US Stem Cell Inc (USRM)

[Dragon Lady]

Quote: "What does that have to do with a companies evolving business model, products, and services? What relevance does sliding have to company leadership? Does sliding effect the developing science and does it serve the need of the public."

First off: 1.3 MILLION shares on the Ask now at .0103 and BMAK backed off a few levels. That's why it looks like they're giving it a little breathing room all of the sudden IMO- they're gonna try and unload a big block now looks like. But the Bid is weak and barely budged- they've opened the spread up a bit now, like they want to try and get a bit more on this large block they're selling for "someone".

http://www.otcmarkets.com/stock/BHRT/quote

0.0089 / 0.0103 (202000 x 1380000)

What does a falling price and continually lower highs and lower lows and falling Bid/Ask mean for a company in this condition? A LOT IMO:

When one understands how this company is being financed- which is essentially via 100% PURE, toxic, convertible debt solutions and now a Magna "credit line" facility - both of which have share discount provisions in them, and in the case of the "toxic" convertible debt are "floorless" - they'd understand that a sliding Bid/Ask on a daily basis can be devastating to the common share price and company's ability to get or raise the survival funds they're living off of.

Read any of the convertible (toxic) debt financing provisions- they all have reset conversion formulas built in- meaning the lower the share price goes, the avg share price of the past 3 or 10 or whatever number of trading days is stated in the conversion formula- then that's how the convertible debt lender gets their shares priced.

When the stock trades like it is now- the amount of dilution that can occur from a continually falling Bid/Ask can literally drive the common shares to not only 2 zeroes after the decimal, but even lower than that- as there literally becomes no limit to the dilution that can happen

Here's the SEC itself commenting on this type of toxic, "ratchet" or "death spiral" financing and what devastation it can cause to the common shares of companies who rely on it. It's called toxic for a reason- and yes, the sliding Bid/Ask has enormous implications IMO for this company's desperate financial condition right now. The lower the price drops- their ability to raise desperate cash gets that much harder and much more dilutive:

http://www.sec.gov/answers/convertibles.htm

Here are a couple of the most recent toxic financing deals done by BHRT- YES, the implication of a falling Bid/Ask makes the horrible terms on these deals that much more devastating IMO, when these firms decided to convert to dilution shares- which are coming due very soon.

Most recent filed 10-Q, PAGE 26: (ALL affected by a dropping Bid/Ask, it has HUGE implications if one understands the conversion formulas listed below)

"NOTE 13 — SUBSEQUENT EVENTS
Subsequent financing
KBM Worldwide
On October 6, 2014, the Company entered into a Securities Purchase Agreement with KBM Worldwide, Inc., for the sale of an 8% convertible note in the principal amount of $38,000 (the “Note”).
The Note bears interest at the rate of 8% per annum. All interest and principal must be repaid on July 8, 2015,. The Note is convertible into common stock, at holder’s option, at a 45% discount to the lowest daily trading price of the common stock during the 10 trading day period prior to conversion. In the event the Company prepays the Note in full, the Company is required to pay off all principal and accrued interest at 150%, and any other amounts.

Daniel James Management
On October 3, 2014, the Company entered into a Securities Purchase Agreement with Daniel James Management, Inc., for the sale of a 9.5% convertible note in the principal amount of $25,000 (the “Note”).
The Note bears interest at the rate of 9.5% per annum. All interest and principal must be repaid on October 2, 2015. The Note is convertible into common stock, at holder’s option, at a 47% discount to the lowest daily trading price of the common stock during the 10 trading day period prior to conversion. In the event the Company prepays the Note in full, the Company is required to pay off all principal and accrued interest at 150%, and any other amounts.

Magna Equities, LLC
On October 7, 2014, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with Magna Equities II, LLC, a New York limited liability company (“Magna”). The Purchase Agreement provides that, upon the terms and subject to the conditions set forth therein, Magna shall purchase from the Company, a senior convertible note with an initial principal amount of $307,500 (the “Convertible Note”) for a purchase price of $205,000 (an approximately 33.33% original issue discount). Pursuant to the Purchase Agreement, the Company issued the Convertible Note to Magna. The Convertible Note matures on August 7, 2015 and, in addition to the approximately 33.33% original issue discount, accrues interest at the rate of 12% per annum.
The Convertible Note is convertible at any time, in whole or in part, at Magna’s option into shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), at a fixed conversion price of $0.01035 per share. $40,000 of the outstanding principal amount of the Convertible Note (together with any accrued and unpaid interest with respect to such portion of the principal amount) shall be automatically extinguished (without any cash payment by the Company) under certain conditions described in the Purchase Agreement. In connection with the execution of the Purchase Agreement, the Company and Magna also entered into a registration rights agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company has agreed to file an initial registration statement with the SEC to register the resale of the Common Stock into which the Convertible Note may be converted,"

Falling Bid/Ask price has all kinds of implications for this cash poor, poor financial condition nano-cap IMO. The lower it goes- the more dilution and if trying to use the Magna "credit line" the less cash they can get "per draw" and it will cost more dilution per draw the lower the price goes.

Simple as that IMO. It's accounting 101 and all in the SEC filings.