SEC Form 3 

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person^*
Pelossof Avi

(Last) | (First) | (Middle)
3661 HORSEBLOCK ROAD

(Street) 
MEDFORD | NY | 11763

(City) | (State) | (Zip)

2. Date of Event Requiring Statement (Month/Day/Year)
05/05/2004

3. Issuer Name and Ticker or Trading Symbol 
Chembio Diagnostics Inc. [ CEMI ]

4. Relationship of Reporting Person(s) to Issuer 
(Check all applicable) 
| Director | | 10% Owner
X | Officer (give title below) | | Other (specify below)
Vice President

5. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line) 
X | Form filed by One Reporting Person
| Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4) | 2. Amount of Securities Beneficially Owned (Instr. 4) | 3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5) | 4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Stock^(1) | 225,554 | D |

Table II - Derivative Securities Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 4) | 2. Date Exercisable and Expiration Date (Month/Day/Year) | 3. Title and Amount of Securities Underlying Derivative Security (Instr. 4) | 4. Conversion or Exercise Price of Derivative Security | 5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5) | 6. Nature of Indirect Beneficial Ownership (Instr. 5)
| Date Exercisable | Expiration Date | Title | Amount or Number of Shares | | |
8% Series A Convertible Preferred Stock^(2) | 05/05/2004 | 12/31/2049 | Common Stock | 10,078 | ^(3) | D |
Option to purchase Common Stock^(1) | 11/19/2003 | 11/19/2007 | Common Stock | 40,000 | 3 | D |
Option to Purchase Common Stock^(1) | 05/05/2004 | 12/31/2008 | Common Stock | 10,000 | 4 | D |
Option to purchase Common Stock^(1) | 05/05/2004 | 05/04/2011 | Common Stock | 40,000 | 0.75 | D |
Option to purchase Common Stock^(1) | 05/05/2004 | 05/04/2011 | Common Stock | 10,000 | 1 | D |
Option to purchase Common Stock^(4) | 05/28/2004 | 05/27/2011 | Common Stock | 100,000 | 0.6 | D |
Option to purchase Common Stock^(4) | 05/28/2005 | 05/27/2011 | Common Stock | 50,000 | 0.9 | D |
Option to purchase Common Stock^(4) | 05/28/2006 | 05/27/2011 | Common Stock | 50,000 | 1.35 | D |
Warrant to purchase Common Stock^(2) | 05/05/2004 | 05/04/2009 | Common Stock | 12,095 | 0.9 | D |
Warrant to purchase Common Stock^(1) | 05/05/2004 | 05/04/2009 | Common Stock | 22,555 | 0.9 | D |
Explanation of Responses:
1. On May 5, 2004, the Issuer acquired Chembio Diagnostic Systems Inc., a privately held corporation ("Chembio"), through a merger of a wholly owned subsidiary of the Issuer with and into Chembio. Pursuant to the terms of the merger, each stockholder of Chembio received shares of the Issuer's Common Stock in exchange for Chembio common stock owned. The Issuer also assumed all the outstanding warrants and options to acquire Chembio common stock. Each assumed warrant and option is now exercisable for shares of the Issuer's Common Stock. Mr. Pelossof received 225,554 shares of the Issuer's Common Stock in exchange for his Chembio common stock and received warrants to purchase 22,555 shares of the Issuer's Common Stock and options to purchase 100,000 shares of the Issuer's Common Stock in exchange for warrants and options, respectively, that he held of Chembio.
2. On May 5, 2004, The Issuer consummated a private offering of its 8% Series A Convertible Preferred Stock (together with warrants to purchase shares of its Common Stock) in exchange for certain indebtedness of Chembio that was previously outstanding. The conversion price at which such debt was exchanged into 8% Series A Convertible Preferred Stock (together with warrants to purchase shares of the Issuer's Common Stock) was $30,000 per share. Mr. Pelossof converted $4,047.12 of Chembio indebtedness that he held prior to the merger into .202 shares Series A Convertible Preferred Stock (together with warrants to purchase 12,120 shares of Common stock) pursuant to the Series A Offering.
3. 50,000 to 1
4. In connection with Mr. Pelossof's employment, options were granted.
| Avi Pelossof | 07/02/2004
| ** Signature of Reporting Person | Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.