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.

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.

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.    Since inception of the License and Royalty Agreement, the Company has recorded $9,300,000 in royalty income due under the terms of the License and Royalty Agreement, of which, Lifecell has paid the Company $8,500,000 as of February 29, 2020. The balance of $800,000 is reflected as Accounts Receivable on the accompanying consolidated balance sheets.

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.    

For the three months ended February 29, 2020 and February 28, 2019, the Company recognized $0 and $0, respectively, for initial license fees and processing and storage royalties.