Full Press Release Details
| FOR MORE INFORMATION: | Company Contact: | |
| Jacqueline Lemke | ||
| President & CEO and CFO | ||
| Phone: 765.497.5829 | ||
| jlemke@BASinc.com | ||
| Agency Contact: | ||
| Neil Berkman | ||
| Berkman Associates | ||
| Phone: 310.477.3118 | ||
| info@berkmanassociates.com |
Notice of Non-Compliance with a Continued
Non-Reliance on Previously Issued Financial
-- August 21, 2013-- Bioanalytical Systems, Inc. (NASDAQ:BASI) announced today that on August 15, 2013, the Company received
a letter from the Nasdaq Listing Qualifications Department stating that the Company no longer complies with the Listing Rules for
continued listing of the Company's common shares on the Nasdaq Capital Market since the Company has not yet filed its Form 10-Q
for the period ended June 30, 2013 with the Securities and Exchange Commission.
stated that, under the listing rules, the Company has until October 14, 2013 to submit a plan to regain compliance. If the Company's
plan is accepted, the Company may be granted an exception of up to 180 calendar days from the initial filing's due date,
or until February 10, 2014, to regain compliance. The Company intends to comply with the dates given above in order to regain compliance
with the listing rules.
the Company filed a 12b-25 indicating that the Company could not, without unreasonable effort or expense, file its Form 10-Q for
the three and nine months ended June 30, 2013 by the original due date of August 14, 2013 until management could resolve a complex
accounting issue related to the accounting treatment for the outstanding warrants.
Non-Reliance on Previously Issued Financial
On August 19, 2013, the Audit
Committee of Bioanalytical Systems, in consultation with management, concluded that, because of an error identified in the Company's
previously issued financial statements for the fiscal years ended September 30, 2011, September 30, 2012 and the first two fiscal
quarters of 2013, the Company should restate its previously issued financial statements for the relevant periods. Accordingly,
investors should no longer rely upon the Company's previously released financial statements and related auditors' reports
for these periods or any earnings releases or other communications relating to these periods.
The error, identified
by management, is related to the accounting for the Class A and B Warrants as part of the May 2011 public offering. At the time
of the transaction, the Company incorrectly recorded the fair value of the warrants as equity. The proper treatment under ASC 815-40
would have been to record the fair value of the warrants as a liability due to the provision in Section 3e of the Common Stock
Purchase Warrant that could require net cash settlement of the warrants. The Audit Committee and management have discussed the
matters reported herein with the Company's prior and current independent registered accounting firms, as applicable. The Audit
Committee, with the assistance of independent counsel, is conducting an investigation into the circumstances surrounding the error.
The Company is evaluating
the debt covenants at each reporting period and expects to be in breach of the tangible net worth ratios in fiscal 2013. The Company
is communicating with our lenders to obtain waivers for the applicable periods, if necessary.
all amendments and restatements to the financial statements affected to be non-cash in nature.
The Company has determined
that the below-detailed restatements of its financial statements resulted from a material weakness in its internal control
over financial reporting, specifically related to its process and procedures related to the accounting for stock purchase
warrants. The Company has been actively engaged in developing a remediation plan to address the material weakness. Implementation
of the remediation plan is in process and consists of, among other things, redesigning the procedures to enhance its
identification, capture, review, approval and recording of contractual terms included in equity arrangements. The Company also
intends to seek the counsel of other experts in accounting before discussions with our auditors on future unusual and non-recurring
following tables summarize the effects of the previously discussed unaudited restatement adjustments on the consolidated
statements of operations for the periods ended:
| Three Months ended June 30, 2011 | Fiscal 2011 | Fiscal 2012 | ||||||||||||||||||||||||||||||||||
| As Reported | Error | Restated | As Reported | Error | Restated | As Reported | Error | Restated | ||||||||||||||||||||||||||||
| Total revenue | $ | 8,478 | $ | - | $ | 8,478 | $ | 33,144 | $ | - | $ | 33,144 | $ | 28,208 | $ | 28,208 | ||||||||||||||||||||
| Total cost of revenue | 5,733 | - | 5,733 | 22,638 | - | 22,638 | 21,370 | 21,370 | ||||||||||||||||||||||||||||
| Gross profit | 2,745 | - | 2,745 | 10,506 | - | 10,506 | 6,838 | - | 6,838 | |||||||||||||||||||||||||||
| Total operating expenses | 2,264 | - | 2,264 | 9,219 | - | 9,219 | 9,329 | 9,329 | ||||||||||||||||||||||||||||
| Restructuring charges | - | - | - | - | - | - | 3,195 | 3,195 | ||||||||||||||||||||||||||||
| Operating income (loss) | 481 | - | 481 | 1,287 | - | 1,287 | (5,686 | ) | - | (5,686 | ) | |||||||||||||||||||||||||
| Interest expense | (70 | ) | - | (70 | ) | (706 | ) | - | (706 | ) | (714 | ) | (714 | ) | ||||||||||||||||||||||
| Warrant valuation-(increase) decrease | - | (185 | ) | (185 | ) | - | 1,759 | 1,759 | - | 73 | 73 | |||||||||||||||||||||||||
| Other income | 7 | - | 7 | 12 | - | 12 | 12 | - | 12 | |||||||||||||||||||||||||||
| Income (loss) before income taxes | 418 | (185 | ) | 233 | 593 | 1,759 | 2,352 | (6,388 | ) | 73 | (6,315 | ) | ||||||||||||||||||||||||
| Income tax expense | - | - | - | 50 | - | 50 | 2 | 2 | ||||||||||||||||||||||||||||
| Net income (loss) | 418 | (185 | ) | 233 | 543 | 1,759 | 2,302 | (6,390 | ) | 73 | (6,317 | ) | ||||||||||||||||||||||||
| Less: Deemed dividend for Series A Preferred Shares | (3,277 | ) | (2,229 | ) | (5,506 | ) | (3,277 | ) | (2,229 | ) | (5,506 | ) | - | - | - | |||||||||||||||||||||
| Less: Preferred stock dividends | (991 | ) | - | (991 | ) | (991 | ) | - | (991 | ) | - | - | - | |||||||||||||||||||||||
| Net income (loss) applicable to common shareholders | $ | (3,850 | ) | $ | (2,414 | ) | $ | (6,264 | ) | $ | (3,725 | ) | $ | (470 | ) | $ | (4,195 | ) | $ | (6,390 | ) | $ | 73 | $ | (6,317 | ) | ||||||||||
| Basic net income (loss) per share | $ | (0.65 | ) | $ | (0.41 | ) | $ | (1.06 | ) | $ | (0.66 | ) | $ | (0.08 | ) | $ | (0.74 | ) | $ | (0.89 | ) | $ | 0.01 | $ | (0.88 | ) |
| Three Months ended December 31, 2012 | Three Months ended March 31, 2013 | Six Months ended March 31, 2013 | ||||||||||||||||||||||||||||||||||
| As Reported | Error | Restated | As Reported | Error | Restated | As Reported | Error | Restated | ||||||||||||||||||||||||||||
| Total revenue | $ | 5,803 | $ | - | $ | 5,803 | $ | 5,156 | $ | - | $ | 5,156 | $ | 10,960 | $ | - | $ | 10,960 | ||||||||||||||||||
| Total cost of revenue | 3,948 | - | 3,948 | 3,898 | - | 3,898 | 7,846 | - | 7,846 | |||||||||||||||||||||||||||
| Gross profit | 1,855 | - | 1,855 | 1,258 | - | 1,258 | 3,114 | - | 3,114 | |||||||||||||||||||||||||||
| Total operating expenses | 1,553 | - | 1,553 | 1,267 | - | 1,267 | 2,820 | - | 2,820 | |||||||||||||||||||||||||||
| Restructuring charges | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| Operating income (loss) | 302 | - | 302 | (9 | ) | - | (9 | ) | 294 | - | 294 | |||||||||||||||||||||||||
| Interest expense | (165 | ) | - | (165 | ) | (163 | ) | - | (163 | ) | (329 | ) | - | (329 | ) | |||||||||||||||||||||
| Warrant valuation-(increase) decrease | - | 117 | 117 | - | (142 | ) | (142 | ) | - | (25 | ) | (25 | ) | |||||||||||||||||||||||
| Other income | 2 | - | 2 | 3 | - | 3 | 5 | - | 5 | |||||||||||||||||||||||||||
| Income (loss) before income taxes | 139 | 117 | 256 | (169 | ) | (142 | ) | (311 | ) | (30 | ) | (25 | ) | (55 | ) | |||||||||||||||||||||
| Income tax expense | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| Net income (loss) | $ | 139 | $ | 117 | $ | 256 | $ | (169 | ) | $ | (142 | ) | $ | (311 | ) | $ | (30 | ) | $ | (25 | ) | $ | (55 | ) | ||||||||||||
| Basic net income (loss) per share | $ | 0.02 | $ | 0.01 | $ | 0.03 | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) |
tables summarize the effects of the previously discussed unaudited restatement adjustments on the consolidated balance sheet
| As of June 30, 2011 | As of September 30, 2011 | As of September 30, 2012 | ||||||||||||||||||||||||||||||||||
| As Reported | Error | Restated | As Reported | Error | Restated | As Reported | Error | Restated | ||||||||||||||||||||||||||||
| Total assets | $ | 34,310 | $ | - | $ | 34,310 | $ | 32,346 | $ | - | $ | 32,346 | $ | 26,975 | $ | 26,975 | ||||||||||||||||||||
| Total all other liabilities | 18,057 | - | 18,057 | 16,760 | - | 16,760 | 17,385 | 17,385 | ||||||||||||||||||||||||||||
| Warrant liability | - | 3,230 | 3,230 | - | 1,286 | 1,286 | - | 1,213 | 1,213 | |||||||||||||||||||||||||||
| Total liabilities | 18,057 | 3,230 | 21,287 | 16,760 | 1,286 | 18,046 | 17,385 | 1,213 | 18,598 | |||||||||||||||||||||||||||
| Shareholders' equity: | ||||||||||||||||||||||||||||||||||||
| Preferred Shares | 2,135 | - | 2,135 | 2,135 | - | 2,135 | 1,335 | - | 1,335 | |||||||||||||||||||||||||||
| Common Shares | 1,690 | - | 1,690 | 1,698 | - | 1,698 | 1,871 | - | 1,871 | |||||||||||||||||||||||||||
| Additional paid-in capital | 19,370 | (816 | ) | 18,554 | 19,408 | (816 | ) | 18,592 | 20,451 | (816 | ) | 19,635 | ||||||||||||||||||||||||
| Accumulated deficit | (7,038 | ) | (2,414 | ) | (9,452 | ) | (7,706 | ) | (470 | ) | (8,176 | ) | (14,096 | ) | (397 | ) | (14,493 | ) | ||||||||||||||||||
| Accumulated other comprehensive income | 96 | - | 96 | 51 | - | 51 | 29 | 29 | ||||||||||||||||||||||||||||
| Total shareholders' equity | 16,253 | (3,230 | ) | 13,023 | 15,586 | (1,286 | ) | 14,300 | 9,590 | (1,213 | ) | 8,377 | ||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 34,310 | $ | - | $ | 34,310 | $ | 32,346 | $ | - | $ | 32,346 | $ | 26,975 | $ | - | $ | 26,975 |
| As of December 31, 2012 | As of March 31, 2013 | |||||||||||||||||||||||
| As Reported | Error | Restated | As Reported | Error | Restated | |||||||||||||||||||
| Total assets | $ | 25,064 | $ | - | $ | 25,064 | $ | 24,790 | $ | 24,790 | ||||||||||||||
| Total all other liabilities | 15,232 | - | 15,232 | 14,999 | 14,999 | |||||||||||||||||||
| Warrant liability | - | 1,096 | 1,096 | - | 1,238 | 1,238 | ||||||||||||||||||
| Total liabilities | 15,232 | 1,096 | 16,328 | 14,999 | 1,238 | 16,237 | ||||||||||||||||||
| Shareholders' equity: | ||||||||||||||||||||||||
| Preferred Shares | 1,335 | - | 1,335 | 1,335 | - | 1,335 | ||||||||||||||||||
| Common Shares | 1,876 | - | 1,876 | 1,880 | - | 1,880 | ||||||||||||||||||
| Additional paid-in capital | 20,541 | (816 | ) | 19,725 | 20,618 | (816 | ) | 19,802 | ||||||||||||||||
| Accumulated deficit | (13,957 | ) | (280 | ) | (14,237 | ) | (14,126 | ) | (422 | ) | (14,548 | ) | ||||||||||||
| Accumulated other comprehensive income | 37 | - | 37 | 84 | 84 | |||||||||||||||||||
| Total shareholders' equity | 9,832 | (1,096 | ) | 8,736 | 9,791 | (1,238 | ) | 8,553 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 25,064 | $ | - | $ | 25,064 | $ | 24,790 | $ | - | $ | 24,790 |
Company has restated and reissued its results for the applicable periods, investors and other users of the Company's SEC
filings are cautioned not to rely on the Company's financial statements for (i) the quarterly periods ended June 30, and
September 30, 2011, (ii) the annual period ended September 30, 2012, and (iii) the quarterly periods ended December 31, 2012 and
About Bioanalytical Systems, Inc.
BASi is a pharmaceutical development company
providing contract research services and monitoring instruments to the world's leading drug development companies and medical research
organizations. The company focuses on developing innovative services and products that increase efficiency and reduce the cost
of taking a new drug to market. Visit www.BASinc.com for more about BASi.
This press release contains statements
that constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements include
our expectations regarding changes in our results of operations to be reported for (i) the quarterly periods ended June 30, and
September 30, 2011, (ii) the annual period ended September 30, 2012, and (iii) the quarterly periods ended December 31, 2012 and
March 31, 2013 when filed with the SEC. Readers are cautioned that any such forward looking statements are not guarantees of future
results and involve risks and uncertainties. In addition, we have based these forward-looking statements on our current expectations
and projections about our third quarter results. Our work to address the warrant accounting issue is ongoing and the results discussed
above may change as we complete our analysis.