License Agreements |
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| License Agreements |
NOTE 14 - 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 a definitive License and Royalty Agreement with LifeCell International Private Limited, formerly Asia Cryo-Cell Private Limited, (“LifeCell”) to establish and market its umbilical cord blood and menstrual stem cell programs in India. The Company changed the methodology used to record the processing and storage royalty income during fiscal year 2015 from recognizing royalty income based on historical estimates of specimens processed and stored to utilizing actual specimens processed and stored. The change increased licensee and royalty income by $322,353 in the fourth quarter of fiscal 2015. The Company accounted for this change as a change in accounting estimate. Per the License and Royalty Agreement with Lifecell, there is a $1 Million cap on the amount of royalty due to the Company per year and a $10 Million cap on the amount of royalties due to the Company for the term of the License and Royalty Agreement. As of November 30, 2016, Lifecell has paid the Company $5.1 Million for royalties due under the terms of the License and Royalty Agreement.
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.` The following table details the processing and storage royalties earned for the technology agreements for fiscal years 2016 and 2015. The initial license fees and processing and storage royalties are reflected in licensee income in the accompanying consolidated statements of comprehensive (loss) income.
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