US Stem Cell Inc (USRM)

[Dragon Lady]

The United States Securities and Exchange Commission (SEC) recognizes "death spiral" (i.e. convertible share based financing) as a 100% legitimate and industry wide used term.

https://www.sec.gov/answers/convertibles.htm (see bottom of page titled "Convertible Securities")

"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. " (SEC speaking)

"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." End quote, United States SEC.

That is the SEC speaking, using their words: "toxic", "death spiral", "ratchet", "convertibles", etc.

They state (the SEC):
"Because the market price based conversion formula.." (SEC speaking)

- SEE BHRT, latest 10-K, PAGE F-41:

"The Note is 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. "
(THAT is the conversion, market price based ratio formula, i.e. what the SEC describes as a "convertible" with "toxic" properties and is "floorless" as it does not matter what the price is (occurs 10 days prior trading period, and is the avg of LOWEST 3 days of price), or how low it goes, nor does it have any other limits/stipulations on it, IMO. The lower the share price goes, the more shares Asher gets upon conversion- thus they are motivated to get the share price as low as possible, IMO and that of experts (the SEC) who write about this type of financing deals)

Lets see? Who to trust, who is credible, who knows what they're talking about IMHO? United States SEC? Or? LOL !