Business Context and Reporting Period
Company: Bone Biologics Corp
Filing Type: Form 8-K (Current Report)
Date of Report: July 16, 2018
Reporting Period: Events occurring on July 16, 2018
Bone Biologics Corp, an emerging growth company, reported significant corporate actions including a change in control, a reverse stock split, and amendments to financing agreements.
Key Financial Metrics and Capital Structure
- Capital Raised: $3,869,979 in proceeds from the issuance of Common Stock.
- Debt Facility: A $2,000,000 credit facility established with Hankey Capital LLC, replacing a direct loan. Draws are evidenced by convertible secured notes.
- Debt Repayment: Proceeds include funds to repay a secured promissory note to Hankey Capital in the principal amount of $600,000.
- Stock Issuance:
- 330,325 shares issued to four existing stockholders (Rights Shares).
- 3,539,654 shares issued to Hankey Capital (Hankey Shares).
- Stock Split: A 1:10 reverse split of Common Stock was effected.
Material Changes Versus Prior Period
- Change in Control: Don Hankey acquired control of the Company, beneficially owning 14,058,673 shares, representing 83.97% of outstanding shares.
- Financing Structure: The original $2,000,000 loan obligation was amended to a credit facility to reduce interest expense.
- Board Composition: Don Hankey was appointed to the Board of Directors and elected Chairman, replacing Bruce Stroever (who remains a director).
Outlook, Management Commentary, and Risks
- Use of Proceeds: Funds will be utilized for working capital, protein development, animal testing, regulatory and clinical expenses, and business growth.
- Strategic Intent: The amendment to the purchase agreement was specifically designed to reduce the Company's interest expense.
- Regulatory Status: The Company is classified as an emerging growth company.
- Unregistered Sales: Securities were issued in reliance on Section 4(a)(2) of the Securities Act of 1933 to accredited investors.
Investor Verification Checklist
- Verify the exact terms of the convertible secured notes attached as Exhibit 10.1.
- Confirm the post-split share count and the impact of the 1:10 reverse split on existing holdings.
- Review the full beneficial ownership breakdown of Don Hankey and related entities (Hankey Capital, Don Hankey Trust, H&H Funding LLC).
- Assess the Company's cash runway given the stated use of proceeds for clinical and regulatory expenses.
- Check for any subsequent filings regarding the drawdown of the $2,000,000 credit facility.