##### 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, 2010
 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.
  California(State of Incorporation)
    
    77-0213001(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
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 o þ




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##### 



ABAXIS, INC.
Form 10-Q
 For the Quarter Ended June 30, 2010
 TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1. Condensed Consolidated Financial Statements (Unaudited):Condensed Consolidated Statements of Income for the Three Months Ended June 30, 2010 and 2009
    
    
    3Condensed Consolidated Balance Sheets as of June 30, 2010 and March 31, 2010
    
    
    4Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2010 and 2009
    
    
    5Notes to 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
    
    
    29PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    29Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    38Item 3. Defaults Upon Senior Securities
    
    
    38Item 4. Removed and Reserved
    
    
    38Item 5. Other Information
    
    
    38Item 6. Exhibits
    
    
    39SIGNATURES
    
    
    40Exhibit 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 INCOME  (Unaudited)  (In thousands, except share and per share data)
 Three Months EndedJune 30,2010
    
    
    2009Revenues
    
    $
    34,953
    
    
    $
    29,625Cost of revenues
    
    
    15,169
    
    
    
    12,470Gross profit
    
    
    19,784
    
    
    
    17,155Operating expenses:Research and development
    
    
    3,078
    
    
    
    2,573Sales and marketing
    
    
    8,633
    
    
    
    6,360General and administrative
    
    
    2,124
    
    
    
    2,498Total operating expenses
    
    
    13,835
    
    
    
    11,431Income from operations
    
    
    5,949
    
    
    
    5,724Interest and other income (expense), net
    
    
    (105
    )
    
    
    514Income before income tax provision
    
    
    5,844
    
    
    
    6,238Income tax provision
    
    
    2,264
    
    
    
    2,482Net income
    
    $
    3,580
    
    
    $
    3,756Net income per share:Basic net income per share
    
    $
    0.16
    
    
    $
    0.17Diluted net income per share
    
    $
    0.16
    
    
    $
    0.17Shares used in the calculation of net income per share:Weighted average common shares outstanding  basic
    
    
    22,211,000
    
    
    
    21,965,000Weighted average common shares outstanding  diluted
    
    
    22,750,000
    
    
    
    22,357,000
   3




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ABAXIS, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS  (Unaudited)  (In thousands, except share data)
 June 30,
    
    
    March 31,2010
    
    
    2010ASSETSCurrent assets:Cash and cash equivalents
    
    $
    36,348
    
    
    $
    27,857Short-term investments
    
    
    28,500
    
    
    
    32,343Receivables (net of allowances of $416 at June 30, 2010 and $446 at March 31, 2010)
    
    
    23,879
    
    
    
    23,714Inventories
    
    
    17,153
    
    
    
    19,067Prepaid expenses and other current assets
    
    
    1,182
    
    
    
    1,588Net deferred tax assets, current
    
    
    3,655
    
    
    
    3,773Total current assets
    
    
    110,717
    
    
    
    108,342Long-term investments
    
    
    33,529
    
    
    
    36,319Property and equipment, net
    
    
    15,707
    
    
    
    15,544Intangible assets, net
    
    
    4,456
    
    
    
    4,600Net deferred tax assets, non-current
    
    
    2,935
    
    
    
    2,935Other assets
    
    
    84
    
    
    
    76Total assets
    
    $
    167,428
    
    
    $
    167,816LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    4,713
    
    
    $
    9,404Accrued payroll and related expenses
    
    
    5,236
    
    
    
    5,615Accrued taxes
    
    
    1,571
    
    
    
    400Other accrued liabilities
    
    
    1,027
    
    
    
    1,256Deferred revenue
    
    
    1,032
    
    
    
    1,157Warranty reserve
    
    
    942
    
    
    
    1,183Total current liabilities
    
    
    14,521
    
    
    
    19,015Non-current liabilities:Deferred rent
    
    
    234
    
    
    
    163Deferred revenue
    
    
    1,582
    
    
    
    1,359Warranty reserve
    
    
    72
    
    
    
    160Total non-current liabilities
    
    
    1,888
    
    
    
    1,682Commitments 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; 22,287,000 and 22,112,000
shares issued and outstanding
at June 30, 2010 and at March 31, 2010, respectively
    
    
    125,370
    
    
    
    125,050Retained earnings
    
    
    25,649
    
    
    
    22,069Total shareholders equity
    
    
    151,019
    
    
    
    147,119Total liabilities and shareholders equity
    
    $
    167,428
    
    
    $
    167,816
   4




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ABAXIS, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (Unaudited)  (In thousands)
 Three Months EndedJune 30,2010
    
    
    2009Cash flows from operating activities:Net income
    
    $
    3,580
    
    
    $
    3,756Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    1,052
    
    
    
    1,290Investment premium amortization
    
    
    95
    
    
    
    11Loss on disposals of property and equipment
    
    
    4
    
    
    
    6Net loss (gain) on foreign exchange translation
    
    
    300
    
    
    
    (88
    )Share-based compensation expense
    
    
    1,134
    
    
    
    896Excess tax benefits from share-based awards
    
    
    (409
    )
    
    
    (190
    )Provision for deferred income taxes
    
    
    118
    
    
    
    245Changes in assets and liabilities:Receivables, net
    
    
    (192
    )
    
    
    (2,099
    )Inventories
    
    
    1,669
    
    
    
    (93
    )Prepaid expenses and other current assets
    
    
    403
    
    
    
    (30
    )Other assets
    
    
    (14
    )
    
    
    (11
    )Accounts payable
    
    
    (4,659
    )
    
    
    340Accrued payroll and related expenses
    
    
    (379
    )
    
    
    598Accrued taxes
    
    
    1,611
    
    
    
    1,770Other accrued liabilities
    
    
    (227
    )
    
    
    19Deferred rent
    
    
    71
    
    
    
    (45
    )Deferred revenue
    
    
    98
    
    
    
    (98
    )Warranty reserve
    
    
    (329
    )
    
    
    88Net cash provided by operating activities
    
    
    3,926
    
    
    
    6,365Cash flows from investing activities:Purchases of available-for-sale investments
    
    
    
    
    
    
    (3,030
    )Purchases of held-to-maturity investments
    
    
    (14,680
    )
    
    
    (11,706
    )Proceeds from redemptions of available-for-sale investments
    
    
    
    
    
    
    798Proceeds from maturities and redemptions of held-to-maturity investments
    
    
    21,218
    
    
    
    5,597Purchases of property and equipment
    
    
    (815
    )
    
    
    (373
    )Net cash provided by (used in) investing activities
    
    
    5,723
    
    
    
    (8,714
    )Cash flows from financing activities:Proceeds from the exercise of stock options
    
    
    324
    
    
    
    38Tax withholdings related to net share settlements of restricted stock units
    
    
    (1,562
    )
    
    
    (287
    )Excess tax benefits from share-based awards
    
    
    409
    
    
    
    190Net cash used in financing activities
    
    
    (829
    )
    
    
    (59
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (329
    )
    
    
    39Net increase (decrease) in cash and cash equivalents
    
    
    8,491
    
    
    
    (2,369
    )Cash and cash equivalents at beginning of period
    
    
    27,857
    
    
    
    49,237Cash and cash equivalents at end of period
    
    $
    36,348
    
    
    $
    46,868Supplemental disclosure of cash flow information:Cash paid for income taxes, net of refunds
    
    $
    168
    
    
    $
    227Supplemental disclosure of non-cash flow information:Change in unrealized gain (loss) on investments, net of tax
    
    $
    
    
    
    $
    (11
    )Transfers of equipment between inventory and property and equipment, net
    
    $
    260
    
    
    $
    347Net change in capitalized share-based compensation
    
    $
    15
    
    
    $
    7Common stock withheld for employee taxes in connection with share-based compensation
    
    $
    1,562
    
    
    $
    287
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ABAXIS, INC.
 
 NOTES TO 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.
 Significant Accounting Policies.
 NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS
   6




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NOTE 3. INVESTMENTS
  June 30, 2010Cost or
    
    
    Gross Unrealized
    
    
    FairAmortized Cost
    
    
    Gain (Loss)
    
    
    ValueShort-term investmentsHeld-to-maturity:Certificates of deposits
    
    $
    17,965
    
    
    $
    
    
    
    $
    17,965Corporate bonds
    
    
    10,535
    
    
    
    
    
    
    
    10,535Total short-term investments in held-to-maturity
    
    $
    28,500
    
    
    $
    
    
    
    $
    28,500Long-term investmentsHeld-to-maturity:Certificates of deposits
    
    $
    4,372
    
    
    $
    
    
    
    $
    4,372Corporate bonds
    
    
    5,683
    
    
    
    
    
    
    
    5,683Municipal bonds
    
    
    3,382
    
    
    
    
    
    
    
    3,382U.S. agency securities
    
    
    20,092
    
    
    
    
    
    
    
    20,092Total long-term investments in held-to-maturity
    
    $
    33,529
    
    
    $
    
    
    
    $
    33,529
 March 31, 2010Cost or
    
    
    Gross Unrealized
    
    
    FairAmortized Cost
    
    
    Gain (Loss)
    
    
    ValueShort-term investmentsHeld-to-maturity:Certificates of deposits
    
    $
    15,767
    
    
    $
    
    
    
    $
    15,767Corporate bonds
    
    
    10,549
    
    
    
    
    
    
    
    10,549Municipal bonds
    
    
    6,027
    
    
    
    
    
    
    
    6,027Total short-term investments in held-to-maturity
    
    $
    32,343
    
    
    $
    
    
    
    $
    32,343Long-term investmentsHeld-to-maturity:Certificates of deposits
    
    $
    6,562
    
    
    $
    
    
    
    $
    6,562Corporate bonds
    
    
    5,720
    
    
    
    
    
    
    
    5,720Municipal bonds
    
    
    3,407
    
    
    
    
    
    
    
    3,407U.S. agency securities
    
    
    20,630
    
    
    
    
    
    
    
    20,630Total long-term investments in held-to-maturity
    
    $
    36,319
    
    
    $
    
    
    
    $
    36,319
   June 30, 2010
    
    
    March 31, 2010Investments
    
    Fair Value
    
    
    Fair ValueDue in less than one year
    
    $
    28,500
    
    
    $
    32,343Due in 1 to 4 years
    
    
    33,529
    
    
    
    36,319Total investments
    
    $
    62,029
    
    
    $
    68,662
 NOTE 4. FAIR VALUE MEASUREMENTS
      7




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As of June 30, 2010Quoted Prices in
    
    
    
    
    
    
    SignificantActive Markets for
    
    
    Significant Other
    
    
    UnobservableIdentical Assets
    
    
    Observable Inputs
    
    
    InputsLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssetsCash equivalents
    
    $
    11,412
    
    
    $
    
    
    
    $
    
    
    
    $
    11,412Total assets at fair value
    
    $
    11,412
    
    
    $
    
    
    
    $
    
    
    
    $
    11,412
 As of March 31, 2010Quoted Prices in
    
    
    
    
    
    
    SignificantActive Markets for
    
    
    Significant Other
    
    
    UnobservableIdentical Assets
    
    
    Observable Inputs
    
    
    InputsLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssetsCash equivalents
    
    $
    4,618
    
    
    $
    
    
    
    $
    
    
    
    $
    4,618Total assets at fair value
    
    $
    4,618
    
    
    $
    
    
    
    $
    
    
    
    $
    4,618
  NOTE 5. INVENTORIES
  June 30,
    
    
    March 31,2010
    
    
    2010Raw materials
    
    $
    7,943
    
    
    $
    8,936Work-in-process
    
    
    3,159
    
    
    
    3,421Finished goods
    
    
    6,051
    
    
    
    6,710Inventories
    
    $
    17,153
    
    
    $
    19,067
 NOTE 6. WARRANTY RESERVES
  Instruments.
  Reagent Discs.
  8




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Three Months EndedJune 30,2010
    
    
    2009Balance at beginning of period
    
    $
    1,343
    
    
    $
    2,297Provision for warranty expense
    
    
    125
    
    
    
    257Warranty costs incurred
    
    
    (147
    )
    
    
    (169
    )Adjustment to pre-existing warranties
    
    
    (307
    )
    
    
    Balance at end of period
    
    
    1,014
    
    
    
    2,385Non-current portion of warranty reserve
    
    
    72
    
    
    
    653Current portion of warranty reserve
    
    $
    942
    
    
    $
    1,732
 NOTE 7. LINE OF CREDIT
   
    
    We were required to 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.
 
    
    We were 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, 2010
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, 2011.
 
    
    We were 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
 Facilities Lease.
  9




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##### Table of Contents



Purchase Commitments.
  Patent License Agreement.
  Litigation.
  NOTE 9. SHARE-BASED COMPENSATION
  Three Months EndedJune 30,2010
    
    
    2009Cost of revenues
    
    $
    145
    
    
    $
    49Research and development
    
    
    339
    
    
    
    140Sales and marketing
    
    
    494
    
    
    
    245General and administrative
    
    
    156
    
    
    
    462Share-based compensation expense before income taxes
    
    
    1,134
    
    
    
    896Income tax benefit
    
    
    (432
    )
    
    
    (292
    )Total share-based compensation expense after income taxes
    
    $
    702
    
    
    $
    604Net impact of share-based compensation on:Basic net income per share
    
    $
    0.03
    
    
    $
    0.03Diluted net income per share
    
    $
    0.03
    
    
    $
    0.03
   10




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##### Table of Contents



Cash Flow Impact
  Equity Compensation Plans
  2005 Equity Incentive Plan.
   1992 Outside Directors Stock Option Plan.
  Stock Options
    11




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Stock Option Activity
  Weighted
    
    
    WeightedAverage
    
    
    Average
    
    
    AggregateExercise
    
    
    Remaining
    
    
    IntrinsicNumber of
    
    
    Price
    
    
    Contractual
    
    
    ValueShares
    
    
    Per Share
    
    
    Life (Years)
    
    
    (In thousands)Outstanding at March 31, 2010
    
    
    720,000
    
    
    $
    9.15Granted
    
    
    
    
    
    
    Exercised
    
    
    (54,000
    )
    
    
    5.92Canceled or forfeited
    
    
    
    
    
    
    Outstanding at June 30, 2010
    
    
    666,000
    
    
    $
    9.42
    
    
    
    2.37
    
    
    $
    8,033Vested and expected to vest at June 30, 2010
    
    
    666,000
    
    
    $
    9.42
    
    
    
    2.37
    
    
    $
    8,033Exercisable at June 30, 2010
    
    
    666,000
    
    
    $
    9.42
    
    
    
    2.37
    
    
    $
    8,033
  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, 2010
    
    
    864,000
    
    
    $
    21.57Granted
    
    
    242,000
    
    
    
    25.76Vested(2)
    
    
    (182,000
    )
    
    
    23.90Canceled or forfeited
    
    
    (5,000
    )
    
    
    23.59Unvested at June 30, 2010
    
    
    919,000
    
    
    $
    22.20
 
 (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 our common stock on the date of grant.(2)
    
    The number of restricted stock units vested includes shares that we withheld on behalf of our
employees to satisfy the statutory tax withholding requirements.  NOTE 10. NET INCOME PER SHARE
   Three Months EndedJune 30,2010
    
    
    2009Numerator:Net income
    
    $
    3,580
    
    
    $
    3,756Denominator:Weighted average common shares outstanding  basic
    
    
    22,211,000
    
    
    
    21,965,000Weighted average effect of dilutive securities:Stock options
    
    
    349,000
    
    
    
    368,000Restricted stock units
    
    
    190,000
    
    
    
    24,000Weighted average common shares outstanding  diluted
    
    
    22,750,000
    
    
    
    22,357,000Net income per share:Basic net income per share
    
    $
    0.16
    
    
    $
    0.17Diluted net income per share
    
    $
    0.16
    
    
    $
    0.17
  Three Months EndedJune 30,2010
    
    
    2009Weighted average number of shares underlying antidilutive stock options
    
    
    
    
    
    
    176,000Weighted average exercise price per share underlying antidilutive stock options
    
    
    N/A
    
    
    $
    21.34
  13




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Three Months EndedJune 30,2010
    
    
    2009Weighted average number of shares underlying antidilutive restricted stock units
    
    
    234,000
    
    
    
    400,000
 NOTE 11. INCOME TAXES
   NOTE 12. COMPREHENSIVE INCOME
  Three Months EndedJune 30,2010
    
    
    2009Net income
    
    $
    3,580
    
    
    $
    3,756Other comprehensive income:Change in unrealized gain (loss) on investments, net of tax
    
    
    
    
    
    
    (11
    )Comprehensive income
    
    $
    3,580
    
    
    $
    3,745
 NOTE 13. SEGMENT REPORTING INFORMATION
   Medical Market
  Veterinary Market
 pro
  14




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Three Months EndedJune 30,2010
    
    
    2009Revenues:Medical Market
    
    $
    6,438
    
    
    $
    5,763Veterinary Market
    
    
    26,818
    
    
    
    21,823Other(1)
    
    
    1,697
    
    
    
    2,039Total revenues
    
    
    34,953
    
    
    
    29,625Cost of revenues:Medical Market
    
    
    2,969
    
    
    
    2,631Veterinary Market
    
    
    10,913
    
    
    
    8,717Other(1)
    
    
    1,287
    
    
    
    1,122Total cost of revenues
    
    
    15,169
    
    
    
    12,470Gross profit:Medical Market
    
    
    3,469
    
    
    
    3,132Veterinary Market
    
    
    15,905
    
    
    
    13,106Other(1)
    
    
    410
    
    
    
    917Gross profit
    
    $
    19,784
    
    
    $
    17,155
 
 (1)
    
    Represents unallocated items, not specifically identified to any particular business segment. NOTE 14. REVENUES BY PRODUCT CATEGORY AND GEOGRAPHIC REGION AND SIGNIFICANT CONCENTRATIONS
 Revenue Information
  Three Months EndedJune 30,Revenues by Product Category
    
    2010
    
    
    2009Instruments(1)
    
    $
    7,325
    
    
    $
    6,277Consumables(2)
    
    
    25,318
    
    
    
    20,905Other products
    
    
    1,869
    
    
    
    1,639Product sales, net
    
    
    34,512
    
    
    
    28,821Development and licensing revenue
    
    
    441
    
    
    
    804Total revenues
    
    $
    34,953
    
    
    $
    29,625
 
 (1)
    
    Instruments include chemistry analyzers, hematology instruments, coagulation analyzers and
i-STAT 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
    
    2010
    
    
    2009North America
    
    $
    27,789
    
    
    $
    24,111Europe
    
    
    5,627
    
    
    
    4,395Asia Pacific and rest of the world
    
    
    1,537
    
    
    
    1,119Total revenues
    
    $
    34,953
    
    
    $
    29,625
 Significant Concentrations
  Three Months EndedGeographical
    
    
    June 30,Distributor
    
    Location
    
    
    2010
    
    
    2009Walco International, Inc., d/b/a DVM Resources
    
    United States
    
    
    <10
    %
    
    
    10
    %
   15




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 FORWARD-LOOKING STATEMENTS
  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
  16




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##### Table of Contents



Dirofilaria immitis
 ®
  CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS
   Revenue Recognition and Deferred Revenue.
     17




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##### Table of Contents



Distributor and Customer Rebates.
 Allowance for Doubtful Accounts.
 Fair Value Measurements.
 Level 1
 Level 2:
 Level 3
  Warranty Reserves.
  18




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##### Table of Contents



Inventories.
 Valuation of Long-Lived Assets.
 Income Taxes.
  Share-Based Compensation Expense .
    19




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##### Table of Contents



RESULTS OF OPERATIONS
  Total Revenues
 Revenues by Geographic Region and by Product Category.
 Three Months Ended
    
    
    ChangeJune 30,
    
    
    Increase/
    
    
    PercentRevenues by Geographic Region
    
    2010
    
    
    2009
    
    
    (Decrease)
    
    
    ChangeNorth America
    
    $
    27,789
    
    
    $
    24,111
    
    
    $
    3,678
    
    
    
    15
    %Percentage of total revenues
    
    
    80
    %
    
    
    81
    %Europe
    
    
    5,627
    
    
    
    4,395
    
    
    
    1,232
    
    
    
    28
    %Percentage of total revenues
    
    
    16
    %
    
    
    15
    %Asia Pacific and rest of the world
    
    
    1,537
    
    
    
    1,119
    
    
    
    418
    
    
    
    37
    %Percentage of total revenues
    
    
    4
    %
    
    
    4
    %Total revenues
    
    $
    34,953
    
    
    $
    29,625
    
    
    $
    5,328
    
    
    
    18
    %
 Three Months Ended
    
    
    ChangeJune 30,
    
    
    Increase/
    
    
    PercentRevenues by Product Category
    
    2010
    
    
    2009
    
    
    (Decrease)
    
    
    ChangeInstruments(1)
    
    $
    7,325
    
    
    $
    6,277
    
    
    $
    1,048
    
    
    
    17
    %Percentage of total revenues
    
    
    21
    %
    
    
    21
    %Consumables(2)
    
    
    25,318
    
    
    
    20,905
    
    
    
    4,413
    
    
    
    21
    %Percentage of total revenues
    
    
    73
    %
    
    
    71
    %Other products
    
    
    1,869
    
    
    
    1,639
    
    
    
    230
    
    
    
    14
    %Percentage of total revenues
    
    
    5
    %
    
    
    5
    %Product sales, net
    
    
    34,512
    
    
    
    28,821
    
    
    
    5,691
    
    
    
    20
    %Percentage of total revenues
    
    
    99
    %
    
    
    97
    %Development and licensing revenue
    
    
    441
    
    
    
    804
    
    
    
    (363
    )
    
    
    (45
    )%Percentage of total revenues
    
    
    1
    %
    
    
    3
    %Total revenues
    
    $
    34,953
    
    
    $
    29,625
    
    
    $
    5,328
    
    
    
    18
    %
 
 (1)
    
    Instruments include chemistry analyzers, hematology instruments, coagulation analyzers and
i-STAT analyzers.(2)
    
    Consumables include reagent discs, hematology reagent kits, coagulation cartridges, i-STAT
cartridges and canine heartworm
rapid tests.  20




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##### Table of Contents



Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009
 North America .
 
    
    Sales of our Piccolo chemistry analyzers in North America (excluding the U.S. government)
increased 28%, or $167,000, primarily due to an increase in sales to distributors during the
three months ended June 30, 2010.
 
    
    Sales of our Piccolo chemistry analyzers to the U.S. government decreased by 70%, or
$488,000, primarily due to a decrease in the U.S. Militarys needs for our products in the
first quarter of fiscal 2011, which were not predictable.
 
    
    Medical reagent discs sales in North America (excluding the U.S. government) increased 16%,
or $475,000, primarily due to an increase in units sold resulting from an expanded installed
base of our Piccolo chemistry analyzers.
 
    
    Sales of our VetScan chemistry analyzers in North America increased 17%, or $259,000,
primarily due to higher average selling prices during the three months ended June 30, 2010.
 
    
    Veterinary reagent discs sales in North America increased 4%, or $431,000, primarily due to
higher average selling prices during the three months ended June 30, 2010.
 
    
    Total sales of our VetScan hematology instruments and hematology reagent kits in North
America increased 15%, or $362,000, during the three months ended June 30, 2010. The increase
was primarily attributed to (a) an increase in units of VetScan hematology instruments sold
due to increased selling activities during the three months ended June 30, 2010 and (b) an
increase in units of hematology reagent kits sold resulting from an expanded installed base of
our VetScan hematology instruments.
 
    
    Total sales from our original equipment manufacturer (OEM) supplied products increased
$2.8 million during the three months ended June 30, 2010 in North America as we began sales
and marketing activities for our VetScan VSprocoagulation analyzers and related consumables
and canine heartworm rapid tests in the fourth quarter of fiscal 2009 and for our i-STAT
analyzers and related consumables in fiscal 2010.
 
    
    Total revenues from development and licensing in North
America decreased 45%, or $363,000,
during the three months ended June 30, 2010, primarily based on the licensees use of our
technology, which varies from period to period.
 Europe .
 
    
    Sales of our Piccolo chemistry analyzers in Europe increased 156%, or $375,000, primarily
due to our promotion strategy and increased sales to distributors during the three months
ended June 30, 2010.
 
    
    Sales of our VetScan chemistry analyzers in Europe decreased 20%, or $173,000, primarily
due to the timing of inventory purchases by our distributors during the three months ended
June 30, 2010.
 
    
    Veterinary reagent discs sales in Europe increased 28%, or $686,000, primarily due to an
increase in units sold resulting from an expanded installed base of our VetScan chemistry
analyzers.
 Asia Pacific and rest of the world .
 
    
    Total sales of our VetScan hematology instruments and hematology reagent kits in Asia
Pacific and rest of the world increased 100%, or $207,000, primarily due to increased sales to
a distributor.
 
    
    Total sales from our OEM supplied products increased $203,000 during the three months ended
June 30, 2010 in Asia Pacific and rest of the world, primarily due to the commencement of
sales and marketing activities for our i-STAT analyzers and related consumables in fiscal
2010.
 Significant concentration.
  21




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##### Table of Contents



Segment Results
 Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009
  Three Months EndedJune 30,
    
    
    ChangePercent of
    
    
    
    
    
    
    Percent of
    
    
    Increase/
    
    
    Percent2010
    
    
    Revenues(1)
    
    
    2009
    
    
    Revenues(1)
    
    
    (Decrease)
    
    
    ChangeRevenues:Medical Market
    
    $
    6,438
    
    
    
    100
    %
    
    $
    5,763
    
    
    
    100
    %
    
    $
    675
    
    
    
    12
    %Percentage of total revenues
    
    
    18
    %
    
    
    
    
    
    
    19
    %Veterinary Market
    
    
    26,818
    
    
    
    100
    %
    
    
    21,823
    
    
    
    100
    %
    
    
    4,995
    
    
    
    23
    %Percentage of total revenues
    
    
    77
    %
    
    
    
    
    
    
    74
    %Other(2)
    
    
    1,697
    
    
    
    
    
    
    
    2,039
    
    
    
    
    
    
    
    (342
    )
    
    
    (17
    )%Percentage of total revenues
    
    
    5
    %
    
    
    
    
    
    
    7
    %Total revenues
    
    
    34,953
    
    
    
    
    
    
    
    29,625
    
    
    
    
    
    
    
    5,328
    
    
    
    18
    %Cost of revenues:Medical Market
    
    
    2,969
    
    
    
    46
    %
    
    
    2,631
    
    
    
    46
    %
    
    
    338
    
    
    
    13
    %Veterinary Market
    
    
    10,913
    
    
    
    41
    %
    
    
    8,717
    
    
    
    40
    %
    
    
    2,196
    
    
    
    25
    %Other(2)
    
    
    1,287
    
    
    
    
    
    
    
    1,122
    
    
    
    
    
    
    
    165
    
    
    
    15
    %Total cost of revenues
    
    
    15,169
    
    
    
    
    
    
    
    12,470
    
    
    
    
    
    
    
    2,699
    
    
    
    22
    %Gross profit:Medical Market
    
    
    3,469
    
    
    
    54
    %
    
    
    3,132
    
    
    
    54
    %
    
    
    337
    
    
    
    11
    %Veterinary Market
    
    
    15,905
    
    
    
    59
    %
    
    
    13,106
    
    
    
    60
    %
    
    
    2,799
    
    
    
    21
    %Other(2)
    
    
    410
    
    
    
    
    
    
    
    917
    
    
    
    
    
    
    
    (507
    )
    
    
    (55
    )%Gross profit
    
    $
    19,784
    
    
    
    
    
    
    $
    17,155
    
    
    
    
    
    
    $
    2,629
    
    
    
    15
    %
 
 (1)
    
    The percentages reported are based on our revenues by operating segment.(2)
    
    Represents unallocated items, not specifically identified to any particular business segment. Medical Market
 Revenues for Medical Market Segment
  Instruments.
 Consumables.
 Gross Profit for Medical Market Segment
   22




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##### Table of Contents



Veterinary Market
 Revenues for Veterinary Market Segment
  
    
    Sales of our VetScan chemistry analyzers increased 2%, or $62,000, during the three months
ended June 30, 2010, as compared to the three months ended June 30, 2009. The increase in
revenues was primarily attributed to an increase in revenues in North America of 17%, or
$259,000, primarily due to higher average selling prices during the three months ended June
30, 2010. The net increase in revenues was partially offset by a decrease in revenues in
Europe by 20%, or $173,000, primarily due to the timing of inventory purchases by our
distributors during the three months ended June 30, 2010.
 
    
    Total revenues from veterinary reagent discs increased 8%, or $1.2 million, during the
three months ended June 30, 2010, as compared to the three months ended June 30, 2009. The
increase in revenues was primarily attributed to (a) an increase in revenues in North America
of 4%, or $431,000, primarily due to higher average selling prices during the three months
ended June 30, 2010, and (b) an increase in revenues in Europe of 28%, or $686,000, primarily
due to an increase in units sold resulting from an expanded installed base of our VetScan
chemistry analyzers.
 
    
    Total sales of our VetScan hematology instruments and hematology reagent kits increased
19%, or $550,000, during the three months ended June 30, 2010, as compared to the three months
ended June 30, 2009. The increase in revenues was primarily attributed to (a) an increase in
revenues in North America of 15%, or $362,000, which was primarily attributed to (i) an
increase in units of VetScan hematology instruments sold due to increased selling activities
during the three months ended June 30, 2010 and (ii) an increase in units of hematology
reagent kits sold resulting from an expanded installed base of our VetScan hematology
instruments, and (b) an increase in revenues in Asia Pacific and rest of the world of 100%, or
$207,000, primarily due to increased sales to a distributor.
 
    
    Total sales from our OEM supplied products increased $3.1 million during the three months
ended June 30, 2010, primarily in North America as we began sales and marketing activities for
our VetScan VSprocoagulation analyzers and related consumables and canine heartworm rapid
tests in the fourth quarter of fiscal 2009 and for our i-STAT analyzers and related
consumables in fiscal 2010.
 Gross Profit for Veterinary Market Segment
  Cost of Revenues
  Three Months Ended
    
    
    ChangeJune 30,
    
    
    Increase/
    
    
    Percent2010
    
    
    2009
    
    
    (Decrease)
    
    
    ChangeCost of revenues
    
    $
    15,169
    
    
    $
    12,470
    
    
    $
    2,699
    
    
    
    22
    %Percentage of total revenues
    
    
    43
    %
    
    
    42
    %
  Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009
   23




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##### Table of Contents



Gross Profit
  Three Months Ended
    
    
    ChangeJune 30,
    
    
    Increase/
    
    
    Percent2010
    
    
    2009
    
    
    (Decrease)
    
    
    ChangeTotal gross profit
    
    $
    19,784
    
    
    $
    17,155
    
    
    $
    2,629
    
    
    
    15
    %Total gross margin
    
    
    57
    %
    
    
    58
    %
 Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009
  Operating Expenses
 Research and Development
  Three Months Ended
    
    
    ChangeJune 30,
    
    
    Increase/
    
    
    Percent2010
    
    
    2009
    
    
    (Decrease)
    
    
    ChangeResearch and development expenses
    
    $
    3,078
    
    
    $
    2,573
    
    
    $
    505
    
    
    
    20
    %Percentage of total revenues
    
    
    9
    %
    
    
    9
    %
  Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009
   Sales and Marketing
  Three Months Ended
    
    
    ChangeJune 30,
    
    
    Increase/
    
    
    Percent2010
    
    
    2009
    
    
    (Decrease)
    
    
    ChangeSales and marketing expenses
    
    $
    8,633
    
    
    $
    6,360
    
    
    $
    2,273
    
    
    
    36
    %Percentage of total revenues
    
    
    25
    %
    
    
    21
    %
   24




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##### Table of Contents



Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009
  General and Administrative
  Three Months Ended
    
    
    ChangeJune 30,
    
    
    Increase/
    
    
    Percent2010
    
    
    2009
    
    
    (Decrease)
    
    
    ChangeGeneral and administrative expenses
    
    $
    2,124
    
    
    $
    2,498
    
    
    $
    (374
    )
    
    
    (15
    )%Percentage of total revenues
    
    
    6
    %
    
    
    8
    %
  Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009
  Interest and Other Income (Expense), Net
  Three Months Ended
    
    
    ChangeJune 30,
    
    
    Increase/
    
    
    Percent2010
    
    
    2009
    
    
    (Decrease)
    
    
    ChangeInterest and other income (expense), net
    
    $
    (105
    )
    
    $
    514
    
    
    $
    (619
    )
    
    
    *
 *
 
Percentage is not meaningful.
  Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009
  Income Tax Provision
  Three Months EndedJune 30,2010
    
    
    2009Income tax provision
    
    $
    2,264
    
    
    $
    2,482Effective tax rate
    
    
    39
    %
    
    
    40
    %
 Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009
   25




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
  June 30,
    
    
    March 31,2010
    
    
    2010Cash and cash equivalents
    
    $
    36,348
    
    
    $
    27,857Short-term investments
    
    
    28,500
    
    
    
    32,343Long-term investments
    
    
    33,529
    
    
    
    36,319Total cash, cash equivalents and investments
    
    $
    98,377
    
    
    $
    96,519Percentage of total assets
    
    
    59
    %
    
    
    58
    %
 Cash Flow Changes
  Three Months EndedJune 30,2010
    
    
    2009Net cash provided by operating activities
    
    $
    3,926
    
    
    $
    6,365Net cash provided by (used in) investing activities
    
    
    5,723
    
    
    
    (8,714
    )Net cash used in financing activities
    
    
    (829
    )
    
    
    (59
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (329
    )
    
    
    39Net increase (decrease) in cash and cash equivalents
    
    $
    8,491
    
    
    $
    (2,369
    )
  Operating Activities
          26




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##### Table of Contents



Investing Activities
  Investments.
 Property and Equipment.
 Financing Activities
  Contractual Obligations
 Facilities Lease.
 Purchase Commitments.
  Patent License Agreement.
   27




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##### Table of Contents



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
     Foreign Currency Rate Fluctuations
   28




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##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  Inherent Limitations on Controls and Procedures
  
 Item 4T. Controls and Procedures
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
    29




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##### Table of Contents



Item 1A. Risk Factors
 Our facilities and manufacturing operations are vulnerable to natural disasters and other
unexpected losses. Any such losses or system failures or delays may harm our business.
   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.
     
    
    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 depend on limited or sole suppliers for several key components in our products and as original
equipment manufacturer supplied products, many of whom we have not entered into contractual
relationships with and failure of our suppliers to provide the components or products 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, a division of
Thermo Fisher Scientific, Roche Molecular Biochemicals of Roche Diagnostics Corporation, a
division of F. Hoffmann-La Roche, Ltd., SA Scientific Co., Sigma Aldrich Inc. and Toyobo
Specialties (formerly Shinko American Inc.).
  30




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##### Table of Contents




    
    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, including components from
Hamamatsu Corporation and 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 MI PLC in Hungary and are purchased by us as a completed
instrument. In addition, currently, we have qualified two suppliers to produce the reagents for our hematology instruments:
Clinical Diagnostic Solutions, Inc. and Diatron MI PLC.
 
    
    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.
 
    
    i-STAT Analyzers and Cartridges:Our i-STAT 1 analyzers and cartridges are manufactured by
Abbott Point of Care Inc. in North America and are purchased by us as completed products.
   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 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 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.
    32




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##### Table of Contents



We need to successfully manufacture and market additional reagent discs for the human diagnostic
market if we are to compete in that market.
  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).
  
    
    range of tests offered;
 
    
    immediacy of results;
 
    
    cost effectiveness;
 
    
    ease of use; and
 
    
    reliability of results.
   33




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##### Table of Contents



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 Government Regulation for Our Products
  510(k) Clearance Pathway.
   APHIS Licensure of Veterinary Biologics
   34




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##### Table of Contents



Need to Comply with Manufacturing Regulations and Various Federal, State, Local and International
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 September 2005 and March 2003, the FDA conducted a facility inspection and verified
our compliance with the 21 CFR 820 Regulation.
 
    
    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 August 2008, the FDA conducted an additional facility inspection to verify our
compliance with 21 CFR 820 Regulation.
 
    
    In October 2009, we received our recertification to the ISO 13485:2003
Quality System Standard for medical devices.
 
    
    In October 2009, we received a United States Veterinary Biologics Establishment License
from the United States Department of Agriculture.
  Effects of the Clinical Laboratory Improvement Amendments on Our Products
  
    
    waived;
 
    
    moderately complex; and
    
    highly complex.
  35




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We have incurred and may continue to incur, in future periods, significant share-based compensation
charges which may adversely affect our reported financial results.
  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.
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We could fail to achieve anticipated revenue if we experience problems related to the manufacture
of our blood chemistry analyzers.
  Fluctuations in foreign exchange rates and the possible lack of financial stability in foreign
countries could prevent overseas sales growth.
  We are subject to increasingly complex requirements from recent legislation requiring companies to
evaluate internal control over financial reporting.
   We must comply with strict and potentially costly environmental regulations or we could pay
significant fines.
  Our operating results could be materially affected by unanticipated changes in our tax provisions
or exposure to additional income tax liabilities.
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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.
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Removed and Reserved
 
 Item 5. Other Information
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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
    *
    
    Fiscal 2011 Base Salary and Target Bonus for the Named Executive Officers (Filed with the Securities
and Exchange Commission in our Current Report on Form 8-K on May 4, 2010 and incorporated herein by
reference.)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
 
 *
    
    Management contract or compensatory plan or arrangement.#
    
    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.  39




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SIGNATURES
  ABAXIS, INC.(Registrant)Date: August 9, 2010
    BY:
    /s/ Clinton H. SeversonClinton H. SeversonPresident, Chief Executive Officer and Director
(Principal Executive Officer)Date: August 9, 2010
    BY:
    /s/ Alberto R. Santa InesAlberto R. Santa InesChief Financial Officer and Vice President of Finance

(Principal Financial and Accounting Officer)  40