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, 2002.
[ ] Transition report pursuant to Section 13 or 15(d) of the Exchange act for
the transition period from to
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Commission File Number: 0-20316
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Avitar, Inc.
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(Exact name of small business issuer as specified in its charter)
Delaware 06-1174053
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
65 Dan Road, Canton, Massachusetts 02021
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(Address of principal executive offices) (Zip Code)
(781) 821-2440
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(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: 44,674,215
AS OF AUGUST 9, 2002
Transitional Small Business Disclosure Format
(Check One): [ ] Yes ; [x] No
Page 1 of 17 pages
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 15
Item 4 Submission of Matters to a Vote of Security Holders 16
Item 6 Exhibits and Reports on Form 8-K 16
Signatures 17
Part I Financial Information
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
Avitar, Inc. and Subsidiaries
Consolidated Balance Sheet
June 30, 2002
(Unaudited)
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ASSETS (Note 4)
CURRENT ASSETS:
Cash and cash equivalents $250,320
Accounts receivable, net 1,405,736
Inventories 511,905
Preferred stock subscription receivable 60,641
Prepaid expenses and other current assets 75,743
---------------
Total current assets 2,304,345
PROPERTY AND EQUIPMENT, net 406,978
GOODWILL, net 2,217,053
OTHER ASSETS 130,487
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Total $5,058,863
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $434,678
Accounts payable 1,819,009
Accrued expenses 802,918
Current portion of long-term debt 19,999
--------------
Total current liabilities 3,076,604
LONG TERM DEBT, LESS CURRENT PORTION 34,822
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Total liabilities 3,111,426
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COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' EQUITY:
Series A, B, C and D convertible preferred stock,
$.01 par value; authorized 5,000,000 shares;
1,758,535 shares issued and outstanding 17,585
Common stock, $.01 par value; authorized
100,000,000 shares; 44,609,237 shares issued
and outstanding 446,092
Additional paid-in capital 42,159,200
Accumulated deficit (40,675,440)
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--------------
Total stockholders' equity 1,947,437
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Total $5,058,863
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See accompanying notes to consolidated financial statements.
Avitar, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
THREE MONTHS ENDED JUNE 30, NINE MONTHS ENDED JUNE 30,
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2002 2001 2002 2001
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SALES $2,233,320 $1,869,441 $7,706,853 $4,268,355
--------------- -------------- ---------------- ---------------
OPERATING EXPENSES
Cost of sales 1,274,229 1,073,250 4,421,119 2,761,461
Selling, general and administrative expenses 1,691,567 1,580,676 4,799,525 4,394,039
Research and development expenses 333,930 457,020 1,001,120 1,401,903
Amortization of goodwill 77,498 76,854 232,494 220,702
--------------- -------------- ---------------- ---------------
Total operating expenses 3,377,224 3,187,800 10,454,258 8,778,105
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LOSS FROM OPERATIONS (1,143,904) (1,318,359) (2,747,405) (4,509,750)
--------------- -------------- ---------------- ---------------
OTHER INCOME (EXPENSE)
Interest income - 361 - 1,094
Interest expense and financing costs (9,481) (10,129) (49,274) (35,704)
Other income (expense), net 85 (963) 19,788 (2,887)
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--------------
Total other expense, net (9,396) (10,731) (29,486) (37,497)
--------------- -------------- ---------------- ---------------
NET LOSS $(1,153,300) $(1,329,090) $(2,776,891) $(4,547,247)
=============== ============== ================ ===============
BASIC AND DILUTED NET LOSS PER SHARE (Note 7) $(0.03) ($0.04) $(0.07) $(0.22)
=============== ============== ================ ===============
WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING 44,605,933 33,459,667 42,006,575 31,768,656
=============== ============== ================ ===============
See accompanying notes to consolidated financial statements.
Avitar, Inc. and Subsidiaries
Consolidated Statement of Stockholders' Equity
Nine Months Ended June 30, 2002
(Unaudited)
Preferred Stock Common Stock
Shares Amount Shares Amount
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Balance at September 30, 2001 2,203,690 $22,036 36,564,342 $365,643
Issuance of common stock for services - - 42,169 422
Sale of common stock and warrants - - 1,909,684 19,097
Exercise of stock options and warrants - - 2,319,734 23,197
Conversion of Series B, C and Series D
preferred stock into common stock (496,418) (4,964) 3,773,308 37,733
Payment of preferred stock dividend, Series
B preferred stock 51,263 513 - -
Reclass of preferred stock subscription
receivable - - - -
Net loss - - - -
- ---------------------------------------------------------------- -------------- ---------------- -------------
Balance at June 30, 2002 1,758,535 $17,585 44,609,237 $446,092
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(continued on next page)
Avitar, Inc. and Subsidiaries
Consolidated Statement of Stockholders' Equity
Nine Months Ended June 30, 2002
(Unaudited)
(continued)
Preferred
Stock
Additional Accumulated Subscription
paid-in capital deficit Receivable
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Balance at September 30, 2001 $39,338,443 $(37,592,117) $(60,641)
Issuance of common stock for services 26,478 - -
Sale of common stock and warrants 1,286,903 - -
Exercise of stock options and warrants 1,234,226 - -
Conversion of Series B, C and Series D
preferred stock into common stock (32,769) - -
Payment of preferred stock dividend, Series
B preferred stock 305,919 (306,432) -
Reclass of preferred stock subscription
receivable - - 60,641
Net loss - (2,776,891) -
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Balance at June 30, 2002 $42,159,200 $(40,675,440) $ -
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See accompanying notes to consolidated financial statements.
Avitar, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
NINE MONTHS ENDED JUNE 30,
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2002 2001
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(2,776,891) $(4,547,247)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization 190,339 127,213
Amortization of goodwill 232,494 220,702
Gain from sale of equity investment and equipment (18,943) 0
Payment of common stock for services 26,900 0
Provision for losses on accounts receivable (12,658) (61,692)
Changes in operating assets and liabilities excluding effects
of business acquisition:
Accounts receivable (88,978) (147,281)
Inventories (267,547) 205,307
Prepaid expenses and other current assets 84,579 (60,432)
Other assets 18,069 97,021
Accounts payable and accrued expenses 355,709 379,157
Deferred revenue (385,000) -
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Net cash used by operating activities (2,641,927) (3,787,252)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (142,853) (79,013)
Acquisition of BJR Security, Inc. - (50,000)
Proceeds from sale of equity investment 24,391 -
Proceeds from sale of equipment 7,500 -
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Net cash used by investing activities (110,962) (129,013)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Sales of common stock, preferred stock and warrants 1,306,000 4,104,298
Exercise of warrants and stock options 1,257,423 39,453
Preferred stock subscription receivable 35,000 42,228
Proceeds from (repayment of) notes payable and long-term debt 159,377 (112,295)
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Net cash provided by financing activities 2,757,800 4,073,684
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NET INCREASE IN CASH AND CASH EQUIVALENTS 4,911 157,419
CASH AND CASH EQUIVALENTS, beginning of the period 245,409 82,313
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CASH AND CASH EQUIVALENTS, end of the period $250,320 $239,732
============== ==================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period:
Income taxes $ - $ -
Interest $15,101 $30,843
See accompanying notes to consolidated financial statements.
AVITAR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
================================================================================
1. BASIS OF PRESENTATION
Avitar, Inc. ("Avitar" or the "Company"), through its wholly-owned
subsidiaries, Avitar Technologies, Inc. ("ATI"), United States Drug Testing
Laboratories, Inc. ("USDTL") and BJR Security, Inc. designs, develops,
manufactures, markets and provides medical products and diagnostic test
products and services as well as contraband detection and education
services. Avitar sells these products and services to large medical supply
companies, employers, diagnostic distributors, schools and governmental
agencies. During Fiscal Year 2001 and Fiscal Year 2002, the Company's
primary focus has been on the continued development and marketing of
ORALscreen(TM), innovative point of care oral fluid drugs of abuse tests
that use the Company's foam as the means for collecting the oral fluid
sample.
The accompanying consolidated financial statements of the Company have
been prepared in accordance with generally accepted accounting principles
for interim financial reporting, 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, 2002 are not necessarily indicative of the results that may be expected
for the full fiscal year ending September 30, 2002. 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, 2001.
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 from operations and has
a working capital deficit of $772,259 as of June 30, 2002. The Company
raised net proceeds aggregating approximately $5,288,000 during the fiscal
year ended September 30, 2001 from the sale of stock and the exercise of
options and warrants. During the nine months ended June 30, 2002, the
Company raised approximately $2,563,000 from the sale of stock and the
exercise of options and warrants. Based upon cash flow projections, the
Company believes the anticipated cash flow from operations and most
importantly, proceeds from future equity financings 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.
2. INVENTORIES
At June 30, 2002, inventories consist of the following:
Raw Materials $209,094
Work-in-Process 79,017
Finished Goods 223,794
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Total $511,905
========
3. MAJOR CUSTOMERS
Customers in excess of 10% of total sales are:
Three Months Ended June 30, Nine Months Ended June 30,
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2002 2001 2002 2001
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Customer A $339,630 $189,459 * $499,458
Customer B 500,000 305,500 $2,477,910 505,790
* Customer was not in excess of 10% of total sales.
4. NOTES PAYABLE
In June 2002, the Company received $250,000 from the Connecticut Bank of
Commerce as proceeds from a note payable to the bank maturing on August 23,
2002 with interest at the prime rate plus 2.00%. This loan is
collateralized by a lien on the assets of the Company.
5. COMMITMENTS AND CONTINGENCIES
The Company is currently negotiating a Settlement Agreement for
compensation to the Estate and successors of a financial advisor who
provided services to the Company from 1998 to 2001 through issuances of
equity instruments. No liability has been recorded since the terms of this
Settlement Agreement are uncertain at this time. However, the Company
anticipates that it may be necessary to issue approximately 2.0 million
shares (subject to various lock-up periods extending in some cases to the
end of calendar 2003) and warrants for the purchase of approximately 1.2
million shares at exercise prices ranging from $0.23 per share to $0.35 per
share, exercisable through June and August 2003, respectively. When a final
settlement has been reached in this matter, the Company will record the
cost of such settlement as a charge against stockholders' equity and an
offsetting increase to stockholders' equity for the fair value of the
shares and warrants. In the event that the Company had to issue the shares
described above as part of the settlement, the fair value of the equity
instruments would be approximately $600,000.
6. COMMON STOCK, PREFERRED STOCK AND WARRANTS
During the nine-month period ended June 30, 2002, the Company received
approximately $1,257,000 from the exercise of stock options and warrants to
purchase 2,319,734 shares of the Company's common stock. In connection with
the exercise of certain warrants, the Company issued to the holders
warrants to purchase 1,750,070 shares of the Company's common stock at an
exercise price of $.68 for a term of three years. Also during the nine
months ended June 30, 2002, the Company sold 1,909,684 shares of the
Company's common stock and received proceeds of approximately $1,306,000.
In connection with the sale of the common stock, the Company issued to the
holders of the common stock warrants to purchase 1,909,684 shares of the
Company's common stock at exercise prices of $.68 to $1.60 per share for
terms of three to five years.
For the nine months ended June 30, 2002 holders of the Series B, C and D
convertible preferred stock converted 496,418 shares of their preferred
stock into 3,773,308 shares of the Company's common stock. Preferred stock
dividends related to the Series B convertible preferred stock for the nine
months ended June 30, 2002 amounted to $283,126. As of June 30, 2002, the
total amount of unpaid and undeclared dividends was $222,018.
7. EARNINGS PER SHARE
The following data show the amounts used in computing earnings per share:
Three Months Ended June 30, Nine Months Ended June 30,
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2002 2001 2002 2001
--------------------- ------------------- ------------------- ---------------
Net loss $(1,153,300) $(1,329,090) $(2,776,891) $(4,547,247)
Less:
Preferred stock dividends ( 97,035) ( 136,032) ( 283,126) ( 332,592)
Value of warrants issued in
connection with Series C and
Series D preferred stock sales - - - ( 575,000)
Original discount related to
Series D preferred stock sales - - - ( 485,000)
------------------ ---------------- --------------- --------------
Loss available to common
stockholders used in basic and
diluted EPS before cumulative
accounting change (1,250,335) ( 1,465,122) (3,060,017) (5,939,839)
Cumulative effect of change in
accounting for original discount
related to prior years' preferred
stock issuances - - - (1,078,205)
------------------- ---------------- ---------------- -------------
Net loss available to common
stockholders used in basic and
diluted EPS $(1,250,335) $ (1,465,122) $(3,060,017) $(7,018,044)
============= =============== ============ ============
Weighted average number of
common shares outstanding 44,605,933 33,459,667 42,006,575 31,768,656
================== =============== ================ ============
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
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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. This report may contain forward-looking statements.
For a description of risks and uncertainties relating to such forward-looking
statements, see the Forward-Looking Statements and Associated Risks section
later in this Item.
RESULTS OF OPERATIONS
Revenues
Sales for the three months ended June 30, 2002 increased $363,879, or
approximately 19%, to $2,233,320 from $1,869,441 for the corresponding period of
the prior year. For the nine months ended June 30, 2002, sales increased
$3,438,498, or approximately 81%, to $7,706,853 from $4,268,355. The change for
the three and nine months ended June 30, 2002 primarily reflects the increase in
sales of its ORALscreen(TM) products which included sales to one major customer
of $500,000 and $2,478,000, respectively.
Operating Expenses
Cost of sales for the three months ended June 30, 2002 were approximately
57% of sales, which was identical to the cost of sales ratio for the three
months ended June 30, 2001. For the nine months ended June 30, 2002, the cost of
sales were 57% compared to 65% of sales for the same period of Fiscal 2001. The
improvement for the nine months ended June 30, 2002 was primarily due to the
increase in sales described above and the overall shift in the product mix to
the higher margin ORALscreen products.
Selling, general and administrative expenses for the three months ended
June 30, 2002 increased $110,891, or approximately 7%, to $1,691,567 from
$1,580,676 for the corresponding period of the prior year. For the nine months
ended June 30, 2002, selling, general and administrative expenses increased
$405,486 or approximately 9%, to $4,799,525 from $4,394,039 for the nine months
ended June 30, 2001. The increase for the three and nine months ended June 30,
2002 reflected the expanded sales, marketing and administrative efforts
associated with the Company's OralScreen and HairScreen products and expenses
from BJR of approximately $80,000 and $184,000, respectively.
Expenses for research and development for the three months ended June 30,
2002 amounted to $333,930 compared to $457,020 for the corresponding period of
the prior year. For the nine months ended June 30, 2002, expenses for research
and development were $1,001,120 versus $1,401,903 for the nine months ended June
30, 2001. The change for the three and nine months ended June 30, 2002 was
primarily attributable to the decrease in development fees and expenses paid to
outside entities for research and development activities related to the
Company's OralScreen products and oral fluid disease testing applications.
For the three months and nine months ended June 30, 2002, amortization of
goodwill which resulted from the Company's acquisition of BJR and USDTL was
$77,498 and $232,494, respectively, compared to $76,854 and $220,702,
respectively, for the three and nine months ended June 30, 2001. The change
reflects the goodwill amortization related to acquisition of BJR on March 1,
2001.
Other Income and Expense
No interest income was earned for the three and six months ended June 30,
2002 compared to $361 and $1,094, respectively for the same periods of Fiscal
2001. The decrease resulted primarily from the reduced interest earned on cash
management accounts.
Interest expense and financing costs were $9,481 for the three months ended
June 30, 2002 compared to $10,129 incurred during the three months ended June
30, 2001. For the nine months ended June 30, 2002, interest expense and
financing costs were $49,274 versus $35,704 for the same period in the prior
year. The change for the nine months ended June 30, 2002 primarily reflects the
interest expense on higher bank advances related to financing of accounts
receivable and loans from private parties.
For the three months ended June 30, 2002, other income amounted to $85 as
compared to other expense of $963 for the three months ended June 30, 2001.
Other income for the nine months ended June 30, 2002 was $19,788 versus other
expense of $2,887 for the corresponding period of the prior year. The change for
the nine months ended June 30, 2002 is mainly a result of the gain from the sale
of an item of equipment and the gain from the sale of a small equity investment
held by the Company.
Net Loss
Primarily as a result of the factors described above, the Company had a net
loss of $1,153,300, $ .03 per basic and diluted share, for the quarter ended
June 30, 2002, as compared to a net loss of $1,329,090, $ .04 per basic and
diluted share, for the quarter ended June 30, 2001. For the nine months ended
June 30, 2002, the Company had a net loss of $2,776,891, $.07 per basic and
diluted share, versus a net loss of $4,547,247, $.22 per basic and diluted
share, for the nine months ended June 30, 2001.
FINANCIAL CONDITION AND LIQUIDITY
At June 30, 2002 and September 30, 2001 the Company had working capital
deficits of $772,259 and $958,293, respectively, and cash and cash equivalents
of $250,320 and $245,409, respectively. Net cash used in operating activities
during the nine months ended June 30, 2002 amounted to $2,641,927 resulting
primarily from a net loss of $2,776,891, a gain from the sale on an equity
investment and equipment of $18,943, a decrease in the provision for losses on
accounts receivable of $12,658, an increase in accounts receivable of $88,978,
an increase in inventories of $267,547 and a decrease in deferred income of
$385,000; partially offset by depreciation and amortization of $190,339,
amortization of goodwill of $232,494, a payment of common stock for services of
$26,900, a decrease in prepaid expenses and other current assets of $84,579, a
decrease in other assets of $18,069 and an increase in accounts payable and
accrued expenses of $355,709. Net cash provided by financing and investing
activities during the nine months ended June 30, 2002 amounted to $2,646,838
which included proceeds from the sale of an equity investment and equipment of
$31,891, proceeds from the sale of common stock and warrants of $1,306,000,
proceeds from the exercise of warrants and stock options of $1,257,423, proceeds
from the collection of stock subscription receivable of $35,000 and proceeds
from notes payable and long-term debt of $159,377; offset in part by the
purchases of property and equipment of $142,853.
Since October 2001, the Company received proceeds of approximately
$1,306,000 from the sale of 1,909,684 shares of the Company's common stock and
warrants to purchase 1,909,684 shares of the Company's common stock at exercise
prices of $.68 -$1.60 per share for a period of three to five years. Also during
this period, the Company received approximately $1,257,000 from the exercise of
stock options and warrants to purchase 2,319,734 shares of the Company's common
stock. In connection with the exercise of certain warrants, the Company issued
to the holders warrants to purchase 1,750,070 shares of the Company's common
stock at an exercise price of $.68 for a term of three years. The Company plans
to raise up to $10,000,000 from the sales of equity and/or debt securities. The
Company plans to use the proceeds from these financings to provide working
capital and capital equipment funding to operate the Company, to expand the
Company's business, to further develop and enhance the ORALscreen and HAIRscreen
drug screening systems and to pursue the development of in-vitro oral fluid
diagnostic testing products. However, there can be no assurance that these
financings will be achieved.
For the balance of fiscal year 2002, the Company's cash requirements are
expected to include primarily the funding of operating losses, the payment of
outstanding accounts payable, the repayment of certain notes payable, the
funding of operating capital to grow the Company's drugs of abuse testing
products and services, and the continued funding for the development of its
ORALscreen product line.
The Company is currently in the process of negotiating a Settlement
Agreement for compensation to the Estate and successors of a financial advisor
who provided services to the Company from 1998 to 2001. The terms of this
Settlement Agreement are uncertain at this time, but the Company anticipates
that it may be necessary to issue approximately 2.0 million shares (subject to
various lock-up periods extending in some cases to the end of calendar 2003) and
warrants for the purchase up to approximately 1.2 million shares at exercise
prices ranging from $0.23 per share to $.35 per share, exercisable through June
and August 2003, respectively. Upon final settlement of this matter, the Company
will record a charge to stockholders' equity for the cost of such settlement.
Operating revenues of the Company grew significantly during the three
quarters of Fiscal 2002 and are expected to continue growing during the last
quarter of Fiscal 2002 as the Company expands its shipments of new and enhanced
ORALscreen products and grows the business of USDTL. Based on current sales,
expense and cash flow projections, the Company believes that the current level
of cash and cash equivalents on hand and most importantly, a portion of the
anticipated net proceeds from the financing mentioned above would be sufficient
to fund operations until the Company achieves profitability. There can be no
assurance that the Company will consummate the above-mentioned financing, or
that any or all of the net proceeds sought thereby will be obtained. Once the
Company achieves profitability, the longer-term cash requirements of the Company
to fund operating activities, purchase capital equipment, expand the existing
business and develop new products 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 and
will continue to actively seek the needed additional capital.
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 2001 contains an explanatory
paragraph stating substantial doubt about the Company's ability to continue as a
going concern. Such report states that the ultimate outcome of this matter could
not be determined as the date of such report (November 20, 2001). The Company's
plans to address the situation are presented above. However, there are no
assurances that these endeavors will be successful or sufficient.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
Except for the historical information contained herein, the matters set
forth herein are "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, Section 21E of the Securities Exchange Act of
1934 and the Private Securities Litigation Reform Act of 1995. We intend that
such forward-looking statements be subject to the safe harbors created thereby.
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from any future results, performance
or achievement expressed or implied by such forward-looking statements. Such
factors include, but are not limited to the following: product demand and market
acceptance risks, the effect of economic conditions, results of pending or
future litigation, the impact of competitive products and pricing, product
development and commercialization, technological difficulties, government
regulatory environment and actions, trade environment, capacity and supply
constraints or difficulties, the result of financing efforts, actual purchases
under agreements and the effect of the Company's accounting policies.
PART II OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ----------------------------------------------------------------------
The annual meeting of the shareholders was held on June 17, 2002. All
members of the Board of Directors were elected by more than 62% of the total
shares outstanding and more than 99% of the shares voted. In addition, the
reappointment of BDO Seidman, LLP as auditors were approved and the tabulation
of votes were as follows:
For Withheld Against Abstain
------------ ------------- ---------- ----------
Reappointment of Auditors 29,976,484 N/A 41,927 354,854
Election of Directors 30,192,638 180,627 N/A N/A
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
None
(b) Reports on Form 8-K:
None
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 14, 2002 /S/ Peter P. Phildius
---------------------------
Peter P. Phildius
Chairman and Chief
Executive Officer
(Principal Executive Officer)
Dated: August 14, 2002 /S/ J.C. Leatherman, Jr.
---------------------------
J.C. Leatherman, Jr.
Chief Financial Officer
(Principal Accounting and
Financial Officer)