CBAI - Losing Over $2 Million Per Quarter Revenues Decreasing, Outstanding Shares Exploding

I urge anyone interested in CBAI to look over their SEC filings. Don't rely on the company press releases, as they are misleading. The are protected by the "forward looking statements" at the bottom of the press release.  It didn't take long to come up with some very compelling facts about CBAI.


Here is a link to their last quarterly report:  CBAI Sept 30th 10Q


Let's cut right to the chase:

• CBAI is losing money at an ever increasing rate, and revenue is on the decline, not rising as the current stock price pump would lead you to believe.

THREE-MONTH PERIOD				THREE-MONTH PERIOD
		ENDED				ENDED
		SEPTEMBER 30,				SEPTEMBER 30,
		2009				2008
Revenue		$	838,238			927,359

Net loss                                (2,298,943)                                (1,610,642)
Shares Outstanding      2,775,994,889                        258,075,887                                                    

• The outstanding shares have increased from 258,075,887 to 4,568,253,327 on November 9th.  That's an astounding growth in the outstanding shares.
  

• Over that same time revenues have fallen and net loss has risen.  The company is losing over $2 million a quarter.  They have lost close to $6 million in the last 9 reported months.

Straight from the 10Q:

Results of Operations for the Nine-Months Ended September 30, 2009

For the nine months ended September 30, 2009, our total revenue decreased approximately $0.7 million, or 22.1% to $2.6 million. Rain’s revenues decreased approximately $0.5 million, or 71.6%, due to the steep down turn in the economy, and also due to the change in the Rain business model as well as our management decision to deemphasize this business.

Cord’s revenues decreased $0.2 million or 8.8%, to $2.4 million, because of significant cutbacks in marketing and advertising due to a lack of capital. Cord remains focused on strategic organic growth and accretive acquisition strategies, which management hopes will reduce or eliminate the losses and negative cash flow.

Liquidity and Capital Resources

We have experienced net losses of $6.0 million and $5.4 million for the nine months ended September 30, 2009 and 2008, respectively. At September 30, 2009, we had $158,164 in cash. We currently collect cash receipts from operations through both of our subsidiaries: Cord and Rain. Cord's cash flows from operations are not currently sufficient to fund operations in combination with its corporate expenses. Because of this shortfall, we have had to obtain additional capital through other sources as discussed in Note 4, Notes and Loans Payable. 

Are you guys following this?

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 will likely continue to experience net negative cash flows from operations. We hope to be able to obtain additional financing to fund operations through equity offerings and borrowings to the extent necessary to provide the necessary 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 could, depending on the terms of its placement, among other things result in dilution to our shareholders.

These words are not mine but straight from CBAI's 10Q. I once again urge you to read it.

If I had to give the cliff note version of it:

CBAI is losing money at an ever increasing rate, our revenues are on the decline, we don't have the funds to continue operating unless we can sell stock and dilute our loyal shareholders. 

When CBAI is back at $.003 don't say the Guru hasn't warned you.