Wow, several more TOXIC, convertible note deals done- just recently. All this reported "revenue", but they just did several more, convertible debt deals as recent as early Oct (about one month ago) with horrible, extremely stiff terms IMO.
They must really, really be desperate for cash IMO, when one looks at the amount of cash brought in on these toxic note deals, yet they, BHRT were willing to accept such horribly stiff financing terms? (and then they still finish the qtr with a paltry $46K cash left on their cash account line?).
Latest 10-Q (filed today), period ended Sept 30, 2104, PAGE 26: (qty-3 more toxic, convertible debt deals and these are whoppers IMO. We knew about the Magna deal from the PR, but not the other two, holy cow)
"NOTE 13 — SUBSEQUENT EVENTS
Subsequent financing
KBM Worldwide
On October 6, 2014, the Company entered into a Securities Purchase Agreement with KBM Worldwide, Inc., for the sale of an 8% convertible note in the principal amount of $38,000 (the “Note”).
The Note bears interest at the rate of 8% per annum. All interest and principal must be repaid on July 8, 2015,. The Note is convertible into common stock, at holder’s option, at a 45% discount to the lowest daily trading price of the common stock during the 10 trading day period prior to conversion. In the event the Company prepays the Note in full, the Company is required to pay off all principal and accrued interest at 150%, and any other amounts.
Daniel James Management
On October 3, 2014, the Company entered into a Securities Purchase Agreement with Daniel James Management, Inc., for the sale of a 9.5% convertible note in the principal amount of $25,000 (the “Note”).
The Note bears interest at the rate of 9.5% per annum. All interest and principal must be repaid on October 2, 2015. The Note is convertible into common stock, at holder’s option, at a 47% discount to the lowest daily trading price of the common stock during the 10 trading day period prior to conversion. In the event the Company prepays the Note in full, the Company is required to pay off all principal and accrued interest at 150%, and any other amounts.
Magna Equities, LLC
On October 7, 2014, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with Magna Equities II, LLC, a New York limited liability company (“Magna”). The Purchase Agreement provides that, upon the terms and subject to the conditions set forth therein, Magna shall purchase from the Company, a senior convertible note 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, the Company issued the Convertible Note to Magna. 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. $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) under certain conditions described in the Purchase Agreement. In connection with the execution of the Purchase Agreement, the Company and Magna also entered into a registration rights agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company has agreed to file an initial registration statement with the SEC to register the resale of the Common Stock into which the Convertible Note may be converted,"
So in addition to the Magna "note" at 12% with basically 1 cent shares being involved, for about $200K dollars, they also, in early Oct. took on qty-2 more toxic (floorless) convertible debt deals- one for a measly $38K with KBM Worldwide (whoever they are?) and the 2nd back to ole Danial James again, for a measly $25K. Why, with all this "revenue" blah, blah, blah and "deals" and all- are they tapping the worst of the worst financing a company can use, and for total of $38K + $25K = $63K dollars? Just to keep paying their salaries and bonuses and other common bills? Highly dilutive "notes" at horrible terms, for what's essentially a pittance of cash, yet they have mega steep share discounts on um (45% and 47%) and will result IMO in more huge amounts of cheap share dilution going to the selling block and crushing the share price down, more than likely.
Just look at the KBM and the Daniel notes and the share discounts- if they, these finance houses, if they can hold the price at around 1.5 cents as it is now, then convert at 45% and 47% discounts (almost 50% off) they could get shares at like 8/10ths of ONE CENT or .008 cents each. What would those do to the common share price, if they got several million shares in that prices range?
At .008 per share, it would take issuing 4,750,000 shares just to pay off a lousy $38K dollars on that note. $38,000/.008 = 4,750,000
That's what toxic, convertible debt deals do to the common shares.
What happened to Cassel and the ole "mezzanine deal" and blah, blah- all that jazz? They, BHRT, IMO, are just doing the same old, same old routine of tapping the convertible debt guys, for the worst of the worst kind of financing a company can scrape together- and at just horrible terms that will result in massive dilution and millions and millions of more dirt cheap shares hitting the sell block down the road, the way I see it.
Wow IMHO.
AI
