U.S. Stem Cell, Inc. f/k/a Bioheart, Inc. (OTCMKTS:BHRT) Jumps Ahead of the Reverse Split
The last two sessions have been pretty wild for U.S. Stem Cell, Inc. f/k/a Bioheart, Inc. (OTCMKTS:BHRT). First, on Monday, the ticker surged 54% up and it reached $0.0017 on strong volume. Trading was even more active yesterday and after another 67% jump, BHRT came to a close of $0.00285 per share. So, what are investors so excited about?
It’s not very easy to say. The latest press release was issued more than a month ago and it says that BHRT has acquired distribution rights to ERASERTM – a tattoo removal system that has yet to be approved by the FDA. The clearance is expected in early 2017, though BHRT themselves said that they can give no guarantees.
The latest 10-Q is not much to shout about, either. It covers the second quarter of 2015 and it looks like this:
- cash: $9,534
- current assets: $193,821
- current liabilities: $8,169,211
- quarterly revenues: $565,307
- quarterly operating loss: $480,224
The fact that there have been no new press releases and filings, however, doesn’t mean that there are no new events around BHRT. The more observant among you have probably noticed the new name and they’ll also see the D at the end of the ticker symbol over the coming sessions. That’s right, BHRT is effecting the 1 for 1,000 reverse split it announced a couple of months ago.
Normally, penny stock investors aren’t extremely fond of reverse splits, especially when they’re as massive as this one, but by the looks of things, in this particular instance, they don’t seem to mind all that much. Theoretically speaking, if there are no gap ups or gap downs at today’s open, BHRT (or BHRTD) will start the session with a price of $2.85 which should make it much more appealing for deep-pocketed investors who don’t have the habit of scouring through sub-penny land, looking for a diamond in the rough.
If the company is to be taken seriously, however, the management team will need to do something about that balance sheet. So, how are they going to solve the issue?
Well, last month, in addition to the ERASERTM deal, BHRT also announced that they have raised $100 thousand by selling a $160 thousand convertible note to the really rather famous Magna Equities II LLC. If the management team file an S-1 registration form for the shares underlying the note within the next month or so, the debt will be convertible at a fixed price of $0.75 (as adjusted for the split). If they don’t, the conversion will take place at a 45% discount to the market price. Either way, in light of BHRT‘s current value, the note gives Magna a rather big profit opportunity.
This note was added to a collection of others that were already outstanding at the end of Q2. Unlike the latest one, they don’t have any fixed price arrangements. Instead, they can all be turned into stock at discounts ranging from 45% to 47% and they can all wreak absolute havoc with the freshly split stock.
