Business Context and Reporting Period
This Form 8-K, dated March 30, 2020, reports on BioRestorative Therapies, Inc., a Delaware corporation. The filing details the company's ongoing Chapter 11 bankruptcy proceedings initiated on March 20, 2020, in the U.S. Bankruptcy Court for the Eastern District of New York. The company is operating as a debtor-in-possession.
Key Financial Metrics and Agreements
- Asset Sale: Entered into an amended and restated stalking horse asset purchase agreement to sell substantially all assets to Phoenix Cell Group Holdings LLC. The purchase price includes $500,000 in cash (subject to adjustment), a credit bid amount, expense reimbursement, and cure amounts.
- Expense Reimbursement: The agreement provides for reimbursement of up to $250,000 of the purchaser's expenses upon certain termination events.
- Debt Financing: Sought approval for a senior secured superpriority debtor-in-possession (DIP) credit facility of $1,424,273. Of this amount, $350,000 was proposed to be available following an interim order.
- Liquidity: The filing does not provide specific current cash balances or liquidity metrics outside of the proposed financing terms.
Material Changes and Developments
The primary material change is the amendment of the asset purchase agreement previously disclosed on March 20, 2020. Additionally, the company sought emergency approval for the DIP financing. However, at a hearing on April 3, 2020, the Bankruptcy Court advised that it would not enter an order approving the DIP facility on the terms as presented. No hearing has been scheduled for the approval of the asset purchase agreement.
Outlook, Risks, and Contingencies
- Bankruptcy Court Approval: Both the asset sale and the DIP financing are contingent upon Bankruptcy Court approval, which has not yet been granted for the financing.
- Competitive Bidding: The asset purchase agreement remains subject to higher or better offers.
- Operational Risks: Risks include the uncertainty of the Chapter 11 case duration, the ability to satisfy conditions for financing, and the potential acceleration of debt obligations.
- Forward-Looking Statements: Management cautions that actual results may differ materially from expectations due to the uncertainties of the bankruptcy process and market conditions.
Investor Verification Checklist
- Verify the status of the Bankruptcy Court's decision on the $1,424,273 DIP financing facility following the April 3, 2020 hearing.
- Confirm if a hearing date has been set for the approval of the amended asset purchase agreement.
- Monitor for any "higher or better offers" that may supersede the current stalking horse agreement with Phoenix Cell Group Holdings LLC.
- Review the full text of the Amended and Restated Asset Purchase Agreement (Exhibit 2.1) and DIP Loan Agreement (Exhibit 10.1) for specific cure amounts and credit bid details not fully quantified in this summary.