Avitar Inc /DE/ - Current report filing (8-K)
March 07 2008 - 5:08PM
Edgar (US Regulatory)
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
------------------
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) of the
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported) March 3, 2008
AVITAR,
INC.
(Exact
Name of Registrant as Specified in Charter)
Delaware
1-15695
06-1174053
(State
or other jurisdiction
(Commission
(IRS Employer
of
incorporation)
File
Number)
Identification No.)
65
Dan Road, Canton,
Massachusetts 02021
(Address
of principal executive
offices) (Zip
code)
Registrant's
telephone number, including area
code: (781) 821-2440
Not
Applicable
(Former
Name or Former Address, If Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange
Act (17
CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange
Act (17
CFR 240.13e-4(c))
Item 1.01
Entry into a Material Definitive Agreement.
On March
3, 2008, Avitar, Inc. ("Avitar" or the "Company"), entered into a
Securities
Purchase Agreement and related agreements, dated as of February 22,
2008, as part of a $310,000 private placement with AJW Partners, LLC,
AJW Master Fund, Ltd., and New Millennium Capital Partners II, LLC
(collectively, the "Purchasers"). As previously reported, the Company entered
into private placements with the same or related parties in 2005, 2006 and
2007. See the information reported in Items 3.02 and 9.01
below.
Item 3.02
Unregistered Sales of Equity Securities.
The
Company entered into a $310,000 private placement of convertible notes and
warrants based upon the Securities Purchase Agreement referred to in Item 1.01
above.
The
securities issued in the private placement are $310,000 of Secured Convertible
Notes (the “Notes”) and 10,000,000 seven-year Warrants (the
“Warrants”).
The Notes
bear interest at 8%, mature three years from the date of issuance, and are
convertible into the Company’s common stock at any time, at the Purchasers'
option, at 35% of the average of the three lowest intraday trading prices for
the Common Stock for the 20 trading days ending the day before the date that the
investors elect to convert. In addition, the conversion prices of
outstanding notes payable to the same or related holders in the aggregate
principal amount of approximately
$6,978,000
issued from September 2005 through December 2007 were adjusted from 40%
to 35% of the average of the three lowest intraday trading prices of the common
stock for the 20 trading days preceding the date that the holders elect to
convert.
The full
principal amount of the Notes, plus a default interest rate of 15%, is due upon
a default under the terms of the Notes. We have a right to prepay the Notes
under certain circumstances at a premium ranging from 20% to 35% depending on
the timing of such prepayment.
In
addition, the Company granted the Purchasers a security interest in
substantially all of our assets. The Company is further required to file the
Registration Statement with the Securities and Exchange Commission within 30
days of receipt of demand from the Purchasers. If the Registration Statement is
not filed on time or not declared effective within 120 days from the date of
receipt of such demand, we are required to pay to the Purchasers damages in
Common Stock or cash, at the election of the Company, in an amount equal to two
percent of the outstanding principal amount of the Notes per month plus accrued
and unpaid interest.
The
Warrants are exercisable until seven years from the date of issuance at a
purchase price of $0.01 per share. The Purchasers may exercise the Warrants on a
cashless basis if the shares of Common Stock underlying the Warrants are not
then registered pursuant to an effective registration statement. In the event
the Purchasers exercise the Warrants on a cashless basis, we will not receive
any proceeds. In addition, the Warrants are subject to standard anti-dilution
provisions.
The
Purchasers have agreed to restrict their ability to convert their Notes or
exercise their Warrants and receive shares of our common stock such that the
number of shares of common stock held by them and their affiliates in the
aggregate after such conversion or exercise does not exceed 4.9% of the then
issued and outstanding shares of Common Stock.
The
transactions described in this Item 3.02 are exempt from registration
requirements pursuant to Section 4(2) and/or Rule 506 of Regulation D
promulgated under the Securities Act of 1933, as amended.
Copies of
the Agreements related to this private placement are attached to this
Report as
Exhibits.
Item
9.01. Financial Statements and Exhibits.
(a)
Not applicable
(b)
Not applicable
(c)
Exhibits
Exhibit Description Location
----------------------------------------------------------------------------------------------------------
4.1 Securities
Purchase Agreement dated as of
February
22, 2008 between the Company and
the
Purchasers Provided
herewith
4.2
Registration Rights Agreement
dated as of
February 22, 2008 between the
Company
and the
Purchasers Provided
herewith
4.3 Form
of 8% Secured Convertible
Note
Provided herewith
4.4 Form
of
Warrant
Provided herewith
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant
has duly caused this report to be signed on its behalf by the
undersigned
hereunto duly authorized.
Date: March
7,
2008
AVITAR, INC.
By:
/s/ Jay
Leatherman
Name: Jay Leatherman
Title: Chief Financial Officer
Avitar (CE) (USOTC:AVTI)
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