Business Context and Reporting Period
Company: Bone Biologics Corp
Filing Type: Form 8-K (Current Report)
Date of Report: April 8, 2017
Event: Termination of Material Definitive Agreements with the Company's Founders.
Key Financial Metrics
This filing does not contain standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on the termination of employment and consulting agreements.
Material Changes and Event Details
The Company terminated Professional Services Agreements with its three Founders (Dr. Chia Soo, Dr. Eric Kang Ting, and Dr. Ben Wu), effective April 8, 2017. The termination was executed "for cause" following a notice issued on December 13, 2016, and subsequent failed negotiations.
- Agreement Terms: Originally entered into on January 8, 2016. Each Founder received a 10-year stock option for 1,800,364 shares (4% of fully diluted outstanding stock) at $1.59/share. An additional option for 33,105 shares at $2.05/share was granted in June 2016.
- Compensation: Agreements stipulated an annual consulting fee of $200,000 per Founder starting January 1, 2017, payable in cash or stock.
- Consequence of Termination: All stock options issued under these agreements immediately terminate upon termination for cause.
- Roles: Dr. Soo and Dr. Wu are directors; Dr. Ting serves on the Scientific Advisory Board.
Outlook, Risks, and Contingencies
Legal Contingency: The Company acknowledges the possibility that one or more Founders may contest the right to terminate the agreements for cause. This creates a potential risk of litigation or dispute regarding the validity of the termination and the forfeiture of options.
Management Commentary: The filing notes that despite lengthy discussions and multiple extensions of the termination date, the Company was unable to resolve outstanding issues under the agreements.
Investor Verification Checklist
- Verify the specific grounds for "cause" cited in the termination letters (Exhibits 10.1, 10.2, 10.3) to assess the strength of the Company's legal position.
- Monitor for any public announcements or filings indicating that the Founders have filed legal action contesting the termination.
- Confirm the impact of the termination on the Company's strategic direction, given the Founders' roles in the company's inception and current board/advisory positions.
- Review subsequent filings for any updates on the status of the $200,000 annual consulting fees that were scheduled to begin in 2017.