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Income Taxes | 12 Months Ended
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Nov. 30, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 6—INCOME TAXES. The Company recorded the following income tax provision for the years ended November 30, 2013 and 2012.
|  | 2013 |  |  | 2012 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |
State |  |  | — |  |  |  | — |
Foreign |  |  | 169,000 |  |  |  | 169,000 |
Subtotal |  |  | 169,000 |  |  |  | 169,000 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | — |  |  |  | 1,561,700 |
State |  |  | — |  |  |  | 157,300 |
Foreign |  |  | — |  |  |  | — |
Subtotal |  |  | — |  |  |  | 1,719,000 |
Income Tax Provision |  | $ | 169,000 |  |  | $ | 1,888,000 |
As of November 2013 and 2012 the tax effects of temporary differences that give rise to the deferred tax assets are as follows:
|  | 2013 |
|  | Current |  |  | Non-current |  |  | Total |
Tax Assets: |  |  |  |  |  |  |  |  |  |  |  |
Deferred income (Net of Discounts) |  | $ | 216,000 |  |  | $ | 3,574,000 |  |  | $ | 3,790,000 |
NOLs, credits, and other carryforward items |  |  | — |  |  |  | 3,055,000 |  |  |  | 3,055,000 |
Tax over book basis in unconsolidated affiliate |  |  | — |  |  |  | 1,285,000 |  |  |  | 1,285,000 |
Accrued payroll |  |  | 45,000 |  |  |  | — |  |  |  | 45,000 |
Reserves and other accruals |  |  | 1,099,000 |  |  |  | — |  |  |  | 1,099,000 |
Stock compensation |  |  | — |  |  |  | 392,000 |  |  |  | 392,000 |
Depreciation and Amortization |  |  | — |  |  |  | 96,000 |  |  |  | 96,000 |
RSA Buy-out |  |  | — |  |  |  | 1,090,000 |  |  |  | 1,090,000 |
Total Assets |  |  | 1,360,000 |  |  |  | 9,492,000 |  |  |  | 10,852,000 |
Less: Valuation Allowance |  |  | (1,360,000 | ) |  |  | (9,492,000 | ) |  |  | (10,852,000 | )
Net Deferred Tax Asset (Liability) |  | $ | — |  |  | $ | — |  |  |  | — |
|  | 2012 |
|  | Current |  |  | Non-current |  |  | Total |
Tax Assets: |  |  |  |  |  |  |  |  |  |  |  |
Deferred income (Net of Discounts) |  | $ | 214,000 |  |  | $ | 3,366,000 |  |  | $ | 3,580,000 |
NOL’s, credits, and other carryforward items |  |  | — |  |  |  | 3,284,000 |  |  |  | 3,284,000 |
Tax over book basis in unconsolidated affiliate |  |  | — |  |  |  | 1,227,000 |  |  |  | 1,227,000 |
Accrued payroll |  |  | 41,000 |  |  |  | — |  |  |  | 41,000 |
Reserves and other accruals |  |  | 1,232,000 |  |  |  | — |  |  |  | 1,232,000 |
Stock compensation |  |  | — |  |  |  | 383,000 |  |  |  | 383,000 |
Depreciation and Amortization |  |  | — |  |  |  | 37,000 |  |  |  | 37,000 |
RSA Buy-out |  |  | — |  |  |  | 1,163,000 |  |  |  | 1,163,000 |
Total Assets |  |  | 1,487,000 |  |  |  | 9,460,000 |  |  |  | 10,947,000 |
Tax Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Less: Valuation Allowance |  |  | (1,487,000 | ) |  |  | (9,460,000 | ) |  |  | (10,947,000 | )
Net Deferred Tax Asset (Liability) |  | $ | — |  |  | $ | — |  |  |  | — |
A valuation allowance covering the deferred tax assets of the Company for November 30, 2013 and November 30, 2012, has been provided as the Company does not believe it is more likely than not that all of the future income tax benefits will be realized. The valuation allowance changed by approximately ($115,000) and $3,191,000 during the years ended November 30, 2013 and 2012, respectively. The 2013 increase was primarily a result of increased deferred assets related to foreign tax credits and bad debts. The 2012 increase was a result of a full valuation allowance being applied against the deferred tax assets as management has concluded it is more likely than not that the deferred tax assets will not be realized. The Company has unused net operating losses available for carryforward as of November 30, 2013 of approximately $4,587,000 to offset future federal taxable income. The net operating loss carryfowards expire during 2022 through 2027. The Tax Reform Act of 1986 contains provisions that limit the utilization of net operating losses if there has been an “ownership change”. Such an “ownership change” as described in Section 382 of the Internal Revenue code may limit the Company’s utilization of its net operating loss carryforwards. Management has completed an internal analysis of potential ownership changes and has concluded that no ownership changes have occurred through November 30, 2013 which would potentially limit the utilization of the net operating losses. A reconciliation of the income tax provision with the amount of tax computed by applying the federal statutory rate to pretax income follows:
|  | For the Years Ended November 30, 2013 |
|  | 2013 |  |  | % |  |  | 2012 |  |  | % |
Tax at Federal Statutory Rate |  |  | 67,000 |  |  |  | 34.0 |  |  |  | (1,560,000 | ) |  |  | (34.0 | )
State Income Tax Effect |  |  | 7,000 |  |  |  | 3.6 |  |  |  | (167,000 | ) |  |  | (3.6 | )
Decrease in valuation allowance |  |  | (115,000 | ) |  |  | –58.4 |  |  |  | 3,191,000 |  |  |  | 69.5 |
Permanent Disallowances |  |  | 210,000 |  |  |  | 106.6 |  |  |  | 424,000 |  |  |  | 9.2 |
Foreign tax credits |  |  | (170,000 | ) |  |  | (86.3 | ) |  |  | (169,000 | ) |  |  | (3.7 | )
Foreign tax withholding |  |  | 170,000 |  |  |  | 86.3 |  |  |  | 169,000 |  |  |  | 3.7 |
Total income taxes |  | $ | 169,000 |  |  |  | 85.8 |  |  | $ | 1,888,000 |  |  |  | 41.1 |
The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. The table below summarizes the open tax years and ongoing tax examinations in major jurisdictions as of November 30, 2013:
Jurisdiction |  | Open Tax Years |  | Examinations in Process
United States – Federal Income Tax |  | 2009 - 2012 |  | N/A
United States – Various States |  | 2008 - 2012 |  | N/A
The Company has made certain strategic decisions during 2011 and 2012 concerning the negotiated termination of some of the perpetual Revenue Sharing Agreements (“RSA’s”), the impairment of internal use software that is being replaced with a technology platform that is better suited for the Company’s business needs and the implementation of a national sales force in order to generate growth and future value for the Company’s stockholders. These strategic decisions, including the decision to terminate the former CEO’s employment, have increased the Company’s expenses which have resulted in losses in the past few quarters in late fiscal 2011 and in fiscal 2012. The accounting standards surrounding income taxes require a company to consider whether it is more likely than not that the deferred income tax assets will be realized. Once a company has had cumulative losses in recent years, regardless of the nature of the loss, the accounting standards do not allow the Company to put significant reliance on future taxable income projections to overcome the more likely than not threshold that the deferred tax assets will be realized. As a result of the cumulative losses, the Company reserved approximately $1,700,000 as of November 30, 2012 resulting in a charge to earnings during the year ended November 30, 2012. The Company records foreign income taxes withheld from installment payments of non-refundable up-front license fees and royalty income earned on the processing and storage of cord blood stem cell specimens in certain geographic areas where the Company has license agreements. The Company recorded approximately $170,000 and $169,000 for the years ended November 30, 2013 and 2012, respectively, of foreign income tax expense, which is included in income tax expense in the accompanying consolidated statements of operations.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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