Toxic debt/conversions all coming due. Wonder why maybe Jan/Feb was the time BHRT has taken such a royal drubbing? Look at what convertible debts were coming due.
ASHER, and for a large amount, potentially $183K worth (at least whatever they hadn't chosen to already convert) was all due by Feb 16, 2015, a few days ago.
Example of how bad the dilution can be if the price is in this 1 CENT, .009 cent range.
Lets say Asher had $50K left owed on that note they wanted to convert in say Jan/Feb cause it was all due only a few days ago, Feb 16th, 2015.
Asher gets a 45% discount on the shares to the avg of the lowest 3 days market closing, blah, blah, blah.
So 1 CENT X .55 (the 45% discount) = .0055 Asher pays per share max.
So to convert $50K debt they were owed under this scenario- how much dilution is that?
$50K / .0055 = 9 MILLION shares of dilution would have been issued to Asher, for just $50K owed on those past notes.
Now just look at the line-up of notes all coming due in the next several months- and imagine the dilution if the price is in this present price range.
Wonder what's in store coming up for the stock price- as far as on-going continued dilution do to convertible debt deals coming due? As in, 10's of MILLIONS of low priced shares about to be issued (look at the discount ratios below: 45%, 47%, etc). Looks like the SUMMER OF DILUTION/CONVERSION is coming IMO.
Here's the due dates of what's gob smacking this stock IMO:
Asher $183K (or at least a portion of it) due or converted by Feb 16, 2015
Daniel James $60K due or converted by May 29th, 2015
Fourth Man $50K due or converted by June 26th, 2015
KBM Worldwide $38K due or converted by July 8th, 2015
Magna $205K/$307K note due or converted by Aug 7th, 2015
Daniel James $25K due or converted by Oct 2nd, 2015
If the price stays around this range- that might easily be 40 MILLION to say perhaps approx 60 MILLION shares (maybe even more) of pure dilution those firms will convert and sell/dump onto the market as free trading shares- and it's coming due one after another after another after another.
Let alone what will happen if BHRT then makes a draw on the Magna credit line plus the 9 MILLION shares already paid to Magna as "up front fees" (and NO, they are not "restricted" as was stated previously- they're paid and in Magna's hands. Period.)
Last filed 10-Q:
PAGE 26:
"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,"
10-Q, prior to last one, the 2nd qtr of 2014, PAGES 14 and 15:
"Asher Notes (During this year)
During the six months ended June 30, 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 $183,000 (the “Asher Notes”).
The Asher Notes bear interest at the rate of 8% per annum. As of the quarter ended June 30, 2014 all interest and principal must be repaid nine months from the issuance date, with the last note being due February 16, 2015. 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.
These embedded derivatives included certain conversion features and reset provision. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Asher Notes and to fair value as of each subsequent reporting date, which at June 30, 2014 was $278,495. At the inception of the Asher Notes, the Company determined the aggregate fair value of $355,447 of the embedded derivatives.
Daniel James Management
During the six months ended June 30, 2014, the Company entered into a Securities Purchase Agreements with Daniel James Management (“Daniel”) for the sale of 8% to 9.5% convertible note in aggregate principal amount of $60,000 (the “Daniel Notes”).
The Daniel Notes bear interest at the rate of 8% to 9.5% per annum. As of the quarter ended June 30, 2014, all interest and principal must be repaid one year from the issuance dated, with the last note being due May 29, 2015. The Daniel Notes are convertible into common stock, at holder’s option, at a 47% 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 Daniel Note. These embedded derivatives included certain conversion features and reset provision.
The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Daniel Notes and to fair value as of each subsequent reporting date which at June 30, 2014 was $105,778. At the inception of the Daniel Note, the Company determined the aggregate fair value of $126,337 of the embedded derivatives.
Fourth Man, LLC
During the six months ended June 30, 2014, the Company entered into a Securities Purchase Agreements with Fourth Man, LLC. (“Fourth Man”), for the sale of an 8% to 9.5% convertible note in the aggregate principal amount of $50,000 (the “Note”).
The Notes bears interest at the rate of 8% to 9.5% per annum. As of the quarter ended June 30, 2014, all interest and principal must be repaid one year from the issuance dated, with the last note being due June 26, 2015. The Notes are convertible into common stock, at Fourth Man’s option, at a 47% 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 Fourth Man Notes. These embedded derivatives included certain conversion features and reset provision."
Another drubbing of a week- closing in the SUB ONE CENT range. It flat-lined from 1:17 PM Eastern to just moments before the close again, not posting a single trade until 3:54 Eastern when they ate up the last blocks on the Bid at .009, with the next levels below that back at .0082 and then a big chunk at .008. BMAK sat on the Ask with a 10K share block at .0094, all afternoon, that never got a fill- I think they're the day's "capping" price when they park on that Ask like that, IMO.
With that line-up of toxic, convertible, dilutive notes all coming due only a few months out (and remember, they all have the right to convert those to shares ANY TIME THEY WANT, including right now, just read the language in each financing statement above) with all that dilution conversion coming due- I just think these shares are going to be under tremendous down pressure for a long while IMO. Could be wrong- but that's an entire line-up of toxic notes coming due one after another- essentially one due every month through the entire summer. Brutal IMO.
