UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
(Rule 13d-102)
INFORMATION TO BE INCLUDED IN STATEMENTS
FILED PURSUANT TO RULE 13d-1(b), (c) AND (d)
AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(b)
(Amendment No. 1)*
CHAD THERAPEUTICS, INC.
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(Name of Issuer)
Common Stock, $.0.01 par value per share
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(Title of Class of Securities)
157228107
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(CUSIP Number)
December 31, 2007
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(Date of Event Which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which this Schedule
13G is filed:
[ ] Rule 13d-1(b)
[X] Rule 13d-1(c)
[ ] Rule 13d-1(d)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. 157228107
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(1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Laurus Master Fund, Ltd.
98-0337673
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(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
(3) SEC Use Only
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(4) Citizenship or Place of Organization: Cayman Islands
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Number of Shares Beneficially Owned
by Each Reporting Person With (5) Sole Voting Power: 0*
--------------------------------------
(6) Shared Voting Power: 1,016,982*
--------------------------------------
(7) Sole Dispositive Power: 0*
--------------------------------------
(8) Shared Dispositive Power: 1,016,982*
--------------------------------------
--------------------------------------------------------------------------------
(9) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,016,982
--------------------------------------------------------------------------------
(10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See
Instructions): [X]
--------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9): 9.99%*
--------------------------------------------------------------------------------
(12) Type of Reporting Person (See Instructions): CO, HC
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* Based on 10,180,000 shares of the common stock, $0.01 par value per share (the
"Shares") outstanding of Chad Therapeutics, Inc., a California corporation (the
"Company"), as disclosed in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2007. As of December 31, 2007, Calliope
Capital Corporation ("Calliope") and Valens U.S. SPV I, LLC ("Valens US", and
together with Calliope, the "Investors") collectively held (i) a warrant (the
"Warrant") to acquire 976,744 Shares, at an exercise price of $1.24 per Share,
subject to certain adjustments, and (ii) a secured convertible term note (the
"Note") in the aggregate principal amount of $750,000, which is convertible into
Shares at a conversion rate of $1.18 per Share, subject to certain adjustments.
The Warrant and Note contain an issuance limitation prohibiting the Investors
from exercising or converting those securities to the extent that such exercise
would result in beneficial ownership by the Investors of more than 9.99% of the
Shares then issued and outstanding (the "Issuance Limitation"). The Issuance
Limitation may be waived by the Investors upon at least 61 days prior notice to
the Company and shall automatically become null and void (i) following notice to
the Issuer of the occurrence and during the continuance of an event of default
(as defined in and pursuant to the terms of the applicable instrument), or (ii)
upon receipt by the Investors of a Notice of Redemption (as defined in an
pursuant to the terms of the applicable instrument). Calliope is a wholly owned
subsidiary of Laurus Master Fund, Ltd. which is managed by Laurus Capital
Management, LLC. Valens US is managed by Valens Capital Management, LLC. Eugene
Grin and David Grin, through other entities, are the controlling principals of
Laurus Capital Management, LLC and Valens Capital Management, LLC and share
voting and investment power over the securities owned by the Investors reported
in this Schedule 13G, as amended.
CUSIP No. 157228107
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(1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Calliope Capital Corporation
57-1237865
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(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
(3) SEC Use Only
--------------------------------------------------------------------------------
(4) Citizenship or Place of Organization: Delaware
--------------------------------------------------------------------------------
Number of Shares Beneficially Owned
by Each Reporting Person With (5) Sole Voting Power: 0*
--------------------------------------
(6) Shared Voting Power: 1,016,982*
--------------------------------------
(7) Sole Dispositive Power: 0*
--------------------------------------
(8) Shared Dispositive Power: 1,016,982*
--------------------------------------
--------------------------------------------------------------------------------
(9) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,016,982
--------------------------------------------------------------------------------
(10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See
Instructions): [X]
--------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9): 9.99%*
--------------------------------------------------------------------------------
(12) Type of Reporting Person (See Instructions): CO
--------------------------------------------------------------------------------
* Based on 10,180,000 shares of the common stock, $0.01 par value per share (the
"Shares") outstanding of Chad Therapeutics, Inc., a California corporation (the
"Company"), as disclosed in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2007. As of December 31, 2007, Calliope
Capital Corporation ("Calliope") and Valens U.S. SPV I, LLC ("Valens US", and
together with Calliope, the "Investors") collectively held (i) a warrant (the
"Warrant") to acquire 976,744 Shares, at an exercise price of $1.24 per Share,
subject to certain adjustments, and (ii) a secured convertible term note (the
"Note") in the aggregate principal amount of $750,000, which is convertible into
Shares at a conversion rate of $1.18 per Share, subject to certain adjustments.
The Warrant and Note contain an issuance limitation prohibiting the Investors
from exercising or converting those securities to the extent that such exercise
would result in beneficial ownership by the Investors of more than 9.99% of the
Shares then issued and outstanding (the "Issuance Limitation"). The Issuance
Limitation may be waived by the Investors upon at least 61 days prior notice to
the Company and shall automatically become null and void (i) following notice to
the Issuer of the occurrence and during the continuance of an event of default
(as defined in and pursuant to the terms of the applicable instrument), or (ii)
upon receipt by the Investors of a Notice of Redemption (as defined in an
pursuant to the terms of the applicable instrument). Calliope is a wholly owned
subsidiary of Laurus Master Fund, Ltd. which is managed by Laurus Capital
Management, LLC. Valens US is managed by Valens Capital Management, LLC. Eugene
Grin and David Grin, through other entities, are the controlling principals of
Laurus Capital Management, LLC and Valens Capital Management, LLC and share
voting and investment power over the securities owned by the Investors reported
in this Schedule 13G, as amended.
CUSIP No. 157228107
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(1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Laurus Capital Management, LLC
13-4150669
--------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
(3) SEC Use Only
--------------------------------------------------------------------------------
(4) Citizenship or Place of Organization: Delaware
--------------------------------------------------------------------------------
Number of Shares Beneficially Owned
by Each Reporting Person With (5) Sole Voting Power: 0*
--------------------------------------
(6) Shared Voting Power: 1,016,982*
--------------------------------------
(7) Sole Dispositive Power: 0*
--------------------------------------
(8) Shared Dispositive Power: 1,016,982*
--------------------------------------
--------------------------------------------------------------------------------
(9) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,016,982
--------------------------------------------------------------------------------
(10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See
Instructions): [X]
--------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9): 9.99%
--------------------------------------------------------------------------------
(12) Type of Reporting Person (See Instructions): OO
--------------------------------------------------------------------------------
* Based on 10,180,000 shares of the common stock, $0.01 par value per share (the
"Shares") outstanding of Chad Therapeutics, Inc., a California corporation (the
"Company"), as disclosed in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2007. As of December 31, 2007, Calliope
Capital Corporation ("Calliope") and Valens U.S. SPV I, LLC ("Valens US", and
together with Calliope, the "Investors") collectively held (i) a warrant (the
"Warrant") to acquire 976,744 Shares, at an exercise price of $1.24 per Share,
subject to certain adjustments, and (ii) a secured convertible term note (the
"Note") in the aggregate principal amount of $750,000, which is convertible into
Shares at a conversion rate of $1.18 per Share, subject to certain adjustments.
The Warrant and Note contain an issuance limitation prohibiting the Investors
from exercising or converting those securities to the extent that such exercise
would result in beneficial ownership by the Investors of more than 9.99% of the
Shares then issued and outstanding (the "Issuance Limitation"). The Issuance
Limitation may be waived by the Investors upon at least 61 days prior notice to
the Company and shall automatically become null and void (i) following notice to
the Issuer of the occurrence and during the continuance of an event of default
(as defined in and pursuant to the terms of the applicable instrument), or (ii)
upon receipt by the Investors of a Notice of Redemption (as defined in an
pursuant to the terms of the applicable instrument). Calliope is a wholly owned
subsidiary of Laurus Master Fund, Ltd. which is managed by Laurus Capital
Management, LLC. Valens US is managed by Valens Capital Management, LLC. Eugene
Grin and David Grin, through other entities, are the controlling principals of
Laurus Capital Management, LLC and Valens Capital Management, LLC and share
voting and investment power over the securities owned by the Investors reported
in this Schedule 13G, as amended.
CUSIP No. 157228107
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(1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Valens U.S. SPV I, LLC
20-8903266
--------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
(3) SEC Use Only
--------------------------------------------------------------------------------
(4) Citizenship or Place of Organization: Delaware
--------------------------------------------------------------------------------
Number of Shares Beneficially Owned
by Each Reporting Person With (5) Sole Voting Power: 0*
--------------------------------------
(6) Shared Voting Power: 1,016,982*
--------------------------------------
(7) Sole Dispositive Power: 0*
--------------------------------------
(8) Shared Dispositive Power: 1,016,982*
--------------------------------------
--------------------------------------------------------------------------------
(9) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,016,982
--------------------------------------------------------------------------------
(10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See
Instructions): [X]
--------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9): 9.99%*
--------------------------------------------------------------------------------
(12) Type of Reporting Person (See Instructions): OO
--------------------------------------------------------------------------------
* Based on 10,180,000 shares of the common stock, $0.01 par value per share (the
"Shares") outstanding of Chad Therapeutics, Inc., a California corporation (the
"Company"), as disclosed in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2007. As of December 31, 2007, Calliope
Capital Corporation ("Calliope") and Valens U.S. SPV I, LLC ("Valens US", and
together with Calliope, the "Investors") collectively held (i) a warrant (the
"Warrant") to acquire 976,744 Shares, at an exercise price of $1.24 per Share,
subject to certain adjustments, and (ii) a secured convertible term note (the
"Note") in the aggregate principal amount of $750,000, which is convertible into
Shares at a conversion rate of $1.18 per Share, subject to certain adjustments.
The Warrant and Note contain an issuance limitation prohibiting the Investors
from exercising or converting those securities to the extent that such exercise
would result in beneficial ownership by the Investors of more than 9.99% of the
Shares then issued and outstanding (the "Issuance Limitation"). The Issuance
Limitation may be waived by the Investors upon at least 61 days prior notice to
the Company and shall automatically become null and void (i) following notice to
the Issuer of the occurrence and during the continuance of an event of default
(as defined in and pursuant to the terms of the applicable instrument), or (ii)
upon receipt by the Investors of a Notice of Redemption (as defined in an
pursuant to the terms of the applicable instrument). Calliope is a wholly owned
subsidiary of Laurus Master Fund, Ltd. which is managed by Laurus Capital
Management, LLC. Valens US is managed by Valens Capital Management, LLC. Eugene
Grin and David Grin, through other entities, are the controlling principals of
Laurus Capital Management, LLC and Valens Capital Management, LLC and share
voting and investment power over the securities owned by the Investors reported
in this Schedule 13G, as amended.
CUSIP No. 157228107
--------------------------------------------------------------------------------
(1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Valens Capital Management, LLC
20-8903345
--------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
(3) SEC Use Only
--------------------------------------------------------------------------------
(4) Citizenship or Place of Organization: Delaware
--------------------------------------------------------------------------------
Number of Shares Beneficially Owned
by Each Reporting Person With (5) Sole Voting Power: 0*
--------------------------------------
(6) Shared Voting Power: 1,016,982*
--------------------------------------
(7) Sole Dispositive Power: 0*
--------------------------------------
(8) Shared Dispositive Power: 1,016,982*
--------------------------------------
--------------------------------------------------------------------------------
(9) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,016,982
--------------------------------------------------------------------------------
(10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See
Instructions): [X]
--------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9): 9.99%*
--------------------------------------------------------------------------------
(12) Type of Reporting Person (See Instructions): OO
--------------------------------------------------------------------------------
* Based on 10,180,000 shares of the common stock, $0.01 par value per share (the
"Shares") outstanding of Chad Therapeutics, Inc., a California corporation (the
"Company"), as disclosed in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2007. As of December 31, 2007, Calliope
Capital Corporation ("Calliope") and Valens U.S. SPV I, LLC ("Valens US", and
together with Calliope, the "Investors") collectively held (i) a warrant (the
"Warrant") to acquire 976,744 Shares, at an exercise price of $1.24 per Share,
subject to certain adjustments, and (ii) a secured convertible term note (the
"Note") in the aggregate principal amount of $750,000, which is convertible into
Shares at a conversion rate of $1.18 per Share, subject to certain adjustments.
The Warrant and Note contain an issuance limitation prohibiting the Investors
from exercising or converting those securities to the extent that such exercise
would result in beneficial ownership by the Investors of more than 9.99% of the
Shares then issued and outstanding (the "Issuance Limitation"). The Issuance
Limitation may be waived by the Investors upon at least 61 days prior notice to
the Company and shall automatically become null and void (i) following notice to
the Issuer of the occurrence and during the continuance of an event of default
(as defined in and pursuant to the terms of the applicable instrument), or (ii)
upon receipt by the Investors of a Notice of Redemption (as defined in an
pursuant to the terms of the applicable instrument). Calliope is a wholly owned
subsidiary of Laurus Master Fund, Ltd. which is managed by Laurus Capital
Management, LLC. Valens US is managed by Valens Capital Management, LLC. Eugene
Grin and David Grin, through other entities, are the controlling principals of
Laurus Capital Management, LLC and Valens Capital Management, LLC and share
voting and investment power over the securities owned by the Investors reported
in this Schedule 13G, as amended.
CUSIP No. 157228107
--------------------------------------------------------------------------------
(1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
David Grin
--------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
(3) SEC Use Only
--------------------------------------------------------------------------------
(4) Citizenship or Place of Organization: Israel
--------------------------------------------------------------------------------
Number of Shares Beneficially Owned
by Each Reporting Person With (5) Sole Voting Power: 0*
--------------------------------------
(6) Shared Voting Power: 1,016,982*
--------------------------------------
(7) Sole Dispositive Power: 0*
--------------------------------------
(8) Shared Dispositive Power: 1,016,982*
--------------------------------------
--------------------------------------------------------------------------------
(9) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,016,982
--------------------------------------------------------------------------------
(10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See
Instructions): [X]
--------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9): 9.99%
--------------------------------------------------------------------------------
(12) Type of Reporting Person (See Instructions): IN
--------------------------------------------------------------------------------
* Based on 10,180,000 shares of the common stock, $0.01 par value per share (the
"Shares") outstanding of Chad Therapeutics, Inc., a California corporation (the
"Company"), as disclosed in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2007. As of December 31, 2007, Calliope
Capital Corporation ("Calliope") and Valens U.S. SPV I, LLC ("Valens US", and
together with Calliope, the "Investors") collectively held (i) a warrant (the
"Warrant") to acquire 976,744 Shares, at an exercise price of $1.24 per Share,
subject to certain adjustments, and (ii) a secured convertible term note (the
"Note") in the aggregate principal amount of $750,000, which is convertible into
Shares at a conversion rate of $1.18 per Share, subject to certain adjustments.
The Warrant and Note contain an issuance limitation prohibiting the Investors
from exercising or converting those securities to the extent that such exercise
would result in beneficial ownership by the Investors of more than 9.99% of the
Shares then issued and outstanding (the "Issuance Limitation"). The Issuance
Limitation may be waived by the Investors upon at least 61 days prior notice to
the Company and shall automatically become null and void (i) following notice to
the Issuer of the occurrence and during the continuance of an event of default
(as defined in and pursuant to the terms of the applicable instrument), or (ii)
upon receipt by the Investors of a Notice of Redemption (as defined in an
pursuant to the terms of the applicable instrument). Calliope is a wholly owned
subsidiary of Laurus Master Fund, Ltd. which is managed by Laurus Capital
Management, LLC. Valens US is managed by Valens Capital Management, LLC. Eugene
Grin and David Grin, through other entities, are the controlling principals of
Laurus Capital Management, LLC and Valens Capital Management, LLC and share
voting and investment power over the securities owned by the Investors reported
in this Schedule 13G, as amended.
CUSIP No. 157228107
--------------------------------------------------------------------------------
(1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Eugene Grin
--------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
(3) SEC Use Only
--------------------------------------------------------------------------------
(4) Citizenship or Place of Organization: United States
--------------------------------------------------------------------------------
Number of Shares Beneficially Owned
by Each Reporting Person With (5) Sole Voting Power: 0*
--------------------------------------
(6) Shared Voting Power: 1,016,982*
--------------------------------------
(7) Sole Dispositive Power: 0*
--------------------------------------
(8) Shared Dispositive Power: 1,016,982*
--------------------------------------
--------------------------------------------------------------------------------
(9) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,016,982
--------------------------------------------------------------------------------
(10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See
Instructions): [X]
--------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9): 9.99%
--------------------------------------------------------------------------------
(12) Type of Reporting Person (See Instructions): IN
--------------------------------------------------------------------------------
* Based on 10,180,000 shares of the common stock, $0.01 par value per share (the
"Shares") outstanding of Chad Therapeutics, Inc., a California corporation (the
"Company"), as disclosed in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2007. As of December 31, 2007, Calliope
Capital Corporation ("Calliope") and Valens U.S. SPV I, LLC ("Valens US", and
together with Calliope, the "Investors") collectively held (i) a warrant (the
"Warrant") to acquire 976,744 Shares, at an exercise price of $1.24 per Share,
subject to certain adjustments, and (ii) a secured convertible term note (the
"Note") in the aggregate principal amount of $750,000, which is convertible into
Shares at a conversion rate of $1.18 per Share, subject to certain adjustments.
The Warrant and Note contain an issuance limitation prohibiting the Investors
from exercising or converting those securities to the extent that such exercise
would result in beneficial ownership by the Investors of more than 9.99% of the
Shares then issued and outstanding (the "Issuance Limitation"). The Issuance
Limitation may be waived by the Investors upon at least 61 days prior notice to
the Company and shall automatically become null and void (i) following notice to
the Issuer of the occurrence and during the continuance of an event of default
(as defined in and pursuant to the terms of the applicable instrument), or (ii)
upon receipt by the Investors of a Notice of Redemption (as defined in an
pursuant to the terms of the applicable instrument). Calliope is a wholly owned
subsidiary of Laurus Master Fund, Ltd. which is managed by Laurus Capital
Management, LLC. Valens US is managed by Valens Capital Management, LLC. Eugene
Grin and David Grin, through other entities, are the controlling principals of
Laurus Capital Management, LLC and Valens Capital Management, LLC and share
voting and investment power over the securities owned by the Investors reported
in this Schedule 13G, as amended.
CUSIP No. 157228107
Item 1(a). Name Of Issuer: Chad Therapeutics, Inc.
Item 1(b). Address of Issuer's Principal Executive Offices:
21622 Plummer Street
Chatsworth, California 91311
Item 2(a). Name of Person Filing:
Laurus Master Fund, Ltd.
This Schedule 13G, as amended, is also filed on behalf of Calliope
Capital Corporation, a Delaware corporation and a wholly owned
subsidiary of Laurus Master Fund, Ltd., Laurus Capital Management,
LLC, a Delaware limited liability company, Valens U.S. SPV I, LLC, a
Delaware limited liability company, Valens Capital Management, LLC, a
Delaware limited liability company, Eugene Grin and David Grin. Laurus
Capital Management, LLC manages Laurus Master Fund, Ltd. Valens
Capital Management, LLC manages Valens U.S. SPV I, LLC. Eugene Grin
and David Grin, through other entities, are the controlling principals
of Laurus Capital Management, LLC and Valens Capital Management, LLC
and share sole voting and investment power over the shares owned by
Calliope Capital Corporation and Valens U.S. SPV I, LLC. Information
related to each of Laurus Capital Management, LLC, Valens Capital
Management, LLC, Calliope Capital Corporation, Valens U.S. SPV I, LLC,
Eugene Grin and David Grin is set forth on Appendix A hereto.
Item 2(b). Address of Principal Business Office or, if None, Residence:
c/o Laurus Capital Management, LLC,
335 Madison Avenue, 10th Floor
New York, NY 10017
Item 2(c). Citizenship:
Cayman Islands
Item 2(d). Title of Class of Securities: Common Stock ("Common Stock")
Item 2(e). CUSIP No.: 157228107
Item 3. If This Statement Is Filed Pursuant to Sections 240.13d-1(b) or
240.13d-2(b) or (c), check whether the Person Filing is a:
Not Applicable.
Item 4. Ownership
(a) Amount Beneficially Owned: 1,016,982
(b) Percent of Class: 9.99%
(c) Number of Shares as to which the person has:
(i) sole power to vote or to direct the vote 0*
(ii) shared power to vote or to direct the vote 1,016,982*
(iii) sole power to dispose or to direct the
disposition of 0*
(iv) shared power to dispose or to direct the
disposition of 1,016,982*
-------------------
* Based on 10,180,000 shares of the common stock, $0.01 par value per share (the
"Shares") outstanding of Chad Therapeutics, Inc., a California corporation (the
"Company"), as disclosed in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2007. As of December 31, 2007, Calliope
Capital Corporation ("Calliope") and Valens U.S. SPV I, LLC ("Valens US", and
together with Calliope, the "Investors") collectively held (i) a warrant (the
"Warrant") to acquire 976,744 Shares, at an exercise price of $1.24 per Share,
subject to certain adjustments, and (ii) a secured convertible term note (the
"Note") in the aggregate principal amount of $750,000, which is convertible into
Shares at a conversion rate of $1.18 per Share, subject to certain adjustments.
The Warrant and Note contain an issuance limitation prohibiting the Investors
from exercising or converting those securities to the extent that such exercise
would result in beneficial ownership by the Investors of more than 9.99% of the
Shares then issued and outstanding (the "Issuance Limitation"). The Issuance
Limitation may be waived by the Investors upon at least 61 days prior notice to
the Company and shall automatically become null and void (i) following notice to
the Issuer of the occurrence and during the continuance of an event of default
(as defined in and pursuant to the terms of the applicable instrument), or (ii)
upon receipt by the Investors of a Notice of Redemption (as defined in an
pursuant to the terms of the applicable instrument). Calliope is a wholly owned
subsidiary of Laurus Master Fund, Ltd. which is managed by Laurus Capital
Management, LLC. Valens US is managed by Valens Capital Management, LLC. Eugene
Grin and David Grin, through other entities, are the controlling principals of
Laurus Capital Management, LLC and Valens Capital Management, LLC and share
voting and investment power over the securities owned by the Investors reported
in this Schedule 13G, as amended.
Item 5. Ownership of Five Percent or Less of a Class
Not applicable
Item 6. Ownership of More Than Five Percent on Behalf of Another Person
Not Applicable.
Item 7. Identification and Classification of the Subsidiary Which Acquired
the Security Being Reported on by the Parent Holding Company or Control
Person
Not Applicable.
Item 8. Identification and Classification of Members of the Group
Not Applicable.
Item 9. Notice of Dissolution of Group
Not Applicable.
Item 10. Certification
By signing below I certify that, to the best of my knowledge and
belief, the securities referred to above were not acquired and are not held for
the purpose of or with the effect of changing or influencing the control of the
issuer of the securities and were not acquired and are not held in connection
with or as a participant in any transaction having that purpose or effect.
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
February 14, 2008
----------------
Date
LAURUS MASTER FUND, LTD.
By: /s/ David Grin
-------------------------------
Name: David Grin
Title: Director
Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001)
CUSIP No. 284739109
APPENDIX A
A. Name: Laurus Capital Management, LLC, a Delaware limited
liability company
Address: 335 Madison Avenue, 10th Floor
New York, New York 10017
Place of
Organization: Delaware
B. Name: Calliope Capital Corporation, a Delaware
corporation
Address: c/o Laurus Capital Management, LLC
335 Madison Avenue, 10th Floor
New York, New York 10017
Place of
Organization: Delaware
C. Name: Valens U.S. SPV I, LLC, a Delaware limited liability
company
Address: c/o Laurus Capital Management, LLC
335 Madison Avenue, 10th Floor
New York, New York 10017
Place of
Organization: Delaware
D. Name: Valens Capital Management, LLC, a Delaware limited
liability company
Address: c/o Laurus Capital Management, LLC
335 Madison Avenue, 10th Floor
New York, New York 10017
Place of
Organization: Delaware
E. Name: David Grin
Business 335 Madison Avenue, 10th Floor
Address: New York, New York 10017
Principal Director of Laurus Master Fund, Ltd.
Occupation: Principal of Laurus Capital Management, LLC
Citizenship: Israel
F. Name: Eugene Grin
Business 335 Madison Avenue, 10th Floor
Address: New York, New York 10017
Principal Director of Laurus Master Fund, Ltd.
Occupation: Principal of Laurus Capital Management, LLC
Citizenship: United States
CUSIP No. 157228107
Each of Calliope Capital Corporation, Laurus Capital Management, LLC, Valens
U.S. SPV I, LLC, Valens Capital Management, LLC, Eugene Grin and David Grin
hereby agree, by their execution below, that the Schedule 13G (as amended) to
which this Appendix A is attached is filed on behalf of each of them,
respectively.
Calliope Capital Corporation
/s/ Eugene Grin
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Eugene Grin
President, Chairman, Secretary
February 14, 2008
Laurus Capital Management, LLC
/s/ David Grin
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David Grin
Principal
February 14, 2008
Valens U.S. SPV I, LLC
Valens Capital Management, LLC
By: Valens Capital Management, LLC
Individually and on behalf of Valens U.S. SPV I, LLC
/s/ David Grin
-----------------------------------------
David Grin
February 14, 2008
/s/ Eugene Grin
-----------------------------------------
Eugene Grin
February 14, 2008