SecProbe.io

CORRESP
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filename1.htm

cbai_corresp

:

EMAIL:
KSCHLESINGER@OLSHANLAW.COM

DIRECT
DIAL: 212.451.2252

April
8, 2020

VIA EDGAR AND ELECTRONIC MAIL

U.S.
Securities and Exchange Commission

Division
of Corporation Finance

Office
of Life Sciences

100 F
Street, N.E.

Washington,
D.C. 20549

Attention:
Chris Edwards and Celeste Murphy

Re:

CBA
Florida, Inc.

Preliminary
Proxy Statement on Schedule 14A

Filed
March 25, 2020

File
No. 000-50746

Ladies
and Gentlemen:

CBA Florida, Inc., a Florida
corporation (the “Company”), has received the
comment letter dated April 3, 2020 from the staff of the Division
of Corporation Finance, Office of Life Sciences
(“Staff”) with
respect to the Company’s Preliminary Proxy Statement on
Schedule 14A, filed March 25, 2020 (the Proxy”). On behalf of the Company,
set forth below are the Company’s responses to the
Staff’s comments. For ease of reference, we have recited the
Staff’s comments in italicized, type and have followed the
comment with the Company’s response. Courtesy copies of this
letter are being provided directly to the Staff for its convenience
(attention: Chris Edwards and Celeste Murphy). Per our discussion
with the Staff, after the Staff has reviewed this letter, we will
incorporate the disclosure in another filing of a Preliminary Proxy
Statement. The Company would like to mail the Definitive Proxy
Statement no later than the week of April 13, 2020.

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Preliminary Proxy Statement on Schedule 14A

Proposal 2: Approval of Plan of Dissolution

Background of the Proposed Dissolution, page 27

1.

Please revise the background section to discuss in greater detail
the process for identifying potential strategic transactions.
Please describe all discussions, meetings, contacts and reports
among specific members of the board and/or management of the
Company, and representatives of potential counterparties as well as
financial, economic and legal advisors regarding the various
options considered.

Response: In response to this comment,
the Company will revise the background section of the Proxy in a
revised preliminary proxy statement (the “Revised Proxy”) as
follows:

“Background of the Proposed Dissolution

At
a special meeting of the Shareholders held on May 14, 2018,
approximately 98.06% of the shares that were voted, representing
52.42% of the Common Stock, approved the Transaction, which
constituted a sale of substantially all of the Company’s
assets. The Company successfully completed the Transaction on May
17, 2018. Following the closing of the Transaction, the Board has
explored the best means by which to maximize Shareholder
value.

During
the period from May 18, 2018 through September 30, 2018, the
Company stored tissue samples and provided transition services to
California Cryobank Stem Cell Services LLC (“Cal Cryo”)
pursuant to a transition services agreement entered into in
connection with the Transaction.

From
May 2018 through June 2019, the Board explored potential strategic
transactions for the Company with counterparties in the same
industry as the Company and counterparties outside of the
industry.

In May
2018, the Company discussed a potential sale of the Company to
Party A.

In July
2018, the Company explored a potential sale of the Company to Party
B.

In September 2018, entered into discussions with Party C regarding
its potential acquisition of the Company. On October 18, 2010, the
Company and Party C signed a non-binding letter of intent and
initiated due diligence. On November 7, 2019, Party C informed the
Company that Party C would no longer pursue a transaction with the
Company due to the non-competition and non-solicit provisions of
the Asset Purchase Agreement. The Company was ultimately unable to
obtain a waiver of such restrictive covenants.

In April 2019, the Company also reviewed a potential strategic
transaction with Party D. On June 19, 2019, Party D informed the
Company that Party D was not interested in such a strategic
transaction.

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Following the termination of discussions with
potential transaction counterparties, the Company undertook an
assessment of potential liabilities of the Company, ongoing
expenses and cash available for distribution to Shareholders. On
August 6, 2019, the Company engaged Greenberg Traurig, P.A.
(“Greenberg Traurig”) to advise the Company in
connection with a voluntary dissolution and liquidation
process. On September 5, 2019,
per a referral advisement from Greenberg Traurig, the Company
engaged National Economic Research Associates, Inc.
(“NERA”) to perform an independent valuation of
contingent liabilities resulting from the Company’s former
operating business that related to storing blood samples. On
November 12, 2019, NERA presented its final report on such
valuation to the Board.

On January 9, 2020, the
Board met to discuss potential liquidating distributions and the
possibility of engaging third parties to act as dissolution agents
during the Dissolution process. The Board determined that its
existing officers and outside management services provider,
Red Oak Partners, LLC, would administer the
Dissolution.

The Board now seeks, as a next step in its efforts
to maximize value for Shareholders and any other relevant
constituents, to effect the Dissolution, including the monetization
of the Company’s remaining holdings and other assets, and to
make a distribution of the proceeds of the Transaction. In
furtherance of these efforts, the Board is presenting the Plan of
Dissolution for approval by the Shareholders. The Plan of
Dissolution was approved by the Board on February 11,
2020. The Board also recommended that
the Shareholders approve the Plan of Dissolution. Florida law
provides that a corporation may dissolve upon the recommendation of
its board of directors, followed by the approval of its
shareholders. A copy of the Plan of Dissolution is attached to this
proxy statement at Appendix
A. All material features of the
Plan of Dissolution are summarized below.

If the Plan of Dissolution is approved by the
Shareholders, the Company will file Articles of Dissolution with
the Florida Secretary of State dissolving the Company. Pursuant to
Florida law, the Company will continue to exist for a minimum of
four years after its dissolution becomes effective solely for the
purposes of prosecuting and defending suits against the Company and
enabling the Company and its subsidiaries to close their business,
to dispose of their property, to discharge their liabilities and to
distribute to Shareholders any remaining assets. The proportionate
interests of all of Shareholders will be fixed on the basis of
their respective stock holdings at the close of business on the
date the Articles of Dissolution are filed with the Florida
Secretary of State as determined by the Board, which date is
referred to herein as the “Final
Record Date”. The Company
intends to discontinue recording transfers of shares of the Common
Stock on the Final Record Date, and thereafter certificates
representing shares of Common Stock will not be assignable or
transferable on the Company’s books except by will, intestate
succession or operation of law. After the Final Record Date, any
distributions made by the Company will be made solely to the
Shareholders of record as of the close of business on the Final
Record Date, except as may be necessary to reflect subsequent
transfers recorded on the Company’s books as a result of any
assignments by will, intestate succession or operation of law.
Currently, the Company’s Amended and Restated Articles of
Incorporation and its Tax Benefits Preservation Plan limit direct
or indirect transfers of the Company’s Common Stock to the
extent such transfers could affect the percentage of stock that is
treated as being owned by a holder of our Common Stock that is in
excess of 4.99% of the Company’s outstanding Common
Stock.”

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2.

Please identify the independent economic consulting firm engaged by
the Company to make an assessment of potential unknown liabilities
and provide the information required by Item 1015(b) of Regulation
M-A.

Response: As requested by the Staff, the
Company will add the following disclosure in the Revised Proxy
regarding National Economic
Research Associates, Inc., the independent economic
consulting firm engaged by the Company to make an assessment of
potential unknown liabilities:

“On September 5, 2019, after seeking recommendations from
attorneys, the Company engaged National Economic
Research Associates, Inc. (“NERA”) to
perform an independent valuation of any contingent liabilities
resulting from the Company’s former operating business that
related to storing blood samples. NERA has significant experience
in complex valuations as part of bankruptcies and corporate wind
downs. No material relationship existed between NERA and the
Company or any of its affiliates during the prior two years, nor is
any future engagements currently contemplated. NERA received
$77,622.50 from the Company for its services to the
Company.

On November 12, 2019, NERA presented its final report on such
valuation to the Board. NERA estimated the Company’s
potential liability based on possible settlements, trial verdicts
or refunds which could arise if former customers of the
Company’s operating business were to bring claims against the
Company for storage or quality of processing issues during the
Company’s years of operation. NERA relied on statistical
probability models, hazard models and historical refund rates with
respect to such claims and a model to estimate the cost of settling
potential claims and litigation or payment of refunds. The models
were based on the historical data of the Company. Additional
assumptions for the baseline scenario were based on the litigation
history of the Company and academic publications on the expected
demand for umbilical cord tissue and blood samples. NERA’s
estimates also took into account the expected shelf-life of the
samples, the expected costs of settlement, projected outcome of
trial verdicts, estimated benefits from stem cell transplants, the
estimated defective rate of stored samples, and the likely
relationship between quality issues and transplant viability, among
other assumptions.”

Amount and Timing of Estimated Liquidating Distributions to
Shareholders, page 30

3.

Please quantify the amounts that make up the Potential Additional
Proceeds and the amount of Transaction purchase price proceeds
expected to be released from escrow in May 2020. Please also
identify and quantify the amounts that make up the $3.0 million to
$3.5 million intended for known, ongoing expenses and the $2.2
million for unknown, contingent and/or conditional
liabilities.

Response: In response to this comment,
the disclosure regarding Potential Additional Proceeds will be
revised as follows:

“. . . the
amount of Transaction purchase price proceeds which may be released
from escrow upon the termination of the Transaction escrow, which
is expected to be in May 2020, less any applicable taxes
(collectively, the “Potential
Additional Proceeds”). While no claims have been made
against the $3 million Transaction escrow to date, the Company
cannot currently predict whether any claims will be made against
the escrow prior to its termination or the amount of funds that
will ultimately be released to the Company from
escrow.”

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In
addition, the Company will add the following disclosure regarding
liability reserves to the section “Amount and Timing of
Estimated Liquidating Distributions to Shareholders” of the
Revised Proxy:

“The
Company’s $2.2 million reserve for unknown, contingent and/or
conditional liabilities is based on the high-end estimate provided
by NERA relating to potential liabilities which do not currently
exist but could arise in connection with the Company’s former
operating business.

The Company’s
$3.0 to $3.5 million reserve for known, ongoing expenses provides
for approximately $120,000 of unpaid state and corporate taxes,
non-executive personnel bonus and estimated severance costs,
current accounts payable of $45,000, and approximately $3.0 million
dollars for ongoing operating expenses (including insurance,
employee expenses, Board fees, management fees, audit and tax fees,
legal fees, public company expenses, rent and other ordinary course
business expenses) during the Dissolution process, which is
anticipated to last approximately 4.5
years.”

Interests of Certain Persons in the Dissolution, page
32

4.

Please disclose the expected amount of compensation to be received
by the Company’s officers and directors above their regular
compensation with respect to their services related to the
implementation of the plan of dissolution.

Response: In response to this comment,
the following disclosure will be added to the Revised
Proxy:

“The
Company’s officers and directors will not receive additional
compensation in connection with the Dissolution. Red Oak Partners,
LLC (“Red Oak”) currently provides ongoing management,
administrative and operational services and assistance to the
Company for $100,000 per year. To the extent the Dissolution
requires more than 80 hours of additional work (outside of hours in
the ordinary course of business) to be provided by Red Oak to the
Company with respect to wind down activities and the administration
of any claims which may arise, Red Oak will be paid $250 per hour
for such additional work beyond 80 hours.”

General

5.

Please tell us how you considered the financial statement
requirements in Item 14(b)(8) through (b)(11) and 14(c)(1) of
Schedule 14A.

Response: In response to this comment,
the Company confirms that it determined that the financial
statement requirements in Item 14(b)(8) through (b)(10) and
14(c)(1) of Schedule 14A are not applicable to the Proxy for the
following reasons. As the Company is a smaller reporting company,
Items 14(b)(8) and 14(b)(9) are not applicable to the Company. In
addition, financial information pursuant to Items 14(b)(8) and
14(b)(9) is not being provided because such information is not
material to the dissolution of the Company, which has nominal
operations and assets primarily consisting of cash. Items 14(b)(10)
and 14(c)(1) are not applicable to this Proxy or the dissolution,
because there is no acquirer with respect to the dissolution, nor
would such information be material to the dissolution of the
Company, which has not had any significant operations for over two
years. The financial information required by Item 14(b)(11) can be
found in the Company’s annual and quarterly financial
statements filed with Securities and Exchange Commission and
incorporated by reference in the Proxy.

*****

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Should
any member of the Staff have any questions concerning the foregoing
or desire any further information or clarification in respect of
Proxy, please do not hesitate to contact Anthony Snow, the
Company’s President, at (844) 266-4622, or me at (212)
451-2252 or my colleague Jason D. Cabico at (212)
451-2395.

 Very truly
yours,

 /s/ Kenneth A.
Schlesinger

 Kenneth A.
Schlesinger

cc:

Anthony
Snow

Jason
D. Cabico

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