US Stem Cell Inc (USRM)

[Dragon Lady]

A public traded company, when in "compliance" with basic "SEC" laws (SEC being the U.S. Govt Securities and Exchange Commission- the govt. body that regulates and enforces the laws of our public stock markets)when they are a "compliant" company- one key thing they do is issue/register/report certain important documents with the SEC.

Note- one problem with some "penny" stocks traded on the OTC- over the counter market or "Pink" sheets unlisted stocks market, versus the NYSE, New York Stock Exchange (nick name Big Board) or the NASDAQ, the other "big" stock exchange where "listed" stocks trade- one problem is that sometimes penny stocks no longer are "compliant" and do not file documents with the SEC properly. Not filing on time or in compliance is in fact one of several reasons that can get a stock "de-listed" from one of the "big boards" like NYSE or NASDAQ which are the most prestigeous and desirable places to trade as a public company. Whew- that's a long explanation, but anyway, that's it in a nut shell. One of the complaints, reasons you will here about why a company may not "want to go public"- is that the INSTANT they do, they fall under tremendous scrutiny and reporting laws governed by the SEC. Many remain "private" companies as they do not want all the hassle of reporting to the SEC. You can raise capital as a public company- but it comes at a big price of reporting, being legally bound, etc. I've worked for a company that had a $billion plus in annual sales and was still a private, essentially "family" owned company- 100 plus yrs old, and no desire to go public. They can run the company their way and don't answer to anyone but themselves, their employees, and if they have private investors- they only answer and report to them as agreed upon. Once public- a whole new ball game and a book of laws as thick as a phone book.

Good news is, that even though BHRT (Bioheart) presently trades on the "Bulletin Board" unlisted exchange as basically a "penny" stock- they, as a company, have made the choice and effort to remain "SEC compliant" and are still filing the necessary documents on time and as required.

So, the question what is all these words "10-Q" and "10-K" mean? They are the quarterly company report (the 10-Q) and the annual, end of yr company report (the 10-K report). It is the philosophy of the U.S. public markets- that as a shareholder in a company, you are entitled to know certain things about them, their financial info, certain business info, etc. That is what these reports serve to do. If they are of high quality, they are typically "audited" - meaning a neutral, 3rd party, licensed CPA or public auditor firm has gone over the document and also put their "stamp of truth" on it- saying that whatever the CEO or Chief Finance officer or others in Sr Mgt said in it, in deed is believed to be true and accurate. A CPA firm or similar, as well as, the CEO or whoever signs off on a 10-Q or 10-K is under a "fiduciary" duty to the shareholders that what is in the document is true and accurate- and it's not to be taken lightly as it can result in financial fines and, up to and including prison in worst case scenarios if lying takes place in reporting- and yes, people have gone to Federal prison for "cooking the books" on SEC documents (famous cases being big companies you probably saw in the news like Enron or MCI/Worldcom the phone/long distance company, Lehman Brothers- once a huge Wall St. brokerage and banking firm).

Anyway, that's what the 10-Q, 10-K is all about. It allows us, the common stock holder to read, and know a lot about the financial health of a company, it talks about current business undertakings, problems the company may be having, etc. It serves to allow you to help to perhaps invest and want to own shares in the company or not. It typically contains a "verbal" description written by Sr. Mgt, as well as, what in business is known as a standard "set of financials"- which any businessman/woman is familiar with and normally is made up of: a) A balance sheet- a "snap shot" of things like cash on hand, accounts receivable, cash owed on accounts payable- basically a summary of what a company "owns" and what it "owes". The most fundamental equation you learn in accounting 101, or MBA 101 is: Assets = Liabilities + Shareholders' Equity. That is what the balance sheet does. It totals out all the pluses the company owns, and all the debt it owes, plus shareholder equity and should balance out each side of the ledger. b) The next document in a financials is typically an Income Statement or "P&L" profit and loss statement, which is just what it sounds like, a statement of whether the company has income coming in, where it's coming from (selling product for example),etc and what is going out being spent, essentially sales or money coming in, versus money going out(sales or cash coming in versus costs/expenses owed going out) and is there a net "income" or a net "loss" for the business and c) A statement of Cash Flows- which is very important as it shows whether or not the company is "throwing off enough cash" on a day to day or month to month basis to pay it's day to day operations without borrowing or financing activities and similar.

That's a lot to swallow, I know. You may want to get an intro to investing in stocks book- many will have a good section on how to read and understand the basics of a company's financials and their 10-Q and similar SEC reports. A guru like Warren Buffet is so good, so experienced- he can "glance" at a "set of financials" and pretty much decide if the company is in good financial health, is in trouble, whether they have costs that are too high, or have finance problems, etc It's like the instant "snap shot" of the total financial picture of the business.

Here is a link to the BHRT documents. Most people use a service called "EDGAR" which is a main, public repository of all the SEC documents put out by public traded companies. Click on some and read through them- it will give you an idea what is in them. Scroll down and you will see the last "10-Q" and if you go back to March 2013 or so, you'll see the last 10-K, which as the other post pointed out, would actually be last year's (yr 2012) full yr report.

We are all chatting here so much about the 10-K that's coming because 1) It's due any day now if it's "on time" (the SEC sets dates per a company's fiscal yr as to when they need to files key documents- think sorta like taxes due by April 15th each yr for you and I) and 2) We all want to read about the latest financial health, or lack of, for BHRT- such as how much cash they have, how many shares of stock they may have sold to raise cash (known as diluting shares), is there new income coming in from some recent business undertakings they have spoken about, and latest updates that management will write to "tell us the story" in their own words of how last yr "wrapped up" for the business.

That's a long explanation- but explaining "what is a 10-Q" is a pretty complicated explanation to someone totally new to the stock markets. Happy learning and good luck. Here is the link to all of BHRT's SEC reports:

http://www.sec.gov/cgi-bin/browse-edgar?CIK=0001388319&action=getcompany