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"Also I have friends who tried to get a decent number of shares at the ask not too long ago and the order was never filled."
I saw you state that before. It's an extremely "interesting" piece of info IMO, to say the least. I mean, I've had stocks a bit slow to fill before, nothing totally unusual about that, but never a day or more where they were trying to fill, as you state, for a pretty good size chunk and couldn't get the order to cross/fill?
Do you know, did they try moving their price around a tad, and the price just kept getting moved up or away from them- never giving their order a fill?
I'm saying "bargain basement"- cause it's sub 2 cents, it's not far from 1 cent, it's under the 50 DMA and 200 DMA averages, from a technical, that's a low and downtrend in most books.
I'd say looking at last DEC period, the worry in here, when it goes low vol, high spread with these long slow, flat-lining periods, I just have a feeling it might be setting up for a big drop, the ole big one. Last time I was gun-shy when it hit .0063, I thought it might of been the lights out, close the doors day. We all know if I'd bought, loaded the boat, it was one of the easiest flip trades one could have made. But that drop was scary IMO, it was so fast and went so low- I really thought that might be it. I was in front of the computer that day and had the funds- I was itching on the buy button, but hesitated and missed it.
Will see what happens in DEC, as you said before, maybe it's tax loss stuff, I have a feeling that Asher and similar also do some end of yr "stuff" maybe to clean their books or whatever it is they do at those places.
We'll see.
It means NO ONE wants to buy at the LOW ASK either. Works the same. No one. Not one buyer out there is enticed by these bottom basement prices? Not even a $100 bucks worth in 2 plus hours?
Why would that be?
TWO hours now since last trade (10:30 AM Eastern, it's now 12:30 Noon Eastern). Totally flat-lined out.
It just sits, like it's stuck. I mean not one person is trying to buy or sell one share of BHRT for 2 hours now? Not one? (maybe $4K or so total traded so far over half way through trading day)
But yesterday, it does 2 MILLION plus shares, and closes down, slightly red?
Weird IMO?
"My thoughts are that Magna bought $2.4m in Bioheart Stock at $0.0161 and the stock will neverrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr see $0.0161 again..
The stock is about to be promo'd/"
.0153 , showing solid RED, on pretty decent volume right at open.(well, actually took 15 minutes of flat-line to post opening trade at 9:45 Eastern, but opening down RED, solid down).
Any update on a specific time-line or details about the "never again" at .0161 and the "promo" and stuff? It'd be great if there's more detailed info available.
Thanks.
I believe it more than likely gets shorted only via pro trading desks, and/or those who are involved in the "financing" deals with them.
I believe I've stated I don't think there's any "retail" shorting of a 1.6 cent penny stock- it's just nearly impossible per my understanding. I don't know a single brokerage who has short inventory, typically on anything under about $5 bucks a share. Even if it's Nokia or whatever, a major player, when it dips under $5 or so a share, the retail outfits like E-trade or whatever, they make one jump through hoops to have a margin account and get short inventory. No way anyone retail is shorting a 1.5 cent, or even a 10 cent or .50 cent stock IMO.
But "big boys"- I believe I've always had the "guess" and belief that they're somehow shorting micro-caps/nano caps, most often when "financing" them. I don't know for sure and I can't prove it and don't have the tools or nohow to know. But it's well rumored, well documented (right here on I-HUB for instance) that Asher, Magna and similar all short the bleep out of their own clients- it's how they make more money.
Remember, on a convertible debt deal, the lower the share price goes, the more the lender (Magna, Asher, Fourth Man, etc), the more shares they get to convert, the more they drive it down again, the more they convert, wash, rinse, repeat.
I've posted links before that explain what a convertible "floorless" debt deal is, and why they're known as death spiral, or ratchet or toxic, etc
What's interesting though- remember, in all these finance deal filings (Asher, Magna, etc) and what not, it's always stated that "we won't short the stock, blah, blah, blah" wink, wink. But everyone somehow seems to know and totally, IMO, believes it happens.
So how would they do it and be legal? Beats me? But I'd guess they have "affiliates", a trading firm across town, some sub company- who knows. Bet there's probably a 100 ways these guys skirt the fine line of the law. Also, they make sooo much freaking money- they even get caught once in a while (look at Asher and Curt Cramer, I believe he's paid fines to the SEC prior, but never stopped him, see the link below, an I-Hub group built an entire page/thread dedicated to this Cramer guy's history and Asher, they're notorious), they pay the SEC a fine (slap on the hand) open under a new name across some state line (NJ maybe, instead of NY or whatever) and bamm, making money all over again.
Wall St is brutal enough. But get down to the dark alleys of high risk lending to cash poor penny stocks- it's a jungle IMO. Brutal is probably being too kind. And the money these places like Asher and Magna can make, for a pretty small operation- it's mind blowing I'm sure.
So yeah, "big boys" somehow shorting this, I'd have almost no doubt.
http://investorshub.advfn.com/~-ASHER-~-25451/
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68247638
http://www.sec.gov/answers/convertibles.htm
http://en.wikipedia.org/wiki/Death_spiral_financing
Here is one of the best examples I've ever read explain why it's called a "death spiral" and how the mechanism actually works:
http://www.stockpatrol.com/article/key/deathspiral
It's the best write-up I've seen cause it specifically shows how the scenario typically plays out, with detailed examples of how the shares would be sold in the "ratchet" style, etc.
"AT DEATH’S DOOR
Investor Information
March 12 2002
Death Spiral Financing. The name says it all. It conjures up the image of a process that is spinning out of control, toward inevitable doom. It is a disaster for companies and their shareholders. Yet desperate companies, needing immediate financial help, succumb to the temptation of short-term aid, only to suffer its long-term ill-effects.
How did death spiral financing earn its unsavory reputation? It works like this. A lender agrees to loan money to a company in exchange for a convertible debenture that bears a reasonable rate of interest. But there’s a catch. The lender is entitled to convert the debenture into shares of the company’s common stock, but the conversion rate is a moving target rather than a fixed, predetermined number of shares.
For example, in exchange for a loan of $1.5 million, the debenture holder may elect to receive $1.5 million of the company’s stock – usually at a discount from the prevailing market price.(a STEEP discount in recent BHRT deals, like 45% to 47%) The number of shares the holder receives will depend on the stock price at the time of conversion. Consequently, the lower share prices go, the more stock the debenture holder gets.
This presents a problem, and an opportunity for abuse, since the debenture holder benefits if stock prices decrease. Unfortunately, in order to take advantage of this process, some debenture holders sell the company’s shares short, hoping to drive down the price. As share prices dip, the debenture holders keep on selling short, pocketing more and more proceeds on the way down.
To illustrate this, consider the case where an investor is entitled to convert a debenture into $1.5 million worth of common stock. If the debenture holder were entitled to convert the debenture into a fixed number of shares – say 500,000 – he or she would have no incentive to see the stock price go down. To the contrary, if the stock price increased, so would the value of those 500,000 shares.
But look at what can happen if the debenture holder stands to get more shares as the stock price decreases. If the company’s shares were trading at $5 when the debenture was issued, the debenture holder might start out by selling short 500,000 shares and pocketing proceeds of $2.5 million. If the stock is not heavily traded (as is the case with most microcap companies) those sales could help drive the price of the stock downward.
As prices fall to $3, the debenture holder can short another 500,000 shares and realize $1.5 million more. There would be no need to stop. When the stock decreases to $2 per share the debenture holder can short 500,000 more shares for another cool $1 million. At that point he or she will have profited to the tune of $5 million.
In our hypothetical situation, when the stock reaches $1, the debenture can be converted into 1.5 million shares. The debenture holder may then deliver those shares to cover the outstanding short position. It’s that simple. For a $1.5 million loan, the debenture holder winds up with $5 million – a cool $3.5 million profit.
Death spiral financing can be a death knell for the company whose stock is battered by this practice.
Regulators are taking notice of this problem, as reflected in an action initiated by the Securities and Exchange Commission on February 26, 2003 against an unregistered investment advisor, Rhino Advisors, Inc., and Rhino’s President, Thomas Badian.
Rhino and Badian were charged with engineering a death spiral financing scheme to benefit one of their clients. The SEC complaint alleged that Rhino and Badian manipulated share prices for the common stock of Sedona Corporation by engaging massive short selling in order to enhance the value of a $3 million Convertible Debenture that had been issued by Sedona on November 22, 2000.
Rhino’s client had provided $2.5 million in financing to Sedona in exchange for a $3 million 5% Convertible Debenture that was due on March 22, 2001. The Debenture included a conversion formula that permitted the client to convert all or any portion of the Debenture into Sedona common stock at a discount to the market price – roughly, 85% of the price of Sedona stock during the five days immediately prior to conversion. Based upon this formula, the lower the share price on the conversion date, the more shares the client would receive.
Although the Debenture prohibited Rhino's client from selling Sedona's stock short while the Debenture "remained issued and outstanding," Rhino allegedly engaged in extensive short selling on behalf of its client before the Debenture was converted. According to the SEC, that short selling increased the supply of shares in the market and depressed Sedona's stock price. Consequently, Rhino’s client received more shares when it converted the Debenture. Following the conversions, Rhino allegedly engineered the trades to conceal the client's involvement in the scheme.
Rather than contest the SEC’s charges, Rhino and Badian consented to the entry of an injunction for violation of the anti-fraud provisions of the federal securities laws, and agreed to pay a $1 million penalty.
Commenting on the case, Thomas Newkirk, Associate Director of the SEC’s Division of Enforcement, noted the potentially poisonous effect of death spiral financing, stating
Certain convertible securities, particularly those referred to as ‘toxic’ or ‘death spiral’ convertibles, present the temptation for persons holding the convertible securities to engage in manipulative short selling of the issuer's stock in order to receive more shares at the time of conversion.
The results can be disastrous for issuers and investors alike.
Regrettably, this is just one example.
"
Agree, I'd call it a near perfect MAGNA DAY IMO. Wow.
These dudes are master's of their craft IMO.
Opened the spread, looked like enticed some buyers on very large spreads. Got it up where they wanted, then pow, unload it w/ perfect timing. Long periods of flat-lining in between, 1/2 hour to one or more hours w/o a single trade, several times.
Played it like a well oiled machine- perfectly walked it up, then unloaded a huge spike near end of day (or they short covered, not sure which, but almost 1 million more shares, right into the close)
Then a nice little end of day, "paint the tape" to walk it up just slightly, but still leaving it in the red, for the close.
Wow again. It's amazing to watch um "do what they do". I would just find it really hard to believe that this was just "regular" ole "retail" trading and retail orders flowing back n forth. No way in my book. That's my opinion.
It's just too, near perfect and a near picture perfect copy of one of the day's last week- right down to the day's volume being almost exactly the same, nearly to the share.
Closed it out at .0158, under .0161 (that's the price it would never see again, ever)
"the stock will neverrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr see $0.0161 again.. "
I'm seeing .0153 RED on my screen, which is a bit concerning, since the volume has picked up a bit too.
Are their any real specific details about that .0161 pricing thing, the "never again" part and all?
How and when exactly does that exactly take place? Any clarification would be a great help. It's a fascinating concept- the "never again" and all.
Thanks.
COST of sales and EXPENSES are even more "incredible", IMO.
For a 4 person operation + 1 "part time" (according to their SEC filing), that just spent essentially nothing on R&D (see 10-Q filing, about $3K a month R&D, last qtr), they sure seem to me to have extremely high "sales, general and administrative costs"- which essentially consume nearly every dime they raise via dilution or "revenues".
Also, the cost of sales as a percentage of "revenue" was off the charts this last qtr IMO. Way out of normal proportions. Costs ate up nearly all "revenue" brought in, meaning it's not profitable or high-margin revenue.
Most recently filed 10-Q, PAGE 5:
Total revenues: $579,536
COST of sales: $523,222
Meaning, they hardly made a thing on those revenues.
$579,536 - $523,222 = $56,314. That's it. $56K is all that was left after costs.
That's about a 10% gross margin. Dismal. Barely worth selling things IMO, if all you make is 10% gross, before taxes, etc.
Expenses? Have ballooned massively upward in the past 12 months or so (think huge bonuses like $800K to just two people, consuming and off-setting essentially, the effect of any "revenues")
From most recent 10-Q filing, PAGE 33/34:
"Marketing, general and administrative expenses were approximately $1,512,706 in the three month period ended September 30, 2014, an increase of $572,352 from marketing, general and administrative expenses of approximately $940,354 in the three month period ended in September 30, 2013. The increase in marketing, general and administrative expenses is attributable, in part, to stock based compensation paid in the current period of $164,247 for services and increase in employee compensation and service providers.
33
Marketing, general and administrative expenses were approximately $3,182,397 in the nine month period ended September 30, 2014, an increase of $1,432,121 from marketing, general and administrative expenses of approximately $1,750,276 in the nine month period ended in September 30, 2013. The increase in marketing, general and administrative expenses is attributable, in part, to stock based compensation paid in the current period of $293,342 for services and increase in employee compensation and service providers."
Over $3 MILLION in "expenses" in 9 months (up from $1.7 million a yr ago, that's nearly a DOUBLE essentially, yr over yr), while spending near ZERO on "R&D" aka "trials"? Where did all that money go and to what?
Well, you now have just two "employees" receiving $525K base salary + $250K base salary + $500K "bonus" + $300K "bonus"- so that right there is = $1,575,000. Yep, over $1.5 MILLION for two people. Which explains a lot to me, where a bunch of those "expenses" are going.
$56K gross profit (revenue-cost of sales) isn't gonna off-set their other rising costs it appears to me. Not even close, the numbers just don't add up?
30 minutes now w/o a single trade, after posting about 26K shares traded less than 2 minutes after the open. That's about $400 bucks worth.
Gonna take a long, long, long time IMO, to burn off 31 MILLION low priced (sub 1 cent, see S-1 filing) shares that Magna just got for the "note", at this pace.
Guess the "blog" hasn't really taken effect yet maybe? Not sure? Interesting IMO.
Oh, there, after 1/2 hours, just posted a few more shares, "up" on a bit now on the wide spread. Still trading very, very low volume and "slow" still, though. 1/2 hour between trades is some pretty slooooow moving trading IMO. Wide spreads too, needed to "try" and move it up. Still in the sustained down trend- trading well, well below both the 50 DMA and the 200 DMA, and on very low volumes.
A "blog" and web site promotion doesn't/hasn't changed the price??
"Blogs" mean little to nothing to me personally. I like SEC filings and other legally binding documents. Blogs- they're everywhere on the net. Read what the recent 10-Q filing has to say about the ole "South Africa" deal, versus what the "blog" says- a bit of a difference between the two IMO. See latest 10-Q, PAGE 23. Kinda tells a pretty different "tale" of the ole South Africa deal, IMO.
Again, when will it "never" see .0161 again? Specifically? When?
It just traded below .161 this AM. It's lower than .0161 right now.
Does it mean it will "NEVER AGAIN" trade higher than .0161? Is that what's being stated?
"and the stock will neverrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr see $0.0161 again.. "
Does it mean it will never be as high as .0161 again?
It just opened and posted trades as low as .0153 and .0159. When does the "never" part start exactly? Is it today? It's at .0160 right now. That's less than .0161?
Or that it will "never" post a trade exactly for .0161 again? "never again" means forever, I think? Is this a 100% certainty?
"The shares are registered with the SEC. $2.4m "
And a good chunk of those shares have nothing to do with being able to be "drawn" upon, they're already allocated to "other" things like fees, like the $205K Magna "note", etc.
The registration table and the "max" price presented have ZERO to due with how much BHRT can/will "draw" in the end. The S-1 filing is about 50 pages long and must be read and understood in its entirety.
It's all in the S-1, filing. The very, very maximum BHRT can ever "draw" on those registered shares if about $1.2 million, and they clearly state, it will likely be SUBSTANTIALLY less than that (their wording in S-1 filing, not mine).
DIRECT FROM RECENT S-1 FILING- the only info that matters and is factual: (and clearly states this registration will/would generate NOWHERE even close to $2.4 million to BHRT, or that BHRT can even request to "draw down" anywhere close to that amount, unless another S-1, or several more S-1's are subsequently filed, the share price would need to remain above a certain level, higher than where it is now, etc)
They can't even make a single "draw" of more than $500K at a time. PER THIS S-1 filing, ONLY approx. 87 MILLION shares are available to be used to "draw down" on the credit line- all other shares are already used up/allocated to the "note", to "fees" etc. It's in plain, black n white.
The "assumed purchase price" at this point is .014 per share, if a "draw" were made based on the filing date. NOT .0161 or whatever.
"S-1 Filing:
Page 42, "we would receive only approximately $1,282,064 in gross proceeds. Furthermore, we may receive substantially less than $1,282,064 in gross proceeds"
** Each time they want to make a "draw" on the credit line- they first must issue a "draw down request" to Magna which triggers a whole bunch of "stuff" set in motion- which then ultimately in the end, determines the actual draw-down price, including something called the "true up" price, which is the final calculation from what I can gather. Again, meaning BHRT could ask for $500K on the line on Monday, a series of events then kick in where Magna gets notified, then lets say Magna sells a big chunk of the 30 MILLION shares they hold now- the price then drops. The price for the 93% calculation would then be based not on the 1.5 cent price on the day BHRT asked for the money, it's apparently based on some final formula that would be effected by the dropping share price, resulting in less money going to BHRT, for more shares issued to Magna. Again, this is what makes Magna who they are. It's the way they make the money they do IMO.
Page 10, S-1 Filing:
"From time to time over the term of the Purchase Agreement, commencing on the trading day immediately following the date on which the registration statement of which this prospectus is a part is declared effective by the Commission, we may, in our sole discretion, provide Magna with a draw down notice, each referred to as a Draw Down Notice, to purchase a specified dollar amount of Shares, which we refer to as the Draw Down Amount, with each draw down subject to the limitations discussed below. The maximum dollar amount of Shares requested to be purchased pursuant to any single Draw Down Notice cannot exceed the lesser of (i) 300% of the average daily trading volume of our common stock for the 10 trading days immediately preceding the date of the Draw Down Notice and (ii) $500,000, which we refer to as the Maximum Draw Down Amount. We may not deliver any Draw Down Notice to Magna if the Initial Purchase Price (described below) with respect to the Shares subject to such Draw Down Notice is less than $0.0025 (subject to adjustment for any stock splits, stock combinations, stock dividends, recapitalizations and other similar transactions) as of the date the applicable Draw Down Notice is received by Magna, which we refer to as the Draw Down Exercise Date."
PAGE 42/43 of S-1 Filing: (the keys to how the whole thing works essentially)
"Once presented with a Draw Down Notice, Magna Equities II, LLC is required to purchase the applicable Draw Down Amount at the applicable Purchase Price. The applicable Settlement Date with respect to a Draw Down Notice will occur within one trading day following the Draw Down Exercise Date. On the applicable Settlement Date for a draw down, we will issue to Magna Equities II, LLC a number of Shares, rounded to the nearest whole Share, equal to (i) the Draw Down Amount that we requested from Magna Equities II, LLC, divided by (ii) the applicable Initial Purchase Price, against simultaneous payment by Magna Equities II, LLC to us in an amount equal to (A) the number of Shares we issued to Magna Equities II, LLC on the Settlement Date, multiplied by (B) the applicable Initial Purchase Price.
With respect to a Draw Down Notice, on the True-Up Date, a calculation of the True-Up Purchase Price and the Purchase Price will occur. On the True-Up Settlement Date, we will issue to Magna Equities II, LLC the Additional Shares, if any, in respect of the applicable Draw Down Notice. Magna Equities II, LLC is not required to return any Shares to us in the event the True-Up Purchase Price is greater than the Initial Purchase Price.
We are prohibited from issuing a Draw Down Notice if (i) the amount requested in such Draw Down Notice exceeds the Maximum Draw Down Amount, (ii) the sale of Shares pursuant to such Draw Down Notice would cause us to issue or sell or Magna Equities II, LLC to acquire or purchase an aggregate dollar value of Shares that would exceed the Total Commitment, or (iii) the sale of Shares pursuant to the Draw Down Notice would cause us to sell or Magna Equities II, LLC to purchase an aggregate number of shares of our common stock which would result in beneficial ownership by Magna Equities II, LLC of more than 9.99% of our common stock (as calculated pursuant to Section 13(d) of the Exchange Act, and the rules and regulations thereunder). We cannot make more than one draw down during the period commencing on any Draw Down Exercise Date and ending on the applicable True-Up Date for such draw down, and we must allow at least two trading days to elapse between the applicable True-Up Date for a draw down and the delivery of any Draw Down Notice for any other draw down.
As of November 20, 2014, there were 560,564,622 shares of our common stock outstanding, of which 554,375,697 shares were held by non-affiliates. Although the Purchase Agreement provides that we may sell up to $3,000,000 of our common stock to Magna Equities II, LLC, only 143,812,591 shares of our common stock are being offered under this prospectus, which represents (i) 31,000,000 shares of common stock that may be issued to Magna Equities II, LLC upon conversion of the Convertible Note, (ii) 9,109,128 shares of common stock that we issued to Magna Equities II, LLC as Initial Commitment Shares on October 27, 2014, (iii) a maximum of 15,890,872 shares of common stock that we may be required to issue to Magna Equities II, LLC as Additional Commitment Shares and (iv) 87,812,591 shares of common stock that we may issue to Magna Equities II, LLC as Shares pursuant to draw downs under the Purchase Agreement. If all of the 143,812,591 shares offered under this prospectus were issued and outstanding as of November 20, 2014, such shares would represent approximately 20.7% of the total number of shares of our common stock outstanding and 20.9% of the total number of outstanding shares of our common stock held by non-affiliates, in each case as of November 20, 2014.
42
At an assumed purchase price of $0.01460 (equal to 93% of the closing price of our common stock of $0.01570 on November 10, 2014), and assuming the sale by us to Magna Equities II, LLC of all of the 87,812,591 Shares, or approximately 15.7% of our issued and outstanding common stock, being registered hereunder pursuant to draw downs under the Purchase Agreement, we would receive only approximately $1,282,064 in gross proceeds. Furthermore, we may receive substantially less than $1,282,064 in gross proceeds from the financing due to our share price, discount to market and other factors relating to our common stock. If we elect to issue and sell more than the 87,812,591 Shares offered under this prospectus to Magna Equities II, LLC, which we have the right, but not the obligation, to do, we must first register for resale under the Securities Act any such additional Shares, which could cause additional substantial dilution to our stockholders. Based on the above assumptions, we would be required to register an additional approximately 117,666,849 shares of our common stock to obtain the balance of $1,717,936 of the Total Commitment that would be available to us under the Purchase Agreement. We currently have authorized and available for issuance 2,000,000,000 shares of our common stock pursuant to our charter.
The number of shares of our common stock ultimately offered for resale by Magna Equities II, LLC is dependent upon a number of factors, including the extent to which Magna Equities II, LLC converts the Convertible Note into shares of our common stock and the number of Shares we ultimately issue and sell to Magna Equities II, LLC under the Purchase Agreement. The following table sets forth the total number of Shares that would be issued at varying purchase prices for us to receive the entire $3,000,000 in gross proceeds under the Purchase Agreement (without accounting for certain fees and expenses):"
"
Another incorrect statement about the S-1 and share registration:
"$2,315,383 in shares registered on Friday by Magna at $0.0161. I will stake my bottom dollars on the fact that Bioheart is about to be Promo'd...
"
Made at investorstemcell by "surperfeed".
It's totally an incorrect statement. Magna does NOT "register shares". Magna is a lender/investment firm, not a public traded company. The only entity that can "register Bioheart shares", is the public traded company to who those shares belong. In this case, that would be Bioheart Inc. Magna has ZERO role in "registering of shares".
Further, the price of .0161 is a "maximum estimated price", it says so right on the filing. Further, the implication is being made that this is somehow how much money BHRT has already received from Magna, which is 100% incorrect. Or that BRHT "might" even receive, even in the future, that much money ($2,315,383) for the registered shares. Again, just totally incorrect.
9 million of those shares have already been paid BY BHRT, TO MAGNA as "fees", up-front fees. Another 15 million of those shares are "set aside" for further "fees" to be incurred by BHRT possibly, and then owed to Magna.
31 million shares are set-aside for the convertible "note" to Magna, which is for $205K, meaning the pricing on those shares will be nowhere near the "maximum" register price of .0161, but are more like at .006 cents.
The remainder, about 87 million shares, are being set aside for draw downs on the credit line from Magna, and will AT MOST, bring BHRT about $1.2 million, but likely much less, and that is clearly noted and stated in the S-1 filing - due to share discounting and "other" factors. Further, there are limits on the maximum draw down amount on the credit line- so in no way would/will BHRT receive anywhere near a single chunk of money from Magna, even close to $1 million dollars. It will take multiple draw downs, done over a period of time, and again, the very maximum would be approx. $1.2 million, but the document uses the specific wording that it may be SUBSTANTIALLY LESS than that amount (see details via reading entire S-1 filing). It's all there in black n white in the S-1 filing.
S-1 Filing:
Page 42, "we would receive only approximately $1,282,064 in gross proceeds. Furthermore, we may receive substantially less than $1,282,064 in gross proceeds"
3) Each time they want to make a "draw" on the credit line- they first must issue a "draw down request" to Magna which triggers a whole bunch of "stuff" set in motion- which then ultimately in the end, determines the actual draw-down price, including something called the "true up" price, which is the final calculation from what I can gather. Again, meaning BHRT could ask for $500K on the line on Monday, a series of events then kick in where Magna gets notified, then lets say Magna sells a big chunk of the 30 MILLION shares they hold now- the price then drops. The price for the 93% calculation would then be based not on the 1.5 cent price on the day BHRT asked for the money, it's apparently based on some final formula that would be effected by the dropping share price, resulting in less money going to BHRT, for more shares issued to Magna. Again, this is what makes Magna who they are. It's the way they make the money they do IMO.
Page 10, S-1 Filing:
"From time to time over the term of the Purchase Agreement, commencing on the trading day immediately following the date on which the registration statement of which this prospectus is a part is declared effective by the Commission, we may, in our sole discretion, provide Magna with a draw down notice, each referred to as a Draw Down Notice, to purchase a specified dollar amount of Shares, which we refer to as the Draw Down Amount, with each draw down subject to the limitations discussed below. The maximum dollar amount of Shares requested to be purchased pursuant to any single Draw Down Notice cannot exceed the lesser of (i) 300% of the average daily trading volume of our common stock for the 10 trading days immediately preceding the date of the Draw Down Notice and (ii) $500,000, which we refer to as the Maximum Draw Down Amount. We may not deliver any Draw Down Notice to Magna if the Initial Purchase Price (described below) with respect to the Shares subject to such Draw Down Notice is less than $0.0025 (subject to adjustment for any stock splits, stock combinations, stock dividends, recapitalizations and other similar transactions) as of the date the applicable Draw Down Notice is received by Magna, which we refer to as the Draw Down Exercise Date."
PAGE 42/43 of S-1 Filing: (the keys to how the whole thing works essentially)
"Once presented with a Draw Down Notice, Magna Equities II, LLC is required to purchase the applicable Draw Down Amount at the applicable Purchase Price. The applicable Settlement Date with respect to a Draw Down Notice will occur within one trading day following the Draw Down Exercise Date. On the applicable Settlement Date for a draw down, we will issue to Magna Equities II, LLC a number of Shares, rounded to the nearest whole Share, equal to (i) the Draw Down Amount that we requested from Magna Equities II, LLC, divided by (ii) the applicable Initial Purchase Price, against simultaneous payment by Magna Equities II, LLC to us in an amount equal to (A) the number of Shares we issued to Magna Equities II, LLC on the Settlement Date, multiplied by (B) the applicable Initial Purchase Price.
With respect to a Draw Down Notice, on the True-Up Date, a calculation of the True-Up Purchase Price and the Purchase Price will occur. On the True-Up Settlement Date, we will issue to Magna Equities II, LLC the Additional Shares, if any, in respect of the applicable Draw Down Notice. Magna Equities II, LLC is not required to return any Shares to us in the event the True-Up Purchase Price is greater than the Initial Purchase Price.
We are prohibited from issuing a Draw Down Notice if (i) the amount requested in such Draw Down Notice exceeds the Maximum Draw Down Amount, (ii) the sale of Shares pursuant to such Draw Down Notice would cause us to issue or sell or Magna Equities II, LLC to acquire or purchase an aggregate dollar value of Shares that would exceed the Total Commitment, or (iii) the sale of Shares pursuant to the Draw Down Notice would cause us to sell or Magna Equities II, LLC to purchase an aggregate number of shares of our common stock which would result in beneficial ownership by Magna Equities II, LLC of more than 9.99% of our common stock (as calculated pursuant to Section 13(d) of the Exchange Act, and the rules and regulations thereunder). We cannot make more than one draw down during the period commencing on any Draw Down Exercise Date and ending on the applicable True-Up Date for such draw down, and we must allow at least two trading days to elapse between the applicable True-Up Date for a draw down and the delivery of any Draw Down Notice for any other draw down.
As of November 20, 2014, there were 560,564,622 shares of our common stock outstanding, of which 554,375,697 shares were held by non-affiliates. Although the Purchase Agreement provides that we may sell up to $3,000,000 of our common stock to Magna Equities II, LLC, only 143,812,591 shares of our common stock are being offered under this prospectus, which represents (i) 31,000,000 shares of common stock that may be issued to Magna Equities II, LLC upon conversion of the Convertible Note, (ii) 9,109,128 shares of common stock that we issued to Magna Equities II, LLC as Initial Commitment Shares on October 27, 2014, (iii) a maximum of 15,890,872 shares of common stock that we may be required to issue to Magna Equities II, LLC as Additional Commitment Shares and (iv) 87,812,591 shares of common stock that we may issue to Magna Equities II, LLC as Shares pursuant to draw downs under the Purchase Agreement. If all of the 143,812,591 shares offered under this prospectus were issued and outstanding as of November 20, 2014, such shares would represent approximately 20.7% of the total number of shares of our common stock outstanding and 20.9% of the total number of outstanding shares of our common stock held by non-affiliates, in each case as of November 20, 2014.
42
At an assumed purchase price of $0.01460 (equal to 93% of the closing price of our common stock of $0.01570 on November 10, 2014), and assuming the sale by us to Magna Equities II, LLC of all of the 87,812,591 Shares, or approximately 15.7% of our issued and outstanding common stock, being registered hereunder pursuant to draw downs under the Purchase Agreement, we would receive only approximately $1,282,064 in gross proceeds. Furthermore, we may receive substantially less than $1,282,064 in gross proceeds from the financing due to our share price, discount to market and other factors relating to our common stock. If we elect to issue and sell more than the 87,812,591 Shares offered under this prospectus to Magna Equities II, LLC, which we have the right, but not the obligation, to do, we must first register for resale under the Securities Act any such additional Shares, which could cause additional substantial dilution to our stockholders. Based on the above assumptions, we would be required to register an additional approximately 117,666,849 shares of our common stock to obtain the balance of $1,717,936 of the Total Commitment that would be available to us under the Purchase Agreement. We currently have authorized and available for issuance 2,000,000,000 shares of our common stock pursuant to our charter.
The number of shares of our common stock ultimately offered for resale by Magna Equities II, LLC is dependent upon a number of factors, including the extent to which Magna Equities II, LLC converts the Convertible Note into shares of our common stock and the number of Shares we ultimately issue and sell to Magna Equities II, LLC under the Purchase Agreement. The following table sets forth the total number of Shares that would be issued at varying purchase prices for us to receive the entire $3,000,000 in gross proceeds under the Purchase Agreement (without accounting for certain fees and expenses):"
The table:
" Proceeds from the
Total Number of Percentage of Sale of Shares to
Shares to be Currently Magna Equities II,
Assumed Average Issued if Outstanding LLC Under the
Purchase Price(1) Full Purchase Shares (2) Purchase Agreement
$0.00365025 (3) 821,861,516 59% $3,000,000
$0.0073005 (4)410,930,758 42% $3,000,000
$0.01095075 (5)273,953,839 33% $3,000,000
$0.014601 (6)205,465,379 27% $3,000,000
$0.01825125 (7)164,372,303 23% $3,000,000
$0.0219015 (8)136,976,919 20% $3,000,000""
Right in that table, is the scenario for example, where if Magna can get the share price to just under 1 CENT a bit, say .007, then it's gonna be 410 MILLION shares dilution, minimum to draw-down the entire $3 million over 24 months. They include the scenario where as much as 821 MILLION shares may end up being used, if the price were to be dropped to .003 per share. Why would they put that in the document, unless it's a possibility and needed to be disclosed? Maybe Magna knows that historically, it's not unusual to see a price collapse that far once these draw-downs and share dilution and share selling by them begin to take effect? A company, IMO, wouldn't just toss those numbers in there for no reason, why? Also, why did BHRT take their A/S to 2 BILLION? It's starting to become pretty clear to me, IMO. Real clear the way I see it.
I do not agree ! either- it's perfectly clear IMO that "Magna bought $2.4m in Bioheart Stock at $0.0161 " is not even a remotely accurate statement.
Magna has NOT even remotely done anything close to buying $2.4 MILLION worth of BHRT stock (At any price)- it's just grossly inaccurate. Do date, Magna purchased a "note" from BHRT and gave them $205,000 ($205K dollars) in return. BHRT in return issued Magna 31 million shares for that note (that works out to about .006 per share of stock, the 31 million shares that Magna received)
Nothing even close to the grossly inaccurate statement, "Magna bought $2.4m in Bioheart Stock at $0.0161" is stated in the SEC S-1 filing or any other official, published documents that I'm aware of. So yes, I concur and also do not agree !
If there is any other official BHRT or Magna or SEC or similar document that states anything like "Magna bought $2.4m in Bioheart Stock at $0.0161"- then I'd sure like to see it and read it.
"Investing in Bioheart, Inc. $$$$$MUSTREAD$$$$ "
The "investorstem" "blog" STATED:
"Current liabilities down $3.6 million (27%) from beginning of year. Down 49% in 24 months from high of $13.6m "
CEO BLOG, Mike Tomas of BHRT just stated:
"Current liabilities were reduced 23% from $13.4m to $10.3m YTD. This was accomplished by debt to equity conversion at $0.04 as well as debt limitations under Florida law."
Looks like CEO is stating that the total reduction from $13.4m to $10.3m is 23% (TWENTY THREE PERCENT), NOT 49%. (also the high number according to the CEO is $13.4 mil, not $13.6 million)
NOT the "49% in 24 months from high of $13.6m" as was stated many places here prior to this CEO blog.
I guess the CEO and his "blog" is the CORRECT ONE HERE? That's a pretty huge difference in percentages stated? One of those statements must be in gross error? Like about a 50% ERROR. 49% versus 23%, actually a tad more than a 50% ERROR.
I would have to assume, IMHO, that the company CEO would be correct?
"My thoughts are that Magna bought $2.4m in Bioheart Stock at $0.0161 and the stock will neverrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr see $0.0161 again.. "?????????????
Never happened?
Magna has NEVER "bought $2.4m in Bioheart Stock at $0.0161"???
When? Where? What SEC document or other document was this disclosed? What page number, etc?
So far, Magna has bought $205K worth of BHRT stock and they paid about .0066 or 6/10's of ONE CENT. PERIOD. That's it.
Just filed, SEC FORM S-1, PAGE 14:
"31,000,000 shares of common stock that we may issue to Magna upon conversion of the Convertible Note;"
"We will not receive any proceeds from the sale of shares by the selling stockholder. However, we have received gross proceeds of $205,000 from the sale of the Convertible Note to Magna"
$205,000/31,000,000 = .0066, or 6/10th's of ONE CENT.
The ONLY money Magna has given to BHRT so far is $205,000. Magna has not "bought" ANY OTHER STOCK per the SEC, S-1 just filed on Friday.
BHRT has PAID TO MAGNA, in shares of stock- $150K in up-front "fees" for the credit line. That's it. They also had to set aside another approx. 15 MILLION shares for further "fees" that may be levied by Magna.
Further, there is no proof that, "The stock is about to be promo'd/"??
Where is that stated in the filing?
"It says it includes 87 million shares for part of the $3 million equity
$1,413,783
"
No, that's not what it says. It says the following:
1) They are limited to how much they can draw at any one time. It looks like a max of $500K per draw and can not exceed 9.99% of O/S shares or something to that effect. So, they don't just dial up and ask and get $1,413,783 lickety-split. Not how it works. There would be multiple draws made and the max is $1,282,064, and as they make these "draws", Magna could very well be selling shares on-going, driving the price down, resulting in far less money being received by BHRT. Thus, the dilution table on page 43.
2) It states the 87 million shares AT MOST "could" generate is $1,282,064 BUT, could generate SUBSTANTIALLY LESS, given a multitude of reasons- all in Magna's control:
Page 42, "we would receive only approximately $1,282,064 in gross proceeds. Furthermore, we may receive substantially less than $1,282,064 in gross proceeds"
3) Each time they want to make a "draw" on the credit line- they first must issue a "draw down request" to Magna which triggers a whole bunch of "stuff" set in motion- which then ultimately in the end, determines the actual draw-down price, including something called the "true up" price, which is the final calculation from what I can gather. Again, meaning BHRT could ask for $500K on the line on Monday, a series of events then kick in where Magna gets notified, then lets say Magna sells a big chunk of the 30 MILLION shares they hold now- the price then drops. The price for the 93% calculation would then be based not on the 1.5 cent price on the day BHRT asked for the money, it's apparently based on some final formula that would be effected by the dropping share price, resulting in less money going to BHRT, for more shares issued to Magna. Again, this is what makes Magna who they are. It's the way they make the money they do IMO.
Page 10, S-1 Filing:
"From time to time over the term of the Purchase Agreement, commencing on the trading day immediately following the date on which the registration statement of which this prospectus is a part is declared effective by the Commission, we may, in our sole discretion, provide Magna with a draw down notice, each referred to as a Draw Down Notice, to purchase a specified dollar amount of Shares, which we refer to as the Draw Down Amount, with each draw down subject to the limitations discussed below. The maximum dollar amount of Shares requested to be purchased pursuant to any single Draw Down Notice cannot exceed the lesser of (i) 300% of the average daily trading volume of our common stock for the 10 trading days immediately preceding the date of the Draw Down Notice and (ii) $500,000, which we refer to as the Maximum Draw Down Amount. We may not deliver any Draw Down Notice to Magna if the Initial Purchase Price (described below) with respect to the Shares subject to such Draw Down Notice is less than $0.0025 (subject to adjustment for any stock splits, stock combinations, stock dividends, recapitalizations and other similar transactions) as of the date the applicable Draw Down Notice is received by Magna, which we refer to as the Draw Down Exercise Date."
PAGE 42/43 of S-1 Filing: (the keys to how the whole thing works essentially)
"Once presented with a Draw Down Notice, Magna Equities II, LLC is required to purchase the applicable Draw Down Amount at the applicable Purchase Price. The applicable Settlement Date with respect to a Draw Down Notice will occur within one trading day following the Draw Down Exercise Date. On the applicable Settlement Date for a draw down, we will issue to Magna Equities II, LLC a number of Shares, rounded to the nearest whole Share, equal to (i) the Draw Down Amount that we requested from Magna Equities II, LLC, divided by (ii) the applicable Initial Purchase Price, against simultaneous payment by Magna Equities II, LLC to us in an amount equal to (A) the number of Shares we issued to Magna Equities II, LLC on the Settlement Date, multiplied by (B) the applicable Initial Purchase Price.
With respect to a Draw Down Notice, on the True-Up Date, a calculation of the True-Up Purchase Price and the Purchase Price will occur. On the True-Up Settlement Date, we will issue to Magna Equities II, LLC the Additional Shares, if any, in respect of the applicable Draw Down Notice. Magna Equities II, LLC is not required to return any Shares to us in the event the True-Up Purchase Price is greater than the Initial Purchase Price.
We are prohibited from issuing a Draw Down Notice if (i) the amount requested in such Draw Down Notice exceeds the Maximum Draw Down Amount, (ii) the sale of Shares pursuant to such Draw Down Notice would cause us to issue or sell or Magna Equities II, LLC to acquire or purchase an aggregate dollar value of Shares that would exceed the Total Commitment, or (iii) the sale of Shares pursuant to the Draw Down Notice would cause us to sell or Magna Equities II, LLC to purchase an aggregate number of shares of our common stock which would result in beneficial ownership by Magna Equities II, LLC of more than 9.99% of our common stock (as calculated pursuant to Section 13(d) of the Exchange Act, and the rules and regulations thereunder). We cannot make more than one draw down during the period commencing on any Draw Down Exercise Date and ending on the applicable True-Up Date for such draw down, and we must allow at least two trading days to elapse between the applicable True-Up Date for a draw down and the delivery of any Draw Down Notice for any other draw down.
As of November 20, 2014, there were 560,564,622 shares of our common stock outstanding, of which 554,375,697 shares were held by non-affiliates. Although the Purchase Agreement provides that we may sell up to $3,000,000 of our common stock to Magna Equities II, LLC, only 143,812,591 shares of our common stock are being offered under this prospectus, which represents (i) 31,000,000 shares of common stock that may be issued to Magna Equities II, LLC upon conversion of the Convertible Note, (ii) 9,109,128 shares of common stock that we issued to Magna Equities II, LLC as Initial Commitment Shares on October 27, 2014, (iii) a maximum of 15,890,872 shares of common stock that we may be required to issue to Magna Equities II, LLC as Additional Commitment Shares and (iv) 87,812,591 shares of common stock that we may issue to Magna Equities II, LLC as Shares pursuant to draw downs under the Purchase Agreement. If all of the 143,812,591 shares offered under this prospectus were issued and outstanding as of November 20, 2014, such shares would represent approximately 20.7% of the total number of shares of our common stock outstanding and 20.9% of the total number of outstanding shares of our common stock held by non-affiliates, in each case as of November 20, 2014.
42
At an assumed purchase price of $0.01460 (equal to 93% of the closing price of our common stock of $0.01570 on November 10, 2014), and assuming the sale by us to Magna Equities II, LLC of all of the 87,812,591 Shares, or approximately 15.7% of our issued and outstanding common stock, being registered hereunder pursuant to draw downs under the Purchase Agreement, we would receive only approximately $1,282,064 in gross proceeds. Furthermore, we may receive substantially less than $1,282,064 in gross proceeds from the financing due to our share price, discount to market and other factors relating to our common stock. If we elect to issue and sell more than the 87,812,591 Shares offered under this prospectus to Magna Equities II, LLC, which we have the right, but not the obligation, to do, we must first register for resale under the Securities Act any such additional Shares, which could cause additional substantial dilution to our stockholders. Based on the above assumptions, we would be required to register an additional approximately 117,666,849 shares of our common stock to obtain the balance of $1,717,936 of the Total Commitment that would be available to us under the Purchase Agreement. We currently have authorized and available for issuance 2,000,000,000 shares of our common stock pursuant to our charter.
The number of shares of our common stock ultimately offered for resale by Magna Equities II, LLC is dependent upon a number of factors, including the extent to which Magna Equities II, LLC converts the Convertible Note into shares of our common stock and the number of Shares we ultimately issue and sell to Magna Equities II, LLC under the Purchase Agreement. The following table sets forth the total number of Shares that would be issued at varying purchase prices for us to receive the entire $3,000,000 in gross proceeds under the Purchase Agreement (without accounting for certain fees and expenses):"
The table:
" Proceeds from the
Total Number of Percentage of Sale of Shares to
Shares to be Currently Magna Equities II,
Assumed Average Issued if Outstanding LLC Under the
Purchase Price(1) Full Purchase Shares (2) Purchase Agreement
$0.00365025 (3) 821,861,516 59% $3,000,000
$0.0073005 (4)410,930,758 42% $3,000,000
$0.01095075 (5)273,953,839 33% $3,000,000
$0.014601 (6)205,465,379 27% $3,000,000
$0.01825125 (7)164,372,303 23% $3,000,000
$0.0219015 (8)136,976,919 20% $3,000,000""
Right in that table, is the scenario for example, where if Magna can get the share price to just under 1 CENT a bit, say .007, then it's gonna be 410 MILLION shares dilution, minimum to draw-down the entire $3 million over 24 months. They include the scenario where as much as 821 MILLION shares may end up being used, if the price were to be dropped to .003 per share. Why would they put that in the document, unless it's a possibility and needed to be disclosed? Maybe Magna knows that historically, it's not unusual to see a price collapse that far once these draw-downs and share dilution and share selling by them begin to take effect? A company, IMO, wouldn't just toss those numbers in there for no reason, why? Also, why did BHRT take their A/S to 2 BILLION? It's starting to become pretty clear to me, IMO. Real clear the way I see it.
" Like I said 143 million is not as bad as I thought. "
That 143 million is simply ROUND-1. The very first steps to getting this Magna "thing" going and the first cash coming in. It's just the very, very first beginning per the S-1. It will only cover the first, maybe 2nd draw. They then have to file another and another S-1 each time they tap out the max on the S-1 filing, which in this case is about 89 MILLION just to "start" using the credit line.
It's gonna be a whole lot more than 143 million before this is all said and done, way, way more IMO. Again, it's all in black n white in that S-1 filing. 143 million is just the $205K "note", the "fees" and maybe the first draw-down or two on that credit line. Not even close to the total dilution that's gonna occur. More S-1 filings like this will follow- it says so right in this S-1, if they need to tap more of the credit line, which they say their intent at this point is likely to use/need it all.
Look at page 89 of this S-1, at BHRT's expenses, this money won't even cover that, let alone some FDA level phase II/III trials. No way IMO can I see how that would work?
Page 43, the "dilution projection table" shows a scenario going all the way out to 800 MILLION or more shares being used. Why would they put that in there if it's not a possibility and needed to be disclosed?
"The dilution is not as bad as I thought actually."???
The dilution is not even known yet at this point, other than an initial 55 MILLION shares, before even one dime of the "credit line" has, or will be "tapped". This is simply S-1 filing NUMBER ONE. There's gonna be a lot more filed, for a lot more shares, each time they draw down a bit on the "credit line". Read the S-1, this is just "round one" to get the first draw or two going. This isn't all the dilution that's coming- not by a long, long, long shot. The S-1 makes that crystal clear- they have to file another one of these each time they tap-out the share block in each prior S-1 filing.
That's part of the entire, extensive "legal-eze" of Magna requiring this S-1 filing as part of their terms, IMO. It makes BHRT state that dilution "may" become enormous, as in staggering enormous, depending on "numerous" factors beyond their control- such as when Magna decides to sell the shares they receive, how many shares Magna will get as that is an unknown- aka, they will get more shares if the price drops and BHRT needs, or decides to, "draw" on the credit line, etc.
Look a the dilution "projection table" (PAGE 43, S-1 Filing) they, Magna made them insert in that filing- it shows scenarios with the share price going all the way down to .003 and like 800 MILLION plus shares dilution as being possible. Why else would they print it and make um put it in a legal disclosure, SEC filed, public available document?
Thus, no one knows yet what the dilution even is or will be- other than, just the initial dilution to get this train rolling is massive IMO and the shares are cheap ( 30 million plus at 6/10ths of one cent, and 10 million or so at approx. 1 cent or less). That many low priced shares, being sold continually at the volumes this thing has been trading at (what was Friday, maybe $5K total dollars for the day, some days it's trading less than 100K shares a day?). So how long to unwind 40 or 50 MILLION low priced shares and soak them up? They will pin the price down, lower probably than even this 1.5 cent range, IMO. Then the credit line will be tapped and you'll have more, free trading low priced shares to just keep throwing logs on the fire.
The real dilution hasn't even gotten started yet or hit the market as free trading IMO.
Read the S-1 filing, skip all the fluff in it- a lot is just the last 10-K and stuff regurgitated. Just follow the parts that detail out Magna's dealings.
All this filing means is they are setting out 143 MILLION shares- but they don't even know how much money that will bring them (other than the $205K), cause they don't know what the price will be when/if they "draw" on the credit line. The lower the price goes, the less money they'd get per draw for a given number of shares (that is Magna's "game", their entire biz in nut shell IMHO). Simple as that. But Magna makes um page HUGE fees, up-front, before they ever see a single dime. What a business to be in.
S-1 filing, PAGE 13:
"The Offering
As of November 20, 2014, there were 560,564,622 shares of our common stock outstanding, of which 554,375,697 shares were held by non-affiliates. Although the Purchase Agreement provides that we may sell up to $3,000,000 of our common stock to Magna, only 143,812,591 shares of our common stock are being offered under this prospectus, which represents (i) 31,000,000 shares of common stock that may be issued to Magna upon conversion of the Convertible Note, (ii) 9,109,128 shares of common stock that we issued to Magna as Initial Commitment Shares on October 27, 2014, (iii) a maximum of 15,890,872 shares of common stock that we may be required to issue to Magna as Additional Commitment Shares and (iv) 87,812,591 shares of common stock that we may issue to Magna as Shares pursuant to draw downs under the Purchase Agreement. If all of the 143,812,591 shares offered under this prospectus were issued and outstanding as of November 20, 2014, such shares would represent approximately 20.7% of the total number of shares of our common stock outstanding and 20.9% of the total number of outstanding shares of our common stock held by non-affiliates, in each case as of November 20, 2014.
At an assumed purchase price of $0.01460 (equal to 93% of the closing price of our common stock of $0.01570 on November 10, 2014), and assuming the sale by us to Magna of all of the 87,812,591 Shares, or approximately 15.7% of our issued and outstanding common stock, being registered hereunder pursuant to draw downs under the Purchase Agreement, we would receive only approximately $1,282,064 in gross proceeds. Furthermore, we may receive substantially less than $1,282,064 in gross proceeds from the financing due to our share price, discount to market and other factors relating to our common stock. If we elect to issue and sell more than the 87,812,591 Shares offered under this prospectus to Magna, which we have the right, but not the obligation, to do, we must first register for resale under the Securities Act any such additional Shares, which could cause additional substantial dilution to our stockholders. Based on the above assumptions, we would be required to register an additional approximately 117,666,849 shares of our common stock to obtain the balance of $1,717,936 of the Total Commitment that would be available to us under the Purchase Agreement. We currently have authorized and available for issuance 2,000,000,000 shares of our common stock pursuant to our charter. The number of shares of our common stock ultimately offered for resale by Magna is dependent upon a number of factors, including the extent to which Magna converts the Convertible Note into shares of our common stock and the number of Shares we ultimately issue and sell to Magna under the Purchase Agreement.
The Total Commitment of $3,000,000 was determined based on numerous factors, including our estimated operating expenses for the next two years. While it is difficult to estimate the likelihood that we will need the full Total Commitment, we presently believe that we may need the full Total Commitment under the Purchase Agreement.
"
Notice, we may receive SUBSTANTIALLY LESS. SUBSTANTIALLY, means "a lot", like maybe HALF for instance would be considered "substantially less" IMO.
Then PAGE 43, of S-1 Filing (the dilution) project table- why would they run it all the way out to .003 per share? Unless they feel the need to legally cover themselves, IMO? If it goes that low, they just say, "Hey, it was all DISCLOSED right in black n white in the ole SEC filed S-1. Didn't you read the risks?"
PAGE 43:
"The number of shares of our common stock ultimately offered for resale by Magna Equities II, LLC is dependent upon a number of factors, including the extent to which Magna Equities II, LLC converts the Convertible Note into shares of our common stock and the number of Shares we ultimately issue and sell to Magna Equities II, LLC under the Purchase Agreement. The following table sets forth the total number of Shares that would be issued at varying purchase prices for us to receive the entire $3,000,000 in gross proceeds under the Purchase Agreement (without accounting for certain fees and expenses):
Proceeds from the
Total Number of Percentage of Sale of Shares to
Shares to be Currently Magna Equities II,
Assumed Average Issued if Outstanding LLC Under the
Purchase Price(1) Full Purchase Shares (2) Purchase Agreement
$0.00365025 (3) 821,861,516 59% $3,000,000
$0.0073005 (4)410,930,758 42% $3,000,000
$0.01095075 (5)273,953,839 33% $3,000,000
$0.014601 (6)205,465,379 27% $3,000,000
$0.01825125 (7)164,372,303 23% $3,000,000
$0.0219015 (8)136,976,919 20% $3,000,000
"
Remember, before that table would even kick-in, they've already had to issue/set aside approx. 55 MILLION shares to Magna, just for the $205K "note" and then the up-front "fees".
Scenario: what if Magna uses the low priced "note" shares to drive the price down? Then what? It would mean Magna would get MORE SHARES for issuing BHRT LESS MONEY each time. Look at that table- taken all the way out to .00365 per share and 800 MILLION plus shares. Why would they print that and file it it's not a possibility and needed legal disclosure?
And their expenses, BHRT's have BALLOONED despite very, very little R&D spending, aka "trial" spending (about $3K per month, per last 10-Q filed) yet spending/expenses exploded upward- look at page 90 of this S-1. (sales, general and admin costs- a big chunk is salaries, which for two people have increased enormously in the past 2 yrs, see SEC filings going back 2 yrs)
PAGE 90:
"Marketing, general and administrative expenses were approximately $3,182,397 in the nine month period ended September 30, 2014, an increase of $1,432,121 from marketing, general and administrative expenses of approximately $1,750,276 in the nine month period ended in September 30, 2013. The increase in marketing, general and administrative expenses is attributable, in part, to stock based compensation paid in the current period of $293,342 for services and increase in employee compensation and service providers."
$3 MILLION in "general expenses" in just the first 9 months of this yr, while almost nothing's been spent on R&D or "trials". Spending/expenses are up $1.4 MILLION from just a yr ago period- yet they're not conducting anything on the key, phase II/III "trials" for "LACK OF FUNDING" per their own wording in the last filed 10-Q statement.
There's no way IMO to know that, "the dilution isn't as bad as I thought actually", cause the dilution is 100% a total unknown at this point per the company's and Magna's own words in that S-1 just filed. Impossible to even guess, IMO, how much dilution is going to occur in the next 12 to 24 months at this point. But, it appears a certainty IMO, that it's going to be a LOT, from reading this S-1 filing.
Look at just the $205K note, what the share price is to Magna. Staggering IMO. (guess not surprising to see this S-1 released on a Friday, after market close)
From the S-1, just filed, PAGE 14:
"31,000,000 shares of common stock that we may issue to Magna upon conversion of the Convertible Note;"
"We will not receive any proceeds from the sale of shares by the selling stockholder. However, we have received gross proceeds of $205,000 from the sale of the Convertible Note to Magna"
So, they, BHRT only receive $205K for the note, but it cost them 31 MILLION shares. So what did Magna just pay for those shares (the question was asked, what would someone pay for shares? Or what are shares worth, as they are worth whatever a buyer is willing to pay- well what was Magna willing to pay?)
$205,000/ 31,000,000 = 0.006. Yep, 6/10ths of ONE CENT is what Magna was willing to pay to give BHRT a pittance of $205K dollars. This IMO, is going to have a share price crushing effect. 31 million ultra low priced shares, now going to become free trading.
How bout some perspective on what how much $3 million over 24 months + $205K will do for BHRT?
Well, the company just finished the past qtr with $46K total cash left. Essentially cash broke. And they spent almost nothing on R&D, aka "trials" for that entire qtr, maybe $3K or so per month, total R&D spending.
But what's their biggest expense on their expense line entries? Salaries and bonuses for just two people, that's what.
Just the base salary and bonus for 2 people is now = $525K + $250K + $500K (bonus) + $300K (bonus) = $1,575,000. Yep, ONE MILLION FIVE HUNDRED and SEVENTY FIVE THOUSAND dollars, salary and bonus for just 2 people.
This credit line ($1.5 million per yr, if max amount is drawn down, which would = massive share dilution and IMO, bury the share price, even lower than its 1.5 cent level) and the $205K "note" = $1.75 million, just barely enough to cover the salaries for two people. That's not counting lease, utilities, insurance, legal and all the other basic overhead expenses on the expense line. Let alone spending one time on the "trials".
BHRT has already, in a blink essentially, diluted over 40 MILLION low priced shares to Magna. 31 MILLION for the $205K "note" and then over 9 MILLION in just up-front "fees" for the "credit line" and they, BHRT had to already set aside another 15 MILLION shares to cover expected "additional fees" to Magna. That right there would be 55 MILLION shares of dilution to Magna for just $205K, w/o one DIME yet being "drawn down" on the $3 million over 24 month "credit line". Staggering IMHO. Just mind blowing. Shares flowing out like water, and low, low priced shares at that.
IMO, this will have little to nothing to do with the "restarting" or "funding" of the key "trials"- I just don't see how that's gonna be possible. BHRT already owes a good chunk of this money in just promised bonuses to just two of the four full time employees ($800K, see last 10-Q, the promissory note has already been issued to them)
That's some "due diligence" in my opinion. Perspective.
Magna MEGA DILUTION about to begin it looks like. Just a quick read, holy cow. Shares O/S are gonna go through the roof IMO, possibly more "commitment fees" to be paid, etc. If I remember, the Magna documents specifically limited the "draw downs" such that Manga can't own more than 9.99% or something to that effect of the BHRT outstanding shares, yet the amount they're gonna initially allocate here- just to start tapping the credit line, plus the original convertible note, would take Magna up to like 20% of the company's total outstanding. So, they can't even tap it all (this initial offering) it appears, but as Magna begins to dilute more and more, then it appears BHRT would be able to go back and ask for more, while staying under that 9.99% limit or whatever it is.
Easy to see now, IMO, why they upped the A/S to 2 BILLION. This is gonna blow the share count rapidly up, 100 million or more shares just in this step-1 it appears. Wow.
Look at the table they, Magna (remember in the credit line 8-K, it said Magna had to approve any offering documents published, approve the wording, etc) - look at the draw down pricing table- it goes all the way out to shares being priced at .00X cents. WOW !!
From the document:
"As of November 20, 2014, there were 560,564,622 shares of our common stock outstanding, of which 554,375,697 shares were held by non-affiliates. Although the Purchase Agreement provides that we may sell up to $3,000,000 of our common stock to Magna Equities II, LLC, only 143,812,591 shares of our common stock are being offered under this prospectus, which represents (i) 31,000,000 shares of common stock that may be issued to Magna Equities II, LLC upon conversion of the Convertible Note, (ii) 9,109,128 shares of common stock that we issued to Magna Equities II, LLC as Initial Commitment Shares on October 27, 2014, (iii) a maximum of 15,890,872 shares of common stock that we may be required to issue to Magna Equities II, LLC as Additional Commitment Shares and (iv) 87,812,591 shares of common stock that we may issue to Magna Equities II, LLC as Shares pursuant to draw downs under the Purchase Agreement. If all of the 143,812,591 shares offered under this prospectus were issued and outstanding as of November 20, 2014, such shares would represent approximately 20.7% of the total number of shares of our common stock outstanding and 20.9% of the total number of outstanding shares of our common stock held by non-affiliates, in each case as of November 20, 2014.
42
At an assumed purchase price of $0.01460 (equal to 93% of the closing price of our common stock of $0.01570 on November 10, 2014), and assuming the sale by us to Magna Equities II, LLC of all of the 87,812,591 Shares, or approximately 15.7% of our issued and outstanding common stock, being registered hereunder pursuant to draw downs under the Purchase Agreement, we would receive only approximately $1,282,064 in gross proceeds. Furthermore, we may receive substantially less than $1,282,064 in gross proceeds from the financing due to our share price, discount to market and other factors relating to our common stock. If we elect to issue and sell more than the 87,812,591 Shares offered under this prospectus to Magna Equities II, LLC, which we have the right, but not the obligation, to do, we must first register for resale under the Securities Act any such additional Shares, which could cause additional substantial dilution to our stockholders. Based on the above assumptions, we would be required to register an additional approximately 117,666,849 shares of our common stock to obtain the balance of $1,717,936 of the Total Commitment that would be available to us under the Purchase Agreement. We currently have authorized and available for issuance 2,000,000,000 shares of our common stock pursuant to our charter.
The number of shares of our common stock ultimately offered for resale by Magna Equities II, LLC is dependent upon a number of factors, including the extent to which Magna Equities II, LLC converts the Convertible Note into shares of our common stock and the number of Shares we ultimately issue and sell to Magna Equities II, LLC under the Purchase Agreement. The following table sets forth the total number of Shares that would be issued at varying purchase prices for us to receive the entire $3,000,000 in gross proceeds under the Purchase Agreement (without accounting for certain fees and expenses):
Proceeds from the
Total Number of Percentage of Sale of Shares to
Shares to be Currently Magna Equities II,
Assumed Average Issued if Outstanding LLC Under the
Purchase Price(1) Full Purchase Shares (2) Purchase Agreement
$0.00365025 (3) 821,861,516 59% $3,000,000
$0.0073005 (4)410,930,758 42% $3,000,000
$0.01095075 (5)273,953,839 33% $3,000,000
$0.014601 (6)205,465,379 27% $3,000,000
$0.01825125 (7)164,372,303 23% $3,000,000
$0.0219015 (8)136,976,919 20% $3,000,000
____________________
(1) Because the Purchase Price for Shares subject to any Draw Down Notice is the lesser of the Initial Purchase Price and the True-Up Purchase Price (which cannot be less than $0.001), and since we cannot deliver any Draw Down Notice to Magna Equities II, LLC if the Initial Purchase Price would be less than $0.0025, the Purchase Price for Shares subject to any Draw Down Notice will never be less than $0.001 per Share.
"
Wow.
Just at a glance, it looks staggering, what it's gonna do to dilution and more than likely the share price. Why else would Magna make um publish/disclose the possibility of the price going down to .003 and specific details about running out to approx. 1 BILLION shares, etc
This one's gonna be a long, long read- it's quite a document to say the least IMO. But holy cow- even the part that BHRT might owe Magna "up to" another 15 MILLION shares on top of the 9 MILLION already given Magna in just "fees" is staggering IMO. Wild. Never saw a document that looks like this. Gonna probably print this one out and read it with a yellow highlighter to "try" and even follow what the heck this really says.
"This is some good valuable analysis Hopalongstocks "
There's actually no "analysis" done or stated. It's a simple statement (straight cut n paste) from the company's own, publicly available, duly filed, SEC documents.
It's all available for anyone to see or read. There was no "analysis" or alteration or interpretation of the information involved. It's straight from the company's own filings.
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001388319&owner=exclude&count=40&hidefilings=0
That is govt/SEC run database contains every document the company, BHRT has ever filed with the SEC. Of course, any former CEO/CTO of a public traded company would obviously be well aware of this.
"Here is my public 10K record of shares. You can see NO SALES"
As a former CEO of a public traded company, one would assume that the CEO would know that a form "10-K" has nothing to do with reporting major insider stock holdings, sales, disposal of shares, etc?? A 10-K is an annual report for the entire company (of course the former CEO would know this, obviously)
Further, one would assume the CEO would know to point to the SEC, EDGAR database for any SEC documents such as a FORM 4, for a major (10% or more) holder's, disclosure forms.
One would also assume that as a former CEO of the company, they'd know how totally inaccurate the information is (it has no date on the data, and thus doesn't even accurately reflect the number of shares held by the former CEO and company CTO when he left the company and also following his subsequent divorce from his spouse, who jointly held shares related to the guarantee of the B of A loan, but of course as the former CEO and CTO one would know all the details of those facts- far more than one can even find in publicly available information), that was linked to on that web site 10Kcrunch or whatever it's called. For it states your holdings as being 7,877,903 shares, and that you are thus a 10% holder and also are the company CTO, and that you've never sold a share, etc,- all of which would now be 100% incorrect, as of any point in time in the yr 2014.
You haven't been the company CTO or CEO for many years now, of course that would be well known.
As of May of 2014, 7.8 million shares would not make one even remotely close to being a 10% holder of company stock as indicated in what is being called "your public 10K record of shares" (there is no such SEC document known as a 10-K, public record of shares, of course a former company CEO would know that)- and one would assume the former CEO would certainly know, that due to the massive share dilution that has occurred since he/she departed the company, he/she is no longer even remotely close to being a 10% or greater holder of shares. Again, one would assume a former CEO of a public traded company would know this instantly and thus spot this gross inaccuracy?
As of approx. May 2014 (date of linked info), there were approx. 466 MILLION shares of BHRT stock outstanding (common shares). Thus, a holding of 7.8 million shares would mean one only holds (and this would be a simple calculation, again for a former CEO of a public held company) it would mean 7,877,903/466,000,000 = .017 X 100 = about a 1.7% holder of the common stock, not the 10% of greater indicated on the inaccurate and very dated web site in the link.
But of course- a former CEO would already know all this, obviously.
Opens down 5% essentially, 3 seconds after market open on a single, $30 buck trade (2000 shares).
It then takes about 30 minutes to post the next trade, 8K shares (about $130 bucks worth) and it swings it through a 10% plus spread, from down 5% to now "up" plus 5%. So, a 10% spread, all on a few trades and about $160 bucks worth? Now another 30 minutes sitting parked, no trades?
OK, I guess that's just "normal" trading patterns on the OTC?
"That would be some pretty bad business plan for Magna if what they do is destroy companies like all of those on that list."???
Actually, it's quite the opposite- it's some of the biggest, fastest, easiest money a firm can make. Lending to cash desperate companies can, and often is more lucrative than having a magic, ATM money printing machine IMO. Firms like Magna, Asher and similar can make 200%, 300% or more ROI on their money, often in 6 months or less. Show any other industry (even hedge funds) that can produce returns like that on their money? High risk, mega high reward, and legal too boot.
I ran down a fair number of the companies on that list- and it's fugly ugly to say the least. A great many with 2 or 3 zeroes after the decimal point. Down from 10 cents or 5 cents a share or whatever, now showing prices like .003 or whatever and market caps in the $100's of thousands of dollars in several cases, and I saw several with many, many BILLIONS of shares outstanding and/or on their 2nd or 3rd reverse split. One can look the at every company on that list for them self- it doesn't take someone else to do it.
As Bigal pointed out- there's also a right hand column that lists the super crash and burns, the one's that completely have dropped off even the ability to trade the OTC.
I pulled up some charts on several of them, their decline was rapid, often 6 months maybe, perhaps 1 yr tops, from pennies per share, to as stated, multi zero's after the decimal or what Bigal called approaching "par".
This is all just public info- no mysteries here. I-HUB members who put a list like that together were able to discover that largely, one common denominator seemed to follow all those stocks and then their rapid decline- and that was they did "financing deals" with Magna, and in many cases other deals with the likes of Asher and similar firms tacked on too boot.
Is it a 100%, hard fast rule that any company involved with Magna and Asher ends in double or triple zeroes? Of course not, no one can prove that. But is there a lot of data that says it's certainly a high risk to use them for financing and that they seem to have a "knack" for creating deals, where the lower they can make the share price go, the more shares they get to convert, then make the share price go lower, then convert more, literally making more and more money for themselves, the lower they can make a share price go, literally often to even zero essentially.
Just the way it is. There's too many observable case studies presented to say it doesn't happen or isn't common. Even the SEC and many other firms/agencies warn about how convertible debt and these particular type of dilutive financing deals work exactly like these scenarios.
I don't think it's by chance that Manga first did a steeply discounted "note" deal with BHRT first, then set up the terms of the credit line. IMO, and just a guess, they're gonna "work um" in tandem, as a pair. That's my opinion. No accident IMO, they did two deals with BHRT, two particular types of "financing' done back to back, within weeks, or even days of each other. Why would they do it that way? Unless there is a reasoning behind it?
My 2 cents.
http://www.sec.gov/answers/convertibles.htm
http://investorshub.advfn.com/~-ASHER-~-25451/
http://securities-law-blog.com/tag/convertible-promissory-notes/
Convertible debt explained:
"The convertible note will set a conversion price which is negotiated between the lender/investor and borrower/public company at the time of issuance. Generally, the note is convertible into common stock at a discount to the market price of the stock at the time of conversion. In my experience, the negotiated discount can vary widely. A public company with greater liquidity, strong market support, strong financial statements, and the like would be in a position to negotiate a smaller discount such as 15-25%, whereas a public company without these benefits may have to agree to a much higher discount such as 35-50%.
Although this type of financing serves many purposes in the capital markets and is fairly easily obtained, small public companies should be aware of the disadvantages. For instance, a convertible promissory note which is partially converted or converted in tranches has the tendency to drive the price of a security down while exponentially increasing the amount of stock in the public float. For example, if the security is priced at $1.00 and the lender/investor converts $10,000 of debt and immediately sells those securities into the public market, that very selling pressure may drive down the price. When the lender converts the next $10,000 in debt at a lower price, say $.80, they would get more common stock to cover the same amount of debt. Upon selling this stock, again, the selling pressure would drive down the price. as the lender/investor continues to convert into more and more stock to cover the same amount of debt, and sell such stock, the price would be driven down further and further. Moreover, the amount of stock in the public float would continue to increase, resulting in dilution to the current shareholders and making it much more difficult for the same stock to see an upward movement in its price. "
Another explanation of convertible debt from the SEC site link above:
"By contrast, in less conventional convertible security financings, the conversion ratio may be based on fluctuating market prices to determine the number of shares of common stock to be issued on conversion. A market price based conversion formula protects the holders of the convertibles against price declines, while subjecting both the company and the holders of its common stock to certain risks. Because a market price based conversion formula can lead to dramatic stock price reductions and corresponding negative effects on both the company and its shareholders, convertible security financings with market price based conversion ratios have colloquially been called "floorless", "toxic," "death spiral," and "ratchet" convertibles.
Both investors and companies should understand that market price based convertible security deals can affect the company and possibly lower the value of its securities. Here's how these deals tend to work and the risks they pose:
* The company issues convertible securities that allow the holders to convert their securities to common stock at a discount to the market price at the time of conversion. That means that the lower the stock price, the more shares the company must issue on conversion.
* The more shares the company issues on conversion, the greater the dilution to the company's shareholders will be. The company will have more shares outstanding after the conversion, revenues per share will be lower, and individual investors will own proportionally less of the company. While dilution can occur with either fixed or market price based conversion formulas, the risk of potential adverse effects increases with a market price based conversion formula.
* The greater the dilution, the greater the potential that the stock price per share will fall. The more the stock price falls, the greater the number of shares the company may have to issue in future conversions and the harder it might be for the company to obtain other financing."
The ole "scientific advisory" board list is perhaps a bit dated, no?
"As of January 1, 2008, Bioheart’s Scientific Advisory Board consists of the following members"
As of 2008? It's going on 2015 in a month. Look up the names on that list and see if they're even in the locations stated- it's "interesting" IMO, to research the list, to say the least.
For example, they list a "Ray Chiu, M.D., Ph.D." of McGill University in Quebec. Sounds like a great "adviser" to have on one's ole "advisory board", no?
Well, all except for the pesky little fact that he PASSED AWAY IN JAN of 2014. A little hard to be an "adviser" when you're no longer alive? Also, he was ill and non-practicing and not involved in anything for at least a yr or more, according to statement easily found on the web.
Here's a few obituary pages about him, the Bioheart "advisory board" member (nothing like keeping info up to date and current I guess?)
http://www.legacy.com/obituaries/montrealgazette/obituary.aspx?pid=169019299
http://www.jtcvsonline.org/article/S0022-5223%2814%2900127-5/abstract
Or, for example, the list of "advisers" current as of 2008 lists "Edward Diethrich, M.D." as Director Arizona Heart Hospital Phoenix, Arizona"
Well, all except a simple Google search shows that the "Arizona Heart Hospital Phoenix" doesn't exist as that facility anymore (it filed BK, was bought out, then even changed owners again it seems) and that "Dr Edward Dietrich" left the facility several year ago as its "director".
http://www.bizjournals.com/phoenix/print-edition/2012/01/13/heavy-heart-noted-valley-surgeon.html?page=all
http://www.medscape.com/viewarticle/726311
So, doesn't seem, IMO, like that "doctor" is doing much "advising" to BHRT anymore, certainly at least not as the "director of the Arizona Heart Hospital" as claimed on the BHRT web page.
Just minor details on a web page I guess? Who knows? Info generally marked as "up to date as of 2008", would make me a little doubtful as to its potential accuracy, seeing as how we're entering 2015 in one month. But that just my opinion.
BigAl,
Great page built right here on I-HUB that tracks many of the Magna/Hanover financing deals and their ultimate outcomes. Very informative IMO.
Bioheart is listed on there.
http://investorshub.advfn.com/Clients-of-Magna-Group-and-Hanover-Holdings-25550/
A lot of very OLD info about Leonhardt ventures and Biohearts past. What's interesting IMO, is if this "technology" and all is so great according to the Leonhardt promotional "brochure" and all- then why are they providing no funding to BHRT today? Instead, sending BHRT to the lenders of last resort, via purely dilutive share deals from the likes of Magna and toxic convertible debt deals with Asher and Fourth Man and similar?
Why would that be? Why would BHRT just finish the last qtr with $46K cash total left on hand with $10 plus MILLION in debt per their own 10-Q filing? Why would the trials all be stalled out for "lack of funding" according to the BHRT 10-Q filing? Why did Leonhardt leave the company if it's all this great stuff according to his brochure?
Makes zero sense to me? Why would one walk away from something so great and why aren't they investing in BHRT anymore? Why wouldn't they just step up to the plate and fund all the trials tomorrow, from how great it all sounds in that brochure?
I don't get it? So a long time ago, they raised a lot of money from various people and groups and now have spent/burned through every last dime of it (over $118 MILLION in paid-in capital is gone, per their SEC filings) and produced a ZERO ROI to those investors, in fact, the stock being down 99% essentially, losing all those investor's money for them. That doesn't sound very good. $5 or more a share to 1.5 cents a share, basically? Hardly a "great investment" IMO? All those original or old investors all took, more than likely, total losses on BHRT. BHRT is in debt $10 MILLION today and has never produced so much as one DIME of ROI at anytime during their existence, not that I'm aware of from any SEC filings or similar published information?
Smallcapvoice?? BHRT paid $5,000 to smallcapvoice for a one month "promotion" campaign. That's simply a biased, paid advertisement and essentially says so right in their own disclosures.. See the disclosure section right on smallcapvoice, it states who paid to promote and how much.
And at the time BHRT paid that $5K to smallcapvoice, they, BHRT spent about the same amount, $5K per month on their entire R&D spending. Kinda tough to run phase II/III or any medical trials on $5K a month, IMO.
BHRT, per this latest 10-Q filing, isn't even spending that $5K per month now on R&D. It dropped to maybe $3K or so a month. A pittance for a medical R&D company, especially one that would be running any kind of "trials", FDA or otherwise, IMO
I guess paid promotion is more important than their trial spending perhaps?
Here's some Magna "destruction" I found via a simple Google search- they are also known as "Hanover" when doing deals for penny companies:
http://globenewswire.com/news-release/2013/12/12/596571/10061358/en/Cereplast-Provides-an-Update-on-the-Magna-Litigation.html
Cereplast is at like .0001 now, if it's even trading. Took about 6 months of Magna to bury um.
http://www.ripoffreport.com/r/Magna-Group-Hanover-Holdings-Jousha-sason/new-york-New-York-10004/Magna-Group-Hanover-Holdings-Jousha-sason-Fraud-Litigation-Breach-of-Contract-Scam-1109563
There's bunches. Entire I-HUB threads and forums dedicated to companies that went in the Magna "crusher" as it's often called. That's other's words on forums, not mine.
http://investorshub.advfn.com/Clients-of-Magna-Group-and-Hanover-Holdings-25550/
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=100105112
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=105469689
"Equity purchase for $3 million at a%7"
Example, just the up front "fees" just cost BHRT 9 MILLION shares, before they tap dime one of that "credit line". And it's pages of details as to how Magna gets "7%" or gets shares, pages of "conditions", any number of which can make it a whole lot more than an equivalent 7% share discount.
Most recent 10-Q, PAGE 26, 27:
"The Company paid to the Investor (Magna) a commitment fee for entering into the Purchase Agreement equal to $150,000 (or 5.0% of the Total Commitment under the Purchase Agreement) in the form of 9,109,128 restricted shares of the Company’s common stock, calculated using a per share price of $0.016467."
"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,"
"Purchase at a 7% discount.
Please provide examples of Magna "destroys""
Uh, MISSED the Magna $200K/$300K convertible "note" they did BEFORE the credit line.
Further, read the fine print, pages of it in the Magna deal- it's not even remotely as simple as just "7%". Not how it works. It's incredibly complex and there are reams written about it on I-HUB and via Google searches of how that supposed "7%" ends up being truck loads of shares for Magna.
Hi Bigal,
Yeah, they did two recent Magna deals, one being a "note", aka convertible debt type deal and the terms were mega stiff on it IMO. Then, they followed with a 2nd Magna deal right after, being a "credit line" type deal. I'm not even sure if there's a 6 month "restriction" or not?
Just to get the "credit line" deal going w/ Magna, BHRT already issued um 9 MILLION shares as up front "fees", $150K worth:
Just issued, most recent 10-Q filing, PAGE 27:
"The Company paid to the Investor (Magna) a commitment fee for entering into the Purchase Agreement equal to $150,000 (or 5.0% of the Total Commitment under the Purchase Agreement) in the form of 9,109,128 restricted shares of the Company’s common stock, calculated using a per share price of $0.016467."
I did some reading up on Magna, I-HUB has several forums dedicated entirely too um, and the general consensus seems to be they're brutal and often end up being common share price crushers, short or long term, even worse than ole Asher of penny fame.
So, I don't know what to make of it all, except that Magna seems to come up as a pretty big red light in every single reference I could find- that they're known as brutal and typically harmful to the common share price- just my opinion from what I found via Google and I-HUB and researching the name/firm "Magna" and companies who did/are involved in deals with them now. Pretty notorious reputation in OTC land it seems.
And yes, BHRT has continued it appears, from their SEC filings to use ASHER and others it appears and did several recent convertible debt (commonly known as toxic debt, floorless convertible) deals involving Asher and even a couple other lender of last resort type firms, I'll list links.
So yeah, IMO, there might be huge downward pressure coming on the shares, from my reading of the history of what Magna deals, and Asher and similar deals do to the common shares. Just from the last 10-Q to this most recent one, the dilution was huge, like almost another 50 MILLION shares diluted. It's on-going and it's a lot of shares, low priced shares as far as I can tell.
Most recent 10-Q, PAGE 9:
"Fully diluted shares outstanding were 659,543,477 and 323,296,916 for the three months ended September 30, 2014 and 2013, respectively and 605,015,919 and 336,682,241 for the nine months ended September 30, 2014 and 2013, respectively."
http://www.sec.gov/Archives/edgar/data/1388319/000114544314001305/d31740.htm
That's a more than doubling of O/S shares in about a 1 yr period.
Here's the very recent links to the Magna deals:
http://www.sec.gov/Archives/edgar/data/1388319/000114544314001228/d31725.htm
That's the Magna "note" convertible deal- look at the terms. It appears like BHRT only gets about $200K dollars, but they may owe Magna as much as $300K "face value" for the note. Brutal. The shares appear to be at like 1 cent each max that Magna pays, maybe less given all sorts of condtional stuff in the legal-eze.
Then, this 2nd deal was done for a Magna 24 month, $3 million credit line. It's like their super-duper "enhanced equity special" or some name like that and when I searched it, it popped up like a flashing red light of other penny companies who had done that same deal/terms- and were getting buried, and one company was even suing Magna over it, their share priced dropped so fast, so rapidly and they claim it was Magna behind it all, etc.
http://www.sec.gov/Archives/edgar/data/1388319/000114544314001254/e61149_8k.htm
Then, just on the most recent 10-Q filing, PAGE 15: One can see where they, BHRT, are continuing to tap Asher, Daniel James Mgt, and now a firm called Fourth Man, for convertible debt deals, often for just pittances of cash, like $50K or whatever at a time, but, IMO, one knows can still be enormously dilutive- look at the terms, 45% to 47% share price discounts up front and no floor to the bottom price, aka floorless ratchet language about the price when converted is based on the most recent 10 trading days average, blah, blah, blah. Something to that effect- the typical "toxic" convertible debt language:
PAGE 15, most recent filed 10-Q:
"Asher Notes (During this year)
During the nine months ended September 30, 2014, the Company entered into a Securities Purchase Agreements with Asher Enterprises, Inc. (“Asher”) or affiliates, for the sale of 8% convertible notes in aggregate principal amount of $258,000 (the “Asher Notes”).
The Asher Notes bear interest at the rate of 8% per annum. As of the quarter ended September 30, 2014, all interest and principal must be repaid nine months from the issuance date, with the last note being due May 12, 2015. The Notes are convertible into common stock, at Asher’s option, at a 45% 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 Asher Notes.
These embedded derivatives included certain conversion features and reset provision. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Asher Notes and to fair value as of each subsequent reporting date, which at September 30, 2014 was $201,607. At the inception of the Asher Notes, the Company determined the aggregate fair value of $480,669 of the embedded derivatives.
The remaining unconverted principle balance as of September 30, 2014 was $175,500.
Daniel James Management
During the nine months ended September 30, 2014, the Company entered into Securities Purchase Agreements with Daniel James Management (“Daniel”) for the sale of 8% to 9.5% convertible notes in aggregate principal amount of $85,000 (the “Daniel Notes”).
The Daniel Notes bear interest at the rate of 8% to 9.5% per annum. As of the quarter ended September 30, 2014, all interest and principal must be repaid one year from the issuance date, with the last note being due July 29, 2015. 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 Note. These embedded derivatives included certain conversion features and reset provision.
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 September 30, 2014 was $66,630. At the inception of the Daniel Note, the Company determined the aggregate fair value of $170,270 of the embedded derivatives.
15
Fourth Man, LLC
During the nine months ended September 30, 2014, the Company entered into Securities Purchase Agreements with Fourth Man, LLC. (“Fourth Man”), for the sale of an 8% to 9.5% convertible note in the aggregate principal amount of $75,000 (the “Note”).
The Notes bears interest at the rate of 8% to 9.5% per annum. As of the quarter ended September 30, 2014, all interest and principal must be repaid one year from the issuance date, with the last note being due August 28, 2015. The Notes are convertible into common stock, at Fourth Man’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 Fourth Man Notes. These embedded derivatives included certain conversion features and reset provision.
The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Fourth Man Notes and to fair value as of each subsequent reporting date which at September 30, 2014 was $91,319. At the inception of the Fourth Man Notes, the Company determined the aggregate fair value of $122,561 of the embedded derivatives.
The fair value of the embedded derivatives of the Asher, Daniel and Fourth Man Notes, was determined using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 166.07% to 171.91%, (3) weighted average risk-free interest rate of 0.10% to 0.13%, (4) expected lives of 0.76 to 1.00 years, and (5) estimated fair value of the Company’s common stock from $0.0231 to $0.0486 per share. The initial fair value of the embedded debt derivative of $773,501 was allocated as a debt discount up to the proceeds of the notes ($418,000) with the remainder ($355,501) charged to current period operations as interest expense. For the three and nine months ended September 30, 2014, the Company amortized an aggregate of $141,977 and $343,592 of debt discounts to current period operations as interest expense, respectively. For the three and nine months ended September 30, 2013 , the Company amortized $53,115 and $295,750 of debt discount to operations as interest expense, respectively."
From most recent 10-Q filing, PAGE 27:
Subsequent issuances
On October 3, 2014, the Company issued 514,886 shares of its common stock as payment of $70,521 interest on its Northstar (related party) debt.
In October 2014, the Company issued 1,818,182 shares of its common stock in settlement of $20,000 of convertible debt.
In October 2014, the Company issued 1,293,103 shares of its common stock in settlement of $15,000 of convertible debt.
In October 2014, the Company issued 2,260,764 shares of its common stock in settlement of $18,000 of convertible debt and accrued interest of $2,120.
In October 2014, the Company issued 552,846 shares of its common stock in settlement of $5,500 of convertible debt and accrued interest of $1,300.
In October 2014, the Company issued an aggregate 2,773,549 shares of common stock for consulting services.
In October 2014, the Company issued 538,875 shares of common stock in settlement of accounts payable.
(just a bunch of "other" shares BHRT issued out in just the past, most recent qtr)
So one does the math there, it's about another maybe 8 MILLION or more common shares just "issued" for all sorts of various "bills" and to Asher and what not. Shares just flying out left and right IMO.
So, these latest "odd" IMO, day to day trading patterns, this thing now seemingly "pinned" at right around 1.5 cents, is it Magna and Asher or who knows?
Last trade yesterday was just a few minutes after 2 PM Eastern. Meaning it sat parked, not a single trade for essentially 2 hours, till 4 PM Eastern, market close. Flat-lined.
Yesterday it traded about 86K total shares. About 86K x .0165 = $1400 bucks worth, total for the day.
But it did 2 million plus the day before that, with 500K shares trading seconds after market open, on spreads as wide as 14% plus?
Today, no opening trade at 9:30 AM Eastern. It took 10 minutes to post first trade, DOWN 6%, on about $250 bucks traded.
So what was the 2 million share day? How could that have been retail buyers or trading? No way IMO. This doesn't pass the smell test to me. Is this Magna, working this now, in total control?
"Bioheart Announces Expansion Of Clinical Study For Degenerative Disc Disease"
Not sure how it's an "expansion" when the ORIGINAL study, as described on cliniclatrials.gov, approx. EIGHT MONTHS AGO, March 2104, already listed 3 sites and this "Dr. Julian Gershon" was already listed as a site physician in this "degenerative disc trial" and that he was already "recruiting patients" clear back in March 2014.
The PR makes no sense whatsoever IMO. (but not surprising either IMO).
http://clinicaltrials.gov/show/NCT02097862
Note carefully- March 2014. NO CHANGES made, no modifications
(clinicaltrials.gov track and date stamps changes made to any original uploaded trial information). This shows NO CHANGES made since March, 2014. This Dr Gershon of Grand Junction, Colorado was listed right there, in black and white, about 8 months ago. So how can this PR be correct now, claiming he's being "added" as of Nov 2014? How?
"Locations
United States, Colorado
Dr. Gershon Recruiting
Grand Junction, Colorado, United States
Contact: Carissa Matton cmatton@bioheartinc.com
United States, Indiana
Dr. Silbert Recruiting
Indianapolis, Indiana, United States
Contact: Carissa Matton cmatton@bioheartinc.com
United States, Texas
Dr. Lightner Recruiting
Laredo, Texas, United States
Contact: Carissa Matton cmatton@bioheartinc.com
"
That's THREE I count. So not sure how it "expands" from one to two, 8 months later, using PR to announce a doctor who was "supposedly" already recruiting patients in MARCH, 2014?
The pr makes zero sense IMO (not surprising though IMO either). Why try and post a "new" PR now in Nov and make it appear something "new" and "expansion" is happening, when you already loaded official information to clinicaltrials.gov in direct conflict with this PR, and you did that clear back in March 2014?
Not getting it? Why would someone do that? Why?
Flat-lined again. Not one trade in about 1.5 hours now. 60K shares total, almost 3 hours into trading day. About $1000 total dollar vol traded.
But yesterday, on no news or anything, it opens with 500K shares within minutes of 9:30 AM Eastern?
IMO, Magna, Asher or someone is "working" this to the tee. I don't see how 2 million plus shares yesterday with a extremely wide percentage spread could have been mostly "retail" trading and then today- it can barely break a $1000 bucks and 60K shares in trade, now going on 3 hours and sits parked, for a 1.5 hour gap now too boot?
Makes no sense IMO how this trades now.
Basically 20 minutes after market open today to make a single, 10K share trade. Then 18 more minutes for 20K more shares to post ($495 bucks worth, total)
But yesterday it did 500K shares nearly right out of the gate at seconds past 9:30 AM Eastern, then 2 million plus for the day.
Last week, two days in a row where it took over 1 hour to trade even a single share after market open and it would barely trade maybe $1,500 bucks for the entire day?
What gives with this one is beyond me? Someone seems to be playing this like a well oiled machine. Magna? Asher? Something's not "normal" in these trading patterns IMO. I don't think 2 million shares yesterday and the 14% plus swing, closing down red on the day before that, was "retail" buyer's and seller's or whatever.
My 2 cents.
"And Bioheart's product is more effective than theirs..."??
What "product"??? Other than a catheter, I don't believe BHRT has a single approved, salable "product" that I'm aware of? Which "product" would that be?
From Biohearts own, last 10-K filing: PAGE 39
"We do not currently have product liability insurance because none of our product candidates has yet been approved for commercialization. While we plan to seek product liability insurance coverage if any of our product candidates are sold commercially, we cannot assure you that we will be able to obtain product liability insurance on commercially acceptable terms, if at all, or that we will be able to maintain such insurance at a reasonable cost or in sufficient amounts to protect against potential losses.
"competition"?? Bioheart is a "competitor" to Neostem?
Neostem is a listed stock w/ a market cap of about $170 million dollars. (BHRT has about an $8.5, maybe $9 milliom market cap and $10 million in debt and trades on the OTC)
Neostem has about 100 plus full time employees, a CEO who's an M.D., and a Sr mgt team of several VP's who are M.D.'s and the rest medical field Ph.d's etc. w/ extensive backgrounds of past medical product development experience and successes (BHRT has 4 full time and maybe 1 part time employee as of latest SEC filings, none of which are an M.D. or have any track record of successfully bringing a medical or drug product to market, no FDA regulatory expertise or past success, etc. per their own listed resumes)
Neostem has about $30 plus million in cash against about $16 million in debt, at least leaving them a net cash position over $10 million. (BHRT had $46 THOUSAND total cash left as of last 10-Q filing, $10 plus million in debt and a "going concern" warning in their latest SEC filing(s))
Neostem has about 35 MILLION total shares outstanding w/ a market cap of about $170 MILLION dollars. (BHRT has about 600 MILLION plus shares outstanding and climbing rapidly, w/ a market cap of maybe $9 MILLION total, w/ debt of $10 MILLION or more)
Neostem has about $16 MILLION in revenues (BHRT, maybe $800K, and that's not from their "key" heart product that's in development, and last qtr's 10-Q showed the cost of sales to be almost as much as the revenue, revenue was $579K, cost of sales was $523K, made no sense IMO)
Neostem's trials are still on-going and moving forward (BHRT's last trials have been parked, the two key, most advanced, the REGEN and MARVEL trials not advancing since 2009/2010 time frame for "lack of funding" and the MIRROR trial enrolled ONE patient then also stalled out for "lack of funding" per their own SEC filings, including the most recent one)
I just don't see how BHRT could really be considered a "competitor" to a company like Neostem? Just don't see that at all IMO.
"Awesome"?
Not sure what's "awesome" about the guy cashing out debt for common shares? To me, he's just switching money he is owed into common shares- IMO, typically a sign one wants to sell and "cash out". A debt holder is almost always in a senior position to a common shareholder.
So by doing all these debt-to-equity swaps they've been doing, it appears they just want free trading shares they can sell/dump and move on IMO.
Not sure what can be inferred about it beyond that? BHRT obviously doesn't have, and hasn't had cash to pay these debt holders back for years- they've been making some interest and other minimum payments to them it appears from what can be deciphered from the 10-K and similar, as far as my read indicates.
So if a guy wanted to get at least some of his money back quicker- IMO, you convert to common stock, which you can then free trade at will, meaning sell if you want and get out. Again, inferring more than that at this point seems impossible to know- all he's done is change money owed into being paid in common stock shares. That's all that appears to have taken place. Of course it increases his "stake" as he now holds more common stock shares.
One would assume this is also just more dilution also- cause it's effectively paying debt, not from cash for example (the revenues for instance) but just issuing out more common stock. Says he converted like $192K dollars. For example: $192K/.015 per share = 12.8 MILLION more shares just handed out. They are issuing stock like water at every turn it seems, from paying common bills, to paying debts to any other number of reasons. On-going, constantly from reading the SEC filings.
It's interesting it seems in light of this recently filed lawsuit. Cause that involves his apparent ex-wife, who upon the divorce, got half the debt the "Leonhardts" were owed. Whether or not she's still a debt holder/owed money or was paid back or has gotten in on any of these debt-to-equity swaps is not clear in any filing or anything I've seen?
https://www.clerk-17th-flcourts.org/Clerkwebsite/BCCOC2/OdysseyPA/CaseSummary.aspx?CaseID=7862332&hidSearchType=party_case&DisplayCitation=no&CaseNumber=CACE14021256&SearchType=
http://www.sec.gov/Archives/edgar/data/1388319/000114544311001144/d28764_ex10-63.htm
http://www.sec.gov/Archives/edgar/data/1388319/000114544310001842/d27040.htm
"That 8-K SEC filing states that Leonhardt had filed divorce papers: PAGE 17
"In February 2010 the Company’s Chief Science and Technology Officer and his spouse filed divorce papers. Pursuant to the divorce, their jointly owned shares and their ownership of the loan to Bioheart which they hold as a result of their payment of $3 million of principal and related interest to Bank of America on behalf of Bioheart, would be divided equally between them. As a result, the Chief Science and Technology Officer’s common shares were then reduced to 2,513,840 and his percentage shareholding of the Company to 13.8%, with his former spouse assuming ownership of the same number of common shares and percentage shareholding of the Company. Their commonly owned loan and related interest, as of March 29, 2010, $4,140,201, was been equally split. The Chief Science and Technology Officer on March 29, 2010, elected to convert his portion of the loan and related interest to
restricted common stock and warrants. As a result, Howard Leonhardt, the Company’s Chief Science and Technology Officer, as of March 31, 2010, owns approximately 22 % of the Company."