U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended June 30, 1999.
[ ] Transition report pursuant to Section 13 or 15(d) of the Exchange act for
the transition period from
______________________________________ to ______________________________________
Commission File Number: 0-20316
Avitar, Inc.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 06-1174053
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
65 Dan Road, Canton, Massachusetts 02021
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(781) 821-2440
- --------------------------------------------------------------------------------
(Issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [x]Yes [ ]No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
COMMON STOCK: 24,059,156
AS OF AUGUST 10, 1999
Transitional Small Business Disclosure Format
(Check One): [ ] Yes; [x] No
Page 1 of 21 pages
Exhibit Index: is on page 18 hereof.
TABLE OF CONTENTS
Page
PART I: FINANCIAL INFORMATION 3
Item 1 Consolidated Financial Statements
Balance Sheet 4
Statements of Operations 5
Statement of Stockholders' Equity 6
Statements of Cash Flows 7
Notes to Consolidated Financial Statements 8
Item 2 Management's Discussion and Analysis or Plan of Operation 11
PART II: OTHER INFORMATION 14
Item 2 Changes in Securities and Use of Proceeds 15
Item 4 Submission of Matters to Vote of Security Holders 15
Item 6 Exhibits and Reports on Form 8-K 15
SIGNATURES 16
EXHIBIT INDEX 17
PART I FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Avitar, Inc. and Subsidiaries
Consolidated Balance Sheet
June 30, 1999
(Unaudited)
- --------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,234,527
Accounts receivable, net 245,543
Inventories 185,777
Prepaid expenses and other 204,182
----------------
Total current assets 1,870,029
PROPERTY AND EQUIPMENT, net 159,735
OTHER ASSETS 17,000
----------------
Total $ 2,046,764
================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 327,414
Accounts payable 646,426
Accrued expenses 443,428
Current portion of long-term debt 70,957
----------------
Total current liabilities 1,488,225
LONG TERM DEBT, LESS CURRENT PORTION 21,631
----------------
Total liabilities 1,509,856
----------------
COMMITMENTS
STOCKHOLDERS' EQUITY:
Series A and B convertible preferred stock, $.01 par value; authorized
5,000,000 shares; 1,851,437 shares issued and outstanding 18,515
Common Stock, $.01 par value; authorized 75,000,000 shares;
21,416,656 shares issued and outstanding 214,167
Additional paid-in capital 20,113,767
Notes receivable (1,000,000)
Accumulated deficit (18,809,541)
----------------
Total stockholders' equity 536,908
----------------
Total $ 2,046,764
================
See accompanying notes to consolidated financial statements.
4
Avitar, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
- --------------------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30, NINE MONTHS ENDED JUNE 30,
------------------------------ --------------------------------
1999 1998 1999 1998
------------- ------------- -------------- -------------
SALES $ 621,105 $ 620,505 $ 1,586,621 $ 1,560,299
OPERATING EXPENSES
Direct cost of revenues 501,181 500,807 1,334,407 1,395,331
Selling, general and administrative expenses 661,287 372,506 1,430,386 1,111,951
Research and development expenses 214,818 134,434 497,534 411,744
------------- ------------- -------------- -------------
Total operating expenses 1,377,286 1,007,747 3,262,327 2,919,026
------------- ------------- -------------- -------------
LOSS FROM OPERATIONS (756,181) (387,242) (1,675,706) (1,358,727)
------------- ------------- -------------- -------------
OTHER INCOME (EXPENSE)
Interest income 26,430 - 26,430 6,761
Interest expense and financing costs (27,659) (32,614) (117,800) (94,173)
Other income, net 11,978 4,372 66,744 9,417
------------- ------------- -------------- -------------
Total other income (expense) 10,749 (28,242) (24,626) (77,995)
------------- ------------- -------------- -------------
LOSS FROM CONTINUING OPERATIONS (745,432) (415,484) (1,700,332) (1,436,722)
DISCONTINUED OPERATIONS:
Gain from the Sale of MHB - - - 1,208,084
Income (loss) from the operations of MHB - - - (71,914)
------------- ------------- -------------- -------------
NET INCOME (LOSS) $ (745,432) $ (415,484) $(1,700,332) $ (300,552)
============= ============= ============== =============
INCOME (LOSS) PER SHARE:
Net income (loss) $ (745,432) $ (415,484) $(1,700,332) $ (300,552)
Preferred stock dividends and accreted dividends (318,160) - (517,704) -
============= ============= ============== =============
Net income (loss) available to common stockholders $(1,063,592) $ (415,484) $(2,218,036) $ (300,552)
============= ============= ============== =============
Loss per share from continuing operations $ (0.05) $ (0.02) $ (0.12) $ (0.09)
Income (loss) per share from discontinued operations - - - 0.07
------------- ------------- -------------- -------------
Net income (loss) per share-basic and diluted $ (0.05) $ (0.02) $ (0.12) $ (0.02)
============= ============= ============== =============
WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING 21,089,191 17,458,779 19,064,941 16,274,977
============= ============= ============== =============
See accompanying notes to consolidated financial statements.
5
Avitar, Inc. and Subsidiaries
Consolidated Statement of Stockholders' Equity
Nine Months Ended June 30, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------
Series A and B
Preferred Stock Common Stock
............................... ......................................
Shares Amount Shares Amount
- ------------------------------------------------------------------ ------------- ------------------ -----------------
Balance at September 30, 1998 792,588 $ 7,926 17,469,768 $ 174,698
Issuance of common stock for services 83,551 836
Exercise of warrants 1,895,000 18,950
Settlement of underwriter litigation 400,000 4,000
Conversion of preferred stock (506,798) (5,068) 1,568,337 15,683
Sale of preferred stock and warrants 1,541,077 15,411
Conversion of notes payable from affiliates 24,570 246
Net loss
-------------- ------------- ------------------ -----------------
Balance at June 30, 1999 1,851,437 $18,515 21,416,656 $ 214,167
============== ============= ================== =================
- --------------------------------------------------------------------------------------------------------------
Additional Notes Accumulated
paid-in capital receivable deficit
- --------------------------------------------------- ------------------- ---------------- -------------------
Balance at September 30, 1998 $ 15,496,788 $ - $(17,109,209)
Issuance of common stock for services 17,910
Exercise of warrants 771,041
Settlement of underwriter litigation (4,000)
Conversion of preferred stock (10,615)
Sale of preferred stock and warrants 3,642,889 (1,000,000)
Conversion of notes payable from affiliates 199,754
Net loss (1,700,332)
----------------- ----------------- -------------------
Balance at June 30, 1999 $ 20,113,767 $(1,000,000) $(18,809,541)
================= ================= ===================
See accompanying notes to consolidated financial statements.
6
Avitar, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
- ---------------------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED JUNE 30,
----------------------------------------
1999 1998
----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,700,332) $ (300,552)
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Depreciation and amortization 97,020 109,626
Recovery for losses on accounts receivable - (6,025)
Non-cash charges for services 18,746 7,311
Non-cash recovery from settlement of note payable - (58,126)
Gain from sale of MHB - (1,208,084)
Changes in operating assets and liabilities:
Accounts receivable (73,635) (265,640)
Prepaid expenses and other current assets (133,268) (8,488)
Other assets (952) 605
Accounts payable and accrued expenses
expenses (298,753) 88,107
Other - (77,916)
----------------- -----------------
Net cash used in operating activities (2,091,174) (1,719,182)
----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (51,383) (6,838)
Proceeds from the sale of MHB - 1,286,000
----------------- -----------------
Net cash provided by (used in) investing activities (51,383) 1,279,162
----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable - 662,597
Sales of preferred stock and warrants, net 2,658,300 75,000
Exercise of warrants 789,991 -
Repayment of long-term debt (72,747) (226,841)
Repayment of notes payable (10,943) (110,000)
----------------- -----------------
Net cash provided by financing activities 3,364,601 400,756
----------------- -----------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,222,044 (39,264)
CASH AND CASH EQUIVALENTS, beginning of the period 12,483 65,512
----------------- -----------------
CASH AND CASH EQUIVALENTS, end of the period $ 1,234,527 $ 26,248
================= =================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period:
Income taxes $ 2,456 $ -
Interest $ 117,280 $ 79,736
See accompanying notes to consolidated financial statements.
7
AVITAR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
================================================================================
1. BASIS OF PRESENTATION
Avitar, Inc. ("Avitar" or the "Company"), through its wholly-owned
subsidiary, Avitar Technologies Inc. ("ATI") develops, manufactures,
markets and sells proprietary hydrophilic polyurethane foam disposables
fabricated for medical, diagnostics, dental and consumer use. The Company
is a leading independent fabricator of disposable medical and dental
products from medical grade hydrophilic polyurethane foam.
On October 27, 1997, the Company sold the business and assets of its
wholly-owned subsidiary, Managed Health Benefits Corporation ("MHB"), which
provided health care cost containment services. Therefore, MHB is
considered a discontinued operation and this report primarily reflects the
continuing operation of the Company.
The accompanying consolidated financial statements of the Company have
been prepared in accordance with generally accepted accounting principles
for interim financial information, the instructions to Form 10-QSB and
Regulation S-B (including Item 310(b) thereof). Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
the Company's management, all adjustments (consisting only of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three and nine month periods ended June
30, 1999 are not necessarily indicative of the results that may be expected
for the full fiscal year ending September 30, 1999. The accompanying
consolidated financial statements should be read in conjunction with the
audited financial statements of the Company for the fiscal year ended
September 30, 1998.
The Company's consolidated financial statements have been presented on
the basis that it is a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of
business. The Company has suffered recurring losses in the past from
operations. The Company raised net proceeds aggregating approximately
$200,000 and $1,100,000 during the fiscal years ended September 30, 1998
and 1997, respectively, from the sale of preferred and common stock. During
the nine months ended June 30, 1999, the Company raised approximately $
4,448,291 from the sale of preferred stock and warrants (see Note 6) and
from the exercise of warrants to purchase common stock. Based upon cash
flow projections, the Company believes the anticipated cash flow from
operations and proceeds from the recent equity financings described above
will be sufficient to finance the Company's operating needs until the
operations achieve profitability. There can be no assurances that
forecasted results will be achieved or that additional financing will be
obtained. The financial statements do not include any adjustments relating
to the recoverability and classification of asset amounts or the amounts
and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.
8
2. DISCONTINUED OPERATIONS
On October 27, 1997, the Company sold MHB's net assets and business and
received $1,286,000. For the period of October 1, 1997 through the date of
the sale on October 27, MHB incurred an operating loss of $71,914.
3. INVENTORIES
At June 30, 1999, inventories consist of the following:
Raw Materials $ 75,575
Work-in-Process 76,632
Finished Goods 33,570
---------
Total $185,777
=========
4. MAJOR CUSTOMERS
Customers in excess of 10% of total sales are:
Three Months Ended June 30, Nine Months Ended June 30,
--------------------------- --------------------------
1999 1998 1999 1998
---- ---- ---- ----
Customer A $280,491 $ 183,274 $556,318 $613,978
Customer B 127,764 65,917 230,799 *
Customer C 67,676 71,968 255,708 181,933
* Not in excess of 10% of sales during this period.
5. DEBT
During March 1999, the Chairman of the Board and the President of the
Company converted notes payable (including the interest thereon) and
accrued salaries totaling approximately $200,000 into 24,570 shares of the
Company's Series B convertible preferred stock (see Note 6) and warrants to
purchase 400,000 shares of the Company's common stock for a period of one
year at an exercise price of $1.22 per share.
6. PREFERRED STOCK AND WARRANTS
During the nine months ended June 30, 1999, the Company sold 1,541,077
shares of Series B convertible preferred stock and received proceeds of
approximately $3,658,300 (cash of $2,658,300 and notes receivable of
$1,000,000 which have maturity dates from August 31, 1999 to October 31,
1999). In connection with the sale of the preferred stock, the Company
issued to the holders of the preferred stock warrants to purchase 7,386,600
shares of the Company's common stock for one year at exercise prices
ranging from $.225 to $2.39 per share. Each share of Series B Convertible
Preferred Stock entitles its holder to convert it, at any time, into 10
shares of the Company's
9
common stock and to receive dividends amounting to an annual 8% cash
dividend or 10% stock dividend computed on the amount invested, at the
discretion of the Company. Preferred stock dividends for the three and nine
month periods ended June 30,1999 amounted to $135,643 and $182,312,
respectively. As of June 30, 1999, the total amount of unpaid and
undeclared dividends was $187,766. Approximately 94,100 shares of the
Series B convertible preferred stock (convertible into 941,000 shares of
the Company's common stock) were issued with a conversion price below the
common stock's quoted value and as a result, accreted dividends of
approximately $182,517 and $335,392 were recorded for the three and nine
month periods, respectively. The amount for dividends and accreted
dividends were included in determining the earnings per share for common
stockholders.
7. SUBSEQUENT EVENTS
On July 9, 1999, the Company acquired all the outstanding stock of United
States Drug Testing Laboratories, Inc. ("USDTL"), a specialized drug
testing company, in exchange for approximately 2 million restricted shares
of the Company's common stock..
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion and analysis should be read in conjunction
with the Company's consolidated financial statements and the notes thereto
appearing elsewhere in this report.
RESULTS OF OPERATIONS
Revenues
Sales for the three months ended June 30, 1999 increased slightly to
$621,105 from $620,505 for the corresponding period of the prior year. For the
nine months ended June 30, 1999, sales increased $26,322, or approximately 2%,
to $1,586,621 from $1,560,299 for the nine months ended June 30, 1998. The sales
of wound dressing products accounted for the increase in sales for both the
three and nine month periods ended June 30, 1999.
Operating Expenses
Direct costs of sales were approximately 81% of sales for both the
three months ended June 30, 1999 and June 31, 1998. For the nine months ended
June 30, 1999, direct costs of sales were 84% of sales compared to 89% of sales
for the same period of Fiscal 1998. The improvement for the nine months ended
June 30, 1999 was primarily the result of certain reductions in costs which may
not occur in future periods.
Selling, general and administrative expenses for the three months ended
June 30, 1999 increased $288,781, or approximately 78%, to $661,287 from
$372,506 for the corresponding period of the prior year. For the nine months
ended June 30, 1999, selling, general and administrative expenses increased
$318,435, or approximately 29%, to $1,430,386 from $1,111,951 for the nine
months ended June 30, 1998. The increase for the three and nine month periods
ended June 30, 1999 resulted mainly from expanded sales and marketing efforts
associated with the Company's launching of its oral fluid drugs of abuse tests
(OralScreen(TM) 3).
Expenses for research and development for the three months ended June
30, 1999 amounted to $214,818 compared to $134,434 incurred for the
corresponding period of the prior year. For the nine months ended June 30, 1999,
expenses for research and development were $497,534 versus $411,744 for the nine
months ended June 30, 1998. The change for the three and nine months ended June
30, 1999 occurred primarily from the increase in research and development
expense for the Company's oral fluid tests for drugs of abuse..
Other Income and Expense
For the three months ended June 30, 1999, other income (net of other
expenses) amounted to $10,749 as compared to other expenses (net of other
income) of $28,242 for the three months ended June 30, 1998. Other expenses (net
of other income) for the nine months ended June 30, 1999 were $24,626 compared
to $77,995 for the corresponding period of the prior fiscal year. The
improvement for the quarter ended June 30, 1999 resulted primarily from interest
income on notes receivable, increase in rental income and reduced interest on
bank advances and loans. The change for the nine months ended June 30, 1999 was
mainly due to an increase in rental and interest income
11
of approximately $77,000 which was partially offset by an increase in interest
expense on bank advances and loans of approximately $24,000.
Discontinued Operations
In October 1997, the Company sold the net assets and business of its
MHB subsidiary and received $1,286,000. No income or expenses were recorded for
the three and nine months ended June 30, 1999 compared to income from the
operations and sale of MHB of $1,136,170 for the nine months ended June 30,
1998.
Net Loss
Primarily as a result of the factors described above, the Company had a
net loss of $745,432 for the three months ended June 30, 1999 versus a net loss
of $414,484 for the three months ended June 30, 1998. For the nine months ended
June 30, 1999, the Company had a net loss of $1,700,332 compared to a net loss
of $300,552 for the nine months ended June 30, 1998.
FINANCIAL CONDITION AND LIQUIDITY
At June 30, 1999 and September 30, 1998 the Company had working capital
(deficiency) of $381,807 and ($1,569,085), respectively, and cash and cash
equivalents of $1,234,527 and $12,483 respectively. Net cash used in operating
activities during the nine months ended June 30, 1999 amounted to $2,091,174
resulting primarily from a net loss of $1,700,332;an increase in accounts
receivable of $73,635, an increase in prepaid and other current assets of
$133,268, an increase in other assets of $952 and a decrease in accounts payable
and accrued expenses of $298,753; partially offset by depreciation and
amortization of $97,020 and non-cash charges for services of $18,746. Net cash
provided by financing and investing activities during the nine months ended June
30, 1999 amounted to $3,313,218 which included proceeds from the sale of
preferred stock and warrants of $2,658,300 and proceeds from the exercise of
warrants of $789,991; offset in part by the repayment of long term debt of
$72,747 and the repayment of notes payable of $10,943.
During the period of October 1998 through April 1999, the Company
received net proceeds of approximately $3,658,300 ($2,258,300 in cash and
$1,000,000 in notes receivable with maturity dates of July 31, 1999 which have
been subsequently extended to August 31, 1999, September 30, 1999 and October
31, 1999) from the sale of 1,541,077 shares of Series B convertible preferred
stock (convertible at any time into 15,410,770 shares of the Company's common
stock) which included warrants to purchase 7,386,600 shares of the Company's
common stock at exercise prices of $.225 -$2.39 per share for a period of twelve
months. From February through June 1999, the Company received proceeds of
approximately $789,991 from the exercise of warrants to purchase approximately
1,895,000 shares of the Company's common stock. In March 1999, the Chairman of
the Board and the President of the Company converted notes payable (including
the accrued interest thereon) and accrued salaries totaling approximately
$200,000 into 24,570 shares of the Company's Series B convertible preferred
stock. (convertible into 245,700 shares of the Company's common stock) and
warrants to purchase 400,000 shares of the Company's common stock at an exercise
price of $1.22 per share for one year.
In July 1999, the Company acquired the entire operations of USDTL
located in DesPlanes,
12
Illinois. USDTL, which provides specialized drug testing products and services
using hair, urine and other samples, had reported revenues of approximately $1
million for calendar year 1998.
For the balance of fiscal year 1999, the Company's cash requirements
are expected to include primarily the funding of operating capital to grow the
Company's rapid oral fluid tests for drugs of abuse (OralScreen(TM)) and the
growth of USDTL's business, the funding of operating losses, the payment of
outstanding accounts payable and the repayment of certain notes payable.
Although operating revenues of the Company only increased 2% during the
first nine months of Fiscal 1999, sales are expected to grow at a more rapid
pace for the last quarter of Fiscal 1999 as the Company launches and commences
shipment of its oral fluid drugs of abuse tests (OralScreen 3(TM)). Based on
current sales, expense and cash flow projections, the Company believes that the
current level of cash and the collection of the notes receivable related to the
financing described above would be sufficient to fund operations until the
Company achieves profitability. Once the Company achieves profitability, the
longer-term cash requirements of the Company to fund operating activities,
purchase capital equipment and expand the business are expected to be met by the
anticipated cash flow from operations and proceeds from the financings described
above. However, because there can be no assurances that sales will materialize
as forecasted, management will continue to closely monitor and attempt to
control costs.
As a result of the Company's recurring losses from operations and
working capital deficit, the report of its independent certified public
accountants relating to the financial statements for Fiscal 1998 contains an
explanatory paragraph stating substantial doubt about the Company's ability to
continue as a going concern. Such report also states that the ultimate outcome
of this matter could not be determined as of the date of such report (December
23, 1998). The Company's plans to address the situation are presented above.
However, there are no assurances that these endeavors will be successful or
sufficient.
Year 2000 Impact
Many currently installed computer systems and software products are
coded to accept or recognize only two digit entries in the date code field.
These systems and software products will need to accept four digit entries to
distinguish 21st century dates from 20th century dates. As a result, computer
systems and/or software used by many companies and governmental agencies may
need to be upgraded to comply with such Year 2000 requirements or risk system
failure or miscalculations causing disruptions of normal business activities.
The Company has undertaken a review concerning the ability of its
internal information systems, including its internal accounting systems, to
handle date information and function appropriately from and after January 1,
2000 and does not believe that the total cost to address any changes to become
Year 2000 Compliant will be material. In addition, the Company during the third
quarter of calendar 1999 will complete its evaluation (which has been expanded
to include the operations of USDTL) as to what impact, if any, possible Year
2000 problems encountered by its suppliers and customers will have upon the
Company. At this time, the Company does not believe that these problems would
have a material effect on the Company.
As discussed above, the Company has not yet completed its Year 2000
evaluation and therefore, has not developed any contingency plans. The results
of the Company's evaluation will be the basis for determining the nature and
extent of any contingency plans.
13
PART II OTHER INFORMATION
14
ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS
During the quarter ended June 30, 1999, the Company sold to private
investors 68,017 shares of Series B Convertible Preferred Stock and received
cash proceeds of approximately $485,000. In connection with the sale of this
preferred stock, the Company issued to the holders of the preferred stock
warrants to purchase 970,000 shares of the Company's common stock at an exercise
price of $.24 to $2.39 per share for a period of 12 months. Each share of the
Series B Convertible Preferred Stock entitles its holders to convert it, at any
time, into 10 shares of the Company's common stock and to receive dividends
amounting to an annual 8% cash dividend or 10% stock dividend computed on the
amount invested, at the discretion of the Company. The exemption for
registration of these securities is based upon Section 4(2) of the Securities
Act.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
The Annual Meeting of shareholders was held on June 23, 1999. All
members of the Board of Directors were elected by approximately 85% of the total
shares outstanding and more than 99% of the shares voted. In addition, the
increase in authorized share of common stock from 25 to 75 million and the
reappointment of BDO Seidman LLP as auditors were approved and the tabulation of
votes were as follows:
For Against Abstain
--- ------- -------
Increase in Authorized Shares 19,284,813 413,678 26,884
Reappointment of Auditors 19,503,979 32,736 188,660
Election of Directors 19,696,503 - 28,872
---------------------------------------------------------------------
* In regard to one nominee, the holder of an additional 200 shares
abstained.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit No. Document
----------- --------
3.1 Certificate of Amendment of Certificate of
Incorporation
27.4 Financial Data Schedule
(b) Reports on Form 8-K:
None
15
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AVITAR, INC.
(Registrant)
Dated: August 13, 1999 /S/ Peter P. Phildius
---------------------------
Peter P. Phildius
Chairman and Chief
Executive Officer
(Principal Executive Officer)
Dated: August 13, 1999 /S/ J.C. Leatherman, Jr.
---------------------------
J.C. Leatherman, Jr.
Chief Financial Officer
(Principal Accounting and
Financial Officer)
16
EXHIBIT INDEX
===============================================================================
Exhibit No. Document Page
- ----------- -------- ----
3.1 Certificate of Amendment of Certificate 18
of Incorporation
27.4 Financial Data Schedule 20
17