UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(Mark One)


[ X ]     ANNUAL  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
          EXCHANGE ACT OF 1934 for the fiscal year ended September 30, 2000.

OR

[   ]     TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
          EXCHANGE ACT OF 1934 for the  transition  period from ___________  to
          _________________.


                        Commission File Number 333-36429

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


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

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


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


Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to section 12(g) of the Act:  Common Shares

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. YES [ X ] NO [  ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (Section 229.045 of this chapter) is not contained herein, and
will not be  contained,  to the best of  registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.

Based on the closing price on the NASDAQ exchange, the aggregate market value of
the voting and non-voting common equity held by non-affiliates of the registrant
is $4,924,744.  As of November 30, 2000, 4,563,397 shares of registrant's common
shares  were  outstanding.  No  shares  of  registrant's  Preferred  Stock  were
outstanding as of November 30, 2000.

Documents  Incorporated  by  Reference:  Certain  portions  of the  Registrant's
definitive  Proxy Statement to be filed pursuant to Regulation 14A in connection
with its 2001 Annual Meeting of  Shareholders  is  incorporated  by reference to
those items listed in Part III of this Form 10-K.

<PAGE>



                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----
Part I

Item 1.   Business ........................................................    3
Item 2.   Properties ......................................................   11
Item 3.   Legal Proceedings ...............................................   11
Item 4.   Submission of Matters to a Vote of Security Holders .............   11


Part II

Item 5.   Market for Registrant's Common Equity
          and Related Stockholder Matters .................................   12
Item 6.   Selected Consolidated Financial Data ............................   13
Item 7.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations ...................   14
Item 7A.  Quantitative and Qualitative Disclosures
          About Market Risk ...............................................   17
Item 8.   Financial Statements and Supplementary Data .....................   18
Item 9.   Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosure ..........................   36


Part III

Item 10.  Directors and Executive Officers of the Registrant ..............   37
Item 11.  Executive Compensation ..........................................   38
Item 12.  Security Ownership of Certain Beneficial Owners
          and Management ..................................................   39
Item 13.  Certain Relationships and Related Transactions ..................   39


Part IV

Item 14.  Exhibits, Financial Statement Schedules and
          Reports on Form 8-K .............................................   40




                                      - 2 -
<PAGE>

                                     Part I

This Report contains certain  statements that are  "forward-looking  statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.  Readers of this
Report are cautioned  that reliance on any  forward-looking  statement  involves
risks and  uncertainties.  Although the Company believes that the assumptions on
which the forward-looking  statements contained herein are based are reasonable,
any of  those  assumptions  could  prove to be  inaccurate  given  the  inherent
uncertainties as to the occurrence or nonoccurrence of future events.  There can
be no assurance  that the  forward-looking  statements  contained in this Report
will prove to be accurate.  The inclusion of a forward-looking  statement herein
should not be regarded as a  representation  by the Company  that the  Company's
objectives will be achieved.

Item 1.  Business

General

     The Company is a contract research  organization  (CRO) providing  research
and development resources to many of the leading pharmaceutical,  medical device
and  biotechnology  companies  in the world.  The Company  prides  itself on its
contributions to basic understanding of the underlying causes of central nervous
system  disorders,  diabetes,  osteoporosis  and other  diseases since 1974. The
Company has played a significant  role in the  development of  technologies  and
drugs with current revenues in excess of $15 billion for its clients.

     The Company offers an efficient,  variable-cost alternative to its clients'
internal  product  development,  compliance and quality  control  programs.  The
Company first focused on providing new products and procedures that  facilitated
research  at client  sites.  Increasing  pressures  to bring  products to market
faster and more cost  effectively  prompted  many  clients to ask the Company to
carry out proprietary  projects in the Company's  research  facilities.  Many of
these clients had a prior relationship with the Company.  To reduce overhead and
speed  drug  approvals   through  the  Food  and  Drug   Administration   (FDA),
pharmaceutical companies are contracting increasing amounts of their development
work to outside firms such as the Company.  As a result, the Company now derives
its revenues  from both the sale of its research  services and drug  development
tools. The Company provides a range of value-added services and products focused
on chemical analysis and preclinical metabolism, allowing its clients to perform
their research and development either in house or at the Company.

     The Company's  services and products combine basic research with diagnostic
and  therapeutic  experience.  One  consequence  of  the  restructuring  of  the
healthcare industry is the greater reliance on outsourced research services. The
Company is capable of  supporting  the clinical  development  (formulations  and
clinical trials) and preclinical needs of researchers and clinicians,  for small
molecule drugs and hormones  through large  biomolecules  such as proteins.  The
Company believes their scientists have the skills necessary in  instrumentation,
chemical reagents, computer software,  physiology, and pathology, as well as the
global  presence to make the  services  and  products  it provides  increasingly
valuable to the worldwide  pharmaceutical,  medical device and  biotechnological
industries.

     Over the past five years,  the Company has regularly  provided its services
and/or products to the top 25  pharmaceutical  companies in the world, as ranked
by 1999 research and development spending. In fiscal 2000, the Company estimates
that more than one-half of its total  revenue was derived from these  companies.
As a result of its (i) client focus,  (ii) reputation for high-quality  services
and  products,   (iii)  capital  investment  in  cutting-edge   instrumentation,
facilities and new service offerings,  (iv) skilled and experienced professional
staff and (v) expertise in performing critical development and support services,
the Company  believes that it is a  value-added  partner in solving its clients'
complex product development problems.

     The Company's  development and preclinical  services support  screening and
pharmacological testing,  preclinical/safety  testing,  formulation development,
regulatory  and  compliance   consulting  and  quality  control   testing.   The
Pharmaceutical Research and Manufacturing  Association (PhRMA) estimates that in
1999, pharmaceutical and biotechnology companies spent approximately $26 billion
worldwide  on research  and  development,  of which  approximately  25%, or $6.6



                                      - 3 -
<PAGE>

billion, was outsourced to independent  contract service providers.  The Company
believes  that this  outsourcing  trend will  continue  as a result of  pressure
toward  accelerated  drug  development,  managed care cost  containment,  better
disease management, shorter product exclusivity, generic competition,  strategic
alliances,  mergers and  acquisitions,  virtual drug  company and  biotechnology
industry  growth,  the need for technical and data management  expertise and the
globalization of pharmaceutical development.

     The Company designs, manufactures and markets a broad range of products and
related  scientific methods that detect and quantify chemicals and monitor their
effect on  biological  systems.  The Company also competes in subsets of the $17
billion per year analytical  instrument industry.  The Company's focus, however,
is not on marketing  hardware and  software.  Rather,  it develops  solutions to
challenging problems,  which permit the Company to use its talented personnel in
providing  a  total   solution  not   generally   offered  by   hardware-focused
competitors.  The Company  develops  and  manufactures  state-of-the-art  liquid
chromatography, electrochemistry, physiology and in vivo sampling systems. These
instruments  are  sold  primarily  to  pharmaceutical   research  organizations.
Principal clients of the Company include  scientists  engaged in drug metabolism
studies, pharmacokinetics and basic neuroscience research.

     Changing Nature of the Pharmaceutical Industry

     The Company  provides  services  and products  globally to  pharmaceutical,
medical  device  and   biotechnology   companies,   academic   institutions  and
governments to facilitate  research and development.  The Company's services are
generally  marketed to  pharmaceutical  and other biotech  companies  engaged in
later  stages of  developmental  pharmaceutical  testing,  while  the  Company's
products   are   generally   marketed  to  both  public  and  private   research
organizations  engaged in the early  stages of drug  development.  The  research
services  industry is highly  fragmented,  consisting of several hundred vendors
operating in niches and a small number of larger  companies  focused on an ever-
growing portfolio of cradle-to-grave pharmaceutical development services.

     The Company's  products  business  competes against several large equipment
manufacturers.  While the markets for the  Company's  services and products have
distinct  customers (often separate  divisions in a single large  pharmaceutical
company) and  requirements,  the Company  believes  that both markets are facing
increased pressure to outsource certain facets of their research and development
activities.  The  Company  believes  that  the  factors  identified  below  will
contribute to a continuing increase in outsourcing activities by its customers.

     Accelerated Drug Development

     Consumers,  physicians,  health care providers and  pharmaceutical  company
shareholders  continue  to  demand  faster,  more  efficient  drug  development.
Pharmaceutical  companies are  accelerating the drug  development  process.  New
combinatorial  synthetic techniques,  high throughput  screening,  novel genomic
targeting and other  technologies are generating an unprecedented  number of new
drug  candidates.  Pharmaceutical  developers  are relying on  external  service
providers for testing and analysis in all phases of development.  Clients demand
fast,  quality service and immediate  informed decisions to quickly exclude poor
candidates and speed development of successful ones.

     Cost Containment

     Pharmaceutical  companies  are facing  increasing  pressure to develop more
efficient  operating  strategies  due to factors  listed  here,  plus  increased
purchasing power of large buyer groups and governmental  initiatives designed to
reduce drug prices.  The Company  believes that the  pharmaceutical  and medical
device  industries  are  limiting the growth of internal  research  programs and
favoring outsourcing.  The need for additional development capacity to speed new
product  development,  maximize market  exclusivity  and increase  profitability
drives the need for outsourced services.

     Patent Expiration

     Patents on all  pharmaceuticals age and expire.  Since 1984,  prescriptions
for  generic  drugs have risen from 18.6% to 47% of all  prescriptions  written.
Generic  market  penetration  can cut an  estimated 2 to 5 years from  effective
patent  protection  for brand name drugs.  Drug  companies  are  developing  new
products or modifying existing products to maintain market share against generic
product  competition.  The  Company  believes  that the  pressure to develop new
products and to modify or reformulate existing products,  combined with internal
capacity constraints, will lead clients to outsource development.



                                      - 4 -
<PAGE>

     Shorter Exclusivity

     The  Competition  and Patent Term  Restoration  Act of 1984  shortened  the
approval time of generic copies of approved drugs.  PhRMA notes that newer drugs
experience  generic  competition much sooner after patent  expiration than older
drugs.  In 1992,  72% of drugs coming off patent saw generic  competition  in 18
months.

     New  breakthrough  drugs,  those  first in  their  therapeutic  class,  are
experiencing  abbreviated  exclusivity as new chemical  entities  penetrate this
new, proven,  profitable end use. Where  Tagamet(R) saw no competitive  pressure
for ten years, Celebrex(R) began to lose share to Vioxx(R) in three months.

     Strategic Alliances

     Strategic  alliances  allow  pharmaceutical  companies  to  share  research
know-how  and to develop  and market new drugs  faster in more  diverse,  global
markets.  There were 121 reported  alliances in 1986,  which increased to 712 in
1998.  The Company  believes  that  alliances  will lead to a greater  number of
potential  drugs in testing,  many under study by new  companies  lacking  broad
technical resources.

     Mergers and Acquisitions

     Consolidation in the pharmaceutical  industry is becoming  commonplace.  As
firms blend personnel,  resources and business activities,  the Company believes
they will continue to streamline operations,  optimizing staffing and leading to
more outsourcing.  This may result in short-term  disruption in placement of, or
progress on, drug development  programs as merging  companies  rationalize their
respective pipelines.

     Biotechnology Industry and Virtual Drug Company Growth

     The biotechnology industry has grown rapidly over the last 10 years and has
introduced many new developmental drugs. Biotechnology companies do not have the
in-house resources to conduct  development and testing.  Also, there are several
new  pharmaceutical  and medical device companies whose business  strategy is to
develop  a  product  sufficiently  to  attract  a  strategic  partner  who  will
manufacture  and  market  the  drug.  Many of  these  virtual  drug  development
companies with little or no internal  resources must outsource drug  development
and testing.

     Need for Unique Technical Expertise

     The increasing  complexity of new drugs requires highly specialized quality
and innovative,  solution-driven contract research not available in the clients'
labs. The Company  believes that this need for unique  technical  expertise will
increasingly lead to outsourcing of research activity.

     Need for Data Management Expertise

     Regulatory  agencies are requiring more  regulatory data and greater access
to  that  data   prior  to   filing.   The  FDA  is   encouraging   the  use  of
computer-assisted  filings in an effort to expedite the approval  process.  Drug
companies are outsourcing to firms with automated data management  capabilities.
In  response  to  clients'  demands  for access to data as it is acquired in the
laboratory, the Company is able to provide clients with remote access to Company
computer systems while at the same time protecting client data from unauthorized
access. The Company has also developed  proprietary  validated online data entry
software enabling direct publication of data in unique client formats.

     Globalization of the Marketplace

     A  growing  number of  foreign  pharmaceutical  companies  are  seeking  US
approval  for  their   products.   Foreign  firms  are  relying  on  independent
development companies with experience in the United States to provide integrated
services  through all phases of product  development  and to assist in preparing
complex and daunting regulatory submissions.  Domestic drug firms are broadening
product availability globally,  demanding local regulatory approval. The Company
believes  that  domestic  service  providers  with  global  reach,   established
regulatory  expertise and a broad range of integrated  development services will
benefit from this trend.  The Company has a  significant  European  presence and
domestic skills in foreign operations.

                                      - 5 -
<PAGE>

The Company's Role in the Drug Development Process

     Process Overview

     The Company has 26 years of experience in developing  analytical methods to
support  drug  discovery.   Under  the  United  States  regulatory  system,  the
development  process for new  pharmaceutical  products can be divided into three
distinct phases.

1)   The preclinical phase includes discovery, characterization, formulation and
     safety testing to prepare an  Investigational  New Drug (IND) exemption for
     submission  to the FDA. The IND must be accepted by the FDA before the drug
     can be tested in humans.

2)   The second,  clinical phase follows a successful IND submission and further
     explores the safety, tolerability,  efficacy and dosage of the substance in
     humans.  Early  manufacturing  demonstrates  production of the substance in
     accordance with the FDA's cGMP  guidelines.  Data from these activities are
     compiled in a New Drug Application  (NDA), or for biotechnology  products a
     Product  License  Application  (PLA),  for submission to the FDA requesting
     approval to market the drug.

3)   The third phase  follows  FDA  approval  of the NDA or PLA.  This  includes
     production and continued  analytical  and clinical  monitoring of the drug.
     The  post-approval  phase also  involves  the  development  and  regulatory
     approval of product  modifications and line extensions,  including improved
     dosage forms.

     The Company's Role

     The Preclinical  Phase. A new  pharmaceutical  begins with the synthesis of
new molecules, which may influence a specific target in the disease under study.
These molecules are screened for pharmacological  activity using various models.
Once  the  pharmacologically  active  molecule  is  fully  characterized,  it is
analyzed to confirm its  integrity.  Development  of the initial dosage form for
clinical trials is completed,  with analytical  chemistry protocols to determine
its stability.  Upon  successful  completion of preclinical  safety and efficacy
studies in in vitro and in vivo,  an IND  submission is prepared and provided to
the FDA for review prior to human clinical trials.

     The Company  provides its  preclinical and  bioanalytical  services in this
phase.  Clients  work  with  the  Company's  Preclinical  Services  division  to
establish pharmacokinetic and safety testing protocols. These studies range from
acute  safety  monitoring  on drugs and  medical  devices to  chronic,  two-year
oncogenicity studies.  Bioanalyses of blood sampled under these protocols by the
Company's  bioanalytical  services  group provide  kinetic,  metabolism and dose
ranging data.

     Many  of the  Company's  products  are  designed  for  use  in  preclinical
development. For example:

1)   The Company's newest product,  the Culex(TM) ABS, a robotic automated blood
     sampler,  enables researchers to develop pharmacokinetic  profiles of drugs
     in  early  screening  in  rodents  quickly  and cost  effectively.  Several
     variations on this technology are in development.

2)   Company   scientists   have  been  recognized  by  their  peers  for  their
     contributions  to  technology  of drugs for central  nervous  system  (CNS)
     disorders  such  as  depression,  Parkinson's  disease,  schizophrenia  and
     Alzheimer's  disease.  The Company's  chromatography  products were used to
     study  serotonin  re-uptake  inhibitors in the CNS programs at universities
     and several major pharmaceutical companies.

3)   Company  technology is the basis for most of the glucose sensors  currently
     sold to  diabetics,  and the  majority  of firms in this market are Company
     clients.

4)   The   Company's   bioanalytical   services   group   used   the   Company's
     chromatography  products to develop a single, quick,  proprietary method to
     screen up to ten  therapeutic  HIV drugs in the same blood  sample with the
     cooperation  of  several  major  therapeutic  drug  developers.  The method
     enables  researchers  to quantify  each  component in a drug cocktail or to
     monitor HIV treatments.



                                      - 6 -
<PAGE>

     The  Company's  ability to solve client  problems  combining  its knowledge
base,  services,  and products has been a factor in the  Company's  selection by
major pharmaceutical  companies to assist in several preclinical and Phase I, II
and III clinical trials.

     The Clinical Phase. After successful submission of an IND application,  the
sponsor  conducts Phase I human  clinical  trials in a limited number of healthy
individuals   to  determine   safety  and   tolerability.   This  work  requires
bioanalytical  assays to determine the availability and metabolism of the active
ingredient  following  administration.   Expertise  in  method  development  and
validation is essential for this phase,  particularly for new chemical entities.
In Phase II clinical  trials the drug is  administered to individuals who suffer
from the target  disease to determine the drug's  effectiveness  and ideal dose.
When further safety,  tolerability  and dosing  regimens have been  established,
Phase III clinical trials with large numbers of patients are conducted to verify
efficacy  and safety.  After the  successful  completion  of Phase III  clinical
trials,  the sponsor of the new drug submits an NDA or PLA to the FDA requesting
that the product be approved for marketing.

     The  Company's  bioanalytical  work per patient  grows rapidly from Phase I
through  III. As the number of patients  grows the number of samples per patient
declines.  Phase II and III studies take several years,  practicing  well proven
analytical protocols.  It is unusual for a sponsor to change laboratories unless
there are problems in the quality or timely delivery of results.

     Many  patients are receiving  multiple drug therapy.  The influence of each
drug on the  effectiveness  of the other  drugs  must be  monitored.  These drug
interaction  studies often extend clinical trials. A CRO such as the Company can
provide  services to several  different  manufacturers  of  complementary  drugs
simultaneously  in cases of potential  synergy (e.g. the "cocktail"  approach to
HIV therapy).  Multi-client studies frequently lead to cost sharing and contacts
with new clients.

     The Post-approval  Phase.  Following  approval,  the drug manufacturer must
comply with  quality  assurance  and  quality  control  requirements  throughout
production and must continue analytical and stability studies of the drug during
commercial  production in order to continue to validate production processes and
confirm  product  shelf life.  The drug  manufacturer's  raw  materials  must be
analyzed prior to use in production,  and samples from each  manufactured  batch
must be tested prior to release of the batch for distribution to the public. The
Company  also  provides  its  bioanalytical  services  in all areas  during  the
post-approval   phase,   concentrating   on   bio-equivalence   studies  of  new
formulations,  line  extensions,  new disease  indications and drug  interaction
studies.

Company Services and Products

     Overview

     The Company  provides  bioanalytical  services,  preclinical  services  and
methods development for the $17 billion per year analytical instrument industry.
The  Company  has,  for 26  years,  developed  expertise  in a  number  of  core
technologies which evolved into state-of-the-art procedures designed to quantify
trace  chemicals  in  complex  materials.  These  technologies  include:  liquid
chromatography,  electrochemistry,  solid phase extraction,  mass  spectrometry,
enzymology and  fluorescence  detection.  The Company also uses its expertise in
analytical  chemistry  to  provide a wide  range of  bioanalytical  services  to
pharmaceutical   companies,   academic   institutions  and  others  involved  in
pharmaceutical  research and  development.  Preclinical  services  provide basic
safety and dosage  information  to  researchers  and are a source of samples for
bioanalytical analyses.

     Services

     The  Company's  customers  continue to draw on the  Company's  knowledge in
bioanalytical  chemistry and preclinical services to solve complex problems. The
Company is poised to use its  expertise to provide a greater  volume and broader
array of services:

     o    Method Development and Validation. Analytical methods are developed to
          demonstrate potency, purity,  stability or physical attributes.  These
          methods are validated to ensure that the data  generated are accurate,
          precise,  reproducible  and reliable and are used  throughout the drug
          development process and in product support testing.




                                      - 7 -
<PAGE>


     o    Product  Characterization.  Characterization  analysis  identifies the
          chemical composition, structure and physical properties of a compound.
          Characterization  data  is  a  significant  portion  of  a  regulatory
          application.  The Company uses several  techniques to characterize the
          compound, including chromatography, spectroscopy, electrochemistry and
          other physical chemistry techniques.

     o    Stability Testing. The Company provides required stability testing and
          secure storage  facilities  necessary to establish and confirm product
          purity, potency and other shelf-life characteristics.  The Company has
          multiple ICH  (International  Conference on  Harmonization)  validated
          controlled climate GMP facilities.

     o    Bioanalytical  Testing.  The  Company's  bioanalytical  testing  group
          analyzes plasma samples to measure drug  concentration and monitor the
          rate of absorption and elimination. This is sometimes difficult due to
          product metabolism into multiple active and inactive forms.

     o    Preclinical and Pathology Services.  The Company acquired T.P.S., Inc.
          in  Evansville,   Indiana  effective  October  1,  1999.  Renamed  BAS
          Evansville,  this  site  is the  core  for the  Company's  preclinical
          services  group  which  provides  pharmacokinetic  and safety  testing
          protocols in studies ranging from acute safety monitoring on drugs and
          medical devices to chronic, two-year oncogenicity studies.

     o    Diagnostic Testing. The Company produces fully automated, networkable,
          state-of-the-art  liquid chromatographs and electrochemical  analyzers
          based on Windows(R)  software.  The Company has recently developed and
          now  produces  a  line  of   diagnostic   kits  designed  to  fit  its
          instrumentation.  These kits help measure  neurotransmitters and their
          metabolites and homocysteine,  an experimental  cardiovascular disease
          indicator in plasma and urine.

     o    In  Vivo  Sampling.  The  Company  pioneered  and  has  commercialized
          miniaturized in vivo sampling products and services for the continuous
          monitoring of chemical  changes in life.  The Company is  aggressively
          adding new  components  to this.  Target  markets  include  veterinary
          research  centers,   pharmaceutical  companies  and  medical  research
          centers. The Company has received two significant Phase II SBIR (Small
          Business  Innovation  Research) grants that involve  subcontracts with
          Purdue  University  and the  University  of Kansas for the  purpose of
          exploring this emerging technology.

     Products

     The Company  designs,  manufactures  and  markets a range of  products  and
related scientific procedures that detect and quantify the presence of chemicals
in  certain   substances.   The  Company's  products  utilize   state-of-the-art
scientific technology including liquid  chromatography,  electrochemistry and in
vivo sampling instrumentation.  Presently, the Company's products and procedures
include:

     o    The  Culex(TM)ABS  robotic  automatic rodent blood sampling system was
          launched in 2000.  Pharmaceutical company researchers use the Culex to
          monitor drug concentrations as a function of time  (pharmacokinetics).
          The Culex provides exceptional cost savings,  significant reduction in
          stress and shorter  screening times to drug  researchers.  Preliminary
          sales  are   exceptional.   Culex  is  promising  to  be  one  of  the
          fastest-growing,  most  significant  products  for  the  Company  in a
          decade.

     o    Bioanalytical  separation  instrumentation (liquid chromatography) and
          Windows(R)   software  detect  and  quantify  low   concentrations  of
          substances in biological fluids and tissues.

     o    A wide-range of chemical analyzers that use  electrochemistry,  liquid
          chromatography   and  enzymology   analyze  trace  levels  of  organic
          chemicals such as neurotransmitters in biological samples.


                                      - 8 -
<PAGE>

     o    Diagnostic kits and procedures, designed to add value to the Company's
          instrumentation,  that enable clinical laboratories and pharmaceutical
          researchers  to  determine  the  presence of  multiple  drugs in blood
          plasma  and to  measure  neurotransmitters  and their  metabolites  in
          plasma and urine.  These kits and  procedures  assist  researchers  in
          developing  new drugs  for  diseases  such as AIDS and  cardiovascular
          disease.

     o    A  line  of  miniaturized  in  vivo  sampling  devices,   marketed  to
          veterinary  research  centers,  pharmaceutical  companies  and medical
          research  centers,  assist  in  the  study  of  a  number  of  medical
          conditions including stroke, depression, Parkinson's disease, diabetes
          and osteoporosis.

Clients

     Over the past five years, the Company  regularly has provided  services and
products to the top 25 pharmaceutical  companies in the world, as ranked by 1999
research and development  spending.  In fiscal 2000, the Company  estimates that
more than  one-half of its total  revenue was derived from these  companies.  In
fiscal 1999, the Company  provided  services and products to  approximately  300
institutions, including some of the largest United States, European and Japanese
drug companies.  Approximately 28% of the Company's  revenues are generated from
customers outside the United States.

     The Company  believes that a concentration  of business among certain large
clients is not uncommon in the CRO  industry.  The Company  recognizes,  much as
other CROs have recently reported, that concentration of sales among a few large
companies  coupled with failure rates of  developmental  drugs can be a risk for
service  providers.  The Company  redirected  its sales team in the middle of FY
2000, to also target pharmaceutical  companies with annual revenues less than $1
billion,  with the  belief  that risk could be  reduced  if  distributed  over a
broader  account base. The company also believes that companies of this size are
less likely to have resources  comparable to the Company's and will consequently
be more inclined to establish a consistent, long-term relationship.

Sales and Marketing

     Although early client relationships grew primarily through direct, internal
recommendations among major pharmaceutical manufacturers,  the current sales and
marketing  plan  focuses  on key  account  development  among the top 200 global
pharmaceutical  companies.  The Company recognizes that its growth and continued
customer  satisfaction  depend upon its ability to continually improve its sales
and  marketing  functions.  Team  training,  merging  services and product sales
efforts, and changes to the sales team compensation plan implemented in 2000 are
designed to deliver growth among these target accounts.

     In North America, the Company's products are sold directly to the end user.
The Company has 20  personnel  selling a range of services  and  products and an
equal number  providing  technical and  development  support.  These members are
technically  trained and  function  in both  capacities.  The  Company  also has
established a highly professional collection of catalogs, training and technical
support literature, video tapes, CD-Rom presentations,  web sites, workshops and
academic publications.

     Sales,  marketing  and technical  support are based in the  Company's  main
office located in West Lafayette, Indiana. The Company also maintains offices in
New Jersey, and Warwickshire and Congleton,  UK, each with a sales and technical
staff,  enabling the Company to demonstrate  its products and present  technical
workshops in close proximity to its largest concentration of key customers.  The
Company also maintains sales and technical support  capabilities in Connecticut,
Massachusetts, New York, Ohio, Texas, Pennsylvania and Kansas.

     The  Company's   primary  marketing  and  sales  strategy  is  to  be  more
aggressive,  to focus on customer needs and to further strengthen communications
with its  markets.  In doing so, the Company  will build on its long  history of
innovation and technical excellence.

                                      - 9 -
<PAGE>

     BAS  Evansville,  a  wholly-owned  subsidiary  of  the  Company,   provides
preclinical contract research in Mount Vernon, Indiana.

     BAS  Analytics,  Ltd., a wholly-owned  subsidiary of the Company,  provides
direct liaison with research service clients in the United Kingdom and maintains
a  laboratory  to  provide  such  services.   BAS  Instruments,   Ltd.,  also  a
wholly-owned subsidiary of the Company, manages most product sales in Europe. In
addition,  the  Company has a network of more than 20  established  distributors
covering Japan, the Pacific Basin, South America,  the Middle East, India, South
Africa and Eastern Europe.  All of the Company's  distributor  relationships are
managed  from  the   Company's   headquarters   in  West   Lafayette,   Indiana.
International growth is planned through  acquisitions,  stronger local promotion
and significant expansion of the Company's distributor network.

Contractual Arrangements

     The Company's  service contracts  typically  establish an estimated fee for
identified  services.  In most cases,  some percentage of the contract costs are
paid in advance.  While the Company is  performing  a  contract,  clients  often
adjust the scope of  services  to be provided by the Company in light of interim
project results, at which time the fee is adjusted accordingly.  Generally,  the
Company's  fee-for-service  contracts are  terminable by the client upon written
notice of 30 days or less. Contracts may be terminated for a variety of reasons,
including  the client's  decision to forego a particular  study,  the failure of
product  prototypes to satisfy safety  requirements  and unexpected or undesired
results of product testing. The loss of a large contract or the loss of multiple
contracts could adversely affect the Company's future revenue and profitability.

Backlog

     Considering that the  arrangements,  pursuant to which the Company provides
its services, are terminable upon written notice of 30 days or less, the Company
does not  calculate  backlog for the  services it provides  and does not believe
that determining such amount would provide a meaningful  indicator of the future
performance of its services unit. Backlog for the Company's products consists of
booked  purchase  orders for products  which have not been shipped.  The Company
rarely  has a backlog  for its  products  of more than one month of sales.  Many
products are shipped within 24 hours of receipt of order.

Competition

     With respect to its services,  the Company competes primarily with in-house
research, development,  quality control and other support service departments of
pharmaceutical and biotechnology  companies, as well as with university research
laboratories   and  teaching   hospitals.   In  addition,   there  are  numerous
full-service  CRO's that compete in this industry.  The largest CRO  competitors
offering similar research services include Covance, Inc., Pharmaceutical Product
Development, Inc., Applied Analytical Industries, Inc. and MDS Health Group Ltd.
CROs  generally  compete  on the  basis  of  previous  experience,  medical  and
scientific   expertise  in  specific  therapeutic  areas,  quality  of  contract
research,  ability to organize and manage  large-scale trials on a global basis,
medical database  management  capabilities,  ability to provide  statistical and
regulatory  services,  ability to recruit  investigators,  ability to  integrate
information  technology  with  systems to improve  the  efficiency  of  contract
research,  existence of an  international  presence with  strategically  located
facilities, financial viability and price.

                                     - 10 -
<PAGE>


     With respect to its  products,  the Company  competes  with  several  large
equipment manufacturers,  including Agilant, Waters Corporation and Perkin Elmer
Corporation. Competitive factors include product quality, reliability and price.
The Company believes it competes  favorably in its target markets because of its
ability to combine  quality  products with  technical  assistance and service to
meet customer needs.

     Many  of the  Company's  competitors  are  much  larger  and  have  greater
financial  resources than the Company.  Those  resources,  much broader  product
lines and large,  well compensated sales teams make it difficult for the Company
to capture  market  share from clients  other than those who need the  Company's
unique capabilities.

Government Regulation

     The  services  performed  by the Company are subject to various  regulatory
requirements  designed to ensure the quality and integrity of pharmaceutical and
diagnostic products.  These regulations are governed primarily under the Federal
Food, Drug and Cosmetic Act, as well as associated GLP and GMP regulations which
are administered by the FDA in accordance with current industry  standards.  The
regulatory requirements apply to all phases of manufacturing, testing and record
keeping,  including  personnel,  facilities,  equipment,  control of  materials,
processes and laboratories, packaging, labeling and distribution.  Noncompliance
by the Company with GLP and GMP regulations could result in  disqualification of
data collected by the Company in a particular project. Material violation of GLP
or GMP  requirements  could result in additional  regulatory  sanctions  and, in
severe  cases,  could  also  result  in a  discontinuance  of  selected  Company
operations.  Such  discontinuance  would have a material  adverse  effect on the
Company's business, financial condition and results of operations.

     To help assure  compliance  with  applicable  regulations,  the Company has
established  quality  assurance  controls at its facilities that monitor ongoing
compliance by auditing test data and regularly inspecting facilities, procedures
and other GMP compliance parameters. In addition, FDA regulations and guidelines
serve  as  a  basis  for  the  Company's  standard  operating  procedures  where
applicable. Some of the Company's development and testing activities are subject
to the Controlled  Substances Act  administered by the Drug  Enforcement  Agency
(DEA), which strictly regulates all narcotic and habit-forming  substances.  The
Company maintains restricted-access facilities and heightened control procedures
for projects  involving  such  substances due to the level of security and other
controls  required by the DEA. In  addition to FDA  regulations,  the Company is
subject  to other  federal  and state  regulations  concerning  such  matters as
occupational safety and health and protection of the environment.

     The Company's  activities involve the controlled use of hazardous materials
and chemicals. The Company is subject to foreign,  federal, state and local laws
and  regulations  governing  the use,  storage,  handling  and  disposal of such
materials and certain waste products.  The risk of accidental  contamination  or
injury from these  materials  cannot be completely  eliminated.  In the event of
such an accident,  the Company could be held liable for any damages that result.
Such damages could have a material adverse effect on the Company's  business and
results of operations.

                                     - 11 -
<PAGE>

Product Liability and Insurance

     The  Company  maintains  product  liability  and  professional  errors  and
omissions liability insurance,  providing approximately $6.0 million in coverage
on a claims-made basis. Additionally, in certain circumstances the Company seeks
to manage  its  liability  risk  through  contractual  provisions  with  clients
requiring  the  Company to be  indemnified  by the client or covered by clients'
product liability insurance policies.  Also, in certain types of engagements the
Company  seeks to limit its  contractual  liability  to clients to the amount of
fees  received  by the  Company.  The  contractual  arrangements  are subject to
negotiation  with  clients  and the  terms  and  scope of such  indemnification,
liability  limitation and insurance coverage vary based upon client and project.
Although most of the Company's  clients are large,  well-capitalized  companies,
the financial  performance of these indemnities is not secured.  Therefore,  the
Company  bears the risk that the  indemnifying  party may not have the financial
ability to fulfill  its  indemnification  obligations  or that  liability  would
exceed the amount of  applicable  insurance.  Furthermore,  the Company could be
held  liable  for  errors and  omissions  in  connection  with the  services  it
performs.  There can be no assurance that the Company's  insurance coverage will
be adequate,  or that insurance  coverage will continue to be available on terms
acceptable  to the  Company,  or that the  Company  can  obtain  indemnification
arrangements or otherwise be able to limit its liability risk. Employees

     At September  30, 2000,  the Company had 230  full-time  employees,  144 of
which hold college  degrees,  including 32 at the doctoral level.  All employees
enter  into  confidentiality   agreements  intended  to  protect  the  Company's
proprietary  information.  The  Company  believes  that its  relations  with its
employees are good. None of the Company's  employees are represented by a union.
The Company's performance depends on its ability to attract and retain qualified
professional,  scientific and technical  staff.  The level of competition  among
employers for skilled  personnel is high. The Company believes that its employee
benefit  plans  enhance  employee  morale,   professional  commitment  and  work
productivity  and provide an incentive for employees to remain with the Company.
While the Company has not  experienced  any unusual  problems in  attracting  or
retaining qualified  personnel,  there can be no assurance that the Company will
be able to avoid these problems in the future.

Item 2.  Properties

     The Company's  principal executive offices are located at 2701 Kent Avenue,
West Lafayette, Indiana, 47906, and constitute approximately 100,000 square feet
of operational and  administrative  space. The Company acquired T.P.S.,  Inc. in
Evansville,  Indiana  on  October  1,  1999.  This  facility  consists  of seven
buildings  with  50,000  square feet under roof on 50 acres.  The  Company  also
maintains  offices which provide  sales and  technical  support  services in New
Jersey,  Pennsylvania  and the United  Kingdom,  and employs sales and technical
support service representatives in North Carolina, Texas, Connecticut,  Maryland
and New Jersey.  The Company  believes that its  facilities are adequate for the
Company's  operations and that suitable  additional space will be available when
needed.

Item 3.  Legal Proceedings

     In April,  1997,  CMA  Microdialysis  Holding  A.B.  (CMA)  filed an action
against the Company in the United States  District Court for the District of New
Jersey in which CMA alleged that the  Company's  microdialysis  probes  infringe
U.S.  Patent No.  4,694,832.  Subsequent to September  30, 2000,  the Company is
working on a settlement for this infringement case. The Company does not believe
the financial  terms of settlement  will have a material  adverse  effect on the
Company's financial condition or its results of operations.


Item 4. Submission of Matters to a Vote of Security Holders

     Not applicable.

                        [Remainder of page intentionally left blank.]


                                           - 12 -
<PAGE>


                                     Part II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

     The following  table sets forth by calendar  quarter the high and low sales
prices of the  common  shares as on the  Nasdaq  National  Market  Systems.  The
approximate number of recordholders of common shares is 1700.

<TABLE>
<CAPTION>

          Fiscal        1st Qtr.    2nd Qtr    3rd Qtr.    4th Qtr.
          ------        --------    -------    --------    --------
          <S>            <C>         <C>        <C>         <C>
          2000
          High           3.875       5.250      3.844       3.500
          Low            2.250       2.563      2.500       2.375

          1999
          High           5.750       4.250      4.250       4.000
          Low            3.625       3.000      3.500       2.875
</TABLE>

                  [Remainder of page intentionally left blank.]


                                     - 13 -

<PAGE>


Item 6. Selected Financial Data

<TABLE>
<CAPTION>
                            SELECTED CONSOLIDATED FINANCIAL DATA
                                       (In thousands)

The following is selected  audited  consolidated  financial data of the Company for the five
years ended  September 30, 2000. The data should be read in conjunction  with  "Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results  of  Operations"  and  the
consolidated  financial statements of Bionalytical Systems, Inc. and notes thereto contained
elsewhere in this Form 10-K.

                                                       Year Ended September 30,
                                      -----------------------------------------------------
                                      2000         1999        1998        1997        1996
                                      ----         ----        ----        ----        ----
                                               (in thousands, except per share data)
Statement of Operations Data:
<S>                                <C>           <C>        <C>         <C>         <C>
Service revenue ...............    $10,999       $9,993     $ 7,609     $ 4,991     $ 3,681
Product revenue ...............      8,224        9,858      10,616       9,932       9,113
                                     -----        -----      ------       -----       -----
    Total revenue .............     19,223       19,851      18,225      14,923      12,794
Cost of service revenue .......      9,245        6,499       4,598       2,986       2,141
Cost of product revenue .......      2,974        3,943       3,911       3,334       3,227
                                     -----        -----       -----       -----       -----
    Total cost of revenue .....     12,219       10,442       8,509       6,320       5,368
                                    ------       ------       -----       -----       -----
Gross profit ..................      7,004        9,409       9,716       8,603       7,426
                                     -----        -----       -----       -----       -----

Operating expenses:
Selling .......................      3,400        3,943       4,524       4,225       3,937
Research and development ......      1,806        1,955       2,165       1,568       1,424
General and administrative ....      2,990        2,550       2,336       1,638       1,364
                                     -----        -----       -----       -----       -----
    Total operating expenses ..      8,196        8,448       9,025       7,431       6,725
                                     -----        -----       -----       -----       -----
Operating income (loss) .......     (1,192)         961         691       1,172         701
Other income (expense), net ...       (621)        (114)        (25)        (75)        (18)
                                      ----         ----         ---         ---         ---
Income (loss) before
  income taxes ................     (1,813)         847         666       1,097         683
Income taxes (benefit) ........       (431)         277         254         413         283
                                      ----          ---         ---         ---         ---
Net income (loss) .............    $(1,382)     $   570     $   412     $   684     $   400
                                   =======      =======     =======     =======     =======
Net income (loss) available
  to common shareholders ......    $(1,382)     $   570     $   412     $   657     $   347


Net income (loss) per Common Share
    Basic .....................    $  (.30)     $   .13     $   .10     $   .30     $   .16
    Diluted ...................    $  (.30)     $   .12     $   .09     $   .21     $   .11

Weighted average Common Shares
  outstanding
    Basic .....................      4,550        4,506       4,117       2,221       2,185
    Diluted ...................      4,550        4,676       4,403       3,101       3,089

                                                          September 30,
                                      -----------------------------------------------------
                                      2000         1999        1998        1997        1996
                                      ----         ----        ----        ----        ----
                                                         (in thousands)
Balance Sheet Data:
Working capital................    $   931      $ 4,275     $ 3,286     $ 2,493     $ 3,059
Property and equipment, net....     18,913       17,355      14,551      10,035       6,526
Total assets...................     26,662       26,321      22,280      15,931      11,374
Long-term debt, less current
  portion                            3,638        4,112       1,124       5,045       2,512
Convertible Preferred Shares...        ---          ---         ---       1,231       1,530
Shareholders' Equity...........     16,062       17,421      16,844       5,651       4,956
</TABLE>


                                     - 14 -
<PAGE>

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

The  following  discussion  and  analysis  should  be read in  conjunction  with
Selected Consolidated  Financial Data and the Company's  Consolidated  Financial
Statements and notes thereto included  elsewhere in this Report.  In addition to
the historical  information contained herein, the discussions in this Report may
contain  forward-looking  statements that involve risks and  uncertainties.  The
Company's actual results could differ materially from those discussed herein.

Overview

     The Company  provides a broad range of  value-added  services  and products
focused on chemical analysis to the worldwide pharmaceutical, medical device and
biotechnology industries.  The Company's  customer-focused approach and its high
quality  services and products  enable it to serve as a  value-added  partner in
solving complex scientific problems by providing  cost-effective  results to its
customers  on an  accelerated  basis.  Founded in 1974 in Lansing,  Michigan and
relocated to West Lafayette, Indiana in 1975, the Company has experienced growth
primarily through internal expansion, supplemented by strategic acquisitions. As
part of its  internal  growth  strategy,  the  Company has  developed  technical
specialties in such areas as chromatography,  electrochemistry, in vivo sampling
and mass spectrometry.  The Company's growth has strategically  positioned it to
take advantage of  globalization  in the marketplace and to provide new services
and areas of technical expertise to its customers.

     Throughout its history, the Company has taken steps to position itself as a
global leader in the analytical  chemistry  field.  Development of the Company's
infrastructure  began in 1975 when it  established  relationships  with  several
customers  and  multiple  international  distributors.   In  1981,  the  Company
increased  its sphere of  influence  to include  Japan with the  creation of BAS
Japan, an independent  distributor.  In 1988, the Company  enhanced its computer
software expertise by acquiring  Interactive  Microware,  Inc. in State College,
Pennsylvania. In 1990, the Company began offering contract services to customers
that  lacked  the time or  expertise  to  perform  certain  analyses  using  the
Company's analytical products. In 1995, the Company acquired a distributor,  BAS
Instruments  Ltd., to further  solidify its presence in the United  Kingdom.  In
1998,  the  Company  acquired  a  manufacturer  of  veterinary   monitoring  and
diagnostic equipment,  BAS Vetronics, to provide additional preclinical support.
In 1998, the Company  acquired a contract  services firm, BAS Analytics Ltd., to
offer local service in the United Kingdom.  In 2000, the Company also acquired a
contract services firm, BAS Evansville, to offer preclinical services.

     Revenues are derived  principally from (i) analytical  services provided to
customers and (ii) the sale of the Company's  analytical  instruments  and other
products.  Both methods of generating  revenue utilize the Company's  ability to
identify,  isolate and resolve  client  problems  relating to the separation and
quantification  of  individual  substances  in  complex  mixtures.  The  Company
supports the  pharmaceutical  industry by focusing on  analytical  chemistry for
biomedical research, diagnostics,  electrochemistry and separations science. The
Company's  analytical  products are sold primarily to  pharmaceutical  firms and
research  organizations.  Principal customers include scientists engaged in drug
metabolism studies, as well as those engaged in basic neuroscience research. The
Company  was  the  first  to  commercialize   the  liquid   chromatography   and
electrochemistry  technology  which  is  now  the  worldwide  standard  for  the
determination of neurotransmitter substances.  Research products include in vivo
sampling devices, reagent chemicals, electrochemical apparatus and sensors.

     The Company's pharmaceutical service contracts generally have terms ranging
from several weeks to several  years. A portion of the contract fee is generally
payable  upon   acceptance  of  the  agreement  with  the  balance   payable  in
installments  over the life of the contract.  The contracts are broken down into
discrete  units of  deliverable  services for which a fixed fee for each unit is
established.  Revenue  and  related  direct  costs are  recognized  as  specific
contract terms are fulfilled under the percentage of completion method utilizing
units  of  delivery.  The  termination  of a  contract  results  in no  material
adjustments  to revenue or direct costs  previously  recognized.  The Company is
entitled  to  payment  for all work  performed  through  the date of  notice  of
termination  and all costs  associated with  termination of a contract.  Revenue
from the sale of the  Company's  products and the related  costs are  recognized
upon shipment of the products to customers.

                                     - 15 -
<PAGE>

     The  Company's  management  believes  that  fluctuations  in the  Company's
quarterly  results are caused by a number of factors,  including  the  Company's
success in attracting new business,  the size and duration of service contracts,
the  timing  of  its  clients'  decisions  to  enter  into  new  contracts,  the
cancellation or delays of on-going  contracts,  the timing of  acquisitions  and
other factors,  many of which are beyond the Company's control.  In fiscal 2000,
28% of the Company's  total revenue was derived from customers  located  outside
the United  States.  These markets tend to be much more volatile than the United
States market.  Significant governmental,  regulatory,  political,  economic and
cultural issues or changes could adversely affect the growth or profitability of
the Company's business activities in any such market.
Results of Operations

     The  following  table  sets  forth,  for  the  periods  indicated,  certain
statement of operations data as a percentage of total revenue.

<TABLE>
<CAPTION>

                                                     Percentage of Revenue
                                                    Year Ended September 30,
                                                    ------------------------
                                                 2000        1999        1998
                                                 ----        ----        ----
<S>                                              <C>         <C>         <C>
Service revenue.............................     57.2%       50.3%       41.8%
Product revenue.............................     42.8        49.7        58.2
                                                 ----        ----        ----
    Total revenue...........................     100.0       100.0       100.0
Cost of service revenue.....................     48.1        32.7        25.2
Cost of product revenue.....................     15.5        19.9        21.5
                                                 ----        ----        ----
    Total cost of revenue...................     63.6        52.6        46.7
                                                 ----        ----        ----
Gross profit................................     36.4        47.4        53.3
Operating expenses:.........................
Selling.....................................     17.7        19.9        24.8
Research and development....................      9.4         9.8        11.9
General and administrative..................     15.6        12.8        12.8
                                                 ----        ----        ----
    Total operating expenses................     42.7        42.5        49.5
Operating income (loss).....................     (6.3)        4.9         3.8
Other income (expense), net.................     (3.2)       (0.6)       (0.1)
                                                 ----        ----        ----
Income (loss) before income taxes...........     (9.5)        4.3         3.7
Income taxes (benefit)......................     (2.2)        1.4         1.4
                                                 ----         ---         ---
Net income (loss)...........................     (7.3)%       2.9%        2.3%
                                                 ====         ===         ===
</TABLE>


Year ended September 30, 2000 compared with Year ended September 30, 1999

     Total revenue for the year ended September 30, 2000 decreased 3.2% to $19.2
million  from $19.9  million  for the year ended  September  30,  1999.  Service
revenue  increased to $11.0  million for the year ended  September 30, 2000 from
$10.0 million for the year ended  September  30, 1999,  primarily as a result of
the addition of preclinical  services  through the  acquisition of T.P.S.,  Inc.
This  increase  was more than offset  with the  decrease  in  products.  Product
revenue  decreased  to $8.2 million for the year ended  September  30, 2000 from
$9.9 million for the year ended September 30, 1999 primarily due to the decrease
in the sales to the Pacific Rim and Europe.

     Costs  of  revenue  increased  17.0% to $12.2  million  for the year  ended
September  30, 2000 from $10.4  million for the year ended  September  30, 1999.
This  increase of $1.8  million  was  largely due to costs of services  from the
acquisition of Toxicology Pathology Systems.  Costs of revenue for the Company's
services  increased  to 84.1% as a percentage  of services  revenue for the year
ended  September  30,  2000 from 65.0% of  services  revenue  for the year ended
September 30, 1999 due to the addition of costs of services from the acquisition
of T.P.S.,  Inc. Costs of revenue for the Company's  products decreased to 36.2%
as a percentage  of product  revenue for the year ended  September 30, 2000 from
40.0% of product revenue for the year ended September 30, 1999, due primarily to
a change in product mix.

                                     - 16 -
<PAGE>

    Selling  expenses for the year ended  September 30, 2000 decreased 13.8% to
$3.4 million from $3.9 million  during the year ended  September 30, 1999 due to
decreased foreign commission expense.  Research and development expenses for the
year ended  September 30, 2000  decreased 7.6% to $1.8 million from $2.0 million
for the year ended  September  30, 1999 due to the  decrease  in research  grant
activity.  General and administrative  expenses for the year ended September 30,
2000  increased  17.3% to $3.0  million  from $2.6  million  for the year  ended
September  30, 1999,  primarily as a result of the addition of expenses from the
acquisition of T.P.S., Inc.

     Other income (expense), net, was $(621,000) in the year ended September 30,
2000 as compared to $(114,000) in the year ended  September 30, 1999 as a result
of the increase in interest expense due to increased use of the line of credit.

     The Company's  effective tax rate for 2000 was 23.8%  compared to 32.8% for
fiscal 1999.  This decrease was primarily due to  nondeductible  foreign  losses
incurred in fiscal 2000.

     Year ended September 30, 1999 compared with Year ended September 30, 1998

     Total revenue for the year ended September 30, 1999 increased 8.9% to $19.9
million  from $18.2  million  for the year ended  September  30,  1998.  The net
increase of $1.7 million related  primarily to increased  revenue from services,
which increased to $10.0 million for the year ended September 30, 1999 from $7.6
million for the year ended  September  30, 1998 as a result of the  expansion of
types and volume of services  provided by the Company.  During this same period,
product revenue  decreased to $9.9 million for the year ended September 30, 1999
from $10.6 million for the year ended  September 30, 1998  primarily as a result
of decreased sales in the Asian electrochemistry markets.

     Costs  of  revenue  increased  22.7% to $10.4  million  for the year  ended
September 30, 1999 from $8.5 million for the year ended September 30, 1998. This
increase  of $1.9  million  was  largely  due to the  addition  of a UK services
facility.  Costs of revenue for the Company's  services  increased to 65.0% as a
percentage of services  revenue for the year ended September 30, 1999 from 60.4%
of services  revenue for the year ended September 30, 1998 due to an increase in
services support staff. Costs of revenue for the Company's products increased to
40.0% as a percentage of product  revenue for the year ended  September 30, 1999
from 36.8% of  product  revenue  for the year  ended  September  30,  1998,  due
primarily to a change in product mix.

     Selling  expenses for the year ended  September 30, 1999 decreased 12.8% to
$3.9  million  from $4.5  million for the year ended  September  30, 1998 due to
decreased foreign commission expense.  Research and development expenses for the
year ended  September 30, 1999  decreased 9.7% to $2.0 million from $2.2 million
for the year ended  September  30, 1998 due to the  decrease  in research  grant
activity.  General and administrative  expenses for the year ended September 30,
1999  increased  9.2% to $2.6  million  from  $2.3  million  for the year  ended
September 30, 1998, primarily as a result of an increase in administrative staff
expense and an increase in health care costs.

     Other income (expense), net, was $(114,000) in the year ended September 30,
1999  compared to $(25,000) in the year ended  September 30, 1998 as a result of
the increase in interest expense due to an increase in long term debt.

     The Company's  effective tax rate for 1999 was 32.8%  compared to 38.2% for
fiscal 1998.  This  decrease was  primarily  due to a decrease in  nondeductible
foreign losses incurred in fiscal 1999.

Liquidity and Capital Resources

     Since its inception, the Company's principal sources of cash have been cash
flow generated from operations and funds received from bank borrowings and other
financings.  At September 30, 2000, the Company had cash and cash equivalents of
$478,000, compared to cash and cash equivalents of $1.9 million at September 30,
1999. The decrease in cash resulted primarily from capital  expenditures made to
expand the Company's  facilities and  operations,  including the  acquisition of
T.P.S., Inc.

     The  Company's net cash used by operating  activities  was $539,000 for the
year ended  September 30, 2000.  Cash used by  operations  during the year ended
September 30, 2000 consisted of net loss of $1,382,000, less non-cash charges of
$1,448,000, plus a net increase of $605,000 in operating assets and liabilities.
The most  significant  decrease  in  operating  liabilities  related to accounts
payable, which decreased $787,000 at September 30, 2000.

                                     - 17 -
<PAGE>

     Cash used by  investing  activities  decreased to $2.0 million for the year
ended  September  30, 2000 from $4.0  million for the year ended  September  30,
1999,  primarily as a result of the reduction of Company purchases of laboratory
equipment.  Cash provided by financing  activities for the year ended  September
30, 2000 was $1.1 million due to the  increased use of the line of credit offset
by payments on long-term debt.

    The Company's net cash  provided by operating  activities  was $1.6 million
for the year ended  September 30, 1999.  Cash provided by operations  during the
year ended September 30, 1999 consisted of net income of $570,000, plus non-cash
charges of $1,321,000,  less a net increase of $304,000 in operating  assets and
liabilities.  The most significant increase in operating assets related to trade
accounts receivable, which increased $638,000 at September 30, 1999.

     Cash used by  investing  activities  decreased to $4.0 million for the year
ended  September  30, 1999 from $5.0  million for the year ended  September  30,
1998,  primarily as a result of the  Company's  completion  of  construction  of
additional facilities.  Cash provided by financing activities for the year ended
September 30, 1999 was $3.2 million due to the increase in debt.

     Total  expenditures  by the Company for  property and  equipment  were $1.6
million,  $4.1  million  and  $4.9  million  in  fiscal  2000,  1999  and  1998,
respectively.  Expenditures  made  in  connection  with  the  expansion  of  the
Company's operating facilities and purchases of laboratory equipment account for
the largest portions of these  expenditures.  The capital  investments relate to
the purchase of additional  laboratory  equipment  corresponding  to anticipated
increases  in  research  services to be  provided  by the  Company.  The Company
expects to make other  investments  to expand its  operations  through  internal
growth and strategic  acquisitions,  alliances and joint ventures.  However, the
Company currently has no firm commitments for capital expenditures.

     Based on its current  business  activities,  the Company believes that cash
generated from its operations, amounts available under its existing bank line of
credit and credit  facility will be  sufficient  to fund the  Company's  working
capital and capital expenditure requirements for the foreseeable future.

     The Company has a working  capital line of credit,  which  expires April 1,
2001 and allows borrowings of up to $3,500,000.  Interest accrues monthly on the
outstanding  balance at the bank's  prime rate minus 50 basis  points  (9.0 % at
September 30, 2000) or at the London  Interbank  Offered Rate (LIBOR) plus 2% as
elected by the Company.  The line is  collateralized by inventories and accounts
receivable and requires the Company to maintain certain  financial  ratios.  The
balance  outstanding  on this  line of  credit at  September  30,  2000 was $2.3
million.

     On June 24, 1999 the Company obtained a $3,500,000 commercial mortgage with
a bank. The mortgage note requires 59 monthly principal payments of $19,444 plus
interest  followed  by a  final  payment  for the  unpaid  principal  amount  of
$2,352,804  due June 24, 2004.  Interest is charged at the one-month  LIBOR rate
plus 200 basis points (8.62% at September 30, 2000).

Inflation

     The Company  believes that inflation has not had a material  adverse effect
on its business operations or financial condition.

New Accounting Pronouncements

     Please  refer  to the  notes to  consolidated  financial  statements  for a
discussion of recently issued accounting standards.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

     Not Applicable.


                                     - 18 -
<PAGE>
Item 8. Financial Statements and Supplementary Data


                         Report of Independent Auditors


Board of Directors and Shareholders
Bioanalytical Systems, Inc.

We have audited the  accompanying  consolidated  balance sheets of Bioanalytical
Systems,  Inc. as of September 30, 2000 and 1999,  and the related  consolidated
statements of  operations,  shareholders'  equity and cash flows for each of the
three years in the period ended September 30, 2000.  These financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  consolidated  financial  position of Bioanalytical
Systems,  Inc. at September 30, 2000 and 1999, and the  consolidated  results of
its  operations  and its cash  flows for each of the three  years in the  period
ended  September 30, 2000 in conformity  with  accounting  principles  generally
accepted in the United States.

                                                Ernst & Young LLP

Indianapolis, Indiana
November 3, 2000



                                     - 19 -
<PAGE>
<TABLE>
<CAPTION>
                           Bioanalytical Systems, Inc.
                           Consolidated balance sheets
                                                                       September 30,
                                                               ----------------------------
                                                               2000                    1999
                                                               ----                    ----
Assets
Current assets:
<S>                                                     <C>                     <C>
    Cash and cash equivalents                           $   477,635             $ 1,924,409
    Accounts receivable
      Trade                                               3,012,003               3,564,795
      Grants                                                 37,224                  46,752
      Other                                                  78,980                  71,715
    Inventories                                           2,234,644               1,790,733
    Deferred income taxes                                   410,796                 242,260
    Refundable income taxes                                 313,043                     ---
    Prepaid expenses                                         55,998                  80,600
                                                             ------                  ------
Total current assets                                      6,620,323               7,721,264

Property and equipment:
    Land and improvements                                   495,390                 171,014
    Buildings and improvements                           13,339,603              11,638,468
    Machinery and equipment                               9,536,275               9,144,104
    Office furniture and fixtures                         1,072,362               1,318,662
    Construction in process                                   7,039                 106,798
                                                              -----                 -------
                                                         24,450,669              22,379,046
    Less accumulated depreciation and amortization       (5,537,957)             (5,023,942)
                                                         ----------              ----------
                                                         18,912,712              17,355,104
                                                         ----------              ----------
Goodwill, less accumulated
  amortization of $213,169 in 2000
  and, $143,328 in 1999                                     990,123               1,053,057
Other assets                                                139,208                 191,429
                                                            -------                 -------
Total assets                                            $26,662,366             $26,320,854
                                                        ===========             ===========
Liabilities and Shareholders' Equity
Current liabilities:
    Accounts payable                                    $ 1,398,326             $ 2,019,989
    Income taxes payable                                      1,956                   2,260
    Accrued expenses                                        618,998                 815,770
    Customer advances                                       928,912                 154,521
    Revolving line of credit                              2,267,281                     ---
    Current portion of capital lease obligation             239,916                 220,432
    Current portion of long-term debt                       234,097                 233,328
                                                            -------                 -------
Total current liabilities                                 5,689,486               3,446,300

Capital lease obligation, less current portion              663,399                 903,315
Long-term debt, less current portion                      2,975,012               3,208,340
Deferred income taxes                                     1,272,811               1,341,605

Shareholders' equity:
    Preferred shares:
      Authorized shares - 1,000,000
      Issued and outstanding shares: none                       ---                     ---
    Common shares, no par value:
      Authorized shares - 19,000,000 Issued
      and outstanding shares - 4,562,645 in
      2000, and 4,514,349 in 1999                         1,010,690                 999,992
    Additional paid-in capital                           10,496,505              10,481,978
    Retained earnings                                     4,577,909               5,959,919
    Accumulated other comprehensive income (loss)           (23,446)                (20,595)
                                                            -------                 -------
                                                         16,061,658              17,421,294
                                                         ----------              ----------
Total liabilities and shareholders' equity              $26,662,366             $26,320,854
                                                        ===========             ===========
See accompanying notes.
</TABLE>
                                     - 20 -
<PAGE>
<TABLE>
<CAPTION>


                                      Bioanalytical Systems, Inc.
                                 Consolidated Statements of Operations


                                                            Year ended September 30,
                                              ----------------------------------------------------
                                              2000                    1999                    1998
                                              ----                    ----                    ----
<S>                                        <C>                     <C>                     <C>
Service revenue                            $10,999,609             $ 9,992,670             $ 7,608,792
Product revenue                              8,223,692               9,858,271              10,616,363
                                             ---------               ---------              ----------
     Total revenue                          19,223,301              19,850,941              18,225,155

Cost of service revenue                      9,245,380               6,498,817               4,598,266
Cost of product revenue                      2,973,787               3,943,437               3,910,740
                                             ---------               ---------               ---------
     Total cost of revenue                  12,219,167              10,442,254               8,509,006
                                            ----------              ----------               ---------
Gross profit                                 7,004,134               9,408,687               9,716,149

Operating expenses:
    Selling                                  3,400,273               3,942,681               4,524,664
    Research and development                 1,805,933               1,955,673               2,164,951
    General and administrative               2,990,234               2,549,806               2,335,564
                                             ---------               ---------               ---------
     Total operating expenses                8,196,440               8,448,160               9,025,179
                                             ---------               ---------               ---------
Operating income (loss)                     (1,192,306)                960,527                 690,970

Interest income                                 15,483                  30,842                  86,521
Interest expense                              (553,715)               (226,518)                (92,855)
Other income (expense)                         (34,067)                 93,520                 (26,587)
Gain (loss) on sale of property
  and equipment                                (48,708)                (11,293)                  8,486
                                               -------                 -------                   -----
Income (loss) before income taxes            1,813,313)                847,078                 666,535
                                             ---------                 -------                 -------
Income taxes (benefit)                        (431,303)                277,501                 254,342
                                              --------                 -------                 -------
Net income (loss)                          $(1,382,010)            $   569,577             $   412,193
                                           ============            ===========             ===========

Net income (loss) per share:
    Basic                                  $    (0.30)             $     0.13              $     0.10
    Diluted                                $    (0.30)             $     0.12              $     0.09

Weighted average common shares outstanding:
     Basic                                   4,550,336               4,505,819               4,117,088
     Diluted                                 4,550,336               4,675,850               4,402,755

See accompanying notes.
</TABLE>

                                     - 21 -
<PAGE>

<TABLE>
<CAPTION>

                                                     Bioanalytical Systems, Inc.

                                           Consolidated Statements of Shareholders' Equity


                                                                                                    Accumulated
                                        Convertible                                                    Other               Total
                                         Preferred      Common        Additional      Retained      Comprehensive      Shareholders'
                                           Shares       Shares     Paid-in Capital    Earnings         Income              Equity
                                        -----------     --------   ---------------    ---------     -------------      -------------
<S>                                    <C>            <C>            <C>           <C>               <C>               <C>
Balance at September 30, 1997          $ 1,231,242    $  497,875     $  178,233    $ 4,978,149       $ (2,944)          $ 6,882,555
Comprehensive income
    Net income                                 ---           ---            ---        412,193            ---               412,193
     Other comprehensive income:
         Foreign currency translation
         adjustments                           ---           ---            ---            ---         (7,624)               (7,624)
                                                                                                                          ----------
     Total comprehensive income                                                                                             404,569

Conversion of preferred
     Shares at IPO                      (1,231,242)      166,667      1,064,575            ---            ---                   ---

Exercise of stock options                      ---        32,192        165,454            ---            ---               197,646

Issuance of common stock at IPO                ---       299,044      9,059,695            ---            ---             9,358,739
                                       ------------   ----------     -----------     ----------       --------           -----------
Balance at September 30, 1998                  ---       995,778     10,467,957      5,390,342        (10,568)           16,843,509
Comprehensive income
     Net income                                ---           ---            ---        569,577            ---               569,577
     Other comprehensive income:
         Foreign currency translation
         adjustments                           ---           ---            ---            ---        (10,027)              (10,027)
                                                                                                                         -----------
       Total comprehensive income                                                                                           559,550

Exercise of stock options                      ---         4,214         14,021            ---            ---                18,235
                                       ------------   ----------     -----------     ----------       --------           -----------
Balance at September 30, 1999                  ---       999,992     10,481,978      5,959,919        (20,595)           17,421,294
Comprehensive income
     Net income (loss)                         ---           ---            ---     (1,382,010)           ---            (1,382,010)
     Other comprehensive income (loss):
         Foreign currency translation
         adjustments                           ---           ---            ---            ---         (2,851)               (2,851)
                                                                                                                         -----------
        Total comprehensive income (loss)                                                                                (1,384,861)

Exercise of stock options                      ---        10,698          14,527           ---            ---                25,225
                                       ------------   ----------     -----------     ----------       --------           -----------
Balance at September 30, 2000          $       ---    $1,010,690     $10,496,505   $  4,577,909      $(23,446)          $16,061,658
                                       ============   ==========     ===========     ==========      =========          ============
See accompanying notes.
</TABLE>


                                                                - 22 -
<PAGE>

<TABLE>
<CAPTION>
                                       Bioanalytical Systems, Inc.

                                  Consolidated Statements of Cash Flows

                                                                Year ended September 30,
                                              ----------------------------------------------------
                                              2000                    1999                    1998
                                              ----                    ----                    ----

<S>                                        <C>                     <C>                     <C>
Operating activities
Net income (loss)                          $(1,382,010)            $   569,577             $   412,193
Adjustments to reconcile net income
(loss) to net cash provided (used) by
  operating activities:
       Depreciation                          1,516,728               1,196,353                 841,854
       Amortization                            119,685                  81,208                  32,118
       Loss (gain) on sale of property
         and equipment                          48,708                  11,293                  (8,486)
       Deferred income taxes                  (237,330)                 31,901                 122,973
       Changes in operating  assets and
         liabilities:
          Accounts receivable                  768,400                (637,781)                431,159
          Inventories                         (440,878)                 89,947                 113,507
          Prepaid expenses and other assets    108,828                  19,530                 159,274
          Accounts payable                    (787,123)                 79,374                 369,983
          Income taxes payable                (313,347)               (153,220)               (212,652)
          Accrued expenses                    (337,834)                463,367                 (16,990)
          Customer advances                    397,013                (164,899)                124,551
                                            -----------            ------------             -----------
Net cash  provided (used) by operating
  activities                                  (539,160)              1,586,650               2,369,484

Investing activities
Capital expenditures                        (1,572,627)             (4,054,319)             (3,508,342)
Proceeds from sale of property and
  equipment                                     13,972                  42,492                  77,359
Payments  for  purchase  of net  assets
  from T.P.S., Inc., net of cash acquired     (446,469)                    ---                     ---
Payments  for  purchase  of net  assets
  from Vetronics, net of cash acquired             ---                     ---                (327,740)
Payments  for  purchase  of net  assets
  from Clinical  Innovations,  net of cash
  acquired                                         ---                     ---              (1,265,230)
                                            -----------            ------------             -----------
Net cash used by investing activities       (2,005,124)             (4,011,827)             (5,023,953)

Financing activities
Borrowings on line of credit                 2,784,572               2,850,000                 860,093
Payments on line of credit                    (781,199)             (2,850,000)             (1,375,470)
Payments on capital lease obligations         (220,432)               (308,447)               (187,894)
Borrowings of long-term debt                     -                   3,500,000                  43,365
Payments of long-term debt                    (707,841)                (58,332)             (5,187,567)
Net proceeds from initial public offering          ---                     ---               9,358,739
Net  proceeds   from  the  exercise  of
  stock options                                 25,225                  18,235                 197,646
                                            -----------            ------------             -----------
Net cash provided by financing activities    1,100,325               3,151,456               3,708,912
Effect of exchange rate changes                 (2,815)                (10,027)                 (7,624)
                                            -----------            ------------             -----------

Net increase (decrease) in cash and
  cash equivalents                          (1,446,774)                716,252               1,046,819
Cash and cash  equivalents at beginning
  of year                                    1,924,409               1,208,157                 161,338
                                            -----------            ------------             -----------
Cash and cash equivalents at end of year   $   477,635             $ 1,924,409              $ 1,208,157
                                           ===========             ===========              ===========
See accompanying notes.
</TABLE>

                                                 - 23 -
<PAGE>

                           Bioanalytical Systems, Inc.

                   Notes to Consolidated Financial Statements

                               September 30, 2000


1.  Significant Accounting Policies

Nature of Business

Bioanalytical  Systems,  Inc.  and its  subsidiaries  (the  Company)  engages in
laboratory services, consulting and research related to analytical chemistry and
chemical  instrumentation.  The Company also manufactures scientific instruments
for  use  in  the  determination  of  trace  amounts  of  organic  compounds  in
biological,  environmental and industrial materials.  The Company also sells its
equipment  and  software  for  use  in  industrial,  governmental  and  academic
laboratories.  The  Company's  customers  are  located in the United  States and
throughout the world.

Principles of Consolidation

The consolidated  financial  statements  include the accounts of the Company and
its  wholly-owned  subsidiaries.  All  significant  inter-company  accounts  and
transactions have been eliminated.

Cash Equivalents

The Company considers all highly liquid investments with an original maturity of
three months or less when purchased to be cash equivalents.

Financial Instruments

Financial   instruments   that  subject  the  Company  to  credit  risk  consist
principally of trade accounts  receivable.  The Company performs periodic credit
evaluations of its customers' financial condition and generally does not require
collateral on trade accounts receivable.

The Company's cash and cash equivalents,  accounts receivable,  accounts payable
and certain other  accrued  liabilities  are all  short-term in nature and their
carrying  amounts  approximate fair value. The Company's bank debt has primarily
variable interest rates, thus their carrying amounts approximate fair value.

Inventories

Inventories are stated at the lower of cost or market.  Cost is determined using
the last-in, first-out (LIFO) method.

Goodwill

Goodwill  represents the excess of cost of  acquisitions  over the fair value of
net assets  acquired and is amortized by the  straight-line  method over periods
ranging from 15 to 20 years.


                                     - 24 -
<PAGE>


Property and Equipment

Property and equipment is recorded at cost,  including  interest  capitalized in
connection with the construction of major  facilities.  Depreciation,  including
amortization on capital leases, is computed using the straight-line  method over
the estimated  useful lives of 3 through 40 years.  Expenditures for maintenance
and repairs are charged to expense as incurred.

Revenue Recognition

The Company's pharmaceutical service contracts generally have terms ranging from
several weeks to several years.  The typical  contract is six months to one year
in duration.  A portion of the contract fee is generally payable upon acceptance
of the agreement with the balance payable in  installments  over the life of the
contract.  A majority of the  Company's  contracts are broken down into discrete
units of deliverable services for which a fixed fee for each unit is established
and revenue and related  direct  costs are  recognized  as units of  deliverable
services are fulfilled. For all other service contracts, the Company allocates a
ratable  portion of the total contract fee to the units of deliverable  services
and recognizes  revenue and the related direct costs as the units of deliverable
services are fulfilled.  Revenue from the sale of the Company's products and the
related costs are recognized upon shipment of the products to customers.

Advertising Expense

The Company  expenses  advertising  costs as incurred.  Advertising  expense was
$306,737, $308,831 and $551,848 for 2000, 1999 and 1998, respectively.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial  statements and accompanying notes.
Actual results could differ from those estimates.

Stock Options

In accordance with Statement of Financial Accounting Standards No. 123 (SFAS No.
123), "Accounting for Stock-Based  Compensation," the Company uses the intrinsic
value method to account for stock  options,  consistent  with the existing rules
established by Accounting  Principles Board No. 25, "Accounting for Stock Issued
to Employees."

                                     - 25 -
<PAGE>


2.  Earnings Per Share

Basic earnings per share is computed on the basis of the weighted average number
of common  shares  outstanding.  Diluted  earnings  per share is computed on the
basis of the  weighted  average  number of common and common  equivalent  shares
outstanding.  Common  equivalent  shares include the dilutive effect of employee
and director options to purchase common shares and convertible preferred shares,
which are assumed to be converted.  There was no dilutive effect of employee and
director  options to purchase  common shares for fiscal year 2000.  The dilutive
effect of  employee  and  director  options  to  purchase  common  shares was to
increase the weighted average number of common shares outstanding by 170,031 and
172,382  shares  in  1999  and  1998,  respectively.   The  dilutive  effect  of
convertible  preferred  shares was to increase  the weighted  average  number of
common shares outstanding by 113,285 shares in 1998.

3.  Acquisitions

Effective  October  31, 1997 the Company  acquired  all of the capital  stock of
Vetronics Inc., for cash approximating $200,000 and a $150,000 note payable. The
acquired  business was involved in the distribution of veterinary  equipment and
supplies in the United States.

Effective July 1, 1998 the Company acquired all of the capital stock of Clinical
Innovations Ltd., for cash approximating  $1,500,000.  The acquired business was
involved in the processing of bioanalytical  samples for pharmaceutical firms in
the United Kingdom.

Effective  October 1, 1999,  the Company  acquired  all of the capital  stock of
T.P.S., Inc. for cash approximating $400,000 and $740,000 in assumption of debt.
The acquired  business was  involved in  providing  preclinical  services to the
pharmaceutical industry.

All acquisitions  were accounted for using the purchase method of accounting and
the  results of  operations  have been  included in the  consolidated  financial
statements  since the effective dates of  acquisition.  The purchase prices were
allocated to the net assets acquired, including $956,000 to goodwill, based upon
the fair market value at the date of acquisitions.

On an unaudited pro forma basis,  revenue,  net income and net income per common
share   (diluted)  for  the  years  ended  September  30,  1999  and  1998  were
$21,790,000,  $194,000, $0.04 and $22,284,000,  $782,000,  $0.18,  respectively.
This pro forma data  presents the  consolidated  results of operations as if the
acquisitions  had occurred on October 1, 1997,  after  giving  effect to certain
adjustments,  including amortization of goodwill, increased interest expense and
related income tax effects.

The pro forma  results have been prepared for  comparative  purposes only and do
not purport to indicate  the results of  operations  which would  actually  have
occurred had the acquisition been in effect on the date indicated,  or which may
occur in the future.

Pro forma amounts for the years ended September 30, 1998 include, for certain of
the  acquired  entities,  financial  data for the years  ended  February  28 and
December 31, respectively,  as it was not practicable to determine the September
30 year end results.

                                     - 26 -
<PAGE>


4.  Inventories

Inventories at September 30 consisted of:

<TABLE>
<CAPTION>
                                               2000                     1999
                                               ----                     ----
<S>                                        <C>                     <C>
Raw materials                              $ 1,288,121             $ 1,049,682
Work in progress                               374,950                 253,329
Finished goods                                 671,361                 594,549
                                           -----------              ----------
                                             2,334,432               1,897,560
LIFO reserve                                   (99,788)               (106,827)
                                               -------                --------
                                           $ 2,234,644             $ 1,790,733
                                           ===========             ===========
</TABLE>

5.  Debt Arrangements

The Company has a working  capital line of credit,  which  expires April 1, 2001
and allows  borrowings  of up to  $3,500,000.  Interest  accrues  monthly on the
outstanding  balance at the bank's  prime rate minus 50 basis  points  (9.0 % at
September 30, 2000) or at the London  Interbank  Offered Rate (LIBOR) plus 2% as
elected by the Company.  The line is  collateralized by inventories and accounts
receivable and requires the Company to maintain certain  financial  ratios.  The
balance outstanding on this line of credit at September 30, 2000 was $2,267,281.

On June 24, 1999 the Company  obtained a $3,500,000  commercial  mortgage with a
bank. The mortgage note requires 59 monthly  principal  payments of $19,444 plus
interest  followed  by a  final  payment  for the  unpaid  principal  amount  of
$2,352,804  due June 24, 2004.  Interest is charged at the one-month  LIBOR rate
plus 200 basis points (8.62% at September 30, 2000).

Cash  interest  payments of $498,513,  $287,058 and $260,249  were made in 2000,
1999 and 1998,  respectively.  Cash interest payments for 1999 and 1998 included
interest of $64,833 and $127,077,  respectively,  which was  capitalized.  These
amounts included  interest required to be paid on a portion of the undistributed
earnings of a  subsidiary  which  qualifies  as a domestic  international  sales
corporation.

                                     - 27 -
<PAGE>

6.  Lease Arrangements

The  Company has  capital  lease  arrangements  to finance  the  acquisition  of
equipment.  Future minimum lease payments,  based upon scheduled  payments under
the lease arrangements, as of September 30, 2000, are as follows:


          2001                                           $  307,494
          2002                                              307,494
          2003                                              302,215
          2004                                              126,932
          ----                                            ---------
          Total minimum lease payments                    1,044,135
          Amount representing interest                      140,820)
                                                          ---------
          Present value of minimum lease payments           903,315
          Less current portion                             (239,916)
                                                          ---------
                                                          $ 663,399
                                                          =========

The total amount of property and equipment  capitalized  under lease obligations
as of both September 30, 2000 and 1999 was $1,917,625.  Accumulated amortization
on capital  leases at September  30, 2000 and 1999 was  $668,852  and  $482,604,
respectively.

The Company  leases  office  space  under  noncancelable  operating  leases that
terminate in 2004.  These leases  contain  renewal  options  ranging from 1 to 5
years. Total rental expense was $32,499,  $33,849 and $27,498 in 2000, 1999, and
1998, respectively.

Future minimum lease payments at September 30, 2000 are as follows:

               2001         $  19,890
               2002            19,890
               2003            19,890
               2004             3,315
               ----             -----
                            $  62,985
                            =========


                                     - 28 -
<PAGE>

7.  Income Taxes

Significant  components of the Company's  deferred tax liabilities and assets as
of September 30 are as follows:

<TABLE>
<CAPTION>
                                                                                2000            1999
                                                                                ----            ----
           <S>                                                             <C>             <C>
           Deferred tax liabilities:

                Tax over book depreciation                                 $  1,226,170    $  1,114,510
                Deferred DISC income                                            170,321         227,095
                                                                           ------------    ------------
           Total deferred liabilities                                         1,396,491       1,341,605
           Deferred tax assets:
                Inventory pricing                                               117,636          64,380
                Accrued vacation                                                154,982         125,199
                Tax credit carryforward                                         205,000           -
                Other-net                                                        56,858          52,681
                Foreign net operating loss                                      396,697         200,698
                                                                           ------------    ------------
           Total deferred tax assets                                            931,173         442,958

           Valuation allowance for deferred tax assets                         (396,697)       (200,698)
                                                                           ------------    ------------
           Net deferred tax assets                                              534,476         242,260
                                                                           ------------    ------------
           Net deferred tax liabilities                                    $    862,015    $  1,099,345
                                                                           ============    ============

</TABLE>

Significant components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
                                                     2000                1999                 1998
                                                     ----                ----                 ----
<S>                                             <C>                 <C>                   <C>
Current:

       Federal                                  $ (245,378)         $    146,471          $     80,911
       State                                        51,405                99,129                50,458
                                                -----------         ------------          ------------
Total current                                     (193,973)              245,600               131,369

Deferred:

       Federal                                    (230,925)               25,581                99,504
       State                                        (6,405)                6,320                23,469
                                                -----------         ------------          ------------
Total deferred                                    (237,330)               31,901               122,973
                                                -----------         ------------          ------------

                                              $   (431,303)         $    277,501          $    254,342
                                              =============         ============          ============
</TABLE>

                                                 - 29 -
<PAGE>

The effective income tax rate varied from the statutory  federal income tax rate
as follows:

<TABLE>
<CAPTION>
                                                     2000        1999      1998
                                                     ----        ----      ----
<S>                                                 <C>          <C>       <C>
Statutory federal income tax rate                   34.0%        34.0%     34.0%
  Increases (decreases):
  Amortization of goodwill and other
    nondeductible expenses                          (0.6)         2.9       3.3
  Benefit of foreign sales corporation, net          1.5         (5.7)     (6.2)
  State income taxes, net of federal tax
         benefit                                    (1.6)         8.2       7.4
Research and development credit                        -         (7.2)    (13.4)
  Nondeductible foreign losses                     (11.5)         1.1      10.3
  Other                                              2.0         (0.5)      2.8
                                                    ----         ------    ----

                                                    23.8%        32.8%     38.2%
                                                    =====        =====     =====


</TABLE>

For fiscal year 2000,  the Company is allowed to  carryback  the loss to receive
refunds from prior taxes paid of $313,043.

In fiscal 2000, 1999 and 1998, the Company's foreign operations generated a loss
before income taxes of $612,496, $26,771 and $201,294, respectively.

Payments  made in 2000,  1999,  and 1998 for income  taxes  amounted to $67,000,
$212,400 and $78,000, respectively.

8.  Shareholders' Equity

Initial Public Offering

On November  26,  1997,  the Company  completed  an initial  public  offering of
1,250,000 Common Shares at an offering price of $8.00 per share. On December 19,
1997,  the  underwriters  exercised an option to purchase an additional  100,000
common shares.  The net proceeds to the Company from the public offering and the
exercise of the over-allotment  option by the underwriters,  after deducting the
underwriting  discounts and  commissions  and offering  expenses  payable by the
Company, were approximately $9.4 million. Upon the closing of the offering,  all
of the Company's  outstanding  convertible  preferred shares were converted into
752,399 common shares.

Stock Option Plans

During 1990,  the Company  established an Employee  Incentive  Stock Option Plan
whereby options to purchase shares of the Company's common shares at fair market
value can be  granted  to  employees  of the  Company.  Options  granted  become
exercisable in four equal installments beginning two years after the date of the
grant. The plan terminated in the year 2000.

During fiscal 1989,  the Company  established  an Outside  Director Stock Option
Plan whereby options to purchase  shares of the Company's  common shares at fair
market  value can be  granted  to  outside  directors.  Options  granted  become
exercisable  in four equal  installments  beginning  two years after the date of
grant. The plan terminated on January 1, 1999.


                                     - 30 -
<PAGE>

The Company adopted new stock option plans,  discussed below, in connection with
its initial  public  offering  and  accordingly  does not plan to grant any more
options pursuant to the plans discussed above.

During  fiscal  1998,  the Company  established  an Employee  Stock  Option Plan
whereby options to purchase shares of the Company's common shares at fair market
value can be  granted  to  employees  of the  Company.  Options  granted  become
exercisable  in four equal  installments  beginning  two years after the date of
grant. The plan terminates in fiscal 2008.

During fiscal 1998,  the Company  established  an Outside  Director Stock Option
Plan whereby options to purchase  shares of the Company's  common shares at fair
market value can be granted to outside directors of the Company. Options granted
become exercisable in four equal installments beginning two years after the date
of grant. The plan terminates in fiscal 2008.

A summary of the Company's stock option activity and related information for the
years ended September 30 follows:

<TABLE>
<CAPTION>


                                         2000                         1999                          1998
                              ------------------------     ------------------------    ------------------------
                                            Weighted                     Weighted                      Weighted
                                             Average                      Average                       Average
                                            Exercise                     Exercise                      Exercise
                               Options        Price         Options        Price           Options       Price
                               -------        -----         -------        -----           -------       -----
<S>                             <C>          <C>              <C>           <C>           <C>            <C>
Outstanding beginning
  of year                       206,299      $  3.35          164,343       $ 2.70         272,671       $1.27

Exercised                       (48,296)        0.52          (19,030)        0.96        (145,328)       1.36

Granted                           5,000         2.88           73,000         4.25          39,000        8.00

Terminated                      (28,768)        3.75          (12,014)        3.73          (2,000)       8.00
                                --------                   ----------                  -----------

Outstanding end of year         134,235      $  4.27          206,299       $ 3.35         164,343       $2.70
                              =========                    ==========                  ===========

</TABLE>


                                                     - 31 -
<PAGE>

<TABLE>
<CAPTION>
                                             Weighted
                           Number            Average        Weighted         Number           Weighted
                      Outstanding at        Remaining        Average     Exercisable at        Average
      Range of         September 30,       Contractual      Exercise      September 30,       Exercise
  Exercise Prices         2000                 Life           Price          2000               Price
  ---------------     --------------       -----------     ----------   ---------------      ----------
<S>                       <C>                <C>             <C>            <C>               <C>
     $1.01 - $1.50         8,292             1.28            $1.33           8,292            $1.33

      1.51 -  2.10        36,943             2.47             1.70          36,943             1.70

      2.11 -  8.00        89,000             7.86             5.61          13,500             6.10
                          ------                                            ------

                         134,235                                            58,735
                         =======                                            ======

</TABLE>

Disclosure of pro forma information  regarding net income and earnings per share
is required by SFAS No. 123 as if the Company  has  accounted  for its  employee
stock  options  granted  subsequent  to December 31, 1994,  under the fair value
method as defined by that  Statement.  The fair value for options granted by the
Company was estimated at the date of grant using a Black-Scholes  option pricing
model with the following weighted-average assumptions:


     Risk-free interest rate                       5.50%
     Dividend yield                                0.00%
     Volatility factor of the expected market
       price of the Company's common stock          .53 (.43 in 1999:
                                                         .52 in 1998)
     Expected life of the options (years)          7.0

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options which have no vesting  restrictions  and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including expected stock price volatility.  Because the
Company's employee stock options have  characteristics  significantly  different
from  those of traded  options,  and  because  changes in the  subjective  input
assumptions  can  materially  affect the fair value  estimate,  in  management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its  employee  stock  options.

                                               - 32 -
<PAGE>

For purposes of pro forma  disclosures,  the estimated fair value of the options
are amortized to expense over the related vesting period.  Because  compensation
expense is recognized over the vesting  period,  the initial impact on pro forma
net income may not be  representative  of compensation  expense in future years,
when the effect of  amortization  of multiple  awards  would be reflected in the
consolidated  statements of  operations.  The  Company's  pro forma  information
giving effect to the estimated  compensation expense related to stock options is
as follows:

<TABLE>
<CAPTION>
                                              2000          1999       1998
                                              ----          ----       ----
<S>                                        <C>            <C>        <C>
Pro forma net income (loss)                $(1,415,284)   $504,268   $367,190
Pro forma net income (loss) per share      $     (0.31)   $   0.11   $   0.08

</TABLE>


The weighted  average fair value of options  granted  during the year was $1.64,
$2.29 and $4.77 in 2000, 1999 and 1998, respectively.

9.  Retirement Plan

Effective July 1, 1984, the Company established an Internal Revenue Code Section
401(k)  Retirement Plan (the Plan) covering all employees over twenty-one  years
of age with at least one year of  service.  Under  the  terms of the  Plan,  the
Company  contributes 2% of each participant's  total wages to the Plan. The Plan
also includes  provisions for various  contributions  which may be instituted at
the  discretion  of  the  Board  of  Directors.  The  contribution  made  by the
participant may not exceed 18% of the  participant's  annual wages.  The Company
made no  discretionary  contributions  under the Plan in 2000,  1999,  and 1998.
Contribution  expense was,  $256,107,  $227,022  and $187,896 in 2000,  1999 and
1998, respectively.


                                     - 33 -
<PAGE>

10. Segment Information

The  Company  operates  in  two  principal  segments:  analytical  services  and
products.  The Company's  analytical services unit provides analytical chemistry
support on a contract basis directly to pharmaceutical  companies. The Company's
products unit provides liquid chromatography, electrochemical, and physiological
monitoring  products  to  pharmaceutical  companies,  universities,   government
research  centers  and medical  research  institutions.  The  Company  evaluates
performance  and allocates  resources  based on these  segments.  The accounting
policies of these  segments  are the same as those  described  in the summary of
significant accounting policies.

Operating Segments:

<TABLE>
<CAPTION>
                                                              Year Ended September 30,
                                                              -----------------------
                                                          2000             1999                1998
                                                    -----------       ------------          -------

                                                                  (in thousands)
<S>                                                 <C>                 <C>                 <C>
Revenue
Services                                            $   10,999          $   9,993           $    7,609
Products                                                 8,224              9,858               10,616
                                                    ----------          ---------           ----------
Total revenue                                       $   19,223          $  19,851           $   18,225
                                                    ==========          =========           ==========


Operating Income (Loss)
Services                                            $     (409)         $   2,075           $    1,753
Products                                                  (783)            (1,114)              (1,062)
                                                    ----------          ---------           ----------
Total operating income (loss)                           (1,192)               961                  691
Corporate income (expenses)                               (621)              (114)                 (24)
                                                    ----------          ---------           ----------
Income (loss) before income taxes                   $   (1,813)         $     847           $      667
                                                    ==========          =========           ==========
Identifiable Assets
Services                                            $   17,537          $  16,523           $   12,819
Product                                                  9,125              9,798                9,461
                                                    ----------          ---------           ----------
Total assets                                        $   26,662          $  26,321           $   22,280
                                                    ==========          =========           ==========

Depreciation and Amortization
Services                                            $    1,218          $     912           $      560
Products                                                   418                366                  314
                                                    ----------          ---------           ----------
Total depreciation and amortization                 $    1,636          $   1,278           $      874
                                                    ==========          =========           ==========
Capital Expenditures
Services                                            $    1,269          $   3,285           $    4,571
Products                                                   304                769                  369
                                                    ----------          ---------           ----------
Total capital expenditures                          $    1,573          $   4,054           $    4,940
                                                    ==========          =========           ==========

</TABLE>


                                                 - 34 -
<PAGE>

Geographic Information:
<TABLE>
<CAPTION>

                                             Year Ended September 30
                                ------------------------------------------------
                                     2000            1999             1998
                                ------------------------------------------------
                                                   (in thousands)
<S>                             <C>             <C>              <C>
Sales to external customers

North America                   $  13,891       $  13,012        $  12,715
Pacific Rim:
               Japan                  580             716            1,053
               Other                  232             695              771
Europe                              2,317           2,776            1,126
Other                               2,203           2,652            2,560
                                ----------       --------        ---------
                                $  19,223       $  19,851        $  18,225
                                ==========       ========        =========
Long-lived assets
North America                   $  18,467       $  16,991        $  14,632
Europe                              1,575           1,609            1,285

                                ----------       --------        ---------
                                $  20,042       $  18,600        $  15,917
                                =========       =========        =========

</TABLE>

Major Customers:

During 2000, 1999 and 1998, a major United States-based  pharmaceutical  company
accounted  for  approximately  21.0%,  22.2%  and  19.6%,  respectively,  of the
Company's total revenues and 16.4% and 23.9% of total trade accounts  receivable
at September 30, 2000 and 1999, respectively.

During 2000, a major United  States-based  pharmaceutical  company accounted for
approximately  12.2% of the  Company's  total  revenues and 13.8% of total trade
accounts receivable at September 30, 2000.

The Company sells its products through international distributors,  one of which
represented  1.4%,  6%  and  10%  of  2000,  1999  and  1998  product  revenues,
respectively.  Accounts receivable from this foreign distributor was $21,962 and
$39,522 at September 30, 2000 and 1999, respectively.

11. Litigation

In April 1997, CMA Microdialysis  Holding A.B. (CMA) filed an action against the
Company in the United  States  District  Court for the District of New Jersey in
which CMA alleged that the Company's  microdialysis  probes infringe U.S. Patent
No.  4,693,832.  Subsequent to September  30, 2000,  the Company is working on a
settlement  for this  infringement  case.  The Company does not believe that the
financial  terms of  settlement  will  have a  material  adverse  effect  on the
Company's financial condition or its results of operations.


                                     - 35 -
<PAGE>

                                           Bioanalytical Systems, Inc.

                                             Quarterly Financial Data


Bioanalytical Systems, Inc.

Unaudited (Amounts in thousands, except for per share data)

<TABLE>


For the Quarter Ended in Fiscal 2000                   December 31       March 31       June 30     September 30
------------------------------------                   -----------       --------       -------     ------------

<S>                                                      <C>              <C>           <C>            <C>
Total revenue                                            $4,446           $4,090        $5,452         $5,235

Gross profit                                              1,409            1,398         2,161          2,036

Net income (loss)                                          (372)           (427)          (139)          (444)

Basic net income (loss) per common share(1)                (.08)           (.09)          (.03)          (.10)

Diluted net income (loss) per common and
common equivalent share(1)                                 (.08)           (.09)          (.03)          (.10)
------------------------------------------------   -------------    ------------    -----------   ------------
For the Quarter Ended in Fiscal 1999                 December 31        March 31        June 30   September 30
------------------------------------------------   -------------    ------------    -----------   ------------
Total revenue                                            $4,598          $5,057         $4,973         $5,223

Gross profit                                              2,096           2,537          2,277          2,499


Net income (loss)                                            (6)            200             67            309

Basic net income per common share(1)                        .00             .04            .01            .07

Diluted net income per common and common
equivalent share(1)                                         .00             .04            .01            .07


(1)  The sum of the net  income  per  common  share may not equal the annual net
     income per share due to interim quarter rounding.

</TABLE>


                                                     - 36 -
<PAGE>

Item 9. Changes in and Disagreements with Accountants on Accounting
        and Financial Disclosure

        None.



                  [Remainder of page intentionally left blank.]



                                     - 37 -
<PAGE>
                                    Part III

Item 10.  Directors and Executive Officers of the Registrant.

<TABLE>
<CAPTION>

Name                             Age                 Position
----------------------------------------------------------------
<S>                               <C>         <C>
Peter T. Kissinger, Ph.D......... 56..........Chairman of the Board;
                                              President; Chief Executive Officer
Ronald E. Shoup, Ph.D.............49..........President, BAS Analytics; Director
Douglas P. Wieten.................39..........Vice President, Finance; Chief Financial
                                                Officer; Treasurer
Candice B. Kissinger..............49..........Senior Vice President, Marketing;
                                              Secretary and Director
Craig S. Bruntlett, Ph.D..........51..........Senior Vice President, International Sales
Donnie A. Evans...................54..........Vice President, Engineering
Stephen Geary, Ph.D...............59..........Vice President, United States Sales & Marketing
Lina L. Reeves-Kerner.............50..........Vice President, Human Resources
Michael P. Silvon.................53..........Vice President, Business Development
Michelle L. Troyer................29..........Corporate Controller
James B. Spence...................57..........Managing Director, BAS Analytics Ltd. and
                                                BAS Instruments Ltd.
William E. Baitinger..............67..........Director
Michael K. Campbell...............49..........Director
John A. Kraeutler.................52..........Director
W. Leigh Thompson.................62..........Director

</TABLE>

     Peter T. Kissinger, Ph.D. founded the Company in 1974 and has served as its
Chairman,  President  and  Chief  Executive  Officer  since  1974.  He is also a
part-time  Professor  of  Chemistry  at  Purdue  University,  where  he has been
teaching  since  1975.  Dr.  Kissinger  has a  Bachelor  of  Science  degree  in
Analytical  Chemistry from Union College and a Doctorate in Analytical Chemistry
from the University of North Carolina.

     Ronald E. Shoup,  Ph.D. has been President of the Company's  services unit,
BAS Analytics,  since 1990. He has been  instrumental  in developing many of the
Company's  chromatographic  applications.  Dr.  Shoup has a Bachelor  of Science
degree in Chemistry  and  Mathematics  and a Ph.D in Analytical  Chemistry  from
Purdue University.

     Douglas P. Wieten has been Vice  President,  Finance since  February  1999,
Chief Financial  Officer since September 1997 and Treasurer since march 1997. He
served as Corporate  Controller from 1992 to February 1999.  Prior to that time,
Mr. Wieten worked at Ernst & Whinney (now Ernst & Young LLP),  where he had been
employed  since 1984.  Mr.  Wieten is a certified  public  accountant  and has a
Bachelor of Science degree in Accounting from Butler University.

     Candice B.  Kissinger  has been  Senior  Vice  President,  Marketing  since
January 2000. She served as Vice  President,  International  Sales and Marketing
since  July  1981.  From 1978 to 1981,  Mrs.  Kissinger  served  as an  accounts
receivable  clerk.   Mrs.   Kissinger  has  a  Bachelor  of  Science  degree  in
Microbiology  from Ohio Wesleyan  University  and a Master of Science  degree in
Food Science from the University of Massachusetts. Mrs. Kissinger is the wife of
Dr. Peter Kissinger.

     Craig S. Bruntlett,  Ph.D. has been Senior Vice President of  International
Sales  since   January  2000.   From  1992  to  1999  he  was  Vice   President,
Electrochemical  Products.  From 1980 to 1990, Dr. Bruntlett was Director of New
Products  Development  for the  Company.  Dr.  Bruntlett  has a Bachelor of Arts
degree in Chemistry and Mathematics from St. Cloud State University in Minnesota
and a Ph.D. in Chemistry from Purdue University.

     Donnie A. Evans was the Company's first full-time employee, beginning as an
electronics engineer in 1978. Since January of 1988, he has been Vice President,
Engineering Services.

                                            - 38 -
<PAGE>

     Stephen  Geary,  Ph.D has been Vice  President,  United  States Sales since
January  1992.  Dr.  Geary is also  responsible  for the  sales  efforts  of the
Company's  clinical  products.  Dr.  Geary has a Bachelor  of Science  degree in
Biology  and  Chemistry  from Tufts  University,  a Master of Science  degree in
Biology from the  University of New Hampshire  and a Ph.D in  Biochemistry  from
Syracuse University.

     Lina L.  Reeves-Kerner has been Vice President,  Human Resources since 1995
and is  responsible  for the  administrative  support  functions of the Company,
including shareholder relations,  human resources and community relations.  From
1980 to 1990, Ms. Reeves-Kerner  served as an Administrative  Assistant with the
Company.  Ms.  Reeves-Kerner  has a  Bachelor  of  Science  degree  in  Business
Administration from Indiana Wesleyan University.

     Michael P. Silvon,  Ph.D.  has been Vice  President,  Business  Development
since March 1997.  Dr.  Silvon has been  general  manager,  BAS  Evansville  and
Vetronics  since  January 2000.  Prior to January 1997,  Dr. Silvon was Manager,
Technical Services for Great Lakes Chemical and Vice President Sales & Marketing
at Hi-Port, Inc. in Houston, Texas. Before October 1993, Dr. Silvon was Regional
Business   Manager-Americas   for  Zeneca  Fine  Chemicals  following  roles  in
Commercial  Development and Technology Planning. He has a Bachelor of Science in
Chemistry from Loyola University of Chicago, a Master of Business Administration
from Sacred Heart University and a Doctorate in Chemistry from the University of
Vermont.

     Michelle L. Troyer has been the Corporate  Controller  since February 1999.
Ms. Troyer joined the Company in 1994 as a Staff Accountant and became Assistant
Controller  in October  1996.  Ms.  Troyer has a Bachelor  of Science  degree in
Accounting from Purdue University and is a certified public accountant.

     James B. Spence has been Managing  Director,  BAS Analytics Ltd. since July
1998. Since 1990 he had been Managing  Director of Clinical  Innovations,  which
was  acquired by the Company in July 1998.  Mr.  Spence was made a Fellow of the
Institute of Medical Laboratory Sciences in 1966.

     William E.  Baitinger  has served as a director of the Company  since 1979.
Mr.  Baitinger  has been Director of  Technology  Transfer at Purdue  University
since 1988,  responsible  for all aspects of the program.  Mr.  Baitinger  has a
Bachelor of Science degree in Chemistry and Physics from Marietta  College and a
Master of Science degree in Chemistry from Purdue University.

     Michael  K.  Campbell  has served as a Company  director  since  1991.  Mr.
Campbell has been the President and Chief Executive Officer of Powerway, Inc., a
software company, since 1993. From January 1992 until January 1993, he was Chief
Financial Officer of Hurco Companies, Inc. and president of Hurco manufacturing,
its largest division. He has a Bachelor of Science degree in Accounting from the
University of Southern Indiana.

     John A.  Kraeutler  has served as a director of the Company  since  january
1997. Mr.  Kraeutler has been President and Chief Operating  Officer of Meridian
Diagnostics,  Inc. since August 1992 and is also a director. Prior to that time,
Mr.  Kraeutler  was Executive  Vice  President  and Chief  Operating  Officer of
Meridian  Diagnostics,  Inc. Mr.  Kraeutler has a Bachelor of Science  degree in
biology  from  Fairleigh  Dickinson  University  as well as a master of  Science
degree in  Biology  and a Master of  Business  Administration  from  Seton  Hall
University.

     W. Leigh  Thompson,  Ph.D.,  M.D.  has served as a director  of the Company
since January 1997. Since 1995, Dr. Thompson has been Chief Executive Officer of
Profound Quality Resources,  Inc., a scientific  consulting firm. Prior to 1995,
Dr. Thompson held various positions at Lilly Research Laboratories. Dr. Thompson
has a Bachelor of Science  degree in Biology from the College of  Charleston,  a
Master of Science and a Doctorate in Pharmacology from the Medical University of
South  Carolina and a Medical  Doctor degree from The Johns Hopkins  University.
Dr. Thompson is also a director of Chrysalis International  Corporation,  Corvas
International,   Inc.  GeneMedicine,  Inc.,  La  Jolla  Pharmaceutical  company,
Medarex, Inc., Ophidian Pharmaceuticals, Inc. and Orphan Medical, Inc.

                                     - 39 -
<PAGE>

Item 11.  Executive Compensation.

     The  information  included  under the  captions  "Election  of  Directors -
Compensation of Directors" and "Executive  Compensation"  in the Proxy Statement
is incorporated herein by reference in response to this item.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

     The information  contained  under the captions "Share  Ownership of Certain
Beneficial Owners and Management" in the Proxy Statement is incorporated  herein
by reference in response to this item.


Item 13.  Certain Relationships and Related Transactions.

     The information  contained under the caption "Certain  Transactions" in the
Proxy Statement is incorporated herein by reference in response to this item.



                  [Remainder of page intentionally left blank.]


                                     - 40 -
<PAGE>
                                     Part IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

     (a) Documents filed as part of this Report.

          1. Financial Statements:

               Included as outlined in Item 8 of Part II of this report.

               Report of Independent Auditors.

               Consolidated   Balance  Sheets  as  of  September  30,  2000  and
               September 30, 1999.

               Consolidated   Statements  of  Operations  for  the  Years  Ended
               September 30, 2000, 1999 and 1998.

               Consolidated  Statements  of  Shareholders'  Equity for the Years
               Ended September 30, 2000, 1999 and 1998.

               Consolidated  Statements  of  Cash  Flows  for  the  Years  Ended
               September 30, 2000, 1999 and 1998.

               Notes to Consolidated Financial Statements.


          2. Financial Statement Schedules:

               No schedules are required to be filed as part of this report.

               Schedules  other than those  listed above are omitted as they are
               not required, are not applicable,  or the information is shown in
               the Notes to the Consolidated Financial Statements.


     (b) Reports on Form 8-K. None.

     (c) Exhibits. See Index to Exhibits.



                                     - 41 -
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                  BIOANALYTICAL SYSTEMS, INC.

                  (Registrant)



                  By:  /s/  Peter T. Kissinger
                       ---------------------------------------------------------
                       Peter T. Kissinger
                       President and Chief Executive Officer



                  By:  /s/ Douglas P. Wieten
                       ---------------------------------------------------------
                       Douglas P. Wieten
                       Chief Financial Officer, Treasurer, VP Finance
                       (Principal Financial and Accounting Officer)

Date:  December 28, 2000


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.



Signature                             Capacity                       Date
---------                             --------                       ----


/s/ Peter T. Kissinger         President, Chief Executive      December 28, 2000
-----------------------------    Officer and Director
Peter T. Kissinger


/s/ Douglas P. Wieten          Chief Financial Officer,        December 28, 2000
-----------------------------    and Treasurer
Douglas P. Wieten


/s/ William E. Baitinger       Director                        December 28, 2000
-----------------------------
William E. Baitinger


/s/ Michael K. Campbell        Director                        December 28, 2000
-----------------------------
Michael K. Campbell


/s/  Candice B. Kissinger      Director                        December 28, 2000
-----------------------------
Candice B. Kissinger


/s/  John A. Kraeutler         Director                        December 28, 2000
-----------------------------
John A. Kraeutler


/s/  Ronald E. Shoup           Director                        December 28, 2000
-----------------------------
Ronald E. Shoup


/s/  W. Leigh Thompson         Director                        December 28, 2000
-----------------------------
W. Leigh Thompson

                                     - 42 -
<PAGE>
<TABLE>
<CAPTION>

                                            INDEX TO EXHIBITS

                                                                                            Sequential
     Number                                                                                  Numbering
  Assigned In                                                                               System Page
 Regulation S-K                                                                              Number of
    Item 601                            Description of Exhibits                               Exhibit
    --------                            -----------------------                             -----------

      (2)            No Exhibit


<S>   <C>    <C>     <C>
      (3)    3.1     Second  Amended  and  Restated   Articles  of   Incorporation  of
                     Bioanalytical Systems, Inc. (Incorporated by reference to Exhibit
                     3.1 to Form 10-Q for the quarter ended December 31, 1997.)

             3.2     Second   Restated   Bylaws   of   Bioanalytical   Systems,   Inc.
                     (Incorporated  by  reference  to Exhibit 3.2 to Form 10-Q for the
                     quarter ended December 31, 1997.)

       (4)    4.1     Specimen Certificate for Common Shares (Incorporated by reference
                     to  Exhibit   4.1  to   Registration   Statement   on  Form  S-1,
                     Registration No. 333-36429).

             4.2     See Exhibits 3.1 and 3.2

      (9)            No Exhibit

      (10)  10.2     Bioanalytical  Systems,  Inc.  Outside Director Stock Option Plan
                     (Incorporated  by  reference  to  Exhibit  10.2  to  Registration
                     Statement on Form S-1, Registration No. 333-36429).

            10.3     Form of Bioanalytical Systems, Inc. Outside Director Stock Option
                     Agreement   (Incorporated   by   reference  to  Exhibit  10.3  to
                     Registration Statement on Form S-1, Registration No. 333-6429).

            10.4     Bioanalytical  Systems, Inc. 1990 Employee Incentive Stock Option
                     Plan  (Incorporated  by reference to Exhibit 10.4 to Registration
                     Statement on Form S-1, Registration No. 333-6429).

            10.5     Form of  Bioanalytical  Systems,  Inc. 1990 Employee Stock Option
                     Agreement   (Incorporated   by   reference  to  Exhibit  10.5  to
                     Registration Statement on Form S-1, Registration No. 333-6429).



                                                 - 43 -
<PAGE>

            10.6     Bioanalytical  Systems, Inc. 1997 Employee Incentive Stock Option
                     Plan  (Incorporated by reference to Exhibit 10.26 to Registration
                     Statement on Form S-1, Registration No. 333-6429).

            10.7     Form of Bioanalytical Systems, Inc. 1997 Employee Incentive Stock
                     Option  Agreement  (Incorporated by reference to Exhibit 10.27 to
                     Registration Statement on Form S-1, Registration No. 333-36429).

            10.8     1997  Bioanalytical  Systems,  Inc. Outside Director Stock Option
                     Plan  (Incorporated by reference to Exhibit 10.28 to Registration
                     Statement on Form S-1, Registration No. 333-36429).

            10.9     Form of Bioanalytical  Systems,  Inc. 1997 Outside Director Stock
                     Option  Agreement  (Incorporated by reference to Exhibit 10.29 to
                     Registration Statement on Form S-1, Registration No. 333-6429).

            10.10    Business  Loan  Agreement by and between  Bioanalytical  Systems,
                     Inc.,  and  Bank  One,   Indiana,   N.A.   dated  April  1,  2000
                     (Incorporated by reference to Exhibit  10.10 to Form 10-Q for the
                     quarter ended June 30, 2000).

            10.11    Commercial  Security  Agreement  by  and  between   Bioanalytical
                     Systems,  Inc. and Bank One,  Indiana,  N.A., dated March 1, 1998
                     (Incorporated  by reference to Exhibit 10.15 to Form 10-Q for the
                     quarter ended March 31, 1998).

            10.12    Negative Pledge Agreement by and between  Bioanalytical  Systems,
                     Inc.  and  Bank  One,   Indiana,   N.A.,   dated  March  1,  1998
                     (Incorporated  by reference to Exhibit 10.16 to Form 10-Q for the
                     quarter ended June 30, 1998).

            10.13    Promissory Note by and between  Bioanalytical  Systems,  Inc. and
                     Bank One,  Indiana  N.A.,  dated June 24, 1999 related to loan in
                     the amount of $3,500,000  (Incorporated by reference to Exhitibit
                     10.18 to Form 10-Q for the quarter ended June 30, 1999).

            10.14    Promissory Note for $3,500,000 executed by Bioanalytical Systems,
                     Inc.  in favor of Bank One,  Indiana  N.A.,  dated  April 1, 2000
                     (Incorporated  by reference to Exhibit 10.19 to Form 10-Q for the
                     quarter ended June 30, 1999).



                                         - 44 -
<PAGE>

      (12)           No Exhibit

      (13)           No Exhibit

      (16)           No Exhibit

      (18)  21.1     No Exhibit

      (21)  21.1     Subsidiaries of the Registrant

      (23)  23.1    Consent of Independent Auditors

      (24)           No Exhibit

      (27)  27.1     Financial Data Schedule

      (99)           No Exhibit


                                     - 45 -
</TABLE>