US Stem Cell Inc (USRM)

[Dragon Lady]

"It sounds like the $300k"??

What $300K? The most BHRT will get on the highly dilutive, toxic convertible "note" from Magna is $205K? Where is $300K coming from?

The Magna convertible note is horrible terms IMO, it's only for about $206K dollars (less fees to Magna) to BHRT, but BHRT may owe Magna back as much as "up to" the $307K face value on the note if BHRT fails to meet numerous terms outlined in the note. It's at 12% interest, has a 55% share discount and also has "up to" $30K of attorney costs and "fees" built in, meaning BHRT probably only nets about $175K on it, when all said and done.

The 24 month Magna "credit line" is costing over $150K on the front-end to BHRT, at least 9 MILLION instant dilutive and free trading common shares, up to 15 MILLION shares that will be priced cheap to Magna (again, read entire 8-K filing)

http://investorshub.advfn.com/boards/post_reply.aspx?message_id=107598669

Notice- it has a "purchase price" of $205K, that's the most cash BHRT gets from it. But it has a "face value" of $307.5K, the amount BHRT may owe back to Magna. It's incredibly "stiff" in its terms. Why anyone would sign on to a note like this, unless incredibly desperate for cash, is beyond me? It's beyond payday-loan "stiff" in its terms IMO.

The "credit line" part from Magna will take time to put in place as it must have a share registration filed and completed, posted, etc and it's not as if they get a big chunk of money all at home time from it (as many are incorrectly implying)?

It's got "draw down" limitations in it, it takes time to make each "draw", thus money will only come in spurts- w/ a MAXIMUM of "up to" $1.5 million per yr, over 24 months. They had this exact same type of "credit line facility" with Greystone, it just ended earlier this yr. They tapped that "credit line" many times- it didn't make any difference.

The Magna toxic convertible "note" direct from 8-K filing:

"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, on the Closing Date, the Company issued the Convertible Note to Magna.

$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) if (i) the Company has properly filed a registration statement with the Securities and Exchange Commission (“SEC”) on or prior to the Filing Deadline (defined below) covering the resale by Magna of all of the shares of Common Stock issued or issuable upon conversion of the Convertible Note and (ii) no event of default or an event that with the passage of time or giving of notice would constitute an event of default has occurred on or prior to such date. Moreover, $62,500 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) if (i) the Company has filed a registration statement with the SEC that has been declared effective by the SEC on or prior to the Effectiveness Deadline (defined below) and the prospectus contained therein is available for use by Magna for the resale by Magna of all of the shares of Common Stock issued or issuable upon conversion of the Convertible Note and (ii) no event of default or an event that with the passage of time or giving of notice would constitute an event of default has occurred on or prior to such date.

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 (subject to adjustment). This conversion price represents a discount of approximately 55% from the lowest trading price of the Common Stock during the five trading days prior to the Closing Date. If the Company has not properly filed a registration statement with the SEC on or prior to the date that is 70 calendar days after the Closing Date covering the resale by Magna of all of the shares of Common Stock issued or issuable upon conversion of the Convertible Note, then, from and after such date, the Convertible Note"

"The Purchase Agreement contains customary representations, warranties and covenants by, among and for the benefit of the parties. The Company also agreed to pay up to $30,000 of reasonable attorneys’ fees and expenses"