UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D. C. 20549



FORM 10-QSB



|                                                                                                                                                                                                                                                                                                     
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(Mark One)

[X]  Quarterly report under Section 13 or 15(d) of the Securities and Exchange Act of 1934 for the quarterly period ended September 30, 2007.

[   ]  Transition report pursuant to Section 13 or 15(d) of the Exchange Act for the transition period from ____________ to ____________ .



| |                                                    | 
| | -------------------------------------------------- | 
| | Cord Blood America, Inc.                           | 
| | (Exact name of registrant as specified in charter) | 



|                                               |  |                          |  |                                  
|---------------------------------------------- |  | ------------------------ |  | ---------------------------------
|Florida                                        |  | 000-50746                |  | 65-1078768                       
|(State or other jurisdiction
of incorporation) |  | (Commission File Number) |  | (IRS Employer
Identification No.)



| |                                                        | 
| | ------------------------------------------------------ | 
| | 501 Santa Monica Blvd, Ste 700, Santa Monica, CA 90401 | 
| | (Address of principal executive offices)               | 



| |                                                      | 
| | ---------------------------------------------------- | 
| | (310) 432-4090                                       | 
| | (Registrants Telephone Number, including Area Code) | 





|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Check whether the registrant: (1) has filed all reports required to be filed by Section 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 filing requirements for the past
90 days. YES [X] NO [  ]

State the number of shares outstanding of each of the issuer's classes of common equity, as of  November 11, 2007: 174,048,335 shares of common stock, par value $.0001 per share.

Transitional Small Business Disclosure Format:  YES [  ]  NO [X]









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CORD BLOOD AMERICA, INC. AND SUBSIDIARIES





INDEX TO FORM 10-QSB







|                                                                                                         |     
|-------------------------------------------------------------------------------------------------------- | ----
|                                                                                                         | Page
|PART I. FINANCIAL INFORMATION                                                                            | 3   
|Item 1.  Consolidated Financial Statements (unaudited)                                                   | 3   
|Consolidated Balance Sheet (unaudited) as of September 30, 2007                                          | 3   
|Consolidated Statements of Operations (unaudited) for the nine months ended September 30, 2007 and 2006  | 4   
|Consolidated Statements of Operations (unaudited) for the three months ended September 30, 2007 and 2006 | 5   
|Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2007 and 2006  | 6   
|Notes to Consolidated Financial Statements (unaudited)                                                   | 8   
|Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations           | 22  
|Item 3.  Controls and Procedures                                                                         | 26  
|PART II. OTHER INFORMATION                                                                               | 27  
|Item 1.  Legal Proceedings                                                                               | 27  
|Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds                                     | 27  
|Item 3.  Defaults Upon Senior Securities                                                                 | 28  
|Item 4.  Submission of Matters to a Vote of Securities Holders                                           | 28  
|Item 5.  Other Information                                                                               | 28  
|Item 6.  Exhibits and Reports on Form 8-K                                                                | 28  
|Signatures                                                                                               | 29  













2



---





PART I. FINANCIAL INFORMATION





ITEM 1.

CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)





CORD BLOOD AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (UNAUDITED)

AS OF SEPTEMBER 30, 2007



|                                                                                     |                                                                                                                                        |                                       |              |            
|------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ------------ | -----------
|ASSETS                                                                              
|Current assets:                                                                      |                                                                                                                                        |                                      
|                                                                                     | Cash                                                                                                                                   |                                       | $            | 107,343    
|                                                                                     | Cash in Escrow                                                                                                                         |                                       | 100,000     
|                                                                                     | Accounts receivable, net of allowance for doubtful accounts of $204,993                                                                |                                       | 419,214     
|                                                                                     | Inventory                                                                                                                              |                                       | 9,151       
|                                                                                     | Deposits                                                                                                                               |                                       | 34,081      
|                                                                                     | Prepaid expenses                                                                                                                       |                                       | 233,313     
|                                                                                     |                                                                                                                                        | Total current assets                  |              | 903,102    
|Property and equipment, net of accumulated depreciation and amortization of $179,154 |                                                                                                                                        | 164,022                              
|                                                                                     |                                                                                                                                        |                                      
|Customer contracts and relationships, net of amortization of $315,098                |                                                                                                                                        | 4,817,724                            
|Domain name, net of amortization of $63                                              |                                                                                                                                        | 337                                  
|Other assets                                                                         |                                                                                                                                        | 670                                  
|                                                                                     |                                                                                                                                        | Total assets                          | $            | 5,885,855  
|LIABILITIES AND CAPITAL DEFICIT                                                     
|Current liabilities:                                                                 |                                                                                                                                        |                                      
|                                                                                     | Accounts payable                                                                                                                       | $                                     | 1,014,001   
|                                                                                     | Accrued expenses                                                                                                                       |                                       | 1,050,100   
|                                                                                     | Deferred revenue                                                                                                                       |                                       | 964,259     
|                                                                                     | Advances from Officers                                                                                                                 |                                       | 206,468     
|                                                                                     | Capital lease obligations, current portion                                                                                             |                                       | 4,694       
|                                                                                     | Promissory notes payable, net of unamortized discount of $366,745                                                                      |                                       | 6,772,556   
|                                                                                     |                                                                                                                                        | Total current liabilities             |              | 10,012,078 
|Capital lease obligations, net of current portion                                    |                                                                                                                                        | 1,041                                
|                                                                                     |                                                                                                                                        | Total liabilities                     |              | 10,013,119 
|Capital deficit:                                                                     |                                                                                                                                        |                                      
|                                                                                     | Preferred stock, $.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding                                       |                                       | --          
|                                                                                     | Common stock, $.0001 par value, 300,000,000 shares authorized, 165,372,807 shares issued and outstanding, inclusive of treasury shares |                                       | 16,547      
|                                                                                     | Additional paid-in capital                                                                                                             |                                       | 37,657,012  
|                                                                                     | Deferred Consideration                                                                                                                 |                                       | (5,460,100) 
|                                                                                     | Prepaid Services                                                                                                                       |                                       | (1,155,843) 
|                                                                                     | Common stock held in treasury stock, 46,166,667 shares                                                                                 |                                       | (17,159,833)
|                                                                                     | Accumulated deficit                                                                                                                    |                                       | (18,025,047)
|                                                                                     |                                                                                                                                        | Total capital deficit                 |              | (4,127,264)
|                                                                                     |                                                                                                                                        | Total liabilities and capital deficit | $            | 5,885,855  



See the accompanying notes to condensed consolidated financial statements.



3



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CORD BLOOD AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006



|                                           |                   |             |                   |   |            
|------------------------------------------ | ----------------- | ----------- | ----------------- | - | -----------
|                                           | NINE-MONTH PERIOD |             | NINE-MONTH PERIOD
|                                           | ENDED             |             | ENDED            
|                                           | SEPTEMBER 30,     |             | SEPTEMBER 30,    
|                                           | 2007              |             | 2006             
|Revenue                                    | $                 | 5,697,701   |                   | $ | 2,582,432  
|Cost of services                           |                   | (3,313,701) |                   |   | (2,055,362)
|Gross profit                               |                   | 2,384,000   |                   |   | 527,070    
|Administrative and selling expenses        |                   | (3,659,485) |                   |   | (3,219,204)
|Loss from Operations                       |                   | (1,275,485) |                   |   | (2,692,134)
|Interest expense                           |                   | (2,912,393) |                   |   | (1,536,538)
|Net loss before income taxes               |                   | (4,187,878) |                   |   | (4,228,672)
|Income taxes                               |                   | --          |                   |   | --         
|Loss from Continuing Operations            | $                 | (4,187,878) |                   | $ | (4,228,672)
|Discontinued Operations (see Note  11)    |                   | --          |                   |   | (33,037)   
|Net loss                                   |                   | (4,187,878) |                   |   | (4,261,709)
|Basic and diluted loss per share           | $                 | (0.05)      |                   | $ | (0.11)     
|Weighted average common shares outstanding |                   | 88,278,103  |                   |   | 40,534,395 



See the accompanying notes to condensed consolidated financial statements.



































4



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CORD BLOOD AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006



|                                           |                    |             |                    |   |            
|------------------------------------------ | ------------------ | ----------- | ------------------ | - | -----------
|                                           | THREE-MONTH PERIOD |             | THREE-MONTH PERIOD
|                                           | ENDED              |             | ENDED             
|                                           | SEPTEMBER 30,      |             | SEPTEMBER 30,     
|                                           | 2007               |             | 2006              
|Revenue                                    | $                  | 1,654,494   |                    | $ | 1,143,390  
|Cost of services                           |                    | (660,045)   |                    |   | (893,286)  
|Gross profit                               |                    | 994,449     |                    |   | 250,104    
|Administrative and selling expenses        |                    | (1,061,531) |                    |   | (831,498)  
|Loss from Operations                       |                    | (67,082)    |                    |   | (581,394)  
|Interest expense                           |                    | (1,040,892) |                    |   | (556,839)  
|Net loss before income taxes               |                    | (1,107,974) |                    |   | (1,138,233)
|Income taxes                               |                    | --          |                    |   | --         
|Loss from Continuing Operations            | $                  | (1,107,974) |                    | $ | (1,138,233)
|Discontinued Operations (see Note  11)    |                    | --          |                    |   | (142,358)  
|Net loss                                   |                    | (1,107,974) |                    |   | (1,280,591)
|Basic and diluted loss per share           | $                  | (0.01)      |                    | $ | (0.03)     
|Weighted average common shares outstanding |                    | 114,319,626 |                    |   | 40,866,021 



See the accompanying notes to condensed consolidated financial statements.





5



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CORD BLOOD AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR

THE NINE MONTHS ENDED SEPTEMBER 3O, 2007 AND 2006



|                                                                            |               |             |               |   |            
|--------------------------------------------------------------------------- | ------------- | ----------- | ------------- | - | -----------
|                                                                            | NINE-MONTH    |             | NINE-MONTH   
|                                                                            | PERIOD ENDED  |             | PERIOD ENDED 
|                                                                            | SEPTEMBER 30, |             | SEPTEMBER 30,
|                                                                            | 2007          |             | 2006         
|Cash flows from operating activities:                                       |               |             |               |   |            
|Net loss                                                                    | $             | (4,187,878) |               | $ | (4,261,709)
|Adjustments to reconcile net loss to net cash used in operating activities: |               |             |               |   |            
|Amortization of Deferred Consideration                                      |               | 2,190,509   |               |   | 945,647    
|Provision for uncollectible accounts                                        |               | --          |               |   | 10,731     
|Issuance of stock for services                                              |               | 761,694     |               |   | 54,799     
|Loan costs                                                                  |               | --          |               |   | 39,337     
|Amortization of shares issued for services                                  |               | 262,522     |               |   | --         
|Depreciation and amortization                                               |               | 622,594     |               |   | 11,819     
|Amortization of discount on warrants                                        |               |             |               |   | 146,602    
|Fixed Asset write off                                                       |               | --          |               |   | 16,616     
|Customer contracts and relationships                                        |               |             |               |   | 13,378     
|Share based compensation                                                    |               | 15,558      |               |   | 243,986    
|Net change in operating assets and liabilities                              |               | 343,136     |               |   | 674,410    
|                                                                            |               |             |               |   |            
|Net cash used in (provided by) operating activities                         |               | 8,135       |               |   | (2,104,384)
|Cash flows from investing activities:                                       |               |             |               |   |            
|Purchase of property and equipment                                          |               | (2,937)     |               |   | (13,515)   
|Purchase of CorCell                                                         |               | (239,085)   |               |   | --         
|Purchase of CureSource                                                      |               | (106,500)   |               |   | --         
|Proceeds from Escrow                                                        |               | 150,000     |               |   | --         
|Purchase of Cryobank                                                        |               | --          |               |   | (120,000)  
|                                                                            |               |             |               |   |            
|Net cash provided by investing activities                                   |               | (198,522)   |               |   | (133,515)  
|Cash flows from financing activities:                                       |               |             |               |   |            
|Repayments on loans payable                                                 |               | (668,487)   |               |   | (52,801)   
|Payments on capital lease obligations                                       |               | (4,379)     |               |   | (2,961)    
|Proceeds from issuance of notes                                             |               | 450,000     |               |   | 374,422    
|Proceeds from advances from officers                                        |               | 223,725     |               |   | --         
|Proceeds from issuance of common stock                                      |               | 275,305     |               |   | --         
|Net cash provided by (used in) financing activities                         |               | 276,164     |               |   | 318,660    
|Net increase (decrease) in cash                                             |               | 85,777      |               |   | (1,919,239)
|Cash and cash equivalents, at beginning of period                           |               | 21,566      |               |   | 2,015,187  
|Cash and cash equivalents, at end of period                                 | $             | 107,343     |               | $ | 95,948     



See the accompanying notes to condensed consolidated financial statements.



6



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CORD BLOOD AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR

THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006



|                                                                         |               |           |               |   |       
|------------------------------------------------------------------------ | ------------- | --------- | ------------- | - | ------
|                                                                         | NINE-MONTH    |           | NINE-MONTH   
|                                                                         | PERIOD ENDED  |           | PERIOD ENDED 
|                                                                         | SEPTEMBER 30, |           | SEPTEMBER 30,
|                                                                         | 2007          |           | 2006         
|Supplemental disclosures of cash flow information:                       |               |           |               |   |       
|Cash paid for interest                                                   | $             | 173,540   |               | $ | 1,348 
|Supplemental disclosures of non-cash investing and financing activities: |               |           |               |   |       
|Discount on issuance of debt with detachable warrants                    |               | 4,845,000 |               |   | 97,735
|                                                                         |               |           |               |   |       
|Shares issued for the purchase of CureSource                             |               | 10,000    |               |   | --    
|                                                                         |               | -         |               |   |       
|Shares issued for the purchase of CorCell business                       |               | 1,761,077 |               |   | --    
|                                                                         |               |           |               |   |       
|Shares issued for future services                                        |               | 1,418,365 |               |   | --    
|lease obligations                                                        |               | --        |               |   | 2,567 
|Debt repaid through issuance of common stock                             | $             | 822,916   |               | $ | --    



See the accompanying notes to condensed consolidated financial statements.





7



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CORD BLOOD AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007



NOTE 1.

ORGANIZATION AND DESCRIPTION OF BUSINESS



Cord Blood America, Inc. ("CBAI"), formerly D&A Lending, Inc., was incorporated in the State of Florida on October 12, 1999. CBAI's headquarters are located in Los Angeles, California. CBAI is primarily a holding company whose subsidiaries include Cord Partners, Inc., CorCell Co. Inc., CorCell Ltd., (Cord), CBA Professional Services, Inc. D/B/A BodyCells, Inc. ("BodyCells"), CBA Properties, Inc. ("Properties"), Career Channel Inc, D/B/A Rainmakers International ("Rain"), and Family Marketing, Inc. ("Family"). CBAI and its subsidiaries engage in the following business activities:



·

Cord specializes in providing private cord blood stem cell preservation services to families.



·

BodyCells is a developmental stage company and intends to be in the business of collecting, processing and preserving peripheral blood and adipose tissue stem cells allowing individuals to privately preserve their stem cells for potential future use in stem cell therapy.



·

Properties was formed to hold the corporate trademarks and other intellectual property of CBAI.



·

Rain specializes in creating direct response television and radio advertising campaigns, including media placement and commercial production.



·

Family specialized in delivering leads through internet based lead generation to incorporate customers in the business of family based products and services. Family was disposed of through a sale in September, 2006.



The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that may be necessary in the event CBAI cannot continue as a going concern.



NOTE 2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Basis of Presentation



The accompanying unaudited consolidated financial statements of Cord Blood America, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with Item 310 of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are considered necessary for a fair presentation of the results for the periods shown. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period. Certain prior period amounts have been reclassified to conform to the current period presentation. The information included in these unaudited consolidated financial statements should be read in conjunction with Management's Discussion and Analysis and Plan of Operations contained in this report and the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006.



Basis of Consolidation



The consolidated financial statements include the accounts of CBAI and its wholly owned subsidiaries, Cord, CorCell Co, CorCell Ltd., BodyCells, Properties, Rain and Family. Significant inter-company balances and transactions have been eliminated upon consolidation.



8



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Deferred Revenue



Deferred revenue for Cord consists of payments for enrollment in the program and processing of umbilical cord blood by customers whose samples have not yet been collected, as well as the pro-rata share of annual storage fees for customers whose samples were stored during the year. For Cord customers who have enrolled in the Annual Payment Option, revenue is recognized in the amount of each payment as received. Deferred revenue for Rain consists of payments for per inquiry leads that have not yet been delivered or media buys that have not yet been placed.



Revenue Recognition



CBAI recognizes revenue under the provisions of Staff Accounting Bulletin ("SAB") 104 "Revenue Recognition". Cord provides a combination of products and services to customers. This combination arrangement is evaluated under Emerging Issues Task Force (Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables," ("EITF 00-21"). EITF 00-21 addresses certain aspects of accounting for arrangements under multiple revenue generating activities. CBAI elected early adoption of EITF 00-21.



Cord recognizes revenue from both enrollment fees and processing fees upon the completion of processing while storage fees are recognized ratably over the contractual storage period unless the customer enrolls in the Annual Payment Option. For Cord customers who have enrolled in the Annual Payment Option, revenue is recognized in the amount of each payment as received.



Rain generates revenue from packaged advertising services, including media buying, marketing and advertising production services. Rain's advertising service revenue is recognized when the media ad space is sold and the advertising occurs. Rain's advertising production service revenue is derived through the production of an advertising campaign including, but not limited to, audio and video production, establishment of a target market and the development of an advertising campaign. Rain recognizes revenue generated from packaged advertising services provided to our clients using the "Gross" basis of Emerging Issues Task Force No. 99-19, "Reporting Revenue Gross as a Principal versus Net as an Agent" (EITF 99-19).



Rain's revenue recognition policy involves significant judgments and estimates about the ability to collect. We assess the probability of collection based on a number of factors, including past transaction history and/or the creditworthiness of our clients' customers, which is based on current published credit ratings, current events and circumstances regarding the business of our client's customer and other factors that we believe are relevant. If we determine that collection is not reasonably assured, we defer revenue recognition until such time as collection becomes reasonably assured, which is generally upon receipt of cash payment. Rain recognizes revenue generated through per inquiry advertising as the per inquiry leads are delivered to the customer.



Cost of Services



Costs for Cord are incurred as umbilical cord blood is collected. These costs include the transport of the umbilical cord blood from the hospital to the lab, the labs processing fees, and royalties. Cord expenses costs in the period incurred and does not defer any costs of sales. Costs for Rain include commercial productions costs, lead generation costs and media buys.



Net Loss Per Share



Net loss per common share is calculated in accordance with SFAS No. 128, Earnings per Share. Basic net loss per share is computed by dividing the net loss by the weighted average common shares outstanding of 88,278,103 and 40,534,395 for the nine-months ended September 30, 2007 and 2006, respectively. Outstanding options to acquire common stock and warrants are not included in the computation of net loss per common share because the effects of inclusion are anti-dilutive.







9



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Recent Accounting Pronouncements



On September 15, 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements(SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not expand the use of fair value in any new circumstances. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company does not expect SFAS No. 157 will have a significant impact on the Companys consolidated financial statements.



In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities(SFAS No. 159). SFAS No. 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently assessing the impact of SFAS No. 159 on the Companys consolidated financial statements.



Going Concern



CBAI's consolidated financial statements have been prepared assuming it will continue as a going concern. CBAI has experienced recurring net losses from operations, which losses have caused an accumulated deficit of approximately $18 million as of September 30, 2007. In addition, CBAI has a working capital deficit of approximately $9.1 million as of September 30, 2007. These factors, among others, raise substantial doubt about CBAI's ability to continue as a going concern.



Management has been able, thus far, to finance the losses and the growth of the business, through private placements of its common stock, the issuance of debt and proceeds from the Equity Distribution Agreement (See Note 5  Cornell) and Securities Purchase Agreement (see Note 5- Shelter Island Opportunity Fund) . CBAI is continuing to attempt to increase revenues within its core businesses. In addition, CBAI is exploring alternate ways of generating revenues through acquiring other businesses in the stem cell industry. As well, the Company has taken steps to reduce its overall spending through the reduction of headcount. The ongoing execution of CBAI's business plan is expected to result in operating losses over the next twelve months. There are no assurances that CBAI will be successful in achieving its goals of increasing revenues and reaching profitability.



In view of these conditions, CBAI's ability to continue as a going concern is dependent upon its ability to meet its financing requirements, and to ultimately achieve profitable operations. Management believes that its current and future plans provide an opportunity to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that may be necessary in the event CBAI cannot continue as a going concern.



NOTE 3.

ACQUISITION



On October 13, 2006, the Company entered into an agreement with CorCell, Inc. under which CBAI started the process of acquiring the CorCell Business of collection, processing and storage of blood taken from umbilical cord after a child is born . On February 28, 2007, the Company completed the acquisition of certain assets from CorCell, Inc., (a Delaware Company) a subsidiary of Vita34 A.G., in exchange for $ 1,550,000 in cash (see Note 5  Shelter Island), two promissory notes totaling $462,959 (see Note 5  CorCell, Inc.), $1,761,077 value paid in common restricted shares of the company (18,498,715 shares) and the assumption of net liabilities in the amount of $1,118,506. The Acquisition related to all rights to possession and custody of all acquired samples owned by CorCell, Inc., and associated with the operations of CorCell, Inc. which is predominantly the current customer base and revenues. The deal also included the purchase of cryogenic freezers and other fixed assets used in this umbilical cord blood samples business. Pursuant to the terms of the acquisition agreement, Cord Blood registered the resale of the common stock CORD received in the Acquisition on a Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on December 15, 2006.

.



10



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Pro-forma Financial Information



These unaudited consolidated financial statements account only for the historical financial results of CBAI, along with the results of CorCell only from the date of acquisition. Accordingly, the results presented below give effect to the transaction as if it had occurred on January 1, 2006. Adjustments necessary to present fairly the pro-forma consolidated Statement of Operations have been made based on available information and assumptions that management believes are reasonable. The pro-forma unaudited consolidated Statement of Operations has been prepared for information purposes only and does not purport to present what our results would actually have been had the transaction occurred on the date in question or to project our results of operations for any future periods.



Pro-forma Statement of Operations



For the Nine-months ended September 30, 2007



|                                    |             |           |                 |            
|----------------------------------- | ----------- | --------- | --------------- | -----------
|                                    | CBAI        | CorCell   | Adjustments     | Pro-Forma  
|                                    |             |           |                 |            
|Revenues                            | $5,697,701  | $296,370  | --              | $5,994,071 
|Cost of Services                    | (3,313,701) | (180,420) | --              | (3,494,121)
|Gross Profit                        | 2,384,000   | 115,950   |                 | 2,499,950  
|Administrative and Selling Expenses | (3,659,485) | (289,777) | (77,087)   (1)  | (4,026,349)
|Interest Expense                    | (2,912,393) |           | (41,875)    (2) | (2,954,268)
|                                    |             |           |                 |            
|Net loss for the period             | (4,187,878) | (173,827) | (118,962)       | (4,480,667)



For the Nine-months ended September 30, 2006



|                                                   |             |             |                  |            
|-------------------------------------------------- | ----------- | ----------- | ---------------- | -----------
|                                                   | CBAI        | CorCell     | Adjustments      | Pro-Forma  
|                                                   |             |             |                  |            
|Revenues                                           | $2,582,432  | $2,194,439  | --               | $4,776,871 
|Cost of Services                                   | (2,055,362) | (958,555)   | --               | (3,013,917)
|Gross Profit                                       | 527,070     | 1,235,884   |                  | 1,762,954  
|Administrative and Selling Expenses                | (3,219,204) | (2,671,211) | (346,895)   (3)  | (6,237,310)
|Interest Expense                                   | (1,536,539) | (141,048)   | (188,437)    (4) | (1,866,024)
|                                                   |             |             |                  |            
|Net loss from continuing operations for the period | (4,228,673) | (1,576,375) | (535,332)        | (6,340,380)



For the Three-months ended September 30, 2006



|                                    |             |           |                 |            
|----------------------------------- | ----------- | --------- | --------------- | -----------
|                                    | CBAI        | CorCell   | Adjustments     | Pro-Forma  
|                                    |             |           |                 |            
|Revenues                            | $1,143,390  | $ 589,808 | --              | $1,733,198 
|Cost of Services                    | (893,286)   | (265,547) | --              | (1,158,833)
|Gross Profit                        | 250,104     | 324,261   |                 | 574,365    
|Administrative and Selling Expenses | (831,498)   | (762,068) | (115,631)   (5) | (1,709,197)
|Interest Expense                    | (556,839)   | (44,892)  | (62,813)   (6)  | (664,544)  
|                                    |             |           |                 |            
|Net loss for the period             | (1,138,233) | (482,699) | (178,444)       | (1,799,376)





11



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Adjustments



1/ To record amortization of the purchased customer list for 2 months

2/ To record the interest on the promissory notes issued to pay for the transaction for 2 months

3/ To record amortization of the purchased customer list for 9 months

4/ To record the interest on the promissory notes issued to pay for the transaction for 9 months

5/ To record the amortization of the purchased customer list for 3 months

6/ To record the interest on the promissory notes issued to pay for the transaction for 3 months



Acquisition of the Assets of CureSource, Inc.



On August 20, 2007, CBAI completed the acquisition of certain assets from CureSource, Inc., a South Carolina corporation for the purchase price of $106,500 in cash and $10,000 in stock, or 196,080, unregistered shares of CBAI's common stock (the "Acquisition"). The Acquisition related to the purchase of approximately 340 umbilical cord blood samples, as well as one cryogenic freezer used for the storage of such umbilical cord blood samples. The entire purchase price was allocated to customer contracts and relationships, which are being amortized over 18 years.



NOTE 4.

ACCRUED EXPENSES



The components of accrued expenses at September 30, 2007 are summarized as follows:



|                              |               |          
|----------------------------- | ------------- | ---------
|                              | September 30,
|                              | 2007         
|Accrued salaries and benefits | $             | 34,906   
|Accrued interest              |               | 862,090  
|Deferred Rent                 |               | 10,077   
|Other                         |               | 143,027  
|                              | $             | 1,050,100



NOTE 5.

NOTES AND LOANS PAYABLE



Cornell



In March 2005, CBAI entered into a Standby Equity Distribution Agreement (the "Equity Agreement") with Cornell Capital Partners L.P. ("Cornell") whereby CBAI could sell up to $5,000,000 of CBAI's common stock to Cornell at CBAI's discretion over a 24-month period. The Equity Agreement and the respective rights and obligations was terminated on December 26, 2005. Prior to termination, the Equity Agreement allowed the Company to sell shares of common stock to the investor group in incremental advances not to exceed $250,000. The shares of common stock issued at each advance were calculated based on 98% of the lowest volume weighted average price of CBAI's common stock for the five day period after the request for an advance was received. The investment company also received a 5% fee for each advance. The Equity Agreement called for the issuance of 1,239,029 shares of common stock as a one time commitment fee. Prior to any advances, the Securities and Exchange Commission declared effective a registration statement registering the resale of CBAI's securities in accordance with the Equity Agreement.



In connection with the Equity Agreement, CBAI entered into a Placement Agency Agreement (the "Agent Agreement") with a registered broker-dealer to act as the placement agent for CBAI. The Agent Agreement called for a placement agent fee of $10,000 paid by the issuance of 51,626 shares of CBAI's common stock.



On April 27, 2005, CBAI issued a promissory note to Cornell in the amount of $350,000. The promissory note accrued interest at a rate of 12% per annum and was due and payable nine months from the date of issuance. On April 28, 2005, $175,000 of the $350,000 loan was funded by Cornell. Pursuant to the terms of the note CBAI issued Cornell a detachable warrant to purchase 1,000,000 shares of common stock at an exercise price of $0.20 per share. The estimated relative fair value of the warrants of approximately $163,000 was recorded as interest expense. In July 2005, Cornell exercised its right to purchase 1,000,000 shares at $0.20 per share.



12



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On June 21, 2005, CBAI issued an Amended and Restated Promissory Note to Cornell in the amount of $600,000 which replaced the Promissory Note dated April 27, 2005 and received $300,000 towards this amended and restated Promissory Note. The Promissory Note accrued interest at 12% per annum. These promissory notes were re-paid with the proceeds of a stock issuance in 2005.



On July 13, 2005 Cornell issued a promissory note in the amount of $500,000. The principal amount of $500,000 was funded to CBAI on July 14, 2005. The promissory note was non-interest bearing unless an event of default occurred.

The note was due and payable on or before August 1, 2005. Full payment was made on July 25, 2005 from the proceeds of a stock issuance.



During the three months ended September 30, 2005, CBAI re-paid $1,360,553 in interest and principal on an outstanding loan with Cornell through the proceeds of issuing 3,568,734 shares of common stock. At September 30, 2005, all of the loans relating to the Equity Agreement had been paid.



On December 26, 2005, CBAI and Cornell amended and restated the $3,500,000 Debentures dated September 9, 2005 and funded the $1,500,000 Debentures pursuant to the Second Closing on December 28, 2005. The Securities Purchase Agreement ("SP Agreement") and the Registration Rights Agreement dated September 9, 2005 were also amended. The amended agreement stated that Cornell would purchase $5,000,000 of secured convertible debentures, which were convertible into shares of CBAI's common stock. $3,500,000 was funded as of September 9, 2005, and $1,500,000 was funded on December 28, 2005.  In the fourth quarter of 2006, the Cornell exercised its rights by converting $75,000 of this debenture in exchange for 818,794 common shares. The interest rate remains unchanged at 10% per annum and the principal together with accrued but unpaid interest is due on or before December 23, 2008. Throughout the first nine months of 2007, Cornell has converted a further $822,916 of this debenture in exchange for 13,339,629 registered and unregistered common shares. The balance outstanding on the debenture at September 30, 2007 is $4,102,084.



The Investor Registration Rights Agreement that was entered into by CBAI and Cornell concurrently with the SP Agreement was amended to state the number of shares to be registered on the Initial Registration Statement, as defined in the Registration Right Agreement, is to be 60,000,000 shares underlying the Debentures. The initial registration statement was filed on February 13, 2006. The number of shares to be registered on the Second Registration Statement, as defined in the Registration Right Agreement, to be filed no later than thirty (30) days after CBAI has increased its authorized common stock to at least 200 million shares, are as follows:



-

Such number of shares of Common Stock equal to five (5) times the total principal balance of the Convertible Debentures remaining at the time the Second Registration Statement is filed divided by the conversion price in effect at the time the Second Registration Statement is filed.



-

7,000,000 Shares underlying the Warrant dated 9/9/05



-

7,285,000 Shares underlying the Warrant dated 9/9/05



-

8,285,000 Shares underlying the Warrant dated 9/9/05



As of September 30, 2007, the Company is in default on the secured convertible debenture issued by Cornell Capital on December 28, 2005, due to the companys inability to register all of the shares as required by the debenture.  The company first attempted to register all of the securities on February 13, 2006.  Due to SEC comments, the company was only able to register 8,751,962 shares with the SEC, declared effective on January 25, 2007. An unregistered amount of  shares remains to satisfy the outstanding debt. As of September 30, 2007, both parties are still seeking a workable solution to remedy the agreement.





13



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Bergen



On November 7, 2006, Bergen Community Regional Blood Center (Bergen), one of the Companys principal suppliers, converted $250,000 of the amount due from CBAI in exchange for a promissory note payable. The promissory note accrues interest at a rate of 12% per annum and is repayable in twelve equal monthly installments of principal (no payments however have been made as of March 31, 2007). The promissory note is due on November 7, 2007. In addition, CBAI issued 2,500,000 common shares from treasury to Bergen. It has also pledged as security 5,000,000 common shares to be held in escrow. In April and May, 2007, the Company, in two tranches, repaid in its entirety the Bergen note.



Strategic



On August 2, 2006, CBAI entered into a Subscription Agreement with Strategic Working Capital Fund, L.P. ("Strategic"). Pursuant to the Subscription Agreement, CBAI (i) issued to Strategic a Promissory Note bearing interest at the rate of 8% with an aggregate principal amount of $285,000 and (ii) delivered 500,000 unregistered shares of its Common Stock (the "Shares") to Strategic. The Promissory Note is due two years from the date of issuance, unless redeemed prior by Strategic but in any event no earlier than the third month following issuance of the note. The Promissory Note also is subject to acceleration upon an event of default, as defined in the Note. Pursuant to the Subscription Agreement, Strategic was granted registration rights for the Shares in the event that CBAI proposes to register any other shares of its common stock.



On December 5, 2006, CBAI issued 1,239,000 restricted common shares in exchange for Strategic providing a three month extension on the promissory note.  On February 2, 2007, CBAI  issued 880,000 restricted common shares in exchange for Strategic providing a further three month extension on the promissory note. On May 4, 2007, CBAI  issued an additional 1,287,000 restricted common shares in exchange for Strategic providing a further three month extension on the promissory note. As of September 30, 2007 the outstanding balance on the note including accrued and unpaid interest was $311,532.



Collections Factoring



On September 5, 2006, Cord received a $93,000 advance on future credit card sales. Repayment terms on this advance call for the 20% capture of certain credit card sales until the sum of $130,200 has been paid. At September 30, 2007, the outstanding principal balance was $19,299.



Shelter Island Opportunity Fund



On February 14, 2007, Cord Blood America, Inc. (the Company) entered into a Securities Purchase Agreement with Shelter Island Opportunity Fund, LLP (the Subscriber). Pursuant to the Securities Purchase Agreement, the Company (i) issued to Subscriber a Secured Original Issue Discount Debenture bearing interest at the rate of 11.25% (or Prime +3%) with an aggregate principal amount of $2,300,000 and (ii) delivered 1,000,000 unregistered shares of its Common Stock (the Shares) to Subscriber. The Debenture is due 30 months from the date of issuance. The Debenture is also subject to acceleration upon an event of default, as defined in the note. Pursuant to the Securities Purchase Agreement, Subscriber was granted registration rights for the Shares in the event that the Company proposes to register any other shares of its common stock. The Securities Purchase Agreement, along with the Registration Rights agreement, Put Option agreement, Warrant Agreement, Stock Pledge Agreement, Security Agreement, Personal Guaranty, Control Account Agreement, Blocked Account Agreement, Collateral Monitoring Agreement, and Pledge Agreement by Matthew Schissler, were filed with the Commission on February 20, 2007 as exhibits and incorporated by reference.



On February 14, 2007, Cord Blood America, Inc. (the Company) entered into an Advisory Fee Agreement, Registration Rights Agreement, Put Option Agreement, and Warrant Agreement with Ascendiant Securities, LLP (the Subscriber). Pursuant to the Securities Purchase Agreement signed with the Shelter Island Opportunity Fund referenced, Ascendiant receives a 3.75% advisory fee for their services.  In addition, they are entitled to the same benefits as Shelter Island Opportunity fund for Registrations Rights, Put Option and Warrant agreements.





14



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On April 12, 2007, the Company entered into a First Amendment to the Securities Purchase Agreement with Shelter Island Opportunity Fund, LLP (the Subscriber), whereby the Company issued a Secured Original Issue Discount Debenture bearing interest at the rate of 11.25% (or Prime +3%) with an aggregate principal amount of $230,000, in exchange for pledging shares of the Companys wholly-owned subsidiary, Rain. The Agreement also entitles the Subscriber with the same benefits as the original Securities Purchase Agreement signed on February 14, 2007. As of September 30, 2007 the outstanding balance on the notes including accrued and unpaid interest was $2,405,426.



CorCell, Inc.



Pursuant to the acquisition of the business from CorCell, Inc (see Note 3  Acquisition), the Company issued one Promissory Note to CorCell, Inc. bearing interest at the rate of 10.5% with an aggregate principal amount of $250,000, due July 1, 2007. Interest payments of $2,187 are due monthly, commencing on April 1, 2007. The Promissory Note is subject to acceleration upon an event of default, as defined in the Promissory Note. The Company issued 1,666,667 shares as security for this Note. During the third quarter of 2007, the Company negotiated an alternative payment schedule of $50,000 monthly, and subsequently made total payments of $150,000, reducing the balance owing to $100,000.



On March 1, 2007, the Company issued a Convertible Note to CorCell, Inc. bearing interest at a rate of 9% with an aggregate principal amount of $212,959, due September 1, 2007. The Convertible Note also is subject to acceleration upon an event of default, as defined in the Convertible Note. At the option of CorCell, the Convertible Note may be converted into restricted common stock at $0.101 per share, with possible adjustment. Interest is accrued and payable at maturity.  The Company has agreed to pay off the Note within a six month period, commencing in December, 2007.



NOTE 6.

COMMITMENTS AND CONTINGENCIES



Agreements



Bergen



Cord is operating under an agreement with a not-for-profit company, Bergen Community Regional Blood Center, to process, test and store all umbilical cord blood samples collected. The agreement has a 10-year term, beginning June 30, 2002, and can be terminated by either party with 90-day notice. The Company notified Bergen of its intent to terminate the agreement during the third quarter.



Progenitor Cell Therapy, LLC-  The Company entered into an agreement on August 1, 2007, with Progenitor Cell Therapy, LLC (PCT) to process, test and store all umbilical cord blood samples collected.  The agreement has a five year term and contains termination provisions for each party.  The Company believes this change provides additional opportunities to leverage operating costs and efficiencies, while maintaining the highest of quality standards. The company is working with both PCT and Bergen to enact the change, and expects to complete the conversion no later than December 31, 2007.



Pharmastem



In March 2004, Cord entered into a Patent License Agreement with the holder of patents utilized in the collection, processing, and storage of umbilical cord blood to settle litigation against Cord for alleged patent infringements. The Patent License Agreement calls for royalties of 15% of processing and storage revenue, with a minimum royalty of $225 per specimen collected, on all specimens collected after January 1, 2004 until the patents expire in 2010. During the three months ended June 30, 2007 and 2006, Cord incurred approximately $14,952 and $65,561 respectively, in royalties to the Patent License Agreement. During the six months ended June 30, 2007 and 2006, Cord incurred approximately $48,748 and $119,613 respectively, in royalties to the Patent License Agreement. At June 30, 2007, approximately $206,092 is included in accounts payable relating to these fees.



In July, 2007, Pharmastem lost a suit of patent infringement in the U.S. Court of Appeals brought against a Company in a similar situation to Cord, as described above. Through the end of the third quarter of 2007, CBAI has decided to continue accruing the royalty amounts, as it follows the reaction to the decision by Pharmastem.





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Operating Lease



In 2005 and 2004, CBAI entered into non-cancelable operating leases for office space and computer software which expire through October 2009. On October 1, 2006, the Company signed a one-year renewable operating lease for office space with Vita34 A.G, which it has not renewed. In September, 2007, the Company signed a new five-year operating lease and re-located its head office to Santa Monica, California. The Company entered into a sub-lease agreement for its previous head office space that runs through the balance of the term (expiring in August, 2009). Net commitments for minimum future rental payments, by year and in the aggregate, to be paid under the operating leases as of September 30, 2007, are as follows:



|                 |   |                 |   |                      |   |        
|---------------- | - | --------------- | - | -------------------- | - | -------
|Year             |   | Future Payments |   | Future Rental Income |   | Net    
|2007 ( 3 months) | $ | 116,008         | $ | 18,630               | $ | 97,378 
|2008             |   | 227,980         |   | 90,616               |   | 137,364
|2009             |   | 199,250         |   | 62,000               |   | 137,250
|2010             |   | 143,093         |   |                      |   | 143,093
|2011             |   | 146,685         |   |                      |   | 146,685
|2012             |   | 106,090         |   |                      |   | 106,090
|Total            | $ | 939,106         | $ | 171,246              | $ | 767,860



The total lease payments are recorded as rent expense on a straight-line basis over the lease periods, resulting in a deferred rent liability of $10,076, which is included in accrued expenses in the accompanying balance sheet. Total lease expense for operating leases, including those with terms of less than one year, amounted to approximately $166,370 and $54,087 for the nine months ended September 30, 2007 and 2006, respectively.



Employment Agreements



On January 1, 2006, CBAI entered into a one-year employment agreement with Matthew L. Schissler (the "Executive Agreement"). Pursuant to his Executive Agreement, Mr. Schissler serves as Chairman and Chief Executive Officer of CBAI at an annual salary of $150,000 through December 31, 2006. The Executive Agreement entitles Mr. Schissler to receive a net year-end performance bonus of $25,000 as well as certain other benefits. Mr. Schissler is subject to non-competition and confidentiality requirements. CBAI may terminate Mr. Schissler's Executive Agreement at any time without cause. In such event, no later than the Termination Date specified in the Termination Notice (both as defined in the Executive Agreement), CBAI shall pay to Mr. Schissler an amount in cash equal to the sum of his Compensation determined as of the date of such Termination Notice through the remaining term of the Executive Agreement. This arrangement is continuing for 2007, although the one-year renewal under the same terms has not yet been signed.



Compensation of the Board of Directors



On January 26, 2006, CBAI's Board of Directors approved a Board Compensation Plan (the Plan) effective through 2008. The Plan calls for shares of the Companys common stock to be issued as compensation for the second year of service in 2007 in an amount equal to $10,000. The number of shares is determined by dividing by the closing stock price on December 31, 2006, which was $0.093, and equaled 324,324 shares. Shares issued as compensation for one year of service in 2008 will be based on $10,000 divided by the closing stock price of the last business day of 2007.





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NOTE 7.

RELATED PARTY TRANSACTIONS AND COMMITMENTS



Advances from Officers



In prior years, the Company received non-interest bearing advances from officers of CBAI. During the nine months ended September 30, 2007, $42,499 of this advance was repaid and the balance remaining amounted to $2,684. In addition, on May 11, 2007, Ms. Stephanie Schissler, CBAI's former President and Chief Operating Officer, who is the spouse of the Company's Chief Executive Officer, loaned $121,500 to theCompany, to be repaid in 36 equal monthly installments of $3,908. The Company signed a Promissory Note, which carries interest at the rate of 10% per annum.In addition, the Company pledged as security 2,500,000 common shares to be held in treasury until the loan is paid off. At September 30, 2007, the balance remaining on this loan was $108,945.



On June 14, 2007, Mr. Matt Schissler loaned $25,650 to the Company, to be repaid in 36 equal monthly installments of $828. The Company signed a Promissory Note, which carries interest at the rate of 10% per annum.In addition, the Company pledged as security 750,000 common shares to be held in treasury until the loan is paid off. At September 30, 2007, the balance remaining on this loan was $23,710.



On June 14, 2007, Ms. Stephanie Schissler loaned a further $76,950 to the Company, to be repaid in 36 equal monthly installments of $2,483. The Company signed a Promissory Note, which carries interest at the rate of 10% per annum.In addition, the Company pledged as security 2,250,000 common shares to be held in treasury until the loan is paid off. At September 30, 2007, the balance remaining on this loan was $71,129.



The total balance owing to the officers of CBAI at September 30, 2007 was $206,468.



Consulting Agreement



On January 1, 2006, CBAI entered into a one-year consulting agreement with Stephanie Schissler, The agreement entitles Ms. Schissler to a $10,000 per month retainer and stock option incentives for her services in relation to strategic corporate planning and other business related matters. The agreement automatically renewed for a second year.



Sale of Family Subsidiary



On September 5, 2006, the Company entered into a Stock Purchase Agreement (the Anderson Agreement) with Noah Anderson, the President of Family Marketing, Inc., a wholly-owned subsidiary of the Company (Family), and Chief Technology Officer of the Company. Mr. Anderson also is the spouse of Ms. Anderson, the Companys former Chief Financial Officer. Pursuant to the Anderson Agreement, the Company sold all assets and liabilities of Family to Mr. Anderson, in exchange for a credit of $82,500 in receivables that Cord Partners, Inc. had outstanding invoices from Family, and cancellation of $32,500 in severance compensation. (see Note 11, Discontinued Operations)



NOTE 8.

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. The Company believes that such awards encourage employees to remain employed by the Company and also to attract persons of exceptional ability to become employees of the Company.



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.





17



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In the first nine months of 2007, there were no options granted, forfeited or expired. The number of outstanding options at September 30, 2007 remains at 5,461,189, with an exercisable price of $0.28 and approximately 7.5 years remaining. The number of exercisable options at September 30, 2007 remains at 4,423,689 with an exercise price of $0.29 and approximately 5.75 years remaining.



NOTE 9.

STOCK OPTION AND WARRANT AGREEMENTS



As previously mentioned above, CBAI did not issue any new stock options during the nine months ending September 30, 2007.



In connection with the Shelter Island Agreement (See Note 4), a warrant was issued to Shelter Island for the purchase  appriximately 36 million of the Companys common shares. The warrant is immediately exercisable for a five-year period, expiring on February 12, 2012, at an exercise price of $0.101 per share. The estimated fair value of the warrants is approximately $4,845,000 and was recorded as deferred compensation against equity; it is being amortized to interest expense over the life of the debenture (30 months). At the date of issuance, the common stock was trading at $0.125 per share. Similarly, Ascendiant Securities, providing advisory services in connection with the Shelter Island debenture, received a warrant to purchase 4,000,000 of the Companys common shares at the same exercise price and under the same conditions as the Shelter Island warrant.



The following table summarizes the warrants outstanding and exercisable at September 30, 2007:



|                     |                |              
|-------------------- | -------------- | -------------
|WARRANTS OUTSTANDING | EXERCISE PRICE | MATURITY DATE
|1,000,000            | $0.1875        | 09/19/2009   
|14,285,000           | $0.101         | 09/09/2010   
|8,285,000            | $0.101         | 09/09/2010   
|40,000,000           | $0.101         | 02/12/2012   
|Total 63,570,000     |                |              



NOTE 10.

STOCKHOLDERS EQUITY



Preferred Stock



CBAI has 5,000,000 shares of $.0001 par value preferred stock authorized. No preferred stock has been issued to date.



Common Stock



During the nine months ended September 30, 2007, CBAI issued a total of 324,324 shares to its directors as compensation. The total cash value of the stock on the issue date was $42,162.



On February 2, 2007, CBAI signed a consulting agreement with Shaub Williams to provide legal services primarily in respect of the acquisition of the business of CorCell, Inc. In exchange for these services, valued at $120,000, the Company issued 1,000,000 fully registered common shares.



On February 14, 2007, CBAI entered into a Securities Purchase Agreement (see Note 4  Shelter Island Opportunity Fund) whereby the Company issued 1,000,000 deposit shares and a warrant to purchase up to 36,000,000 shares of common stock along with a put option by CBAI to repurchase the same in exchange for financing a Debenture of $2.3 million, used to purchase the CorCell business. Concurrently, Ascendiant Securities, LLC, a financial advisor, received a Warrant to purchase up to 4,000,000 common shares and a Put Option by CBAI to repurchase the same.



On February 16, 2007, the Company terminated its agreement with Gecko Media. In exchange for early termination of this Agreement, and as part of the consideration, CBAI issued 480,000 registered common shares to Gecko Media.



On February 21, 2007, CBAI issued 150,000 registered shares in exchange for legal services rendered and to be rendered. The value of the shares and services was $19,125.



18



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On February 23, 2007, CBAI signed an Agreement with Capital Growth Resources which allows for Capital Growth Resources to act as lead placement agent for a private placement to be executed by Cord Blood America in 2007, in exchange for 150,000 of un-registered securities of the CBAIs common stock.  Capital Growth Resources will be paid a placement agent fee of 10% of the equity capital raised in the private placement and 3% non-accountable fee for costs of services.  Capital Growth Resources will also have the option to purchase up to 13% of the value of the placement in CBAI warrants. No funds had been raised as at March 31, 2007.  On May 11, 2007, the company terminated its agreement with Capital Growth Resources.  Capital Growth Resources received no additional compensation.



On March 1, 2007, CBAI issued 1,666,667 common shares to Vita34 A.G. as security, along with the $250,000 Promissory Note, all related to the purchase of the CorCell business (see Note 2  Acquisition). The Company also issued 18,498,715 as part of the consideration for this same purchase.



As mentioned in Note 3 above, on May 4, 2007, CBAI issued 1,287,000 common shares to Strategic Working Capital in exchange for Strategic providing a further three month extension on its promissory note.



On May 21, 2007, CBAI entered into a placement agent agreement with RHK Midtown Partners, LLC, for providing financial consulting services, at a value of $150,000, in exchange for the issuance of 1,875,000 common shares of the Company.



On May 21, 2007, CBAI signed an exclusive Consulting Agreement with Fuselier & Associates 1, L.P., whereby the consultant will negotiate creditor claims and attempt to effect settlements of these claims (currently in Accounts Payable on the Companys Balance Sheet). In exchange, the Company issued 15,000,000 restricted common shares with a value of $1,200,000. Creditor claims that go unassigned to the consultant will result in a share reduction equivalent to a set formula, as outlined in the Agreement, on file with the SEC. On July 23, 2007, CBAI signed an amendment to this agreement, which provided for an additional issuance of 871,945 restricted common shares, for no additional consideration.



On the same date, the Company also entered into an exclusive Consulting Agreement with Dr. Jean Fuselier Sr. (Fuselier) for advisory services over a 36 month term, at $15,000 monthly, payable in registered S-8 shares of the Company. The terms call for these fees to be paid seven months in advance; accordingly, the Company issued 1,312,500 common shares to Fuselier.



On June 20, 2007, the Company issued 2,000,000 unregistered common shares to Bergen Community Regional Blood Center in consideration for extending the credit terms on its outstanding balance in accounts payable.



On July 23, 2007, CBAI signed consulting agreements with certain of its professional consultants to provide legal and financial advisory services valued at approximately $75,000 in exchange for the issuance of 1,600,000 unrestricted common shares.



On July 31, 2007 and August 31, 2007, CBAI issued 969,400 and 1,473,429 restricted common shares to Independent Blue Cross in exchange for a total cash consideration of $129,768.



On September 21, 2007, CBAI issued 150,000 restricted common shares to RHK Midtown Partners, LLC, valued at $7,050 in exchange for providing financial advisory services.



In the third quarter of 2007, CBAI issued a total of 222,006 restricted common shares to an employee with a value of approximately $12,000.



As of September 30, 2007 CBAI had 119,206,140 shares of Common Stock outstanding. An additional 46,166,667 shares has been issued and remains in the Companys treasury.





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NOTE 11.

DISCONTINUED OPERATIONS



The Company follows the provisions of SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS No.144"), related to the accounting and reporting for segments of a business to be disposed of. In accordance with SFAS No. 144, the definition of discontinued operations includes components of an entity whose cash flows are clearly identifiable.



|                                      |                   |    |                    |  |          |  |      |    |  |   |          
|------------------------------------- | ----------------- | -- | ------------------ |  | -------- |  | ---- | -- |  | - | ---------
|                                      | Nine Months Ended |    | Three Months Ended
|                                      | September 30,     |    | September 30,     
|                                      | 2007              |    | 2006               |  | 2007     |  | 2006
|Revenue                               |                   | -- |                    |  | 558,260  |  | $    | -- |  | $ | 93,487   
|Cost of services                      |                   | -- |                    |  | --       |  |      | -- |  |   | --       
|Operating Expenses                    |                   | -- |                    |  | 591,297  |  |      | -- |  |   | 235,845  
|Net Loss from Discontinued Operations |                   | -- |                    |  | (33,037) |  | $    | -- |  | $ | (142,358)



NOTE 12.

SEGMENT REPORTING



SFAS No. 131 "Disclosures about Segments of an Enterprise and Related Information," requires that public business enterprises report financial and descriptive information about its reportable operating segments. CBAI has two operating segments. Cord generates revenues related to the processing and preservation of umbilical cord blood. Rain generates revenues related to television and radio advertising. All of its long-lived assets are located in, and substantially all of its revenues are generated from within, the United States of America.



The table below presents certain financial information by business segment for the nine months ended September 30, 2007:



|                                |            |             |            |          |             |        |          |           |              |   |             |  |   |            
|------------------------------- | ---------- | ----------- | ---------- | -------- | ----------- | ------ | -------- | --------- | ------------ | - | ----------- |  | - | -----------
|                                |            |             |            | Adipose/ |             | Radio/ |          |           |              |  
|                                | Umbilical  |             | Peripheral |          | Television  |        | Segments |           | Consolidated
|                                | Cord Blood |             | Blood      |          | Advertising |        | Total    |           | Total       
|Revenue from External Customers | $          | 3,079,919   |            | $        | 0           |        | $        | 2,617,782 |              | $ | 5,697,701   |  | $ | 5,697,701  
|Interest Expense                |            | 2,910,818   |            |          | 0           |        |          | 1,575     |              |   | 2,912,393   |  |   | 2,912,393  
|Depreciation and Amortization   |            | 374,089     |            |          | 0           |        |          | 0         |              |   | 374,089     |  |   | 374,089    
|Segment Income (Loss)           |            | (4,421,592) |            |          |             |        |          | 233,714   |              |   | (4,187,878) |  |   | (4,187,878)
|Segment Assets                  | $          | 5,771,093   |            | $        | 197         |        | $        | 114,565   |              | $ | 5,885,855   |  | $ | 5,885,855  



The table below presents certain financial information by business segment for the nine months ended September 30, 2006:



|                                |            |             |            |          |             |        |          |           |              |   |             |  |   |            
|------------------------------- | ---------- | ----------- | ---------- | -------- | ----------- | ------ | -------- | --------- | ------------ | - | ----------- |  | - | -----------
|                                |            |             |            | Adipose/ |             | Radio/ |          |           |              |  
|                                | Umbilical  |             | Peripheral |          | Television  |        | Segments |           | Consolidated
|                                | Cord Blood |             | Blood      |          | Advertising |        | Total    |           | Total       
|Revenue from External Customers | $          | 903,718     |            | $        | 0           |        | $        | 1,678,714 |              | $ | 2,582,432   |  | $ | 2,582,432  
|Interest Expense                |            | 1,535,720   |            |          | 0           |        |          | 819       |              |   | 1,536,539   |  |   | 1,536,539  
|Depreciation and Amortization   |            | 13,766      |            |          | 0           |        |          | 32        |              |   | 13,798      |  |   | 13,798     
|Segment Income (Loss)           |            | (4,303,857) |            |          | (61,330)    |        |          | 136,515   |              |   | (4,228,672) |  |   | (4,228,672)
|Segment Assets                  | $          | 547,066     |            | $        | 196         |        | $        | 166,056   |              | $ | 713,318     |  | $ | 713,318    





20



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The table below presents certain financial information by business segment for the three months ended September 30, 2007:



|                                |            |             |            |          |             |        |          |          |              |   |             |  |   |            
|------------------------------- | ---------- | ----------- | ---------- | -------- | ----------- | ------ | -------- | -------- | ------------ | - | ----------- |  | - | -----------
|                                |            |             |            | Adipose/ |             | Radio/ |          |          |              |  
|                                | Umbilical  |             | Peripheral |          | Television  |        | Segments |          | Consolidated
|                                | Cord Blood |             | Blood      |          | Advertising |        | Total    |          | Total       
|Revenue from External Customers | $          | 1,211,023   |            | $        | 0           |        | $        | 443,471  |              | $ | 1,654,494   |  | $ | 1,654,494  
|Interest Expense                |            | 1,039,557   |            |          | 0           |        |          | 1,335    |              |   | 1,040,892   |  |   | 1,040,892  
|Depreciation and Amortization   |            | 151,550     |            |          | 0           |        |          | 0        |              |   | 151,550     |  |   | 151,550    
|Segment Income (Loss)           |            | (1,071,858) |            |          |             |        |          | (36,116) |              |   | (1,107,974) |  |   | (1,107,974)
|Segment Assets                  | $          | 5,771,093   |            | $        | 197         |        | $        | 114,565  |              | $ | 5,885,855   |  | $ | 5,885,855  



The table below presents certain financial information by business segment for the three months ended September 30, 2006:



|                                |            |             |            |          |             |        |          |         |              |   |             |  |   |            
|------------------------------- | ---------- | ----------- | ---------- | -------- | ----------- | ------ | -------- | ------- | ------------ | - | ----------- |  | - | -----------
|                                |            |             |            | Adipose/ |             | Radio/ |          |         |              |  
|                                | Umbilical  |             | Peripheral |          | Television  |        | Segments |         | Consolidated
|                                | Cord Blood |             | Blood      |          | Advertising |        | Total    |         | Total       
|Revenue from External Customers | $          | 278,888     |            | $        | 0           |        | $        | 864,502 |              | $ | 1,143,390   |  | $ | 1,143,390  
|Interest Expense                |            | 556,839     |            |          | 0           |        |          |         |              |   | 556,839     |  |   | 556,839    
|Depreciation and Amortization   |            | 11,410      |            |          | 0           |        |          | 11      |              |   | 11,421      |  |   | 11,421     
|Segment Loss)                   |            | (1,237,254) |            |          | (1,726)     |        |          | 100,747 |              |   | (1,138,233) |  |   | (1,138,233)
|Segment Assets                  | $          | 547,066     |            | $        | 196         |        | $        | 166,056 |              | $ | 713,318     |  | $ | 713,318    









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ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS



Forward Looking Statements



In addition to the historical information contained herein, we make statements in this Quarterly Report on Form 10-QSB 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, our ability to increase income streams, to grow revenue and earnings, and to obtain additional cord blood banking revenue streams. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties.



The following information should be read in conjunction with our September 30, 2007 consolidated financial statements and related notes thereto included elsewhere in the quarterly report and with our consolidated financial statements and notes thereto for the year ended December 31, 2006 and the related "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our annual Report on Form 10-KSB for the year ended December 31,

2006. We also urge you to review and consider our disclosures describing various risks that may affect our business, which are set forth under the heading "Risk Factors Related to our Business" in our annual Report on Form 10-KSB for the year ended December 31, 2006.



Summary and Outlook of the Business



CBAI is an umbilical cord blood stem cell preservation company with a particular focus on the acquisition of customers in need of family based products and services. We also provide television, radio and internet advertising services to businesses that sell family based products and services.



We operate two core businesses:



Ø

Cord operates the umbilical cord blood stem cell preservation operations, and

Ø

Career Channel, Inc. D/B/A Rainmakers International ("Rain") operates the television and radio advertising operations.



Cord



CBAI and its subsidiaries CorCell (Cord) provide umbilical cord blood banking services to expectant parents throughout all 50 United States. Our corporate headquarters are located in Los Angeles, CA. Cord also maintains offices in Philadelphia, Pennsylvania, which were the former offices of the CorCell operations. Cord earns revenue through a one-time enrollment and processing fee, and through an annually recurring storage and maintenance fee. Cord blood testing, processing, and storage is conducted by our outsourced laboratory partner, Bergen Community Regional Blood Services, located in Paramus, New Jersey. On August 1, 2007, CBAI entered into an agreement with Progenitor Cell Therapy, LLC, (PCT) for testing, processing and storage of cord blood samples.  The company believes this transition from Bergen to PCT will provide additional leverage to operating costs and efficiencies while maintaining the highest of quality standards. We provide the following services to each customer. In addition, some storage services are provided by ThermoFisher of Rockville, Maryland.



·

Collection Materials. We provide a medical kit that contains all of the materials necessary for collecting the newborn's umbilical cord blood at birth and packaging the unit for transportation. The kit also provides for collecting a maternal blood sample for later testing.



·

Physician and Customer Support. We provide 24-hour consulting services to customers as well as to physicians and labor and delivery personnel, providing any instruction necessary for the successful collection, packaging, and transportation of the cord blood & maternal blood samples.



·

Transportation. We coordinate the transportation of the cord blood unit to our laboratory partner, Community Blood Services, immediately following birth. This process utilizes a private medical courier, Quick International, for maximum efficiency and security.



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·

Comprehensive Testing. At the laboratory, the cord blood sample is tested for stem cell concentration levels, bacteria and blood type. The maternal blood sample is tested for infectious diseases. We report these results to the newborn's mother.



·

Cord Blood Preservation. After processing and testing, the cord blood unit is cryogenically frozen in a controlled manner and stored in liquid nitrogen for potential future use. Data indicates that cord blood retains viability and function for at least eighteen years when stored in this manner and theoretically could be maintained at least as long as the normal life span of an individual.



Cords revenue and gross profit will benefit from the asset purchase of CorCell.  Going forward, management will continue to assess the market conditions, particularly related to the cost of customer acquisition, and whether organic growth or continued M&A activity will lead CBAI closer to profitability.



Rain



Rain, the television and radio advertising operations, are located in the corporate headquarters in Los Angeles, CA. The offices were relocated from Carlsbad, CA in September, 2006.  Rain provides advertising and direct marketing customers a range of services including:



·

the placement of advertising in television and radio outlets,



·

the production of advertising content, including television commercials and radio copy, which is outsourced to third party production companies, and



·

advertising and marketing consulting services which can include assistance in not only developing an advertising program, but helping the client to develop the particular product or service, determine the appropriate market and design and implement an overall marketing program and strategy.



A majority of Rain's revenues are earned via direct response media buys and per inquiry campaigns. For direct response, we currently buy television and radio schedules for our clients on a national and local level. Our national television outlets include Directv, DISH Network, Comcast Digital, national cable networks and various local cable interconnects. We buy time with numerous national radio networks including Premiere Radio, Clear Channel, Westwood One and Jones Radio Network, along with a variety of local radio stations. For per inquiry advertising, we focus on national campaigns. The placements are made using our internal media buyers and other agencies with which we have formed strategic marketing alliances. We also generate revenues through the commercial production aspect of our business using production partners in Florida and California.



During 2006, Rain focused on the development of a new sales channel, referred to as "remnant radio", which is unsold radio inventory from radio networks that is available at a deeply discounted rate. In the past, this unsold inventory was available to us on nationally syndicated radio shows. This new channel involves unsold inventory at the local radio station level. We have developed relationships with the top three firms in this space and now offer discounted unsold radio inventory to our clients on a local level. The ability to purchase this local remnant radio inventory is made possible in large part due to the utilization of the internet as a supply chain management tool, allowing local radio station managers to sell their unsold inventory at the last minute. The development of this service benefits us in two ways:



·

we are now able to offer a lower entry point for new clients wishing to test radio which has provided us the opportunity to pursue business that we were unable to serve in the past; and



·

we are now able to target specific cities or states which has been a common request by our prospective clients



By being able to offer our clients these new services, we have been able to increase our customer base as well as an increase in media buys from existing clients. We believe this will continue to be a trend over the next twelve months.



23



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BodyCells



We are continuing to pursue other growth opportunities by acquisition or internal growth. The development of BodyCells, which is anticipated to facilitate the collecting, processing and preserving of peripheral blood and adipose tissue stem cells allowing individuals to privately preserve their stem cells for potential future use in stem cell therapy, is currently suspended pending the identification of an alternative lab to partner.



Results of Operations for the Nine-Months Ended September 30, 2007



For the nine months ended September 30, 2007, our total revenue increased $3,115,269 or 121% to $5,697,701 due to three factors: Rains revenues increased $939,068, or 56%, as a result of additional marketing and exposure for our Radio and Television Advertising services, which resulted in the addition to our customer base and increased revenue from existing customers. Cords revenues increased $2,176,201 or 241% to $3,079,919, primarily due to the Companys acquisition of more umbilical cord samples along with customer lists and marketing efforts.



Cost of services increased by $1,258,339 as a result of substantially higher revenues, but Gross Profit increased from 20.4% of revenues to 41.8% as economies of scale, especially for the Companys Cord division, start impacting the Companys results. The Company anticipates that through the continued growth and expansion of its Cord business, they will increasingly benefit from economies of scale in that business segment.



Administrative and selling expenses increased by approximately $440,000 or 13.7% from the prior comparative period to $3,659,000. With the acquisition of CorCell, the Company has temporarily increased some of its administrative expenses, until it completes its integration plans. On the other hand, the cost-cutting measures implemented in 2006 are now being felt for the entire period. These include a decrease in total labor costs of $222,000, a reduction in marketing costs of $694,000, partially offset by an increase in capital raising expenses and financial consulting charges and fees of $667,000, loan discounts expensed of $147,000, office, rent and related expenses of $150,000 and increases of $350,000 in depreciation and amortization, a consequence of the acquisition of additional equipment and customer lists.  The Company has had to raise additional debt to finance both its acquisitions as well as its operating losses. Consequently, interest costs increased 133% from $1,565,000 to $3,654,000. A significant part of this increase is associated with the amortization of the deferred consideration, resulting from the new warrants issued in the first quarter. All interest charges during the period have been accrued.



Our net loss from continuing operations did not significantly change from the comparative period, declining 1.8% to $4,188,000.



Results of Operations for the Three-Months Ended September 30, 2007



For the three months ended September 30, 2007, our total revenue increased $511,000 or 44.7% to $1,654,494  due to three factors: Cords revenues increased $746,000 or 267% to $1,025,000 primarily due to the Companys acquisition of more umbilical cord samples along with customer lists and marketing efforts. This was offset by a decline in Rains revenues of $421,000 or approximately 49%, as a result of re-inventing the focus of RainMakers to create a residual income company that can stand alone.  As CBAI evaluates its position in the stem cell market, it believes that both Rain and Cord need to operate on their own and are positioning these companies to have recurring revenue streams that allow for predictable, strategic income.



Cost of services decreased  by $233,000 primarily due to the significant decrease in Rains revenues, which has a substantially lower gross margin than the Companys cord division, and consequently the overall Gross Profit increased significantly from 22% of revenues to 60% as economies of scale for the Companys Cord division starts impacting the Companys results. The Company anticipates that through the continued growth and expansion of its Cord business, they will increasingly benefit from economies of scale in that business segment.





24



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Administrative and selling expenses were $1,062,000, or an increase of $230,000 from the three month comparative period in 2006. Financial consulting and capital raising expenses increased by $136,000 over the prior period, as did health insurance costs by $26,000, office, rent and related expenses by $82,000 and increases of $140,000 in depreciation and amortization, a consequence of the acquisition of additional equipment and customer lists. These increases were partially offset by a decrease in marketing costs of $234,000. Interest costs increased $473,000 over the prior years comparative period, an increase of 87%. The amortization of the deferred consideration associated with the warrants issued to fund the acquisition, along with the costs of the increased debt incurred by the Company to shore up its working capital are the primary reasons behind this increase.



Liquidity and Capital Resources



We have experienced net losses from continuing operations of $4,187,878 and $4,228,672 for the nine months ended September 30, 2007 and 2006, respectively. At September 30, 2007, we had $107,343 in cash and $100,000 cash in escrow, which relates to the financing by Shelter. Under the terms of the Agreement, this money will be released to CBAI once the Company can demonstrate collection of most of CorCells inherited accounts receivable. During the past three months ending September 30, 2007, $150,000 of the original escrowed amount was released. We currently collect cash receipts from operations through both of our subsidiaries: Cord and Rain. In addition, the CorCell business also collects cash receipts through its Pennsylvania office. However, all corporate expenses such as legal, auditing, investor relations and interest are currently being paid through Cord. Cord's cash flows from operations are not currently sufficient to fund operations in combination with these corporate expenses. Because of this shortfall, we have had to obtain additional capital through other sources as discussed in Note 5, Notes and Loans Payable.



Since inception, we have financed cash flow requirements through the issuance of common stock and warrants for cash, services and loans. As we expand our operational activities, we may continue to experience net negative cash flows

from operations and we will be required to obtain additional financing to fund operations through equity offerings and borrowings to the extent necessary to provide working capital. Financing may not be available, and, if available, it may not be available on acceptable terms. Should we secure such financing, it could have a negative impact on our financial condition and our shareholders. The sale of debt would, among other things, adversely impact our balance sheet, increase our expenses and increase our cash flow requirements. The sale of equity would, among other things, result in dilution to our shareholders. If our cash flows from operations are significantly less than projected, then we would either need to cut back on our budgeted spending, look to outside sources for additional funding or a combination of the two. If we are unable to access sufficient funds when needed, obtain additional external funding or generate sufficient revenue from the sale of our products, we could be forced to curtail or possibly cease operations.













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ITEM 3.

CONTROLS AND PROCEDURES



(a) Evaluation and Disclosure Controls and Procedures



As of September 30, 2007, an evaluation was carried out under the supervision of and with the participation of CBAI's management, including CBAI's Chief Executive Officer (Principal Executive Officer and acting Principal Financial and Accounting Officer), of the effectiveness of our disclosure controls and procedures (as defined in Securities Exchange Act Rule 13a-15(e)). Based on that evaluation, the Company's Chief Executive Officer identified a major deficiency that existed in the design or operation of our internal control over financial reporting that it considers to be a material weakness. The Public Company Accounting Oversight Board has defined a material weakness as a significant deficiency or combination of significant deficiencies that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will note be prevented or detected.



The deficiency in our internal control related to a lack of segregation of duties due to the size of the accounting department. We are in the process of improving our internal control over financial reporting in an effort to remediate this deficiency.



Based upon that evaluation and deficiency identified above, the Chief Executive Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective, as of September 30, 2007, to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.



(b) Changes in Internal Controls



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 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS



We have issued the following securities in the first nine months of 2007 without registering them under the Securities Act of 1933:



During the nine months ended September 30, 2007, CBAI issued a total of 324,324 shares to its directors as compensation. The total cash value of the stock on the date of issuance was $42,162.



On February 23, 2007 CBAI issued 750,000 shares in exchange for finders fees related to the financing arranged with Shelter.



On February 14, 2007, CBAI entered into a Securities Purchase Agreement (see Note 4  Shelter Island Opportunity Fund) whereby the Company issued 1,000,000 deposit shares in exchange for financing a Debenture of $2.3 million, used to purchase the CorCell business.



On March 1, 2007, CBAI issued 1,666,667 common shares to Vita34 A.G. as security, along with the $250,000 Promissory Note, all related to the purchase of the CorCell business (see Note 2  Acquisition). The Company also issued 18,498,715 as part of the consideration for this same purchase.



On May 21, 2007, CBAI entered into a placement agent agreement with RHK Midtown Partners, LLC, for providing financial consulting services, at a value of $150,000, in exchange for the issuance of 1,875,000 common shares of the Company.



On May 21, 2007, CBAI signed an exclusive Consulting Agreement with Fuselier & Associates 1, L.P., whereby the consultant will negotiate creditor claims and attempt to effect settlements of these claims (currently in Accounts Payable on the Companys Balance Sheet). In exchange, the Company issued 15,000,000 restricted common shares with a value of $1,200,000. Creditor claims that go unassigned to the consultant will result in a share reduction equivalent to a set formula, as outlined in the Agreement, on file with the SEC. On July 23, 2007, CBAI signed an amendment to this Agreement, issuing an additional 871,945 common shares.



On June 20, 2007, the Company issued 2,000,000 unregistered common shares to Bergen Community Regional Blood Center in consideration for extending the credit terms on its outstanding balance in accounts payable.



On June 28, 2007, Cornell Capital converted $36,212 of their convertible debenture in exchange for 853,080 common shares of CBAI.



On July 31 and August 31, 2007, the Company issued 969,400 and 1,473,429 restricted common shares to Independent Blue Cross in exchange for a total cash consideration of $129,786.



Unless otherwise noted in this section, with respect to the sale of unregistered securities referenced above, all transactions were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended (the "1933 Act"), and Regulation D promulgated under the 1933 Act. In each instance, the purchaser had access to sufficient information regarding CBAI so as to make an informed investment decision. More specifically, we had a reasonable basis to believe that each purchaser was an "accredited investor" as defined in Regulation D of the 1933 Act and otherwise had the requisite sophistication to make an investment in CBAI's securities.





27



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ITEM 3.

DEFAULTS UPON SENIOR SECURITIES



As of September 30, 2007, the Company is in default on the secured convertible debenture issued by Cornell Capital on December 28, 2005, due to the companys inability to register all of the shares as required by the debenture.  The company first attempted to register all of the securities on February 13, 2006.  Due to SEC comments, the company was only able to register 8,751,962 shares with the SEC, declared effective on January 25, 2007. An unregistered amount of  shares remains to satisfy the outstanding debt. As of September 30, 2007, both parties are still seeking a workable solution to remedy the agreement.



ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS



NONE



ITEM 5.

OTHER INFORMATION



NONE



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K



(a)      Exhibits



The following exhibits are filed as part of this Form 10-QSB.



|            |  |                                                                                                                                                      |  |                  
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                                                          |  | LOCATION         
|            |  |                                                                                                                                                      |  |                  
|31.1        |  | Certification of Cord Blood America, Inc. Chief  Executive Officer, Matthew L. Schissler, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  |  | Provided herewith
|32.1        |  | Certification of Cord Blood America, Inc. Chief  Executive Officer, Matthew L. Schissler, pursuant  to Section 906 of the Sarbanes-Oxley Act of 2002 |  | Provided herewith







28



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SIGNATURES



In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                           |  |     |                                                                                                                   | 
|-------------------------- |  | --- | ----------------------------------------------------------------------------------------------------------------- | 
|                           |  |     | CORD BLOOD AMERICA, INC.                                                                                         
|                           |  |     |                                                                                                                  
|                           |  |     |                                                                                                                   | 
|Date:    November 14, 2007 |  | By: | /s/ Matthew L. Schissler                                                                                          | 
|                           |  |     | Matthew L. Schissler                                                                                              | 
|                           |  |     | Chairman and Chief Executive Officer (Principal Executive Officer and Principal Financial and Accounting Officer) | 







29