Exhibit 99.2
BIOS INTERNATIONAL CORPORATION
Condensed Financial Statements
March 31, 2012 and 2011
BIOS INTERNATIONAL CORPORATION
Table of Contents
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Condensed Financial Statements |
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Condensed Balance Sheets (Unaudited) | 1 |
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Condensed Statements of Income (Unaudited) | 2 |
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Condensed Statements of Cash Flows (Unaudited) | 3 |
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Notes to Condensed Financial Statements (Unaudited) | 4 |
BIOS INTERNATIONAL CORPORATION
Condensed Balance Sheets (Unaudited)
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| March 31, |
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| 2012 |
| 2011 |
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Assets |
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Current assets |
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Cash and cash equivalents |
| $ | 271,630 |
| $ | 603,908 |
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Accounts receivable |
| 649,688 |
| 586,493 |
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Inventory, net |
| 792,683 |
| 694,798 |
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Total current assets |
| 1,714,001 |
| 1,885,199 |
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Non-current assets |
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Property and equipment, net |
| 72,643 |
| 32,337 |
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Other long term assets |
| 28,506 |
| 26,763 |
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Total non-current assets |
| 101,149 |
| 59,100 |
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Total assets |
| $ | 1,815,150 |
| $ | 1,944,299 |
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Liabilities and Stockholder’s Equity |
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Current liabilities |
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Accounts payable |
| $ | 81,652 |
| $ | 84,111 |
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Accrued expenses |
| 87,718 |
| 215,127 |
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Total current liabilities |
| 169,370 |
| 299,238 |
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Total liabilities |
| 169,370 |
| 299,238 |
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Commitments and contingencies (Note 4) |
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Stockholder’s equity |
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Common stock, $10 par value, 1,000 shares authorized, issued, and outstanding |
| 10,000 |
| 10,000 |
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Retained earnings |
| 1,635,780 |
| 1,635,061 |
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Total stockholder’s equity |
| 1,645,780 |
| 1,645,061 |
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Total liabilities and stockholder’s equity |
| $ | 1,815,150 |
| $ | 1,944,299 |
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See notes to financial statements.
BIOS INTERNATIONAL CORPORATION
Condensed Statements of Income (Unaudited)
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| For the Three Month Period Ended |
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| March 31, |
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| 2012 |
| 2011 |
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Revenues |
| $ | 1,527,597 |
| $ | 1,365,796 |
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Cost of revenue |
| 741,151 |
| 575,540 |
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Gross profit |
| 786,446 |
| 790,256 |
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Operating expenses |
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General and administrative |
| 288,740 |
| 309,889 |
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Research and development |
| 110,701 |
| 140,556 |
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Selling |
| 67,591 |
| 50,967 |
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Total operating expenses |
| 467,032 |
| 501,412 |
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Other income |
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Other income |
| (408 | ) | (992 | ) | ||
Total other income |
| (408 | ) | (992 | ) | ||
Net income |
| $ | 319,822 |
| $ | 289,836 |
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See notes to financial statements.
BIOS INTERNATIONAL CORPORATION
Condensed Statements of Cash Flows (Unaudited)
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| For the Three Month Period Ended |
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| March 31, |
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| 2012 |
| 2011 |
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Cash flows from operating activities |
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Net income |
| $ | 319,822 |
| $ | 289,836 |
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Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities |
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Depreciation and amortization |
| 2,395 |
| 1,583 |
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Changes in assets and liabilities |
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Accounts receivable |
| 156,803 |
| 63,285 |
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Inventory |
| 127,433 |
| 46,585 |
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Other current assets |
| 16,146 |
| — |
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Other long term assets |
| 487 |
| — |
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Accounts payable |
| (25,516 | ) | (11,053 | ) | ||
Accrued expenses |
| (58,859 | ) | 78,500 |
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| 218,889 |
| 178,900 |
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Net cash and cash equivalents provided by operating activities |
| 538,711 |
| 468,736 |
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Cash flows from investing activities |
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Purchase of property and equipment |
| (7,401 | ) | — |
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Net cash and cash equivalents used in investing activities |
| (7,401 | ) | — |
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Cash flows from financing activities |
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Distributions to owners |
| (300,000 | ) | (233,000 | ) | ||
Stockholder loan repayment |
| — |
| — |
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Net cash and cash equivalents used in financing activities |
| (300,000 | ) | (233,000 | ) | ||
Net increase in cash and cash equivalents |
| 231,310 |
| 235,736 |
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Cash and cash equivalents - beginning of year |
| 40,320 |
| 368,172 |
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Cash and cash equivalents - end of year |
| $ | 271,630 |
| $ | 603,908 |
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See notes to financial statements.
BIOS INTERNATIONAL CORPORATION
Notes to Condensed Financial Statements
Note 1 - Description of Business and Summary of Significant Accounting Policies
Bios International Corp (“Bios”) was established in 1991. Bios International is a recognized manufacturer of gas flow measurement, providing the industry’s most reliable products, service and solutions for professionals in environmental protection, workplace safety, industrial process control and laboratory calibration. The Company serves its customers directly and through a vast network of distributors across the globe.
Accounts Receivable
The Company estimates an allowance for doubtful accounts based on overall historic write-offs, the age of receivable balances, and the payment history and creditworthiness of the customer. The losses ultimately incurred could differ materially in the near term from the amounts estimated in determining the allowance. As of March 31, 2012 and 2011, the Company determined that no allowance was necessary as all accounts were deemed fully collectible.
For product sold, payments by customers to the Company for shipping and handling costs are included in revenue on the statements of income, while the Company’s expense is included in cost of revenue. Shipping and handling for inventory and materials purchased by the Company is included as a component of inventory on the balance sheets, and in cost of revenue when the product is sold.
Note 2 - Related Party Transactions
The Company pays the owner of the Company royalties for the use of patented technology. The related expense is recorded as cost of revenue within the statements of income for the three month period ended March 31, 2012.
Note 3 - Inventory
Inventories are summarized as follows:
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| March 31, |
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| 2012 |
| 2011 |
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Finished goods and raw materials |
| $ | 798,684 |
| $ | 698,516 |
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Inventory reserve |
| (6,001 | ) | (3,718 | ) | ||
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| $ | 792,683 |
| $ | 694,798 |
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Finished goods include raw materials, direct labor, and manufacturing overhead at March 31, 2012 and 2011.
BIOS INTERNATIONAL CORPORATION
Notes to Condensed Financial Statements
Note 4 - Commitments and Contingencies
Operating Leases
The Company leases equipment, storage and vehicles under non-cancelable operating leases. Rent expense for the three month period ended March 31, 2012 and 2011 was $61,279 and $44,032, respectively.
Future minimum lease payments under these leases are approximately as follows:
Year Ending March 31, |
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2012 |
| $ | 135,000 |
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2013 |
| 180,000 |
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2014 |
| 180,000 |
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2015 |
| 15,000 |
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| $ | 510,000 |
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Litigation
In the normal course of business, the Company is party to litigation from time to time. The Company maintains insurance to cover certain actions and believes that resolution of such litigation will not have a material adverse effect on the Company.
Note 5 - Subsequent Events
On May 15, 2012, the Company was acquired by Mesa Laboratories, Inc. (“Mesa”). Under the terms of the acquisition, certain assets and liabilities of the Company were acquired for a cash payment of $16,660,000, which includes $1 million held in escrow, and contingent consideration of up to $6,710,000 depending on the results of a three-year earn period.
The Company has evaluated all subsequent events through July 20, 2012, which is the date the financial statements were available to be issued.