US Stem Cell Inc (USRM)

[Starbase9]

Yeah, there is a large debt pay down to a single holder from 2008, account and interest payable, under section F-21.

But on the other hand, they accrue other short-term debts, including institutional convertibles, with lower interest, 8%, but with very unfavorable terms.

Overall, the net liability decrease is somewhat, which we can see on the balance sheet, but even with a higher interest 13.5, I would imagine the terms for servicing this "one" debt are much more reasonable than what's to follow with the "convertibles."

I expected the ongoing dilution, even at this rate. But regarding the debt, the look of this is a management team taking a bet that they can recover within the short-term payback window or provide a compelling enough reason to refinance the existing short-term debt with "more" debt, to cover operational cash flows.

They're betting that progress with the various in-phase trials will provide enough of a boost to the share price to allow for more efficient equity financing between now and 2015.

The $$$ question is how much do they need to progress the Phase III trials and are they close to getting the funds, or do they have them already? That's not something I can readily gather from the 10K. This goes for MARVEL, REGEN and MIRROR trials...