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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2015
 
or
 
o
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 þ Noo

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 o No o

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
o
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company filer
þ

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act.): Yes ¨ No þ

Number of shares of Cord Blood America, Inc. common stock, $0.0001 par value, outstanding as of November 12, 2015, 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 September 30, 2015 (unaudited) and December 31, 2014 (audited)
 
3
 
         
 
Condensed Consolidated Statements of Income (unaudited) for the three and nine months ended September 30, 2015 and September 30, 2014 
 
4
 
         
 
Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2015 and September 30, 2014 
 
6
 
         
 
Notes to Condensed Consolidated Financial Statements (unaudited) 
 
7
 
         
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations 
 
18
 
         
Item 3.
Quantitative and Qualitative Disclosures About Market Risk 
 
22
 
         
Item 4T. 
Controls and Procedures
 
2
 
         
PART II. OTHER INFORMATION
         
Item 1.
Legal Proceedings 
 
23
 
         
Item 1A.
Risk Factors
 
23
 
         
Item 2. 
Unregistered Sales Of Equity Securities And Use Of Proceeds 
 
23
 
         
Item 3.
Defaults Upon Senior Securities 
 
24
 
         
Item 4.
Reserved 
 
24
 
         
Item 5.
Other Information 
 
24
 
         
Item 6.
Exhibits
 
25
 
         
Signatures 
 
28
 
 
 
 

 
 
PART I. FINANCIAL INFORMATION
 
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 
CORD BLOOD AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
   
September 30,
2015
(unaudited)
    December 31, 2014  
                 
 Current assets:
               
Cash
 
$
776,782
   
$
750,886
 
Accounts receivable, net of allowance for doubtful accounts of $105,037 and $93,123, respectively
   
532,686
     
287,593
 
Other current assets
   
138,411
     
101,569
 
Note receivable – Banco Vida – current portion
   
40,635
     
18,828
 
Prepaid expenses
   
86,667
     
79,657
 
Total current assets
   
1,575,181
     
1,238,533
 
Property and equipment, net of accumulated depreciation and amortization of $683,612 and $640,772, respectively
   
107,071
     
127,018
 
Customer contracts and relationships, net of accumulated amortization of $3,641,671 and $3,676,947, respectively
   
1,722,419
     
1,982,757
 
Note receivable – Banco Vida – long term portion
   
30,429
     
56,172
 
Receivable - BioCells net of discount of $220,991
   
439,026
     
459,009
 
Total assets
 
$
3,874,126
   
$
3,863,489
 
                 
Current liabilities:
               
Accounts payable
 
$
210,987
   
$
363,079
 
Accrued expenses
   
122,972
     
311,320
 
Deferred revenue – current portion
   
1,328,290
     
1,164,662
 
Derivative liability – current portion
   
143,481
     
343,876
 
    Interest on promissory notes
   
104,779
     
7,156
 
    Promissory notes payable, net of unamortized discount of $94,476 and $350,362, respectively
   
219,679
     
449,638
 
Total current liabilities
   
2,130,188
     
2,639,731
 
                 
Deferred revenue - long term portion
   
304,342
     
327,975
 
Derivative liability - long term portion
   
389,775
     
687,754
 
Promissory notes payable – long term portion – net of unamortized discount of $127,403 and $350,362, respectively
   
596,765
     
899,277
 
Total liabilities
   
3,421,070
     
4,554,737
 
                 
Stockholders' equity (deficit):
               
Preferred stock, $.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding
   
--
     
--
 
Common stock, $.0001 par value, 890,000,000 shares authorized, 1,272,066,146 and 890,000,000 shares issued and outstanding, inclusive of treasury shares, respectively
   
127,207
     
89,000
 
  Additional paid-in capital
   
53,954,510
     
53,264,971
 
  Common stock held in treasury stock, 20,000 shares
   
(599,833
)
   
(599,833
)
  Accumulated deficit
   
(53,028,828
)
   
(53,445,386
)
Total stockholders’ equity (deficit)
   
453,056
     
(691,248
)
Total liabilities and stockholders' equity (deficit)
 
$
3,874,126
   
$
3,863,489
 
 
See accompanying notes to these condensed consolidated financial statements
 
 
3

 
 
 
CORD BLOOD AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
   
NINE-MONTH
PERIOD
   
NINE-MONTH
PERIOD
 
   
ENDED
   
ENDED
 
   
SEPTEMBER 30,
   
SEPTEMBER 30,
 
   
2015
   
2014
 
             
Revenue
 
$
4,121,503
   
$
3,136,047
 
Cost of services
   
(1,456,646
)
   
(981,111
)
Gross profit
   
2,664,857
     
2,154,936
 
Administrative and selling expenses
   
(2,304,120
)
   
(2,405,840
)
Income (loss) from operations
   
360,737
     
(250,904
Interest expense and change in derivative liability
   
(291,778
)
   
(303,159
)
Income (loss) from continuing operations before provision for income taxes
   
68,959
     
(554,063
)
                 
Loss from discontinued operations
   
--
     
(338,196)
 
Gain on recovery of loan receivable
   
29,982
     
--
 
Gain on settlement payable
   
346,269
     
--
 
Gain on sale of BioCell
   
--
     
1,115,191
 
Loss on legal settlement
   
(28,652)
     
--
 
Net income
 
 $
416,558
   
 $
222,932
 
                 
Basic loss per share
               
Continuing operations
 
 $
(0.00)
   
 $
(0.00)
 
Discontinued operations
   
(0.00)
     
(0.00)
 
Net basic earnings per share
 
 $
0.00
   
 $
0.00
 
Diluted loss per share
               
Continuing operations
 
 $
(0.00)
   
 $
(0.00)
 
Discontinued operations
   
(0.00)
     
(0.00)
 
Net diluted earnings per share
 
$
0.00
   
$
0.00
 
                 
Weighted average common shares outstanding
               
Basic weighted average common shares outstanding
   
1,085,905,369
     
890,000,000
 
Diluted weighted average common shares
   
1,090,999,022
     
890,958,445
 
 
See accompanying notes to these condensed consolidated financial statements

 
4

 
 
CORD BLOOD AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

   
THREE-MONTH
PERIOD
   
THREE-MONTH
PERIOD
 
   
ENDED
   
ENDED
 
   
SEPTEMBER 30,
   
SEPTEMBER 30,
 
   
2015
   
2014
 
             
Revenue
 
$
1,430,513
   
$
1,197,268 
 
Cost of services
   
(545,513)
     
(423,064
)
Gross profit
   
885,000
     
774,204
 
Administrative and selling expenses
   
(658,630)
     
(754,054
)
Income from operations
   
226,370
     
20,150
 
Interest expense and change in derivative liability
   
(18,005)
     
518,508
 
Income from continuing operations before provision for income taxes
   
208,365
     
538,658
 
                 
Loss from discontinued operations
   
--
     
(148,479)
 
Gain on recovery of loan receivable
   
19,982
     
--
 
Gain on sale of BioCells
   
--
     
1,115,191
 
Net income
 
 $
228,347
   
$
1,505,370
 
                 
Basic loss per share
               
Continuing operations
 
$
(0.00)
   
$
(0.00)
 
Discontinued operations
   
(0.00)
     
(0.00)
 
Net basic earnings per share
 
 $
0.00
   
$
0.00
 
Diluted loss per share
               
Continuing operations
 
$
(0.00)
   
$
(0.00)
 
Discontinued operations
   
(0.00)
     
(0.00)
 
Net diluted earnings per share
 
$
0.00
   
$
0.00
 
                 
Weighted average common shares outstanding
               
Basic weighted average common shares outstanding
   
1,471,327,890
     
890,000,000
 
Diluted weighted average common shares
   
1,476,922,143
     
890,958,445
 
 
See accompanying notes to these condensed consolidated financial statements

 
5

 
 
CORD BLOOD AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
   
NINE-MONTH
   
NINE-MONTH
 
   
PERIOD ENDED
   
PERIOD ENDED
 
   
SEPTEMBER 30,
   
SEPTEMBER 30,
 
   
2015
   
2014
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net income
 
$
416,558
   
$
222,932
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
     Amortization of loan discount
   
692,529
     
50,831
 
     Depreciation and amortization
   
303,177
     
402,252
 
     Change in value of derivative liability
   
(498,374)
     
(20,760)
 
     Bad debt
   
55,370
     
943
 
     Gain on recovery of loan receivable
   
(29,982)
     
--
 
Net change in operating assets and liabilities
               
     Changes in accounts receivable
   
(280,480)
     
(213,003)
 
     Changes in other current assets
   
(36,842)
     
17,746
 
     Changes in prepaid
   
(7,010)
     
2,370
 
     Changes in accounts payable
   
(152,092)
     
118,384
 
     Changes in accrued expense
   
(184,602)
     
32,636
 
     Changes in accrued interest
   
97,623
     
264,895
 
     Changes in deferred revenue
   
139,995
     
77,364
 
NET CASH PROVIDED BY OPERATING ACTIVITIES OF CONTINUING OPERATIONS
   
515,870
     
956,590
 
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
     Payments for purchase of property and equipment
   
(22,892
)
   
(38,034
)
     Payment for loan receivable
   
--
     
(75,000
)
     Proceeds from recovery of loan receivable
   
29,982
     
--
 
     Proceeds from note receivable - Banco Vida
   
3,936
     
--
 
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES OF CONTINUING OPERATIONS
   
11,026
     
(113,034)
 
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
     Proceeds from share issuance
   
724,000
     
--
 
     Repayment of notes payable
   
(1,225,000)
     
--
 
NET CASH USED IN FINANCING ACTIVITIES OF CONTINUING OPERATIONS
   
(501,000)
     
--
 
                 
CASH FLOW USED IN DISCONTINUED OPERATIONS:
               
     Net cash provided by operating activities
   
--
     
(630,046)
 
     Net cash used in investing activities
   
--
     
(226,422)
 
     Foreign currency translation from discontinued operation
   
--
     
3,585 
 
NET CASH FLOW FOR THE PERIOD USED IN DISCONTINUED OPERATIONS
   
--
     
(852,883)
 
                 
NET INCREASE (DECREASE) IN CASH
   
25,896
     
(9,327)
 
                 
Cash balance at beginning of period
 
$
750,886
   
$
708,760
 
Cash balance at end of period
 
$
776,782
   
$
699,433
 
Supplemental disclosures of cash flow information:
               
Cash paid for interest expense
 
$
--
   
$
--
 
     Cash paid for taxes
 
 $
-- 
   
 $
--
 
Non – cash investing and financing activities:
               
     Shares issued for settlement of payable
 
$
3,750
   
$
--
 
 
See accompanying notes to these condensed consolidated financial statements

 
6

 
 
CORD BLOOD AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(UNAUDITED)
 
Note 1.  Organization and Description of Business

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 ("Rain”).  In September 2010, CBAI purchased a majority interest in Biocordcell Argentina S.A. (BioCells), a company providing private cord blood processing and storage services to families in Argentina, Uruguay and Paraguay. On September 29, 2014, the Company sold its ownership interest in BioCells.  As such, all activities of BioCells are reported as discontinued operations. CBAI and its subsidiaries engage in the following business activities:

CBAI and Cord specializes in providing private cord blood and cord tissue stem cell storage services to families throughout the United States and Puerto Rico.  Additionally, the Company is 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.

The accompanying condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that may be necessary in the event CBAI cannot continue as a going concern.

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 10 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 months and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015 or for any other future period.  The condensed consolidated balance sheet at December 31, 2014 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, 2014 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 Presentation and Going Concern
 
The accompanying financial statements of CBAI and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has experienced net losses until recently from operations, which losses have caused an accumulated deficit of approximately $53.03 million as of September 30, 2015. In addition, CBAI has notes and loans payable of approximately $0.82 million, net of unamortized discount as of September 30, 2015. Although the Company made payments of $175,000 on the note and loan payable balance during the quarter ending September 30, 2015; with funds from the Company’s operational cash flows, there is no assurance that cash flow from operations will be sufficient or that common stock could be issued to retire the remaining debt balance. On August 17, 2015, the Company received a notice of termination from Banco Vida with regards to both the Tissue Agreement and the Storage and Processing Agreement between the two companies, effective February 2016.  Such termination will have a negative impact on the Company’s revenue from storage and processing as well as the supply of tissue related products in 2016 unless the Company enters into an extension with Banco Vida or finds alternative or replacement sources. These factors, among others, raise substantial doubt about CBAI's ability to continue as a going concern.
 
Since inception, the Company has financed cash flow requirements through the issuance of common stock and warrants for cash, services and loans. In 2014, the Company has divested its equity stake in BioCells, and received no additional funding from outside sources for working capital. During the quarter ended September 30, 2015 the Company had cash flow from operations of $0.52 million. The Company plans to fund the business via cash flows from operations by aligning its expenses with its revenues. If cash flows from operations are significantly less than projected, then the Company would need to either cut back on its budgeted spending, look to outside sources for additional funding or a combination of the two. The Company currently does not have any financing agreements in place for additional funding. If the Company is unable to access sufficient funds when needed, obtain additional external funding or generate sufficient revenue from the sale of its products, it could be forced to curtail or possibly cease operations.
 
 
7

 
 
In view of these conditions, CBAI's ability to continue as a going concern is dependent upon its ability to meet its financing requirements, and to ultimately achieve consistent profitable operations. Management believes that its current and future plans provide an opportunity to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that may be necessary in the event CBAI cannot continue as a going concern.

Basis of Consolidation
 
The condensed consolidated financial statements include the accounts of CBAI and its wholly-owned and majority-owned subsidiaries, Cord and Biocordcell Argentina S.A. All significant inter-company balances and transactions, BioCells in 2014 only, have been eliminated upon consolidation.

Deferred Revenue

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.

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.

Valuation of Derivative Instruments

ASC 815-40 (formerly SFAS No. 133 "Accounting for derivative instruments and hedging activities"), 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 (formerly EITF 00-19 "Accounting for derivative financial instruments indexed to, and potentially settled in, a company's own stock") 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 model. At September 30, 2015, the Company adjusted its derivative liability to its fair value, and reflected the change in fair value, in its condensed consolidated statements of operations and comprehensive income (loss).
 
 
8

 

Revenue Recognition

CBAI recognizes revenue under the provisions of ASC 605-25 (previously Staff Accounting Bulletin 104 “Revenue Recognition”). CBAI provides a combination of products and services to customers. This combination arrangement is evaluated under ASC 605-25-25 (previously Emerging Issues Task Force Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables"). ASC 605-25-25 addresses certain aspects of accounting for arrangements under multiple revenue generating activities.
 
Cord recognizes revenue from both enrollment fees and processing fees upon the completion of processing while revenue from storage fees are recognized ratably over the contractual storage period.

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.

Earnings (Loss) 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.  Net loss per common share is calculated in accordance with ASC 260, Earnings Per Share.
 
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 820-10, 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.
 
The following table summarizes fair value measurements by level at September 30, 2015 of assets and liabilities measured at fair value on a recurring basis: 
   
Level 1
   
Level 2
   
Level 3
   
Total
 
                         
Derivative liability
 
$
   
$
   
$
(533,256
)
 
$
(533,256
)
 
 
9

 
 
Derivative liability was valued under the Binomial model, consistent with last year, with the following assumptions:
 
Risk free interest rate
 
0 to 0.84 %
 
Expected life
 
0 to 2 years
 
Dividend Yield
    0 %
Volatility
 
0% to 114%
 
 
The following is a reconciliation of the derivative liability:
 
Value at December 31, 2014
 
$
1,031,630
 
Change in value of derivative
 
$
(498,374
Value at September 30, 2015
 
$
533,256
 

For certain parts 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 Issued Accounting Pronouncements
 
In May 2014, the FASB issued an accounting standard update on revenue recognition that will be applied to all contracts with customers. The update requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. It also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance will be required to be applied on a retrospective basis, using one of two methodologies, and will be effective for fiscal years beginning after December 15, 2016, with early application not being permitted. The Company is currently assessing the impact that the guidance will have on the Company's financial condition and results of operations.
 
In April 2015, the FASB issued an accounting standard update on simplifying the presentation of debt issuance costs.  The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update.  Updates are effective for financial statements issued for fiscal years beginning after December 15, 2015, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s condensed consolidated financial statements.

Note 3. Notes and Loans Payable
 
At September 30, 2015 and December 31, 2014 notes and loans payable consist of:
 
   
September 30,
2015
   
December 31,
2014
 
Secured Convertible Promissory Note to Tonaquint, Inc., 6% per annum; due on or before September 17, 2017
  $ 1,175,000     $ 2,400,000  
                 
      1,175,000       2,400,000  
Less: Unamortized Discount
    (356,556 )     (1,051,085 )
    $ 818,444     $ 1,348,915  
 
 
10

 
 
Tonaquint, Inc.

On December 17, 2014, in settlement of the Action, the parties entered into a Settlement and Exchange Agreement (the "Settlement Agreement"). Pursuant to the Settlement Agreement, the Secured Convertible Promissory Note and the Warrant to Purchase Shares of Common Stock issued by the Company to St. George on or around March 10, 2011, as well as the SGI Purchase Agreement, and all other documents that made up the March 2011 transaction between the Company and St. George, all of which have been set forth in detail in prior filings by the Company, were terminated, cancelled or otherwise extinguished.  Further pursuant to the Settlement Agreement, the Tonaquint Note was exchanged for a Secured Convertible Promissory Note of the Company in the principal amount of $2,500,000 (the "Company Note"), and certain of the other documents that were part of the June 27, 2012 transaction between the Company and Tonaquint (the “June 2012 Tonaquint Transaction”) were terminated, cancelled or otherwise extinguished, and certain of them were amended, as set forth below.

Under the Company Note, the Company shall make monthly payments to Tonaquint, with the first payment due on or before April 17, 2015, and with payments continuing thereafter until the Company's Note is paid in full, with a maturity date that is 33 calendar months after the effective date of December 17, 2014. The amount of the monthly payments is $100,000 (the “Installment Amount”); provided, however, that if the remaining amount owing under the Company Note as of the applicable Installment Date (defined in the Company Note) is less than $100,000, then the Installment Amount for such Installment Date shall be equal to the outstanding amount. The Company may prepay any or all of the outstanding amount of the Company Note at any time, without penalty. In the event the Company prepays an amount that is less than the outstanding amount, then the prepayment amount shall be applied to the next Installment Amount(s) due under the Company Note.

For each monthly payment, the Company may elect to designate all or any portion of the Installment Amount then due as a conversion eligible amount (hereafter “Conversion Eligible Amount”); provided that the total outstanding Conversion Eligible Amount that has not been converted by Tonaquint, as set forth below, at any given time may not exceed one hundred thousand dollars ($100,000) without Tonaquint’s prior written consent and subject to additional restrictions set forth in the Company Note. In the event the Company designates any portion of any monthly payment amount as a Conversion Eligible Amount, the applicable monthly payment shall be reduced by an amount equal to the portion thereof designated as a Conversion Eligible Amount. The Conversion Eligible Amount shall continue to be included in and be deemed to be a part of the Outstanding Balance (defined in the Company Note) of the Company Note unless and until such amount is either paid in cash by the Company or converted into Common Stock by Tonaquint. The Company may pay the Conversion Eligible Amount in cash, provided that no prepayments of cash shall reduce the Conversion Eligible Amount until the Outstanding Balance is equal to or less than the Conversion Eligible Amount.

Once the Company has designated amounts as Conversion Eligible Amount, Tonaquint may convert all or any portion of that amount into shares of the Company's Common Stock. In the event of a conversion by Tonaquint of a Conversion Eligible Amount, the number of Common Stock shares delivered to Tonaquint upon conversion will be calculated by dividing the amount of the Company Note that is being converted by 70% of the average of the three (3) lowest Closing Bid Prices of the Common Stock (as defined in the Company Note) in the twenty (20) Trading Days immediately preceding the applicable Conversion.
 
The Company records debt discounts in connection with the issuance of convertible debt and the initial valuation of the derivative liability. The discounts are amortized to non cash interest expense over the life of the debt.
 
The Company Note has an interest rate of 7.5%, compounding daily, which would increase to a rate of 15.0% on the happening of certain Events of Default (defined in the Company Note) that are not considered a Payment Default (defined in the Company Note), provided that the Company may cure the default in accordance with and subject to the terms set forth in the Company Note. Where a Payment Default occurs, including where (i) Borrower shall fail to pay any principal, interest, fees, charges, or any other amount when due and payable under that Company Note; or (ii) Borrower shall fail to deliver any Conversion Shares in accordance with the terms of the Company Note, late fees shall accrue as set forth in the Company Note, and in addition, the Company shall have ninety (90) days from delivery of notice of default from Tonaquint to cure the default, as set forth in more detail in the Company Note. If the Company fails to cure the Payment Default, Tonaquint may accelerate the Company Note by written notice to the Company, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default Amount (defined in the Company Note) equal to (i) the Outstanding Balance as of the date of acceleration (which Outstanding Balance, for the avoidance of doubt, will include all Late Fees that accrue until any applicable Payment Default is cured) multiplied by (ii) two hundred fifty percent (250%), along with other remedies, as set forth in the Company Note.  
 
 
11

 
 
Note 4:  Investment and Notes Receivable, Related Parties
 
At September 30, 2015 and December 31, 2014, notes receivable consist of:
 
   
September 30, 2015
   
December 31, 2014
 
Effective August 14, 2014, Company entered into a Secured Promissory Note with Banco Vida which carries 8% interest per annum.  Interest only payments for first 12 months; thereafter principal and interest on standard amortization schedule due on or before February 1, 2017.
 
$
71,064
   
$
75,000
 
                 
On September 29, 2014, the Company closed a transaction selling its stake in BioCells to Diego Rissola; current President.  Payments are to be annually, after June of 2015, and the last payment due on or before June 1, 2025.
   
670,017
     
700,000
 
                 
Unamortized discount on BioCells note receivable
   
(220,991
)
   
(215,991
)
Allowance of doubtful accounts on BioCells note receivable
   
(10,000
)
   
(25,000
)
                 
   
$
510,090
   
$
534,009
 
 
Under the Agreement with Purchaser of BioCells, the remaining payments are as follows:  $15,000 on or before June 1, 2015; $45,000 on or before June 1, 2016; $55,000 on or before June 1, 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.

This loan receivable is secured, non-interest bearing, and subject to a 6% discount rate. As of September 30, 2015, the receivable has a balance of $670,017.  The Purchaser made the final principal plus default interest payments in October and November, of the June 2015 payment, which will be reflected in the year end results.

Note 5.  Commitments and Contingencies

VidaPlus

On January 24, 2011, the Company entered into a Stock Purchase Agreement to acquire up to 51% of the capital stock in VidaPlus, an umbilical cord processing and storage company headquartered in Madrid, Spain. The Agreement is organized into three tranches; the first executed at closing with an initial investment of approximately $204,000 (150,000 Euro) for an amount equivalent to 7% as follows; 1% of share capital in initial equity or approximately $30,000 and 6% or an estimated $174,000 as a loan convertible into equity within 12 months of closing. The initial investment was secured by a Pledge Agreement on 270 VidaPlus samples that are incurring annual storage fees. The second tranche provides the opportunity for an additional 28% in share capital through monthly investments based on the number of samples processed in that month (up to a maximum of 550,000 EUR). In connection with Tranche 2, the Company has loaned VidaPlus $246,525. Converting the investment from a loan into equity will take place within 24 months of the date the amount of shares due to the Company pursuant to the second tranche is calculated. The third tranche follows a similar loan to equity agreement as tranche two but for an additional 16% equity at the option of the Company (up to a maximum of 550,000 EUR). VidaPlus contracts through Stellacure and their relationship with the German Red Cross for their processing and storage.
 
 
12

 
 
In connection with the VidaPlus Stock Purchase Agreement entered into on January 24, 2011, the Company is obligated to make monthly loans to VidaPlus based on the number of new samples processed and up to a maximum of 550,000 Euro for each of Tranche 2 and 3 of the Agreement. Tranche 2 did contain provisions that provided the Company an option to discontinue funding if certain performance targets were not met.

In January 2012, the Company exercised its right to convert its Tranche 1 loan into 6% of the outstanding shares of VidaPlus, and as a result, the Company owned a total of 7% of the outstanding shares. At the time of the equity conversion, the Company no longer maintained its Pledge on the 270 VidaPlus samples associated with Tranche 1; however, the Company maintained a liquidation preference in VidaPlus over the money invested by the Company in VidaPlus. Additionally, the Company declined to make any further investment (loan or otherwise) to VidaPlus under whether Tranche 2, Tranche 3 or otherwise. On February 14, 2014, CBAI delivered to VidaPlus its election to convert its loan under Tranche 2 into shares of stock in VidaPlus, including Anti-Dilution shares and maintains a liquidation preference in VidaPlus.  The Company is entitled to an additional ownership stake of approximately 2.24% in connection with the forgoing, bringing its total ownership percentage to approximately 9.24%.
 
Patent License Agreement

PharmaStem Therapeutics claims to hold certain patents relating to the storage, expansion and use of hematopoietic stem cells. In the past several years, PharmaStem has commenced suit against numerous companies involved in cord blood collection and preservation alleging infringement of its patents. In October 2003, after a jury trial, judgment was entered against certain of the Company's competitors and in favor of PharmaStem in one of those suits. In February 2004, PharmaStem commenced suit against Cord Partners and certain of its competitors alleging infringement of its patents. Management of Cord Partners determined to settle, rather than to litigate, this matter. As a result, PharmaStem and Cord Partners entered into a Patent License Agreement in March 2004. Pursuant to the Patent License Agreement, Cord Partners could, on a non-exclusive basis, collect, process and store cord blood utilizing PharmaStem’s claimed technology and processes allegedly covered by its patents for so long as the patents may remain in effect. Three of the patents at issue expired in 2010 and two additional patents in May 2015. All litigation between the parties was dismissed and all prior claims were released. As of 2008, Cord ceased paying all royalties to PharmaStem. The patents have been declared void under a final decision on appeal, and as such, there is no pending litigation in this matter.   As of September 30, 2015, the Company made a one-time adjustment of the previously held amount of approximately $226,000 in accounts payable and $120,000 in accrued expenses, to its income statement as a gain on a settlement payable of $346,269, and a credit to the accounts payable and accrued expenses accounts on its balance sheet.

Commitments and Contingencies
  
Employment Agreements

On December 18, 2014, the Company entered into an Executive Employment Agreement with Joseph R. Vicente, the Company’s President and Chairman of the Board, which is effective as of January 1, 2015 and shall 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 provides for a base salary equal to $135,000, as well as an annual bonus, payable at the discretion of the Board of Directors, equal to 30% of Mr. Vicente’s base salary for that calendar year, provided that Mr. Vicente has the option to receive any portion of his salary and bonus in stock of the Company, in lieu of cash, at a value determined by the Board of Directors in their reasonable discretion and otherwise in accordance with the Vicente Employment Agreement.

The Vicente Employment Agreement provides for change of control termination payments, whereby if Mr. Vicente is terminated, his compensation reduced, or the employer terminates his employment within one year after a change of control, then Mr. Vicente is entitled to a termination benefit in an amount no less than the total of the highest annual salary and bonus amount set forth in the Vicente Employment Agreement multiplied by two (2).  The Employment Agreement also provides for termination payments in the absence of a change of control in the event the Company terminates Mr. Vicente without cause, which said payments shall be in an amount equal to all compensation paid by the Company to Mr. Vicente for the 24 months preceding the termination, including salary, bonus, equity, stock options and other compensation, to be paid in equal, monthly installments over the 24-month period following termination.  The Vicente Employment Agreement includes two-year restrictions on competition and solicitation of customers following termination of the agreement.
 
 
13

 
 
On March 31, 2015, the Company entered into an Executive Employment Agreement with Stephen Morgan, the Company’s Vice President, General Counsel and Corporate Secretary, which is effective as of April 1, 2015 and shall terminate as of March 31, 2018, unless earlier terminated by the Company or Mr. Morgan in accordance with the agreement (the “Morgan Employment Agreement”).

The Morgan Employment Agreement provides for a base salary equal to $130,000, as well as an annual bonus, payable at the discretion of the Board of Directors, equal to 25% of Mr. Morgan’s base salary for that calendar year, provided that Mr. Morgan has the option to receive any portion of his salary and bonus in stock of the Company, in lieu of cash, at a value determined by the Board of Directors in their reasonable discretion and otherwise in accordance with the Employment Agreement.

The Morgan Employment Agreement provides for change of control termination payments, whereby if Mr. Morgan is terminated, his compensation reduced, or the employer terminates his employment within one year after a change of control, then Mr. Morgan is entitled to a termination benefit in an amount no less than the total of the highest annual salary and bonus amount set forth in the Morgan Employment Agreement.  The Morgan Employment Agreement also provides for termination payments in the absence of a change of control in the event the Company terminates Mr. Morgan without cause, which said payments shall be in an amount equal to all compensation paid by the Company to Mr. Morgan for the 12 months preceding the termination, including salary, bonus, equity, stock options and other compensation, to be paid in equal, monthly installments over the 12-month period following termination.  The Morgan Employment Agreement includes one-year restrictions on competition and solicitation of customers following termination of the agreement.
 
Effective April 9, 2015, as part of the transaction with Red Oak, the Company entered into an Amendment to Executive Employment Agreement with Joseph R. Vicente, the Company’s President and Chairman of the Board, amending Mr. Vicente’s January 1, 2015 Executive Employment Agreement, as well as an Amendment to Executive Employment Agreement with Stephen Morgan, the Company’s Vice President, General Counsel and Secretary, amending Mr. Morgan’s April 1, 2015 employment agreement such that Mr. Vicente and Mr. Morgan no longer have the option, in their sole discretion, to receive their salary and bonus amounts in the form of Company stock, rather than cash.

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, 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 shall revert 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 has the option to lease a portion of the premises currently occupied by the Company to a third party, and if this portion is leased to a third party, the Company’s monthly rent amount shall 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. 
 
Commitments for future minimum rental payments, by year, and in the aggregate, to be paid under such operating lease as of September 30, 2015, are as follows:
 
   
Rent
 
   
to be paid
 
2015
   
45,790
 
2016
   
184,243
 
2017
   
188,600
 
2018
   
193,088
 
2019
   
147,397
 
Total
 
$
759,118
 

 
14

 
 
Note 6.  Related Party Transactions and Commitments
 
China Stem Cells, Ltd.
 
In March of 2010, the Company acquired pursuant to a License Agreement, a 10% non dilutable interest in what became, in December 2010, China Stem Cells, Ltd., a Cayman Islands Company (hereinafter "Cayman"), which indirectly holds a 100% capital interest in AXM Shenyang, a company organized to conduct a Stem Cell Storage Business in China. In exchange for issuance of an equity interest in Cayman, under the terms of the Transfer of Technology Agreement the Company agreed to provide technology transfer, knowhow and training in the setup, marketing and operation of the China Stem Cell Storage business. In connection with the License Agreement, the Company is to receive royalties equal to 8.5% of "Net Revenues" realized from the China Stem Cell Storage business, over the 15 year term of the agreement, with certain minimum annual royalties’ payable beginning in 2011. China Stem Cells, Ltd has not been paid any royalty balance due to date, and it remains doubtful that any such royalties will be collected.
 
In December of 2010 the Company also acquired the option to provide up to $750,000 of additional capital funding to Cayman through the purchase of Cayman Secured Convertible Promissory Notes and attached Cayman Warrants to acquire its Common Stock. Other Cayman shareholders were granted similar options, with the intent of raising the aggregate up to $1.5 million in additional capital for Cayman and its subsidiaries. CBAI has exercised this option in part, provided a total of $400,000 in additional capital to Cayman, and is to receive Cayman Secured Convertible Promissory Notes for this sum along with 80 Cayman (TBD) Warrants. The Secured Convertible Promissory Notes are convertible into Cayman stock at a conversion price of $1,500 per share, subject to certain adjustments. The Warrants have a five year term and are exercisable at an option exercise price of $0.05 per share per share, subject to certain adjustments. The Company has recorded a reserve for the entire carrying amount of the receivable, including interest. The Company’s current President, Joseph Vicente was appointed as a Director of China Stem Cells Ltd. in July 2012.
 
VidaPlus
 
The Company holds approximately 9.24% of the outstanding shares of VidaPlus, and has a balance of convertible loans receivable amounting to $246,525. During the year ended December 31, 2012, the Company reviewed the recoverability of the equity investment and loans receivable and the carrying amount exceeded the fair value of the investment as a result of recurring and continued operating losses at VidaPlus. Fair value of the loans receivable is determined based on the discounted future net cash flows expected to be generated by assets pledged against the loans. The Company recorded an impairment of 100% of the book value of the equity investment and convertible loan receivable.

Note 7.  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 increases the total shares available to 4 million common shares. The agreement 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.
 
 
15

 
 
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 for the period ended September 30, 2015.

The Company’s stock option activity was as follows:
 
   
Stock
Options
   
Weighted Average Exercise Price
   
Weighted Avg. Contractual
Remaining Life
 
                         
Outstanding, January 1, 2014
   
5,570,830
     
1.01
     
5.76
 
Exercised
   
-
     
-
     
-
 
Forfeited/Expired
   
460,055
     
-
     
-
 
Outstanding, December 31, 2014
   
5,106,775
     
1.01
     
4.51
 
Exercisable at December 31, 2014
   
5,106,775
     
1.01
     
4.51
 
Forfeited/Expired
   
488,652
                 
Outstanding, September 30, 2015
   
4,618,123
     
1.01
     
3.51
 
Exercisable, September 30, 2015
   
4,618,123
     
1.01
         
 
The following table summarizes significant ranges of outstanding stock options under the stock option plan at September 30, 2015:
 
Range of
Exercise Prices
   
Number of
Options
   
Weighted Average
Remaining
Contractual Life
(years)
   
Weighted Average
Exercise
Price
   
Number of
Options
Exercisable
   
Weighted Average
Exercise
Price
 
$
0.33 — 20.00
     
4,616,623
     
4.11
   
$
1.04
     
4,616,623
   
$
1.04
 
$
21.00 — 30.00
     
1,500
     
0.54
     
25.00
     
1,500
     
25.00
 
         
4,618,123
     
4.11
   
$
1.05
     
4,618,123
   
$
1.05
 
 
Note 9.  Stockholder’s Equity
 
Preferred Stock

CBAI has 5,000,000 shares of $.0001 par value preferred stock authorized.

Common Stock

The Company’s Articles of Incorporation were amended to increase the authorized common stock to 2,890,000,000 shares, par value $0.0001, up from 890,000,000. This amendment was adopted by the Company’s Board of Directors on January 21, 2015, and its Shareholders at a Special Meeting of Shareholders called for this purpose on May 7, 2015.
 
 
16

 
 
Pursuant to the Purchase Agreement executed on April 9, 2015 between the Company and Red Oak Partners, LLC, Red Oak paid $724,000 to the Company, and the Company delivered 724,000 shares of Series A Convertible Preferred Stock to Red Oak. The purchase price proceeds were used as repayment to the Company’s outstanding debt obligations.  As a result of the increase in the authorized shares being approved by the shareholders on May 7, 2015, and per the terms of the Red Oak Agreement, the 724,000 shares of Preferred Stock held by Red Oak automatically converted into 381,052,632 common shares of the Company equivalent to 29.98% ownership in the Company. The common stock had a fair market value of $724,000.  The Company also issued 1,013,514 shares of common stock to employees for 2014 bonuses which had a fair market value of $3,750.

As of September 30, 2015 CBAI had 1,272,066,146 shares of Common Stock outstanding. 20,000 shares remain in the Company's treasury.

Note 10.  Segment Reporting
 
Guidance issued by the FASB requires that public business enterprises report financial and descriptive information about its reportable operating segments. Cord primarily generates revenues related to the processing and storage of umbilical cord blood and cord tissue. Cord’s long-lived assets are located in, and since 2015, substantially all of its revenues are generated from the United States of America.
 
The table below presents certain financial information by business segment for the nine months ended September 30, 2015:
 
   
Cord
   
Biocordcell
   
Segment
Total
 
Consolidation
Eliminations
 
Condensed
Consolidated
Total
 
                           
Revenue from External Customers
 
$
4,121,503
   
$
--
   
$
4,121,503
     
$
4,121,503
 
Interest & Derivative Expense
   
(291,778
)    
--
     
(291,778
)      
(291,778
)
Depreciation and Amortization
   
303,177
     
--
     
303,177
       
303,177
 
Segment Income from continuing operations
   
68,959
     
--
     
68,959
       
68,957
 
Segment Assets
 
$
3,874,126
   
$
--
   
$
3,874,126
     
$
3,874,126
 
 
The table below presents certain financial information by business segment for the three months ended September 30, 2015:
 
   
Cord
   
Biocordcell
   
Segment
Total
 
Consolidation
Eliminations
 
Condensed
Consolidated
Total
 
                           
Revenue from External Customers
 
$
1,430,513
   
$
--
   
$
1,430,513
     
$
1,430,513
 
Interest & Derivative Expense
   
(18,005
)    
--
     
(18,005
)      
(18,005
)
Depreciation and Amortization
   
98,769
     
--
     
98,769
       
98,769
 
Segment Income from Continuing Operations
   
208,368
     
--
     
208,368
       
208,368
 
Segment Assets
 
$
3,874,126
   
$
--
   
$
3,874,126
     
$
3,874,126
 
 
 
17

 
 
The table below presents certain financial information by business segment for the nine months ended September 30, 2014:
 
   
Cord
   
Biocordcell
   
Segment
Total
 
Consolidation
Eliminations
 
Condensed
Consolidated
Total
 
                           
Revenue from External Customers
 
$
3,136,047
   
$
--
   
$
3,136,047
       
3,136,047
 
Interest & Derivative Expense
   
(303,159
)
   
--
     
(303,159)
       
(303,159)
 
Depreciation and Amortization
   
402,252
     
--
     
402,252
       
402,252
 
Segment Income (Loss) from Continuing Operations
    (554,063
)
 
$
--
     
(554,063
)
     
(554,063
)
Gain from Discontinued Operations
           
776,995
     
776,995
       
776,995
 
Segment Assets
 
$
3,959,423
   
$
--
   
$
3,959,423
     
$
3,959,423
 
 
The table below presents certain financial information by business segment for the three months ended September 30, 2014:
 
   
Cord
   
Biocordcell
   
Segment
Total
 
Consolidation
Eliminations
 
Condensed
Consolidated
Total
 
                           
Revenue from External Customers
 
$
1,197,268
   
$
--
   
$
1,197,268
     
$
1,197,268
 
Interest & Derivative Expense
   
(518,508
)
   
--
     
(518,508)
       
(518,508
Depreciation and Amortization
   
133,692
     
--
     
133,692
       
133,692
 
Segment Income from Continuing Operations
   
538,657
     
--
     
538,657
       
538,657
 
Gain from Discontinued Operations
           
966,712
     
996,712
       
996,712
 
Segment Assets
 
$
3,959,423
   
$
--
   
$
3,959,423
     
$
3,959,423
 
 
Note 11. Subsequent Events 

The Company’s Management has reviewed all material events through the date of this report in accordance with ASC 855-10, and believes there are no subsequent events of which should have any material effect on financial statements.
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
 
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 our 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 September 30, 2015 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, 2014 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, 2014, 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, 2014.
 
 
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Recent Developments During the Quarter

Annual Shareholders Meeting

The Company's previously set Annual General Meeting, to be held July 14, 2015, to elect Directors, ratify auditors and approve changes to the Company’s Articles of Incorporation and Bylaws was moved to August 6, 2015.  The Annual Meeting was held and the following proposals passed:

Proposal 1 to elect five directors nominated by the Board of Directors named in the Proxy Statement; David Sandberg, Anthony Snow, Adrian Pertierra, Timothy McGrath and Joseph Vicente.

Proposal 2 to ratify the appointment of De Joya Griffith, LLC as the Company’s independent registered certified public accounting firm for the fiscal year ending December 31, 2015;

Proposal 5 to consider and act upon a proposal to approve an amendment to the Amended and Restated Articles of Incorporation to require that, in the case of a combination, the authorized shares should be reduced commensurately with the reduction in outstanding shares and approval to conform cross-references and other immaterial clean-up changes in the Amended and Restated Articles of Incorporation;

Proposal 6 to approve (on an advisory basis) the Company's executive compensation.

The following proposals required the approval of 2/3 of the issued common shares did not pass:

Proposal 3 to consider and act upon a proposal to approve an amendment to the Amended and Restated Articles of  Incorporation of the Company to declassify the Board of Directors and to require that all directors stand for annual election;

Proposal 4 to consider and act upon a proposal to approve an amendment to the Amended and Restated Articles of Incorporation to change the shareholder vote required to amend Articles III, IV, and V of the Articles of Incorporation from a supermajority common shareholder vote requirement to a majority vote requirement.

Finally, regarding Proposal 7, to conduct an advisory vote on the frequency of future advisory votes on executive compensation, “every three years” obtained the most votes.

Change in Auditors

On August 7, 2015, De Joya Griffith resigned as the Company’s independent registered public accountants.  On August 7, 2015, the Company engaged RBSM, LLP to serve as the Company’s independent registered public accountants as approved by the Company’s Audit Committee.
 
Banco Vida Agreement
 
On August 17, 2015, the Company received a notice of termination from Banco Vida with regards to both the Tissue Agreement and the Storage and Processing Agreement between the two companies, effective February 2016.  The Company is currently in discussions with Banco Vida with the intention of creating a new agreement.  If the agreements are terminated, revenue from storage and processing as well as the supply of tissue related products will be negatively impacted in 2016 unless the Company finds alternative or replacement sources.

Summary and Outlook of the Business
 
CBAI is primarily an umbilical cord blood and cord tissue stem cell processing and storage company 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 provide umbilical cord blood banking and cord tissue services to expectant parents throughout all 50 United States and Puerto Rico. 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 processes and stores cord blood and cord tissue in its own facility. Cord provides the following services to each customer.
 
 
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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 any instruction necessary 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 centralized facility immediately following birth. This procedure ensures chain-of-custody control during transportation for maximum security.
Comprehensive Testing. The cord blood sample is tested for stem cell concentration levels and blood type. The maternal samples are tested for infectious diseases. Cord reports these 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. Data indicates that cord blood retains viability and function for at least twenty five years when stored in this manner, and theoretically could be maintained at least as long as the normal life span of an individual.
 
Additionally, the Company is 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; transportation, collection materials, information used to determine donor eligibility and infectious disease testing of the maternal blood.   
 
Going forward, management will continue to assess business opportunities, and plans to pursue customer acquisition.

Results of Operations for the Three-Months Ended September 30, 2015
 
For the three months ended September 30, 2015, total revenue increased to approximately $1.43 million from $1.20 million, an increase of 19% over the same period of 2014.  Revenues are generated primarily from three sources; new enrollment/processing fees, recurring storage fees (both from cord blood and cord tissue) and fees associated with other tissue related products. The increase in revenue is due to growth in recurring storage fees and fees from other tissue related products. For the three months ended September 30, 2015 recurring revenues accounted for 47% of total revenue. Cord remains focused on strategic organic growth which management anticipates will provide sustainable operating cash flows and net income.
 
Cost of services as a percentage of revenue increased to 38% for the three month period ending September 30, 2015 compared to 35% the same prior period of 2014. The increasing mix of business related to other tissue related products is a primary contributor to the increase in cost of services.  The cost of services include transportation of the umbilical cord blood from the hospital to the lab, direct material plus labor costs for processing and cryogenic storage, and allocated rent, utility and general administrative expenses. Gross profit increased by approximately $0.11 million or 14% to approximately $0.89 million for the three month period ending September 30, 2015 from the comparable three month period of 2014.
 
The Company’s income from operations was $0.23 million versus $0.02 million for the three month comparative period of 2015 from 2014. The Company’s net income was $0.23 million for the three month period ending September 30, 2015, compared to $1.51 million for the period ended September 30, 2014.  The decrease in net income for the three month period comparable period is primarily attributable to the change in the derivative liability and the discontinued operations which largely contributed to the gains for the period ending September 30, 2014.
 
 
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Results of Operations for the Nine-Months Ended September 30, 2015

For the nine months ended September 30, 2015, total revenue increased to approximately $4.12 million from $3.14 million, an increase of 31% over the same period of 2014.  Revenues are generated primarily from three sources; new enrollment/processing fees, recurring storage fees (both from cord blood and cord tissue) and fees associated with other tissue related products. The increase in revenue is due to growth in recurring storage fees and fees from other tissue related products. For the nine months ended September 30, 2015 recurring revenues accounted for 48% of total revenue. Cord remains focused on strategic organic growth which management anticipates will provide sustainable operating cash flows and net income.

Cost of services as a percentage of revenue increased to 35% for the period ending September 30, 2015 compared to 31% the same prior period of 2014. The increasing mix of business related to other tissue related products is a primary contributor to the increase in cost of services. The cost of services include transportation of the umbilical cord blood from the hospital to the lab, direct material plus labor costs for processing and cryogenic storage, and allocated rent, utility and general administrative expenses. Gross profit increased by approximately $0.51 million or 24% to approximately $2.66 million for the nine month period ending September 30, 2015 from the comparable nine month period of 2014.
 
The Company’s income from operations was $0.36 million versus a loss of $0.25 million for the nine month comparative period of 2015 from 2014. The Company’s net income was $0.42 million for the nine month period ending September 30, 2015, compared to a net income of $0.22 million for the period ended September 30, 2014.  
 
Liquidity and Capital Resources
 
Total assets at September 30, 2015 were $3.87 million, compared to $3.86 million at December 31, 2014. Total liabilities at September 30, 2015 were $3.42 million consisting primarily of promissory notes, accounts payable and deferred revenue $0.82 million, $0.21 million and $1.63 million respectively. At December 31, 2014, total liabilities were $4.55 million consisting primarily of promissory notes, accounts payable and deferred revenue $1.35 million, $0.36 million and $1.49 million respectively.
 
At September 30, 2015, the company had $0.78 million in cash, an increase of $0.03 million from the period ending December 31, 2014 of $0.75 million. Cash flows from operations are currently sufficient to fund operations as net cash provided by operating activities for the quarter ended September 30, 2015, were $0.52 million and $0.96 million for the prior comparative period of 2014.  During the nine month period of 2015 there was no increase in notes payable for purposes of working capital.  However, the Company has made a $175,000 prepayment on the convertible note held by Tonaquint which is reflected as a use of cash in financing activities.  Net cash used in investing activities decreased by $0.10 million as the Company increased its investment in property and equipment.
 
Since inception, the Company has financed cash flow requirements through the issuance of common stock and warrants for cash, services and loans. However, since the beginning of the second quarter of 2012, the Company has reduced operating expenses, ended investment in its unconsolidated affiliates and received no additional funding from outside sources for working capital. The Company plans to continue to operate on its cash flows from operations by aligning its expenses with its revenues. If cash flows from operations are significantly less than projected, then the company would need to either cut back on its budgeted spending, look to outside sources for additional funding or a combination of the two. The Company currently does not have any financing agreements in place for additional funding. If the Company is unable to access sufficient funds when needed, obtain additional external funding or generate sufficient revenue from the sale of our products, the Company could be forced to curtail or possibly cease operations.

Inflation

In the opinion of management, inflation has not and will not have a material effect on the Company’s operations in the immediate future with the sale of Bio. Management will continue to monitor inflation and evaluate the possible future effects of inflation on the Company's business and operations.

 
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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Disclosure not applicable to smaller reporting companies.

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, including its president and chief financial officer, have reviewed and evaluated the effectiveness of its disclosure controls and procedures as of September 30, 2015. 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 submit 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, vice 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.
 
 
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PART II. OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS

NONE
 
ITEM 1A.RISK FACTORS.
 
A description of the Company’s “Risk Factors” of its Annual Report on Form 10-K for the year ended December 31, 2014.  The following material change to those risk factors for the three months ended September 30, 2015 is as follows.

On August 17, 2015, the Company received a notice of termination from Banco Vida with regards to both the Tissue Agreement and the Storage and Processing Agreement between the two companies, effective February 2016.  The Company is currently in discussions with Banco Vida with the intention of creating a new agreement.  If the agreements are terminated, revenue from storage and processing as well as the supply of tissue related products will be negatively impacted in 2016 unless the Company finds alternative or replacement sources.
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
In the instances described under this sub-heading, the Company relied upon Section 4(2) of the Securities Act in issuing securities. The Company’s reliance was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by the Company which did not involve a public offering; (b) there were only a limited number of offerees; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; and (e) the negotiations for the sale of the securities took place directly between the offeree and the Company.
 
Tonaquint

Under the Company Note, the Company shall make monthly payments to Tonaquint, with the first payment due on or before April 17, 2015, and with payments continuing thereafter until the Company's Note is paid in full, with a maturity date that is 33 calendar months after the effective date of December 17, 2014. The amount of the monthly payments is $100,000 (the “Installment Amount”); provided, however, that if the remaining amount owing under the Company Note as of the applicable Installment Date (defined in the Company Note) is less than $100,000, then the Installment Amount for such Installment Date shall be equal to the outstanding amount. The Company may prepay any or all of the outstanding amount of the Company Note at any time, without penalty. In the event the Company prepays an amount that is less than the outstanding amount, then the prepayment amount shall be applied to the next Installment Amount(s) due under the Company Note.

For each monthly payment, the Company may elect to designate all or any portion of the Installment Amount then due as a conversion eligible amount (hereafter “Conversion Eligible Amount”); provided that the total outstanding Conversion Eligible Amount that has not been converted by Tonaquint, as set forth below, at any given time may not exceed one hundred thousand dollars ($100,000) without Tonaquint’s prior written consent and subject to additional restrictions set forth in the Company Note. In the event the Company designates any portion of any monthly payment amount as a Conversion Eligible Amount, the applicable monthly payment shall be reduced by an amount equal to the portion thereof designated as a Conversion Eligible Amount. The Conversion Eligible Amount shall continue to be included in and be deemed to be a part of the Outstanding Balance (defined in the Company Note) of the Company Note unless and until such amount is either paid in cash by the Company or converted into Common Stock by Tonaquint. The Company may pay the Conversion Eligible Amount in cash, provided that no prepayments of cash shall reduce the Conversion Eligible Amount until the Outstanding Balance is equal to or less than the Conversion Eligible Amount.
 
Once the Company has designated amounts as Conversion Eligible Amount, Tonaquint may convert all or any portion of that amount into shares of the Company's Common Stock. In the event of a conversion by Tonaquint of a Conversion Eligible Amount, the number of Common Stock shares delivered to Tonaquint upon conversion will be calculated by dividing the amount of the Company Note that is being converted by 70% of the average of the three (3) lowest Closing Bid Prices of the Common Stock (as defined in the Company Note) in the twenty (20) Trading Days immediately preceding the applicable Conversion.
 
The Company records debt discounts in connection with the issuance of convertible debt and the initial valuation of the derivative liability. The discounts are amortized to non-cash interest expense over the life of the debt.
 
The Company Note has an interest rate of 7.5%, compounding daily, which would increase to a rate of 15.0% on the happening of certain Events of Default (defined in the Company Note) that are not considered a Payment Default (defined in the Company Note), provided that the Company may cure the default in accordance with and subject to the terms set forth in the Company Note. Where a Payment Default occurs, including where (i) Borrower shall fail to pay any principal, interest, fees, charges, or any other amount when due and payable under that Company Note; or (ii) Borrower shall fail to deliver any Conversion Shares in accordance with the terms of the Company Note, late fees shall accrue as set forth in the Company Note, and in addition, the Company shall have ninety (90) days from delivery of notice of default from Tonaquint to cure the default, as set forth in more detail in the Company Note. If the Company fails to cure the Payment Default, Tonaquint may accelerate the Company Note by written notice to the Company, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default Amount (defined in the Company Note) equal to (i) the Outstanding Balance as of the date of acceleration (which Outstanding Balance, for the avoidance of doubt, will include all Late Fees that accrue until any applicable Payment Default is cured) multiplied by (ii) two hundred fifty percent (250%), along with other remedies, as set forth in the Company Note.  

As of September 30, 2015, the Company did not issue any shares to Tonaquint.  The principal balance due on the Note was $1,175,000 and $105,316 of interest as of September 30, 2015.
 
Red Oak Partners, LLC

On April 9, 2015, Cord Blood America, Inc. (the "Company") executed a Preferred Stock Purchase Agreement (the “Purchase Agreement”) and a Stockholder Agreement with Red Oak Fund LP, Red Oak Long Fund, LP and Pinnacle Opportunities Fund, LP (collectively the “Purchasers” or “Red Oak”). Subsequently, on April 14, 2015, the Company and Red Oak closed the transaction.
 
 
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Pursuant to the Purchase Agreement, the Purchasers are to deliver to the Company, at Closing (defined in the Purchase Agreement), $724,000 (the “Purchase Price”), and the Company is to deliver to the Purchasers 724,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”).  The Purchase Price proceeds shall be used as repayment to the Company’s outstanding debt obligations.  The terms of the Preferred Stock are set forth in Articles of Amendment to Articles of Incorporation of the Company (“Articles of Amendment”) that were designated by the Board of Directors of the Company on April 9, 2015.

As set forth in the Articles of Amendment, the Preferred Stock shall be convertible into common stock of the Company at the “Conversion Rate,” where each holder of Preferred Stock shall be entitled to common stock in accordance with the number of shares of Preferred Stock they hold divided by the total shares of Preferred Stock outstanding, 724,000 shares, multiplied by the “Maximum Common Converted Share Number,” which is 29.9793% of the outstanding shares of the Company on a fully diluted and converted basis assuming the conversion of all convertible securities, including the conversion of the Preferred Stock.  The Preferred Stock shall not be converted until such time as there are sufficient authorized common stock shares, which are not reserved for other purposes, in order that all of the Preferred Stock can be converted to common shares.  When there are sufficient such shares, all of the Preferred Stock shall automatically be converted to common stock at the Conversion Rate.

As a result of the increase in the authorized shares being approved by the shareholders on May 7, 2015, and per the terms of the Red Oak Agreement, the 724,000 shares of Preferred Stock held by Red Oak automatically converted into 381,052,632 common shares of the Company equivalent to 29.98% ownership in the Company.
 
Repurchase of Shares
 
The Company did not repurchase any of our shares during the quarter ended September 30, 2015.
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES

NONE

ITEM 4. RESERVED
 
ITEM 5. OTHER INFORMATION
 
NONE 
 
 
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ITEM 6. EXHIBITS (UPDATE)
 
The following documents are included as exhibits to this Form 10Q:
 
EXHIBIT
 
DESCRIPTION
     
2.0
 
Form of Common Stock Share Certificate of Cord Blood America, Inc. (1)
     
3.1(i)
 
Amended and Restated Articles of Incorporation of Cord Blood America, Inc. (1)
     
3.1(ii)
 
Articles of Amendment to Articles of Incorporation (5)
     
3.1(iii)
 
Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc.(6)
     
3.1(iv)
 
Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (16)
     
3.1(v)
 
Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (16)
     
3.1(vi)
 
Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (23)
     
3.1 (vii)
 
Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (28)
     
3.2(i)
 
Amended and Restated Bylaws of Cord Blood America, Inc. (1)
     
10.0
 
Patent License Agreement dated as of January 1, 2004 between PharmaStem Therapeutics, Inc. and Cord Partners, Inc. (2)
     
10.1
 
Board Compensation Plan (3)
     
10.2
 
Employment Agreement between the Company and Joseph Vicente (22)
     
10.3
 
Lease for Las Vegas Facility (11)
     
10.4
 
2011 Flexible Stock Option Plan (17)
     
10.5
 
Compensatory Arrangement for Certain Officers Effective July 13, 2009, Stock Options (8)
 
10.6
 
Compensatory Arrangement for Certain Officers Effective December 31, 2009, Stock Options (9)
     
10.7
 
License and Cooperation Agreement with AXM Pharma effective March 31, 2010 (11)
     
10.8
 
Compensatory Arrangement for Certain Officers Executed July 1, 2010, Stock Options (11)
     
10.9
 
Departure of Directors or Appointment Certain Officers; Election and of Directors, Appointment of Certain Officers on May 15, 2012 (15)
     
10.10
 
Employment Agreement between the Company and Stephen Morgan (23)
     
10.11
 
On May 20, 2013 Cord Blood America, Inc. announced a new service offering. (18)
 
 
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10.12
 
On December 30, 2013, the Company engaged De Joya Griffith, LLC (the “New Accountant”) to serve as the Registrant’s independent registered public accountants for the fiscal year ended December 31, 2013. (19)
     
10.13
 
Amended lease for Las Vegas facility (20)
     
10.14
 
On September 29, 2014, the Company announced it had sold its ownership interest in Biocordcell Argentina S.A. (BioCells) to a current shareholder and President, Diego Rissola. (21)
     
10.15
 
On December 17, 2014, the Company entered into a Settlement Agreement with St. George Investments, LLC and Tonaquint (22)
     
10.16
 
On April 9, 2015, the Company announced it had executed a Purchase Agreement with Red Oak Partners, LLC and its affiliates for a preferred equity investment. (24)
     
10.17
 
On April 9, 2015, the Company entered into an Amendment to the Executive Employment Agreement with Joseph R. Vicente and Stephen Morgan. (25)
     
10.18
 
Effective April 15, 2015, pursuant to the Preferred Stock Red Oak Transaction, three (3) Directors were elected to the Board of the Company, David Sandberg, Anthony Snow and Andrian Pertierra. (26)
     
10.19
 
On April 17, 2015, the Company established compensation for non-management Directors. (27)
     
10.20
 
Effective May 22, 2015, the Board of Directors unanimously approved and adopted the Second Amended and Restated By-Laws of the Company. (29)
     
10.21
 
The Company postponed its annual meeting of Shareholders until August 6, 2015 (30)
     
10.22
 
On August 6, 2015, the Company shareholders approved an amendment to the Amended and Restated Articles of Incorporation (31)
     
10.23
 
The Company’s Audit Committee approved the change in the Company’s auditors to RBSM LLP.  The former auditor, De Joya Griffith resigned. (32)
     
21
 
List of Subsidiaries (4)
     
     
31.1
 
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)
     
32.1
 
Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
 
(1) Filed as an exhibit to Registration Statement on Form 10-SB filed on May 6, 2004.

(2) Filed as an exhibit to Amendment No. 1 to Form 10-SB filed on August 23, 2004.

(3) Filed as an exhibit to Current Report on Form 8-K filed on February 8, 2006.

(4) Filed as an exhibit to Current Report on Form 8-K filed on June 13, 2008

(5) Filed as an exhibit to Current Report on Form 8-K filed on August 29, 2008

(6) Filed as an exhibit to the Current Report on Form 8-K filed on March 31, 2009
  
(7) Filed as an exhibit to the Current Report on Form 8-K filed on July 17, 2009
 
 
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(8) Filed as an exhibit to Current Report on Form 8-K filed on January 7, 2010

(9) Filed as an exhibit to Current Report on Form 10-K filed on March 31, 2010

(10) Filed as an exhibit to Current Report on Form 10Q filed on May 5, 2010

(11) Filed as an exhibit to Current Report on Form 8-K filed on July 7, 2010

(12) Filed as an exhibit to Current Report on Form 10Q filed on May 23, 2011

(13) Filed as an exhibit to Current Report on Form S-8 filed on June 3, 2011

(14) Filed as an exhibit to Current Report on Form 8K filed on September 12, 2011

(15) Filed as an exhibit to Current Report on Form 8-K filed on May 15, 2012

(16) Filed as an exhibit to Current Report on Form 10Q filed on August 14, 2012

(17) Filed as an exhibit to Current Report on Form 8K filed on September 27, 2012

(18) Filed as an exhibit to Current Report on Form 8K filed on May 20, 2013.

(19) Filed as an exhibit to Current Report on Form 8K filed on January 10, 2014

(20) Filed as an exhibit to Current Report on Form 10K filed on March 31, 2014

(21) Filed as an exhibit to Current Report on Form 8K filed on October 3, 2014

(22) Filed as an exhibit to Current Report on Form 8K filed on December 23, 2014

(23) Filed as an exhibit to Current Report on Form 10K filed on March 31, 2015

(24) Filed as an exhibit to the Current Report on Form 8K filed on April 14, 2015

(25)  Filed as an exhibit to the Current Report on Form 8K filed on April 14, 2015

(26) Filed as an exhibit to the Current Report on Form 8K filed on April 16, 2015

(27) Filed as an exhibit to the Current Report on Form 8K filed on April 22, 2015

(28) Filed as an exhibit to the Current Report on Form 8K filed on May 13, 2015

(29) Filed as an exhibit to the Current Report on Form 8K filed on May 29, 2015

(30) Filed as an exhibit to the Current Report on Form 8K filed on July 9, 2015

(31) Filed as an exhibit to the Current Report on Form 8K filed on August 10, 2015

(32) Filed as an exhibit to the Current Report on Form 8K filed on August 13, 2015

 
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
CORD BLOOD AMERICA, INC.
 
       
November 16, 2015
By:
/s/ Joseph R. Vicente
 
   
Joseph R. Vicente
 
   
President
 
   
and
 
   
Principal Financial and Accounting Officer)
 
 
 
 


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