A Diagnostics & Imaging Week

Avitar (Canton, Massachusetts) reported completing a financing with investors for the sale of $750,000 of secured convertible notes and 1.5 million seven-year warrants.

It said that the proceeds will be used for marketing of the company's ORALscreen product, a non-invasive, rapid, onsite oral fluid test for drugs-of-abuse, as well as for general corporate development.

The notes, like the notes issued pursuant to the $3-million financing Avitar secured in September 2005, will mature three years from the date of issuance and bear interest at 8%. The notes, secured by the assets of the company, are convertible into shares of common stock of Avitar, at the option of the investors, at 65% of the average of the three lowest intraday trading prices of the common stock, as quoted on the OTC Bulletin Board for the 20 trading days preceding the date that the investors elect to convert.

Avitar manufactures products for the oral fluid diagnostic market, the disease and clinical testing market, and customized polyurethane applications used in the wound dressing industry.

It manufactures ORALscreen and also Hydrasorb, a topical dressing for moderate-to-heavy exudating wounds.

In other financing news:

• BioMag (Orangevale, California) reported that it has completed a private placement of $350,000 with International Investment Capital Corporation (IICC) at $1 a share

BioMag said that through its wholly owned subsidiary, Biospectrum Technologies, a company that has design-ed diagnostic equipment and immunoassays, it will identify "market inadequacies" and fill those needs with new technologies and assays that are qualitative, (yes/no) and quantitative (viral load/degree of infection).

IICC, established in 2002, facilitates securitizations of senior life settlement contracts. Clayton Hardman, president and CEO of Biomag, holds a 90% ownership position in IICC.

• Chembio Diagnostics (Medford, New York) reported that it raised $1.3 million in secured debt financing through a private placement to four institutional investors. Each purchaser received a secured debenture due in 90 days with interest at 0.667% per month and a warrant to purchase up to 400 shares of the company's common stock for each $1,000 loaned to the company, with an exercise price of 75 cents per share and an exercise term of 5 years.

The debentures are secured by the assets of the company and its wholly owned subsidiary, Chembio Diagnostic Systems.

Chembio Diagnostics develops rapid diagnostic tests for various infectious diseases. The company has received approval from the FDA for its Sure Check HIV 1/2 and HIV 1/2 Stat-Pak rapid test premarket approvals.

• Biosite (San Diego), a company commercializing proteomics discoveries for the advancement of medical diagnosis, reported that, in accordance with Nasdaq Mar-ketplace Rule 4350, 37 non-officer employees were grant-ed inducement stock options covering an aggregate of 35,050 shares of common stock. These options were grant-ed pursuant to Nasdaq Marketplace Rule 4350 (i)(1)(A)(iv) with the following terms: each option has been classified as a non-qualified stock option, has an exercise price equal to the fair market value on the grant date, has a 10-year term, and vests in 16 equal quarterly installments over four years.