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Income Taxes | 12 Months Ended
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Nov. 30, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 12–INCOME TAXES. The Company recorded the following income tax provision for the years ended November 30, 2015 and 2014.
|  | 2015 |  |  | 2014 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |
State |  |  | 63,000 |  |  |  | — |
Foreign |  |  | 150,000 |  |  |  | 123,000 |
Subtotal |  |  | 213,000 |  |  |  | 123,000 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | (6,761,000 | ) |  |  | — |
State |  |  | (609,000 | ) |  |  | — |
Foreign |  |  | — |  |  |  | — |
Subtotal |  |  | (7,370,000 | ) |  |  | — |
Income Tax (Benefit) Expense |  | $ | (7,157,000 | ) |  | $ | 123,000 |
As of November 2015 and 2014, the tax effects of temporary differences that give rise to the deferred tax assets are as follows:
|  | 2015 |
|  | Current |  |  | Non-current |  |  | Total |
Tax Assets: |  |  |  |  |  |  |  |  |  |  |  |
Deferred income (Net of Discounts) |  | $ | 218,000 |  |  | $ | 4,406,000 |  |  | $ | 4,624,000 |
NOL’s, credits, and other carryforward items |  |  | — |  |  |  | 1,137,000 |  |  |  | 1,137,000 |
Tax over book basis in unconsolidated affiliate |  |  | — |  |  |  | 1,686,000 |  |  |  | 1,686,000 |
Accrued payroll |  |  | 55,000 |  |  |  | — |  |  |  | 55,000 |
Reserves and other accruals |  |  | 1,063,000 |  |  |  | — |  |  |  | 1,063,000 |
Stock compensation |  |  | — |  |  |  | 618,000 |  |  |  | 618,000 |
Depreciation and Amortization |  |  | — |  |  |  | 7,000 |  |  |  | 7,000 |
RSA Buy-out |  |  | — |  |  |  | 810,000 |  |  |  | 810,000 |
Total Assets: |  |  | 1,336,000 |  |  |  | 8,664,000 |  |  |  | 10,000,000 |
Tax Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Unrealized gains on AFS securities |  |  | — |  |  |  | (103,000 | ) |  |  | (103,000 | )
Total Liabilities: |  |  |  |  |  |  | (103,000 | ) |  |  | (103,000 | )
Less: Valuation Allowance |  |  | — |  |  |  | (2,630,000 | ) |  |  | (2,630,000 | )
Net Deferred Tax Asset |  | $ | 1,336,000 |  |  | $ | 5,931,000 |  |  |  | 7,267,000 |
|  | 2014 |
|  | Current |  |  | Non-current |  |  | Total |
Tax Assets: |  |  |  |  |  |  |  |  |  |  |  |
Deferred income (Net of Discounts) |  | $ | 217,000 |  |  | $ | 3,934,000 |  |  | $ | 4,151,000 |
NOL’s, credits, and other carryforward items |  |  | — |  |  |  | 2,260,000 |  |  |  | 2,260,000 |
Tax over book basis in unconsolidated affiliate |  |  | — |  |  |  | 1,417,000 |  |  |  | 1,417,000 |
Accrued payroll |  |  | 49,000 |  |  |  | — |  |  |  | 49,000 |
Reserves and other accruals |  |  | 1,066,000 |  |  |  | — |  |  |  | 1,066,000 |
Stock compensation |  |  | — |  |  |  | 391,000 |  |  |  | 391,000 |
Depreciation and Amortization |  |  | — |  |  |  | 165,000 |  |  |  | 165,000 |
RSA Buy-out |  |  | — |  |  |  | 1,018,000 |  |  |  | 1,018,000 |
Total Assets: |  |  | 1,332,000 |  |  |  | 9,185,000 |  |  |  | 10,517,000 |
Tax Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Less: Valuation Allowance |  |  | (1,332,000 | ) |  |  | (9,185,000 | ) |  |  | (10,517,000 | )
Net Deferred Tax Asset |  | $ | — |  |  | $ | — |  |  |  | — |
A valuation allowance covering the deferred tax assets of the Company for November 30, 2015 and November 30, 2014, 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 ($7,887,000) and ($302,000) during the years ended November 30, 2015 and 2014, respectively. The 2015 change was primarily a result of NOL usage and partial release of the valuation allowance. As of November 30, 2014, we had a valuation allowance against our deferred tax assets of $10,517,000. The 2014 change was primarily a result of NOL usage and assets relating to deferred revenue. The change for year ended November 30, 2015 was primarily a result of NOL usage, impairment of the Company’s investment in Saneron CCEL Therapeutics, Inc., and a partial release of the valuation allowance. The Company evaluates the recoverability of our deferred tax assets as of the end of each quarter, weighing all positive and negative evidence, and are required to establish and maintain a valuation allowance for these assets if we determine that it is more likely than not that some or all of the deferred tax assets will not be realized. The weight given to the evidence is commensurate with the extent to which the evidence can be objectively verified. If negative evidence exists, positive evidence is necessary to support a conclusion that a valuation allowance is not needed. The positive evidence that weighed in favor of releasing the allowance as of August 31, 2015 and ultimately outweighed the negative evidence against releasing the allowance was the following:
| • |  | Identifiable sources of future income relating to the Company’s deferred revenue accounts;
| • |  | Certainty as to the amount available of deferred tax assets and nature in which the deferred tax assets reverse;
| • |  | Profitability for years ended November 30, 2013 and 2014 and our expectations regarding the sustainability of these profits;
| • |  | The Company’s three-year cumulative income position as of November 30, 2015; and
| • |  | The Company’s taxable income projection for fiscal years ending November 30, 2016, 2017 and 2018.
As of August 31, 2015, the Company concluded that the positive evidence which included the Company’s historical operating performance which included profitability in ten of the last eleven quarters, steadily improving operations and positive expectations for future taxable income were all factors that were in favor of releasing the allowance which outweighed the negative evidence against releasing the allowance and that it was more likely than not that our deferred tax assets, except the deferred tax assets relating to foreign tax credit carryforwards, investment in Saneron CCEL Therapeutics, Inc., capital loss carryforwards, and deferred revenue: RSA, would be realized. Further positive evidence and analysis as of November 30, 2015 allowed the Company to conclude that an additional amount of the valuation allowance to be released relating to foreign tax credit carryforwards and therefore the only valuation allowance as of year-end was the for the investment in Saneron CCEL Therapeutics, Inc., capital loss carryforwards, and deferred revenue: RSA. The Company has utilized all of its unused net operating losses available for carryforward as of November 30, 2015 to offset future federal taxable income. 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. An analysis has been performed on the net operating loss carryforwards as of November 30, 2015 and it has been concluded that no ownership changes have occurred through November 30, 2015 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, 2015 |
|  | 2015 |  |  | % |  |  | 2014 |  |  | % |
Tax at Federal Statutory Rate |  | $ | 272,000 |  |  |  | 34.0 |  |  | $ | 272,000 |  |  |  | 34.0 |
State Income Tax Effect |  |  | 29,000 |  |  |  | 3.6 |  |  |  | 29,000 |  |  |  | 3.6 |
Change in Valuation Allowance |  |  | 264,000 |  |  |  | 33.0 |  |  |  | (301,000 | ) |  |  | (37.7 | )
Valuation Allowance Release |  |  | (8,151,000 | ) |  |  | (1,019.4 | ) |  |  | 0 |  |  |  | 0 |
Permanent Disallowances |  |  | 160,000 |  |  |  | 20.0 |  |  |  | 123,000 |  |  |  | 15.2 |
Other |  |  | 269,000 |  |  |  | 33.6 |  |  |  | 0 |  |  |  | 0 |
Foreign tax credits |  |  | (150,000 | ) |  |  | (18.8 | ) |  |  | (124,000 | ) |  |  | (15.5 | )
Foreign tax withholding |  |  | 150,000 |  |  |  | 18.8 |  |  |  | 124,000 |  |  |  | 15.5 |
Total income taxes |  | $ | (7,157,000 | ) |  |  | (895.2 | ) |  | $ | 123,000 |  |  |  | 15.1 |
The Company adopted the accounting standard for uncertain tax positions, ASC 740-10, on December 1, 2007. As required by the standard, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Increases or decreases to the unrecognized tax benefits could result from management’s belief that a position can or cannot be sustained upon examination based on subsequent information or potential lapse of the applicable statute of limitation for certain tax positions. There were no uncertain tax positions as of November 30, 2015 and 2014. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. For the years ended November 30, 2015 and 2014, the Company had no provisions for interest or penalties related to uncertain tax positions. 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, 2015:
Jurisdiction |  | Open Tax Years |  | Examinations in Process
United States – Federal Income Tax |  | 2011 - 2014 |  | N/A
United States – Various States |  | 2010 - 2014 |  | N/A

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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 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 2: 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 Reference 3: 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 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 + Details
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