UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| ☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2018
or
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
for the transition period from _________ to _________
CORD BLOOD AMERICA, INC.
(Exact Name of Small Business Registrant as Specified in its Charter)
| FLORIDA | | 000-50746 | | 90-0613888 |
| (State or other jurisdiction of incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
1857 HELM DRIVE LAS VEGAS, NV 89119 | | 89119 |
| (Address of principal executive offices) | | (Zip Code) |
(702) 914-7250
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all documents and reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filings for the past 90 days. Yes ☑ No☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act:
Large accelerated filer ☐ | Accelerated filer ☐ |
Non-accelerated filer ☐ | Smaller reporting company ☑ |
| (do not check if smaller reporting company) | Emerging growth company ☐ |
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act.): Yes ☐ No ☑
| Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). |
Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Number of shares of Cord Blood America, Inc. common stock, $0.0001 par value, outstanding as of May 14, 2018, 1,272,066,146 exclusive of treasury shares.
CORD BLOOD AMERICA, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
| PART I. FINANCIAL INFORMATION |
| | | | | |
| Item 1. | Condensed Consolidated Financial Statements (unaudited) | | 3 | |
| | | | | |
| | Condensed Consolidated Balance Sheets March 31, 2018 (unaudited) and December 31, 2017 | | 3 | |
| | | | | |
| | Condensed Consolidated Statements of Income (unaudited) for the three months ended March 31, 2018 and March 31, 2017 | | 4 | |
| | | | | |
| | Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2018 and March 31, 2017 | | 5 | |
| | | | | |
| | Notes to Condensed Consolidated Financial Statements (unaudited) | | 6 | |
| | | | | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 17 | |
| | | | | |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | | 19 | |
| | | | | |
| Item 4T. | Controls and Procedures | | 19 | |
| | | | | |
| PART II. OTHER INFORMATION |
| | | | | |
| Item 1. | Legal Proceedings | | 20
| |
| | | | | |
| Item 1A. | Risk Factors | | 20
| |
| | | | | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | | 20
| |
| | | | | |
| Item 3. | Defaults Upon Senior Securities | | 20 | |
| | | | | |
| Item 4. | Mine Safety Disclosures | | 20 | |
| | | | | |
| Item 5. | Other Information | | 20 | |
| | | | | |
| Item 6. | Exhibits | | 21 | |
| | | | | |
| Signatures | | 22 | |
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) CORD BLOOD AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| | | December 31,
2017 |
| | | |
| Current assets: | | |
| Cash | $1,195,710 | $1,069,917 |
| Accounts receivable, net of allowance for doubtful accounts of $36,237 and $26,429 respectively | 66,831 | 61,698 |
| Receivable – Biocells net of discount of $25,628 and $26,044, respectively current portion | 29,372 | 28,956 |
| Prepaid expenses | 107,983 | 146,478 |
| Assets held for sale | 1,059,171 | 1,130,032 |
| Total current assets | 2,459,067 | 2,437,081 |
| | | |
| Property and equipment, net of accumulated depreciation and amortization of $277,711 and $276,369, respectively | 7,749 | 9,092 |
| Other Assets | 19,292 | 19,292 |
| Receivable - BioCells net of discount of $107,589 and $113,996, respectively - long term portion | 397,411 | 391,004 |
| Total assets | $2,883,519 | $2,856,469 |
| | | |
| Liabilities and Stockholders’ equity: | | |
| Accounts payable | $358,308 | $371,169 |
| Accrued expenses | 92,734 | 93,233 |
| Severance payable | -- | 26,764 |
| Liabilities held for sale | 1,411,740 | 1,381,215 |
| Total current liabilities | 1,862,782 | 1,872,381 |
| | | |
| Total liabilities | 1,862,782 | 1,872,381 |
| | | |
| Stockholders' equity: | | |
| Preferred stock, $.0001 par value, 5,000,000 shares authorized, no shares outstanding | -- | -- |
| Common stock, $.0001 par value, 2,890,000,000 shares authorized, 1,272,066,146 shares issued and outstanding, inclusive of treasury shares, respectively | 127,207 | 127,207 |
| Additional paid-in capital | 53,954,510 | 53,954,510 |
| Common stock held in treasury stock, 20,000 shares | (599,833) | (599,833) |
| Accumulated deficit | (52,461,147) | (52,497,796) |
| Total stockholders’ equity | 1,020,737 | 984,088 |
| Total liabilities and stockholders' equity | $2,883,519 | $2,856,469 |
See accompanying notes to these unaudited condensed consolidated financial statements.
CORD BLOOD AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND MARCH 31, 2017
| | |
| | |
| | |
| Revenue | $-- | $-- |
| Cost of services | -- | -- |
| Gross profit | -- | -- |
| Administrative and selling expenses | (428,923) | (420,046) |
| Loss from operations | (428,923) | (420,046) |
| | |
| Interest expense and change in derivative liability | -- | 41,102 |
| Other income | 6,823 | 7,073 |
| Loss from continuing operations before income taxes | (422,100) | (371,871) |
| Income taxes | -- | -- |
| Net loss from continuing operations | (422,100) | (373,871) |
| Net income from discontinuing operations | 458,749 | 493,559 |
| 36,649 | 121,688 |
Basic earnings from continuing operations per share | $0.00 | $0.00 |
Diluted earnings from continuing operations per share
| $0.00 | $0.00 |
Basic earnings from discontinued operations per share | $0.00 | $0.00 |
Diluted earnings from discontinued operations per share | $0.00 | $0.00 |
| | |
| $0.00 | $0.00 |
Diluted earnings per share | $0.00 | $0.00 |
| | |
Weighted average common shares outstanding | | |
Basic weighted average common shares outstanding | 1,272,066,146 | 1,272,066,146 |
Diluted weighted average common shares outstanding | 1,272,066,146 | 1,272,066,146 |
See accompanying notes to these unaudited condensed consolidated financial statements.
CORD BLOOD AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AUDITED)
| | | |
| | | |
| CASH FLOWS FROM OPERATING ACTIVITIES | | |
| Net loss from continuing operations | $(422,100) | $(371,871) |
| Adjustments to reconcile net income to net cash used in operating activities: | | |
| Amortization of loan discount | -- | 36,386 |
| Amortization of loan receivable discount | (6,823) | (7,073) |
| Depreciation and amortization | 1,343 | 1,342 |
| Change in value of derivative liability | -- | (85,681) |
| Bad debt | 9,808 | 38,254 |
| Net change in operating assets and liabilities | | |
| Changes in accounts receivable | (14,491) | 26,363 |
| Changes in prepaid | 38,495 | 51,001 |
| Changes in accounts payable | (12,861) | (35,039) |
| Changes in accrued expenses | (499) | (1,556) |
| Changes in severance payable | (26,764) | (40,149) |
| Changes in accrued interest | -- | 8,192 |
| NET CASH USED IN OPERATING ACTIVITIES OF CONTINUING OPERATIONS | (434,342) | (379,831) |
| | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | |
| Repayment of convertible note payable | -- | (300,000) |
| NET CASH USED IN FINANCING ACTIVITIES OF CONTINUING OPERATIONS | -- | (300,000) |
| Change in cash – continuing operations | (434,342) | (679,831) |
| | | |
| CASH FLOWS FROM DISCONTINUED OPERATIONS | | |
| Net Cash provided by operating activities | 560,135 | 575,051 |
| Net Cash provided by investing activities | -- | -- |
| Net Cash provided by financing activities | -- | -- |
| NET CASH PROVIDED BY DISCONTINUED OPERATIONS | 560,135 | 575,051 |
| | | |
| NET INCREASE (DECREASE) IN CASH | 125,793 | (104,780) |
| | | |
| Cash balance at beginning of year | $1,069,917 | $926,209 |
| Cash balance at end of year | $1,195,710 | $821,429 |
| | | |
| Non-Cash Investing and Financing Activities | | |
| Cash paid for interest | $-- | $-- |
| Cash paid for tax | $-- | $-- |
The accompanying notes are an integral part of these consolidated financial statements.
CORD BLOOD AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2018
(UNAUDITED)
Note 1. Organization and Description of Business
Overview
Cord Blood America, Inc. ("CBAI" or the “Company”), formerly D&A Lending, Inc., was incorporated in the State of Florida on October 12, 1999. In October, 2009, CBAI re-located its headquarters from Los Angeles, California to Las Vegas, Nevada. CBAI's wholly-owned subsidiaries include Cord Partners, Inc., CorCell Companies, Inc., CorCell, Ltd., (Cord Partners, Inc., CorCell Companies, Inc. and CorCell, Ltd. are sometimes referred to herein collectively as “Cord”), CBA Properties, Inc. ("Properties"), and Career Channel, Inc. formerly D/B/A Rainmakers International. CBAI and its subsidiaries engage in the following business activities:
●
CBAI and Cord specialize in providing private cord blood and cord tissue stem cell services. Additionally, the Company is in the business of procuring birth tissue for organizations utilizing the tissue in the transplantation and/or research of therapeutic based products.
●
Properties was formed to hold corporate trademarks and other intellectual property.
Company Developments – Sale of Assets
On February 7, 2018, the Company announced that it entered into an Asset Purchase Agreement, dated as of February 6, 2018 (the “Purchase Agreement”), with California Cryobank Stem Cell Services LLC (“FamilyCord”).
Pursuant to the terms of the Purchase Agreement, FamilyCord agreed to acquire from CBAI substantially all of the assets of CBAI and its wholly-owned subsidiaries and to assume certain liabilities of CBAI and its wholly-owned subsidiaries. The sale does not include CBAI’s cash and certain other excluded assets and liabilities. FamilyCord agreed to pay a purchase price of $15,500,000 in cash at closing with $3,000,000 of the purchase price deposited into escrow to secure CBAI’s indemnification obligations under the Purchase Agreement. The sale, which is subject to the closing conditions described below, is expected to close as soon as practicable, but likely during the second quarter of 2018.
The Purchase Agreement contains customary representations, warranties and covenants for a transaction of this type and nature. Pursuant to the terms of the Purchase Agreement, CBAI shall indemnify FamilyCord for breaches of its representations and warranties, breaches of covenants, losses related to excluded assets or excluded liabilities and certain other matters. The representations and warranties set forth in the Purchase Agreement generally survive for two years following the closing.
In connection with the sale, the parties will also enter into a transition services agreement designed to ensure a smooth transition of CBAI’s business from CBAI to FamilyCord.
The consummation of the sale is dependent upon the satisfaction or waiver of a number of closing conditions, including among other things, approval by CBAI’s shareholders, receipt of certain third-party consents and FamilyCord obtaining external financing. The Purchase Agreement may be terminated at any time prior to the date of closing by mutual agreement of the parties, or by either party under certain circumstances set forth in the Purchase Agreement, including by either party if the closing has not occurred within six months of the execution of the Purchase Agreement, by FamilyCord for CBAI’s failure to obtain its shareholders’ approval of the asset sale, by FamilyCord if CBAI pursues an alternative superior transaction or by FamilyCord if it is unable to obtain necessary financing. The Purchase Agreement also sets forth termination fees that may be payable by one party to the other under certain circumstances of termination.
Upon completion of the transaction, CBAI presently estimates it will distribute a portion of the sale proceeds to its shareholders. The initial distribution amount will be determined by CBAI’s board of directors and will be subject to such factors as taxes payable, operating expenses and other contingencies and estimates. Additional monies may be distributed over time based on cash available and the release of known and unknown liabilities. Given cash needed for the aforementioned expenses and contingencies, total proceeds paid out to shareholders are expected to be significantly less than the gross purchase price.
A copy of the Purchase Agreement was attached as Exhibit 2.1 to the Form 8-K filed February 8, 2018.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete annual financial statements. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. Operating results for the three ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 or for any other future period. The condensed consolidated balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. It is suggested that these interim condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements of the Company for the period ended December 31, 2017 and notes thereto included in the Company's annual report on Form 10-K. The Company follows the same accounting policies in the preparation of interim reports as noted in the Company's annual report on Form 10-K.
Note 2. Summary of Significant Accounting Policies
Basis of Consolidation
The consolidated financial statements include the accounts of CBAI and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated upon consolidation.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.
Cash
Cash and cash equivalents include cash on hand, deposits in banks with maturities of three months or less, and all highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less at the time of purchase.
The Company maintains cash and cash equivalents at several financial institutions.
Accounts Receivable
Accounts receivable consist of the amounts due for facilitating the processing and storage of umbilical cord blood and cord tissue, and birth tissue procurement services. Accounts receivable relating to deferred revenues are netted against deferred revenue for presentation purposes. The allowance for doubtful accounts is estimated based upon historical experience. The allowance is reviewed quarterly and adjusted for accounts deemed uncollectible by management. Amounts are written off when all collection efforts have failed. The Company wrote off $9,808 and $38,254 in bad debt expense during the three months ended March 31, 2018 and 2017, respectively.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. Routine maintenance and repairs are charged to expense as incurred while major replacement and improvements are capitalized as additions to the related assets. Sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the related asset and accumulated depreciation accounts with any gain or loss credited or charged to income upon disposition.
Impairment of Long-Lived Assets
Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and fair value. The Company reviews goodwill for impairment at least annually or whenever events or circumstances are more likely than not to reduce the fair value of goodwill below its carrying amount.
Inventory
Inventory, comprised principally of finished goods, is stated at the lower of cost or net realized value, using the first-in, first-out (“FIFO”) method. This policy requires the Company to make estimates regarding the market value of its inventory, including an assessment of excess or obsolete inventory. The Company determines excess and obsolete inventory based on an estimate of the future demand and estimated selling prices for its products.
Note Receivable
Notes receivable consists of the notes due from Biocordcell Argentina S.A. (BioCells) (Note 4). The note receivable is recorded at the carrying-value on the financial statements.
For note receivable from BioCells, since the Company agreed to finance the sale of the shares in Biocordcell at no stated interest, in accordance with ASC 500, the interest method was applied using a 6% borrowing rate. The Company recorded an unamortized discount based on the 6% borrowing rate and the discount is amortized throughout the life of the note.
Deferred Revenue (related to cord blood and cord tissue stem cell storage business)
Deferred revenue consists of payments for enrollment in the program and processing of umbilical cord blood and cord tissue by customers whose samples have not yet been collected, as well as the pro-rata share of annual storage fees for customers whose samples were stored during the year.
Valuation of Derivative Instruments
ASC 815-40 requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and in accordance with ASC 815-40-15 to determine whether they should be considered a derivative liability and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Binomial option pricing formula and present value pricing. At March 31, 2018 and December 31, 2017, the Company adjusted its derivative liability to its fair value, and reflected the change in fair value, in its condensed consolidated statements of income (loss).
Revenue Recognition (related to cord blood and cord tissue stem cell storage business)
CBAI recognizes revenue under the provisions of ASC 606. See Note 10 for the Company’s disclosures on Revenue Recognition.
Cost of Services
Costs are incurred as umbilical cord blood, cord tissue and birth tissue are collected. These costs include the transportation of the umbilical cord blood, cord tissue and birthing tissue from the hospital, direct material and labor, costs for processing and cryogenic storage of new samples by a third party laboratory, collection kit materials and allocated rent, utility and general administrative expenses. The Company expenses costs in the period incurred.
Accounting for Stock Option Plan
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date.
Earnings Per Share
Basic earnings per share (EPS) is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. Diluted EPS is similar to basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been exercised.
Concentration of Risk
Credit risk represents the accounting loss that would be recognized at the reporting date if counterparties failed completely to perform as contracted. Concentrations of credit risk (whether on or off balance sheet) that arise from financial instruments exist for groups of customers or counterparties when they have similar economic characteristics that would cause their ability to meet their contractual obligations to be similarly affected by changes in economic or other conditions described below.
Relationships and agreements which could potentially expose the Company to concentrations of credit risk consist of the use of one source for the processing and storage of all umbilical cord blood and one source for the development and maintenance of a website. The Company believes that alternative sources are available for each of these concentrations.
Financial instruments that subject the Company to credit risk could consist of cash balances maintained in excess of federal depository insurance limits. The Company maintains its cash and cash equivalent balances with high credit quality financial institutions. At times, cash and cash equivalent balances may be in excess of Federal Deposit Insurance Corporation limits. To date, the Company has not experienced any such losses.
Fair Value Measurements
Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure the fair value. Level inputs, as defined by ASC 820, are as follows:
●
Level 1 – quoted prices in active markets for identical assets or liabilities.
●
Level 2 – other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.
●
Level 3 – significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.
For certain of the Company’s financial instruments, including cash, accounts receivable, prepaid expenses and other assets, accounts payable and accrued expenses, and deferred revenues, the carrying amounts approximate fair value due to their short maturities. The carrying amounts of the Company’s notes receivable and notes payable approximates fair value based on the prevailing interest rates.
Recently Adopted Accounting Pronouncements
In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC 605 - Revenue Recognition (“ASC 605”) and most industry-specific guidance throughout ASC 605. The FASB has issued numerous updates that provide clarification on a number of specific issues as well as requiring additional disclosures. The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.
The Company adopted ASC 606 effective January 1, 2018 using the full retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the Company’s consolidated financial position, results of operations, equity or cash flows.
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, in an effort to reduce the diversity of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. There was no impact as a result of adopting this ASU will have on the financial statements and related disclosures.
In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard was effective for the Company on January 1, 2018, There was no impact as a result of adopting this ASU on the financial statements and related disclosures..
In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. This new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This amendment was effective for the Company on December 15, 2017. There was no impact as a result of adopting this ASU on the financial statements and related disclosures.
On December 22, 2017 the SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of the Tax Cuts and Jobs Act (the TCJA). SAB 118 provides a measurement period that should not extend beyond one year from the enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the TCJA is incomplete but for which they are able to determine a reasonable estimate, it must record a provisional amount in the financial statements. Provisional treatment is proper in light of anticipated additional guidance from various taxing authorities, the SEC, the FASB, and even the Joint Committee on Taxation. If a company cannot determine a provisional amount to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the TCJA. The Company has applied this guidance to its financial statement
Recently Issued Accounting Pronouncements
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments of this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the potential impact this ASU will have on the consolidated financial statements and related disclosures.
Note 3. Assets Held for Sale - Cord Blood and Cord Tissue Stem Cell Storage Operations
Background
Pursuant to the terms of the Purchase Agreement dated as of February 6, 2018, FamilyCord agreed to acquire from CBAI substantially all of the assets of CBAI and its wholly-owned subsidiaries and to assume certain liabilities of CBAI and its wholly-owned subsidiaries. FamilyCord agreed to pay a purchase price of $15,500,000 in cash at closing with $3,000,000 of the purchase price deposited into escrow to secure CBAI’s indemnification obligations under the Purchase Agreement. The sale, which is subject to the closing conditions described below, is expected to close as soon as practicable, but likely during the second quarter of 2018. The sale does not include CBAI’s cash, accounts receivables, and certain other excluded assets and liabilities.
The consummation of the sale is dependent upon the satisfaction or waiver of a number of closing conditions, including among other things, approval by CBAI’s shareholders, receipt of certain third-party consents and FamilyCord obtaining external financing. The Purchase Agreement may be terminated at any time prior to the date of closing by mutual agreement of the parties, or by either party under certain circumstances set forth in the Purchase Agreement, including by either party if the closing has not occurred within six months of the execution of the Purchase Agreement, by FamilyCord for CBAI’s failure to obtain its shareholders’ approval of the asset sale, by FamilyCord if CBAI pursues an alternative superior transaction or by FamilyCord if it is unable to obtain necessary financing. The Purchase Agreement also sets forth termination fees that may be payable by one party to the other under certain circumstances of termination.
The assets sold in the transaction are the sole revenue generating assets of the Company. The results of operations associated with the assets sold have been reclassified into discontinued operations and the assets and liabilities are reflected as held-for-sale (current and long-term) for all periods presented.
Assets and groups of assets and liabilities which comprise disposal groups are classified as “held for sale” when all of the following criteria are met: a decision has been made to sell, the assets are available for sale immediately, the assets are being actively marketed at a reasonable price in relation to the current fair value, a sale has been or is expected to be concluded within twelve months of the balance sheet date, and significant changes to the plan to sell are not expected. Assets held for sale are not depreciated.
Additionally, the operating results and cash flows related to these assets and liabilities are included in discontinued operations in the consolidated statements of operations and consolidated statements of cash flows for the three months ended March 31, 2018 and March 31, 2017.
The following is summary of aggregate carrying amounts of the major classes of assets and liabilities classified as held-for-sale as of March 31, 2018 and December 31, 2017:
| | | |
| ASSETS | | |
| Inventory | $46,701 | $45,762 |
| Property and equipment, net of accumulated depreciation | 31,635 | 35,152 |
| Customer contracts and relationships, net of accumulated amortization | 980,835 | 1,049,118 |
| Total assets | $1,059,171 | $1,130,032 |
| | | |
| LIABILITIES | | |
| | | |
| Deferred revenue | $1,411,740 | $1,381,215 |
| Total liabilities | $1,411,740 | $1,381,215 |
Income From Discontinued Operations
The proposed sale of majority of the assets and liabilities related to the cord blood and cord tissue stem cell operation represents a strategic shift in the Company’s business. For this reason, the results of operations related to the assets and liabilities held for sale for all periods are classified as discontinued operations.
The following is a summary of the results of operations related to the assets held for sale for the three months ended March 31, 2018 and 2017:
| | | |
| | | |
| Revenue | $702,879 | $745,948 |
| Cost of services | (172,328) | (170,934) |
| Gross profit | 530,551 | 575,014 |
| Depreciation and Amortization | (71,800) | (81,455) |
| Net income from discontinued operations | $458,751 | $493,559 |
The following is a summary of net cash provided by operating activities for the assets held for sale for the three months ended March 31, 2018 and March 31, 2017:
| | | |
| | | |
| Cash provided by operating activities | $560,135 | $575,051 |
Note 4. Property and Equipment
At March 31, 2018 and December 31, 2017, property and equipment consist of:
| | | | |
| Furniture and fixtures | 1-5 | $17,597 | $17,597 |
| Computer equipment | 5 | 124,466 | 124,466 |
| Laboratory Equipment | 1-5 | 5,837 | 5,837 |
| Freezer equipment | 7-15 | 34,699 | 34,699 |
| Leasehold Improvements | 5 | 102,862 | 102,862 |
| | | 285,461 | 285,461 |
| Less: accumulated depreciation and amortization | | (277,712) | (276,369) |
| | | $7,749 | $9,092 |
| Assets held for sale: | | | |
| Furniture and fixtures | 1-5 | $5,432 | $5,432 |
| Computer equipment | 5 | 93,339 | 93,339 |
| Laboratory Equipment | 1-5 | 92,351 | 92,351 |
| Freezer equipment | 7-15 | 329,526 | 329,526 |
| | | 520,648 | 520,648 |
| Less: accumulated depreciation and amortization | | (489,013) | (485,496) |
| | | $31,635 | $35,152 |
For the three months ended March 31, 2018 and 2017, depreciation expense totaled $1,342 and $1,342 respectively for continuing operations and $3,517 and $4,893, respectively for discontinued operations.
Note 5. Investment and Notes Receivable, Related Parties
At March 31, 2018 and December 31, 2017, notes receivable consist of:
| | | |
| | | |
| On September 29, 2014, the Company closed a transaction selling its stake in BioCells to Diego Rissola; current President. Payments are to be made annually, after June of 2015, and the last payment due on or before June 1, 2025. | $560,000 | $560,000 |
| | | |
| Unamortized discount on BioCells note receivable | (133,217) | (140,040) |
| | $426,783 | $419,960 |
Under the Agreement with the Purchaser of BioCells, BioCells is to make payments as follows: $5,000 on or before October 12, 2014 (amount paid in 2014); $10,000 on or before December 1, 2014 (amount paid in 2015); $15,000 on or before March 1, 2015 (amount paid in 2015); $15,000 on or before June 1, 2015 (amount paid in 2015); $45,000 on or before June 1, 2016 (amount paid in 2016); $55,000 on or before June 1, 2017 (amount paid in 2017); $55,000 on or before June 1, 2018; $55,000 on or before June 1, 2019; $65,000 on or before June 1, 2020; $75,000 on or before June 1, 2021; $75,000 on or before June 1, 2022; $75,000 on or before June 1, 2023; $80,000 on or before June 1, 2024; $80,000 on or before June 1, 2025. As of March 31, 2018, the Purchaser has paid all amounts due for the June 1, 2017 payment, such that the Purchaser is current with payments due under the Agreement. This loan receivable is secured, non-interest bearing, and subject to a 6% discount rate. As of March 31, 2018 and December 31, 2017, the receivable has a balance of $426,783 and $419,960, respectively.
Note 7. Commitments and Contingencies
Joseph Vicente Agreements
On December 18, 2014, the Company entered into an Executive Employment Agreement with Joseph R. Vicente, the Company’s former President and Chairman of the Board, which was effective as of January 1, 2015 and was to terminate as of December 31, 2017, unless earlier terminated by the Company or Mr. Vicente in accordance with the agreement (the “Vicente Employment Agreement”).
The Vicente Employment Agreement provided for a base salary equal to $135,000, as well as an annual bonus opportunity, payable at the discretion of the Board of Directors, equal to 30% of Mr. Vicente’s base salary for that calendar year. Mr. Vicente had the option to receive any portion of his salary and bonus in stock of the Company, which was amended effective April 9, 2015 pursuant to an Amendment to Executive Employment Agreement whereby Mr. Vicente no longer had the option in his sole discretion to receive his salary and bonus amounts in stock. The Vicente Employment Agreement includes two-year restrictions on competition and solicitation of customers following termination of the agreement.
Effective February 12, 2016 (the “Separation Date”), the Company entered a Mutual Separation Agreement with Mr. Vicente (the “Separation Agreement”). Pursuant to the Separation Agreement, Mr. Vicente stepped down from his positions as President and as a member of the Board. Under the Separation Agreement, Mr. Vicente is entitled to receive a severance, payable in equal monthly installments over the twenty-four month period post separation, in an amount equal to all compensation paid by the Company to Mr. Vicente for the 24 months preceding the termination, including salary and bonus received by Mr. Vicente. Additionally, the Company will pay for the value of his health insurance premiums, in monthly installments, until the earlier of twenty-four months after the Separation Date or until Mr. Vicente or his dependents become eligible for group health insurance coverage through a new employer. Mr. Vicente is also entitled to payment of his salary through the Separation Date, payment for unused vacation days, payment for any unreimbursed expenses, and a bonus payment for work performed in calendar year 2015, payable within sixty (60) days of the Company completing its fiscal 2015 audit.
Mr. Vicente remains subject to the restrictive covenants contained in the Vicente Employment Agreement, including a covenant not to compete and a non-solicitation provision, and is subject to additional restrictive covenants in the Separation Agreement. In the first quarter of 2018, the Company paid $13,382 in connection with the severance, and the remaining amount payable as of March 31, 2018 is $0.
Operating Leases
On January 21, 2014, the Company entered a First Amendment to Lease, which extended its lease at the property located at 1857 Helm Drive, Las Vegas (the “Property”), Nevada through September 30, 2019. In connection with the amendment, the Company received an abatement of the entire amount of its rent for January 2014, except for CAM charges. In addition, as of October 1, 2014, the Company’s monthly lease payments reverted back to their rates as they existed in June 2009, other than CAM charges, with annual adjustments thereafter as set forth in the Amendment. Moreover, the Landlord had the option to lease a portion of the premises then occupied by the Company to a third party, and if this portion is leased to a third party, the Company’s monthly rent amount was to be reduced pro rata with the portion of the space leased to a third party. If the Landlord is unable to or elects not to lease a portion of the premises to a third party by November 30, 2015 and by each subsequent anniversary thereof, the Company shall receive an additional abatement of one month rent, excluding CAM charges, in December 2015, December 2016 and December 2017, respectively and as applicable. Effective May 15, 2016, the Company entered a Second Amendment to Lease. The Second Amendment to Lease sets forth that the square footage of the Property has been reduced by 380 square feet, such that the Property now consists of 16,523 square feet, confirms the abatements set forth in the First Amendment to Lease, sets forth that the Company’s Common Area Maintenance Expenses and HOA costs shall be calculated based on the reduced square footage amount, and confirms that the Company’s monthly rent amounts will remain unchanged from the First Amendment to Lease.
Commitments for future minimum rental payments, by year, and in the aggregate, to be paid under such operating lease as of March 31, 2018, are as follows:
| | |
| | |
| 2018 | $143,541 |
| 2019 | 145,835 |
| Total | $289,376 |
Note 8. Share Based Compensation
Stock Option Plan
The Company's Stock Option Plan permits the granting of stock options to its employees, directors, consultants and independent contractors for up to 8.0 million shares of its common stock. The Company believes that such awards encourage employees to remain employed by the Company and also to attract persons of exceptional ability to become employees of the Company. On July 13, 2009, the Company registered its 2009 Flexible Stock Plan, which increased the total shares available to 4 million common shares. The plan allows the Company to issue either stock options or common shares from this Plan.
On June 3, 2011, the Company registered its 2011 Flexible Stock Option plan, and reserved 1,000,000 shares of the Company's common stock for future issuance under the Plan. The Company canceled the Company's 2010 Flexible Stock Plan, and returned 501,991 reserved but unused common shares back to its treasury.
Stock options that vest at the end of a one-year period are amortized over the vesting period using the straight-line method. For stock options awarded using graded vesting, the expense is recorded at the beginning of each year in which a percentage of the options vests. The Company did not issue any stock options during the three months ended March 31, 2018 and the year ended December 31, 2017.
The Company’s stock option activity was as follows:
| | | Weighted Average Exercise Price | Weighted Avg. Contractual Remaining Life |
| | | | |
| Outstanding, December 31, 2017 | 4,307,994 | 0.69 | 2.06 |
| Granted | -- | -- | -- |
| Exercised | -- | -- | -- |
| Forfeited/Expired | -- | -- | -- |
| Outstanding March 31, 2018 | 4,307,994 | 0.69 | 1.82 |
| Exercisable March 31, 2018 | 4,307,994 | 0.69 | 1.82 |
The following table summarizes significant ranges of outstanding stock options under the stock option plan at March 31, 2018:
| | Weighted Average Remaining Contractual Life (years) | Weighted Average Exercise Price | Number of Options Exercisable | Weighted Average Exercise Price |
$0.53— 1.11
| 4,307,994 | 1.82 | $0.69 | 4,307,994 | $0.69 |
| | 4,307,994 | 1.82 | $0.69 | 4,307,994 | $0.69 |
Note 9. Stockholder’s Equity
Preferred Stock
The Company has 5,000,000 shares of $.0001 par value preferred stock authorized. As of March 31, 2018, and December 31, 2017, the Company had no shares of preferred stock outstanding.
Common Stock
The Company has 2,890,000,000 shares of $.0001 par value common stock authorized. As of March 31, 2018, and December 31, 2017, the Company had 1,272,066,146 shares of common stock issued and outstanding. 20,000 shares remain in the Company’s treasury.
Note 10. Revenue Recognition (related to cord blood and cord tissue stem cell storage business)
The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:
●
Step 1: Identify the contract with the customer
●
Step 2: Identify the performance obligations in the contract
●
Step 3: Determine the transaction price
●
Step 4: Allocate the transaction price to the performance obligations in the contract
●
Step 5: Recognize revenue when the company satisfies a performance obligation
Because the Company’s agreements have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations.
The Company’s performance obligation to preserve cord blood and/or cord tissue is satisfied when the cord blood and/or cord tissue is cryogenically frozen, which is when the customer has obtained control and is receiving the benefits of the Company’s performance. The Company satisfies its performance obligation to store cord blood and/or cord tissue over time using a time-based input measure of progress that recognizes revenue on a straight-line basis as the customer is receiving a service that is provided continuously over time. The Company allocates the transaction price to each performance obligation using an adjusted market assessment approach. Customers pay upfront for processing and storage fees that are billed annually for each year of storage.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
As described under Note 1. Organization and Description of Business - Company Developments – Sale of Assets, the Company has entered into an Asset Purchase Agreement with FamilyCord relating to the sale of substantially all of the assets of the Company.
Forward Looking Statements
In addition to the historical information contained herein, the Company makes statements in this Quarterly Report on Form 10-Q that are forward-looking statements. Sometimes these statements will contain words such as "believes," "expects," "intends," "should," "will," "plans," and other similar words. Forward-looking statements include, without limitation, assumptions about the Company’s future ability to increase income streams, reduce and control costs, to grow revenue and earnings, and our ability to obtain additional debt and/or equity capital on commercially reasonable terms, none of which is certain. These statements are only predictions and involve known and unknown risks, uncertainties and other factors included in the Company's periodic reports with the SEC. Although forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment, actual results could differ materially from those anticipated in such statements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.
The following information should be read in conjunction with the Company’s March 31, 2018 unaudited condensed consolidated financial statements and related notes thereto included elsewhere in the quarterly report and with its consolidated financial statements and notes thereto for the year ended December 31, 2017 and the related "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as well as its quarterly reports and reports filed on Form 8-K for the relevant periods. The Company also urges you to review and consider its disclosures describing various risks that may affect its business, which are set forth under the heading "Risk Factors Related to the Company Business" in its Annual Report on Form 10-K for the year ended December 31, 2017.
Summary of the Business and Discontinued Operations
CBAI primarily facilitates umbilical cord blood and cord tissue stem cell services, with a particular focus on the acquisition of customers in need of family based products and services.
Cord
Services Provided By Cord
Cord’s operations facilitate umbilical cord blood banking and cord tissue services to expectant parents. The Company’s corporate headquarters re-located to Las Vegas, NV from Los Angeles, CA in October 2009. Cord earns revenue through a one-time enrollment and processing fee, and through an annually recurring storage and maintenance fee. Cord facilitates processing and storage of cord blood and cord tissue for new customers through an engagement with a third party laboratory. Cord provides or facilitates the following services to each customer.
●
Collection Materials. A medical kit that contains all of the materials and instructions necessary for collecting the newborn’s umbilical cord blood and cord tissue at birth and packaging the unit for transportation. The kit also provides for collecting a maternal blood sample for infectious disease testing.
●
Physician And Customer Support. 24-hour consulting services to customers as well as to physicians and labor and delivery personnel, providing instruction for the successful collection, packaging, and transportation of the cord blood and cord tissue and maternal blood samples.
●
Transportation. Manage all logistics for transporting the cord blood and cord tissue unit to the Company’s third party facility immediately following birth. This procedure ensures chain-of-custody control during transportation for maximum security.
●
Comprehensive Testing. The cord blood sample is tested by third parties engaged by Cord for stem cell concentration levels and blood type. The maternal samples are tested for infectious diseases. Cord reports results to the newborn’s mother.
●
Cord Blood Storage. After processing and testing, the cord blood and cord tissue unit is cryogenically frozen in a controlled manner and stored in liquid nitrogen for potential future use. For new customers, this process is conducted at a third party laboratory.
Additionally, the Company provides services related to procuring birth tissue for organizations utilizing the tissue in the transplantation and/or research of therapeutic based products. The Company receives a one-time recovery fee per tissue. Associated services provided by the Company with this offering may include arranging for transportation, providing collection materials, facilitating information used to determine donor eligibility and arranging for infectious disease testing of the maternal blood.
Results of Operations for the Three-Months Ended March 31, 2018
For the three months ended March 31, 2018, total revenue from discontinued operations decreased to approximately $0.70 million from $0.75 million, a 5.8% decrease over the same period of 2017. Revenues are generated primarily from two sources: new enrollment/processing fees; and recurring storage fees (both from cord blood and cord tissue). The decrease in revenue is due a decrease in new enrollment/processing fees offset by an increase in recurring storage revenue. Recurring storage revenues increased 2.1% to $0.65 million for the three months ended March 31, 2018, versus $0.64 million for the prior comparative period ended March 31, 2017.
Discontinued operations cost of services as a percentage of revenue increased to 24.5% for the three months ended March 31, 2018 compared to 22.9% in the same period of 2017. The cost of services includes transportation of the umbilical cord blood and tissue from the hospital to the lab, direct material and labor, costs for processing and cryogenic storage of new samples by a third-party laboratory, and allocated rent, utility and general administrative expenses. Gross profit decreased by approximately $0.04 million or 7.7% to approximately $0.53 million for the three months ended March 31, 2018 from the comparable three month period of 2017.
Administrative and selling expenses for the three months ended March 31, 2018 were $0.43 million as compared to $0.42 million for the comparative period of 2017, representing a 2.1% increase. These expenses are primarily related to marketing/advertising, professional services, allocated facility, including utilities, expenses, and wages for personnel.
The Company’s net loss from continuing operations was $0.42 million for the three month period ended March 31, 2018, as compared to a net loss of $0.37 million for the comparative three month period of 2017.
The Company’s net income from discontinued operations was $0.46 million for the three months ended March 31, 2018, a decrease of $0.03 million from net income from discontinued operations of $0.49 million for the comparative three month period in 2017.
Liquidity and Capital Resources
Total assets at March 31, 2018 were $2.88 million, compared to $2.86 million at December 31, 2017. Total liabilities at March 31, 2018 were $1.86 million consisting primarily of liabilities held for sale of $1.41 million. At December 31, 2017, total liabilities were $1.87 million consisting primarily of liabilities held for sale of $1.38 million.
At March 31, 2018, the Company had $1.20 million in cash, an increase of $0.13 million from the December 31, 2017 cash balance of $1.07 million. For the three months ended March 31, 2018, cash flow used in operating activities of continuing operations totaled $0.43 million compared to $0.38 million for the three months ended March 31, 2017. For the three months ended March 31, 2018, cash flow generated from discontinued operations totaled $0.56 million compared to $0.58 million for the three months ended March 31, 2017.
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has incurred losses since its inception through December 31, 2014, as development and infrastructure costs were incurred in advance of obtaining customers. Starting in 2014, the Company's management commenced a plan to reduce operating expenses to be commensurate with operating cash flows. Prior to 2015, the Company relied on debt to provide capital for working capital needs. The Company had and has net income and positive cash flow, primarily from the discontinued operations, for the years ended December 31, 2016 and December 31, 2017. If the transaction to sell substantially all of the Company’s assets to FamilyCord closes, the Company will have sufficient cash on hand to meet the Company’s obligations over the next 12 months. In the event the transaction does not close, we anticipate that we will be able to satisfy the cash requirements associated with, among other things, our working capital needs, capital expenditures and lease commitments through at least the next 12 months primarily with cash generated by operations and existing cash balances.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4T. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
It is management's responsibility to establish and maintain adequate internal control over all financial reporting pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (the "Exchange Act"). The Company’s management has reviewed and evaluated the effectiveness of its disclosure controls and procedures as of March 31, 2018. Following this review and evaluation, management collectively determined that its disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to management, including its president and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
The deficiency in the Company’s disclosure controls and procedures is related to a lack of segregation of duties due to the size of the accounting department and the lack of experienced accountants due to the limited financial resources of the Company. The Company continues to actively develop the controls and resources necessary in order to be in position to remediate this lack of segregation of duties.
Changes in Internal Control over Financial Reporting
There were no significant changes in the Company's internal controls over financial reporting or in other factors that could significantly affect these internal controls subsequent to the date of their most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 1A.RISK FACTORS.
A description of the Company’s risk factors can be found in “Risk Factors” of its Annual Report on Form 10-K for the year ended December 31, 2017. There were no material changes to those risk factors for the three months ended March 31, 2018.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a-b) Not applicable.
(c) Repurchase of Shares. The Company did not repurchase any of its shares during the quarter ended March 31, 2018.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS
The following documents are included as exhibits to this Form 10Q:
| EXHIBIT | | DESCRIPTION |
| | Form of Common Stock Share Certificate of Cord Blood America, Inc. (1) |
| | Amended and Restated Articles of Incorporation of Cord Blood America, Inc. (1) |
| | Articles of Amendment to Articles of Incorporation (2) |
| | Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (3) |
| | Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (4) |
| | Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (4) |
| 3.1(vi) | | Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (5) |
| | Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (6) |
| | Amended and Restated Bylaws of Cord Blood America, Inc. (1) |
| | Second Amended and Restated Bylaws of Cord Blood America, Inc. (7) |
| | Certification of the registrant’s Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed Herewith) |
| | Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
(1) Filed as an exhibit to Registration Statement on Form 10-SB filed on May 6, 2004
(2) Filed as an exhibit to Current Report on Form 8-K filed on August 29, 2008
(3) Filed as an exhibit to the Current Report on Form 8-K filed on March 31, 2009
(4) Filed as an exhibit to Current Report on Form 10Q filed on May 23, 2011
(5) Filed as an exhibit to Current Report on Form S-8 filed on June 3, 2011
(6) Filed as an exhibit to the Current Report on Form 8-K filed on August 10, 2015
(7) Filed as an exhibit to the Current Report on Form 8-K filed on May 29, 2015
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of May 2018.
| | CORD BLOOD AMERICA, INC. | |
| | | | |
| | By: | /s/Anthony Snow | |
| | | Interim President and Corporate Secretary | |
| | | (Principal Executive Officer, Principal Financial and Accounting Officer) | |
| | | | |
