CBA Florida Inc. (fka CBAI)

[Goodbuddy4863]

Cord Blood America, Inc. Announces Agreement to Sell Substantially All of Its Assets to FamilyCord:

https://www.morningstar.com/news/access-wire/ASW_Accesswire_488293MSN/cord-blood-america-inc-announces-agreement-to-sell-substantially-all-of-its-assets-to-familycord.html

02/07/18 08:30 AM EST
LAS VEGAS, NV / ACCESSWIRE / February 7, 2018 / Cord Blood America, Inc. (OTC PINK: CBAI) ("CBAI" or the "Company") announced today that it has entered into an agreement with California Cryobank Stem Cell Services LLC (dba "FamilyCord") for the sale of substantially all of its assets to FamilyCord for a purchase price of $15.5 million.


"Completion of the sale is contingent upon approval by CBAI's shareholders, receipt of certain third-party consents, and customary closing conditions for transactions of this type, as well as FamilyCord's obtaining external financing. The sale does not include the Company's cash and certain other excluded assets. CBAI plans to seek shareholder approval of the proposed sale at a special meeting of shareholders. Red Oak Partners, LLC and its affiliated funds - together representing approximately 30% ownership of CBAI - have agreed to vote in favor of the transaction. Complete information regarding the transaction will be provided to CBAI's stockholders in materials to be distributed for the special meeting.

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.

David Sandberg, CBAI's Chairman of the Board and Red Oak Partner's Managing Member stated, "Red Oak Partner's April 2015 investment allowed CBAI to pay down a substantial portion of debt that resulted from a December 2014 settlement of litigation and map out a pay-down plan to preserve equity value given the settlement resulted in monthly obligations in excess of CBAI's estimated cash generation at the time. Shortly after Red Oak's investment and appointment to CBAI's board of directors, the board discovered operational challenges and management expectations of significant revenue declines as CBAI's lucrative tissue procurement business was effectively going away due to concerns regarding the Zika virus and other customer-related reasons. Since then, annualized revenues have declined more than 40%. In response, the board took drastic action including announcing a review of strategic alternatives to maximize shareholder value and moving to an outsourced model under which more than $1 million in annualized operating costs were reduced (boosted by unsustainably low management and board compensation), allowing CBAI to generate cash flow sufficient to pay down its debt. Although it has been a challenging few years for the business, we are pleased to announce this sale to FamilyCord which we believe optimizes value for our shareholders. I want to thank CBAI's employees who have continued to work hard and remain focused on providing high-quality cryogenic services during a difficult time period."