US Stem Cell Inc (USRM)

[Dragon Lady]

New toxic note- appears is not even $200K cash to BHRT. One needs to go to EDGAR, the SEC filing site and read the entire 8-K filing and all exhibits- it's a stunner IMHO. It looks pretty clear IMO, that BHRT doesn't even net $200K on it, but could owe as much as $300K to pay back the note- in dilutive shares of course. To read the entire thing, and all exhibits is like a 50 page deal.

Also, interesting is why did BHRT file an 8-K on this? They've been doing ASHER and similar type "finance" deals for years now- and never file an 8-K. Well, in reading the document, it's stated that MAGNA required as part of the deal- that BHRT file an 8-K, making it all public. And, also has them paying up to $30K in legal fees and all kinds of other restrictions, covenants and "stuff". IMO, BHRT must be incredibly desperate for cash to have taken on a convertible debt note that reads like this one- it's a doozy when one tries to read it all, IMO. Further, given the stiff terms that this MAGNA put up in front of BHRT- they must feel that BHRT is an extremely high credit risk or even a default risk IMHO, the language eluding to all kinds of stuff about defaulting and penalties and if this happens, then you owe us this and such- is plastered all through out the document. And Tomas signed off on all of it- so they must really, really, really be desperate for a lousy $200K or less that this Magna is going to pay them (after the "up to" $30K in legal fees BHRT must pay to Magna)- it's a real whopper deal IMO.

Again, what's $200K? Not even a few months survival cash - not even one of the bonuses they just handed out to Comella, let alone Tomas' huge bonus. Why would they take such horrible terms for a few $hundred thous in cash? Why? IF some supposed "big financing" supposed deal is sitting right around the supposed next bend in the road?

http://www.sec.gov/Archives/edgar/data/1388319/000114544314001228/d31725.htm

http://www.sec.gov/Archives/edgar/data/1388319/000114544314001228/d31725_ex4-1.htm

http://www.sec.gov/Archives/edgar/data/1388319/000114544314001228/d31725_ex10-1.htm

http://www.sec.gov/Archives/edgar/data/1388319/000114544314001228/d31725_ex10-2.htm

From "exhibit" 10.1:

"NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the premises and the mutual agreements, representations and warranties, provisions and covenants contained herein, the parties hereto, intending to be legally bound hereby, agree as follows:

1. Purchase and Sale of Note. On the Closing Date (as hereinafter defined), subject to the terms and conditions of this Agreement, the Investor hereby agrees to purchase, and the Company hereby agrees to sell and issue, a Note in the principal amount of $307,500 (the “Principal Amount”).

2. Purchase Price. The purchase price for the Note to be purchased by the Investor at the Closing shall be $205,000 (the “Purchase Price”). The Note will be issued with an original issue discount of approximately 33.33%. The Investor shall pay approximately $0.6666 for each $1.00 of principal amount of the Note to be purchased at the Closing. At the Closing, the Investor shall fund the Purchase Price by wire transfer of immediately available funds to the account specified in writing by the Company prior to the date hereof.

3. The Closing. Subject to the conditions set forth below, the purchase and sale of the Note shall take place at the offices of Greenberg Traurig, LLP, The MetLife Building, 200



Park Avenue, New York, New York 10166, on the date hereof (the “Closing” and the “Closing Date”). At the Closing, the Company shall deliver to the Investor: (i) this Agreement duly executed by the Company, (ii) the Note in the Principal Amount duly executed by the Company and registered in the name of the Investor and (iii) the Registration Rights Agreement duly executed by the Company. At the Closing, the Investor shall deliver to the Company (i) this Agreement duly executed by the Investor and (ii) the Registration Rights Agreement duly executed by the Investor.

4. Closing Conditions; Certain Covenants.

4.1 Conditions to the Investor’s Obligations. The obligation of the Investor to purchase the Note to be issued to the Investor at the Closing is subject to the fulfillment, to the Investor’s reasonable satisfaction, prior to or at the Closing, of each of the following conditions:

(a) Representations and Warranties. The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects on the date hereof.

(b) Note. At the Closing, the Company shall have tendered to the Investor the Note.

(c) Registration Rights Agreement. The Company shall have duly executed and delivered the Registration Rights Agreement to the Investor.

(d) No Actions. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any court, governmental agency or authority or legislative body to enjoin, restrain, prohibit or obtain substantial damages in respect of, this Agreement or the consummation of the transactions contemplated by this Agreement.

(e) Proceedings and Documents. All proceedings in connection with the transactions contemplated hereby and all documents and instruments incident to such transactions shall be reasonably satisfactory in substance and form to the Investor, and the Investor shall have received all such counterpart originals or certified or other copies of such documents as it may reasonably request.

4.2 Conditions to the Company’s Obligations. The obligation of the Company to sell and issue the Note to the Investor at the Closing is subject to the fulfillment, to the Company’s reasonable satisfaction, prior to or at the Closing, of each of the following conditions:

(a) Representations and Warranties. The representations and warranties of the Investor contained in this Agreement shall be true and correct in all material respects on the date hereof.

(b) Purchase Price. At the Closing, the Investor shall have tendered to the Company the Purchase Price (less the amounts to be withheld pursuant to Section 10.12) by wire

2

transfer of immediately available funds to the account specified in writing by the Company prior to the date hereof.

(c) Registration Rights Agreement. The Investor shall have duly executed and delivered the Registration Rights Agreement to the Company.

(d) No Actions. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any court, governmental agency or authority or legislative body to enjoin, restrain, prohibit, or obtain substantial damages in respect of, this Agreement or the consummation of the transactions contemplated by this Agreement.

(e) Proceedings and Documents. All proceedings in connection with the transactions contemplated hereby and all documents and instruments incident to such transactions shall be satisfactory in substance and form to the Company and the Company shall have received all such counterpart originals or certified or other copies of such documents as the Company may reasonably request.

4.3 Securities Law Disclosure; Publicity. The Company shall (a) by 9:00 a.m. (New York City time) on the business day immediately following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby and (b) issue a Current Report on Form 8-K disclosing the material terms of the transactions contemplated hereby, and including the Transaction Documents as exhibits thereto, within the time required by the 1934 Act. From and after the issuance of such press release, the Company represents to the Investor that the Company shall have publicly disclosed all material, non-public information delivered to the Investor by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company shall afford the Investor and its counsel with a reasonable opportunity to review and comment upon, shall consult with the Investor and its counsel on the form and substance of, and shall give due consideration to all such comments from the Investor or its counsel on, any press release, Commission filing or any other public disclosure made by or on behalf of the Company relating to the Investor, its purchases hereunder or any aspect of the Transaction Documents or the transactions contemplated thereby, prior to the issuance, filing or public disclosure thereof, and the Company shall not issue, file or publicly disclose any such information to which the Investor shall object. For the avoidance of doubt, the Company shall not be required to submit for review any such disclosure contained in periodic reports filed with the Commission under the Exchange Act if it shall have previously provided the same disclosure for review in connection with a previous filing."