Bone Biologics Corp annual report, FY2012

Issuer and reporting period

Important issuer mismatch: The supplied filing is for AFH Acquisition X, Inc., not Bone Biologics Corp. It is an annual report for the fiscal year ended October 31, 2012—not a quarterly report for 2012 Q4. The summary below reflects the filing text provided.

AFH Acquisition X describes itself as a development-stage blank-check shell company seeking a merger with or acquisition of an unidentified business. It reports no target negotiations or definitive agreements and has no active operating business.

Financial results and liquidity

At October 31, 2012, total assets were $500 and liabilities were $35,099, including $30,605 due to the parent and $4,494 in accrued expenses. Stockholders’ deficit was $34,599. No interest expense or cash interest payments were reported; the filing does not describe conventional interest-bearing debt. Margins are not meaningful because the company had no revenue.

Changes and outlook

Net loss increased by $711 from 2011, while operating cash use increased by $2,460. Parent advances provided the reported financing in 2012. The company says it expects to fund reporting and acquisition-search costs from treasury cash, deferred service-provider fees, and potential loans or investments from stockholders, management, or other investors. It gives no revenue or earnings guidance.

Risks, contingencies, and unusual items

• The auditor’s report and Note D state that recurring losses and dependence on future capital or a successful business combination raise substantial doubt about the company’s ability to continue as a going concern.
• Management says it cannot assure that cash requirements can be met for at least the next 12 months. Continued operations depend on financing, including support from related parties; the parent advances have no stated repayment terms.
• The company warns that a future transaction could substantially dilute existing shareholders, and may be structured without a shareholder vote in some circumstances. No transaction is currently identified.
• The financial statements are audited and presented in accordance with U.S. GAAP; the auditor did not audit internal control over financial reporting.
• The filing reports no material off-balance-sheet arrangements or legal proceedings. Management states disclosure controls and internal control over financial reporting were effective at year-end.

Important facts for investors to verify

• Confirm issuer identity and period: the supplied report names AFH Acquisition X, Inc. and covers the year ended October 31, 2012, not Bone Biologics Corp. or a 2012 Q4 filing.
• Verify current cash availability, accrued expenses, and the parent’s advances and willingness to continue funding the company.
• Assess the auditor’s going-concern warning and the company’s ability to finance operations and identify a viable acquisition target.
• Review the terms and potential dilution, control changes, and shareholder-approval requirements of any future business combination.