US Stem Cell Inc (USRM)

[Dragon Lady]

The "convertibles" for ASHER and similar are "floorless"- meaning there is no "bottom price", NONE.

They "convert" based on the formula given in the 10-Q, PAGE 14:
Asher Notes (During this year)

During the three months ended March 31, 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 $97,500 (the “Asher Notes”).

The Asher Notes bear interest at the rate of 8% per annum. As of the quarter ended March 31, 2014 all interest and principal must be repaid nine months from the issuance date, the last note due December 26, 2014. 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."

That means, that ASHER actually benefits, gets MORE SHARES, the lower the price goes, even if it approaches zero. They can't lose, no matter what. They convert at a 45% discount, and there is no bottom of ".03" or any other "limit".

Similarly, many of the warrants, the recent ones, can "be exercised" at about 1 cent to 1.6 cents, putting them well, "in the money" at even 2 cents. Meaning they could be "exercised" and turn around and sold for a decent profit. BHRT gets some money from the warrant/shares being bought, but it will also put huge, IMO, downward pressure on the common shares, as I doubt that warrant holder is going to hold long term, but instead only wants to get the shares, turn and flip um, for the profit IMO. It results in more shares going on the market and selling pressure.

Also, as pointed out, page 24/25 of the 10-Q, lists an enormous wash-list of firms/people who got "shares as payment" for all kinds of stuff such as "services rendered"- and a good chunk of those shares, when one does the math, shoes them to be given out at about 1 CENT. Meaning, similarly, those people/firms, could easily sell into the 2 cent range, and still be doubling their money.

So, there is a TON of "in the money shares" out there, and I'm not aware of anything related to a "below a .03 limit" or anything regarding that term or similar to that term?

If shares were given at 1 cent and they're common shares, then they are "in the money", meaning they could be sold on the market, at a profit, at any price above about 1 cent. The "convertibles" are floorless- meaning they are "in the money" and make money for an ASHER type firm, no matter how low the share price goes and typically, for a firm like them, the lower the price goes- the better for them and the more money they will make.

It's explained real well here, in this article (one of the best, easiest explanations I've ever found of how this type of financing "works" and how an "ASHER" or similar, "do what they do"). It's a very good article IMO, as they give a very specific explanation of how the "ratchet" down works. Short, cover using "convertible shares, short some more, cover some more, on down- making money all the way. How low it goes, doesn't matter, the firm like an "ASHER" makes money all the way down, in fact more money is made, the lower the share price goes. How "floorless convertibles" or "ratchet" financing works and how a "short position" can/will be used by an ASHER type firm, to make even more money on those "convertible" shares:
http://www.stockpatrol.com/article/key/deathspiral