Business Context and Reporting Period
This Form 8-K Current Report was filed by American BriVision (Holding) Corporation on August 1, 2019, regarding events occurring on May 30, 2019. The filing discloses the entry into a Material Definitive Agreement involving the issuance of convertible debt securities to an accredited investor.
Key Financial Metrics
The filing details a financing transaction rather than periodic financial performance. Key metrics include:
- Gross Proceeds: $160,000 received on May 30, 2019, and an additional $90,000 received on July 2, 2019, totaling $250,000 in principal amounts.
- Debt Instrument: Two convertible promissory notes with a combined principal of $250,000.
- Interest Rate: 20% per annum.
- Maturity: One-year anniversary from the respective issuance dates.
- Conversion Price: The lower of $0.50 per share or 70% of the per share offering price of a completed public equity offering exceeding $10,000,000.
- Ownership Cap: Conversion is limited to prevent the holder from beneficially owning more than 4.99% of the Company's outstanding common stock.
The filing text does not provide clear values for revenue, profit, cash flow, margins, or existing liquidity positions outside of the proceeds from this specific transaction.
Material Changes
The primary material change is the creation of a direct financial obligation through the issuance of the Notes. Additionally, the Company entered into a second Securities Purchase Agreement with another accredited investor on July 29, 2019, under the same terms and conditions as the May 30 agreement.
Outlook, Risks, and Management Commentary
Management commentary is limited to the disclosure of the transaction terms. The filing highlights the contingent nature of the conversion price, which is tied to a future public equity offering exceeding $10,000,000. No specific forward-looking guidance, risk factors, or contingencies beyond the standard terms of the debt agreement are provided in this text.
Investor Verification Checklist
- Verify the total outstanding debt and accrued interest as of the current date.
- Confirm the status of the second Securities Purchase Agreement dated July 29, 2019, and whether the $90,000 principal was fully funded.
- Assess the likelihood of a public equity offering exceeding $10,000,000 to determine the potential dilution impact of the conversion feature.
- Review the full text of the Securities Purchase Agreement (Exhibit 10.1) and Convertible Promissory Note (Exhibit 10.2) for additional covenants or default provisions.