CBA Florida Inc. (fka CBAI)

[worthylion]

All the posts here and no real discussion of the recent quarterly filing. From my perspective it wasn't an encouraging report because their tissue business which has been their recent growth engine has been gutted by the loss of their primary customer. If you extract the tissue business from recent reports it's evident that new cord blood enrollments are declining YOY so not evident at all how the company will show improving operating results going forward. Neither is it evident how the company can continue to pay off debt from cash flow as operating results decline so they'll probably need another equity infusion.

Their crown jewel is their sticky recurring revenue which they brag as being an increasing percentage of overall revenue. The reason it's an increasingly higher percentage is because other revenue from cord blood processing fees and the tissue business is declining. Even with declining cord blood enrollments they can probably continue to grow recurring revenues so long as the rate of new enrollments exceeds the number of customers who stop paying their storage fees. Nonetheless, this won't be enough to provide sufficient cash flow after debt service.

Some on this board think that Red Oak will engineer an operating turnaround, but there's no evidence of that so far and they have no experience in the cord blood business. They did shore up and stabilize the balance sheet for now but may not be enthusiastic about injecting more cash. If they do it will cause significant additional dilution.