##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2009
 or
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission File Number 000-19720
 ABAXIS, INC.
 (Exact name of registrant as specified in its charter)
 California
    
    77-0213001(State of Incorporation)
    
    (I.R.S. Employer Identification No.)
 3240 Whipple Road
Union City, California 94587  (Address of principal executive offices)
 (510) 675-6500  (Registrants telephone number including area code)
 þ o
 o o
 12b-2 of the Exchange Act.
(Check one):
 Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



ABAXIS,
INC.
 Form 10-Q
 For the Quarter Ended June 30, 2009
 TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1. Condensed Consolidated Financial Statements (Unaudited):Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 2009 and 2008
    
    
    3Condensed Consolidated Balance Sheets as of June 30, 2009 and March 31, 2009
    
    
    4Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2009 and 2008
    
    
    5Notes to the Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 4. Controls and Procedures
    
    
    29Item 4T. Controls and Procedures
    
    
    30PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    30Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    40Item 3. Defaults Upon Senior Securities
    
    
    40Item 4. Submission of Matters to a Vote of Security Holders
    
    
    40Item 5. Other Information
    
    
    40Item 6. Exhibits
    
    
    40SIGNATURES
    
    
    41Exhibit 10.1Exhibit 10.3Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    Condensed Consolidated Financial Statements (Unaudited)
 ABAXIS,
INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share data)
 Three Months EndedJune 30,2009
    
    
    2008Revenues
    
    $
    29,625
    
    
    $
    24,572Cost of revenues
    
    
    12,470
    
    
    
    11,069Gross profit
    
    
    17,155
    
    
    
    13,503Operating expenses:Research and development
    
    
    2,573
    
    
    
    1,997Sales and marketing
    
    
    6,360
    
    
    
    5,827General and administrative
    
    
    2,498
    
    
    
    1,662Total operating expenses
    
    
    11,431
    
    
    
    9,486Income from operations
    
    
    5,724
    
    
    
    4,017Interest and other income (expense), net
    
    
    514
    
    
    
    462Income before income tax provision
    
    
    6,238
    
    
    
    4,479Income tax provision
    
    
    2,482
    
    
    
    1,703Net income
    
    $
    3,756
    
    
    $
    2,776Net income per share:Basic net income per share
    
    $
    0.17
    
    
    $
    0.13Diluted net income per share
    
    $
    0.17
    
    
    $
    0.12Shares used in the calculation of net income per share:Weighted average common shares outstanding  basic
    
    
    21,965,000
    
    
    
    21,735,000Weighted average common shares outstanding  diluted
    
    
    22,357,000
    
    
    
    22,398,000Share-based compensation expense by function:Cost of revenues
    
    $
    49
    
    
    $
    35Research and development
    
    
    140
    
    
    
    61Sales and marketing
    
    
    245
    
    
    
    137General and administrative
    
    
    462
    
    
    
    168Total share-based compensation expense
    
    $
    896
    
    
    $
    401
   3




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ABAXIS,
INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share data)
 June 30,
    
    
    March 31,2009
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    46,868
    
    
    $
    49,237Short-term investments
    
    
    20,215
    
    
    
    20,776Accounts receivables (net of allowances of $473 at June 30, 2009 and $388 at March 31, 2009)
    
    
    24,159
    
    
    
    21,983Inventories
    
    
    15,488
    
    
    
    15,735Prepaid expenses
    
    
    959
    
    
    
    957Net deferred tax asset, current
    
    
    4,628
    
    
    
    4,676Total current assets
    
    
    112,317
    
    
    
    113,364Long-term investments
    
    
    13,759
    
    
    
    4,886Property and equipment, net
    
    
    14,366
    
    
    
    14,798Intangible assets, net
    
    
    5,031
    
    
    
    5,175Other assets
    
    
    35
    
    
    
    24Net deferred tax asset, non-current
    
    
    2,464
    
    
    
    2,464Total assets
    
    $
    147,972
    
    
    $
    140,711LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    4,303
    
    
    $
    3,963Accrued payroll and related expenses
    
    
    4,296
    
    
    
    3,698Accrued taxes
    
    
    2,005
    
    
    
    34Other accrued liabilities
    
    
    1,135
    
    
    
    1,116Deferred revenue
    
    
    1,047
    
    
    
    1,024Warranty reserve
    
    
    1,732
    
    
    
    1,714Total current liabilities
    
    
    14,518
    
    
    
    11,549Non-current liabilities:Deferred rent
    
    
    92
    
    
    
    137Deferred revenue
    
    
    1,429
    
    
    
    1,550Warranty reserve
    
    
    653
    
    
    
    583Total non-current liabilities
    
    
    2,174
    
    
    
    2,270Commitments and contingencies (Note 8)Shareholders equity:Preferred stock, no par value; 5,000,000 shares authorized; no shares issued and outstanding
    
    
    
    
    
    
    Common stock, no par value; 35,000,000 shares authorized; 21,985,000 and 21,933,000 shares issued and outstanding
at June 30, 2009 and at March 31, 2009, respectively
    
    
    118,489
    
    
    
    117,846Retained earnings
    
    
    12,802
    
    
    
    9,046Accumulated other comprehensive loss
    
    
    (11
    )
    
    
    Total shareholders equity
    
    
    131,280
    
    
    
    126,892Total liabilities and shareholders equity
    
    $
    147,972
    
    
    $
    140,711
   4




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ABAXIS,
INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 Three Months EndedJune 30,2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    3,756
    
    
    $
    2,776Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    1,290
    
    
    
    1,004Investment premium amortization
    
    
    11
    
    
    
    (Gain) loss on disposal of property and equipment
    
    
    6
    
    
    
    (20
    )(Gain) loss on foreign exchange translation
    
    
    (88
    )
    
    
    Share-based compensation expense
    
    
    896
    
    
    
    401Excess tax benefits from share-based awards
    
    
    (190
    )
    
    
    (1,773
    )Provision for deferred income taxes
    
    
    245
    
    
    
    1,439Changes in assets and liabilities:Accounts receivables, net
    
    
    (2,127
    )
    
    
    (79
    )Inventories
    
    
    (93
    )
    
    
    (296
    )Prepaid expenses
    
    
    (2
    )
    
    
    (763
    )Other assets
    
    
    (11
    )
    
    
    5Accounts payable
    
    
    340
    
    
    
    (1,613
    )Accrued payroll and related expenses
    
    
    598
    
    
    
    (830
    )Accrued taxes
    
    
    1,770
    
    
    
    120Other accrued liabilities
    
    
    19
    
    
    
    (280
    )Deferred rent
    
    
    (45
    )
    
    
    (35
    )Deferred revenue
    
    
    (98
    )
    
    
    331Warranty reserve
    
    
    88
    
    
    
    167Net cash provided by operating activities
    
    
    6,365
    
    
    
    554Cash flows from investing activities:Purchases of available-for-sale investments
    
    
    (3,030
    )
    
    
    Purchases of held-to-maturity investments
    
    
    (11,706
    )
    
    
    (6,991
    )Proceeds from redemptions of available-for-sale investments
    
    
    
    
    
    
    4,000Proceeds from maturities of held-to-maturity investments
    
    
    5,597
    
    
    
    6,991Principal payments of asset-backed securities
    
    
    798
    
    
    
    Purchases of property and equipment
    
    
    (373
    )
    
    
    (524
    )Proceeds from disposal of property and equipment
    
    
    
    
    
    
    20Net cash (used in) provided by investing activities
    
    
    (8,714
    )
    
    
    3,496Cash flows from financing activities:Proceeds from issuance of common stock under stock plans, net
    
    
    (249
    )
    
    
    (11
    )Excess tax benefits from share-based awards
    
    
    190
    
    
    
    1,773Net cash (used in) provided by financing activities
    
    
    (59
    )
    
    
    1,762Effect of exchange rate changes on cash and cash equivalents
    
    
    39
    
    
    
    Net (decrease) increase in cash and cash equivalents
    
    
    (2,369
    )
    
    
    5,812Cash and cash equivalents at beginning of period
    
    
    49,237
    
    
    
    17,219Cash and cash equivalents at end of period
    
    $
    46,868
    
    
    $
    23,031Supplemental disclosure of cash flow information:Cash paid for income taxes, net of refunds
    
    $
    227
    
    
    $
    144Supplemental disclosure of non-cash flow information:Change in unrealized gain (loss) on investments, net of tax
    
    $
    (11
    )
    
    $
    83Transfers of equipment between inventory and property and equipment, net
    
    $
    347
    
    
    $
    589Net change in capitalized share-based compensation
    
    $
    7
    
    
    $
    (6
    )Common stock withheld for employee taxes in connection with share-based
compensation
    
    $
    287
    
    
    $
    229
   5




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ABAXIS,
INC.
 
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
 Description of Business.
  Principles of Consolidation.
 Basis of Presentation.
   Reclassifications.
 Use of Estimates in Preparation of Financial Statements.
 Significant Accounting Policies.
  6




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NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS
          7




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NOTE 3. INVESTMENTS
  June 30, 2009Cost or
    
    
    Gross Unrealized
    
    
    FairAmortized Cost
    
    
    Gain (Loss)
    
    
    ValueShort-term investmentsHeld-to-maturity:Certificates of deposits
    
    $
    18,001
    
    
    $
    
    
    
    $
    18,001Total short-term investments in held-to-maturity
    
    $
    18,001
    
    
    $
    
    
    
    $
    18,001Available-for-sale:Asset-backed securities
    
    $
    2,232
    
    
    $
    (18
    )
    
    $
    2,214Total short-term investments in available-for-sale
    
    $
    2,232
    
    
    $
    (18
    )
    
    $
    2,214Total short-term investments
    
    $
    20,233
    
    
    $
    (18
    )
    
    $
    20,215Long-term investmentsHeld-to-maturity:Certificates of deposits
    
    $
    3,168
    
    
    $
    
    
    
    $
    3,168Corporate bonds
    
    
    10,591
    
    
    
    
    
    
    
    10,591Total long-term investments in held-to-maturity
    
    $
    13,759
    
    
    $
    
    
    
    $
    13,759
 March 31, 2009Cost or
    
    
    Gross Unrealized
    
    
    FairAmortized Cost
    
    
    Gain (Loss)
    
    
    ValueShort-term investmentsHeld-to-maturity:Certificates of deposits
    
    $
    20,776
    
    
    $
    
    
    
    $
    20,776Total short-term investments in held-to-maturity
    
    $
    20,776
    
    
    $
    
    
    
    $
    20,776Long-term investmentsHeld-to-maturity:Certificates of deposits
    
    $
    2,376
    
    
    $
    
    
    
    $
    2,376Corporate bonds
    
    
    2,510
    
    
    
    
    
    
    
    2,510Total long-term investments in held-to-maturity
    
    $
    4,886
    
    
    $
    
    
    
    $
    4,886
   Investments excluding asset-backed securities
    
    Fair ValueDue in less than one year (fiscal year 2010)
    
    $
    18,001Due in 1 to 2 years (fiscal year 2011)
    
    
    13,759Asset-backed securities(1)Weighted average maturity less than 1 year
    
    
    621Weighted average maturity 1 to 2 years
    
    
    1,593Total investments
    
    $
    33,974
 
 (1)
    
    Asset-backed securities are separately disclosed as they are not due at a single maturity date. NOTE 4. FAIR VALUE MEASUREMENTS
    8




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As of June 30, 2009Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Inputs
    
    
    InputsLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssetsCash and cash equivalents(1)
    
    $
    46,868
    
    
    $
    
    
    
    $
    
    
    
    $
    46,868Short-term investments:Certificates of deposits
    
    
    18,001
    
    
    
    
    
    
    
    
    
    
    
    18,001Asset-backed securities
    
    
    2,214
    
    
    
    
    
    
    
    
    
    
    
    2,214Long-term investments:Certificates of deposits
    
    
    3,168
    
    
    
    
    
    
    
    
    
    
    
    3,168Corporate bonds
    
    
    10,591
    
    
    
    
    
    
    
    
    
    
    
    10,591Total assets at fair value
    
    $
    80,842
    
    
    $
    
    
    
    $
    
    
    
    $
    80,842
 
 (1)
    
    Cash and cash equivalents as of June 30, 2009 consisted of $7.1 million in cash and $39.8
million in cash equivalents, consisting of money market mutual funds.  NOTE 5. INVENTORIES
  June 30,
    
    
    March 31,2009
    
    
    2009Raw materials
    
    $
    9,032
    
    
    $
    8,539Work-in-process
    
    
    2,613
    
    
    
    2,592Finished goods
    
    
    3,843
    
    
    
    4,604Inventories
    
    $
    15,488
    
    
    $
    15,735
 NOTE 6. WARRANTY RESERVES
  Instruments.
 Reagent Discs.
  9




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Three Months EndedJune 30,2009
    
    
    2008Balance at beginning of period
    
    $
    2,297
    
    
    $
    1,948Provision for warranty expense
    
    
    257
    
    
    
    507Warranty costs incurred
    
    
    (169
    )
    
    
    (340
    )Balance at end of period
    
    
    2,385
    
    
    
    2,115Non-current portion of warranty reserve
    
    
    653
    
    
    
    1,007Current portion of warranty reserve
    
    $
    1,732
    
    
    $
    1,108
 NOTE 7. LINE OF CREDIT
   
    
    The Company must have a minimum net income of $25,000 before preferred stock dividends and
accretion on preferred stock in any three quarters of a fiscal year, provided that any loss
before preferred stock dividends and accretion on preferred stock incurred in the remaining
quarter is not to exceed $250,000.
 
    
    The Company is required to be profitable, as defined, on a fiscal year to date basis
beginning, with respect to the current fiscal year, with the six month period ending September
30, 2009 and to have net income before preferred stock dividends and accretion on preferred
stock of at least $1.2 million for the fiscal year ending March 31, 2010.
 
    
    The Company is required to comply with certain financial covenants as follows:
 Financial Covenants
    
    RequirementsQuick ratio, as defined
    
    Not less than 2.00 to 1.00Cash flow coverage, as defined
    
    Not less than 1.25 to 1.00Debt to net worth ratio, as defined
    
    Not greater than 1.00 to 1.00Tangible effective net worth, as defined
    
    Not less than $25.7 million
  NOTE 8. COMMITMENTS AND CONTINGENCIES
 Purchase Commitments.
 Patent License Agreement.
  10




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##### Table of Contents



Litigation.
 NOTE 9. SHARE-BASED COMPENSATION
   Cash Flow Impact
  Equity Compensation Plans
  2005 Equity Incentive Plan.
   1992 Outside Directors Stock Option Plan.
  11




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Stock Options
   Stock Option Activity
  Weighted
    
    
    WeightedAverage
    
    
    Average
    
    
    AggregateExercise
    
    
    Remaining
    
    
    IntrinsicNumber of
    
    
    Price
    
    
    Contractual
    
    
    ValueShares
    
    
    Per Share
    
    
    Life (Years)
    
    
    (In thousands)Outstanding at March 31, 2009
    
    
    848,000
    
    
    $
    8.86Granted
    
    
    
    
    
    
    Exercised
    
    
    (11,000
    )
    
    
    3.27Canceled or forfeited
    
    
    
    
    
    
    Outstanding at June 30, 2009
    
    
    837,000
    
    
    $
    8.93
    
    
    
    3.01
    
    
    $
    9,886Vested and expected to vest at June 30, 2009
    
    
    837,000
    
    
    $
    8.93
    
    
    
    3.01
    
    
    $
    9,886Exercisable at June 30, 2009
    
    
    837,000
    
    
    $
    8.93
    
    
    
    3.01
    
    
    $
    9,886
  Restricted Stock Units
  
    
    Restricted stock unit awards to employees:Four-year time-based vesting as follows:
five percent vesting after the first year; additional ten percent after the second year;
additional 15 percent after the third year; and the remaining 70 percent after the fourth
year of continuous employment with the Company.
    
    Restricted stock unit awards to non-employee directors:100 percent vesting after one
year of continuous service to the Company.
   12




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Restricted Stock Unit Activity
  WeightedAverageNumber of
    
    
    Grant DateShares
    
    
    Fair Value(1)Unvested at March 31, 2009
    
    
    690,000
    
    
    $
    23.43Granted
    
    
    220,000
    
    
    
    15.15Vested(2)
    
    
    (59,000
    )
    
    
    24.17Canceled or forfeited
    
    
    (56,000
    )
    
    
    23.92Unvested at June 30, 2009
    
    
    795,000
    
    
    $
    21.05
 
 (1)
    
    The weighted average grant date fair value of restricted stock units is based on the number of
shares and the closing market price of the Companys common stock on the date of grant.(2)
    
    The number of restricted stock units vested includes shares that the Company withheld on behalf
of the employees to satisfy the statutory tax withholding requirements.  NOTE 10. NET INCOME PER SHARE
   13




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Three Months EndedJune 30,2009
    
    
    2008Numerator:Net income
    
    $
    3,756
    
    
    $
    2,776Denominator:Weighted average common shares outstanding  basic
    
    
    21,965,000
    
    
    
    21,735,000Weighted average effect of dilutive securities:Stock options
    
    
    368,000
    
    
    
    585,000Restricted stock units
    
    
    24,000
    
    
    
    78,000Weighted average common shares outstanding  diluted
    
    
    22,357,000
    
    
    
    22,398,000Net income per share:Basic net income per share
    
    $
    0.17
    
    
    $
    0.13Diluted net income per share
    
    $
    0.17
    
    
    $
    0.12
  Three Months EndedJune 30,2009
    
    
    2008Weighted average number of shares underlying antidilutive stock options
    
    
    176,000
    
    
    
    Weighted average exercise price per share underlying antidilutive stock options
    
    $
    21.34
    
    
    
    N/A
  Three Months EndedJune 30,2009
    
    
    2008Weighted average number of shares underlying antidilutive restricted stock units
    
    
    400,000
    
    
    
    24,000
 NOTE 11. INCOME TAXES
    NOTE 12. COMPREHENSIVE INCOME
  Three Months EndedJune 30,2009
    
    
    2008Net income
    
    $
    3,756
    
    
    $
    2,776Other comprehensive income:Change in unrealized gain (loss) on investments, net of tax
    
    
    (11
    )
    
    
    83Comprehensive income
    
    $
    3,745
    
    
    $
    2,859
 NOTE 13. SEGMENT REPORTING INFORMATION
   14




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Medical Market
  Veterinary Market
   Three Months EndedJune 30,2009
    
    
    2008Revenues:Medical Market
    
    $
    5,763
    
    
    $
    6,529Veterinary Market
    
    
    21,823
    
    
    
    16,613Other(1)
    
    
    2,039
    
    
    
    1,430Total revenues
    
    
    29,625
    
    
    
    24,572Cost of revenues:Medical Market
    
    
    2,631
    
    
    
    3,226Veterinary Market
    
    
    8,717
    
    
    
    7,043Other(1)
    
    
    1,122
    
    
    
    800Total cost of revenues
    
    
    12,470
    
    
    
    11,069Gross profit:Medical Market
    
    
    3,132
    
    
    
    3,303Veterinary Market
    
    
    13,106
    
    
    
    9,570Other(1)
    
    
    917
    
    
    
    630Gross profit
    
    $
    17,155
    
    
    $
    13,503
 
 (1)
    
    Represents unallocated items, not specifically identified to any particular business segment.  15




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NOTE 14. REVENUES BY PRODUCT CATEGORY AND GEOGRAPHIC REGION AND SIGNIFICANT CONCENTRATIONS
 Revenue Information
  Three Months EndedJune 30,Revenues by Product Category
    
    2009
    
    
    2008Instruments(1)
    
    $
    6,277
    
    
    $
    7,802Consumables(2)
    
    
    20,905
    
    
    
    14,893Other products
    
    
    1,639
    
    
    
    1,110Product sales, net
    
    
    28,821
    
    
    
    23,805Development and licensing revenue
    
    
    804
    
    
    
    767Total revenues
    
    $
    29,625
    
    
    $
    24,572
 
 (1)
    
    Instruments include chemistry analyzers, hematology instruments and coagulation analyzers.(2)
    
    Consumables include reagent discs, hematology reagent kits, coagulation cartridges, i-STAT
cartridges and canine heartworm rapid tests.  Three Months EndedJune 30,Revenues by Geographic Region
    
    2009
    
    
    2008North America
    
    $
    24,111
    
    
    $
    20,295Europe
    
    
    4,395
    
    
    
    3,385Asia Pacific and rest of the world
    
    
    1,119
    
    
    
    892Total revenues
    
    $
    29,625
    
    
    $
    24,572
 Significant Concentrations
  Three Months EndedGeographical
    
    
    June 30,Distributor
    
    Location
    
    
    2009
    
    
    2008Walco International, Inc., d/b/a DVM Resources
    
    United States
    
    
    10
    %
    
    
    <10
    %
   
 Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 FORWARD-LOOKING STATEMENTS
   16




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##### Table of Contents



BUSINESS OVERVIEW
   
    
    Medical Market: We currently market the blood analysis system in the medical market under
the name Piccolo® xpress. Through October 2006, we marketed the blood analysis
system in the medical market as the Piccolo®, now referred to as the Piccolo
Classic. We continue to support and service our current population of Piccolo xpress and
Piccolo Classic chemistry analyzers.
 
    
    Veterinary Market: We currently market the blood analysis system in the veterinary market
under the name VetScan VS2®. Through March 2006, we marketed the blood analysis
system in the veterinary market as the VetScan®, now referred to as the VetScan
Classic. We continue to support and service our current population of VetScan VS2 and VetScan
Classic chemistry analyzers.
   pro pro
 Dirofilaria immitis
 ®
   17




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##### Table of Contents



CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS
   Revenue Recognition and Deferred Revenue.
   Distributor and Customer Rebates.
 Sales and Other Allowances.
 Allowance for Doubtful Accounts.
  18




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##### Table of Contents



Fair Value Measurements.
 Level 1:
 Level 2:
 Level 3:
  Warranty Reserves.
   Inventories.
 Valuation of Long-Lived Assets.
  19




---



##### Table of Contents



Income Taxes.
  Share-Based Compensation Expense .
  
    
    Risk-free interest rate:The risk-free interest rate is based on U.S. Treasury yields in
effect at the time of grant for the expected term of the option.
 
    
    Expected stock price volatility:We estimate the volatility of our common stock at the
date of grant based on the historical volatility of our common stock.
 
    
    Expected term:We estimate the expected term of stock options granted based on historical
exercise and post-vesting termination patterns, which we believe are representative of future
behavior.
 
    
    Expected dividends:We have not paid cash dividends on our common stock and we do not
anticipate paying cash dividends in the foreseeable future; consequently, we use an expected
dividend yield of zero.
   RESULTS OF OPERATIONS
   20




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##### Table of Contents



Total Revenues
 Revenues by Geographic Region and by Product Category.
 Three Months EndedJune 30,
    
    
    ChangeIncrease/
    
    
    PercentRevenues by Geographic Region
    
    2009
    
    
    2008
    
    
    (Decrease)
    
    
    ChangeNorth America
    
    $
    24,111
    
    
    $
    20,295
    
    
    $
    3,816
    
    
    
    19
    %Percentage of total revenues
    
    
    81
    %
    
    
    83
    %Europe
    
    
    4,395
    
    
    
    3,385
    
    
    
    1,010
    
    
    
    30
    %Percentage of total revenues
    
    
    15
    %
    
    
    14
    %Asia Pacific and rest of the world
    
    
    1,119
    
    
    
    892
    
    
    
    227
    
    
    
    25
    %Percentage of total revenues
    
    
    4
    %
    
    
    3
    %Total revenues
    
    $
    29,625
    
    
    $
    24,572
    
    
    $
    5,053
    
    
    
    21
    %
 Three Months EndedJune 30,
    
    
    ChangeIncrease/
    
    
    PercentRevenues by Product Category
    
    2009
    
    
    2008
    
    
    (Decrease)
    
    
    ChangeInstruments(1)
    
    $
    6,277
    
    
    $
    7,802
    
    
    $
    (1,525
    )
    
    
    (20
    %)Percentage of total revenues
    
    
    21
    %
    
    
    32
    %Consumables(2)
    
    
    20,905
    
    
    
    14,893
    
    
    
    6,012
    
    
    
    40
    %Percentage of total revenues
    
    
    71
    %
    
    
    61
    %Other products
    
    
    1,639
    
    
    
    1,110
    
    
    
    529
    
    
    
    48
    %Percentage of total revenues
    
    
    5
    %
    
    
    4
    %Product sales, net
    
    
    28,821
    
    
    
    23,805
    
    
    
    5,016
    
    
    
    21
    %Percentage of total revenues
    
    
    97
    %
    
    
    97
    %Development and licensing revenue
    
    
    804
    
    
    
    767
    
    
    
    37
    
    
    
    5
    %Percentage of total revenues
    
    
    3
    %
    
    
    3
    %Total revenues
    
    $
    29,625
    
    
    $
    24,572
    
    
    $
    5,053
    
    
    
    21
    %
 
 (1)
    
    Instruments include chemistry analyzers, hematology instruments and coagulation
analyzers.(2)
    
    Consumables include reagent discs, hematology reagent kits, coagulation cartridges, i-STAT
cartridges and canine heartworm rapid tests. Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
 North America .
 
    
    Medical reagent discs sales in North America (excluding the U.S. government) increased 12%,
or $303,000, primarily due to an increase in units sold resulting from an expanded installed
base of our Piccolo chemistry analyzers.
 
    
    Veterinary reagent discs sales in North America increased 42%, or $3.4 million, primarily
due to an increase in units sold resulting from an expanded installed base of our VetScan
chemistry analyzers.
 
    
    Sales of our canine heartworm rapid tests, which we launched in the fourth quarter of
fiscal 2009, were $1.1 million in North America during the three months ended June 30, 2009.
 
    
    Sales of our VetScan VSprocoagulation analyzers, which we launched in the fourth quarter
of fiscal 2009, were $220,000 in North America during the three months ended June 30, 2009.
 
    
    During the three months ended June 30, 2009, total revenues from other products sold in
North America increased 41%, or $446,000, as compared to the three months ended June 30, 2008.
The net increase in revenues from other products was primarily due to a decrease in
maintenance contracts offered to customers from time to time as incentives in the form of free
goods in connection with the sale of our products, for which revenue is deferred and
recognized ratably over the life of the maintenance contract.
  21




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##### Table of Contents




    
    Medical reagent discs sold to the U.S. government decreased 10%, or $61,000, primarily due
to lower average selling prices during the three months ended June 30, 2009. Sales of our
medical reagent discs to the U.S. government were based on the U.S. militarys needs for these
products, which were not predictable.
 
    
    Sales of our Piccolo chemistry analyzers in North America (excluding the U.S. government)
decreased 62%, or $970,000, primarily due to inventory stock adjustments by distributors
during the three months ended June 30, 2009.
 
    
    Sales of our Piccolo chemistry analyzers to the U.S. government decreased 8%, or $60,000,
primarily due to lower average selling prices during the three months ended June 30, 2009.
Sales of our Piccolo chemistry analyzers to the U.S. government were based on the U.S.
militarys needs for these products, which were not predictable.
 
    
    Sales of our VetScan chemistry analyzers in North America decreased 35%, or $835,000, and
sales of our hematology instruments in North America decreased 16%, or $245,000. The decrease
in sales of VetScan chemistry analyzers and hematology instruments was primarily due to
economic conditions and the resulting impact of reduced capital spending at the physician
office level as a result of the reduced availability of credit to customers.
 Europe .
 
    
    Veterinary reagent discs sales in Europe increased 39%, or $688,000, primarily due to an
increase in units sold resulting from an expanded installed base of our VetScan chemistry
analyzers.
 Significant concentration.
 Segment Results
 Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
  Three Months EndedJune 30,
    
    
    ChangePercent of
    
    
    
    
    
    
    Percent of
    
    
    Increase/
    
    
    Percent2009
    
    
    Revenues(1)
    
    
    2008
    
    
    Revenues(1)
    
    
    (Decrease)
    
    
    ChangeRevenues:Medical Market
    
    $
    5,763
    
    
    
    100
    %
    
    $
    6,529
    
    
    
    100
    %
    
    $
    (766
    )
    
    
    (12
    %)Percentage of total revenues
    
    
    19
    %
    
    
    
    
    
    
    26
    %Veterinary Market
    
    
    21,823
    
    
    
    100
    %
    
    
    16,613
    
    
    
    100
    %
    
    
    5,210
    
    
    
    31
    %Percentage of total revenues
    
    
    74
    %
    
    
    
    
    
    
    68
    %Other(2)
    
    
    2,039
    
    
    
    
    
    
    
    1,430
    
    
    
    
    
    
    
    609
    
    
    
    43
    %Percentage of total revenues
    
    
    7
    %
    
    
    
    
    
    
    6
    %Total revenues
    
    
    29,625
    
    
    
    
    
    
    
    24,572
    
    
    
    
    
    
    
    5,053
    
    
    
    21
    %Cost of revenues:Medical Market
    
    
    2,631
    
    
    
    46
    %
    
    
    3,226
    
    
    
    49
    %
    
    
    (595
    )
    
    
    (18
    %)Veterinary Market
    
    
    8,717
    
    
    
    40
    %
    
    
    7,043
    
    
    
    42
    %
    
    
    1,674
    
    
    
    24
    %Other(2)
    
    
    1,122
    
    
    
    
    
    
    
    800
    
    
    
    
    
    
    
    322
    
    
    
    40
    %Total cost of revenues
    
    
    12,470
    
    
    
    
    
    
    
    11,069
    
    
    
    
    
    
    
    1,401
    
    
    
    13
    %Gross profit:Medical Market
    
    
    3,132
    
    
    
    54
    %
    
    
    3,303
    
    
    
    51
    %
    
    
    (171
    )
    
    
    (5
    %)Veterinary Market
    
    
    13,106
    
    
    
    60
    %
    
    
    9,570
    
    
    
    58
    %
    
    
    3,536
    
    
    
    37
    %Other(2)
    
    
    917
    
    
    
    
    
    
    
    630
    
    
    
    
    
    
    
    287
    
    
    
    46
    %Gross profit
    
    $
    17,155
    
    
    
    
    
    
    $
    13,503
    
    
    
    
    
    
    $
    3,652
    
    
    
    27
    %
 
 (1)
    
    The percentages reported are based on revenues by operating segment.(2)
    
    Represents unallocated items, not specifically identified to any particular business segment.  22




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##### Table of Contents



Medical Market
 Revenues for Medical Market Segment
  Instruments.
 Consumables.
 Gross Profit for Medical Market Segment
  Veterinary Market
 Revenues for Veterinary Market Segment
  Instruments.
 
    
    Sales of our VetScan chemistry analyzers decreased 20%, or $681,000, comprising primarily
of a decrease in revenues in North America of 35%, or $835,000. The decrease was primarily
due to economic conditions and the resulting impact of reduced capital spending at the
physician office level as a result of the reduced availability of credit to customers.
 
    
    Sales of our hematology instruments decreased 5%, or $88,000, comprising primarily of a
decrease in revenues in North America of 16%, or $245,000. The decrease was primarily due to
economic conditions and the resulting impact of reduced capital spending at the physician
office level as a result of the reduced availability of credit to customers.
 
    
    Sales of our VetScan VSprocoagulation analyzers, which we launched in the fourth quarter
of fiscal 2009, were $241,000 during the three months ended June 30, 2009.
 Consumables.
 
    
    Total revenues from reagent discs sold in the veterinary market increased 40%, or $4.1
million, during the three months ended June 30, 2009, as compared to the three months ended
June 30, 2008. The increase in revenues from veterinary reagent discs was primarily
attributed to an increase in units sold resulting from an expanded installed base of our
VetScan chemistry analyzers. The increase in revenues was comprised of (a) an increase in
revenues in North America of 42%, or $3.4 million,
and (b) an increase in revenues in Europe of 39%, or $688,000.
 
    
    Sales of our canine heartworm rapid tests, which we launched in the fourth quarter of
fiscal 2009, were $1.1 million during the three months ended June 30, 2009, primarily in North
America.
  23




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##### Table of Contents



Gross Profit for Veterinary Market Segment
  Cost of Revenues
  Three Months EndedJune 30,
    
    
    ChangeIncrease/
    
    
    Percent2009
    
    
    2008
    
    
    (Decrease)
    
    
    ChangeCost of revenues
    
    $
    12,470
    
    
    $
    11,069
    
    
    $
    1,401
    
    
    
    13
    %Percentage of total revenues
    
    
    42
    %
    
    
    45
    %
  Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
  Gross Profit
  Three Months EndedJune 30,
    
    
    ChangeIncrease/
    
    
    Percent2009
    
    
    2008
    
    
    (Decrease)
    
    
    ChangeTotal gross profit
    
    $
    17,155
    
    
    $
    13,503
    
    
    $
    3,652
    
    
    
    27
    %Total gross margin
    
    
    58
    %
    
    
    55
    %
 Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
  Operating Expenses
 Research and Development
  Three Months EndedJune 30,
    
    
    ChangeIncrease/
    
    
    Percent2009
    
    
    2008
    
    
    (Decrease)
    
    
    ChangeResearch and development expenses
    
    $
    2,573
    
    
    $
    1,997
    
    
    $
    576
    
    
    
    29
    %Percentage of total revenues
    
    
    9
    %
    
    
    8
    %
  24




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##### Table of Contents



Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
   Sales and Marketing
  Three Months EndedJune 30,
    
    
    ChangeIncrease/
    
    
    Percent2009
    
    
    2008
    
    
    (Decrease)
    
    
    ChangeSales and marketing expenses
    
    $
    6,360
    
    
    $
    5,827
    
    
    $
    533
    
    
    
    9
    %Percentage of total revenues
    
    
    21
    %
    
    
    24
    %
  Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
  General and Administrative
  Three Months EndedJune 30,
    
    
    ChangeIncrease/
    
    
    Percent2009
    
    
    2008
    
    
    (Decrease)
    
    
    ChangeGeneral and administrative expenses
    
    $
    2,498
    
    
    $
    1,662
    
    
    $
    836
    
    
    
    50
    %Percentage of total revenues
    
    
    8
    %
    
    
    7
    %
  Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
   25




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##### Table of Contents



Interest and Other Income (Expense), Net
  Three Months EndedJune 30,
    
    
    ChangeIncrease/
    
    
    Percent2009
    
    
    2008
    
    
    (Decrease)
    
    
    ChangeInterest and other income (expense), net
    
    $
    514
    
    
    $
    462
    
    
    $
    52
    
    
    
    11
    %
  Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
  Income Tax Provision
  Three Months EndedJune 30,2009
    
    
    2008Income tax provision
    
    $
    2,482
    
    
    $
    1,703Effective tax rate
    
    
    40
    %
    
    
    38
    %
 Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
    LIQUIDITY AND CAPITAL RESOURCES
  June 30,
    
    
    March 31,2009
    
    
    2009Cash and cash equivalents
    
    $
    46,868
    
    
    $
    49,237Short-term investments
    
    
    20,215
    
    
    
    20,776Long-term investments
    
    
    13,759
    
    
    
    4,886Total cash, cash equivalents and investments
    
    $
    80,842
    
    
    $
    74,899Percentage of total assets
    
    
    55
    %
    
    
    53
    %
  26




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##### Table of Contents



Cash Flow Changes
  Three Months EndedJune 30,2009
    
    
    2008Net cash provided by operating activities
    
    $
    6,365
    
    
    $
    554Net cash (used in) provided by investing activities
    
    
    (8,714
    )
    
    
    3,496Net cash (used in) provided by financing activities
    
    
    (59
    )
    
    
    1,762Effect of exchange rate changes on cash and cash equivalents
    
    
    39
    
    
    
    Net (decrease) increase in cash and cash equivalents
    
    $
    (2,369
    )
    
    $
    5,812
  Operating Activities
       Investing Activities
  Investments.
 Property
and Equipment.
 Financing Activities
   27




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##### Table of Contents



Contractual Obligations
 Purchase Commitments.
 Patent License Agreement.
  Line of Credit.
 Contingencies
  Off-Balance Sheet Arrangements
  Financial Condition
  RECENT ACCOUNTING PRONOUNCEMENTS
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk
     28




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##### Table of Contents



Foreign Currency Rate Fluctuations
     
 Item 4.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
   29




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##### Table of Contents



Inherent Limitations on Controls and Procedures
  
 Item 4T.
    
    Controls and Procedures
  
 PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
 RISK FACTORS THAT MAY AFFECT OUR PERFORMANCE
    We are not able to predict sales in future quarters and a number of factors affect our periodic
results, which makes our quarterly operating results less predictable.
     30




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##### Table of Contents




    
    new product announcements made by us or our competitors;
 
    
    changes in our pricing structures or the pricing structures of our competitors;
 
    
    our ability to develop, introduce and market new products on a timely basis;
 
    
    our manufacturing capacities and our ability to increase the scale of these capacities;
 
    
    the mix of product sales between our blood chemistry analyzers and our reagent disc
products;
 
    
    the amount we spend on research and development; and
 
    
    changes in our strategy.
 We would fail to achieve anticipated revenue if the market does not accept our products.
    We rely on patents and other proprietary information, the loss of which would negatively affect our
business.
    31




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##### Table of Contents



We must increase sales of our Piccolo and VetScan products or we may not be able to increase
profitability.
  
    
    continue to improve our existing products and develop new and innovative products;
    
    increase our sales and marketing activities;
    
    effectively manage our manufacturing activities; and
    
    effectively compete against current and future competitors.
  We must continue to develop our sales, marketing and distribution experience in the human
diagnostic market or our business will not grow.
  
    
    we will be able to establish and maintain effective distribution arrangements in the
human diagnostic market;
    
    any distribution arrangements that we are able to establish will be successful in
marketing our products; or
    
    the costs associated with sales, marketing and distributing our products will not be
excessive.
  We could fail to achieve anticipated revenue if we experience problems related to the manufacture
of our blood chemistry analyzers.
  We may inadvertently produce defective products, which may subject us to significant warranty
liabilities or product liability claims and we may have insufficient product liability insurance to
pay material uninsured claims.
    32




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##### Table of Contents



We must effectively train and integrate the members of our sales team in order to achieve our
anticipated revenue or expand our business.
  We need to successfully manufacture and market additional reagent discs for the human diagnostic
market if we are to compete in that market.
  We rely primarily on distributors to sell our products and we rely on sole distributor arrangements
in a number of countries. Our failure to successfully develop and maintain these relationships
could adversely affect our business.
       33




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##### Table of Contents



We depend on limited or sole suppliers for several key components in our products, many of whom we
have not entered into contractual relationships with and failure of our suppliers to provide the
components to us could harm our business.
  
    
    Reagent Discs:Two injection-molding manufacturers, C. Brewer & Co. and Nypro, Inc.,
currently make the molded plastic discs which, when loaded with reagents and welded together,
form our reagent disc products. We believe that only a few manufacturers are capable of
producing these discs to the narrow tolerances that we require. To date, we have only
qualified these two manufacturers to manufacture the molded plastic discs.
 
    
    Reagent Chemicals:We currently depend on the following single source vendors for some of
the chemicals that we use to produce the dry reagent chemistry beads that are either inserted
in our reagent discs or sold as stand-alone products: Amano Enzyme USA Co., Ltd., Genzyme
Corporation, Kikkoman Corporation Biochemical Division, Microgenics Corporation, Roche
Molecular Biochemicals of Roche Diagnostics Corporation, a division of F. Hoffmann-La Roche,
Ltd., Sigma Aldrich Inc. and Toyobo Specialties (formerly Shinko American Inc.).
 
    
    Blood Chemistry Analyzer Components:Our blood analyzer products use several
technologically-advanced components that we currently purchase from a limited number of
vendors, including certain components from a single-source supplier, UDT Sensors (a division of OSI
Optoelectronics). Our analyzers also use a printer that is primarily made by Seiko North
America Corporation. The loss of the supply of any of these components could force us to
redesign our blood chemistry analyzers.
 
    
    Hematology Instruments and Reagents:Our hematology instruments are manufactured by
Diatron Medical Instruments PLC. in Hungary and are purchased by us as a completed instrument.
In addition, to date, we have qualified only three suppliers to produce the reagents for our
hematology instruments: Clinical Diagnostic Solutions, Inc., Diatron Medical Instruments PLC.
and Mallinckrodt Baker BV.
 
    
    Coagulation Analyzers and Cartridges:Our coagulation analyzers and cartridges are
manufactured by Scandinavian MicroBiodevices APS in Denmark and are purchased by us as
completed products.
   We may not be able to compete effectively with larger, more established entities or their products,
or with future organizations or future products, which could cause our sales to decline.
  
    
    commercial clinical laboratories;
 
    
    hospitals clinical laboratories; and
 
    
    manufacturers of bench top multi-test blood analyzers and other testing systems that health
care providers can use on-site (a listing of our competitors is listed below).
  34




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##### Table of Contents




    
    range of tests offered;
 
    
    immediacy of results;
 
    
    cost effectiveness;
 
    
    ease of use; and
 
    
    reliability of results.
   Changes in third-party payor reimbursement regulations can negatively affect our business.
  We are subject to numerous governmental regulations and regulatory changes are difficult to predict
and may be damaging to our business.
 Need for FDA Certification for Our Medical Device Products
    35




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##### Table of Contents



Need to Comply with Manufacturing Regulations
  
    
    In April 2001, the State of California Food and Drug Branch granted our manufacturing
facility in compliance status, based on the regulations for Good Manufacturing Practices for
medical devices.
 
    
    In May 2001, the State of California Food and Drug Branch granted licensing for our
manufacturing facility in Union City, California.
 
    
    In May 2002, we received our ISO 9001 certification, expanding our compliance with
international quality standards.
 
    
    In December 2003, we received ISO 13485 Quality System certification as required by the
2003 European In Vitro Device Directive. This certified our quality system specifically to
medical devices.
 
    
    In both March 2003 and September 2005, the FDA conducted a facility inspection and verified
our compliance with the 21 CFR 820 Regulation.
 
    
    In November 2006, we received our recertification to the ISO 13485:2003 Quality System
Standard for medical devices.
 
    
    In August 2008, the FDA conducted an additional facility inspection to verify our
compliance with 21 CFR 820 Regulation.
  Effects of the Clinical Laboratory Improvement Amendments on Our Products
  
    
    waived;
    
    moderately complex; and
 
    
    highly complex.
    36




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##### Table of Contents



Need to Comply with Various Federal, State, Local and International Regulations
  
    
    In December 2003, we received certification from the British Standards Institute to the ISO
13485:1996 Quality System standard for medical devices. This quality system certification,
along with successful completion of product testing to 2003 European standards and the
translation of Piccolo product documentation into the required languages, enabled us to meet
the compliance requirements of the CE Mark and the 2003 European In Vitro Device Directive.
 
    
    In September 2005, we received the Canadian Medical Device Conformity Assessment System
stamp on our ISO 13485 certificate to signify compliance with Health Canada regulations.
 
    
    In March 2006, we received our certification to the 2003 version of the ISO 13485 Quality
System Standard for medical devices.
 
    
    In November 2006, we received our recertification to the ISO 13485:2003 Quality System
Standard for medical devices.
   We have incurred and may continue to incur, in future periods, significant share-based compensation
charges under SFAS No. 123(R), which may adversely affect our reported financial results.
  We depend on key members of our management and scientific staff and, if we fail to retain and
recruit qualified individuals, our ability to execute our business strategy and generate sales
would be harmed.
  We are subject to increasingly complex requirements from recent legislation requiring companies to
evaluate internal control over financial reporting.
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We may need additional funding in the future and these funds may not be available to us.
   
    
    further commercialization of our products and development of new test methods to allow us
to further penetrate the human diagnostic market and the veterinary diagnostic market;
 
    
    our need to acquire capital equipment for our manufacturing facilities, which includes the
ongoing costs related to the continuing development of our current and future products;
 
    
    research and design costs related to the continuing development of our current and future
products; and
 
    
    additional pre-clinical testing and clinical trials for our current and future products.
  We must comply with strict and potentially costly environmental regulations or we could pay
significant fines.
  Our facilities and manufacturing operations are vulnerable to natural disasters and other
unexpected losses; system failures or delays may harm our business.
    38




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Fluctuations in foreign exchange rates and the possible lack of financial stability in foreign
countries could prevent overseas sales growth.
  Our operating results could be materially affected by unanticipated changes in our tax provisions
or exposure to additional income tax liabilities.
  Our stock price is highly volatile and investing in our stock involves a high degree of risk, which
could result in substantial losses for investors.
  
    
    fluctuation in our operating results;
    
    announcements of technological innovations or new commercial products by us or our
competitors;
 
    
    changes in governmental regulation in the United States and internationally;
 
    
    prospects and proposals for health care reform;
 
    
    governmental or third-party payors controls on prices that our customers may pay for our
products;
 
    
    developments or disputes concerning our patents or our other proprietary rights;
 
    
    product liability claims and public concern as to the safety of our devices or similar
devices developed by our competitors; and
 
    
    general market conditions.
  Our shareholders rights plan and our ability to issue preferred stock may delay or prevent a change
of control of Abaxis.
   39




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Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
  
 Item 5.
    
    Other Information
  
 Item 6.
    
    Exhibits
 Exhibit No.
    
    Description of Document3.1
    
    Restated Articles of Incorporation (Filed with the Securities and Exchange Commission as an exhibit with
our Annual Report on Form 10-K for the fiscal year ended March 31, 1993 and incorporated herein by
reference.)3.2
    
    Certificate of Amendment of Amended and Restated Articles of Incorporation (Filed with the Securities
and Exchange Commission as an exhibit with our Quarterly Report on Form 10-Q for the quarterly period ended
December 31, 1996 and incorporated herein by reference.)3.3
    
    By-laws (Filed with the Securities and Exchange Commission in our Registration Statement No. 33-44326 on
December 11, 1991 and incorporated herein by reference.)3.4
    
    Amendment to the By-laws (Filed with the Securities and Exchange Commission as an exhibit with our
Current Report on Form 8-K on July 30, 2007 and incorporated herein by reference.)4.1
    
    Registration Rights Agreement, dated as of March 29, 2002 (Filed with the Securities and Exchange
Commission as an exhibit with our Current Report on Form 8-K on May 13, 2002 and incorporated herein by
reference.)4.2
    
    Reference is made to Exhibit 3.1, Exhibit 3.2, Exhibit 3.3 and Exhibit 3.4.10.1+
    
    Exclusive Agreement, dated as of May 1, 2009, by and between the Registrant and Abbott Point of Care Inc.10.2*
    
    Fiscal 2010 Base Salary and Target Bonus for the Named Executive Officers (Filed with the Securities and
Exchange Commission as an exhibit with our Current Report on Form 8-K on April 28, 2009 and incorporated
herein by reference.)10.3+
    
    License Agreement by and between
Inverness Medical Switzerland GmbH and the Registrant, dated
January 5, 2009.31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1#
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2#
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 #
    
    This certification accompanies this Quarterly Report on Form 10-Q. The certification is not deemed filed with the
Securities and Exchange Commission and is not to be incorporated by reference into any filing of Abaxis, Inc. under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the
date of this Quarterly Report on Form 10-Q and irrespective of any general incorporation language contained in any such
filing.*
    
    Management contract or compensatory plan or arrangement.+
    
    Confidential treatment of certain portions of this agreement has been requested from the
Securities and Exchange Commission.  40




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##### Table of Contents



SIGNATURES
  ABAXIS, INC.(Registrant)Date: August 10, 2009
    BY:
    /s/ Clinton H. SeversonClinton H. SeversonPresident, Chief Executive Officer and Director
(Principal Executive Officer)Date: August 10, 2009
    BY:
    /s/ Alberto R. Santa InesAlberto R. Santa InesChief Financial Officer and Vice President of Finance
(Principal Financial and Accounting Officer)  41




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description of Document3.1
    
    Restated Articles of Incorporation (Filed with the Securities and Exchange Commission as an exhibit with our
Annual Report on Form 10-K for the fiscal year ended March 31, 1993 and incorporated herein by reference.)3.2
    
    Certificate of Amendment of Amended and Restated Articles of Incorporation (Filed with the Securities and Exchange
Commission as an exhibit with our Quarterly Report on Form 10-Q for the quarterly period ended December 31, 1996 and incorporated herein by reference.)3.3
    
    By-laws (Filed with the Securities and Exchange Commission in our Registration
Statement No. 33-44326 on December 11, 1991 and incorporated herein by reference.)3.4
    
    Amendment to the By-laws (Filed with the Securities and Exchange Commission as an
exhibit with our Current Report on Form 8-K on July 30, 2007 and incorporated herein by reference.)4.1
    
    Registration Rights Agreement, dated as of March 29, 2002 (Filed with the Securities and Exchange
Commission as an exhibit with our Current Report on Form 8-K on May 13, 2002 and incorporated herein by reference.)4.2
    
    Reference is made to Exhibit 3.1, Exhibit 3.2, Exhibit 3.3 and Exhibit 3.4.10.1+
    
    Exclusive Agreement, dated as of May 1, 2009, by and between the Registrant and Abbott Point of Care Inc.10.2*
    
    Fiscal 2010 Base Salary and Target Bonus for the Named Executive Officers (Filed with the Securities and Exchange
Commission as an exhibit with our Current Report on Form 8-K on April 28, 2009 and incorporated herein by reference.)10.3+
    
    License Agreement by and between
Inverness Medical Switzerland GmbH and the Registrant, dated
January 5, 2009.31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1#
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2#
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 #
    
    This certification accompanies this Quarterly Report on Form 10-Q.
The certification is not deemed filed with the Securities and Exchange Commission and is not to be incorporated
by reference into any filing of Abaxis, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, whether made before or after the date of this Quarterly Report on Form 10-Q
and irrespective of any general incorporation language contained in any such filing.*
    
    Management contract or compensatory plan or arrangement.+
    
    Confidential treatment of certain portions of this agreement has been requested from the Securities and Exchange Commission.  42