Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One:)
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þ |
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
for the fiscal year ended December 31, 2007
OR
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o |
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the transition period from to
Commission File Number: 000-19720
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A. |
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Full title of the plan and the address of the plan, if different from that of
the issuer named below: |
ABAXIS TAX DEFERRAL SAVINGS PLAN
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B. |
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Name of issuer of the securities held pursuant to the plan and address of its
principal executive office: |
ABAXIS, INC.
3240 Whipple Road
Union City, California 94587
ABAXIS TAX DEFERRAL SAVINGS PLAN
Contents
Report of Independent Registered Public Accounting Firm
To Participants and Administrator of the
Abaxis Tax Deferral Savings Plan
We have audited the accompanying statements of net assets available for benefits of the Abaxis Tax
Deferral Savings Plan (the Plan) as of December 31, 2007, and the related statement of changes in
net assets available for benefits for the year ended December 31, 2007. These financial statements
are the responsibility of the Plans management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31, 2007, and the
changes in net assets available for benefits for the year ended December 31, 2007 in conformity
with U.S. generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplemental schedule, as listed in the accompanying table of contents, is
presented for the purpose of additional analysis and is not a required part of the basic financials
statements but is supplementary information required by the Department of Labors Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.
The supplemental schedule is the responsibility of the Plans management. The supplemental
schedule has been subjected to the auditing procedures applied in the audit of the basic financial
statements and in our opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/
Burr, Pilger & Mayer LLP
BURR,
PILGER & MAYER LLP
San Jose, California
June 23, 2008
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and
Plan Administrator of the
Abaxis Tax Deferral Savings Plan
We have audited the financial statements of the Abaxis Tax Deferral Savings Plan (the Plan) as of
December 31, 2006. These financial statements are the responsibility of the Plans management.
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. We
were not engaged to perform an audit of the Plans internal control over financial reporting. Our
audit included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Plans internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the Plans management,
as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material respects, the net assets
available for benefits of the Plan as of December 31, 2006, in conformity with accounting
principles generally accepted in the United States of America.
/s/ Mohler, Nixon & Williams
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
June 29, 2007
2
ABAXIS TAX DEFERRAL SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2007 and 2006
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2007 |
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2006 |
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ASSETS |
Investments, at fair value |
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$ |
8,790,728 |
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$ |
6,537,575 |
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Participant loans |
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22,762 |
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22,426 |
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Assets held for investment purposes |
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8,813,490 |
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6,560,001 |
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Employer contribution receivable |
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63,451 |
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53,678 |
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Total assets |
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8,876,941 |
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6,613,679 |
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LIABILITIES |
Other |
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377 |
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Net assets available for benefits |
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$ |
8,876,564 |
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$ |
6,613,679 |
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The
accompanying notes are an integral part of these financial statements.
3
ABAXIS TAX DEFERRAL SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the year ended December 31, 2007
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Additions: |
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Additions to net assets attributed to: |
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Investment income: |
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Net increase in fair value of
investments |
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$ |
1,454,835 |
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Interest and dividend income |
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2,481 |
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Total investment income |
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1,457,316 |
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Contributions: |
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Participants |
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1,041,519 |
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Employer, net of forfeitures $41,426 |
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239,854 |
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Rollovers |
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20,431 |
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Total contributions |
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1,301,804 |
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Total additions |
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2,759,120 |
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Deductions: |
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Deductions from net assets attributed to: |
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Benefits paid to participants |
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438,564 |
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Administrative expenses |
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57,671 |
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Total deductions |
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496,235 |
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Net increase |
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2,262,885 |
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Net assets available for benefits at: |
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Beginning of year |
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6,613,679 |
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End of year |
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$ |
8,876,564 |
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The
accompanying notes are an integral part of these financial statements.
4
ABAXIS TAX DEFERRAL SAVINGS PLAN
Notes to Financial Statements
NOTE 1 THE PLAN AND ITS SIGNIFICANT ACCOUNTING POLICIES
General
The
following description of the Abaxis Tax Deferral Savings Plan (the Plan) provides only general
information. Participants should refer to the Plan document for a more complete description of the
Plan.
The Plan is a defined contribution plan containing a cash deferred arrangement described in Section
401(k) of the Internal Revenue Code. The Plan was established on December 1, 1990 by Abaxis, Inc.
(the the Company) to provide benefits to eligible employees, as defined in the Plan document. The
Plan is currently designed to be qualified under the applicable requirements of the Internal
Revenue Code (IRC), as amended, and the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA), as amended.
Administration
The Company has contracted with a third-party-administrator to process and maintain the records of
participant data and with Charles Schwab Trust Company (CSTC) to act as the trustee and custodian
of Plan assets. Substantially all expenses incurred for administering the Plan are paid by the
Plan.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, and changes therein, and disclosure of contingent
assets and liabilities. Actual results could differ from those estimates.
Basis of Accounting
The financial statements have been prepared on the accrual basis of accounting in accordance with
accounting principles generally accepted in the United States of America and ERISA. Contributions
from participants are recorded when withheld from the participant. Benefit payments are recorded
when paid.
As described in Financial Accounting Standards Board Staff Position, FSP AAG INV-1 and SOP 94-4-1,
Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies
Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and
Pension Plans (the FSP), investment contracts held by a defined-contribution plan are required to
be reported at fair value. However, contract value is the relevant measurement attribute for that
portion of the net assets available for benefits of a defined-contribution plan attributable to
fully benefit responsive investment contracts because contract value is the amount participants
would receive if they were to initiate permitted transactions under the terms of the plan. As
required by the FSP, the Statement of Net Assets Available for Benefits presents the fair value of
the investment contracts. No adjustment to contract value was disclosed as fair value approximated
contract value as of December 31, 2007 and 2006. The Company has considered the impact of this
standard on these financial statements to be immaterial.
Forfeitures
Forfeitures of nonvested Plan Sponsor contributions are used to reinstate any former participant
account balance, reduce any matching and or profit sharing contributions or may be used to pay Plan
expenses.
Forfeitures of nonvested account balances for the years ended December 31, 2007 and 2006 amounted
to approximately $14,000 and $8,000, respectively. Forfeitures used to reduce employer matching
contributions during the years ended December 31, 2007 and 2006 amounted to approximately $41,000
and $16,000, respectively.
5
ABAXIS TAX DEFERRAL SAVINGS PLAN
Notes to Financial Statements
NOTE 1 THE PLAN AND ITS SIGNIFICANT ACCOUNTING POLICIES, continued
Investments
At December 31, 2007 and 2006, investments of the Plan were held by CSTC, and invested based solely
upon instructions received from participants.
The Plans investments in mutual funds and the Companys common stock fund are valued at fair value
as of the last day of the Plan year, as measured by quoted market prices. Participant loans are
stated at cost which approximates fair value.
The Plans investment contract accounts with MetLife Stable Value Fund are fully-benefit responsive
and, therefore, have been reported in the financial statements at contract value. The fair value
of the Plans investment contract account approximate the contract value at December 31, 2007 and
2006.
The average yield on investment contract accounts for the years ended December 31, 2007 and 2006
were 6.53% and 4.56%, respectively. The average crediting interest rates for the respective years
were 4.69% and 4.55%.
Income Taxes
The Plan obtained its latest determination letter dated October 22, 2002 in which the Internal
Revenue Service stated that the Plan, as then designed, was in compliance with the applicable
requirements of the Internal Revenue Code. The Plan has been amended and restated since receiving
that determination letter. However, the Plan Administrator and the Plans tax counsel believe the
Plan is currently designed and being operated in compliance with the applicable requirement of the
Internal Revenue Code.
Risk and Uncertainties
The Plan provides for various investment options in any combination of investment securities
offered by the Plan. In addition, the Company common stock is included in the Plan. Investment
securities are exposed to various risks, such as interest rate, market fluctuations and credit
risks. Due to the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in market values, interest rate, or other factors will occur in
the near term and that such changes could materially affect participants account balances and the
amounts reported in the statement of net assets available for benefits and the statement of changes
in net assets available for benefits.
NOTE 2 RELATED PARTY AND PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments are managed by CSTC, the trustee and asset custodian of the Plan. Any
purchases and sales of these funds are performed in the open market at fair value. Such
transactions, while considered party-in-interest transactions under ERISA regulations, are
permitted under the provisions of the Plan and are specifically exempt from the prohibition of
party-in-interest transactions under ERISA.
The employers discretionary matching contribution is invested in the Companys common stock or
cash as elected by the Board. Participants may contribute to the ABAXIS, Inc. Common Stock Fund
(the Stock Fund) and may transfer funds from the Stock Fund to other Plan investment options
available by the Plan. Participants are limited to allocate not more than 20% of their vested
contributions to the Stock Fund.
6
ABAXIS TAX DEFERRAL SAVINGS PLAN
Notes to Financial Statements
NOTE 2 RELATED PARTY AND PARTY-IN-INTEREST TRANSACTIONS, continued
Aggregate investment in Company common stock at December 31, 2007 and 2006 is as follows:
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Shares |
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Fair Value |
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2007 |
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54,949 |
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$ |
1,970,471 |
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2006 |
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63,493 |
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$ |
1,222,240 |
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NOTE 3 PARTICIPATION AND BENEFITS
Participant Contributions
Participants may elect to have the Company contribute a portion of their eligible pre-tax
compensation, not to exceed the amount allowable under current income tax regulations. Participant
who elect to have the Company contribute a portion of their compensation to the Plan agree to
accept an equivalent reduction in taxable compensation. Contributions withheld are invested in
accordance with the participants direction.
Participants are also allowed to make rollover contributions of amounts received from other
tax-qualified employer-sponsored retirement plans. Such contributions are deposited in the
appropriate investment funds in accordance with the participants direction and the Plans
provision.
Employer Contributions
The Company may make discretionary matching contributions and discretionary profit sharing
contributions as defined by the Plan and as approved by the Board of Directors. In 2007, the
Company matched 50% of each eligible participants contribution up to a maximum of 5% and 2.5% of
the participants eligible compensation on a quarterly basis, respectively. No discretionary profit
sharing contribution has been made in 2007.
Vesting
Participants are immediately vested with respect to their contributions plus actual earning
thereon. Participants are fully vested in Plan Sponsors matching and discretionary contributions
after four years of credited service.
Participant Accounts
Each participants account is credited with the participants contribution, plan earnings or losses
and an allocation of the Companys contribution, if any. Allocation of the Companys contribution
is based on participant contributions and compensation as defined by the Plan.
Payment of Benefits
The Plan provides for the payment of benefits to the participant (or, if applicable, the
beneficiary) upon normal retirement (age 60), termination of service, death or disability.
Participants are entitled to the vested portion of their account balance. In-service distributions
are also available for participants who have attained age 55 and have completed five years of
service or who qualify for financial hardship. Participants will receive their distributions in
the form of a lump-sum in cash. Terminated participants with an account balance of less then
$1,000 are subject to an automatic administrative distribution.
7
ABAXIS TAX DEFERRAL SAVINGS PLAN
Notes to Financial Statements
NOTE 3 PARTICIPATION AND BENEFITS, continued
Loans to Participants
The Plan allows participants to borrow not less than $1,000 and up to the lesser of $50,000 or 50%
of their vested account balance. The loans are secured by the participants vested balance. Such
loans bear interest at 2% above the prime rate and must be repaid to the Plan within a five-year
period, unless the loan is used for the purchase of a principal residence, in which case it may be
longer. The specific terms and conditions of such loans are established by the Company. Outstanding
loans at December 31, 2007 carry interest rates ranging from 9.50% to 10.25%.
Amendments
There were no amendments to the Plan during the years ended December 31, 2007 and 2006.
NOTE 4 INVESTMENTS
The following presents investments at December 31, 2007 and 2006 that represent 5% or more of the
Plans net assets:
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2007 |
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2006 |
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Investments |
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Amount |
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Assets |
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Amount |
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Assets |
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Abaxis, Inc. |
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$ |
1,970,471 |
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22 |
% |
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$ |
1,222,240 |
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19 |
% |
Artisan Midcap Fund |
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604,068 |
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7 |
% |
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414,923 |
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6 |
% |
Calvert Income Fund |
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792,562 |
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9 |
% |
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580,193 |
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9 |
% |
Davis New York Venture Fund |
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880,615 |
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10 |
% |
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778,918 |
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12 |
% |
Dodge & Cox International Stock Fund |
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730,331 |
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8 |
% |
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Europacific Growth Fund |
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763,994 |
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9 |
% |
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535,156 |
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8 |
% |
Growth Fund of America |
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620,252 |
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7 |
% |
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513,135 |
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8 |
% |
Schwab S&P 500 Index Fund |
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944,342 |
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11 |
% |
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835,188 |
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13 |
% |
Metlife Stable Value Fund |
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645,855 |
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7 |
% |
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480,867 |
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7 |
% |
Goldman Sachs Mid Cap Value Fund |
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420,725 |
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5 |
% |
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366,449 |
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6 |
% |
First Eagle Overseas Fund |
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547,848 |
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8 |
% |
Other funds less than 5% of net assets |
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440,275 |
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5 |
% |
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285,084 |
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4 |
% |
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Total investments |
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$ |
8,813,490 |
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100 |
% |
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$ |
6,560,001 |
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100 |
% |
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8
ABAXIS TAX DEFERRAL SAVINGS PLAN
Notes to Financial Statements
NOTE 4 INVESTMENTS, continued
The Plans investments including gains and losses on investments bought and sold during the year
appreciated in value as follows:
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2007 |
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Mutual funds |
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$ |
455,247 |
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Common stock |
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972,040 |
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Stable Value fund |
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27,548 |
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$ |
1,454,835 |
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NOTE 5 PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right under the Plan to
terminate the Plan subject to the provisions of ERISA. In the event of Plan termination,
participants would become 100% vested in their account.
NOTE 6 SUBSEQUENT EVENTS
During 2008 the Plan Sponsor elected to change the third party administrator, custodian and trustee
of the Plan. The conversion is scheduled to occur during July 2008.
9
ABAXIS TAX DEFERRAL SAVINGS PLAN
SCHEDULE H, LINE 4i SCHEDULE OF ASSETS (HELD AT END OF YEAR)
(PLAN NUMBER 001 EIN 77-0213001)
December 31, 2007
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Description of Investment including maturity |
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date, rate of interest, collateral, par on |
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Identity of issue, borrower, lessor or similar party |
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maturity value |
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Fair Value |
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* Abaxis, Inc. |
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Common Stock |
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$ |
1,970,471 |
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* Schwab S&P 500 Index Fund |
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Mutual Fund |
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944,342 |
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Davis New York Venture Fund |
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Mutual Fund |
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880,615 |
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Calvert Income Fund |
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Mutual Fund |
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792,562 |
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Europacific Growth Fund |
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Mutual Fund |
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763,994 |
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Dodge & Cox International Stock Fund |
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Mutual Fund |
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730,331 |
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Metlife Stable Value Fund |
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Common Collective Trust |
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645,855 |
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Growth Fund of America |
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Mutual Fund |
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620,252 |
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Artisan Midcap Fund |
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Mutual Fund |
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604,068 |
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Goldman Sachs Mid Cap Value Fund |
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Mutual Fund |
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420,725 |
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Royce Low Priced Stock Fund |
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Mutual Fund |
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208,744 |
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American Beacon Largecap Value Fund |
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Mutual Fund |
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199,287 |
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* Participant loans |
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Interest rates ranging from 9.50% to 10.25% |
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22,762 |
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* Schwab U.S. Treasury Money Fund |
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Interest-bearing cash, various rates |
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8,909 |
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* Cash |
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Cash |
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378 |
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* Schwab Government Money Fund |
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Interest-bearing cash, various rates |
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195 |
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TOTAL INVESTMENTS: |
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$ |
8,813,490 |
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10
SIGNATURES
THE
PLAN, Pursuant to the requirements of the Securities Exchange Act of 1934, the Abaxis Tax
Deferral Savings Plan Administrative Committee has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
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ABAXIS TAX DEFERRAL SAVINGS PLAN
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Date: June 23, 2008 |
By: |
/s/ Alberto Santa Ines
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Alberto Santa Ines |
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Member of Abaxis Tax Deferral
Savings Plan Administrative Committee,
as Plan Administrator |
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By: |
/s/ Thana Bao
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Thana Bao |
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Member of Abaxis Tax Deferral
Savings Plan Administrative Committee,
as Plan Administrator |
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11
EXHIBIT INDEX
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Exhibit No. |
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Description |
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Exhibit 23.1 |
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CONSENT OF BURR, PILGER & MAYER LLP, INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM |
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Exhibit 23.2 |
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CONSENT OF MOHLER, NIXON & WILLIAMS, INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM |
12