BASi Files Form 8K Notice of Non-Compliance with a Continued Listing Rule Non-Reliance on Previously Issued Financial

  BASi Files Form 8K Notice of Non-Compliance with a Continued Listing Rule
  Non-Reliance on Previously Issued Financial Statements

Business Wire

WEST LAFAYETTE, Ind. -- 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.

The Letter further 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.

On August 14, 2013, 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 Statements

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 its lenders to obtain waivers for the applicable
periods, if necessary.

The Company expects all amendments and restatements to the financial
statements affected to be non-cash in nature.

The Company hasdetermined that the below-detailed restatements ofits
financial statements resulted from a material weakness in its internal control
over financial reporting, specifically related toits 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,redesigningthe 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 its auditors on future
unusual and non-recurring transactions.

The 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                                           As                                                 As
                    Reported      Error         Restated         Reported      Error         Restated         Reported      Error     Restated
                                                                                                                                                        
Total revenue       $ 8,478          $ --             $ 8,478          $ 33,144         $ –              $ 33,144         $ 28,208         $ –          $ 28,208
Total cost of        5,733       --          5,733          22,638      -           22,638         21,370               21,370 
revenue
                                                                                                                                                        
Gross profit          2,745            --               2,745            10,506           --               10,506           6,838            --           6,838
                                                                                                                                                        
Total
operating             2,264            --               2,264            9,219            --               9,219            9,329                         9,329
expenses
Restructuring        --          --          --             --          --          --             3,195                3,195  
charges
                                                                                                                                                        
Operating             481              --               481              1,287            --               1,287            (5,686 )         --           (5,686 )
income (loss)
                                                                                                                                                        
Interest              (70    )         --               (70    )         (706   )         --               (706   )         (714   )         --           (714   )
expense
Warrant
valuation             --               (185   )         (185   )         --               1,759            1,759            --               73           73
(increase)
decrease
Other income         7           --          7              12          --          12             12          --       12     
                                                                                                                                                        
Income (loss)
before income         418              (185   )         233              593              1,759            2,352            (6,388 )         73           (6,315 )
taxes
                                                                                                                                                        
Income tax           --          --          --             50          --          50             2                    2      
expense
                                                                                                                                                        
Net income            418              (185   )         233              543              1,759            2,302            (6,390 )         73           (6,317 )
(loss)
                                                                                                                                                        
Less: Deemed
dividend for
Series A
Preferred             (3,277 )         (2,229 )         (5,506 )         (3,277 )         (2,229 )         (5,506 )         --               --           --
Shares
Less:
Preferred             (991   )         --               (991   )         (991   )         --               (991   )         --               --           --
stock
dividends
                                                                                                                              
Net loss
applicable to
common              $ (3,850 )    $ (2,414 )    $ (6,264 )       $ (3,725 )    $ (470   )    $ (4,195 )       $ (6,390 )    $ 73      $ (6,317 )
shareholders
                                                                                                                                                        
Basic net
income (loss)       $ (0.65  )       $ (0.41  )       $ (1.06  )       $ (0.66  )       $ (0.08  )       $ (0.74  )       $ (0.89  )       $ 0.01       $ (0.88  )
per share
                                                                                                                                                                 

                                                                                                                      
                    Three Months Ended                           Three Months Ended                              Six Months ended
                    December 31, 2012                            March 31, 2013                                  March 31, 2013
                    As                                           As                                              As
                    Reported     Error     Restated        Reported     Error        Restated        Reported      Error        Restated
                                                                                                                                                  
Total revenue       $ 5,803         $ --         $ 5,803         $ 5,156         $ –             $ 5,156         $ 10,960           --            $ 10,960
Total cost of        3,948      --       3,948         3,898      --         3,898         7,846       --         7,846  
revenue
                                                                                                                                                  
Gross profit          1,855           --           1,855           1,258           --              1,258           3,114            --              3,114
                                                                                                                                                  
Total
operating             1,553           --           1,553           1,267           --              1,267           2,820            --              2,820
expenses
Restructuring        --         --       --            --         --         --            --          --         --     
charges
                                                                                                                                                  
Operating             302             --           302             (9    )         --              (9    )         294              --              294
income (loss)
                                                                                                                                                  
Interest              (165  )         --           (165  )         (163  )         --              (163  )         (329   )         --              (329   )
expense
Warrant
valuation             --              117          117             --              (142  )         (142  )         --               (25   )         (25    )
(increase)
decrease
Other income         2          --       2             3          --         3             5           --         5      
                                                                                                                                                  
Income (loss)
before income         139             117          256             (169  )         (142  )         (311  )         (30    )         (25   )         (55    )
taxes
                                                                                                                                                  
Income tax           --         --       --            --         --         --            --          --         --     
expense
                                                                                                                                                  
Net income          $ 139       $ 117     $ 256          $ (169  )    $ (142  )    $ (311  )       $ (30    )    $ (25   )    $ (55    )
(loss)
                                                                                                                                                  
Basic net
income (loss)       $ 0.02          $ 0.01       $ 0.03          $ (0.02 )       $ (0.02 )       $ (0.04 )       $ (0.00  )       $ (0.01 )       $ (0.01  )
per share
                                                                                                                                                           

The following tables summarize the effects of the previously discussed
unaudited restatement adjustments on the consolidated balance sheet items.

                                                                                                                                 
                    As of June 30, 2011                                As of September 30, 2011                           As of September 30, 2012
                    As                                                 As                                                 As
                    Reported      Error         Restated         Reported      Error         Restated         Reported       Error         Restated
                                                                                                                                                             
Total assets        $ 34,310     $ --         $ 34,310       $ 32,346     $ --         $ 32,346        $ 26,975      $ --         $ 26,975  
                                                                                                                                                             
Total all
other                 18,057           --               18,057           16,760           --               16,760           17,385            --               17,385
liabilities
Warrant              --          3,230       3,230          --          1,286       1,286          --           1,213       1,213   
liability
Total                 18,057           3,230            21,287           16,760           1,286            18,046           17,385            1,213            18,598
liabilities
                                                                                                                                                             
Shareholders'
equity:
Preferred             2,135            --               2,135            2,135            --               2,135            1,335             --               1,335
Shares
Common Shares         1,690            --               1,690            1,698            --               1,698            1,871             --               1,871
Additional
paid-in               19,370           (816   )         18,554           19,408           (816   )         18,592           20,451            (816   )         19,635
capital
Accumulated           (7,038 )         (2,414 )         (9,452 )         (7,706 )         (470   )         (8,176 )         (14,096 )         (397   )         (14,493 )
deficit
Accumulated
other
comprehensive        96          --          96             51          --          51             29           --          29      
income
Total
shareholders'        16,253      (3,230 )     13,023         15,586      (1,286 )     14,300         9,590        (1,213 )     8,377   
equity
                                                                                                                                                             
Total
liabilities
and
shareholders'       $ 34,310     $ --         $ 34,310        $ 32,346     $ --         $ 32,346        $ 26,975      $ --         $ 26,975  
equity
                                                                                                                                                                       

                                                                                         
                    As of December 31, 2012                              As of March 31, 2013
                    As                                                   As
                    Reported       Error         Restated          Reported       Error         Restated
                                                                                                            
Total assets        $ 25,064      $ --         $ 25,064         $ 24,790      $ –          $ 24,790  
                                                                                                            
Total all
other                 15,232            --               15,232            14,999            --               14,999
liabilities
Warrant              --           1,096       1,096           --           1,238       1,238   
liability
Total                 15,232            1,096            16,328            14,999            1,238            16,237
liabilities
                                                                                                            
Shareholders'
equity:
Preferred             1,335             --               1,335             1,335             --               1,335
Shares
Common Shares         1,876             --               1,876             1,880             --               1,880
Additional
paid-in               20,541            (816   )         19,725            20,618            (816   )         19,802
capital
Accumulated           (13,957 )         (280   )         (14,237 )         (14,126 )         (422   )         (14,548 )
deficit
Accumulated
other
comprehensive        37           --          37              84           --          84      
income
Total
shareholders'        9,832        (1,096 )     8,736           9,791        (1,238 )     8,553   
equity
                                                                                                            
Total
liabilities
and
shareholders'       $ 25,064      $ --         $ 25,064         $ 24,790      $ --         $ 24,790  
equity

Until the 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 March 31, 2013.

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. Our work to address the warrant accounting issue is ongoing and
     the results discussed above may change as we complete our analysis.

Contact:

Company Contact:
Bioanalytical Systems, Inc.
Jacqueline Lemke
President, CEO and CFO
765-497-5829
jlemke@BASinc.com
or
Agency Contact:
Berkman Associates
Neil Berkman
310-477-3118
info@berkmanassociates.com