US Stem Cell Inc (USRM)

[Dragon Lady]

"What you seem to be suggesting would be BHRT intends on conducting an illegal solicitation and balloting of shares. I can not at all believe that will be the situation."

Thanks for the securities law and legal analysis. However, I never stated or even "suggested" anything that you're stating, and I never once used the word "illegal" or any derivative or variation thereof. That's your legal word and apparent legal analysis, not mine.

I simply pointed out the reality and fact that the insiders of BHRT hold the total controlling votes (a majority) for anything needing a "shareholder vote" in the company. Therefor, they will never be out-voted on anything put to a shareholder vote. Ever. It's impossible.

There is nothing "new" or unusual about companies where the insiders have set up a controlling vote structure- whereby they control all shareholder voting matters. Google, the mega cap company has done it, via creating a second, separate class of voting shares, just as BHRT has done by creating Northstar LLC who hold a separate class of shares, the "Class A" shares with their 25 to 1 voting rights and power.

http://www.fool.com/investing/general/2013/06/12/average-shareholders-likely-oppose-googles-dual-cl.aspx

http://www.investopedia.com/articles/fundamental/04/092204.asp

http://economix.blogs.nytimes.com/2014/04/02/the-many-classes-of-google-stock/?_r=0

"Google currently has a dual-class voting structure that ensures that not only will it get its way in all director elections, but it will also be able to soundly defeat any shareholder proposals pushing for changes to its corporate-governance structure."

"Designed to give specific shareholders voting control, unequal voting shares are primarily created to satisfy owners who don't want to give up control, but do want the public equity market to provide financing. In most cases, these super-voting shares are not publicly traded and company founders and their families are most commonly the controlling groups in dual-class companies."

"Rarely has a shareholder vote been less suspenseful. With the Class B shares able to vote, the founders (Google founders) can easily vote down the proposal."

It's very common and used all the time by companies. Again, the votes of the proxy (a SEC formality essentially and requirement to hold an annual corporate meeting and put certain items to a "vote") will be "counted" but they'll never over-ride or defeat the insider's voting block power. Just the way it is.

Northstar alone, which is 100% insiders (mainly the same as a sub-set of the BOD) - they hold a voting rights of 25 to 1 on 20 MILLION shares of preferred stock. Giving them 500 MILLION votes right there.

http://ih.advfn.com/p.php?pid=nmona&article=64870277&xref=newsalert

See the proxy PAGE 29:

The table of insider share ownership and thus voting power per share controlled.

Northstar holds 47 MILLION shares, or about 6.62% and that's excluding the 20 MILLION preferred shares they hold (see note "9", share ownership table page 49 of proxy), the 20,000 million additional "Class A" shares held by Norhtstar have a 25 votes per share provision, giving them 500 MILLION votes right there, and the the other insiders (including the same insiders holdings "outside" their Northstar holdings) hold about another 105 MILLION shares or a 14.8% block of voting power. Add 105 million to Northstar's 547 MILLLION votes and that's over 600 MILLION votes right there, all held by the same 4 or 5 or 6, whatever it is, "insiders"- thus, no "common shareholders" votes (the company has about 350 total shareholder per that proxy, including those insiders)- no "common shareholders" are ever gonna garner enough votes/voting power to ever override what the insider's want passed or voted down.

http://ih.advfn.com/p.php?pid=nmona&article=64870277&xref=newsalert

PAGE 49 of Proxy:
"NOTES
(9) Excludes 20,000,000 shares of Series A Preferred Stock (non-convertible) with each share of Series A Preferred Stock having voting power of twenty-five common shares."

So Northstar alone has 47 MILLION shares plus the 20 MILLION preferred shares with their 25 to 1 voting power. That alone is about 550 MILLION votes. It's a majority of votes if just the Northstar LLC members vote- they control it all. Period, end of story.

It's as simple as that. Again, it's not "new" or "unusual" or in your legal advice terms "illegal"- it's done all the time by insiders of public companies. They want to control it all and they've created the share structure and voting rights structure to do so. They also uppsed those Northstar votes as dilution occurred to insure they could never be out-voted (it was once 20 to 1 votes, then they took it to 25 to 1 as more dilution occurred, giving them a majority when they increased the share to 970 million).

From the 8K filed Dec 2013 :

http://www.sec.gov/Archives/edgar/data/1388319/000114544313002314/d31019.htm

"On December 16, 2013, effective with the filing of the amendment to the Company's Articles of Incorporation with the Florida Secretary of State (confirmed as filed on December 30, 2013), the Company amended its Articles of Incorporation to modify the voting rights of the Series A Convertible Preferred Stock from 20 votes per share on matters to be voted on by the common stock holders to 25 votes per share on matters to be voted on by the common stock holders."

Who holds all the class "A" shares with those 25 to 1 voting rights? Northstar LLC, the BOD and one or two other "mystery" members, that's who. Why would they boost those voting rights from 20 to 1 to 25 to 1? To insure they can never be outvoted by a majority of shareholders as they continually diluted the stock, that's why.

Again, a "common shareholder" little ole retail investor can send in a vote on the proxy, but it will never overcome or override the insider's shares being voted. Those insiders will vote and pass, or vote down whatever they put forth in that proxy. The BOD and the controlling votes are one in the same people essentially. And it's not "new" or "illegal"- it's done all the time in companies who do not want shareholder's voices to be heard or common shareholder's to have any control over what the insider's feel is "their company", yet they want the common shareholder's money via being a public company, just as the several articles cited above state, including the NY Times.

Again, look at the results and wording of the last PROXY VOTE Bioheart issued- they plainly state (paraphrasing), "WE PASSED IT and we DON'T NEED nor do we WANT YOUR VOTES". How could they do that? Because the insiders hold all the majority voting power. Simple.

http://www.sec.gov/Archives/edgar/data/1388319/000114544314000633/d31331.htm

This was a "PROXY VOTE" item.

See PAGE 2:

Quote:
"Form 14A PAGE 2 (filed on April 16th, 2014)

"This notice and information statement (the “Information Statement”) will be mailed on or about April 17, 2014 to the stockholders of record, as of April 16, 2014, to shareholders of Bioheart, Inc., a Florida corporation (the “Company”) pursuant to: Section 14(c) of the Exchange Act of 1934, as amended. This Information Statement is circulated to advise the shareholders of action already approved and taken without a meeting by written consent of the holders of a majority of the Company’s outstanding voting common and outstanding voting preferred stock, specifically, management and one non-solicited shareholder, representing 597,553,092 voting capital shares (including 20,000,000 preferred shares that have 25 for 1 voting rights or 500,000,000 voting shares) (62% of the Company’s issued and outstanding voting stock as of the Record Date). Pursuant to Rule 14c-2 under the Securities Exchange Act of 1934, as amended, the corporate action described in this Notice can be taken no sooner than 20 calendar days after the accompanying Information Statement is first sent or given to the Company’s stockholders. Since the accompanying Information Statement is first being sent or given to security holders on April 28, 2014 to the corporate action described therein may be effective on or after May 19, 2014."

And

"The increase in the authorized shares described in the accompanying Information Statement has been duly authorized and approved by the written consent of the holders of a majority of the voting capital shares of the Company’s issued and outstanding voting securities, your vote or consent is not requested or required."

Notice, they had to "mail it out" to all the "shareholder's of record" per SEC rules, just like they need to hold an annual meeting and hold a "proxy vote" on certain items per SEC rules. But look at the wording, the inside majority had already VOTED and PASSED what was in the proxy- so it was for "information only" as they know the other retail shareholder votes would never out-vote their outcome or decision anyway. Thus the "formality" of mailing it to "notify" them they've been out-voted and the proxy was already passed by a "majority vote", past tense.

See that wording "majority", that's the insiders, aka Northstar primarily and they vote on, and pass what they want, at-will, because they hold the "majority" of votes, which is how "proxy" votes get passed or voted down.