By Sheri Kasprzak
New York, Sept. 27 - Avitar, Inc. said it has received commitments for its $3 million private placement of secured convertible notes.
The 8% notes mature in three years and are convertible into common shares at a price equal to 65% of the average of the three lowest intraday trading prices for the 20 trading days before conversion.
The investors will also receive warrants for 6 million shares, exercisable at $0.25 each for five years.
The notes may be prepaid at premiums ranging from 20% to 35% depending on the timing of the prepayment.
So far, the company has received $1 million of the proceeds. It will receive another $1 million once it files a registration statement with the Securities and Exchange Commission, and the remaining $1 million will be funded once that registration statement is declared effective.
The proceeds will be used to fund the growth of the company's ORALscreen products.
Based in Canton, Mass., Avitar manufactures oral fluid diagnostic tests for drug abuse.
| Issuer: | Avitar, Inc.
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| Issue: | Secured convertible notes
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| Amount: | $3 million
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| Maturity: | Three years
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| Coupon: | 8%
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| Price: | Par
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| Yield: | 8%
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| Conversion price: | Equal to 65% of the average of the three lowest intraday trading prices for the 20 trading days before conversion
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| Call: | May be prepaid at premiums ranging from 20% to 35%
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| Warrants: | For 6 million shares
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| Warrant expiration: | Five years
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| Warrant strike price: | $0.25
|
| Settlement date: | Sept. 23
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| Stock price: | $0.024 at close Sept. 23
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