018. Certain amounts in the fiscal 2018 consolidated financial statements have been reclassified to conform to the fiscal 2019 presentation without affecting previously reported net income or stockholders’ equity. In the opinion of management, the condensed consolidated financial statements for the three and six months ended March 31, 2019 and 2018 include all adjustments which are necessary for a fair presentation of the results of the interim periods and of our financial position at March 31, 2019. The results of operations for the three and six months ended March 31, 2019 may not be indicative of the results for the year ending September 30, 2019. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | 2. STOCK-BASED COMPENSATION The Company’s 2008 Stock Option Plan (“the Plan”) was used to promote our long-term interests by providing a means of attracting and retaining officers, directors and key employees and aligning their interests with those of our shareholders. The Plan is described more fully in Note 9 in the Notes to the Consolidated Financial Statements in our Form 10-K for the fiscal year ended September 30, 2018. In March 2018, our shareholders approved the amendment and restatement of the Plan in the form of the Amended and Restated 2018 Equity Incentive Plan (the “Equity Plan”) and the Company currently grants equity awards from the Equity Plan. The purpose of the Equity Plan is to promote our long-term interests by providing a means of attracting and retaining officers, directors and key employees. The maximum number of common shares that may be granted under the Equity Plan is 700 shares. All options granted under the Plan and the Equity Plan had an exercise price equal to the fair market value of the underlying common shares on the date of grant. We expense the estimated fair value of stock options over the vesting periods of the grants. We recognize expense for awards subject to graded vesting using the straight-line attribution method, reduced for estimated forfeitures. Forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates and an adjustment is recognized at that time. Stock based compensation expense for the three and six months ended March 31, 2019 was $99 and $124, respectively. Stock based compensation expense for the three and six months ended March 31, 2018 was $34 and $68, respectively. The additional expense in the three months ending March 31, 2019 was due to the grants issued to our new Chief Executive Officer in January 2019 and option grants to all employees that were employed as of February 6, 2019. A summary of our stock option activity for the six months ended March 31, 2019 is as follows (in thousands except for share prices): Options (shares) Weighted- Average Exercise Price Weighted- Average Grant Date Fair Value Outstanding – September 30, 2018 301 $ 1.73 $ 1.38 Exercised (1 ) $ 1.40 $ 1.15 Granted 403 $ 1.41 $ 1.04 Forfeited (4 ) $ 1.74 $ 1.38 Outstanding - March 31, 2019 699 $ 1.55 $ 1.18 The weighted-average assumptions used to compute the fair value of the options granted in the six months ended March 31, 2019 were as follows: Risk-free interest rate 2.58 % Dividend yield 0.00 % Volatility of the expected market price of the Company's common shares 72.0 72.5 % Expected life of the options (years) 8.0 As of March 31, 2019, our total unrecognized compensation cost related to non-vested stock options was $500 and is expected to be recognized over a weighted-average service period of 1.6 years. A summary of our restricted share activity for the six months ended March 31, 2019 is as follows: Restricted Shares Outstanding – September 30, 2018 - Granted 45 Vested (35 ) Forfeited - Outstanding - March 31, 2019 10 As of March 31, 2019, our total unrecognized compensation cost related to non-vested restricted stock was $12 and is expected to be recognized over a weighted-average service period of 1.79 years. The total fair value of the shares vested during the three and six months ended March 31, 2019 was $ 44 |
INCOME (LOSS) PER SHARE
INCOME (LOSS) PER SHARE | 6 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
INCOME (LOSS) PER SHARE | 3. INCOME (LOSS) PER SHARE We compute basic income (loss) per share using the weighted average number of common shares outstanding. The Company has two categories of dilutive potential common shares: Series A preferred shares issued in May 2011 in connection with our registered direct offering and shares issuable upon exercise of options. We compute diluted earnings per share using the if-converted method for preferred stock and the treasury stock method for stock options, respectively. Shares issuable upon exercise of 699 options and 17 The following table reconciles our computation of basic income per share to diluted income per share: Three Months Ended March 31, Six Months Ended March 31, 2019 2018 2019 2018 Basic net income (loss) per share: Net income (loss) applicable to common shareholders $ (569 ) $ 55 $ (654 ) $ 81 Weighted average common shares outstanding 10,290 8,245 10,268 8,245 Basic net income (loss) per share $ (0.06 ) $ 0.01 $ (0.06 ) $ 0.01 Diluted net income per share: Diluted net income (loss) applicable to common shareholders $ (569 ) $ 55 $ (654 ) $ 81 Weighted average common shares outstanding 10,290 8,245 10,268 8,245 Plus: Incremental shares from assumed conversions: Series A preferred shares - 518 - 518 Dilutive stock options/shares - 26 - 30 Diluted weighted average common shares outstanding 10,290 8,789 10,268 8,793 Diluted net income (loss) per share $ (0.06 ) $ 0.01 $ (0.06 ) $ 0.01 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 4. INVENTORIES Inventories consisted of the following: March 31, 2019 September 30, 2018 Raw materials $ 841 $ 939 Work in progress 191 89 Finished goods 264 342 $ 1,296 $ 1,370 Obsolescence reserve (193 ) (188 ) $ 1,103 $ 1,182 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 5. SEGMENT INFORMATION We operate in two principal segments - research services and research products. Our Services segment provides research and development support on a contract basis directly to pharmaceutical companies. Our Products segment provides liquid chromatography, electrochemical and physiological monitoring products to pharmaceutical companies, universities, government research centers and medical research institutions. Our accounting policies in these segments are the same as those described in the summary of significant accounting policies found in Note 2 to the Consolidated Financial Statements in our annual report on Form 10-K for the fiscal year ended September 30, 2018. Three Months Ended March 31, Six Months Ended March 31, 2019 2018 2019 2018 Revenue: Service $ 8,131 $ 5,030 $ 15,866 $ 9,555 Product 1,213 914 2,103 1,766 $ 9,344 $ 5,944 $ 17,969 $ 11,321 Operating Income (Loss) Service $ 877 $ 918 $ 1,513 $ 1,699 Product 30 52 (50 )) 84 Corporate (1,355 ) (861 ) (1,870 ) (1,662 ) $ (449 ) $ 110 $ (408 ) $ 121 Interest expense (122 ) (48 ) (248 ) (100 ) Other income 3 4 4 4 Income (loss) before income taxes $ (568 ) $ 66 $ (652 ) $ 25 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 6. INCOME TAXES We use the asset and liability method of accounting for income taxes. We recognized deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We recognize the effect on deferred tax assets and liabilities of a change in tax rates in income in the period that includes the enactment date. We record valuation allowance based on a determination of the expected realization of tax assets. We recognize the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. We measure the amount of the accrual for which an exposure exists as the largest amount of benefit determined on a cumulative probability basis that we believe is more likely than not to be realized upon settlement of the position. At March 31, 2019 and September 30, 2018, we had no liability for uncertain income tax positions. We record interest and penalties accrued in relation to uncertain income tax positions as a component of income tax expense. Any changes in the liability for uncertain tax positions would impact our effective tax rate. We do not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months. We file income tax returns in the U.S. and several U.S. states. We remain subject to examination by taxing authorities in the jurisdictions in which we have filed returns for years after 2013. |
DEBT
DEBT | 6 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | 7. DEBT Credit Facility On June 23, 2017, we entered into a Credit Agreement with First Internet Bank of Indiana (“FIB”), which Credit Agreement as of March 31, 2019 had been amended on July 2, 2018, September 6, 2018 and September 28, 2018 (as amended, the “Credit Agreement”). The Credit Agreement included two term loans (the “Initial Term Loan” and “Subsequent Term Loan,” respectively), a revolving line of credit (the “Revolving Facility”), a construction draw loan (the “Construction Draw Loan”) and an equipment draw loan (the “Equipment Draw Loan”). The Initial Term Loan for $4,500 bears interest at a fixed rate of 3.99%, with monthly principal and interest payments of approximately $33. The Initial Term Loan matures in June 2022. The balance on the Initial Term Loan at March 31, 2019 was $4,106. We used the proceeds from the Initial Term Loan to satisfy our indebtedness with Huntington Bank and terminated the related interest rate swap. The July 2, 2018 amendment to the Credit Facility provided the Company with the Subsequent Term Loan in the amount of $5,500, the proceeds of which were used to fund a portion of the cash consideration for the acquisition of Seventh Wave Laboratories LLC. Amounts outstanding under the Subsequent Term Loan bear interest at a fixed per annum rate of 5.06%, with monthly principal and interest payments equal to $78. The Subsequent Term Loan matures July 2, 2023 and the balance on the Subsequent Term Loan at March 31, 2019 was $5,057. The Revolving Facility provides a line of credit for up to $3,500 which the Company may borrow from time to time, subject to the terms of the Credit Agreement, including as may be limited by the amount of the Company’s outstanding eligible receivables. As of March 31, 2019, the Revolving Credit Facility was to have matured in June 2019 and bears interest at the Prime Rate (generally defined as the highest rate identified as the “Prime Rate” in The Wall Street Journal “Money Rates” column on the date the interest rate is to be determined, or if that date is not a publication date, on the publication date immediately preceding) less Twenty-five (25) Basis Points (0.25%). The balance on the Revolving Facility was $409 and $0 as of March 31, 2019 and September 30, 2018, respectively. We must pay accrued and unpaid interest on the outstanding balance under the Revolving Facility on a monthly basis. The September 28, 2018 amendment provided the Company with the Construction Draw Loan in a principal amount not to exceed $4,445 and the Equipment Draw Loan in a principal amount not to exceed $1,429. The Construction Draw Loan and Equipment Draw Loan each mature on March 28, 2025. As of March 31, 2019, there was a $1,193 aggregate balance on these loans. Subject to certain conditions precedent, a Construction Draw Loan and an Equipment Draw Loan each permit the Company to obtain advances aggregating up to the maximum principal amount available for such loan through March 28, 2020. Amounts outstanding under these loans bear interest at a fixed per annum rate of 5.20%. The Construction Draw Loan and the Equipment Draw Loan each require monthly payments of accrued interest on amounts outstanding through March 28, 2020, and thereafter monthly payments of principal and interest on amounts then outstanding through maturity. Long term debt is detailed in the table below. As of: March 31, 2019 September 30, 2018 Initial term loan $ 4,106 $ 4,222 Subsequent term loan 5,057 5,392 Construction loans 1,193 - 10,356 9,614 Less: Current portion (930 ) (909 ) Less: Debt issue costs not amortized (161 ) (159 ) Total Long-term debt $ 9,265 $ 8,546 The Credit Agreement contains various restrictive covenants, including restrictions on the Company's ability to dispose of assets, make acquisitions or investments, incur debt or liens, make distributions to shareholders or repurchase outstanding stock, enter into related party transactions and make capital expenditures, other than upon satisfaction of the conditions set forth in the Credit Agreement. As of March 31, 2019, the Credit Agreement also required us to maintain (i) a minimum debt service coverage ratio of not less than 1.25 to 1.0 and (ii) a cash flow coverage ratio whereby, the ratio of the Company’s total funded debt (as defined in the Credit Agreement) as of the last day of each fiscal quarter to its EBITDA (as defined in the Credit Agreement) for the 12 months ended on such date may not exceed 4.50 to 1.00. Upon an event of default, which includes certain customary events such as, among other things, a failure to make required payments when due, a failure to comply with covenants, certain bankruptcy and insolvency events, and defaults under other material indebtedness, FIB may cease advancing funds, increase the interest rate on outstanding balances, accelerate amounts outstanding, terminate the agreement and foreclose on all collateral. As of March 31, 2019, the Company’s obligations under the Credit Agreement were guaranteed by BAS Evansville, Inc. (“ BASEV On May 1, 2019, the Company entered into certain amendments to its credit arrangements with FIB. Refer to Note 12 to the Condensed Consolidated Financial Statements. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 6 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | 8. ACCRUED EXPENSES As part of a fiscal 2012 restructuring, we accrued for lease payments at the cease use date for our United Kingdom facility and have considered free rent, sublease rentals and the number of days it would take to restore the space to its original condition prior to our improvements. Based on these matters, we had a $1,117 reserve for lease related costs and for legal and professional fees and other costs to remove improvements previously made to the facility. During the first six months of fiscal 2019, the Company released portions of the reserve for lease related liabilities that were no longer owed due to the statute of limitations. For the three and six months ended March 31, 2019, general and administrative expenses on the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income were reduced by $55 and $546, respectively for the liability reduction. At March 31, 2019 and September 30, 2018, respectively, we had $503 and $1,117 reserved for the remaining liability. The reserve is classified as a current liability on the Condensed Consolidated Balance Sheets. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | 9. BUSINESS COMBINATIONS Overview On July 2, 2018, the Company, through its wholly-owned subsidiary Seventh Wave Laboratories, LLC (f/k/a Cardinal Laboratories LLC) (the “Seventh Wave Purchaser”), acquired (the “Seventh Wave Acquisition”) substantially all of the assets of SW Chrysalis, LLC (f/k/a Seventh Wave Laboratories LLC) (the “Seventh Wave Seller”), a consulting-based contract research laboratory located in Maryland Heights, Missouri providing integrated services for discovery and preclinical drug development, under the terms and conditions of an Asset Purchase Agreement, dated July 2, 2018, among the Seventh Wave Purchaser, the Company, the Seventh Wave Seller and certain members of the Seventh Wave Seller. The total consideration for the Seventh Wave Acquisition was approximately $9,234, which consisted of $6,759 in cash, including an indemnity escrow of $750, and 1,500,000 of the Company’s common shares valued at $2,475, using the closing price of the Company’s common shares on June 29, 2018. The Seventh Wave Purchaser is operated as a wholly-owned subsidiary of the Company. The Company funded the cash portion of the purchase price for the Seventh Wave Acquisition with cash on hand and the net proceeds from the refinancing of its credit arrangements with FIB, as described in Note 7. Pro Forma Results The Company’s unaudited pro forma results of operations for the three and six months ended March 31, 2018 assuming the Seventh Wave Acquisition had occurred as of October 1, 2017 are presented for comparative purposes below. These amounts are based on available information of the results of operations of the Seventh Wave Seller’s operations prior to the acquisition date and are not necessarily indicative of what the results of operations would have been had the Seventh Wave Acquisition been completed on October 1, 2017. The unaudited pro forma information is as follows: Three Months Ended Six Months Ended March 31, 2018 March 31, 2018 Total revenues $ 8,946 $ 18,065 Net income (174 ) 75 Pro forma basic net income (loss) per share $ (0.02 ) $ 0.01 Pro forma diluted net income (loss) per share $ (0.02 ) $ 0.01 |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Mar. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | 10. NEW ACCOUNTING PRONOUNCEMENTS On October 1, 2018, the Company adopted Accounting Standard Codification, or ASC Topic 606, “ Revenue from Contracts with Customers ,” (Topic 606), using the modified retrospective method for all contracts that were not completed as of October 1, 2018. Comparative prior period information continues to be reported under the accounting standards in effect for the period presented. Topic 606 superseded the revenue recognition requirements in ASC Topic 605, Revenue Recognition. Topic 606 requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance requires the Company to apply the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation. The cumulative effect of initially applying the new revenue standard was $(76) and has been recorded as an adjustment to the opening balance of retained earnings. The cumulative adjustment relates primarily to the recognition of revenue for free archive storage offered to customers. Gross sales and deferred revenue of $(76), respectively, were recorded as part of the cumulative effect adjustment. The comparative information has not been restated and it is reported in accordance with accounting standard Topic 605, which was in effect for those periods. On October 1, 2018 the Company adopted ASU 2016-15, Statement of Cash Flows (Topic 230), which addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2017. The adoption of this guidance had no material impact on our consolidated financial statements. In February 2016, the FASB issued updated guidance on leases which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with earlier application permitted. The amendments are to be applied prospectively to business combinations that occur after the effective date. The Company is progressing with its preparation for the adoption and implementation of this new accounting standard and related changes in internal controls and will adopt the standard in the first quarter of fiscal 2020. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | 11. REVENUE RECOGNITION In accordance with ASC 606, the Company disaggregates its revenue from customers into two revenue streams, service revenue and product revenue. At contract inception the Company assesses the services promised in the contract with the customers to identify performance obligations in the arrangements. Service revenue The Company enters into contracts with customers to provide drug discovery and development services with payments based on mainly fixed-fee arrangements. The Company also offers free archive storage services on certain contracts. Customers can also enter into separate archive storage contracts after the expiration of the free storage period. The Company’s drug discovery and development services contracts that include a free storage period are considered a single performance obligation because the company provides a highly integrated service. The inclusion of free storage fee in the measurement of progress under the discovery and development service contracts creates a timing difference between the amounts the company is entitled to receive in reimbursement of cost incurred and amount of revenue recognized on such costs, which is recognized as deferred revenue and classified as customer advances on the condensed consolidated balance sheet. The Company’s fixed fee arrangements may involve bioanalytical and pharmaceutical method development and validation, nonclinical research services and the analysis of bioanalytical and pharmaceutical samples. For bioanalytical and pharmaceutical method validation services and nonclinical research services, revenue is recognized over time using the input method based on the ratio of direct costs incurred to total estimated direct costs. For contracts that involve method development or the analysis of bioanalytical and pharmaceutical samples, revenue is recognized over time when samples are analyzed or when services are performed. The Company generally bills for services on a milestone basis. These contracts represent a single performance obligation and due to the Company’s right to payment for work performed, revenue is recognized over time. Research services contract fees received upon acceptance are deferred until earned, and classified within customer advances on the condensed consolidated balance sheet. Unbilled revenues represent revenues earned under contracts in advance of billings. Archive services provide climate controlled archiving for client’s data and samples. The archive revenue is recognized over time, generally when the service is provided. These arrangements typically include only one performance obligation. Amounts related to future archiving or prepaid archiving contracts for customers where archiving fees are billed in advance are accounted for as deferred revenue and recognized ratably over the period the applicable archive service is performed. Product revenue The Company’s products can be sold to multiple customers and have alternative use. Both the transaction sales price and shipping terms are agreed upon in the customer order. For these products, all revenue is recognized at a point in time, generally when title of the product and risk of loss is transferred to the customer based upon shipping terms. These arrangements typically include only one performance obligation. Certain products have maintenance agreements available for customers to purchase. These are typically billed in advance and are accounted for as deferred revenue and recognized ratably over the applicable maintenance period. The impact of adoption of ASC 606 to the Company’s condensed consolidated financial statements for the three months ended March 31, 2019 is as follows: Statements of Operations and Comprehensive (Loss) Income As Reported Effect of Change Higher/(Lower) Amount Without Adoption of ASC 606 Service revenue $ 8,131 $ (25 ) $ 8,156 Product revenue 1,213 1,213 Total revenue 9,344 (25 ) 9,369 Total cost of revenue 6,783 6,783 Gross profit 2,561 (25 ) 2,586 Operating loss (449 ) (25 ) (424 ) Net loss before income taxes (568 ) (25 ) (543 ) Income taxes expense 1 1 Net loss $ (569 ) $ (25 ) $ (544 ) Diluted net loss per share $ (0.06 ) $ (0.00 ) $ (0.06 ) Balance Sheet As Reported Effect of Amount Without Current Liabilities: Customer advances $ 5,583 $ (95 ) $ 5,489 Shareholder’s equity: Accumulated deficit $ (16,961 ) $ 95 $ (16,867 ) The impact of adoption of ASC 606 to the Company’s condensed consolidated financial statements for the six months ended March 31, 2019 is as follows: Statements of Operations and Comprehensive (Loss) Income As Reported Effect of Change Higher/(Lower) Amount Without Adoption of ASC 606 Service revenue $ 15,866 $ (19 ) $ 15,885 Product revenue 2,103 2,103 Total revenue 17,969 (19 ) 17,988 Total cost of revenue 12,989 12,989 Gross profit 4,980 (19 ) 4,999 Operating loss (408 ) (19 ) (389 ) Net loss before income taxes (652 ) (19 ) (633 ) Income taxes expense 2 2 Net loss $ (654 ) $ (19 ) $ (635 ) Diluted net loss per share $ (0.06 ) $ (0.00 ) $ (0.06 ) Balance Sheet As Reported Effect of Change Higher/(Lower) Amount Without Adoption of ASC 606 Current Liabilities: Customer advances $ 5,583 $ (95 ) $ 5,489 Shareholder’s equity: Accumulated deficit $ (16,961 ) $ 95 $ (16,867 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 12. SUBSEQUENT EVENTS Acquisition On May 1, 2019, the Company, through its wholly-owned subsidiary Oriole Toxicology Services LLC (the “ Smithers Avanza Purchaser”), acquired (the “Smithers Avanza Acquisition”) from Smithers Avanza Toxicology Services LLC (the “Smithers Avanza Seller”), a consulting-based contract research laboratory located in Gaithersburg, Maryland, substantially all of the assets used by the Smithers Avanza Seller in connection with the performance of in-vivo mammalian toxicology CRO services for pharmaceuticals (small molecules and biologics), vaccines, agro and industrial chemicals, under the terms and conditions of an Asset Purchase Agreement, dated May 1, 2019, among the Smithers Avanza Purchaser, the Company, the Smithers Avanza Seller and the member of the Smithers Avanza Seller (the “Smithers Avanza Purchase Agreement”). The consideration for the Acquisition consisted of $1,271 in cash, subject to certain adjustments and an indemnity escrow of $125, 200 of the Company’s common shares and an unsecured promissory note in the initial principal amount of $810 made by the Smithers Avanza Purchaser and guaranteed by the Company. The Company funded the cash portion of the purchase price for the Acquisition with cash on hand and the net proceeds from the refinancing of its credit arrangements with FIB, as described below. The Smithers Avanza Purchase Agreement contains customary representations, warranties, covenants (including non-competition requirements applicable to the selling parties for a 5-year period) and indemnification provisions. As contemplated by the Smithers Avanza Purchase Agreement, on May 1, 2019 the Smithers Avanza Purchaser assumed amended lease arrangements for certain premises in Gaithersburg, Maryland (the “Lease Arrangements”). Under the Lease Arrangements, the Smithers Avanza Purchaser agreed to lease the premises for a term of 5 years and 8 months, with two 5 year extensions at the Smithers Avanza Purchaser’s option. Annual minimum rental payments under the initial term of the Lease Arrangements range from $400 to $800, provided that the Lease Arrangements provide the Smithers Avanza Purchaser with the option to purchase the premises. The Lease Arrangements include customary rights upon a default by landlord or tenant. Amendment to Credit Arrangements In connection with the Second Acquisition, on May 1, 2019 the Company and FIB entered into a fourth amendment (the “Fourth Amendment”) to the Credit Agreement by and between the parties dated June 23, 2017, as previously amended July 2, 2018, September 6, 2018 and September 28, 2018 (as amended, the “Credit Agreement”) to (i) extend the term of the Company’s $3,500 revolving credit facility to June 30, 2020, (ii) provide the Company with an additional term loan (the “New Term Loan”) in the amount of $1,271, the proceeds of which were used to fund the cash consideration for the Acquisition, and (iii) provide for an additional line of credit in the principal amount of $1,100 (the “Capex Line”), which the Company may borrow from time to time, subject to the terms of the Credit Agreement. The New Term Loan and the Capex Line mature November 1, 2025 and June 30, 2020, respectively. Amounts outstanding under the New Term Loan bear interest at a fixed per annum rate of 4.63%, while interest accrues on the principal balance of the Capex Line at a floating per annum rate equal to the sum of the Prime Rate plus Fifty Basis Points (0.5%), which rate shall change concurrently with the Prime Rate. Commencing June 1, 2019, the New Term Loan requires monthly interest only payments until December 1, 2019, from which time payments of principal and interest in monthly installments of $20 become due, with all accrued but unpaid interest, cost and expenses due and payable at the maturity date. The Company is required to pay accrued but unpaid interest on the Capex Line on a monthly basis commencing on June 1, 2019, until June 30, 2020, at which time the entire balance of the Capex Line, together with accrued but unpaid interest, costs and expenses, shall be due and payable in full. Following its amendment, the Company’s obligations under the Credit Agreement are guaranteed by BAS Evansville, Inc. (“BASEV”), Seventh Wave Laboratories, LLC (“Seventh Wave”), as well as the Smithers Avanza Purchaser, each a wholly owned subsidiary of the Company. The Company’s obligations under the Credit Agreement and BASEV’s, Seventh Wave’s and the Smithers Avanza Purchaser’s obligations under their respective Guaranties are secured by first priority security interests in substantially all of the assets of the Company, BASEV, Seventh Wave and the Smithers Avanza Purchaser respectively, as well as mortgages on the Company’s and BASEV’s facilities in West Lafayette, Indiana and Evansville, Indiana, respectively, and pledges of the Company’s ownership interests in its subsidiaries. The various restrictive covenants under the Credit Agreement remain consistent, provided that the parties agreed (i) to modify the computation of the minimum debt service coverage ratio and lower the ratio itself during certain periods to 1.15 to 1.0 or 1.20 to 1.0 to appropriately reflect relevant aspects of the Smithers Avanza Acquisition and (ii) to suspend application of the cash flow coverage ratio through the fiscal quarter ending December 31, 2019, with the ratio of the Company’s total funded debt (as defined in the Credit Agreement) as of the last day of each fiscal quarter to its EBITDA (as defined in the Credit Agreement) for the 12 months ended as of March 31, 2020 and June 30, 2020 not to exceed 5.00 to 1.00 and 4.50 to 1.00, respectively. The Company also agreed to obtain a life insurance policy in an amount not less than $2,000 for its President and Chief Executive Officer and to provide FIB an assignment of such life insurance policy as collateral. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of our stock option activity for the six months ended March 31, 2019 is as follows (in thousands except for share prices): Options (shares) Weighted- Average Exercise Price Weighted- Average Grant Date Fair Value Outstanding – September 30, 2018 301 $ 1.73 $ 1.38 Exercised (1 ) $ 1.40 $ 1.15 Granted 403 $ 1.41 $ 1.04 Forfeited (4 ) $ 1.74 $ 1.38 Outstanding - March 31, 2019 699 $ 1.55 $ 1.18 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted-average assumptions used to compute the fair value of the options granted in the six months ended March 31, 2019 were as follows: Risk-free interest rate 2.58 % Dividend yield 0.00 % Volatility of the expected market price of the Company's common shares 72.0 72.5 % Expected life of the options (years) 8.0 |
Schedule of Restricted Share, Stock Options, Activity | A summary of our restricted share activity for the six months ended March 31, 2019 is as follows: Restricted Shares Outstanding – September 30, 2018 - Granted 45 Vested (35 ) Forfeited - Outstanding - March 31, 2019 10 |
INCOME (LOSS) PER SHARE (Tables
INCOME (LOSS) PER SHARE (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles our computation of basic income per share to diluted income per share: Three Months Ended March 31, Six Months Ended March 31, 2019 2018 2019 2018 Basic net income (loss) per share: Net income (loss) applicable to common shareholders $ (569 ) $ 55 $ (654 ) $ 81 Weighted average common shares outstanding 10,290 8,245 10,268 8,245 Basic net income (loss) per share $ (0.06 ) $ 0.01 $ (0.06 ) $ 0.01 Diluted net income per share: Diluted net income (loss) applicable to common shareholders $ (569 ) $ 55 $ (654 ) $ 81 Weighted average common shares outstanding 10,290 8,245 10,268 8,245 Plus: Incremental shares from assumed conversions: Series A preferred shares - 518 - 518 Dilutive stock options/shares - 26 - 30 Diluted weighted average common shares outstanding 10,290 8,789 10,268 8,793 Diluted net income (loss) per share $ (0.06 ) $ 0.01 $ (0.06 ) $ 0.01 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consisted of the following: March 31, 2019 September 30, 2018 Raw materials $ 841 $ 939 Work in progress 191 89 Finished goods 264 342 $ 1,296 $ 1,370 Obsolescence reserve (193 ) (188 ) $ 1,103 $ 1,182 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segments | Three Months Ended March 31, Six Months Ended March 31, 2019 2018 2019 2018 Revenue: Service $ 8,131 $ 5,030 $ 15,866 $ 9,555 Product 1,213 914 2,103 1,766 $ 9,344 $ 5,944 $ 17,969 $ 11,321 Operating Income (Loss) Service $ 877 $ 918 $ 1,513 $ 1,699 Product 30 52 (50 )) 84 Corporate (1,355 ) (861 ) (1,870 ) (1,662 ) $ (449 ) $ 110 $ (408 ) $ 121 Interest expense (122 ) (48 ) (248 ) (100 ) Other income 3 4 4 4 Income (loss) before income taxes $ (568 ) $ 66 $ (652 ) $ 25 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long term debt is detailed in the table below. As of: March 31, 2019 September 30, 2018 Initial term loan $ 4,106 $ 4,222 Subsequent term loan 5,057 5,392 Construction loans 1,193 - 10,356 9,614 Less: Current portion (930 ) (909 ) Less: Debt issue costs not amortized (161 ) (159 ) Total Long-term debt $ 9,265 $ 8,546 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Business Acquisition, Pro Forma Information | The unaudited pro forma information is as follows: Three Months Ended Six Months Ended March 31, 2018 March 31, 2018 Total revenues $ 8,946 $ 18,065 Net income (174 ) 75 Pro forma basic net income (loss) per share $ (0.02 ) $ 0.01 Pro forma diluted net income (loss) per share $ (0.02 ) $ 0.01 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule Of The New Revenue, Standard Impacted The Consolidated Financial Statements | The impact of adoption of ASC 606 to the Company’s condensed consolidated financial statements for the three months ended March 31, 2019 is as follows: Statements of Operations and Comprehensive (Loss) Income As Reported Effect of Change Higher/(Lower) Amount Without Adoption of ASC 606 Service revenue $ 8,131 $ (25 ) $ 8,156 Product revenue 1,213 1,213 Total revenue 9,344 (25 ) 9,369 Total cost of revenue 6,783 6,783 Gross profit 2,561 (25 ) 2,586 Operating loss (449 ) (25 ) (424 ) Net loss before income taxes (568 ) (25 ) (543 ) Income taxes expense 1 1 Net loss $ (569 ) $ (25 ) $ (544 ) Diluted net loss per share $ (0.06 ) $ (0.00 ) $ (0.06 ) Balance Sheet As Reported Effect of Amount Without Current Liabilities: Customer advances $ 5,583 $ (95 ) $ 5,489 Shareholder’s equity: Accumulated deficit $ (16,961 ) $ 95 $ (16,867 ) The impact of adoption of ASC 606 to the Company’s condensed consolidated financial statements for the six months ended March 31, 2019 is as follows: Statements of Operations and Comprehensive (Loss) Income As Reported Effect of Change Higher/(Lower) Amount Without Adoption of ASC 606 Service revenue $ 15,866 $ (19 ) $ 15,885 Product revenue 2,103 2,103 Total revenue 17,969 (19 ) 17,988 Total cost of revenue 12,989 12,989 Gross profit 4,980 (19 ) 4,999 Operating loss (408 ) (19 ) (389 ) Net loss before income taxes (652 ) (19 ) (633 ) Income taxes expense 2 2 Net loss $ (654 ) $ (19 ) $ (635 ) Diluted net loss per share $ (0.06 ) $ (0.00 ) $ (0.06 ) Balance Sheet As Reported Effect of Change Higher/(Lower) Amount Without Adoption of ASC 606 Current Liabilities: Customer advances $ 5,583 $ (95 ) $ 5,489 Shareholder’s equity: Accumulated deficit $ (16,961 ) $ 95 $ (16,867 ) |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - Employee Stock Option [Member] shares in Thousands | 6 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Options (shares) Outstanding | shares | 301 |
Options (shares) Exercised | shares | (1) |
Options (shares) Granted | shares | 403 |
Options (shares) Forfeited | shares | (4) |
Options (shares) Outstanding | shares | 699 |
Weighted-Average Exercise Price Outstanding | $ 1.73 |
Weighted-Average Exercise Price Exercised | 1.40 |
Weighted-Average Exercise Price Granted | 1.41 |
Weighted-Average Exercise Price Forfeited | 1.74 |
Weighted-Average Exercise Price Outstanding | 1.55 |
Weighted-Average Grant Date Fair Value Outstanding | 1.38 |
Weighted-Average Grant Date Fair Value Exercised | 1.15 |
Weighted-Average Grant Date Fair Value Granted | 1.04 |
Weighted-Average Grant Date Fair Value Forfeited | 1.38 |
Weighted-Average Grant Date Fair Value Outstanding | $ 1.18 |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details 1) | 6 Months Ended |
Mar. 31, 2019 | |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility of the expected market price of the Company's common shares | 72.50% |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility of the expected market price of the Company's common shares | 72.00% |
Employee Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 2.58% |
Dividend yield | 0.00% |
Expected life of the options (years) | 8 years |
STOCK-BASED COMPENSATION (Det_3
STOCK-BASED COMPENSATION (Details 2) - Restricted Stock [Member] shares in Thousands | 6 Months Ended |
Mar. 31, 2019shares | |
Outstanding – September 30, 2018 | 0 |
Granted | 45 |
Vested | (35) |
Forfeited | 0 |
Outstanding - March 31, 2019 | 10 |
STOCK-BASED COMPENSATION (Det_4
STOCK-BASED COMPENSATION (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
2018 Equity Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 700 | 700 | ||
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 500 | $ 500 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 7 months 6 days | |||
Allocated Share-based Compensation Expense | 99 | $ 34 | $ 124 | $ 68 |
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 12 | 12 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 9 months 14 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 44 | $ 44 |
INCOME (LOSS) PER SHARE (Detail
INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Basic net income (loss) per share: | ||||
Net income (loss) applicable to common shareholders | $ (569) | $ 55 | $ (654) | $ 81 |
Weighted average common shares outstanding | 10,290 | 8,245 | 10,268 | 8,245 |
Basic net income (loss) per share | $ (0.06) | $ 0.01 | $ (0.06) | $ 0.01 |
Diluted net income per share: | ||||
Diluted net income (loss) applicable to common shareholders | $ (569) | $ 55 | $ (654) | $ 81 |
Weighted average common shares outstanding | 10,290 | 8,245 | 10,268 | 8,245 |
Plus: Incremental shares from assumed conversions: | ||||
Series A preferred shares | 0 | 518 | 0 | 518 |
Dilutive stock options/shares | 0 | 26 | 0 | 30 |
Diluted weighted average common shares outstanding | 10,290 | 8,789 | 10,268 | 8,793 |
Diluted net income (loss) per share | $ (0.06) | $ 0.01 | $ (0.06) | $ 0.01 |
INCOME (LOSS) PER SHARE (Deta_2
INCOME (LOSS) PER SHARE (Details Textual) - shares | 3 Months Ended | 6 Months Ended |
Mar. 31, 2019 | Mar. 31, 2019 | |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 699 | 699 |
Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 17 | 17 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Inventory [Line Items] | ||
Raw materials | $ 841 | $ 939 |
Work in progress | 191 | 89 |
Finished goods | 264 | 342 |
Gross inventories | 1,296 | 1,370 |
Obsolescence reserve | (193) | (188) |
Inventories | $ 1,103 | $ 1,182 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 9,344 | $ 5,944 | $ 17,969 | $ 11,321 |
Operating Income (Loss) | (449) | 110 | (408) | 121 |
Interest expense | (122) | (48) | (248) | (100) |
Other income | 3 | 4 | 4 | 4 |
Income (loss) before income taxes | (568) | 66 | (652) | 25 |
Service Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 8,131 | 5,030 | 15,866 | 9,555 |
Operating Income (Loss) | 877 | 918 | 1,513 | 1,699 |
Product Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,213 | 914 | 2,103 | 1,766 |
Operating Income (Loss) | 30 | 52 | (50) | 84 |
Corporate Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | $ (1,355) | $ (861) | $ (1,870) | $ (1,662) |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Debt Instrument [Line Items] | ||
Long-term Debt | $ 10,356 | $ 9,614 |
Less: Current portion | 930 | 909 |
Less: Debt issue costs not amortized | (161) | (159) |
Total Long-term debt | 9,265 | 8,546 |
Construction Draw Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 1,193 | 0 |
Credit Facility Term Loan One [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 4,106 | 4,222 |
Credit Facility Term Loan Two [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 5,057 | $ 5,392 |
DEBT (Details Textual)
DEBT (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |||
Sep. 28, 2018 | Jul. 02, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | |
Debt Instrument [Line Items] | |||||
Debt Instrument, Periodic Payment | $ 33 | ||||
Long-term Debt | 10,356 | $ 9,614 | |||
Business Combination, Contingent Consideration Arrangements, Description | As of March 31, 2019, the Credit Agreement also required us to maintain (i) a minimum debt service coverage ratio of not less than 1.25 to 1.0 and (ii) a cash flow coverage ratio whereby, the ratio of the Company's total funded debt (as defined in the Credit Agreement) as of the last day of each fiscal quarter to its EBITDA (as defined in the Credit Agreement) for the 12 months ended on such date may not exceed 4.50 to 1.00. | ||||
Equipment Draw Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Maturity Date | Mar. 28, 2025 | ||||
Long-term Debt | 1,193 | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,429 | ||||
Construction Draw Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Maturity Date | Mar. 28, 2025 | ||||
Long-term Debt | 1,193 | 0 | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 4,445 | ||||
First Internet Bank of Indiana [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Periodic Payment | $ 33 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 3.99% | ||||
Debt Instrument, Face Amount | $ 4,500 | ||||
Long-term Debt, Gross | 4,106 | ||||
First Internet Bank of Indiana [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 3,500 | ||||
Debt Instrument, Description of Variable Rate Basis | less Twenty-five (25) Basis Points (0.25%). | ||||
Long-term Line of Credit | $ 409 | $ 0 | |||
Subsequent Term Loan [Member] | First Internet Bank of Indiana [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Periodic Payment | $ 78 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 5.06% | ||||
Debt Instrument, Face Amount | $ 5,500 | ||||
Debt Instrument, Maturity Date | Jul. 2, 2023 | ||||
Long-term Debt | $ 5,057 | ||||
Current Credit Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 5.20% |
ACCRUED EXPENSES (Details Textu
ACCRUED EXPENSES (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve, Current | $ 503 | $ 503 | $ 1,117 |
General and Administrative Expense [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Increase (Decrease) in Accrued Liabilities and Other Operating Liabilities | 55 | 546 | |
Lease Related Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring reserves | $ 1,117 | $ 1,117 |
NEW ACCOUNTING PRONOUNCEMENTS (
NEW ACCOUNTING PRONOUNCEMENTS (Details Textual) $ in Thousands | 3 Months Ended |
Dec. 31, 2018USD ($) | |
Accounting Changes and Error Corrections [Abstract] | |
Cumulative Effect on Retained Earnings, Net of Tax | $ (76) |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Mar. 31, 2018 | Mar. 31, 2018 | |
Total revenues | $ 8,946 | $ 18,065 |
Net income | $ (174) | $ 75 |
Pro forma basic net income (loss) per share | $ (0.02) | $ 0.01 |
Pro forma diluted net income (loss) per share | $ (0.02) | $ 0.01 |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details Textual) - USD ($) | 1 Months Ended | |||
Jul. 02, 2018 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 29, 2018 | |
Business Combination, Contingent Consideration, Asset | $ 9,234 | |||
Business Combination, Consideration Transferred | 6,759 | |||
Escrow Deposit Disbursements Related to Property Acquisition | $ 750 | |||
Common Stock, Shares, Issued | 1,500,000 | 10,290,531 | 10,245,277 | |
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | $ 2,475 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | |
Total revenue | $ 9,344 | $ 5,944 | $ 17,969 | $ 11,321 | ||
Total cost of revenue | 6,783 | 4,204 | 12,989 | 8,000 | ||
Gross profit | 2,561 | 1,740 | 4,980 | 3,321 | ||
Operating income | (449) | 110 | (408) | 121 | ||
Net loss before income taxes | (568) | 66 | (652) | 25 | ||
Income taxes expense | 1 | 11 | 2 | (56) | ||
Net loss | $ (569) | $ (85) | $ 55 | $ 26 | $ (654) | $ 81 |
Diluted net loss per share | $ (0.06) | $ 0.01 | $ (0.06) | $ 0.01 | ||
Product [Member] | ||||||
Total revenue | $ 1,213 | $ 914 | $ 2,103 | $ 1,766 | ||
Total cost of revenue | 832 | 542 | 1,441 | 1,065 | ||
Service [Member] | ||||||
Total revenue | 8,131 | 5,030 | 15,866 | 9,555 | ||
Total cost of revenue | 5,951 | $ 3,662 | 11,548 | $ 6,935 | ||
Previously Reported [Member] | ||||||
Total revenue | 9,369 | 17,988 | ||||
Total cost of revenue | 6,783 | 12,989 | ||||
Gross profit | 2,586 | 4,999 | ||||
Operating income | (424) | (389) | ||||
Net loss before income taxes | (543) | (633) | ||||
Income taxes expense | 1 | 2 | ||||
Net loss | $ (544) | $ (635) | ||||
Diluted net loss per share | $ (0.06) | $ (0.06) | ||||
Previously Reported [Member] | Product [Member] | ||||||
Total revenue | $ 1,213 | $ 2,103 | ||||
Previously Reported [Member] | Service [Member] | ||||||
Total revenue | 8,156 | 15,885 | ||||
New Accounting Pronouncement, Early Adoption, Effect [Member] | ||||||
Total revenue | (25) | (19) | ||||
Gross profit | (25) | (19) | ||||
Operating income | (25) | (19) | ||||
Net loss before income taxes | (25) | (19) | ||||
Net loss | $ (25) | $ (19) | ||||
Diluted net loss per share | $ 0 | $ 0 | ||||
New Accounting Pronouncement, Early Adoption, Effect [Member] | Service [Member] | ||||||
Total revenue | $ (25) | $ (19) |
REVENUE RECOGNITION (Detail 1)
REVENUE RECOGNITION (Detail 1) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Current Liabilities: | ||
Customer advances | $ 5,583 | $ 4,925 |
Shareholder's equity: | ||
Retained earnings | (16,961) | $ (16,231) |
Previously Reported [Member] | ||
Current Liabilities: | ||
Customer advances | 5,489 | |
Shareholder's equity: | ||
Retained earnings | (16,867) | |
New Accounting Pronouncement, Early Adoption, Effect [Member] | ||
Current Liabilities: | ||
Customer advances | (95) | |
Shareholder's equity: | ||
Retained earnings | $ 95 |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - USD ($) | 1 Months Ended | 6 Months Ended | ||
May 01, 2019 | Jul. 02, 2018 | Mar. 31, 2019 | Sep. 30, 2018 | |
Debt Instrument, Periodic Payment | $ 33,000 | |||
Debt Instrument, Frequency of Periodic Payment | Commencing June 1, 2019, the New Term Loan requires monthly interest only payments until December 1, 2019, from which time payments of principal and interest in monthly installments of $20 become due, with all accrued but unpaid interest, cost and expenses due and payable at the maturity date. | |||
Long-term Debt | $ 10,356,000 | $ 9,614,000 | ||
Debt Instrument, Covenant Description | The various restrictive covenants under the Credit Agreement remain consistent, provided that the parties agreed (i) to modify the computation of the minimum debt service coverage ratio and lower the ratio itself during certain periods to 1.15 to 1.0 or 1.20 to 1.0 to appropriately reflect relevant aspects of the Smithers Avanza Acquisition and (ii) to suspend application of the cash flow coverage ratio through the fiscal quarter ending December 31, 2019, with the ratio of the Company's total funded debt (as defined in the Credit Agreement) as of the last day of each fiscal quarter to its EBITDA (as defined in the Credit Agreement) for the 12 months ended as of March 31, 2020 and June 30, 2020 not to exceed 5.00 to 1.00 and 4.50 to 1.00, respectively. | |||
First Internet Bank of Indiana [Member] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 3.99% | |||
Line of Credit Facility, Interest Rate Description | interest accrues on the principal balance of the Capex Line at a floating per annum rate equal to the sum of the Prime Rate plus Fifty Basis Points (0.5%), which rate shall change concurrently with the Prime Rate. | |||
Debt Instrument, Periodic Payment | $ 33,000 | |||
Subsequent Event [Member] | Extended Maturity [Member] | Property, Plant and Equipment [Member] | ||||
Long-term Debt, Maturity Date | Jun. 30, 2020 | |||
Subsequent Event [Member] | Credit Agreement [Member] | ||||
Long-term Debt, Maturity Date | Jun. 30, 2020 | |||
Long-term Debt | $ 3,500 | |||
Subsequent Event [Member] | New Term Loan [Member] | ||||
Long-term Debt | $ 1,271 | |||
Subsequent Event [Member] | CapexLine [Member] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4.63% | |||
Debt Instrument, Periodic Payment | $ 20 | |||
Line Of Credit | $ 1,100 | |||
Debt Instrument, Description of Variable Rate Basis | Prime Rate plus Fifty Basis Points (0.5%) | |||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | |||
Bank Owned Life Insurance On Loan | $ 2,000 | |||
Subsequent Event [Member] | Smithers Avanza Acquisition [Member] | ||||
Payments to Acquire Businesses, Gross | $ 1,271 | |||
Description of Lessee Leasing Arrangements, Operating Leases | the Smithers Avanza Purchaser agreed to lease the premises for a term of 5 years and 8 months, with two 5 year extensions at the Smithers Avanza Purchaser's option. | |||
Subsequent Event [Member] | Smithers Avanza Acquisition [Member] | Unsecured Debt [Member] | ||||
Business Combination, Consideration Transferred, Other | $ 810 | |||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | 125,200 | |||
Subsequent Event [Member] | Smithers Avanza Acquisition [Member] | Maximum [Member] | Lease Arrangements [Member] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 800 | |||
Subsequent Event [Member] | Smithers Avanza Acquisition [Member] | Minimum [Member] | Lease Arrangements [Member] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | $ 400 |