US Stem Cell Inc (USRM)

[Dragon Lady]

LOL, quote, "Something is not right, why is this still under .01 with all the good news?"

Well, something's not right, that much is for sure IMO.

When a company (one that is THREE people total now per the 10-K just issued) dilutes out about 300 MILLION shares in the past 1 yr to live off of- it's gotta have some effect (negative IMO) eventually to the common shares.

Just filed 10-K PAGE F-10:

". Fully diluted shares outstanding were 668,063,786 and 344,241,761 for the years ended December 31, 2014 and 2013, respectively."

When a company with a stock price in the pennies, now SUB ONE CENT pours out 668,063,786 - 344,241,761 = 323,822,025 shares of PURE DILUTION in a one yr period (323 MILLION SHARES) - well, IMO at some point the ole "chickens gotta start to come home to roost". I think this is that point now.

Also, that massive, massive dilution is continuing on- unabated due to the continual use of toxic, convertible debt (floorless) financing deals for their survival cash- to pay their salaries, legal and other enormously increased "general and admin" expenses per their own just filed 10-K (general and admin expenses more than DOUBLED in 2014 from 2013, see PAGE F-4, just filed 10-K)

Also, when a company lives off of "toxic" convertible debt financing (and NO, "toxic" is not a "derogatory" or otherwise negative term as a poster yesterday tried to imply, the SEC, United States Securities And Exchange Commission uses that exact term on their website to describe this type of financing, as well as, the terms "death spiral" or "ratchet" etc. "toxic" debt financing is a well recognized, industry used term for this type of penny lending, floorless convertible debt, Bloomberg just used the same terms in a piece they wrote about Magna)- when a firm makes use of an essentially endless, on-going, continual flow of convertible debt deals to finance their operations- thus creating a never ending stream of 10's of MILLIONS of shares of stock dilution, LOW PRICED shares that will hit and be dumped to the sell side of the market- the share price per all standard research is usually going to get hit hard sooner or later (just read BHRT's own extensive warnings regarding their use of MAGNA financing in their latest filed 10-K, PAGES 36/37)

Just filed 10-K, PAGE 36:

"The sale or issuance of our common stock to Magna Equities II, LLC at a discount may cause substantial dilution and the resale of the shares of common stock by Magna Equities II, LLC into the public market, or the perception that such sales may occur, could cause the price of our common stock to fall."

Add to that- a continual list of convertible debt financing deals including Asher multiple times, Daniel James multiple times, Fourth Man multiple times, KBM Worldwide multiple times, and now a brand new 2015 toxic lender called Vis Vires Group, used just about one month ago, in Feb of 2015, their, BHRT's latest additional to their long, long list of toxic lenders they use for survival cash and to keep whatever it is exactly they do- going.

Including paying ever larger base salaries to TWO people and "cash" bonuses to TWO people of a now THREE total person company. Just TWO people of a now THREE total "employee" company- now have annual compensation packages totaling about $2.7 MILLION dollars annually. (see latest filed 10-K, compensation table, PAGE 65)

Just as ONE example of how much toxic debt is "hanging out there" to be converted - much of it coming due now, or in the next 6 months or less, just look at PAGE F-17 of the just filed 10-K, the 2014 ASHER NOTES:

"During the year ended December 31, 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 $334,000 (the “Asher Notes”).

The Asher Notes bear interest at the rate of 8% per annum. As of December 31, 2014, all interest and principal must be repaid nine months from the issuance date, with the last note being due August 12, 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 December 31, 2014 was $149,770. At the inception of the Asher Notes, the Company determined the aggregate fair value of $566,294 of the embedded derivatives.

For the year ended December 31, 2014, the Company amortized $248,153 of debt discount to current period operations as interest expense.

The remaining principle balance as of December 31, 2014 was $151,000."

So Asher has been doing some converting of a total of $334K worth of "toxic" style convertible debt notes all done in 2014. But still has a $151K balance due- and that all is due by August 12, 2015 about 5 months from now. At these current price- how much more dilution would that add?

Well, Asher gets a 45% discount on their shares when they convert.

So .009 X .45 = .004. .009- .004 = .005 Asher gets their shares for if they convert right now. So how much dilution would that $151K Asher balance create if converted now at .005 per share?

$151K / .005 = 30 MILLION more dilution shares that is highly likely going to get paid to Asher alone, to settle notes that were already done months, and months ago and from which the money/cash was long ago spent.

THAT is what DILUTION DOES TO A STOCK and especially toxic dept financing type dilution. Asher will have 30 MILLION more shares at .005 cents each to dump onto the sell-side of the market. I don't see how there would possibly be enough retail buy interest generated to soak up all that cheap priced share selling that's most certainly coming. And that's just Asher. Not Magna, Daniel James, Fourth Man, KBM and now Vis Vires too- ALL of which will similarly be receiving shares to sell in the 10's of MILLIONS. It's DILUTION, a common share price crusher IMO.

Remember too- by the very way these "toxic" convertible debt financing deals are constructed- the LOWER THE SHARE PRICE GOES, a firm like Asher just gets more shares to convert. The price going lower makes no difference to them- they can actually profit even more typically the lower the share price goes.

What exactly was the "good news" part? I may have missed all that perhaps? I read the 10-K cover to cover yesterday and last night- I didn't really find the "good news" part I guess? There is none IMO?

But that just me I guess?

My .0085 cents worth

Excellent financial journalism piece by one of the most respected financial papers in the world, Bloomberg. It explains toxic type "penny financing" via explaining how Magna does what they do- but all the other firms operate on very similar business models (Asher, KBM, Daniel James, Fourth Man, etc)

Fascinating reading- very enlightening IMO as to why the BHRT share price is likely where it is today. DILUTION has consequences IMO, and BHRT lives off of dilution for all intents and purposes IMO.

http://www.bloomberg.com/news/articles/2015-03-12/josh-sason-made-millions-from-penny-stock-financing