this is another case study. needs to be complete by November 14,


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this is another case study. needs to be complete by November 14, 2015. by noon central standard US time case3 PDF.pdf Case lll lrreterred Stock Freferred S’ Hearts ‘R Us f’Hearts, or "the Companlr) is an early-stage researeh and development rnedical device compatly. He.arts has no current products in the marketplaee but is in the final stages of goiug to ruarket with the Heart Valve Sysrem. All pretiminary tials have been approved by tlre FDA and the Courpauy is in the final trial once the final tial is complete. the Companywillpleseat theproduct totheEDA forfinal approval. approved by the FDA, the Hearf tr.alve System will rwohrtionize the way medical professiouals repair heart valve defects- If Bionic Body f’Bionid)- a SEC registrant, is a biological uedical device company that focuses on the developmeut ofi4plautable biological devices- swgical adhesives, and bioruaterials. Bionic. could benefit frorn the approval of the Heart Valve Systeu siuee it Iras a supplementary der.,ice flrat could be used in taudem udth the Heart tr-alve Systenr" As pafi of a fiuaucing strategy to support its operations. Heads sold tsioaic $3-5 urilliou of Series A Preferred Shares (the "Shares’) ofthe Company with a par value of Sl per Share. The transaction was completed on November 30, 20I l- As part of the Series A Preferred Stock pruchase agreeruent Bionic has the followins riglrts: , o o Board Rryhts – / As the holder ofthe prefened stock Bionic is entitled to / *Board"). In appoiat one member to the Compaay’s board of directors (the addition, Bionic has the right to appoint an obseryer to reeeive all information provided to the Board and to be preseat at meetings ofthe Board- Mandatory Conversion Right The Shares will be converted to the Conrpany’s corrunor stock upon execution of an initial public offering (IPO) that trsts at least $50 million inproceeds- o The Shares will be redeemed for par value on Contingent Redemption Right the fifth anoiversary ofthe date ofpurchase corrditioned upon the event that Hearts has not obtained FDA approval for the Heart Valve Systalr- e Adititional Protective Riglts debt issuances has the rig&t to limit firture equity and firuding rounds lo -Bioaic as well as tlre riglrt to participate iu future protect its invesheut percettage- o Biouic has the right of first refirsal Right of First Refusal and Co-$ale Rights ou sale ofshares by identified key holders of to pgrchase and right ofco-sale Hearts’shares- Ihe Compauy is a calendar year-ead comPatry- The Compaay plans to go tlrouprh an IPO iu tfie uear future aud Hearts’ mal]ageueot ("Manageuent’) has beguu to fhink about how it may record its transactions in accordanee with the applicable U.S. GAAP for pgblic registrants- Crmently- Hearts prepares finaucial statements to complywith the Page 2 covenants of its outstandiqg debt but such financial statements are not requiretl to be fiLed with the SEC- Hearts is uot required to conrply wi& sEC regnrlatioqs when prepa,ring finascial statemenb and currentlyhas not electedto do so, Requireil: l- How slrould Hearts accou&t for the Series A Preferred Shares qrou issumco? 2. Afer Year 4, Heaits is still in the process of fiIing forEDA appro’rial: however the clinical testing and arlministrative process f6s filing Sbr the FDA approval have taken much lourgw &an initially anticipated^.In addition- the trial results have beer wonisome because of certain post-su4rery issues that have been enperienced by parients uiho received the Heart Valve System. The Compauy has deterrnined tlrat it is cefain the product will not receive FDA rpproval by eud ofYer 5. Wlmt. if aoythir& stould Hearts do soq’ to aceount for the Series A Preferred $hares? 3- Would your ailswer to Questiou requirements? fI ehange ifHearts were subject to SEC Read more

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