Business Context and Reporting Period
This Form 8-K was filed by BioZone Pharmaceuticals, Inc. (not Cocrystal Pharma, Inc.) on July 5, 2012, reporting events occurring on June 28, 2012. The company is incorporated in Nevada and is based in Englewood Cliffs, NJ. The filing details a restructuring of existing debt obligations through the issuance of new convertible notes and warrants.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, or margin data. The primary financial activity reported is the issuance of debt and equity-linked instruments:
- Debt Issued: $455,274 in aggregate principal amount of 10% convertible promissory notes ("Revised Notes").
- Interest Rate: 10% per annum.
- Maturity: Two years from the issue date (June 28, 2014).
- Conversion Price: $0.20 per share of common stock.
- Warrants Issued: 2,250,000 warrants to purchase common stock.
- Warrant Exercise Price: $0.40 per share.
- Warrant Term: 10 years from issuance.
Material Changes
The company cancelled previously issued promissory notes ("Prior Notes") described in filings dated June 20, 2012, and April 24, 2012. The aggregate principal and accrued interest due on the Prior Notes were exchanged for the Revised Notes and Warrants. This transaction altered the company's capital structure by extending the maturity of the debt and introducing equity conversion features at a discount to the warrant exercise price.
Guidance, Risks, and Unusual Items
The filing contains no forward-looking guidance or management commentary regarding future operations. Key terms and restrictions include:
- Prepayment: The company may prepay the Revised Notes in whole or part at any time prior to maturity.
- Beneficial Ownership Limit: Conversion of notes or exercise of warrants is prohibited if the holder would beneficially own more than 4.99% of the company's outstanding common stock (subject to waiver).
- Regulatory Status: Securities were sold to "accredited investors" under Section 4(2) and Regulation D (Rule 506) exemptions.
- Default Provisions: The entire principal and accrued interest become due upon an Event of Default.
Investor Verification Checklist
- Verify the exact amount of accrued interest included in the $455,274 principal of the Revised Notes versus the Prior Notes.
- Confirm the current number of outstanding shares to calculate the potential dilution from the 2,250,000 warrants and note conversions.
- Review the specific definition of "Event of Default" in the attached Exhibit 10.1 (Form of Note).
- Check for any subsequent filings regarding the waiver of the 4.99% beneficial ownership limitation.
- Clarify the discrepancy between the requested company name (Cocrystal Pharma) and the filing registrant (BioZone Pharmaceuticals).