The news did not get the same reaction as the one the promotions got, but still CBAI stock received enormous trading volume of over 133 million shares and closed the market with 5% higher share price. The share price increase was much more considerable within the session as the price reached $0.0047.
According to the 8-k filing from yesterday, Cord Blood America keeps its plans to expand internationally. The company has signed last Friday a Letter of Intent to acquire Cell de México, S.A. de C.V. Further, the filing describes the new acquisition target as the largest umbilical cord blood stem cell storage company in the country, having over 70,000 samples in storage and an average of 8,000 new customers each of the last three years. The expected revenue increase for Cord Blood has also been provided and it amounts for $10 million per year.
But as the latest financial report of the company would suggest, a lot of events should happen before it can enjoy that revenue boost up. The purchase price is set at $17.84 million, $12.5 million to be paid at the closing, and CBAI also has to pay debts of the acquired company for $5.5 million. With CBAI cash position of $236,000, the additionally created obligations under the LOI sound more than logical.
The acquisition is subject to Cord Blood raising $14 million through a private placement, and amending its Articles of Incorporation so as to create sufficient authorized number of shares for issuance for the new capital required, the extent of the expected dilution being enormous at the current price level. Finally, the due diligence on Cryo-Cell de Mexico is also yet to be undertaken and completed.
