Interview with: Matthew L. Schissler, Founder, Chairman, and CEO - featuring: their wholly owned subsidiary, Cord Partners, Inc., markets a service to preserve the umbilical cord blood in a patented process for future use exclusively by the family.

Cord Blood America, Inc. (CBAI-OTC: BB)

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Cord Blood America has accomplished what they set out to do in early 2003, which was to create a company that makes it very easy for consumers to privately store their umbilical cord blood stem cells

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Healthcare
Medical Laboratories & Research
(CBAI-OTC: BB)

Cord Blood America, Inc.

9000 West Sunset Boulevard – Suite 400
Los Angeles, CA 90069
Phone: 310-432-4090

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Matthew L. Schissler
Founder, Chairman and CEO

Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
August 3, 2006

BIO:
Matt Schissler, Founder, Chairman and CEO of Cord Blood America, Inc.

Mr. Schissler and two partners Founded Cord Partners, Inc on January 3, 2003. In April of 2004, Mr. Schissler lead Cord Partners through a reverse merger into an newly formed company Cord Blood America, Inc., and began trading publicly under the symbol CBAI by January of 2005. Prior to January 2003, was 7 months of research and development in order to create their corporation. Cord Partners has launched successfully, achieving rapid growth in its first 3 years, all while using personal investment as well as raising over $7M though various channels to fund its growth.

Before this, Matt began his RainMakers International start-up on May 3, 2001. In his career, Start-ups are all Matt has ever done. It quickly became a powerhouse in the direct response advertising arena. His prior success of start-ups led him on his entrepreneurial quest of providing a revenue generating sales machine that any client company can use to boost their top line.  Matt’s mission is to create “The most respected advertising agency in the world.” Currently, RainMakers is doing just that. By using a cost per acquisition model on National Television, Radio and the internet, RainMakers provides their clients a fixed cost per lead or fixed cost per sale advertising approach.

Matt started his second RainMakers’ affiliated company on May 3, 2002.  RainMakers Fruit is a direct-to-consumer Fruit shipping business great for holiday gifting, corporate gifting, fundraisers and Floridian souvenirs.

Prior to RainMakers, Matt held the position of Sr. Regional Director for TMP Worldwide, formerly System One Technical.   During Matt’s seven year stint, he was instrumental in starting four separate business units for System One/TMP. Matt became the youngest Branch manager ever in System One history, and followed that by starting three of the most profitable offices in System One history, including New York, Atlanta and Dallas.

In addition to his sales achievements, Matt was responsible for developing the entire training program for hundreds of sales representatives across North America. He personally trained over 200 Sales Representatives in a one week Boot Camp training. He also authored the “Accountability and Results” standards for TMP Worldwide, for all sales representatives. This manual is also still in use and practice today.

Prior to System One, Matt and a partner were involved in a start-up radio station, Sports Radio 960, WTGM, in Salisbury, MD. This new radio broadcast achieved profitability within six months. Before radio, Matt started his own successful Life Insurance practice in Delaware and Maryland.

Matt graduated with a BA in both Biology and Public Policy, from St. Mary’s College of Maryland.

Company Profile:
There is uniformity in science that stem cells will play a key role in fighting disease as we move through this century; indeed, some believe stem cells could launch a new era in medicine, perhaps even curing some of our most intractable diseases. The umbilical cord, which at birth, traditionally has been tossed away, contains a rich store of stem cells. Cord Blood America, Inc., through its wholly owned subsidiary, Cord Partners, Inc., markets a service to preserve the umbilical cord blood in a patented process for future use exclusively by the family. The collection takes less than five minutes, is umbilical cord stem cells have already been used to treat 75 major diseases, including leukemia, severe anemia, metabolic blood disorders and immune deficiencies. This list is guaranteed to grow as medical research learns more about the incredible healing power of stem cells.

What Cord Blood America offers is the proverbial once in a lifetime opportunity. You can’t give birth to the same child twice. That is why marketing, and education, is such an important factor in this sector. Cord Blood America has assembled an experienced marketing team second to none in the industry. This is a growth industry: In 2003, only five percent of the four million women in the U.S. giving birth knew about preserving their umbilical cord blood and two percent of these took advantage of this life-saving procedure. The number of cord blood samples stored grew by 75 percent in 2004 and is expected to grow again by 75 percent in 2005, with five percent of all those giving birth now preserving their umbilical cord blood. Cord Blood America intends to be number one in educating about the advantages of these cord blood banking services and then to be the top performer in signing new families to utilize its services. The Company already has revenues topping $2 million annually.

CEOCFO: Mr. Schissler, what is your vision when you founded the company and where are you today?
Mr. Schissler: “Our vision was to create a company that made it very easy for consumers to privately store their umbilical cord blood stem cells. When we were founded in early 2003, stem cell storage was still very new and not heard of and most consumers had a difficult time linking all the pieces they had together to store them. Our vision was to make a one-stop, one phone call, all services you need to get your stem cells stored type of company and we did just that.”

CEOCFO: Who is storing stem cells today; what is the demographic?
Mr. Schissler: “It tends to be families, mostly urban or suburban, highly educated families that are having children and storing stem cells from the child’s umbilical cord, which are a perfect match for that baby.”

CEOCFO: How do you keep them safely and where are they stored?
Mr. Schissler: “We store them at the Community Blood Services of Paramus New Jersey, which is a large not for profit blood bank up in New Jersey. The stem cells and umbilical cord are cryogenically frozen and the Bergen Community Blood center has over 20,000 samples stored privately and they have been doing it since 1996. They hold all the licenses required to do so including the American Association of Blood banks, The American Association of Tissue Banks, State of NY and NJ licenses. They are a well-run, highly accredited, highly certified, with a long history of experience type of lab that stores stem cells.”

CEOCFO: How do you introduce the subject to your customers?
Mr. Schissler: “The first way is through direct response advertising; what that means is through magazine advertising, internet advertising, direct mail, email, and so forth. That prompts the customers to call into our office and request information and ask questions. The other way is through the business-to-business channels, which include OB-GYNS, hospitals and other healthcare influencers, to provide them information during their prenatal stages whether it be lamaze class, doctors office or a tour of the facility; that is another time where you can reach the consumer.”

CEOCFO: Are the doctors receptive?
Mr. Schissler: “Some are, some aren’t. At the end of the day, this is an elective for the consumer. If the consumer chooses to do so, the doctors are more than   willing to collect the cord blood for the consumer; it is a very simple procedure. Most doctors do not tend to sell things that are not medically necessary like a medical procedure that is an elective procedure. They are not un-receptive; I believe they leave that decision in the consumer’s hands.”

CEOCFO: Will you tell us about the industry and what part Cord Blood  America  plays?
Mr. Schissler: “In the US there are 25competitors in the industry that privately bank umbilical cord stem cells; there are also numerous public donation banks. Cord Blood America is a private bank and the consumers know us as Cord Partners. There is no industry oversight as of rankings and size of labs and so forth; we do believe we are in the top 10 of the 25 labs and the number of private storages. The industry from 2003, to 2005, grew 79% up to about 3 percent of all families privately banking in 2005. What has happened in late 2005 through 2006 is that we have seen some slow growth in the industry. It is growing but not at such a dramatic rate. We feel what has happened in the industry is the earlier doctors, the ones that have to have everything first, they are in and have bought on to the fact that they need to store their stem cells and that is great. We are now in a period of creating new incentives, payment plans, and educational opportunities for families that are not 100% convinced and even more importantly have the money to store their stem cells to figure out ways to get them storing stem cells for the family. I consider this like any other industry; this is the consolidation phase at the industry. The early adopters are in and the masses are not in. This is when all the original players start to consolidate. Therefore, Cord Blood America is going to be extremely aggressive in mergers and acquisitions and in fact, we did our first one in January of 2006; that was the first asset purchase in the industry in over three years. We have launched the first (inaudible) and we continue to look at mergers and acquisitions.”

CEOCFO: Where are your customers geographically?
Mr. Schissler: “We have customers all over the country and all over the world. Some companies market locally and some, like us market nationally. It depends on the business model; I can name 10 laboratories that just market to the local doctors and local communities. They have what I call the boutique model and are not highly profitable, they do not have a tremendous growth curve but they do work a nice business and local market. By and large, there are about six either large companies or rapid growers in the industry that market nationally. They go after national audiences or baby fairs around the country.”

CEOCFO: Is it mostly cost or lack of knowledge that impedes growth?
Mr. Schissler: “A bit of both. Families have to equate cost at the time of birth as to whether or not it is valuable. To talk about stem cells and how they are used to battle diseases, takes a lot of time and if a family does not have the time to learn about stem cells, they probably do not equate the value to meeting it. Stem cells battle cancer and leukemia and they just do the math and say what are the odds that our child comes down with cancer and leukemia and the odds are fairly slim. We consider a biological life insurance policy similar to what we are paying for insurance and other products in our lives. If you are asking a family at the time of birth to spend anywhere from $1,500 to $2000, usually one of the two parents are not working so there is less income coming into the house. You are starting to see more people that are not of the traditional demographics.”

CEOCFO: Tell us about your new payment plan to increase your reach?
Mr. Schissler: “Yes, we have a payment plan of no money down and $269 dollars a year that we launched in September last year; it helped to grow our core enrollments through last year by approximately 27%. We reached out to a different demographic. If you do not have the money at the time of birth, but have a decent credit history, you do not have to give us any money at the time of birth and you only pay $269 a year for eighteen years and it is a one-time payment. That makes it a lot more realistic to families.”

CEOCFO: You certainly had good numbers this last quarter!
Mr. Schissler: “Yeah! We did. Our revenues were up 71% over the fourth quarter of 2005. Our gross profit was up 116% over fourth quarter of 2005 and our loss was down 20% over the fourth quarter of 2005.”

CEOCFO: Your mission is to be the most respected stem cell preservation company in the industry; how do you accomplish that?
Mr. Schissler: “By making this a consumer based industry, and providing the education to the consumer so they can make their own decisions. What has historically happened in the industry is lack of educational opportunities and more presence in higher sales opportunities by our competitors that confuse families and storing their stem cells. What we want to do to is become the most respected and we want the families to know that we are the ones that educated them on stem cells; why they are valuable and why they should store them. Everyday, by talking to one family at a time by using a quote by Dean Witter, we talk to one family at a time and educate them and that is how we become the most respected.”

CEOCFO: What is new in the stem cell area?
Mr. Schissler: “There are a few new sources of stem cells that are getting tremendous amount of publicity and they are doing a tremendous amount of clinical trials. The first source is adipose tissue stem cells, which are stem cells from your fat, and they show regenerative traits to be able to grow things such as bone, and cartilage. There are also adult peripheral stem cells, which are stem cells in adult bloodstreams that are not concentrated, so they show the same traits as bone marrow stem cells or umbilical stem cells, which are called Hematopoietic traits, which essentially means that they repopulate the immune system of the body while a person may undergo radiation treatment for cancer and leukemia. The Hematopoietic stem cells can re-populate the immune system, keep the body strong so you can endure the radiation and chemotherapy.”

CEOCFO: How does that fit into what you would do?
Mr. Schissler: “We actually made an announcement late last summer that we were going to be storing adipose tissue stem cells and that business plan is still on track. The laboratory where we will be storing adipose stem cells is taking a little longer to get the plan approved by all of the accrediting and licensing facilities. We are still on target for the middle of the summer maybe early August, to be able to store adipose tissue stem cells as well. We should be the first company to launch this in the United States.”

CEOCFO: Why should potential investors be interested and what should they realize about the company that they may not realize at first?
Mr. Schissler: “They should be interested in the fact that stem cells actually dominate the medical news at this juncture and many of the large companies such as Amgen, Inc. (NASDAQ: AMGN) and Baxter International Inc. (NYSE: BAX) have launched stem cell initiatives for therapies in the future. The pharmaceutical companies are starting to realize that stem cells will play an important role in the future health of America. The other thing they need to realize is that we are growing rapidly and if you do your due diligence on us vs. a couple of our competitors that trade publicly, you will see that although they are larger than we are at this juncture, with our rapid growth rate, you can do your due diligence and realize we are probably an undervalued stock at this point. That is my speculative opinion. I think investors need to realize as far as CBAI, and the industry, that unlike the late nineties and the internet boom, stem cells take time to get through clinical trials so that the new therapies can be approved and used in patients. We are in those trials now; it could be a couple more years until we start to see more uses for stem cells. Unlike the 1990’s and early 2000’s where computer and software based companies could just pump out new products and services by hiring new people, we have to allow the due process of nature through clinical trials, take effect before the stem cell industry shows more promise in battling cancer and leukemia.”

CEOCFO: Do you see this as standard 20 years down the road?
Mr. Schissler: “I do. Before any of us were human beings, we were 8 stem cells and those cells multiplied into the 208 different types of cells that we have in our bodies. Theoretically, scientists believe they can take those cells, which have no identity and recreate almost any human tissue through the proper channels. Since stem cells are the building blocks of human beings, it all starts with stem cells. I believe this is the stem cell revolution and through the next forty years you are going to see many more therapies being developed for stem cell use.”

CEOCFO: Any final words to our readers?
Mr. Schissler: “I would like to say thanks to any investors that are currently invested in CBAI. For the potential investors evaluating us as an organization, do your due diligence, look at our stock vs. other stem cell companies in the micro cap and nano cap space and I think you will see that we have a good story to tell in this space.”


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“Before any of us were human beings, we were 8 stem cells and those cells multiplied into the 208 different types of cells that we have in our bodies. Theoretically, scientists believe they can take those cells, which have no identity and recreate almost any human tissue through the proper channels. Since stem cells are the building blocks of human beings, it all starts with stem cells. I believe this is the stem cell revolution and through the next forty years you are going to see many more therapies being developed for stem cell use.” - Matthew L. Schissler

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