LAS VEGAS, April 10, 2015 /PRNewswire/ -- Cord Blood
America, Inc. (www.cordblood-america.com) (OTC Bulletin Board:
CBAI) ("CBAI" or the "Company") today announced it has executed a
purchase agreement for the sale of $0.724
million preferred equity investment funded by Red Oak
Partners, LLC and its affiliates ("Red
Oak"). All proceeds shall be used towards retiring
debt owed to Tonaquint, Inc.
Joseph Vicente, President of Cord
Blood America, Inc. commented "In December
2014 we settled litigation with Tonaquint, Inc. which was a
positive but resulted in monthly amortization and interest payments
in excess of our estimated cash generation. Accordingly, the
Company was weakly positioned and could not seize upon the sizable
growth and market opportunities available to us. Red Oak's investment stabilizes our organization
and allows us to immediately focus on growth endeavors, including
taking market share from our competitors. We are
adjourning the April 10th
special meeting to May 7th
in order to allow shareholders reasonable time to digest this
investment and make an informed decision.
Red Oak has had meaningful
dialogue and iterations of term sheets prior to and during the
Tonaquint litigation as well as after the settlement was announced
and brings significant value across M&A, financing, and
corporate governance. Red
Oak's managing member (David
Sandberg) and its team have strong public company experience
and a track record of success, and we plan to leverage their skills
to help us grow shareholder value. As part of their
investment, the Board will consist of a majority of Directors
independent from management.
Stated David Sandberg, "With a
more stabilized balance sheet, CBAI is well positioned to pursue a
sensible yet meaningful growth strategy. We believe this best
serves shareholders' interests and we are already working to
compile and reach out to M&A targets. CBAI's excess
storage capacity coupled with a less constrained marketing budget
allows for a real opportunity to grow its business both organically
and via acquisitions with improved margins and earnings to the
bottom line. In addition to focusing on growth, the Board
will be populated with new Directors independent from management
and we expect to implement shareholder friendly changes to CBAI's
Charter and Bylaws as well as to call an annual meeting for
Director Elections and other business (as is proposed). We
expect CBAI to announce an annual meeting date shortly after the
May 7th special
meeting.
Continued Mr. Vicente, "As many of you may know, Cryo-Cell
International, one of our competitors, has publicly announced over
the past 30 days (through a series of filings) their ownership
stake in CBAI and stated its intention to nominate a slate of
directors for election and, if successful, to 'explore various
alternatives, including the potential for a merger between CBAI and
Cryo-Cell, with Cryo-Cell as the surviving entity.' We are
aware we have been in a weak position given our balance sheet, and
some – like Cryo-Cell – are seeking to take advantage of
this. Red Oak has a
demonstrated history of good governance and going out of their way
to protect the rights of all shareholders, not just their own
interests. While it is important to provide balance sheet
relief via Red Oak's investment, we
would only enter into a transaction that is in the best interest of
all shareholders and provides the greatest opportunity to create
future value for all shareholders. As part of this investment
agreement with Red Oak, should
Red Oak seek to take CBAI private
then any voting rights it holds in excess of what the second
largest shareholder holds shall be voted along with the consensus
outside of Red Oak.
Effectively their excess voting rights can work against them if the
majority of other holders don't support such a deal."
"In closing, we are confident that the platform, both
operationally and financially, is at its strongest point in the
Company's operating history. With the Company's past issues
largely resolved and a new and experienced partner in place, we
expect to produce significantly improved long term shareholder
returns and be better able to compete in our industry – including
against Cryo-Cell and others – as we move ahead."
About Cord Blood America
Cord Blood America, Inc. is the parent company of CorCell
Companies, Inc. which, along with Cord Blood America, Inc.,
facilitates umbilical cord blood and cord tissue stem cell
processing and storage for expectant parents and their
children. Collected through a safe and non-invasive process,
cord blood stem cells offer a powerful and potentially life-saving
resource for treating a growing number of ailments, including
cancer, leukemia, blood, and immune disorders. To find out more
about Cord Blood America, Inc. and CorCell Companies, Inc., visit
our websites: http://www.cordblood-america.com/ for investor
information and http://www.corcell.com/ for customer
information.
Forward-Looking Statements
Some statements made in this press release are forward-looking
statements, which are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. We use
words such as "anticipate," "believe," "expect,'' "future,"
"intend," "plan," and similar expressions to identify
forward-looking statements. These statements including those
related to the growth of the industry, new stem cell treatments,
and Cord Blood America's performance, are only predictions and are
subject to certain risks, uncertainties and assumptions. Additional
risks are identified and described in the Company's public filings
with the Securities and Exchange Commission. Statements made herein
are as of the date of this press release and should not be relied
upon as of any subsequent date. The Company's past performance is
not necessarily indicative of its future performance. The Company
does not undertake, and the Company specifically disclaims any
obligation to update any forward-looking statements to reflect
occurrences, developments, events, or circumstances after the date
of such statement.
Investor
Contact:
|
Cameron
Donahue
|
|
Hayden IR
|
|
(651)
653-1854
|
|
cameron@haydenir.com
|
Web Site: http://www.cordblood-america.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cord-blood-america-announces-equity-investment-by-red-oak-partners-llc-for-purposes-of-debt-retirement-and-to-focus-on-forward-growth-adjourns-special-meeting-to-may-7th-300063995.html
SOURCE Cord Blood America, Inc.