Business context and reporting period
The supplied filing is AFH Acquisition X, Inc.’s annual report on Form 10-K for the fiscal year ended October 31, 2011—not a filing identified in its text as Bone Biologics Corp. The company describes itself as a development-stage blank-check shell formed to seek a business combination. It had no operating business, no revenue, and no identified or negotiated target as of the filing.
Financial results and position
- Revenue: $0 in fiscal 2011 and fiscal 2010, and $0 since inception.
- Net loss: $4,920 in fiscal 2011 versus $3,597 in fiscal 2010; cumulative loss since inception was $53,968. Fiscal 2011 loss per share was reported as $0.00, rounded.
- Expenses and margins: Fiscal 2011 expenses were $4,520, including legal and professional costs, plus $400 of franchise tax. Margins are not meaningful with no revenue.
- Cash flow: Operating cash use was $3,597 in fiscal 2011 versus $5,681 in fiscal 2010. Financing cash inflows, principally advances from the parent, offset operating cash use; ending cash was $0 in both years.
- Liquidity and liabilities: Assets were $0 at October 31, 2011 and 2010. Current liabilities were $28,968 at October 31, 2011, up from $24,048 a year earlier, consisting of $4,920 in accrued expenses and $24,048 due to the parent. Parent advances have no stated repayment terms. No interest-bearing debt is identified.
Material changes versus prior year
Net loss increased by $1,323, or approximately 37%, from fiscal 2010. Operating cash use declined by $2,084. Total liabilities rose by $4,920, reflecting the current-year accrued expense; the amount due to the parent increased from $20,451 to $24,048.
Outlook, risks, and unusual items
Management planned to continue searching for an acquisition over the next 12 months and expected reporting and search costs. It said these costs might be funded from treasury funds, deferred service-provider fees, or additional loans or investments from stockholders, management, or other investors, but provided no assurance of funding. The auditor’s report raises substantial doubt about the company’s ability to continue as a going concern; the company is dependent on raising capital or acquiring a marketable business. A business combination could materially dilute existing holders, and management acknowledged limited resources may constrain target evaluation. No material litigation or off-balance-sheet arrangements were reported.
The financial statements received an unqualified audit opinion, accompanied by the going-concern emphasis. Management reported disclosure controls and internal control over financial reporting as effective; the auditor did not provide an internal-control opinion.
Most important facts to verify
- Confirm the issuer’s identity: the supplied filing names AFH Acquisition X, Inc., not Bone Biologics Corp.
- Confirm whether a later business combination, name change, or other corporate event makes this historical shell-company filing relevant.
- Review the company’s ability to fund ongoing costs, the parent advances and their terms, and the auditor’s going-concern warning.
- Assess potential dilution and control changes in any future business combination; the filing reports 5,000,000 common shares outstanding and 100% beneficial ownership associated with the parent and its sole member.