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*
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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.
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