Company Quick10K Filing
Quick10K
CBA Florida
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2018-08-14 Exhibits
8-K 2018-05-31 Amend Bylaw, Exhibits
8-K 2018-05-29 Shareholder Vote
8-K 2018-05-22 Amend Bylaw, Exhibits
8-K 2018-05-16 M&A, Officers, Amend Bylaw, Other Events, Exhibits
8-K 2018-05-14 Shareholder Vote, Other Events, Exhibits
8-K 2018-04-25 Enter Agreement, Shareholder Rights, Amend Bylaw, Other Events, Exhibits
8-K 2018-02-06 Enter Agreement, Other Events, Exhibits
ORIG Ocean Rig Udw 2,720
STLR Stellar Acquisition III 405
APLT Applied Therapeutics 173
QSEP QS Energy 44
SPND Spindletop Oil & Gas 27
GRMM Grom Social Enterprises 17
AGUSA AG Acquisition Group 0
DJO DJO Finance 0
SCTF Securetech Innovations 0
TRXD Trxade Group 0
CBAI 2019-06-30
Note 1.  Organization and Description of Business
Note 2.  Summary of Significant Accounting Policies
Note 5.  Commitments and Contingencies
Note 6.  Share Based Compensation
Note 7. Income Tax
Note 8.  Stockholder’S Equity
EX-31.1 cbai_ex311.htm
EX-32.1 cbai_ex321.htm

CBA Florida Earnings 2019-06-30

CBAI 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 cbai_10q.htm QUARTERLY REPORT Blueprint
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2019
 
or
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 
for the transition period from _________ to _________
 
CBA FLORIDA, 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
(Address of principal executive offices)
 
(Zip Code)
 
(702) 914-7293
(Registrant's telephone number, including area code)
 
Indicate by check mark whether the Registrant (1) has filed all documents and reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filings for the past 90 days. Yes ☐ No☑
 
Indicate by check mark whether the registrant has submitted electronically every interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☑
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act.): Yes ☐ No ☑
 
Number of shares of CBA Florida, Inc. common stock, $0.0001 par value, outstanding as of August 14, 2019, 1,272,066,146 exclusive of treasury shares.
 

 
 

CBA FLORIDA, INC. AND SUBSIDIARIES
 
INDEX TO FORM 10-Q
 
 
 
 
 
 
Condensed Consolidated Financial Statements (unaudited) 
 
3
 
 
 
 
 
 
 
Condensed Consolidated Balance Sheets June 30, 2019 (unaudited) and December 31, 2018
 
3
 
 
 
 
 
 
 
Condensed Consolidated Statements of Income (unaudited) for the six months ended June 30, 2019 and June 30, 2018 
 
4
 
 
 
 
 
 
 
Condensed Consolidated Statements of Income (Loss) (unaudited) for the three months ended June 30, 2019 and 30, 2018 
 
5
 
 
 
 
 
 
 
Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the six months ended June 30, 2019 and June 30, 2018 
 
6
 
 
 
 
 
 
 
Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the three months ended June 30, 2019 and June 30, 2018
 
7
 
 
 
 
 
 
 
Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2019 and June 30, 2018 
 
8
 
 
 
 
 
 
 
Notes to Condensed Consolidated Financial Statements (unaudited) 
 
9
 
 
 
 
 
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations 
 
18
 
 
 
 
 
 
Quantitative and Qualitative Disclosures About Market Risk 
 
19
 
 
 
 
 
 
Controls and Procedures 
 
19
 
 
 
 
 
 
 
 
 
 
 
Legal Proceedings 
 
20
 
 
 
 
 
 
Risk Factors
 
20
 
 
 
 
 
 
Unregistered Sales of Equity Securities and Use of Proceeds 
 
20
 
 
 
 
 
 
Defaults Upon Senior Securities 
 
20
 
 
 
 
 
 
Mine Safety Disclosures 
 
20
 
 
 
 
 
 
Other Information 
 
20
 
 
 
 
 
 
Exhibits
 
20
 
 
 
 
 
 
Signatures 
 
21
 
 
 
 
 
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
CBA FLORIDA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
 
June 30,
2019
(unaudited)
 
 
December 31,
2018
 
 
 
 
 
 
 
 
 Current assets:
 
 
 
 
 
 
Cash
 $11,499,859 
 $12,412,583 
Accounts receivable, net of allowance for doubtful accounts of $0.00 and $0.00, respectively
  21,633 
  11,876 
Prepaid expenses
  106,553 
  113,259 
Total current assets
  11,628,045 
  12,537,718 
 
    
    
Cash held in escrow
  3,005,165 
  3,000,674 
Other Assets
  31,478 
  31,478 
Total assets
 $14,664,688 
 $15,569,870 
 
    
    
Liabilities and Stockholders’ equity:
    
    
Accounts payable
 $301 
 $109,689 
    Income tax payable
  259,176 
  618,176 
    Sales tax payable & other
  114,000 
  116,000 
Deferred tax liability
  201,788 
  503,577 
Accrued expenses
  16,556 
  64,902 
Total current liabilities
  591,821 
  1,412,344 
Total liabilities
  591,821 
  1,412,344 
 
    
    
Stockholders' equity:
    
    
Preferred stock, $.0001 par value, 5,000,000 shares authorized, no shares outstanding
  -- 
  -- 
Common stock, $.0001 par value, 2,890,000,000 shares authorized, 1,272,066,146 shares issued and outstanding, inclusive of treasury shares, respectively
  127,207 
  127,207 
Additional paid-in capital
  53,954,510 
  53,954,510 
Common stock held in treasury stock, 20,000 shares
  (599,833)
  (599,833)
Accumulated deficit
  (39,409,017)
  (39,324,358)
Total stockholders’ equity
  14,072,867 
  14,157,526 
Total liabilities and stockholders' equity
 $14,664,688 
 $15,569,870 
 
See accompanying notes to these unaudited condensed consolidated financial statements.
 
 
3
 
 
CBA FLORIDA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND JUNE 30, 2018
 
 
 
 
Six-Month
Period Ended
 
 
 Six-Month
Period Ended
 
 
 
 June 30,
 
 
 June 30,
 
 
 
 2019
 
 
 2018
 
 
 
 
 
 
 
 
Revenue
 $-- 
 $-- 
Cost of services
  -- 
  -- 
Gross profit
  -- 
  -- 
Administrative and selling expenses
  (252,054)
  (1,191,615)
Loss from operations
  (252,054)
  (1,191,615)
 
    
    
 
    
    
Other income
  145,606 
  13,230 
Loss from continuing operations before income taxes
  (106,448)
  (1,178,385)
Income tax benefit
  21,789 
  260,000 
Net loss from continuing operations
  (84,659)
  (918,385)
Net income from discontinued operations, net of tax
  -- 
  14,743,188 
Net income (loss)
  (84,659)
  13,824,803 
 
    
    
Basic earnings from continuing operations per share
 $(0.00)
 $(0.00)
Diluted earnings from continuing operations per share
 $(0.00 
 $(0.00)
Basic earnings from discontinued operations per share
 $0.00 
 $0.01 
Diluted earnings from discontinued operations per share
 $0.00 
 $0.01 
 
    
    
Basic earnings per share
 $0.00 
 $0.01 
Diluted earnings per share
 $0.00 
 $0.01 
 
    
    
Weighted average common shares outstanding
    
    
Basic weighted average common shares outstanding
  1,272,066,146 
  1,272,066,146 
Diluted weighted average common shares outstanding
  1,272,066,146 
  1,272,066,146 
 
    
    
 
See accompanying notes to these unaudited condensed consolidated financial statements.
 
 
4
 

CBA FLORIDA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
FOR THE THREE MONTHS ENDED JUNE 30, 2019 AND JUNE 30, 2018
 
 
 
 
Three-Month
Period Ended
 
 
 
Three-Month
Period Ended
 
 
 
 June 30,
 
 
 June 30,
 
 
 
 2019
 
 
 2018
 
 
 
 
 
 
 
 
Revenue
 $-- 
 $  
Cost of services
  -- 
    
Gross profit
  -- 
    
Administrative and selling expenses
  (148,623)
  (762,693)
Loss from operations
  (148,623)
  (762,693)
 
 
 
    
    
 
 
 
    
    
Other income
  97,514 
  6,407 
Loss from continuing operations before income taxes
  (51,109)
  (756,286)
Income tax benefit
  8,901 
  260,000 
Net loss from continuing operations
  (42,208)
  (496,286)
Net income from discontinued operations, net of tax
  -- 
  14,284,439 
Net income (loss)
  (42,208)
  13,788,153 
 
 
 
    
    
Basic earnings from continuing operations per share
 $(0.00)
 $(0.00)
Diluted earnings from continuing operations per share
 $(0.00 
 $(0.00)
Basic earnings from discontinued operations per share
 $0.00 
 $0.01 
Diluted earnings from discontinued operations per share
 $0.00 
 $0.01 
 
    
    
Basic earnings per share
 $0.00 
 $0.01 
Diluted earnings per share
 $0.00 
 $0.01 
 
    
    
Weighted average common shares outstanding
    
    
Basic weighted average common shares outstanding
  1,272,066,146 
  1,272,066,146 
Diluted weighted average common shares outstanding
  1,272,066,146 
  1,272,066,146 
 
    
    
 
See accompanying notes to these unaudited condensed consolidated financial statements.
 
 
5
 
 
CBA FLORIDA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
 
 
Six-Month period Ended June 30, 2019
 
 
 
Preferred stock
 
 
Common stock
 
 
Additional paid- in capital
 
 
Accumulated deficit
 
 
Treasury stock
 
 
Total
 
 
 
Shares
 
 
Amount
 
 
Shares
 
 
Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
Balances at December 31, 2018
  -- 
 $-- 
  1,272,066,146 
  127,207 
  53,954,510 
  (39,324,358)
  (599,833)
  14,157,526 
Net Income
  -- 
  -- 
    
  -- 
  -- 
  (84,659)
  -- 
  (84,659)
Other comprehensive income:
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  -- 
Deferred unrealized gain on derivatives
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  -- 
Dividends declared:
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  -- 
Preferred stock, $0.0001/Share
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  -- 
Common stock, $0.0001/Share
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  -- 
Acquisition of treasury stock
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  -- 
Cumulative effect adjustment
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  -- 
Balances at June 30, 2019
  -- 
 $-- 
  1,272,066,146 
  127,207 
  53,954,510 
  (39,409,017)
  (599,833)
  14,072,867 
 
 
 
Six-Month period Ended June 30, 2018
 
 
 
Preferred stock
 
 
Common stock
 
 
Additional paid- in capital
 
 
Accumulated deficit
 
 
Treasury stock
 
 
Total
 
 
 
Shares
 
 
Amount
 
 
Shares
 
 
Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
Balances at December 31, 2017
  -- 
 $-- 
  1,272,066,146 
  127,207 
  53,954,510 
  (52,497,796)
  (599,833)
  984,088 
Net Income
  -- 
  -- 
    
  -- 
  -- 
  13,824,803 
  -- 
  13,824,803 
Other comprehensive income:
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Deferred unrealized gain on derivatives
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Dividends declared:
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Preferred stock, $0.0001/Share
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Common stock, $0.0001/Share
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Acquisition of treasury stock
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Cumulative effect adjustment
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Balances at June 30, 2018
  -- 
 $-- 
  1,272,066,146 
  127,207 
  53,954,510 
  (38,672,993)
  (599,833)
  14,808,891 
 
See accompanying notes to these unaudited condensed consolidated financial statements
 
 
6
 
 
CBA FLORIDA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
 
 
Three-Month period Ended June 30, 2019
 
 
 
Preferred stock
 
 
Common stock
 
 
Additional paid- in capital
 
 
Accumulated deficit
 
 
Treasury stock
 
 
Total
 
 
 
Shares
 
 
Amount
 
 
Shares
 
 
Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
Balances at March 31, 2019
  -- 
 $-- 
  1,272,066,146 
  127,207 
  53,954,510 
  (39,324,358)
  (599,833)
  14,157,526 
Net Income
  -- 
  -- 
    
  -- 
  -- 
  (42,208)
  -- 
  (42,208)
Other comprehensive income:
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Deferred unrealized gain on derivatives
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Dividends declared:
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Preferred stock, $0.0001/Share
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Common stock, $0.0001/Share
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Acquisition of treasury stock
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Cumulative effect adjustment
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Balances at June 30, 2019
  -- 
 $-- 
  1,272,066,146 
  127,207 
  53,954,510 
  (39,366,566)
  (599,833)
  14,115,318 
 
 
 
                        Three-Month period Ended June 30, 2018
 
 
 
Preferred stock
 
 
Common stock
 
 
Additional paid- in capital
 
 
Accumulated deficit
 
 
Treasury stock
 
 
Total
 
 
 
Shares
 
 
Amount
 
 
Shares
 
 
Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
Balances at March 31, 2018
  -- 
 $-- 
  1,272,066,146 
  127,207 
  53,954,510 
  (52,497,796)
  (599,833)
  984,088 
Net Income
  -- 
  -- 
    
  -- 
  -- 
  13,788,153 
  -- 
  13,788,153 
Other comprehensive income:
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Deferred unrealized gain on derivatives
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Dividends declared:
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Preferred stock, $0.0001/Share
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Common stock, $0.0001/Share
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Acquisition of treasury stock
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Cumulative effect adjustment
  -- 
  -- 
    
  -- 
  -- 
  -- 
  -- 
  - 
Balances at June 30, 2018
  -- 
 $-- 
  1,272,066,146 
  127,207 
  53,954,510 
  (38,709,643)
  (599,833)
  14,772,241 
 
See accompanying notes to these unaudited condensed consolidated financial statements.
 
 
7
 
 
CBA FLORIDA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS 
(UNAUDITED)
 
 
 
Six-Month
Period Ended
 
 
Six-Month
Period Ended
 
 
 
 June 30, 2019
 
 
June 30, 2018
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
 
Net loss from continuing operations
 $(84,659)
 $(918,385)
Adjustments to reconcile net income to net cash used in operating activities:
    
    
Amortization of loan receivable discount
  -- 
  (13,230)
Depreciation and amortization
  -- 
  2,686 
Bad debt
  -- 
  16,197 
Net change in operating assets and liabilities
    
    
     Changes in accounts receivable
  (9,757)
  (177,905)
     Changes in prepaid
  6,706 
  72,175 
     Change in escrow receivable
  (4,491)
  -- 
     Changes in other assets
  -- 
  (15,822)
     Changes in accounts payable
  (109,388)
  (136,075)
     Changes in accrued expenses
  (48,346)
  (15,174)
     Changes in severance payable
  -- 
  (26,764)
     Changes in deferred income taxes
  (662,789)
  (260,000)
 
    
    
NET CASH USED IN OPERATING ACTIVITIES OF CONTINUING OPERATIONS
  (912,724)
  (1,472,297)
 
    
    
NET CASH USED IN INVESTING ACTIVITIES OF
    
    
CONTINUING OPERATIONS
    
    
 Payment from loan receivable- BioCells
  -- 
  55,000 
CASH FLOWS FROM FINANCING ACTIVITIES
Change in cash – continuing operations
  -- 
  (1,417,297)
 
    
    
CASH FLOWS FROM DISCONTINUED OPERATIONS
    
    
     Net Cash provided by operating activities
  -- 
  1,087,005 
     Net Cash provided by investing activities
  -- 
  12,500,000 
NET CASH PROVIDED BY DISCONTINUED OPERATIONS
  -- 
  13,587,005 
 
    
    
NET INCREASE IN CASH
  (912,724)
  12,169,708 
 
    
    
Cash balance at beginning of period
 $12,412,583 
 $1,069,917 
Cash balance at end of period
 $11,499,859 
 $13,239,625 
 
    
    
Cash Paid For
    
    
     Interest
 $-- 
 $-- 
     Taxes
 $(641,000)
 $-- 
 
See accompanying notes to these unaudited condensed consolidated financial statements.
 
 
8
 
 
Note 1.  Organization and Description of Business
 
Overview
 
CBA Florida, Inc. ("CBAI" or the “Company”), formerly known as Cord Blood America, Inc., was incorporated in the State of Florida on October 12, 1999 as D&A Lending, Inc. CBAI's wholly-owned subsidiaries include CBA Partners, Inc. which was formerly Cord Partners, Inc., CBA Companies Inc. which was formerly CorCell Companies, Inc., and CBA Sub Ltd. which was formerly CorCell, Ltd., (CBA Partners, Inc., CBA Companies Inc. and CBA Sub Ltd. are sometimes referred to herein collectively as “Cord”), CBA Properties, Inc. ("Properties"), and Career Channel, Inc. formerly D/B/A Rainmakers International.  As further described below, on May 17, 2018, CBAI completed a sale of substantially all of the assets of the Company and its wholly-owned subsidiaries. Prior to the sale of substantially all of the assets, CBAI and its subsidiaries had engaged in the following business activities:
 
CBAI and Cord specialized in providing private cord blood and cord tissue stem cell services. Additionally, the Company was in the business of procuring birth tissue for organizations utilizing the tissue in the transplantation and/or research of therapeutic products.
 
Properties was formed to hold corporate trademarks and other intellectual property.
 
Company Developments – Sale of Assets
 
On February 7, 2018, the Company announced that it entered into an Asset Purchase Agreement, dated as of February 6, 2018 (the “Purchase Agreement”), with California Cryobank Stem Cell Services LLC (“FamilyCord”). The sale of substantially all of the Company’s assets pursuant to the Purchase Agreement was completed on May 17, 2018.
 
Pursuant to the terms of the Purchase Agreement, FamilyCord acquired from CBAI substantially all of the assets of CBAI and its wholly-owned subsidiaries and assumed certain liabilities of CBAI and its wholly-owned subsidiaries. The sale did not include CBAI’s cash and certain other excluded assets and liabilities. FamilyCord agreed to pay a purchase price of $15,500,000 in cash at closing with $3,000,000 of the purchase price deposited into escrow to secure CBAI’s indemnification obligations under the Purchase Agreement.
 
The Purchase Agreement contained customary representations, warranties and covenants for a transaction of this type and nature. Pursuant to the terms of the Purchase Agreement, CBAI indemnified FamilyCord for breaches of its representations and warranties, breaches of covenants, losses related to excluded assets or excluded liabilities and certain other matters. The representations and warranties set forth in the Purchase Agreement generally survive for two years following the closing.
 
In connection with the sale, the parties also entered into a transition services agreement designed to ensure a smooth transition of CBAI’s business from CBAI to FamilyCord. 
 
CBAI presently anticipates it will distribute a portion of the sale proceeds to its shareholders in 2019. However, no distribution has been declared by CBAI’s board of directors. 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, indemnification obligations under the Purchase Agreement 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.
 
Sale of China Stem Cell Stock and Convertible Debt
 
The Company entered into an Asset Purchase Agreement, dated June 19, 2019 (the “Golden Sun Purchase Agreement”), with Golden Sun Multi-Manager Fund LP (“Golden Sun”), whereby the Company sold all shares and convertible debt it held in China Stem Cells Ltd. (“China Stem Cells”) to Golden Sun. The total proceeds from the sale was $50,000. The Company previously wrote-off the entire value of shares and convertible debt held, and has accrued a gain for the full value of sale proceeds received on its statement of operations for the three and six months ended June 30, 2019.
 
 
9
 
 
Unaudited Interim Financial Information
 
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete annual financial statements.  These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein.  Operating results for the three and six ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 or for any other future period.  The condensed consolidated balance sheet at December 31, 2018 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, 2018 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
 
Financial Statement Presentation
 
The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from these estimates. Certain prior year amounts have been reclassified to conform to current year presentation.
 
Pursuant to guidance in ASC 205-20, Presentation of Financial Statements, and ASC 360-10-45-9 to 14, Property, Plant and Equipment, regarding when the results of operations of a component of an entity that is classified as held for sale would be reported as a discontinued operation in the financial statements of the entity. The Company determined that it met the threshold for reporting discontinued operations due to a strategic business shift having a major effect on an entity's operations and financial results.
 
On February 7, 2018, the Company announced that it entered into the Purchase Agreement with FamilyCord. The sale of substantially all of the Company’s assets occurred on May 17, 2018. For this reason, the results of operations for the cord blood and cord tissue stem cell operations have been reclassified into discontinued operations.
 
Basis of Consolidation
 
The consolidated financial statements include the accounts of CBAI and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated upon consolidation. 
 
Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.
 
Cash
 
Cash and cash equivalents include cash on hand, deposits in banks with maturities of three months or less, and all highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less at the time of purchase. The value of cash and cash equivalents held by the Company at a bank in excess of federally insured limits was $11,249,859 during the period ended June 30,2019.
 
The Company maintains cash and cash equivalents at several financial institutions.
 
Accounts Receivable
 
Accounts receivable consist of the amounts due for facilitating the processing and storage of umbilical cord blood and cord tissue, and birth tissue procurement services.  Accounts receivable relating to deferred revenues are netted against deferred revenue for presentation purposes. The allowance for doubtful accounts is estimated based upon historical experience. The allowance is reviewed quarterly and adjusted for accounts deemed uncollectible by management. Amounts are written off when all collection efforts have failed. The Company wrote off $0 and $16,197 in bad debt expense during the six months ended June 30, 2019 and 2018, respectively.
 
 
10
 
 
Property and Equipment
 
Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. Routine maintenance and repairs are charged to expense as incurred while major replacement and improvements are capitalized as additions to the related assets. Sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the related asset and accumulated depreciation accounts with any gain or loss credited or charged to income upon disposition.

Income Taxes
 
The Company follows the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that included the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance based on the portion of tax benefits that more likely than not will not be realized.
 
The Company follows guidance issued by the FASB with regard to its accounting for uncertainty in income taxes recognized in the financial statements. Such guidance prescribes a recognition threshold of more likely than not and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities. Our policy is to include interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties totaled $641,000 and $0.00 for the six months ended June 30, 2019 and 2018, respectively. The Company files income tax returns with the Internal Revenue Service (“IRS”) and various state jurisdictions.
 
Accounting for Stock Option Plan
 
The Company follows the provisions of Accounting Standards Codification (“ASC”) 718, “Accounting for Stock-based Compensation”), which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
 
Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date.
 
Earnings (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.
 
Concentration of Risk
 
Credit risk represents the accounting loss that would be recognized at the reporting date if counterparties failed completely to perform as contracted. Concentrations of credit risk (whether on or off balance sheet) that arise from financial instruments exist for groups of customers or counterparties when they have similar economic characteristics that would cause their ability to meet their contractual obligations to be similarly affected by changes in economic or other conditions described below.
 
Relationships and agreements which could potentially expose the Company to concentrations of credit risk consist of the use of one source for the processing and storage of all umbilical cord blood and one source for the development and maintenance of a website. The Company believes that alternative sources are available for each of these concentrations.
 
Financial instruments that subject the Company to credit risk could consist of cash balances maintained in excess of federal depository insurance limits. The Company maintains its cash and cash equivalent balances with high credit quality financial institutions. At times, cash and cash equivalent balances may be in excess of Federal Deposit Insurance Corporation limits, and as of June 30, 2019, this was the case. To date, the Company has not experienced any such losses. 
 
 
11
 
 
Fair Value Measurements
 
Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure the fair value. Level inputs, as defined by ASC 820, are as follows:
 
Level 1 – quoted prices in active markets for identical assets or liabilities.
 
Level 2 – other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.
 
Level 3 – significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.
 
For certain of the Company’s financial instruments, including cash, accounts receivable, prepaid expenses and other assets, accounts payable and accrued expenses, and deferred revenues, the carrying amounts approximate fair value due to their short maturities. The carrying amounts of the Company’s notes receivable and notes payable approximates fair value based on the prevailing interest rates.
 
 
Recently Issued Accounting Pronouncements
 
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09) as modified by ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” and ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients.” The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, new and enhanced disclosures will be required. Companies may adopt the new standard either using the full retrospective approach, a modified retrospective approach with practical expedients, or a cumulative effect upon adoption approach. The Company adopted ASC 606 effective January 1, 2018 using the full retrospective approach. The adoption of ASU 2014-09 did not have any material impact on the Company’s consolidated financial position, results of operations, equity or cash flows.
 
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, in an effort to reduce the diversity of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. There has been no impact as a result of adopting this ASU on our financial statements and related disclosures.
 
In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard was effective for the Company on January 1, 2018, and there was no impact as a result of adopting this ASU on our financial statements and related disclosures.
 
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments of this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company determined that there no impact this ASU on the consolidated financial statements and related disclosures. The Company has no long-term operating leases on the date of adoption.
 
 
12
 
 
Note 3. Discontinued Operations - Cord Blood and Cord Tissue Stem Cell Storage Operations
 
On February 7, 2018, the Company announced that it entered into the Purchase Agreement with FamilyCord. The sale of substantially all of the Company’s assets to FamilyCord was completed on May 17, 2018.
 
Discontinued Operations
On May 17, 2018, the Company divested its Cord Blood and Cord Tissue Stem Cell Storage Operations (CBCTS) to FamilyCord $15.5 million in cash and the assumption of net liabilities of $473,538. The sale resulted in the recognition of an after-tax income of $13.9 million, which is reflected as net income from discontinued operations in the Consolidated Statements of Operations.
 
The Company has classified the CBCTS assets and liabilities as held-for-sale as of December 31, 2017 in the accompanying Consolidated Balance Sheets and has classified the CBCTS operating results, net of tax, as discontinued operations in the accompanying Consolidated Statement of Operations for all periods presented. Previously, CBCTS represented the sole operations of the Company.
 
Background
Pursuant to the terms of the Purchase Agreement, FamilyCord agreed to acquire from CBAI substantially all of the assets of CBAI and its wholly-owned subsidiaries and to assume certain liabilities of CBAI and its wholly-owned subsidiaries. FamilyCord agreed to pay a purchase price of $15,500,000 in cash at closing with $3,000,000 of the purchase price deposited into escrow to secure CBAI’s indemnification obligations under the Purchase Agreement. The sale, which was completed on May 17, 2018, did not include CBAI’s cash, accounts receivables, and certain other excluded assets and liabilities.
  
The assets sold and liabilities transferred in the transaction were previously the sole revenue generating assets of the Company. The results of operations associated with the assets sold have been reclassified into discontinued operations for periods prior to the completion of the transaction.
 
The following is a summary of assets and liabilities sold, and gain recognized, in connection with the sale of assets to FamilyCord during the year ended December 31, 2018:
 
 
Other current assets
 $45,391 
Total current assets
  45,391 
Customer contracts and relationships, net of amortization
  953,490 
Property, plant & equipment, less accumulated depreciation
  23,685 
Total assets
 $1,022,566 
 
    
Deferred revenue
 $1,496,104 
Total liabilities
 $1,496,104 
 
    
The gain on sale of assets was reported during the period was determined as follows:
    
Total assets sold
 $1,022,566 
Total liability sold
  1,496,104 
Net liability sold
  473,538 
 
    
Cash received
  12,500,000 
Cash in escrow
  3,000,000 
Total consideration
  15,500,000 
 
    
Net gain from sales of assets
 $15,973,538 
 
Income from Discontinued Operations
 
The sale of the majority of the assets and liabilities related to the cord blood and cord tissue stem cell operation represents a strategic shift in the Company’s business. For this reason, the results of operations related to the assets and liabilities held for sale for all periods are classified as discontinued operations.
 
 
13
 
 
The following is a summary of the results of operations related to the assets held for sale for the six months ended June 30, 2019 and 2018:
 
 
 
Six-Month Period Ended
 
 
Six-Month Period Ended
 
 
 
June 30,
2019
 
 
June 30,
2018
 
Revenue
 $-- 
 $1,108,381 
Cost of services
  -- 
  (308,976)
Gross profit
  -- 
  799,405 
Depreciation and amortization
  -- 
  (99,231)
Income from Discontinued Operations
  -- 
  700,174 
FamilyCord reimbursement
  -- 
  164,477 
Gain on sale of assets
  -- 
  15,973,537 
Income from discontinued operations before taxes
  -- 
  16,838,188 
Income taxes
  -- 
  (2,095,000)
Net income from discontinued operations
  -- 
  14,743,188 
 
The following is a summary of net cash provided by operating activities and investing activities for the assets held for sale for the six months ended June 30, 2019 and June 30, 2018:
 
 
 
Six-Month Period Ended
 
 
Six-Month Period Ended
 
 
 
June 30,
2019
 
 
June 30,
2018
 
Cash provided by discontinued operations
 $-- 
 $1,087,005 
Cash provided by investing activities of discontinued operations
 $-- 
 $12,500,000 
 
 
The following is a summary of the results of operations related to the assets held for sale for the three months ended June 30, 2019 and 2018:
 
 
 
Three-Month Period Ended
 
 
Three-Month Period Ended
 
 
 
June 30,
2019
 
 
June 30,
2018
 
Revenue
 $-- 
 $405,502 
Cost of services
  -- 
  (136,646)
Gross profit
  -- 
  268,856 
Depreciation and amortization
  -- 
  (27,431)
Income from Discontinued Operations
  -- 
  241,425 
FamilyCord reimbursement
  -- 
  164,477 
Gain on sale of assets
  -- 
  15,973,537 
Income from discontinued operations before taxes
  -- 
  16,379,439 
Income taxes
  -- 
  (2,095,000)
Net income from discontinued operations
  -- 
  14,248,439 
 
The following is a summary of net cash provided by operating activities and investing activities for the assets held for sale for the three months ended June 30, 2019 and June 30, 2018:
 
 
 
Three-Month Period Ended
 
 
Three-Month Period Ended
 
 
 
June 30,
2019
 
 
June 30,
2018
 
Cash provided by discontinued operations
 $-- 
 $526,869 
Cash provided by investing activities of discontinued operations
 $-- 
 $12,500,000 
 
 
14
 

 Note 4. Property and Equipment
 
At June 30, 2019 and December 31, 2018, property and equipment consist of:
 
 
 
Useful Life
(Years)
 
 
June 30,
2019
 
 
December 31,
2018
 
Furniture and fixtures
  1-5 
 $-- 
 $17,597 
Computer equipment
  5 
  -- 
  124,466 
Laboratory Equipment
  1-5 
  -- 
  5,837 
Freezer equipment
  7-15 
  -- 
  34,699 
Leasehold Improvements
  5 
  -- 
  102,862 
 
    
  -- 
  285,461 
Less: accumulated depreciation and amortization
    
  -- 
  (285,461)
 
    
 $-- 
 $-- 
 
For the six months ended June 30, 2019 and 2018, depreciation expense totaled $0 and $2,686 respectively for continuing operations and $0 and $5,682 respectively for discontinued operations.
 
For the three months ended June 30, 2019 and 2018, depreciation expense totaled $0 and $1,344 respectively for continuing operations and $0 and $2,345, respectively for discontinued operations.
 
 
Note 5.  Commitments and Contingencies
 
Operating Leases
 
On January 21, 2014, the Company entered a First Amendment to Lease (the “Amendment”), which extended its lease at the property located at 1857 Helm Drive, Las Vegas (the “Property”), Nevada through September 30, 2019.  In connection with the Amendment, the Company received an abatement of the entire amount of its rent for January 2014, except for common area maintenance (“CAM”) charges.  In addition, as of October 1, 2014, the Company’s monthly lease payments reverted back to their rates as they existed in June 2009, other than CAM charges, with annual adjustments thereafter as set forth in the Amendment. Moreover, the landlord had the option to lease a portion of the premises then occupied by the Company to a third party, and if this portion is leased to a third party, the Company’s monthly rent amount was to be reduced pro rata with the portion of the space leased to a third party.  If the landlord was unable to or elected not to lease a portion of the premises to a third party by November 30, 2015 and each subsequent anniversary thereof, the Company was to receive an additional abatement of one month rent, excluding CAM charges, in December 2015, December 2016 and December 2017, respectively and as applicable. Effective May 15, 2016, the Company entered a Second Amendment to Lease. The Second Amendment to Lease sets forth that the square footage of the Property has been reduced by 380 square feet, such that the Property now consists of 16,523 square feet, confirms the abatements set forth in the First Amendment to Lease, sets forth that the Company’s CAM expenses and home owner association costs shall be calculated based on the reduced square footage amount, and confirms that the Company’s monthly rent amounts will remain unchanged from the First Amendment to Lease. On October 25, 2018, the Company entered into a Sublease with a Subleasee for its offices at 1857 Helm Drive, Las Vegas, Nevada. The Sublease was approved by the Landlord on October 26, 2018 and includes essentially the same terms as lease payment obligations included in the First Amendment to Lease between the Company and the Landlord. Lease payments will cover the period commencing the second half of October 2018 through September 30, 2019, the end of the remaining term existing on the First Amendment to Lease.
 
Commitments for future minimum rental payments, by year, and in the aggregate, to be paid under such operating lease as of December 31, 2018, were as follows:
 
 
 
Rent
 
 
 
to be paid.
 
2019
  48,612 
Total
 $48,612 
 
 
15
 
 
Note 6.  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. On July 13, 2009, the Company registered its 2009 Flexible Stock Plan, which increased the total shares available to 4 million common shares. The plan allows the Company to issue either stock options or common shares from this Plan.
 
On June 3, 2011, the Company registered its 2011 Flexible Stock Option plan, and reserved 1,000,000 shares of the Company's common stock for future issuance under the Plan. The Company canceled the Company's 2010 Flexible Stock Plan, and returned 501,991 reserved but unused common shares back to its treasury.
 
Stock options that vest at the end of a one-year period are amortized over the vesting period using the straight-line method. For stock options awarded using graded vesting, the expense is recorded at the beginning of each year in which a percentage of the options vests. The Company did not issue any stock options during the six months ended June 30, 2019 and the year ended December 31, 2018.
 
The Company’s stock option activity was as follows:
 
 
 
Stock
Options
 
 
Weighted Average Exercise Price
 
 
Weighted Avg. Contractual
Remaining Life
 
 
 
 
 
 
 
 
 
 
 
Outstanding, December 31, 2018
  4,307,994 
  0.69 
  0.57 
Granted
  -- 
  -- 
  -- 
Exercised
  -- 
  -- 
  -- 
Forfeited/Expired
  -- 
  -- 
  -- 
Outstanding June 30, 2019
  4,307,994 
  0.69 
  0.57 
Exercisable June 30, 2019
  4,307,994 
  0.69 
  0.57 
 
The following table summarizes significant ranges of outstanding stock options under the stock option plan at June 30, 2019:
 
 
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
 
 $0-53 — 1.11 
  4,307,994 
  0.57 
 $0.69 
  4,307,994 
 $0.69 
 
  4,307,994 
  0.57 
 $0.69 
  4,307,994 
 $0.69 
 
 
16
 
 
Note 7. Income Tax
The Company provides for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. For the first quarter of 2019 the Company expects to utilize net operating losses generated in the current year to offset future deferred tax liabilities derived from the sale of assets in 2018.
The company expects its overall effective tax rate for 2019 to be around 23%.  
 
As of June 30, 2019 and December 31, 2018, the Company has a partial valuation allowance on net operating losses that may not be able to be utilized fully.
 
For the six months ended June 30, 2019 the Company recorded a tax benefit of $21,789, as compared to a tax benefit of $260,000 for the comparative six month period ended June 30, 2018.
 
For the three months ended June 30, 2019 the Company recorded a tax benefit of $8,901, as compared to a tax benefit of $260,000 for the comparative three month period ended June 30, 2018.
 
Note 8.  Stockholder’s Equity
 
Preferred Stock
 
The Company has 5,000,000 shares of $.0001 par value preferred stock authorized. As of June 30, 2019, and December 31, 2018, the Company had no shares of preferred stock outstanding.
 
Common Stock
 
The Company has 2,890,000,000 shares of $.0001 par value common stock authorized. As of June 30, 2019, and December 31, 2018, the Company had 1,272,066,146 shares of common stock issued and outstanding. 20,000 shares remain in the Company’s treasury.
 
 
Note: 9. Subsequent Events
None.
 
 
17
 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
 
As described under Note 1. Organization and Description of Business - Company Developments – Sale of Assets, the Company completed a sale of substantially all of the assets of the Company.
 
Forward Looking Statements
 
In addition to the historical information contained herein, the Company makes statements in this Quarterly Report on Form 10-Q that are forward-looking statements. Sometimes these statements will contain words such as "believes," "expects," "intends," "should," "will," "plans," and other similar words. Forward-looking statements include, without limitation, assumptions about the Company’s future ability to increase income streams, reduce and control costs, to grow revenue and earnings, and our ability to obtain additional debt and/or equity capital on commercially reasonable terms, none of which is certain. These statements are only predictions and involve known and unknown risks, uncertainties and other factors included in the Company's periodic reports with the SEC. Although forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment, actual results could differ materially from those anticipated in such statements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.
 
The following information should be read in conjunction with the Company’s June 30, 2019 unaudited condensed consolidated financial statements and related notes thereto included elsewhere in the quarterly report and with its consolidated financial statements and notes thereto for the year ended December 31, 2018 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, 2018, 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, 2018.
 
Summary of the Business and Discontinued Operations
 
Prior to the sale of substantially all of the assets, CBAI and its subsidiaries had engaged in the following business activities:
 
CBAI and Cord specialized in providing private cord blood and cord tissue stem cell services. Additionally, the Company was in the business of procuring birth tissue for organizations utilizing the tissue in the transplantation and/or research of therapeutic products.
 
Properties was formed to hold corporate trademarks and other intellectual property.
 
Results of Operations for the Three-Months Ended June 30, 2019
 
For the three months ended June 30, 2019, the Company had no revenue from discontinued operations, versus $0.41 million the same period of 2018.  During the three months ended June 30, 2018, revenues related to discontinued operations were generated primarily from two sources: new enrollment/processing fees; and recurring storage fees (both from cord blood and cord tissue).  The decrease in revenue is due to the sale of essentially all the Company assets on May 17, 2018. The Company had no recurring storage revenue for the three months ended June 30, 2019, versus $0.41 million for the prior comparative period ended June 30, 2018. 
 
Discontinued operations cost of services as a percentage of revenue was 0.0% for the three months ended June 30, 2019 compared to 33.6% in the same period of 2018.  The cost of services includes transportation of the umbilical cord blood and tissue from the hospital to the lab, direct material and labor, costs for processing and cryogenic storage of new samples by a third-party laboratory, and allocated rent, utility and general administrative expenses. For the three months ended June 30, 2019, the Company had no gross profit from discontinued operations, versus approximately $0.27 million the same period of 2018.
 
Administrative and selling expenses for the three months ended June 30, 2019 were $0.15 million as compared to $0.76 million for the comparative period of 2018, representing an 80.5% decrease. These expenses are primarily related to marketing/advertising, professional services, allocated facility, including utilities, expenses, and wages for personnel.
 
The Company’s net loss from continuing operations was $0.04 million for the three month period ended June 30, 2019, as compared to a net loss of $0.50 million for the comparative three month period of 2018.
 
The Company had no net income from discontinued operations for the three months ended June 30, 2019, versus $.24 million for the prior comparative period ended June 30, 2018.
 
 
18
 
 
Results of Operations for the Six-Months Ended June 30, 2019
 
For the six months ended June 30, 2019, the Company had no revenue from discontinued operations, versus $1.11 million the same period of 2018.  During the six months ended June 30, 2018, revenues related to discontinued operations were generated primarily from two sources: new enrollment/processing fees; and recurring storage fees (both from cord blood and cord tissue).  The decrease in revenue is due to the sale of essentially all the Company assets on May 17, 2018. The Company had no recurring storage revenue for the six months ended June 30, 2019, versus $1.11 million for the prior comparative period ended June 30, 2018. 
 
Discontinued operations cost of services as a percentage of revenue was 0.0% for the six months ended June 30, 2019 compared to 27.9% in the same period of 2018.  The cost of services includes transportation of the umbilical cord blood and tissue from the hospital to the lab, direct material and labor, costs for processing and cryogenic storage of new samples by a third-party laboratory, and allocated rent, utility and general administrative expenses. For the six months ended June 30, 2019, the Company had no gross profit from discontinued operations, versus approximately $.80 million the same period of 2018.
 
Administrative and selling expenses for the six months ended June 30, 2019 were $0.25 million as compared to $1.19 million for the comparative period of 2018, representing a 78.8% decrease. These expenses are primarily related to marketing/advertising, professional services, allocated facility, including utilities, expenses, and wages for personnel.
 
The Company’s net loss from continuing operations was $0.08 million for the six month period ended June 30, 2019, as compared to a net loss of $0.92 million for the comparative six month period of 2018.
 
The Company had no net income from discontinued operations for the six months ended June 30, 2019, versus $.70 million for the prior comparative period ended June 30, 2018.
 
  
Liquidity and Capital Resources
 
Total assets at June 30, 2019 were $14.66 million, compared to $15.57 million at December 31, 2018. Total liabilities at June 30, 2019 were $0.60 million consisting primarily of income tax payable and deferred taxes liability. At December 31, 2018, total liabilities were $1.41 consisting primarily of income tax payable and deferred taxes liability.
 
At June 30, 2019, the Company had $11.50 million in cash, a decrease of $0.91 million from the December 31, 2018 cash balance of $12.41 million. For the six months ended June 30, 2019, cash flow used in operating activities of continuing operations totaled $.91 million compared to $1.47 million for the six months ended June 30, 2018. For the six months ended June 30, 2019, the Company did not have cash flow generated from discontinued operations compared to $13.59 million for the six months ended June 30, 2018. At December 31, 2018, the Company had $3.00 million deposited in escrow to secure CBAI’s indemnification obligations under the Purchase Agreement.
 
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has incurred losses since its inception through December 31, 2014, as development and infrastructure costs were incurred in advance of obtaining customers. Starting in 2014, the Company's management commenced a plan to reduce operating expenses to be commensurate with operating cash flows. Prior to 2015, the Company relied on debt to provide capital for working capital needs. The Company had and has net income and positive cash flow, primarily from the discontinued operations, for the years ended December 31, 2018 and December 31, 2017. The Company believes it has sufficient cash on hand from the sale of substantially all its assets to meet the Company’s obligations over the next 12 months.
 
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not applicable.
 
ITEM 4T.  CONTROLS AND PROCEDURES
 
Evaluation of Disclosure Controls and Procedures
 
It is management's responsibility to establish and maintain adequate internal control over all financial reporting pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (the "Exchange Act"). The Company’s management has reviewed and evaluated the effectiveness of its disclosure controls and procedures as of March 31, 2019. Following this review and evaluation, management collectively determined that its disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to management, including its president and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
 
The deficiency in the Company’s disclosure controls and procedures is related to a lack of segregation of duties due to the size of the accounting department and the lack of experienced accountants due to the limited financial resources of the Company. The Company continues to actively develop the controls and resources necessary in order to be in position to remediate this lack of segregation of duties.
 
Changes in Internal Control over Financial Reporting
 
There were no significant changes in the Company's internal controls over financial reporting or in other factors that could significantly affect these internal controls subsequent to the date of their most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
 
 
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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 can be found in “Risk Factors” of its Annual Report on Form 10-K for the year ended December 31, 2018. There were no material changes to those risk factors for the three months ended March 31, 2019.
 
  
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
(a-b) Not applicable.
 
(c) Repurchase of Shares. The Company did not repurchase any of its shares during the quarter ended June 30, 2019.
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
NONE
 
ITEM 4. MINE SAFETY DISCLOSURES.
 
Not applicable.
 
ITEM 5. OTHER INFORMATION
 
NONE
 
ITEM 6. EXHIBITS
 
The following documents are included as exhibits to this Form 10Q:
 
EXHIBIT
 
DESCRIPTION
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 (2)
3.1(iii)
 
Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (3)
3.1(iv)
 
Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (4)
3.1(v)
 
Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (4)
3.1(vi)
 
Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (5)
3.1 (vii)
 
Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (6)
3.1 (viii)
 
Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (7)
3.1 (ix)
 
Articles of Amendment to the Articles of Incorporation of Cord Blood America, Inc. (8)
3.1 (x)

Articles of Amendment to the Articles of Incorporation of CBA Florida, Inc. (9)
3.2(i)
 
Amended and Restated Bylaws of Cord Blood America, Inc. (1)
3.2(ii)

Second Amended and Restated Bylaws of Cord Blood America, Inc. (7)
 
Certification of the registrant’s Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed Herewith)
 
Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
(1) Filed as an exhibit to Registration Statement on Form 10-SB filed on May 6, 2004
(2) Filed as an exhibit to Current Report on Form 8-K filed on August 29, 2008
(3) Filed as an exhibit to the Current Report on Form 8-K filed on March 31, 2009  
(4) Filed as an exhibit to Current Report on Form 10Q filed on May 23, 2011
(5) Filed as an exhibit to Current Report on Form S-8 filed on June 3, 2011
(6) Filed as an exhibit to the Current Report on Form 8-K filed on August 10, 2015
(7) Filed as an exhibit to the Current Report on Form 8-K filed on April 26, 2018
(8) Filed as an exhibit to the Current Report on Form 8-K filed on May 25, 2018
(9) Filed as an exhibit to the Current Report on Form 8-K filed on May 31, 2018
(7) Filed as an exhibit to the Current Report on Form 8-K filed on May 29, 2015
 
 
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SIGNATURES
 
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of August 2019.
 
 
CBA FLORIDA, INC.
 
 
 
 
 
 
By:
/s/Anthony Snow
 
 
 
President and Corporate Secretary
 
 
 
(Principal Executive Officer,
Principal Financial and Accounting Officer)
 
 
 
 
 
 
 
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