US Stem Cell Inc (USRM)

[Dragon Lady]

"mezzanine financing"??

Just keep tossing the ole word "mezzanine financing" out there- without clue ONE, what "mezzanine financing" is or how it works, or what it takes typically to get/secure, etc. Yep, that'll make it happen and come "true".

And call up ole investorstemblahblah- as if he knows anything IMO? He runs a tiny web site about stem penny stocks? How many "mezzanine financing" deals does one know for certain he's ever arranged and successfully put together for cash poor, cash flow negative, near zero asset companies? Would be curious myself to know? Can one add that to the ole "PM" please?

Here is a statement of a typical "mezzanine company" and them explaining a "mezzanine debt/share hyprid" typical "mezzanine type deal and what they look for/require:

https://vcexperts.com/buzz_articles/339

"Sources of Capital: Mezzanine Funds
Kenneth H. Marks, Larry E. Robbins, Gonzalo Fernandez, John P. Funkhouser et al

The base content of this section is adapted from "Mezzanine Capital Financing for Small and Midsize Businesses," written by Donald Tyson, PNC Bank.

Mezzanine funds are typically subordinated debt lenders and seek businesses that have high potential for growth and earnings but are currently unable to obtain from a bank all of the funds necessary to achieve their goals. This may be because of a lack of collateral, higher balance sheet leverage, shorter operating history, or a variety of other, transitional reasons. As risk lenders, mezzanine investors consider investment opportunities outside conventional commercial bank parameters. Ideally, mezzanine investors prefer companies that, in a three-to-five-year period, can exit mezzanine financing through additional debt from a senior lender, an initial public offering, or an acquisition. In addition to these financial criteria, a critical consideration is the quality of the people involved. Strong management is important, and mezzanine investors look closely at an entrepreneur's hands-on operating achievements and proven management ability. The track record of a company's management team is a valuable indicator of its ability to achieve future success.

The typical borrowing profile of a company funded by a mezzanine fund is:

Strong management.
Strong cash flow.
Insufficient senior financing.
Insufficient collateral.
High leverage.

Mezzanine funds typically provide financing for:

Acquisitions and management buyouts.
Business expansion.
Recapitalizations.
New product launches and diversification.
Long-term working capital to support growth.
Equipment and owner-occupied real estate purchases.
Dividends.

Businesses and situations usually not of interest to mezzanine investors include:
Start-ups.
Seed capital.
Prerevenue or development stage companies.
Non-owner-occupied real estate investment.
Any business unable to support additional debt service from its cash flow.
Turnaround situations."

http://www.srr.com/article/benefits-mezzanine-financing-middle-market-companies

In addition, there may be certain business or transaction characteristics which make it difficult to utilize mezzanine financing. These attributes may include but are not limited to the following:

High customer concentration
Capital expenditure intensive business
Lack of management
Commodity-like products or services
Cyclicality resulting in volatile cash flow (how bout NO CASH FLOW?)
A current debt to EBITDA ratio close to or exceeding the market value of the company"

This link is from Canada- but banking/lending is lending, especially someone as aligned with us (USA) as Canada:
https://precipicecapital.com/mezzanine-financing-a-powerful-financing-vehicle-for-growth/

"Mezzanine financing is available for companies with strong cash flows. Although there are some limited exceptions in Canada, the majority of mezzanine lenders require historical cash flows to be at a minimum of $2M when looking at historical performance over a three year term."

http://www.fidelisfinancial.com/mezzfund.htm

"Here are some general criteria to be qualified for Mezzanine Financing:
1. The company is in business for 3 years or more.

2. Has a stable or growing “Operating Cash Flow” of between $3 million and $25 million (defined as Earnings before Interest, Taxes, Depreciation, Amortization and nonrecurring costs).

3. Has a defensible market position in its niche."

From most recent BHRT 10-K, PAGE 26
". Since inception, we have generated substantial net losses, including net losses of approximately $3.1 million, $4.0 million, $4.7 million, $5.2 million, and $4.4 million in 2013, 2012, 2011, 2010 and 2009, respectively and substantial negative cash flows from operations. We anticipate that we will continue to incur significant and increasing net losses and negative cash flows from operations for the foreseeable future as we:..:

Yeah, sounds perfect for a "debt" based ole "mezzanine financing" deal IMHO? Sure thing. Great. Right on.

Always just my own opinions, musings, thought and ideas and OPINIONS only of course. Do your own due diligence. Never buy, sell, trade a stock or anything else, or like or dislike a company based on my 100% amateur opinions. And of course- always wear a seat belt when driving, it's the law.

Oh, and HAPPY TRADING and GO $BHRT !!