SEC Filing Summary: KokiCare, Inc. (Form 8-K)
Business Context and Reporting Period
This Current Report on Form 8-K was filed by KokiCare, Inc. (not Beyond Air, Inc.) on May 16, 2016, reporting events that occurred on May 12, 2016. The filing details the entry into a material definitive agreement involving the issuance of a convertible promissory note to an accredited investor.
Key Financial Metrics
- Debt Issuance: $15,000 aggregate principal amount.
- Interest Rate: 8% per annum (increases to 24% per annum retroactively upon default).
- Maturity Date: November 8, 2016.
- Accounting Classification: Current liability.
- Revenue/Profit/Cash Flow: The filing text does not provide a clear value for revenue, profit, cash flow, or margins.
Material Changes and Transaction Details
The Company entered into a Securities Purchase Agreement (SPA) to issue a convertible note. The note is convertible into common stock at a price equal to 60% of the average of the lowest three trading prices during the ten trading days prior to conversion. The transaction was exempt from SEC registration under Section 4(2) of the Securities Act of 1933. No underwriting discounts were paid.
Outlook, Risks, and Contingencies
- Default Risk: The note may be accelerated by the holder in the event of default.
- Penalty Interest: Upon default, the interest rate increases to 24% per annum, applied retroactively to the issuance date.
- Dilution Risk: The conversion price formula (60% of the lowest average trading price) creates significant potential for shareholder dilution.
Key Facts for Investor Verification
- Verify the Company's current liquidity position to assess the ability to repay the $15,000 principal by November 2016.
- Confirm the current trading volume and price volatility of the common stock to evaluate the potential dilution impact of the conversion feature.
- Review the full text of the Securities Purchase Agreement (Exhibit 10.1) for additional covenants or restrictions not summarized in the 8-K.
- Check for any subsequent filings regarding the repayment or conversion of this specific note.