Avitar, Inc. (AVTI)

[hugh_jackoman]

The last reported note balance in a SEC filing was $6,147,365

Convertible notes payable (Note 5)
650,000
Current portion of long-term notes payable (Note 5)
1,430,322
CONVERTIBLE LONG-TERM NOTES PAYABLE (Note 5)
4,067,043

Add them up.

http://sec.gov/Archives/edgar/data/814008/000094376308000006/form10qsb-feb2008.htm

5.

Notes Payable and Short and Long-term Convertible Notes Payable

From September 2005 through December 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 $6,815,000 which are payable at maturity dates from September 2008 to December 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. In addition, as of November 16, 2007, the entire unpaid and unconverted 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. The total amount of these notes issued in the quarter ended December 31, 2007 amounted to $650,000. 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 September 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. For the notes executed during fiscal 2008, the Company issued warrants to purchase a total of 55,000,000 shares of common stock at $.01 per share for seven years valued at $130,000. Fees of approximately $1,202,000 incurred in connection with securing these loans were recorded as a deferred financing charge. On December 31, 2007, the Company executed notes payable with AJW Partners, LLC, New Millennium Capital Partners II, LLC and AJW Master Fund in the total principal amount of $632,417 to cover the accrued interest through October 31, 2007 on all of the above notes. These interest notes are payable on December 31, 2010 with interest on these notes at 2% per annum that is payable quarterly in cash or the Company’s common stock at the option of the Company. The entire unpaid and unconverted principal plus any accrued and unpaid interest associated with these interest 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. A discount to debt totaling $2,648,864 ($1,708,258 for the fair value of the conversion feature of these notes and $940,606 for the incremental fair value of the warrants issued in connection with these notes) was recorded during fiscal 2005, 2006, 2007 and 2008 and is being amortized over the terms of the notes. The unamortized discount was $1,500,341 ($119,967 for note maturing September 2008 and $1,380,374 for the remainder of the notes) as of December 31, 2007. The collateral pledged by the Company to secure these notes includes all assets of the Company. A liability of approximately $3,254,000 was recorded for the fair value of the warrants issued in connection with the $7,447,000 of notes and the conversion feature, which was reduced to its market value of approximately $917,000 at December 31, 2007. Through December 31, 2007, notes totaling $449,711 were converted into 61,246,734 shares of common stock.



From April to August 2005, the Company executed convertible notes with an individual in the total principal amount of $650,000 with interest at 10%. Each note has a maturity date of six months from the date of the note and is payable in ten monthly installments plus accrued interest commencing on the maturity date of the note. The notes, that were due in variable monthly installments plus accrued interest from October 1, 2005 and June 30, 2006, were outstanding at December 31, 2007. Under the terms of the notes, the entire unpaid principal balance and accrued interest shall become due and payable upon the occurrence of any default by the Company in the payment of interest and principal on the due date thereof and any such default that remains unremedied for twenty business day following written notice to the Company by the holders. No written notice of default from the holders of these notes has been received by the Company. The Company issued warrants to purchase 650,000 shares of common stock at $1.65 to $4.95 per share for three years in connection with these notes. In addition, the entire principal plus accrued interest associated with these notes is convertible into the Company’s common stock at a conversion price of the lesser of the closing price of the common stock on the date of the loan or 85% of the average closing price of the common stock for the five trading days preceding the notice of conversion. In no event shall the conversion price be lower than 50% of the closing price of the common stock on the date of the loan. A discount to debt totaling $172,930 ($156,800 for the value of the conversion feature of these notes and $16,130 for the value of the warrants issued in connection with these notes) was recorded during fiscal year 2005 and was fully amortized over the term of the notes. A liability of approximately $173,000 was recorded for the fair value of the warrants issued in connection with the $650,000 of notes and the conversion feature, which was reduced to its market value of $0 at December 31, 2007.