Filing summary
Registrant identity warning: The supplied filing is for AFH Acquisition X, Inc., not Bone Biologics Corp. It describes AFH as a Delaware development-stage blank-check company seeking a business combination. Investors should verify that this is the intended filing before relying on this summary.
Business context and reporting period
This unaudited Form 10-Q covers the three months ended January 31, 2014. AFH reported that it had no active operations other than searching for acquisition candidates, and was not negotiating with a target as of the financial-statement date. The filing identifies October 18, 2007 as the inception date in its financial statements and notes, but the MD&A gives a different inception date, September 24, 2007.
Financial performance and liquidity
| Metric | Three months ended Jan. 31, 2014 | Comparable 2013 period |
|---|---|---|
| Revenue | $0 | $0 |
| Total expenses | $1,979 | $1,618 |
| Net loss | $1,979 | $1,618 |
| Basic and diluted loss per share | $0.00 | $0.00 |
| Operating cash flow | $(1,535) | $(30) |
- At January 31, 2014, cash and total assets were $94, compared with $380 at October 31, 2013.
- Total liabilities were $41,878: $4,028 accrued expenses and $37,850 due to the parent. The parent advances have no stated repayment terms.
- Stockholders’ deficit was $41,784; accumulated deficit was $66,784. The company reported negative working capital of $41,878.
- Financing cash flow was $1,249, entirely from a cash advance by the parent. Net cash decreased by $286 during the quarter. No investing cash flow was reported.
- No debt balance, profit margin, or meaningful revenue margin is reported; revenue was zero.
Changes, outlook, and risks
- Quarterly expenses and net loss increased by $361 from the comparable 2013 period; operating cash use increased from $30 to $1,535.
- Management said the company would rely on common-stock issuance and additional shareholder contributions to fund administrative expenses while pursuing an acquisition. It said there was no assurance of locating a target or obtaining equity funding.
- The filing states that recurring losses, accumulated deficit, and negative working capital raise substantial doubt about the company’s ability to continue as a going concern. Management said continued existence depends on raising capital or acquiring a marketable company; the financial statements include no adjustments for a potential failure to continue.
- Management anticipated that a business combination could significantly dilute existing shareholders. It also noted that issuing securities in a transaction or raising funds through a private offering could affect shareholders, with no assurance that funding would be available.
- No revenue guidance or specific acquisition timetable was provided. The company reported no off-balance-sheet arrangements and no legal proceedings. Management concluded disclosure controls were effective and reported no significant quarterly changes in internal controls.
Important facts to verify
- Confirm the registrant: this 10-Q names AFH Acquisition X, Inc., not Bone Biologics Corp.
- Resolve the inconsistent inception dates stated in the filing (October 18 versus September 24, 2007).
- Verify the availability and terms of further parent support or other financing, given $94 in cash and $41,878 in liabilities.
- Review subsequent filings for any business-combination activity, financing, or developments affecting the going-concern assessment.