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License Agreements | 6 Months Ended
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May 31, 2014
Goodwill And Intangible Assets Disclosure [Abstract] |
License Agreements | Note 5 – License Agreements The Company enters into two types of licensing agreements and in both types, the Company earns revenue on the initial license fees. Under the technology agreements, the Company earns processing and storage royalties from the affiliates that process in their own facility. Under the marketing agreements, the Company earns processing and storage revenues from affiliates that store specimens in the Company’s facility in Oldsmar, Florida. Technology Agreements The Company has entered into definitive License and Royalty Agreements with Cryo-Cell de Mexico (“Mexico”) and Asia Cryo-Cell Private Limited to establish and market its umbilical cord blood program in Mexico and India, respectively. The Company has entered into definitive License and Royalty Agreements with Asia Cryo-Cell Private Limited and S-Evans Bio-Sciences, Inc. to establish and market its menstrual stem cell program in India and China, respectively. On August 19, 2011, the Company received notification from Mexico that it was terminating the license agreement effective immediately due to an alleged breach of the license agreement. On October 17, 2011, the Company and Mexico entered into an amendment to the license agreement whereby the termination was revoked and Mexico will pay the Company $1,863,000 in 37 monthly installments of $50,000 beginning on October 17, 2011 with a final payment of $13,000. The amendment will result in a reduction of licensee income in future periods. In December 2013, Mexico paid the balance due of $563,000. The Company recognized the balance paid as licensee and interest income during the six months ended May 31, 2014 in the accompanying consolidated statement of operations. Mexico has no other continuing obligations to the Company for royalties or other license payments and the agreement is terminated. As of May 31, 2014 and November 30, 2013, the Company recorded a receivable of $0 and $550,782, respectively, and deferred revenue of $0 and $551,585, respectively, in the accompanying consolidated balance sheets. Note receivable is calculated using the present value of all of the monthly installments using a discount rate that reflects both the risk-free rate at the inception of the contract and the contract period. In accordance with the agreement, the Company received six installments of $50,000 during the six months ended May 31, 2013, which is reflected in the consolidated statement of operations as of May 31, 2013 as licensee and other income. Marketing Agreements The Company has definitive license agreements to market the Company’s umbilical cord blood stem cell programs in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Pakistan. In October 2012, the Company sent a notice of termination to the Company’s Venezuelan affiliate for failure to meet its payment obligation in accordance with the contract. Subsequent to the notice of termination, payment was received for outstanding processing and storage fees due from Venezuela. The Company is in the process of discussing a new agreement. The Company continues to accept umbilical cord blood stem cell specimens to be processed and stored during the negotiations. In December 2012, the Company sent a notice of termination to the Company’s affiliate in Ecuador for failure to meet its payment obligation in accordance with the contract. Subsequent to the notice of termination, payment was received for outstanding processing and storage fees due from Ecuador. In August 2013, the Company was notified that its affiliate in Ecuador was closed by the National Institute of Organic Donation (INDOT). As a result, the Company recorded an allowance for uncollectible receivables for the $150,000 processing and storage fee receivable due from Ecuador in the third quarter of fiscal 2013. During the fourth quarter of fiscal 2013, the Company began to bill the Ecuadorian clients directly for cord blood specimens that are stored at the Company’s facility in Oldsmar, Florida. Processing and storage revenues from specimens originating in territories that store at the Company’s facility in Oldsmar, Florida totaled $449,664 and $382,979 for the three months ended May 31, 2014 and May 31, 2013, respectively, and are reflected in processing and storage fees in the accompanying consolidated statements of operations. Processing and storage revenues from specimens originating in territories that store at the Company’s facility in Oldsmar, Florida totaled $812,611 and $757,199 for the six months ended May 31, 2014 and May 31, 2013, respectively, and are reflected in processing and storage fees in the accompanying consolidated statements of operations. The following table details the initial license fees for the technology and marketing agreements and processing and storage royalties earned under the technology agreements for the three and six months ended May 31, 2014 and May 31, 2013. The initial license fees and processing and storage royalties are reflected in licensee income in the accompanying consolidated statements of operations.
|  | Three Months Ended May 31, 2014 |  |  | Six Months Ended May 31, 2014 |
|  | License Fee |  |  | Process and Storage Royalties |  |  | Total |  |  | License Fee |  |  | Process and Storage Royalties |  |  | Total |
India |  | $ | — |  |  | $ | 169,411 |  |  | $ | 169,411 |  |  | $ | — |  |  | $ | 338,823 |  |  | $ | 338,823 |
Mexico |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 793,839 |  |  |  | 793,839 |
Total |  | $ | — |  |  | $ | 169,411 |  |  | $ | 169,411 |  |  | $ | — |  |  | $ | 1,132,662 |  |  | $ | 1,132,662 |
|  | Three Months Ended May 31, 2013 |  |  | Six Months Ended May 31, 2013 |
|  | License Fee |  |  | Process and Storage Royalties |  |  | Total |  |  | License Fee |  |  | Process and Storage Royalties |  |  | Total |
India |  | $ | — |  |  | $ | 169,412 |  |  | $ | 169,412 |  |  | $ | — |  |  | $ | 338,824 |  |  | $ | 338,824 |
Mexico |  |  | — |  |  |  | 158,818 |  |  |  | 158,818 |  |  |  | — |  |  |  | 312,940 |  |  |  | 312,940 |
Total |  | $ | — |  |  | $ | 328,230 |  |  | $ | 328,230 |  |  | $ | — |  |  | $ | 651,764 |  |  | $ | 651,764 |

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