US Stem Cell Inc (USRM)

[Dragon Lady]

Quote NO LOL, "Under 1 million shares thru 02 now"

NO, not even close to accurate.

MM, market maker BMAK is parked on that Ask, w/ a 10K share block, as they've been ALL WEEK NOW.

0.0138 / 0.014 (10000 x 10000)

That .0140 is BMAK, thus, as long as that MM is parked there, that Ask is NEVER going to go above .0140....just the was it "works" in convertible debt, toxic-loan land.

On the OTC, a MM does not have to show "size". BMAK ALWAYS, ALWAYS, ALWAYS uses a simple 10K share block- and yet there can, and usually MILLIONS of shares sold at or below that Ask, and that 10K can stay there for days, or even weeks. It's bottomless.

BMAK is highly likely the key MM who handles order flow for the dilution wrecking ball known as Maga, aka Josh Sason, who now holds USRM's largest toxic, convertible debt not. $263K balance as of last filed 10-Q.

This is the guy, Josh Sason, who's now essentially in total control over USRM's daily stock pricing IMO (along with a bit of Fourth Man and Daniel James, two other toxic hedge lenders that USRM uses on a regular basis):

http://www.bloomberg.com/news/articles/2015-03-12/josh-sason-made-millions-from-penny-stock-financing

https://www.bloomberg.com/view/articles/2015-03-12/death-spiral-convertible-financier-has-a-lot-of-fun

PULL UP THE MAGNA FINANCING SEC DOCS off the SEC EDGAR database, you'll see JOSH SASON'S signature inked on every Magna toxic loan deal, right next to USRM/Bioheart's CEO Mike (Miguel) Tomas' signature. Simple as that.

Here's what the SEC asked USRM last time, recently, as USRM wanted more dilution shares to be able to issue to Magna, for survival cash:

https://www.sec.gov/Archives/edgar/data/1388319/000000000016060760/filename1.pdf

USRM's reply to the SEC:

https://www.sec.gov/Archives/edgar/data/1388319/000118518516003574/filename1.htm

"February 2, 2016

VIA EDGAR

Securities and Exchange Commission
Division of Corporate Finance
Washington, D.C. 20549

Re: U.S. Stem Cell, Inc.
Registration Statement on Form S-1
Filed December 14, 2015
File No. 333-208539


Dear Mr. Alper, Mr. Lopez, and Mr. Reynolds:

The Company received your letter of January 7, 2016, and responds as follows:

1.
Please quantify for us Magna’s total share ownership and tell us whether Magna or its affiliates have completed the resale of the securities registered for sale under prior registration statements. If so, please tell us the amount of time that has passed since Magna or its affiliates completed the resale.

We have noted your comment and will revise the disclosure to include the following:

As of the date of this filing, Magna does not own any securities of the Company. Magna has completed the resale of securities registered for sale under the prior registration statement. On November 6, 2015, Magna converted the last portion of the promissory note described in the last registration statement and received 18,013 (post-split) shares of common stock (which was issued in electronic form). Magna has represented that these shares, representing all their holdings at the time, was sold into the public market on or before November 19, 2015. Magna has represented that they have not bought or sold any Company securities (except for the convertible promissory notes listed herein).

2.
Please revise to provide quantitative and qualitative disclosure regarding the substantial dilution involving Magna’s sales into the market

We have noted your comment and added the following risk factor:


The sale or issuance of our common stock to Magna Equities II, LLC upon the issuance of the common stock underlying the convertible promissory notes may cause substantial dilution and the resale of the shares of common stock by Magna Equities II, LLC into the public market, or the perception that such sales may occur, could cause the price of our common stock to fall.

In the event Magna Equities II, LLC elects, upon effectiveness of the registration statement of which this prospectus is a part, to convert part of all of the outstanding principal and interest of the convertible promissory notes to the common stock registered hereunder, there will be substantial dilution to the current number of issued and outstanding shares and any sale of such stock may have an adverse effect upon our stock price. The number of shares ultimately offered for sale by Magna Equities II, LLC under this prospectus is dependent upon a number of factors, including the extent to which Magna Equities II, LLC converts the convertible promissory notes into shares of our common stock. Because the actual exercise price for the shares of common stock that Magna Equities II, LLC may receive upon conversion will fluctuate based on the market price of our common stock, we are not able to determine at this time the exact number of shares of our common stock that we will issue and, therefore, the exact number of shares we will ultimately register for resale under the Securities Act. At no time will Magna Equities II, LLC be entitled to convert any portion of the Convertible Note to the extent that after such conversion, Magna Equities II, LLC (together with its affiliates) would beneficially own more than 4.99% of our common stock (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the rules and regulations thereunder). Moreover, there is an inverse relationship between the market price of our common stock and the number of shares of our common stock that may be sold following a conversion to common stock.. That is, the lower the market price, the more shares of our common stock that may be issued and sold. Accordingly, if the market price of our common stock decreases (whether such decrease is due to sales by Magna Equities II, LLC in the market or otherwise) and, in turn, the exercise price of our common stock provided in a conversion of the convertible promissory notes to common stock issued to Magna Equities II, LLC decreases, this could allow Magna Equities II, LLC to receive greater numbers of shares of our common stock. Although the number of shares of our common stock that our existing stockholders own will not decrease, the common stock owned by our existing stockholders will represent a smaller percentage of our total outstanding shares after any such issuances to Magna Equities II, LLC. Depending on market liquidity at the time, the issuance of a substantial number of shares of our common stock by Magna Equities II, LLC, and the resale of such shares by Magna Equities II, LLC into the public market, or the perception that such sales may occur, could cause the trading price of our common stock to decline, result in substantial dilution to existing stockholders and make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.

In the prior registration statement (SEC File No. 200457), we registered 143,813 (post-split) shares of common stock underlying commitment shares, a draw down equity line, and convertible promissory notes. The number of shares and stock prices listed below reflect post-split calculations. Magna Equities II, LLC was issued 9,109 and 2,891 shares as of October 27, 2014 and December 23, 2014 respectively, representing 1.66% and 0.50% of the then current issued and outstanding shares of our common stock respectively. Our common stock price as of October 27, 2014 and December 23, 2014 was $20.50 and $12.80 respectively. Pursuant to the draw down equity line, we requested drawdowns from January 13, 2015 through August 27, 2015 (which includes issuing true up shares as per the terms and conditions of the Purchase Agreement of the equity line). During this period, we issued an aggregate of 87,813 shares (post-split) pursuant to ten draw down requests initiated solely by us. The percentage dilution for any one draw down or true up represented from 0.35% of the then issued and outstanding shares of common stock to 2.12% of the then issued and outstanding shares of common stock. The price of our common stock was $8.40 as of January 13, 2015 (the date of the initial draw down) to $4.00 as of August 27, 2015 (the date of the final true up issuance). Magna Equities II, LLC converted a portion of its convertible promissory notes on February 2, 2015, receiving 7,246 (post-split) shares of common stock (representing 1.19% of the then issued and outstanding shares of common stock). The remainder of the convertible promissory notes were converted to shares of common stock from August 27, 2015 through November 6, 2015. The percentage dilution for any one conversion during this period represented from 0.82% of the then issued and outstanding shares of common stock to 2.85% of the then issued and outstanding shares of common stock. The price of our common stock during this period was $4.00 as of August 27, 2015 to $1.40 as of October 27, 2015, the second to last conversion date) ($5.45 as of November 6, 2015 (the date of the final conversion). Consequently, during the period covered by the prior registration period, our stock price decreased from $20.50 to $1.40 ($5.45 as of the last conversion). During this time, our number of issued and outstanding shares increased from 548,186 showing 595,198 shares outstanding on 1/13/15 to 1,615,772 shares, partly as a result of the issuances to Magna Equities II, LLC.

As of the date of this filing, Magna Equities II, LLC does not own any securities of the Company, except for the convertible promissory note listed herein. Magna Equities II, LLC has completed the resale of securities registered for sale under the prior registration statement. On November 6, 2015, Magna Equities II, LLC converted the last portion of the promissory note described in the last registration statement and received 18,013 (post-split) shares of common stock (which was issued in electronic form). Magna Equities II, LLC has represented that these shares, representing all their holdings at the time, was sold into the public market on or before November 19, 2015. Since that date, Magna Equities II, LLC has represented that they have not bought or sold any Company securities (except for the convertible promissory notes listed herein). Since Magna Equities II, LLC may convert all or part of its convertible promissory notes to common stock as registered hereunder, further dilution may occur similar to the prior registration. This further dilution may result in your additional dilution of the existing ownership interests of our common stockholders and may adversely affect the stock price of the shares of common stock.


The Company hereby acknowledges:

• should the Commission or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing;

• the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and

• the company may not assert staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.


Very truly yours,


/s/ Mike Tomas
Mike Tomas
Chief Executive Officer

"

CURRENT TOXIC LOANS OWED BACK BY USRM, ALL will result in MASSIVE common share dilution, and MILLIONS of steeply discounted commons shares being issued and then going straight to the Ask/Sell-side of the market:

MOST RECENT FILED 10-Q, PAGES 14/15:

"Daniel James Management (during this period)

2016 Notes

During the six months ended June 30, 2016, the Company entered into Securities Purchase Agreements with Daniel James Management (“Daniel”) for the sale of 9.5% convertible promissory note in aggregate principal amount of $75,000 (the “Daniel Notes”).

The Daniel Notes bear interest at the rate of 9.5% per annum. As of the six months ended June 30, 2016, all interest and principal must be repaid one year from the issuance date, with the last note being due March 9, 2017. The Daniel Notes are convertible into common stock, at holder’s option, at a 47% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. The Company has identified the embedded derivatives related to the Daniel Notes. These embedded derivatives included certain conversion features and reset provision. (see Note 8).

The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Daniel Notes and to fair value as of each subsequent reporting date which at June 30, 2016 was $99,823. At the inception of the Daniel Notes, the Company determined the aggregate fair value of $139,691 of the embedded derivatives.

During the six months ended June 30, 2016, $68,575 of promissory notes plus accrued interest that were outstanding at December 31, 2015 were converted into shares of the Company’s common stock (see Note 9).

The remaining aggregate promissory notes to Daniel unconverted principle balance as of June 30, 2016 was $81,425.

Fourth Man (during this period)

During the six months ended June 30, 2016, the Company entered into Securities Purchase Agreements with Fourth Man, LLC (“Fourth Man”) for the sale of 9.5% convertible promissory note in aggregate principal amount of $50,000 (the “Daniel Notes”).

The Fourth Man Notes bear interest at the rate of 9.5% per annum. As of the six months ended June 30, 2016, all interest and principal must be repaid one year from the issuance date, with the last note being due June 26, 2017. The Fourth Man Notes are convertible into common stock, at holder’s option, at a 49% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. The Company has identified the embedded derivatives related to the Fourth Man Notes. These embedded derivatives included certain conversion features and reset provision. (see Note 8).

The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Daniel Notes and to fair value as of each subsequent reporting date which at June 30, 2016 was $76,052. At the inception of the Fourth Man Notes, the Company determined the aggregate fair value of $122,435 of the embedded derivatives.

During the six months ended June 30, 2016, $52,450 of promissory notes plus accrued interest that were outstanding at December 31, 2015 were converted into shares of the Company’s common stock (see Note 9).

The remaining aggregate promissory notes to Fourth Man unconverted principle balance as of June 30, 2016 was $75,000.

Magna Group (during this period)

2015 Note

On December 3, 2015, the Company entered into a Securities Purchase Agreement with Magna Equities II, LLC (“Magna”) for the sale of a 12% convertible promissory note in the principal amount of $262,500 (the “Note”). The Note was subsequently funded in February 2016 upon effectiveness of the Company’s registration statement (see below). Proceeds from the note was $250,000 (less an original issue discount of 5% or $12,500).

The Note bears interest at the rate of 12% per annum. All interest and principal must be repaid on December 3, 2016. The Note is convertible into common stock, at Magna’s option, at the lower of i) 40% discount to the lowest sales price of the common stock during the 5 trading day period prior to conversion or ii) $0.70. In the event the Company prepays the Note in full, the Company is required to pay off all principal at 140%, interest and any other amounts.

On December 12, 2014, the Company filed a Registration Statement on Form S-1 to register 341,718 shares of common issuable upon the conversion of Magna Equity II, LLC convertible notes dated December 3, 2015 (as restated) for $110,000 and December 3, 2015 for $262,500. The latter note was funded in February 2016. The Registration Statement on Form S-1 was declared effective on February 12, 2016

The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Notes to Magna and to fair value as of each subsequent reporting date which at June 30, 2016 was $229,518. At the inception of the Notes, the Company determined the aggregate fair value of $263,204 of the embedded derivatives.

During the six months ended June 30, 2016, $124,285 of the 2015 notes were converted into shares of the Company’s common stock (see Note 9).

The remaining aggregate Magna Group promissory notes unconverted principle balance as of June 30, 2016 was $263,215."