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Related Quotes Sym. Price Chg. AVTI Trade News 0.005 0.001 Avitar Reports Fourth Quarter and Fiscal Year 2007 Financial Results
Dec 28, 2007 17:30:00 (ET)
CANTON, Mass., Dec 28, 2007 /PRNewswire-FirstCall via COMTEX/ -- Avitar, Inc. (AVTI, Trade ) today announced financial results for the three and 12 months ended September 30, 2007.
For the year ended September 30, 2007, Avitar reported revenues of $3,106,000 from continuing operations compared to $4,519,000 from continuing operations for the year ended September 30, 2006. The operating loss from continuing operations amounted to $2,733,000 versus $2,893,000. The net loss was $2,260,000, or $0.09 per basic and diluted share, for the year ending September 30, 2007 compared with a net loss of $3,703,000, or $0.80 per basic and diluted share, for the year ended September 30, 2006. The changes in net loss for Fiscal 2007 occurred primarily from an increase in non-cash income from the change in the fair value of derivative securities and warrants of $1,090,000, a decrease in operating expenses of $1,573,000 resulting from the reduced sales volume and an expense reduction program implemented in April 2007, lower interest and financing costs related to short-term and long-term borrowings of $96,000 and a decrease in the loss from discontinued operations of $97,000, offset in part by a reduction in sales of $1,413,000 due mainly to the transition to a new distributor for the Hydrasorb(R) wound dressing products.
Revenues from continuing operations for the fourth quarter of fiscal 2007 were $666,000 compared to $1,357,000 from continuing operations in the prior year's fourth fiscal quarter ended September 30, 2006. The operating loss from continuing operations amounted to $596,000 versus $600,000. The net loss was $718,000, or $0.02 per basic and diluted share, for the quarter ended September 30, 2007 compared with net loss of $447,000, or $0.08 per basic and diluted share, for the quarter ended September 30, 2006. The net loss for the quarter ended September 30, 2007 reflected a reduction in sales of $691,000 due mainly to the transition to a new distributor for the Hydrasorb(R) wound dressing products, increases in interest and financing costs of $109,000 related to the long-term debt borrowings undertaken during fiscal 2007, a reduction in non-cash income of $360,000 resulting from changes in fair market value of derivative securities and warrants, offset in part by lower operating expenses of $696,000 resulting from the reduced sales volume and an expense reduction program implemented in April 2007 and a decrease in the loss from discontinued operations of $194,000.
Peter P. Phildius, Chairman and CEO commented, "Despite our capital constraints we continue our efforts to grow the Company. As previously reported, we are positioning our oral fluid, drugs of abuse product line, Oralscreen, to address the needs of larger employers across several industry sectors. Particularly in the construction vertical market where the incidence of drug abuse has reached as high as 20%, we are beginning to see traction from our sales and marketing efforts."
Mr. Phildius continued, "As we have previously noted, our foam business continues to be negatively impacted by the lack of sales by the new distributor of our Hydrasorb product line. We are working to develop new distribution channels for Hydrasorb and, in addition, we are expanding our customer base in the foam product area to reduce our dependence in the future on our branded Hydrasorb product line."
ABOUT AVITAR
Avitar, Inc. develops, manufactures and markets innovative and proprietary products in the oral fluid diagnostic market, disease and clinical testing market, and customized polyurethane applications used in the wound dressing industry. Oral fluid diagnostics includes the estimated $1.5 billion drugs-of- abuse testing market, which encompasses the corporate workplace and criminal justice markets. Avitar's products include ORALscreen(TM), the world's first non-invasive, rapid, onsite oral fluid test for drugs-of-abuse. Additionally, Avitar manufactures and markets HYDRASORB(TM) an absorbent topical dressing for moderate to heavy exudating wounds. In the estimated $25 billion in vitro diagnostics market, Avitar is developing diagnostic strategies for disease and clinical testing. Some examples include influenza, diabetes and pregnancy. For more information, see Avitar's website at www.avitarinc.com .
Safe Harbor Statement. This release contains forward looking statements that are subject to risks and uncertainties including the development and marketing of new applications and other risks that are detailed from time to time in the Company's filings with the Securities and Exchange Commission. In view of such risks and uncertainties, the Company's actual results could differ materially from those anticipated in such forward looking statements
Company Contact: Jay C. Leatherman, CFO Avitar, Inc., 781-821-2440 x139
Avitar, Inc. Summary of Financial Results (in thousands, except per share amounts)
Quarter Year Ended September 30, Ended September 30, 2007 2006 2007 2006 Sales $666 $1,357 $3,106 $4,519
Operating Expenses: Cost of Sales 466 899 2,269 3,144 Selling, General and Administrative 732 913 3,260 3,774 Research and Development 64 145 310 494 Total Operating Expenses 1,262 1,957 5,839 7,412
Operating Loss (596) (600) (2,733) (2,893)
Other Income (Expenses) (121) 348 530 (656)
Loss from Continuing Operations (717) (252) (2,203) (3,549)
Discontinued Operations: Loss from the operations of BJR (1) (195) (57) (274) Income from the Disposal of USDTL - - - 120 Loss from Discontinued Operations (1) (195) (57) (154)
Net Loss $(718) $(447) $(2,260) $ (3,703)
Basic and Diluted Loss Per Share From Continuing Operations $(0.02) $(0.05) $(0.09) $(0.77)
Basic and Diluted Net Loss Per Share $(0.02) $(0.08) $(0.09) $(0.80)
Weighted Average Number of Shares and Common Equivalent Shares Outstanding 37,341,177 6,482,942 26,479,234 4,850,608
Selected Balance Sheet Items-9/30/07: Cash $94 Total Assets 1,748 Total Liabilities 8,377 Redeemable Convertible Preferred Stock 3,216 Shareholders' Deficit (9,846)
Entry into a Material Definitive Agreement, Unregistered Sale of Equity Securitie
Item 1.01 Entry into a Material Definitive Agreement. On December 20, 2007, Avitar, Inc. ("Avitar" or the "Company"), entered into a Securities Purchase Agreement and related agreements, dated as of December 13, 2007, as part of a $250,000 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 in March, May, June, July, August and November 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 $250,000 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 $250,000 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 40% 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. 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. (b) Not applicable
(c) Exhibits
Exhibit Description Location -------------------------------------------------------------------------------- --------------------------------- 4.1 Securities Purchase Agreement dated as of December 13, 2007 between the Company and the Purchasers Provided herewith
4.2 Registration Rights Agreement dated as of December 13, 2007 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
-------------------- LIFE IS 10% HOW YOU MAKE IT AND 90% HOW YOU TAKE IT! Posts: 9276 | From: San Diego CA | Registered: Jul 2006
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Item 6. 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 fiscal year ended September 30, 2007 ("Fiscal 2007") decreased $1,412,814, or approximately 31%, to $3,106,232 from $4,519,046 for the fiscal year ended September 30, 2006 ("Fiscal 2006"). The change for Fiscal 2007 primarily reflects a decrease in the volume of sales for its Foam Products resulting mainly from the change to a new US distributor on January 1, 2007 for Hydrasorb® wound dressings. The Company expects sales volume of the Foam Products to improve when and if a new primary distributor for Hydrasorb® is appointed as a replacement for Dukal and additional orders for new products are received.
Operating Expenses
Cost of sales for Fiscal 2007 was approximately 73% of sales compared to the cost of sales of approximately 70% of sales for Fiscal 2006. The change for Fiscal 2007 occurred primarily as a result of the reduction in sales described above, offset in part by the impact of the expense reduction program put in place by the Company in April 2007.
Sales, general and administrative expenses for Fiscal 2007 decreased $513,981, or approximately 14%, to $3,259,876 from $3,773,857 for Fiscal 2006. The decrease for Fiscal 2007 primarily resulted from expense reductions of approximately $52,000 for consulting fees, $390,000 for salary and payroll related costs for various sales, marketing and other administrative positions, $57,000 for insurance premiums, $55,000 for travel expenses, $43,000 for trade shows and promotion materials, $41,000 for annual meeting and report costs, and $164,000 for various other administrative items; offset in part by an increase of approximately $93,000 for legal fees, $73,000 for investor relations and $122,000 for stock-based compensation. In order to achieve revenue growth, the Company will need to incur increased expenses to hire additional direct sales staff and expand marketing programs as sufficient additional funding becomes available.
Research and development expenses for Fiscal 2007 were $309,637 compared to $493,943 for Fiscal 2006. The decrease of approximately $184,000 resulted primarily from reduced salary and fringe benefit expenses of $152,000, consulting expense of $7,000, and material and various development related expenses of $25,000. Although research and development expenses were lower for Fiscal 2007, the Company must continue developing and enhancing its ORALscreen products and therefore will most likely incur increased expenses for research and development beyond Fiscal 2007 as sufficient additional funding becomes available.
Other Income and Expense
Other income for Fiscal 2007 was $1,966,739 as compared to other income of $876,939 for the fiscal year ended September 30, 2006. The change for Fiscal 2007 resulted primarily from the changes in the fair market value of embedded derivative securities and warrants.
Interest expense and financing costs were $1,436,301 for Fiscal 2007 compared to $1,532,711 incurred during Fiscal 2006. The decrease for the fiscal year ended September 30, 2007 resulted primarily from the $605,000 non-cash interest expense recorded in Fiscal 2006 for the fair value of the warrants issued as replacement for the outstanding warrants in May 2006 (see Note 9 to the accompanying consolidated financial statements); offset in part by the interest, amortization of deferred financing costs and amortization of debt discount associated with the additional long-term note borrowings totaling approximately $1,895,000 that were completed by the Company from December 2006 through August 2007.
Discontinued Operations
On May 1, 2007, the Company consummated a sale of the business of its BJR subsidiary. For the fiscal year ended September 30, 2007, the loss from discontinued operations was $57,256 solely related to the operations of BJR compared to a loss of $154,214 for Fiscal 2006. The loss for Fiscal 2006 was composed of the loss from operations of BJR of $136,094 and a goodwill impairment charge of $138,120 for BJR; offset in part by income of $120,000 from the disposal of USDTL. See Note 3 to the accompanying consolidated financial statements.
Net Loss
Primarily as a result of the factors described above, the Company had a net loss of $2,259,629 or $.09 per basic and diluted share for Fiscal 2007, compared to a net loss of $3,703,165 or $.80 per basic and diluted share for Fiscal 2006.
Financial Condition and Liquidity
At September 30, 2007, the Company had a working capital deficit of $3,823,193 and cash and cash equivalents of $94,069. Cash flows from financing activities provided the primary source of funding during the year ended September 30, 2007 and the Company will continue to rely on this type of funding until profitability is reached. The following is a summary of cash flows for the year ended September 30, 2007:
September 30, Sources (use) of cash flows 2007 Operating activities $(1,768,713) Investing activities (21,011) Financing activities 1,603,250 Net decrease in cash and equivalents $ (186,474)
Operating Activities. The net loss of $2,259,629 (composed of expenses totaling $7,332,600 less sales and other income of $5,072,971) was the major use of cash by operations. When the net loss is adjusted for non-cash expenses such as depreciation and amortization, amortization of debt discounts, deferred financing costs and deferred lessor incentive, common stock issued for services, stock-based compensation, and income from the changes in the fair market value of derivative securities and warrants, the cash needed to finance the net loss was $2,957,340. Working capital changes lowered operating cash requirements as a result of a decrease in accounts receivable of $332,073 due to the lower sales volume, a reduction in inventory levels of $46,642, a decrease in prepaid expenses and other current assets of $62,741, an increase in accounts payable and accrued expenses of $740,928 primarily from the deferral of vendor payments and interest payments on long-term convertible debt and a decrease in the net assets of discontinued operations of $10,643. In addition, there was a decrease in deferred revenue that became recognized revenue in Fiscal 2007 of $4,400.
Investing and Financing Activities. Cash of $21,011 was used for additions to property, plant and equipment. To fulfill the major financing requirements of the business, the Company generated $1,628,400 through the issuance of long-term convertible notes (as described in Note 9 to the accompanying consolidated financial statements) and $109,807 in proceeds from issuance of short-term notes payable; of which $134,957 was used to repay various short-term notes payable and capital lease obligations.
During Fiscal 2008, 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.
In November and December 2007, the Company executed additional notes payable with AJW Partners, LLC, AJW Master Fund, Ltd. and New Millennium Capital Partners II, LLC in the total principal amount of $650,000. Interest on these notes is at 8% per annum and is payable quarterly in cash or the Company's common stock at the option of the Company. The Company issued warrants to purchase 55,000,000 shares of common stock at $.01 per share for seven years in connection with these notes. The entire principal plus any accrued and unpaid interest associated with these notes is convertible, at the holder's option, into the Company's common stock at a conversion price of 40% of the average of the three lowest intraday trading prices of the common stock for the twenty trading days preceding the date that the holders elect to convert. As part of this financing, the conversion price related to all previously issued and outstanding notes to AJW Partners, AJW Master Fund, Ltd., AJW Qualified Partners, and New Millennium Capital Partners II, LLC (as described in following paragraph) was changed from 55% or 65% to 40%.
From September 2005 through August 2007 the Company executed notes payable with AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC, New Millennium Capital Partners II, LLC and AJW Master Fund in the total principal amount of $6,165,000 which are payable at maturity dates from September 2008 to August 2010. Interest on these notes is at 8% per annum and is payable quarterly in cash or the Company's common stock at the option of the Company. The Company originally issued warrants to purchase 100,000 shares of common stock at $12.50 per share for five years in connection with the notes executed from September 2005 to April 2006. In conjunction with the notes executed in May 2006, the outstanding warrants were cancelled and replaced with warrants to purchase 3,000,000 shares of common stock at $1.25 per share for seven years. For the notes executed from July 2006 through August 2007, the Company issued warrants to purchase a total of 65,500,000 shares of common stock at $.01 to $.22 per share for seven years. Non-cash interest expense of $605,000 representing the fair value of the warrants issued as replacement for the outstanding warrants in May 2006 was recorded in fiscal 2006. Fees of approximately $1,202,000 incurred in connection with securing these loans were recorded as a deferred financing charge. In addition, the entire unpaid and unconverted principal plus any accrued and unpaid interest associated with these notes was convertible, at the holder's option, into the Company's common stock at a conversion price of 65% for notes issued through February 2006 and 55% for notes executed after February 2006 of the average of the three lowest intraday trading prices of the common stock for the twenty trading days preceding the date that the holders elect to convert. A discount to debt totaling $2,288,222 ($1,477,616 for the fair value of the conversion feature of these notes and $810,606 for the incremental fair value of the warrants issued in connection with these notes) was recorded during fiscal 2005, 2006 and 2007 and is being amortized over the terms of the notes. The unamortized discount was $1,332,072 ($63,524 for notes maturing September 2008 and $1,268,548 for the remainder of the notes) as of September 30, 2007. The collateral pledged by the Company to secure these notes includes all assets of the Company. Through September 30, 2007, notes totaling $393,873 were converted into 25,305,763 shares of common stock.
As security for full and faithful performance of all provisions of the lease renewal for the facility at Canton, MA in Fiscal 2005, the Company furnished the landlord an irrevocable letter of credit in the amount of $150,000. The letter of credit was obtained from a bank that requires the Company to maintain $150,000 on deposit with the bank as full collateral for the letter of credit.
The cash available at September 30, 2007, the proceeds received in November and December 2007 from the financing described above and the anticipated customer receipts are expected to be sufficient to fund the operations of the Company through early January 2008. Beyond that time, the Company will require significant additional financing from outside sources to fund its operations. The Company plans to continue working with placement agents and/or investment fund managers in order to raise additional capital during Fiscal 2008 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 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.
Required payments for debt and minimum rentals as of September 30, 2007 are as follows:
Short-Term Fiscal Year Operating Leases Debt * Term Debt* Total 2008 $ 330,781 $ 2,263,215 $ 413,200 $ 3,007,196 2009 348,906 - 3,546,946 3,895,852 2010 271,875 - 1,977,913 2,249,788
Management expects that operating revenues will grow during Fiscal 2008 as employers expand their use of random drug testing utilizing Avitar's ORALscreen, which, as an instant on-site diagnostic test, is part of the fastest growing segment of the diagnostic test market and if the Company is able to find a major US distributor for its Hydrasorb wound dressing products. However, due to the funding constraints described above, the Company in April 2007 initiated an expense reduction program which resulted in a decrease in its direct sales force and delayed the implementation of an expanded, targeted marketing program. ORALscreen, as an instant on-site diagnostic test, is part of the fastest growing segment of the diagnostic test market. Funding constraints have also resulted in the Company having difficulty in maintaining raw material inventories at sufficient levels for manufacturing products to meet anticipated sales volumes. 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, the anticipated net proceeds from the future financings 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 future financings, or that any or all of the net proceeds sought thereby will be obtained. Furthermore, there can be no assurance that the Company will find a major US distributor for its Hydrasorb products or have sufficient resources to achieve the anticipated growth. 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 control discretionary costs at the Company 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 registered public accounting firm relating to the financial statements for Fiscal 2007 contains an explanatory paragraph expressing 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 of the date of such report (December 24, 2007). The Company's plans to address the situation are presented above. However, there are no assurances that these endeavors will be successful or sufficient.
Recent Accounting Pronouncements
In July 2006, the Finance Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109". FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company's financial statements in accordance with FASB Statement No. 109, "Accounting for Income Taxes". FIN 48 prescribes the recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for the Company's fiscal year beginning October 1, 2007. The Company is currently evaluating the effect that the adoption of FIN 48 will have on its consolidated financial statements but does not expect that it will have a material impact.
In February 2006, the FASB issued SFAS 155, "Accounting for Certain Hybrid Financial Instruments" which amends SFAS 133, "Accounting for Derivative Instruments and Hedging Activities" and SFAS 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities." SFAS 155 simplifies the accounting for certain derivatives embedded in other financial instruments by allowing them to be accounted for as a whole if the holder elects to account for the whole instrument on a fair value basis. SFAS 155 also clarifies and amends certain other provisions of SFAS 133 and SFAS 140. SFAS 155 is effective for all financial instruments acquired, issued or subject to a remeasurement event occurring in fiscal years beginning after September 15, 2006 and therefore, was effective for the Company beginning October 1, 2006. The adoption of SFAS 155 by the Company has not had a material impact on its consolidated financial statements.
In March 2006, the FASB issued EITF 06-03, "How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That is, Gross versus Net Presentation)" that clarifies how a company discloses its recording of taxes collected that are imposed on revenue-producing activities. EITF 06-03 was effective for the Company beginning October 1, 2006. The adoption of EITF 06-03 has not had a material impact on its consolidated financial statements.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". SFAS No. 157 defines fair value, establishes a framework for measuring fair value in U.S. generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The FASB has issued a one-year deferral of SFAS 157's fair value measurement requirement for non-financial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis. The Company is currently evaluating the impact that SFAS No. 157 will have on its results of operations or financial position.
In December 2006, the FASB issued FASB Staff Position Number 00-19-2, "Accounting for Registration Payment Arrangements" ("FSP EITF 00-19-2"). FSP EITF 00-19-2 addresses an issuer's accounting for registration payment arrangements. FSP EITF 00-19-2 specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with FASB Statement No. 5, "Accounting for Contingencies". FSP EITF 00-19-2 is effective immediately for registration payment arrangements and the financial instruments subject to those arrangements that are entered into or modified subsequent to the date of issuance of FSP EITF 00-19-2 (December 21, 2006). For registration payment arrangements and financial instruments subject to those arrangements that were entered into prior to the issuance of FSP EITF 00-19-2, this guidance shall be effective for financial statements issued for fiscal years beginning after December 15, 2006, and interim periods within those fiscal years. The adoption of FSP EITF 00-19-2 by the Company has not had an impact on its consolidated financial statements.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB No 115". This Statement provides companies with an option to measure, at specified election dates, many financial instruments and certain other items at fair value that are not currently measured at fair value. The standard also establishes presentation and disclosure requirements designed to facilitate comparison between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the effect that the adoption of SFAS No. 159 will have on its consolidated financial statements but does not expect that it will have a material impact.
Critical Accounting Policies
The Company's significant accounting policies are listed in Note 2 to the accompanying consolidated financial statements for the year ended September 30, 2007. However, certain of its accounting policies require the application of significant judgment by its management, and such judgments are reflected in the amounts reported in the consolidated financial statements. The Company considers its accounting policies with respect to revenue recognition, use of estimates, long-lived assets and goodwill as the most critical to its results of operations and financial condition.
Revenue Recognition The Company recognizes revenue from product sales upon shipment and delivery with delivery being made F.O.B. to the carrier. Revenues from the sales of services are recognized in the period the services are provided. These revenues are recognized provided that a purchase order has been received or a contract has been executed, there are no uncertainties regarding customer acceptance, the sales price is fixed or determinable and collection is reasonably assured. If uncertainties regarding customer acceptance exist, the Company recognizes revenue when those uncertainties are resolved. Amounts collected or billed prior to satisfying the above revenue recognition criteria are recorded as deferred revenue.
The Company does not offer its customers or distributors the right to return product once it has been delivered in accordance with the terms of sale. Product returns, which must be authorized by the Company, occur mainly under the warranties associated with the product. The Company maintains sufficient reserves for warranty costs. Price discounts for products are reflected in the amount billed to the customer at the time of delivery. Rebates and payments have not been material and are adequately covered by established allowances.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Valuation of Derivative Securities
The Company accounts for the value of warrants issued and conversion and put features granted to investors as part of the private placement of securities or debt in accordance with the provisions of SFAS No. 133 and EITF Issue No. 00-19. When required, the amount of the liability is calculated on the date of sale or issuance of the securities or debt based on a valuation utilizing a market value approach. This approach determines the fair value of the securities sold by the Company by using one or more methods that compare these securities to similar securities that have been sold. The liability is marked-to-market adjusted to fair value at the end of each quarter and the change recorded to other income (expense).
-------------------- LIFE IS 10% HOW YOU MAKE IT AND 90% HOW YOU TAKE IT! Posts: 9276 | From: San Diego CA | Registered: Jul 2006
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posted
Related Quotes Sym. Price Chg. AVTI Trade News 0.004 0.001 Avitar's Technology to be Used by Egyptian Government
Jan 7, 2008 12:46:06 (ET)
CANTON, Mass., Jan 07, 2008 (BUSINESS WIRE) -- Avitar Inc. ("AVTI") (AVTI, Trade ), manufacturers of nationally branded oral fluid testing diagnostic devices and customized polyurethane applications used in wound dressings, announced today that the Company's ORALscreen rapid test for drugs-of-abuse and electronic reader has been approved by the Egyptian Government to be initially deployed by the Ministry of Tourism. Avitar's random on-site drug screening technology will be used to test all tour bus drivers, travel agents, and related personnel.
Peter Phildius, Avitar's Chairman and CEO said, "Egypt represents a significant business opportunity for Avitar. While we have previously focused our attention on the $1.5B existing market in the United States, we also must recognize the demand for our products world-wide. Egypt's population of 75 million is growing twice as fast as the US. The ORALscreen program is important to the Egyptian government's expanding efforts to address substance abuse in its society. Avitar will seize upon this opportunity to increase its reach in overseas markets, which currently represent approximately 10% of sales revenue."
Avitar's positioning as a consultative drug-free workplace technology and services provider, plays a central role in the model for convergence and integration efforts of its Egyptian business partners, the Ministry of Health, the Ministry of Tourism and the Ministry of the Interior.
About Avitar, Inc.
Avitar Inc. develops, manufactures and markets innovative proprietary products. Markets include fluid diagnostics, disease and clinical testing, and customized applications for wound dressings. Principal products include ORALscreen(R), (the first non-invasive, rapid, onsite oral fluid test for drugs-of abuse), and Hydrasorb(R), (an absorbent topical dressing for moderate to heavy exudating wounds). Avitar is also developing diagnostic strategies for disease and clinical testing in the estimated $25 billion in-vitro diagnostics market. Conditions targeted include influenza, diabetes, and pregnancy. For more information, see Avitar's website at http://www.avitarinc.com .
Avitar Inc. is a fully reporting company whose stock trades on the OTCBB under the symbol "AVTI.OB". For information, contact Investor Relations 781-821-2440 - Peter Cholakis, VP - Marketing.
Forward-Looking Statements
This release contains forward-looking statements that are subject to risks and uncertainties including the development and marketing of new applications and other risks that are detailed from time to time in the Company's filings with the Securities and Exchange Commission. In view of such risks and uncertainties, the Company's actual results could differ materially from those anticipated in such forward-looking statements.
SOURCE: Avitar Inc.
Avitar Inc., Canton Investor Relations: Peter Cholakis, VP - Marketing, 781-821-2440
quote:Originally posted by IMAKEMONEY: BEEN TAKEN DOWN WITH LOW VOLUME, TIME TO ADD IMO!
nice call IMAKE!!
-------------------- If your not on the edge of ur seat, sell it! Everything posted is my opinion! Posts: 992 | From: H-town | Registered: Nov 2006
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Disclosure Category Current Information Primary SIC — Industry Classification 8082 - Home health care services State Of Incorporation DE Jurisdiction Of Incorporation USA Company Officers Peter P. Phildius, CEO Jay Leatherman, CFO
SEC Reporting Status SEC Reporting Company CIK 0000814008 Fiscal Year End 9/30 Estimated Market Cap 296,966.604 as of Jan 4, 2008 Outstanding Shares 98,988,868 as of Dec 12, 2007 Number of Share Holders of Record 550 as of Dec 28, 2007 Current Capital Change shs decreased by 1 for 50 split Pay Date: Feb 21, 2006 Company Notes Formerly=Managed Health Benefits Corp. until 5-95 Security Notes Note=8-29-05 deleted from AMEX New Issue=6-87 750,000 shs at $2 (best efforts-400,000 min.) by Jerold Securities & Co., Inc. Transfer Agent Continental Stock Transfer & Trust Company, 17 Battery Place 8th Floor New York, NY 10004
-------------------- LIFE IS 10% HOW YOU MAKE IT AND 90% HOW YOU TAKE IT! Posts: 9276 | From: San Diego CA | Registered: Jul 2006
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