Cord Blood America Jumps amid Press Coverage
Cord Blood America Inc. (CBAI) shares moved up more than 30 percent following a Fox News interview earlier this week with CEO Matthew Schissler. However, some investors are concerned about the company’s questionable financials.
Cord Blood America Inc. [[CBAI.OB]], one of the largest umbilical cord blood stem cell preservation companies, held an interview earlier this week with Fox News discussing its new state-of-the-art laboratory in Las Vegas. The facility was developed to store multiple stem cell products that can be used to save lives down the road.
Since the building was leased, the company has seen tremendous interest from parties in the western United States looking to partner up. In addition, the company is excited to have the capability to process and store multiple forms of stem cells, and expects to begin generating different revenue streams from the sale of these services in early 2010.
Last quarter, Cord Blood America reported a net loss of approximately $1.7 million on revenues of $941,938, which was down from $1.4 million during the same period a year ago. Meanwhile, the company’s liabilities exceed its assets by a factor of three with just $106,883 in cash on its books. These results led to a “going concern” clause put in by its auditors.
Perhaps more troubling for investors was the number of outstanding shares last quarter, which increased by nearly 600 million to 821 million. This issuance led to substantial dilution for shareholders, who witnessed the stock price fall nearly 60% from its average levels in the first quarter ended in March 2009. However, the issuance was likely necessary to fund operations.
Regardless of the perilous financial situation, many investors are convinced that Cord Blood America will come out ahead in the end. Recent expansions in its operations and interest in its storage services may drive substantial revenues in the future. Meanwhile, the company was able to attain $7.5 million in preferred stock and reduce its long-term debt by $4.2 million.
In the end, Cord Blood America continues to work to expand its operations with its new facilities and financials. However, many risks still remain given the liabilities on its balance sheet, decreasing revenues and net income last quarter. As a result, prudent investors may want to wait on the sidelines until the company starts seeing revenues in the door and improved financials.
CONTACT: Daniel Minton, Managing Director, 406-862-5400, daniel@accelerize.com