10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-Q

(Mark One)

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended August 31, 2019

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from                      to                     

Commission File Number 0-23386

CRYO-CELL INTERNATIONAL, INC.

(Exact name of Registrant as Specified in its Charter)

DELAWARE	22-3023093
(State or other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

700 Brooker Creek Blvd. Oldsmar, FL 34677

(Address of Principal Executive Offices) (Zip Code)

Issuer’s phone number, including area code: (813) 749-2100

(Former name, former address and former fiscal year, if changed since last report).

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	CCEL	OTCQB

Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.    Yes  ☒    No  ☐ Not Applicable  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” “small reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

State the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date. As of October 12, 2019, 13,598,909 shares of $0.01 par value common stock were issued and 7,803,333 were outstanding.

CRYO-CELL INTERNATIONAL, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

	PAGE
PART I - FINANCIAL INFORMATION  (UNAUDITED)
Item 1. Financial Statements
Consolidated Balance Sheets		3
Consolidated Statements of Comprehensive Income  (Loss)		4
Consolidated Statements of Cash Flows		5
Consolidated Statements of Stockholders’ Deficit		6
Notes to Consolidated Financial Statements		7
Item 2. Management’s Discussion and  Analysis of Financial Condition and Results of Operations		34
Item 3. Quantitative and Qualitative  Disclosures about Market Risk		44
Item 4. Controls and Procedures		44
PART II - OTHER  INFORMATION
Item 1. Legal Proceedings		45
Item 1A. Risk Factors		46
Item 2. Unregistered Sales of Equity  Securities and Use of Proceeds		46
Item 3. Defaults Upon Senior Securities		46
Item 4. Mine Safety Disclosures		47
Item 5. Other Information		47
Item 6. Exhibits		48
SIGNATURES		49

2

CRYO-CELL INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	(Unaudited) August 31, 2019			November 30, 2018
ASSETS
Current Assets
Cash and cash equivalents	$	7,338,789		$	6,040,033
Marketable securities		874,691			875,689
Accounts receivable (net of allowance for doubtful accounts of $2,535,513 and $2,264,848, respectively)		5,888,156			5,867,335
Prepaid expenses		526,288			461,815
Inventory, current portion		1,031,845			1,260,557
Other current assets		259,971			254,465
Total current assets		15,919,740			14,759,894
Property and Equipment-net		1,769,213			1,493,401
Other Assets
Investment—Tiahne Stock		308,000			308,000
Intangible assets, net		1,268,400			1,341,336
Inventory, net of current portion		12,646,000			14,775,316
Goodwill		1,941,411			1,941,411
Deferred tax assets		7,562,705			7,656,897
Deposits and other assets, net		412,287			113,888
Total other assets		24,138,803			26,136,848
Total assets	$	41,827,756		$	42,390,143
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable	$	1,013,037		$	1,261,653
Accrued expenses		1,372,539			2,702,788
Current portion of note payable		3,100,000			3,100,000
Deferred revenue		8,781,229			8,365,284
Total current liabilities		14,266,805			15,429,725
Other Liabilities
Deferred revenue, net of current portion		22,893,086			20,317,231
Contingent Consideration		3,601,697			4,282,975
Note payable, net of current portion and debt issuance costs		6,604,527			9,843,510
Long-term liability—revenue sharing agreements		1,425,000			1,425,000
Total other liabilities		34,524,310			35,868,716
Total liabilities		48,791,115			51,298,441
Commitments and contingencies (Note 10)		—			—
Stockholders’ Deficit
Preferred stock ($.01 par value, 500,000 authorized and none issued and outstanding)		—			—
Series A Junior participating preferred stock ($.01 par value, 20,000 authorized and none issued and outstanding)		—			—
Common stock ($.01 par value, 20,000,000 authorized; 13,598,909 issued and 7,803,333 outstanding as of August 31, 2019 and 13,596,409 issued and 7,800,833 outstanding as of November 30, 2018)		135,989			135,964
Additional paid-in capital		35,761,040			35,515,382
Treasury stock, at cost		(19,571,113	)		(19,571,113	)
Accumulated other comprehensive income		—			340,984
Accumulated deficit		(23,289,275	)		(25,329,515	)
Total stockholders’ deficit		(6,963,359	)		(8,908,298	)
Total liabilities and stockholders’ deficit	$	41,827,756		$	42,390,143

The accompanying notes are an integral part of these consolidated financial statements.

3

CRYO-CELL INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	For the Three Month Ended						For the Nine Months Ended
	August 31, 2019			August 31, 2018			August 31, 2019			August 31, 2018
Revenue:
Processing and storage fees	$	7,606,624		$	7,237,053		$	22,621,520		$	19,732,575
Public banking revenue		160,561			65,575			529,041			65,575
Licensee and royalty income		423,173			539,286			625,001			742,445
Product revenue		33,035			29,308			70,795			84,208
Total revenue		8,223,393			7,871,222			23,846,357			20,624,803
Costs and Expenses:
Cost of sales		2,589,335			2,486,180			7,683,853			5,864,826
Selling, general and administrative expenses		3,556,602			4,390,614			10,949,831			11,513,190
Impairment of public inventory		—			—			2,332,763			—
Change in fair value of contingent consideration		34,649			—			(636,278	)		—
Research, development and related engineering		2,440			22,234			13,281			64,927
Depreciation and amortization		47,286			52,072			159,600			124,865
Total costs and expenses		6,230,312			6,951,100			20,503,050			17,567,808
Operating Income		1,993,081			920,122			3,343,307			3,056,995
Other Expense:
Other income (expense)		35,868			38,300			2,014			14,520
Interest expense		(413,942	)		(410,366	)		(1,245,154	)		(995,437	)
Total other expense		(378,074	)		(372,066	)		(1,243,140	)		(980,917	)
Income before income tax expense		1,615,007			548,056			2,100,167			2,076,078
Income tax expense		(498,748	)		(303,072	)		(654,358	)		(3,821,660	)
Net Income (Loss)	$	1,116,259		$	244,984		$	1,445,809		$	(1,745,582	)
Net income (loss) per common share—basic	$	0.14		$	0.03		$	0.19		$	(0.24	)
Weighted average common shares outstanding—basic		7,803,333			7,694,662			7,802,676			7,350,868
Net income (loss) per common share—diluted	$	0.13		$	0.03		$	0.17		$	(0.24	)
Weighted average common shares outstanding—diluted		8,445,237			8,375,675			8,430,251			7,350,868
Other Comprehensive Income
Unrealized gain on marketable securities (net of tax)	$	—		$	285,255		$	—		$	405,255
Comprehensive Income (Loss)	$	1,116,259		$	530,239		$	1,445,809		$	(1,340,327	)

The accompanying notes are an integral part of these consolidated financial statements.

4

CRYO-CELL INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended
	August 31, 2019			August 31, 2018
Cash flows from operating activities:
Net income (loss)	$	1,445,809		$	(1,745,582	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense		304,463			214,275
Impairment of public inventory		2,332,763			—
Loss on disposal of property and equipment		—			153,756
Change in fair value of contingent consideration		(681,278	)		—
Compensatory element of stock options		239,983			323,798
Provision for doubtful accounts		587,716			539,365
Deferred income tax expense		—			3,117,263
Amortization of debt issuance costs		86,014			79,876
Changes in assets and liabilities:
Accounts receivable		(608,537	)		(805,183	)
Prepaid expenses		(64,473	)		(156,022	)
Inventory		25,265			182,466
Other current assets		(5,506	)		(3,066	)
Deposits and other assets, net		30,832			—
Accounts payable		(248,616	)		(808,839	)
Accrued expenses		(1,311,841	)		(99,555	)
Deferred revenue		2,991,800			3,496,790
Net cash provided by operating activities		5,124,394			4,489,342
Cash flows used in investing activities:
Purchases of property and equipment		(507,339	)		(408,297	)
Purchase of intangible asset		—			(200,000	)
Sales (purchases) of marketable securities and other investments, net		998			(105,186	)
Purchase of Cord Use		—			(10,500,000	)
Net cash used in investing activities		(506,341	)		(11,213,483	)
Cash flows from financing activities:
Repayments of note payable		(3,324,997	)		(1,516,666	)
Proceeds from the exercise of stock options		5,700			170,925
Proceeds from note payable		—			9,000,000
Issuance costs associated with the proceeds from the note payable		—			(169,300	)
Net cash (used in) provided by financing activities		(3,319,297	)		7,484,959
Increase in cash and cash equivalents		1,298,756			760,818
Cash and cash equivalents—beginning of period		6,040,033			6,279,154
Cash and cash equivalents—end of period	$	7,338,789		$	7,039,972
Supplemental non-cash investing activities:
Unrealized gain on marketable securities, net of tax	$	—		$	405,255
Cumulative-effect adjustment due to the adoption of ASU 2016-01	$	(340,984	)	$	—
Assets acquired and liabilities assumed in acquisitions:
Assets acquired in acquisition	$	—		$	20,103,661
Liabilities assumed in acquisition	$	—		$	1,405,406

The accompanying notes are an integral part of these consolidated financial statements.

5

CRYO-CELL INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)

	For the Three Months Ended August 31, 2019
										Accumulated
					Additional					Other						Total
	Common Stock				Paid-In		Treasury			Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital		Stock			Income/(Loss)			Deficit			Deficit
Balance at May 31, 2019		13,598,909	$	135,989	$	35,746,866	$	(19,571,113	)	$	—		$	(24,405,534	)	$	(8,093,792	)
Compensatory element of stock options						14,174											14,174
Net income														1,116,259			1,116,259
Balance at August 31, 2019		13,598,909	$	135,989	$	35,761,040	$	(19,571,113	)	$	—		$	(23,289,275	)	$	(6,963,359	)
	For the Nine Months Ended August 31, 2019
					Additional					Other						Total
	Common Stock				Paid-In		Treasury			Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital		Stock			Income/(Loss)			Deficit			Deficit
Balance at November 30, 2018		13,596,409	$	135,964	$	35,515,382	$	(19,571,113	)	$	340,984		$	(25,329,515)		$	(8,908,298	)
Common stock issued		2,500		25		5,675											5,700
Compensatory element of stock options						239,983											239,983
Cumulative-effect adjustment due to the adoption of ASU 2016-01											(340,984	)		340,984			—
ASC 606 adoption adjustment, net of tax														253,447			253,447
Net income														1,445,809			1,445,809
Balance at August 31, 2019		13,598,909	$	135,989	$	35,761,040	$	(19,571,113	)	$	—		$	(23,289,275	)	$	(6,963,359	)
	For the Three Months Ended August 31, 2018
					Additional					Other						Total
	Common Stock				Paid-In		Treasury			Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital		Stock			Income/(Loss)			Deficit			Deficit
Balance at May 31, 2018		13,069,483	$	130,695	$	31,644,654	$	(19,571,113	)	$	160,865		$	(26,465,257	)	$	(14,100,156	)
Common stock issued		527,026		5,270		3,660,735											3,666,005
Compensatory element of stock options						55,412											55,412
Unrealized gain on available for sale securities											285,255						285,255
Net income														244,984			244,984
Balance at August 31, 2018		13,596,509	$	135,965	$	35,360,801	$	(19,571,113	)	$	446,120		$	(26,220,273)		$	(9,848,500	)
	For the Nine Months Ended August 31, 2018
					Additional					Other						Total
	Common Stock				Paid-In		Treasury			Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital		Stock			Income/(Loss)			Deficit			Deficit
Balance at November 30, 2017		12,899,517	$	128,995	$	31,373,048	$	(19,571,113	)	$	40,865		$	(24,474,691)		$	(12,502,896	)
Common stock issued		696,992		6,970		3,663,955											3,670,925
Compensatory element of stock options						323,798											323,798
Unrealized gain on available for sale securities											405,255						405,255
Net loss														(1,745,582	)		(1,745,582	)
Balance at August 31, 2018		13,596,509	$	135,965	$	35,360,801	$	(19,571,113	)	$	446,120		$	(26,220,273	)	$	(9,848,500	)

The accompanying notes are an integral part of these consolidated financial statements.

6

CRYO-CELL INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2019

(Unaudited)

Note 1 - Description of Business, Basis of Presentation and Significant Accounting Policies

Cryo-Cell International, Inc. (“the Company” or “Cryo-Cell”) was incorporated in Delaware on September 11, 1989 and is headquartered in Oldsmar, Florida. The Company is organized in three reportable segments, cellular processing and cryogenic cellular storage, with a current focus on the collection and preservation of umbilical cord blood stem cells for family use, the manufacture of PrepaCyte CB units, the processing technology used to process umbilical cord blood stem cells and cellular processing and cryogenic storage of umbilical cord blood stem cells for public use. Revenues recognized for the cellular processing and cryogenic cellular storage represent sales of the umbilical cord blood stem cells program to customers and income from licensees selling the umbilical cord blood stem cells program to customers outside the United States. Revenues recognized for the manufacture of PrepaCyte CB units represent sales of the PrepaCyte CB units to customers. Revenue recognized for the cryogenic storage of umbilical cord blood stem cells for public use is generated from the sale of the cord blood units to the National Marrow Donor Program (“NMDP”), which distributes the cord blood units to transplant centers located in the United States and around the world. The Company’s headquarters facility in Oldsmar, Florida handles all aspects of its U.S.-based business operations including the processing and storage of specimens, including specimens obtained from certain of its licensees’ customers. The specimens are stored in commercially available cryogenic storage equipment.

The unaudited consolidated financial statements including the Consolidated Balance Sheets as of August 31, 2019 and November 30, 2018, the related Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended August 31, 2019 and August 31, 2018, Cash Flows for the nine months ended August 31, 2019 and 2018 and Stockholders’ Deficit for the three and nine months ended August 21, 2019 and August 31, 2018 have been prepared by Cryo-Cell International, Inc. and its subsidiaries pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Certain financial information and note disclosures, which are normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to those rules and regulations. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s November 30, 2018 Annual Report on Form 10-K. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and changes in cash flows for all periods presented have been made. The results of operations for the three and nine months ended August 31, 2019 are not necessarily indicative of the results expected for any interim period in the future or the entire year ending November 30, 2019.

Revenue Recognition

Effective December 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective transition method. The Company recognized the cumulative effect of applying the new revenue standard to all contracts with customers that were not completed as of December 1, 2018 as an adjustment to the opening balance of stockholders’ deficit at the beginning of fiscal year 2019. The reported results for 2019

7

reflect the application of ASC 606 guidance while the reported results for 2018 were prepared under the guidance of ASC 605, Revenue Recognition (ASC 605). ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. ASC 606 also impacts certain other areas, such as the accounting for costs to obtain or fulfill a contract. ASC 606 also requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

The adoption of ASC 606 did not have an impact on the amount of reported revenues with respect to the Company’s product or service revenues. In connection with the adoption of ASC 606, the Company is required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed and amortize these costs on a systematic basis, consistent with the pattern of transfer of the storage services provided over time for which the asset relates. As of December 1, 2018, the Company capitalized in deposits and other assets, net, $329,231 in incremental contract acquisition costs related to sales commissions on prepaid storage contracts and reversed $18,408 of its variable consideration that the Company determined to be fully constrained, with a corresponding change in the opening balance of stockholders’ deficit of $253,447, net of tax, of $94,192.

Under ASC 606, revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised services are transferred to the customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring services to a customer (“transaction price”).

At contract inception, if the contract is determined to be within the scope of ASC 606, the Company evaluates its contracts with customers using the five-step model: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenue when (or as) each performance obligation is satisfied. The Company evaluates its contracts for legal enforceability at contract inception and subsequently throughout the Company’s relationship with its customers. If legal enforceability with regards to the rights and obligations exist for both the Company and the customer, then the Company has an enforceable contract and revenue recognition is permitted subject to the satisfaction of the other criteria. If, at the outset of an arrangement, the Company determines that a contract with enforceable rights and obligations does not exist, revenues are deferred until all criteria for an enforceable contract are met. The Company only applies the five-step model to contracts when it is probable that collection of the consideration that the Company is entitled to in exchange for the goods or services being transferred to the customer, will occur.

Contract modifications exist when the modification either creates new or changes in the existing enforceable rights and obligations. The Company’s contracts are occasionally modified to account for changes in contract terms and conditions, which the Company refers to as an upgrade or downgrade. An upgrade occurs when a customer wants to pay for additional years of storage. A downgrade occurs when a customer originally entered into a long-term contract (such as twenty-one year or life-time plan) but would like to change the term to a one-year contract. Upgrade modifications qualify for treatment as a separate contract as the additional services are distinct and the increase in contract price reflects the Company’s stand-alone selling price for the additional services and will be accounted for on a prospective basis. Downgrade modifications do not qualify for treatment as a separate contract as there is no increase in price over the original contract, thus failing the separate contract criteria. As such, the Company separately considers downgrade modifications to determine if these should be accounted for as a termination of the existing contract and creation of a new contract (prospective method) or as part of the existing contract (cumulative catch-up adjustment). ASC 606 requires that an entity account for the contract modification as if it were a termination of the existing contract, and the creation of a new contract, if the remaining goods or services are distinct from the goods or services transferred on or before the date of the contract modification. As the services after the modification were previously determined to be distinct, the Company concluded that downgrade modifications qualify under this method and will be accounted for on a prospective basis. Although contract modifications do occur, they are infrequent.

8

Performance Obligations

At contract inception, the Company assesses the goods and services promised in the contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company determined that the following distinct goods and services represent separate performance obligations involving the sale of its umbilical cord blood product:

• Collection and processing services

• Storage services

• Public cord blood banking

• License and royalties

• Sale of PrepaCyte CB product

a) Processing and Storage Fees

Processing and storage fees include the Company providing umbilical cord blood and tissue cellular processing and cryogenic cellular storage for private use. Revenues recognized for the cellular processing and cryogenic cellular storage represent sales of the umbilical cord blood stem cells program to customers and income from licensees who are selling the umbilical cord blood stem cells program to customers outside the United States.

The Company recognizes revenue from processing fees at the point in time of the successful completion of processing and recognizes storage fees over time, which is ratably over the contractual storage period as well as other income from royalties paid by licensees related to long-term storage contracts which the Company has under license agreements. Contracted storage periods are annual, twenty-one years and life-time. The life-time storage plan is based on a life expectancy of 81 years, which is the current estimate by the Center for Disease Control for United States women’s life expectancy and concluded that additional data analysis would result in an immaterial difference in revenue. Deferred revenue on the accompanying consolidated balance sheets includes the portion of the annual, the twenty-one-year and the life-time storage fees that are being recognized over the contractual storage period as well as royalties received from foreign licensees relating to long-term storage contracts for which the Company has future obligations under the license agreement. The Company classifies deferred revenue as current if the Company expects to recognize the related revenue over the next 12 months from the balance sheet date.

Significant financing

When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. For all plans being annual, twenty-one years and life-time, the storage fee is paid at the beginning of the storage period (prepaid plans). Alternatively, the Company offers payment plans (including a stated service fee) for customers to pay over time for a period of one to twenty-four plus months. The one-time plan includes the collection kit, processing and testing, return medical courier service and twenty-one years of pre-paid storage fees. The life-time plan includes the collection kit,

9

processing and testing, return medical courier service and pre-paid storage fees for the life of the customer. The Company concluded that a significant financing component is not present within either the prepaid or overtime payment plans. The Company has determined that the twenty-one year and life-time prepayment options do not include a significant financing component as the payment terms were structured primarily for reasons other than the provision of financing and to maximize profitability.

The Company has determined that the majority of plans that are paid over time are paid in less than a year. When considered over a twenty-four-month payment plan, the difference between the cash selling price and the consideration paid is nominal. As such, the Company believes that its payment plans do not include significant financing components as they are not significant in the aggregate when considered in the context of all contracts entered into nor significant at the individual contract level.

The Company elected to apply the practical expedient where the Company does not need to assess whether a significant financing component exists if the period between when it performs its obligations under the contract and when the customer pays is one year or less.

As of August 31, 2019, the total aggregate transaction price allocated to the unsatisfied performance obligations was recorded as deferred revenue amounting to $31,674,315, which will be recognized ratably on a straight-line basis over the contractual period of which $8,781,229 will be recognized over the next twelve months.

Variable consideration

In December 2005, the Company began providing its customers that enrolled after December 2005 a payment warranty under which the Company agrees to pay $50,000 to its client if the umbilical cord blood product retrieved is used for a stem cell transplant for the donor or an immediate family member and fails to engraft, subject to various restrictions. Effective February 1, 2012, the Company increased the $50,000 payment warranty to a $75,000 payment warranty to all of its new clients. Effective June 1, 2017, the Company increased the payment warranty to $100,000 to all new clients who choose the premium processing method, Prepacyte CB. Additionally, under the Cryo-Cell CaresTM program, the Company will pay $10,000 to the client to offset personal expenses if the umbilical cord blood product is used for bone marrow reconstitution in a myeloblative transplant procedure. The product warranty and the Cryo-Cell Cares program are available to clients who enroll under this structure for as long as the specimen is stored with the Company. In the processing and storage agreements, the Company provides limited rights which are offered to customers automatically upon contract execution. The Company has determined that the payment warranty represents variable consideration payable to the customer.

Based on the Company’s historical experience to date, the Company has determined the payment warranty to be fully constrained under the most likely amount method. Consequently, the transaction price does not currently reflect any expectation of service level credits. At the end of each reporting period, the Company will update the estimated transaction price related to the payment warranty including updating its assessment of whether an estimate of variable consideration is constrained to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period.

Allocation of transaction price

As the Company’s processing and storage agreements contain multiple performance obligations, ASC 606 requires an allocation of the transaction price based on the estimated relative standalone selling prices of the promised services underlying each performance obligation. The Company has selected an adjusted market assessment approach to estimate the stand-alone selling prices of the processing services

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and storage services and concluded that the published list price is the price that a customer in that market would be willing to pay for those goods or services. The Company also considered the fact that all customers are charged the list prices current at the time of their enrollment where the Company has separately stated list prices for processing and storage.

Costs to Obtain a Contract

Prior to the adoption of ASC 606, the Company expensed in the period, all commissions paid to its internal and external sales representatives the Company employs and to its customers for generating new contracts. With the adoption of ASC 606 as of December 1, 2018, the Company capitalizes commissions that are incremental in obtaining customer contracts and the costs incurred to fulfill a customer contract if those costs are not within the scope of another topic within the accounting literature and meet the specified criteria. These costs are deferred in other current or long-term assets and are expensed to selling, general and administrative expenses as the Company satisfies the performance obligations by transferring the service to the customer. These assets will be periodically assessed for impairment. As a practical expedient, the Company elected to recognize the incremental costs of obtaining its annual contracts as an expense when incurred, as the amortization period of the asset recognized would have been one year.

The Company has determined that payments under the Company’s refer-a-friend program (“RAF program”) are incremental costs of obtaining a contract as they provide an incentive for existing customers to refer new customers to the Company and is referred to as commission. The amount paid under the RAF program (either through issuance of credits to customers or check payments) which exceeds the typical commission payment to a sales representative is recorded as a reduction to revenue under ASC 606. During the three and nine months ended August 31, 2019, the Company recorded $10,747 and $25,216, respectively, in commission payments to customers under the RAF program as a reduction to revenue. As of December 1, 2018, the Company capitalized $329,231 in incremental contract acquisition costs related to contracts that were not completed, net of the cumulative amortization expense of $66,533 through the adoption date. The Company did not record any impairment losses in relation to costs capitalized. For the three and nine months ended August 31, 2019, the Company capitalized additional contract acquisition costs of $23,180 and $67,668, respectively, net of amortization expense.

b) Public banking revenue

The Company sells and provides units not likely to be of therapeutic use for research to qualified organizations and companies operating under Institutional Review Board approval. Control is transferred at the point in time when the shipment has occurred, at which time, the Company records revenue.

c) Licensee and royalty income

Licensee and royalty income consist of royalty income earned on the processing and storage of cord blood stem cell specimens by an affiliate where the Company has a License and Royalty Agreement. The Company records revenue from processing and storage of specimens and pursuant to agreements with licensees. The Company records the royalty revenue in same period that the related processing and storage is being completed by the affiliate.

d) Product Revenue

The Company records revenue from the sale of the PrepaCyte CB product line upon shipment of the product to the Company’s customers.

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e) Shipping and handling

The Company elected to apply the practical expedient to account for shipping and handling activities performed after the control of a good has been transferred to the customer as a fulfillment cost. Shipping and handling costs that the Company incurs are therefore expensed and included in cost of sales.

The adoption of ASC 606 did not have an impact on the timing of revenue recognition for any of the Company’s revenue streams.

Disaggregation of Revenue

The following table provides information about disaggregated revenue by products and services:

	Three months ended
	August 31, 2019		August 31, 2018
Processing and storage fees	$	7,606,624	$	7,237,053
Public banking revenue		160,561		65,575
Licensee and royalty income		423,173		539,286
Product revenue		33,035		29,308
	$	8,223,393	$	7,871,222

	Nine months ended
	August 31, 2019		August 31, 2018
Processing and storage fees	$	22,621,520	$	19,732,575
Public banking revenue		529,041		65,575
Licensee and royalty income		625,001		742,445
Product revenue		70,795		84,208
	$	23,846,357	$	20,624,803

The following table provides information about assets and liabilities from contracts with customers:

	August 31, 2019		At Adoption
Contract assets (sales commissions)	$	383,399	$	329,231
Accounts receivables	$	5,888,156	$	5,867,335
Short-term contract liabilities (deferred revenue)	$	8,781,229	$	8,365,284
Long-term contract liabilities (deferred revenue)	$	22,893,086	$	20,317,231

The Company, in general, requires the customer to pay for processing and storage services at the time of processing. Contract assets include deferred contract acquisition costs, which will be amortized along with the associated revenue. Contract liabilities include payments received in advance of performance under the contract and are realized with the associated revenue recognized under the contract. Accounts receivable consists of amounts due from clients that have enrolled and processed in the umbilical cord blood stem cell processing and storage programs related to renewals of annual plans and amounts due from license affiliates, and sublicensee territories. The Company did not have asset impairment charges related to contract assets in the three and nine months ended August 31, 2019.

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The following table presents changes in the Company’s contract assets and liabilities during the nine months ended August 31, 2019:

	Balance at December 1, 2018		Additions		Deductions			Balance at August 31, 2019
Contract assets (sales commissions)	$	329,231	$	67,668	($	13,500	)	$	383,399
Accounts receivables	$	5,867,335	$	27,615,196	($	27,594,375	)	$	5,888,156
Contract liabilities (deferred revenue)	$	28,682,515	$	14,184,601	($	11,192,801	)	$	31,674,315

Accounts Receivable

Accounts receivable consist of uncollateralized amounts due from clients that have enrolled and processed in the umbilical cord blood stem cell processing and storage programs and amounts due from license affiliates, and sublicensee territories. Accounts receivable are due within 30 days and are stated at amounts net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering the length of time accounts receivable are past due, the Company’s previous loss history, and the client’s current ability to pay its obligations. Therefore, if the financial condition of the Company’s clients were to deteriorate beyond the estimates, the Company may have to increase the allowance for doubtful accounts which could have a negative impact on earnings. The Company writes-off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts.

Inventories

As part of the Asset Purchase Agreement, (see Note 2), the Company has an agreement with Duke University (“Duke”) expiring on January 31, 2020 for Duke to receive, process, and store cord blood units for the Public Cord Blood Bank (“Duke Services”). As of August 31, 2019, the Company had 5,981 cord blood units in inventory. These units are valued at the lower of cost or net realizable value. Costs include the cost of collecting, transporting, processing and storing the unit. Costs charged by Duke for their Duke Services are based on a monthly fixed fee for storing 12 blood units per month. The Company computes the cost per unit for these Duke Services and capitalizes the unit cost on all blood units shipped and stored in a year at Duke. If the Company ships and stores less than 144 blood units with Duke in a one-year period, a portion of these fixed costs are expensed and included in facility operating costs. Certain costs of collection incurred, such as the cost of collection staff and transportation costs incurred to ship Public Bank units from hospitals to the stem cell laboratory are allocated to banked units based on an average cost method. Costs incurred related to cord blood units that cannot be sold are expensed in the period incurred and are included in facility operating costs in the accompanying statements of operations. The Company records a reserve against inventory for units which have been processed and frozen but may not ultimately become distributable (see Note 4). Due to changes in sales trends and estimated recoverability of cost capitalized into inventory, an impairment charge of $2,332,763 was recognized during the second quarter of fiscal 2019 to reduce inventory from cost to net realizable value and is included in the accompanying consolidated statements of comprehensive income (loss).

Income Taxes

Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. The Company has recorded a valuation allowance of $1,634,000 and $1,634,000 as of August 31, 2019 and November 30, 2018, as the Company does not believe it is “more

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likely than not” that all future income tax benefits will be realized. When the Company changes its determination as to the amount of deferred income tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact to income tax expense in the period in which such determination is made. The ultimate realization of the Company’s deferred income tax assets depends upon generating sufficient taxable income prior to the expiration of the tax attributes. In assessing the need for a valuation allowance, the Company projects future levels of taxable income. This assessment requires significant judgment. The Company examines the evidence related to the recent history of losses, the economic conditions in which the Company operates and forecasts and projections to make that determination.

The Company recorded U.S. income taxes of approximately $453,000 and $245,000 for the three months ended August 31, 2019 and August 31, 2018, respectively. The Company recorded U.S. income taxes of approximately $587,000 and $3,741,000, for the nine months ended August 31, 2019 and August 31, 2018, respectively. Included in the $3,741,000 tax expense for the nine months ended August 31, 2018 is approximately $2,985,000 of expense related to the reduction of the federal tax rate to 21% as of January 1, 2018 as a result of the Tax Cuts and Jobs Act that was signed into law on December 22, 2017. The decrease in the federal tax rate caused a decrease in the Company’s deferred tax asset which resulted in an increase in the income tax expense.

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 geographic areas where the Company has license agreements. The Company recognized approximately $46,000 and $58,000 for the three months ended August 31, 2019 and 2018, respectively, of foreign income tax expense. The Company recognized approximately $68,000 and $80,000 for the nine months ended August 31, 2019 and 2018, respectively, of foreign income tax expense. Foreign income tax expense is included in income tax expense in the accompanying consolidated statements of comprehensive income (loss).

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.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. For the three and nine months ended August 31, 2019 and August 31, 2018, the Company had no provisions for interest or penalties related to uncertain tax positions.

Long-Lived Assets

The Company evaluates the realizability of its long-lived assets, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment, such as reductions in demand or when significant economic slowdowns are present. Reviews are performed to determine whether the carrying value of an asset is impaired, based on comparisons to undiscounted expected future cash flows. If this comparison indicates that there is impairment and carrying value is in excess of fair value, the impaired asset is written down to fair value, which is typically calculated using: (i) quoted market prices or (ii) discounted expected future cash flows utilizing a discount rate. The Company did not note any impairment for the three and nine months ended August 31, 2019 and 2018.

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Goodwill

Goodwill represents the excess of the purchase price of the assets acquired from Cord:Use (Note 2) over the estimated fair value of the net tangible and identifiable assets acquired. The annual assessment of the reporting unit is performed as of September 1st, and an assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. Step one of the impairment assessment compares the fair value of the reporting unit to its carrying value and if the fair value exceeds its carrying value, goodwill is not impaired. If the carrying value exceeds the fair value, the implied fair value of goodwill is compared to the carrying value of goodwill. If the implied fair value exceeds the carrying value then goodwill is not impaired; otherwise, an impairment loss would be recorded by the amount the carrying value exceeds the implied fair value. As of August 31, 2019, and November 30, 2018, goodwill, is reflected on the consolidated balance sheets at $1,941,411 and $1,941,411.

Stock Compensation

As of August 31, 2019, the Company has two stock-based compensation plans, which are described in Note 8 to the unaudited consolidated financial statements. The Company’s stock-based employee compensation plan became effective December 1, 2011 as approved by the Board of Directors and approved by the stockholders at the 2012 Annual Meeting. The Company recognized approximately $240,000 and $324,000 for the nine months ended August 31, 2019 and August 31, 2018 respectively, of stock compensation expense. The Company reversed $444,000 of stock compensation expense during the nine months ended August 31, 2018 as the Co-CEOs each opted to receive a lump sum cash payment in lieu of 30,000 shares of earned common stock pursuant to the terms of their Employment Agreements. The reversal had no impact on the accompanying consolidated statements of comprehensive income (loss) as other compensation expense was recognized to offset the reversal.

The Company recognizes stock-based compensation based on the fair value of the related awards. Under the fair value recognition guidance of stock-based compensation accounting rules, stock-based compensation expense is estimated at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the award. The fair value of service-based vesting condition and performance-based vesting condition stock option awards is determined using the Black-Scholes valuation model. For stock option awards with only service-based vesting conditions and graded vesting features, the Company recognizes stock compensation expense based on the graded-vesting method. To value awards with market-based vesting conditions the Company uses a binomial valuation model. The Company recognizes compensation cost for awards with market-based vesting conditions on a graded-vesting basis over the derived service period calculated by the binomial valuation model. The use of these valuation models involves assumptions that are judgmental and highly sensitive in the determination of compensation expense and include the expected life of the option, stock price volatility, risk-free interest rate, dividend yield, exercise price, and forfeiture rate. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period.

The estimation of stock awards that will ultimately vest requires judgment and to the extent that actual results or updated estimates differ from current estimates, such amounts will be recorded as a cumulative adjustment in the period they become known. The Company considered many factors when estimating forfeitures, including the recipient groups and historical experience. Actual results and future changes in estimates may differ substantially from current estimates.

The Company issues performance-based equity awards which vest upon the achievement of certain financial performance goals, including revenue and income targets. Determining the appropriate amount to expense based on the anticipated achievement of the stated goals requires judgment, including

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forecasting future financial results. The estimate of the timing of the expense recognition is revised periodically based on the probability of achieving the required performance targets and adjustments are made as appropriate. The cumulative impact of any revision is reflected in the period of the change. If the financial performance goals are not met, the award does not vest, so no compensation cost is recognized and any previously stock-recognized stock-based compensation expense is reversed.

The Company issues equity awards with market-based vesting conditions which vest upon the achievement of certain stock price targets. If the awards are forfeited prior to the completion of the derived service period, any recognized compensation is reversed. If the awards are forfeited after the completion of the derived service period, the compensation cost is not reversed, even if the awards never vest.

Fair Value of Financial Instruments

Management uses a fair value hierarchy, which gives the highest priority to quoted prices in active markets. The fair value of financial instruments is estimated based on market trading information, where available. Absent published market values for an instrument or other assets, management uses observable market data to arrive at its estimates of fair value. Management believes that the carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term nature of these instruments. The Company believes that the fair value of its Revenue Sharing Agreements (”RSA”) liability recorded on the balance sheet is between the recorded book value and up to the Company’s previous settlement experience, due to the various terms and conditions associated with each RSA.

The Company uses an accounting standard that defines fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities.
Level 2	Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

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The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of August 31, 2019 and November 30, 2018, respectively, segregated among the appropriate levels within the fair value hierarchy:

				Fair Value Measurements
	Fair Value at			at August 31, 2019 Using
Description	August 31, 2019			Level 1		Level 2		Level 3
Assets:
Marketable securities	$	874,691		$	874,691		—		—
Total	$	874,691		$	874,691		—		—
Liabilities:
Contingent consideration	$	3,601,697		$	—		—	$	3,601,697
Total	$	3,601,697		$	—		—	$	3,601,697
Contingent Consideration:
Beginning Balance as of November 30, 2018	$	4,282,975
Subtractions – Cord:Use earnout		(45,000	)
Fair value adjustment as of August 31, 2019		(636,278	)
Ending balance as of August 31, 2019	$	3,601,697
	Fair Value at			Fair Value Measurements at November 30, 2018 Using
Description	November 30, 2018			Level 1		Level 2		Level 3
Assets:
Trading securities	$	68,816		$	68,816		—		—
Available-for-sale securities		806,873			806,873		—		—
Total	$	875,689		$	875,689		—		—
Liabilities
Contingent consideration	$	4,282,975		$	—		—	$	4,282,975
Total	$	4,282,975		$	—		—	$	4,282,975

The following is a description of the valuation techniques used for these items, as well as the general classification of such items pursuant to the fair value hierarchy:

Trading securities – Fair values for these investments are based on quoted prices of identical securities in active markets and are therefore classified within Level 1 of the fair value hierarchy. For trading securities, there was $37,536 in unrealized holding gains recorded in other income and expense on the accompanying consolidated statements of comprehensive income (loss) for the three months ended August 31, 2018. For trading securities, there was $12,328 in unrealized holding gains recorded in other income on the accompanying consolidated statements of comprehensive income (loss) for the nine months ended August 31, 2018.

Available-for-sale securities – These investments are classified as available for sale and consist of marketable equity securities that we intend to hold for an indefinite period of time. Investments are stated at fair value and unrealized holding gains and losses are reported as a component of accumulated other comprehensive income until realized. Realized gains or losses on disposition of investments are computed using the first in, first out (FIFO) method and reported as income or loss in the period of disposition in the

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accompanying consolidated statements of comprehensive income (loss). For available-for-sale securities, there was $285,255 unrealized holding gains, net of tax, reported as comprehensive income (loss) on the accompanying statements of comprehensive income (loss) for the three months ended August 31, 2018. For available-for-sale securities, there was $405,255 unrealized holding gains, net of tax, reported as a component of comprehensive income (loss) on the accompanying consolidated statements of comprehensive income (loss) for the nine-month period ended August 31, 2018.

Marketable securities - Effective December 1, 2018, the Company adopted ASU 2016-01, which requires equity securities with readily determinable fair values to be measured at fair value with the changes in fair value recognized through net income. Such securities are no longer reflected as trading or available-for-sale but are noted as marketable securities. As a result of this accounting change, in the first quarter of 2019, the Company recognized a cumulative-effect adjustment from accumulated other comprehensive income to retained earnings of approximately $341,000 in the consolidated statements of stockholders’ deficit as of the date of adoption. Prior periods have not been restated for the impact of this accounting change. There was $35,000 and ($1,000) in unrealized holding gain (losses), respectively, recorded in other income and expense on the accompanying consolidated statements of comprehensive income (loss) for the three and nine months ended August 31, 2019, respectively.

Contingent consideration - The contingent consideration is the earnout that Cord:Use is entitled to from the Company’s sale of the public cord blood inventory from and after closing. See Note 2. The estimated fair value of the contingent earnout was determined using a Monte Carlo analysis examining the frequency and mean value of the resulting earnout payments. The resulting value captures the risk associated with the form of the payout structure. The risk-neutral method is applied, resulting in a value that captures the risk associated with the form of the payout structure and the projection risk. The carrying amount of the liability may fluctuate significantly and actual amounts paid may be materially different from the estimated value of the liability.

Product Warranty and Cryo-Cell Cares^TM Program

In December 2005, the Company began providing its customers that enrolled after December 2005 a payment warranty under which the Company agrees to pay $50,000 to its client if the umbilical cord blood product retrieved is used for a stem cell transplant for the donor or an immediate family member and fails to engraft, subject to various restrictions. Effective February 1, 2012, the Company increased the $50,000 payment warranty to a $75,000 payment warranty to all of its new clients. Effective June 1, 2017, the Company increased the payment warranty to $100,000 to all new clients who choose the premium processing method, Prepacyte CB. Additionally, under the Cryo-Cell CaresTM program, the Company will pay $10,000 to the client to offset personal expenses if the umbilical cord blood product is used for bone marrow reconstitution in a myeloblative transplant procedure. The product warranty and the Cryo-Cell Cares program are available to clients who enroll under this structure for as long as the specimen is stored with the Company. The Company has not experienced any claims under the warranty program nor has it incurred costs related to these warranties.

As discussed above, the Company has determined that the payment warranty represents variable consideration payable to the customer. Upon the adoption of ASC 606, the Company has concluded the payment warranty be fully constrained under the most likely amount method, therefore, the transaction price does not reflect any expectation of service level credits at August 31, 2019. At the end of each reporting period, the Company shall update the estimated transaction price related to the payment guarantee including updating its assessment of whether an estimate of variable consideration is constrained to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period.

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Recently Issued Accounting Pronouncements

In August 2018, the FASB issued Accounting Standards Update No. 2018-15, Intangibles – Goodwill and Other Internal-Use Software (Topic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This update addresses how a customer should account for the costs of implementing a cloud computing service arrangement (also referred to as a “hosting arrangement”). Entities should account for costs associated with implementing a cloud computing arrangement that is considered a service contract in the same way as accounting for implementation costs incurred to develop or obtain software for internal use using the guidance in Topic 350-40. The amendments address when costs should be capitalized rather than expensed, the term to use when amortizing capitalized costs, and how to evaluate the unamortized portion of these capitalized implementation costs for impairment. The ASU also includes guidance on how to present implementation costs in the financial statements and creates additional disclosure requirements. The guidance is effective for annual periods beginning after December 15, 2019, and interim periods within that reporting period. The Company is currently evaluating the effect that the updated standard will have on our financial statements.

In June 2018, the FASB issued Accounting Standards Update No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This update simplifies the accounting for nonemployee share-based payment transactions by expanding the scope of Topic 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance is effective for annual periods beginning after December 15, 2018, and interim periods within that reporting period. The Company is currently evaluating the effect that the updated standard will have on our financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The update removes Step 2 from the goodwill impairment test. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, although early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on our financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842). This update requires organizations that lease assets with lease terms of more than 12 months to recognize assets and liabilities for the rights and obligations created by those leases on their balance sheets. It also requires new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated balance sheets and related disclosures.

Note 2 – Acquisition

On June 11, 2018, Cryo-Cell completed its acquisition of substantially all of the assets (the “Cord Purchase”) of Cord:Use Cord Blood Bank, Inc., a Florida corporation (“Cord:Use”), in accordance with the definitive Asset Purchase Agreement between Cryo-Cell and Cord:Use (the “Purchase Agreement”), including without limitation Cord:Use’s inventory of public cord blood units existing as of the closing date (the “Public Cord Blood Inventory”) and Cord:Use’s shares of common stock of Tianhe Stem Cell Biotechnologies, Inc., an Illinois corporation (the “Tianhe Capital Stock”). Cord:Use was in the business of public and private cord blood and tissue, collection, processing, storage and banking.

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The aggregate consideration payable at closing under the Purchase Agreement was $14,000,000, with $10,500,000 paid in cash and the balance paid through the delivery to Seller of 465,426 shares of Cryo-Cell’s common stock, par value $0.01 per share (“Common Stock”), at $7.52 per share. In addition, Cryo-Cell assumed certain limited liabilities incurred by Cord:Use in connection with its business that were unpaid as of the closing date and that directly relate to the services to be provided after closing by Cryo-Cell. Cryo-Cell also assumed certain of Cord:Use’s contracts and the obligations arising therefrom after the closing.

Additionally, Cord:Use is entitled to an earnout from Cryo-Cell’s sale of the public cord blood inventory from and after closing. Each calendar year after the closing, Cryo-Cell will pay to Cord:Use 75% of all gross revenues, net of any returns, received from the sale of public cord blood inventory in excess of $500,000. Such payments will be made quarterly, within 30 days of the end of the last month of each calendar quarter, until the public cord blood inventory is exhausted. In addition, each calendar year after closing, until the public cord blood inventory is exhausted, for every $500,000 of retained gross revenues, net of any returns, received and retained by Cryo-Cell in excess of the initial $500,000 retained by Cryo-Cell during such year, Cryo-Cell will deliver $200,000 worth of Cryo-Cell Common stock to Cord:Use, up to an aggregate value of $5,000,000.    Cord:Use is also entitled to a portion of the gross profits generated, or deemed to have been generated, by Cryo-Cell from its ownership of the Tianhe Capital Stock.

The Company incurred $580,000 in costs associated with the acquisition of Cord:Use.

The following summarizes the fair value of the consideration of the Acquisition:

Consideration
Cash	$	10,500,000
Cryo-Cell common stock		3,500,000
Cord blood inventory earnout		4,698,255
Consideration	$	18,698,255

The following summarizes the preliminary allocation of the total purchase price for the Acquisition:

Accounts receivable	$	188,019
Inventory		16,037,957
Prepaid expenses		68,867
Property and equipment		568,407
Other asset - Tiahne capital stock		308,000
Brand		31,000
Customer relationships		960,000
Total identifiable net assets acquired		18,162,250
Less: Deferred revenue		(1,405,406	)
Goodwill		1,941,411
Total	$	18,698,255

The Company has assigned goodwill to the segment reporting unit for cellular processing and cryogenic storage of umbilical cord blood and cord tissue stem cells for family use. Goodwill includes the fair value of the assembled workforce. The fair value of the assembled workforce was estimated by applying a cost approach, representing a level 2 measurement. The goodwill is not deductible for income tax purposes.

The property and equipment are stated at an estimate of fair value.

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The Tiahne capital stock is an investment that is valued based on fair value. Cord:Use had a supply and equity participation agreement with Tiahne who is engaged in medical and life science research that involves the use of stem cells derived from umbilical cord blood units in clinical trials for humans.

The fair value of the company brand and customer relationships were estimated by applying an income approach, representing a level 3 measurement. The fair value estimates are based on (1) an assumed discount rate of 19%, (2) long-term sustainable growth rate of 3%, (3) market royalty rate of 1% and (4) one and thirty-year lives for the brand and customer relationships, respectively.

The fair values of the assets acquired includes public cord blood banking inventory of $16,037,957 which the Company expects to sell to outside customers. The Company also acquired accounts receivable of $188,019 and prepaid expenses of $68,867.

The fair values of the license agreement and customer relationships reflect the anticipated cash flows over their expected lives.

The fair value of deferred revenue is valued based on the cost method. Deferred revenues are pre-payment fees for future storage of umbilical cord blood and/or cord tissue specimens. The short- and long-term deferred revenue is $330,508 and $1,074,898, respectively.

Unaudited Pro forma Results

The following table provides the Company’s consolidated unaudited pro forma revenues, net income per basic and diluted common share had the results of the acquired businesses’ operations been included in its operations commencing on December 1, 2016, based on available information related to the respective operations. This proforma information presented is not necessarily indicative either of the combined results of operations that actually would have been realized by the Company had the acquisition been consummated at the beginning of the period for which the pro forma information is presented, or of future results, and does not account for any operation improvements to be made by the Company post-acquisition.

	Three months ended August 31, 2018		Nine months ended August 31, 2018
Revenue	$	7,871,222	$	22,794,591
Net income (loss)	$	244,984	($	3,797,189	)
Earnings (loss) per share:
Basic	$	0.03	($	0.52	)
Diluted	$	0.03	($	0.52	)

Note 3 – Segment Reporting

During the third quarter of fiscal 2018, the Company purchased the assets and assumed contracts that Cord:Use used in the operation of its cord blood business (See Note 2). The Company evaluated and determined that this acquisition qualifies as a separate segment.

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The Company is organized in three reportable segments:

1. The cellular processing and cryogenic storage of umbilical cord blood and cord tissue stem cells for family use. Revenue is generated from the initial processing and testing fees and the annual storage fees charged each year for storage (the “Umbilical cord blood and cord tissue stem cell service”).

2. The manufacture of Prepacyte^® CB units, the processing technology used to process umbilical cord blood stem cells. Revenue is generated from the sales of the Prepacyte^® CB units (the “Prepacyte^®-CB”).

3. The cellular processing and cryogenic storage of umbilical cord blood stem cells for public use. Revenue is generated from the sale of the cord blood units to the National Marrow Donor Program (“NMDP”), which distributes the cord blood units to transplant centers located in the United States, and around the world.

The following table shows, by segment: net revenue, cost of sales, depreciation and amortization, operating profit, interest expense, and income tax (expense) benefit for the three months and nine months ended August 31, 2019 and August 31, 2018:

	For the three months ended August 31, 2019			For the three months ended August 31, 2018
Net revenue
Umbilical cord blood and cord tissue stem cell service	$	8,029,797		$	7,776,339
Prepacyte®-CB		33,035			29,308
Public cord blood banking		160,561			65,575
Total net revenue	$	8,223,393		$	7,871,222
Cost of sales
Umbilical cord blood and cord tissue stem cell service	$	2,240,257		$	2,149,778
Prepacyte®-CB		25,180			27,740
Public cord blood banking		323,898			308,662
Total cost of sales	$	2,589,335		$	2,486,180
Depreciation and amortization
Umbilical cord blood and cord tissue stem cell service	$	38,223		$	43,008
Prepacyte®-CB		9,063			9,064
Public cord blood banking		—			—
Total depreciation and amortization	$	47,286		$	52,072
Operating (loss) income
Umbilical cord blood and cord tissue stem cell service	$	2,175,563		$	1,170,704
Prepacyte®-CB		(19,146	)		( 7,496	)
Public cord blood banking		(163,336	)		(243,086	)
Total operating income	$	1,993,081		$	920,122
Interest expense
Umbilical cord blood and cord tissue stem cell service	$	413,942		$	410,366
Prepacyte®-CB		—			—
Public cord blood banking		—			—
Total interest expense	$	413,942		$	410,366
Income tax expense
Umbilical cord blood and cord tissue stem cell service	$	498,748		$	303,072
Prepacyte®-CB		—			—
Public cord blood banking		—			—
Total income tax expense	$	498,748		$	303,072

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	For the nine months ended August 31, 2019			For the nine months ended August 31, 2018
Net revenue
Umbilical cord blood and cord tissue stem cell service	$	23,246,521		$	20,475,020
Prepacyte®-CB		70,795			84,208
Public cord blood banking		529,041			65,575
Total net revenue	$	23,846,357		$	20,624,803
Cost of sales
Umbilical cord blood and cord tissue stem cell service	$	6,497,788		$	5,431,359
Prepacyte®-CB		189,806			124,805
Public cord blood banking		996,259			308,662
Total cost of sales	$	7,683,853		$	5,864,826
Depreciation and amortization
Umbilical cord blood and cord tissue stem cell service	$	132,409		$	97,674
Prepacyte®-CB		27,191			27,191
Public cord blood banking		—			—
Total depreciation and amortization	$	159,600		$	124,865
Operating (loss) income
Umbilical cord blood and cord tissue stem cell service	$	6,307,426		$	3,521,625
Prepacyte®-CB		(164,141	)		(67,788	)
Public cord blood banking		(2,799,978	)		(243,087	)
Total operating income	$	3,343,307		$	3,056,995
Interest expense
Umbilical cord blood and cord tissue stem cell service	$	1,245,154		$	995,437
Prepacyte®-CB		—			—
Public cord blood banking		—			—
Total interest expense	$	1,245,154		$	995,437
Income tax expense
Umbilical cord blood and cord tissue stem cell service	$	654,358		$	3,821,660
Prepacyte®-CB		—			—
Public cord blood banking		—			—
Total income tax expense	$	654,358		$	3,821,660

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The following table shows the assets by segment as of August 31, 2019 and November 30, 2018:

	As of August 31, 2019		As of November 30, 2018
Assets
Umbilical cord blood and cord tissue stem cell service	$	28,132,949	$	26,239,260
Prepacyte®-CB		202,408		319,802
Public cord blood banking		13,492,399		15,831,081
Total assets	$	41,827,756	$	42,390,143

Note 4 – Inventory

Inventory is comprised of public cord blood banking specimens, collection kits, finished goods, work-in-process and raw materials. Collection kits are used in the collection and processing of umbilical cord blood and cord tissue stem cells, finished goods include products purchased or assumed for resale and for the use in the Company’s processing and storage service. Inventory in the Public Cord Blood Bank includes finished goods that are specimens that are available for resale. The Company considers inventory in the Public Cord Blood Bank that has not completed all testing to determine viability to be work in process. The components of inventory at August 31, 2019 and November 30, 2018 are as follows:

	As of August 31, 2019			As of November 30, 2018
Raw materials	$	—		$	—
Work-in-process		130,217			188,085
Work-in-process – Public Bank		—			—
Finished goods		23,811			5,262
Finished goods – Public Bank		13,492,398			15,831,081
Collection kits		39,137			19,163
Inventory reserve		(7,718	)		(7,718	)
Total inventory	$	13,677,845		$	16,035,873
Inventory, current portion		1,031,845			1,260,557
Inventory, long-term portion		12,646,000			14,775,316
Total inventory	$	13,677,845		$	16,035,873

During the second quarter of fiscal 2019, due to changes in sales trends and estimated recoverability of cost capitalized into inventory for the public banking inventory, the Company prepared an analysis and determined that the value of the public inventory should be reduced from cost to net realizable value and this led to an impairment charge to the public inventory of $2,332,763.

Due to the nature of the units of public inventory, the net realizable value of those units that are expected to be sold during the next twelve months are included in current inventory. The remaining balance of the public inventory is considered to be long-term. In order to conform to the current period presentation, the Company made certain reclassifications to the Public Bank inventory prior period balance in the Consolidated Balance Sheets. This reclassification had no effect on the previously reported total assets or liabilities, net income or cash flows from operating activities.

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Note 5 – Intangible Assets

The Company incurs certain legal and related costs in connection with patent and trademark applications. If a future economic benefit is anticipated from the resulting patent or trademark or an alternate future use is available to the Company, such costs are capitalized and amortized over the expected life of the patent or trademark. The Company’s assessment of future economic benefit involves considerable management judgment. A different conclusion could result in the reduction of the carrying value of these assets.

Intangible assets were as follows as of August 31, 2019 and November 30, 2018:

	Useful lives	August 31, 2019			November 30, 2018
Patents and Domain Names	10-20 years		234,570			234,570
Less: Accumulated amortization			(32,560	)		(23,663	)
License agreement	10 years		470,000			470,000
Less: Intangible asset impairment			(185,000	)		(185,000	)
Less: Accumulated amortization			(147,277	)		(123,528	)
Customer relationships-Prepacyte CB	15 years		41,000			41,000
Less: Intangible asset impairment			(26,267	)		(26,267	)
Less: Accumulated amortization			(6,066	)		(5,276	)
Brand	1 year		31,000			31,000
Less: Accumulated amortization			(31,000	)		(15,500	)
Customer relationships-Cord:Use	30 years		960,000			960,000
Less: Accumulated amortization			(40,000	)		(16,000	)
Net Intangible Assets		$	1,268,400		$	1,341,336

Amortization expense of intangibles was approximately $19,000 and $27,000 for the three months ended August 31, 2019 and August 31, 2018, respectively. Amortization expense of intangibles was approximately $73,000 and $49,000 for the nine months ended August 31, 2019 and August 31, 2018, respectively.

Note 6 – Notes Payable

On May 20, 2016, the Company entered into a Credit Agreement (“Agreement”) with Texas Capital Bank, National Association (“TCB”) for a term loan of $8.0 million in senior credit facilities. The proceeds of the term loan were used by the Company to fund repurchases of the Company’s common stock. Subject to the terms of the Agreement, on May 20, 2016, TCB advanced the Company $100.00. On July 1, 2016, TCB advanced the remaining principal amount of $7,999,900 per a promissory note dated May 20, 2016 between the Company and TCB, at a rate of 3.75% per annum plus LIBOR, payable monthly with a maturity date of July 2021. On August 26, 2016, the Company entered into a First Amendment to Credit Agreement with TCB. Pursuant to terms of the First Amendment to Credit Agreement, on August 26, 2016, TCB made an additional advance to the Company in principal amount of $2,133,433 per an Amended and Restated Promissory Note dated August 26, 2016 between the Company and TCB. The additional proceeds of the term loan were used by the Company to fund the extinguishment of revenue sharing agreements. On June 11, 2018, the Company entered into a Second Amendment to Credit Agreement with TCB. Pursuant to the terms of the Second Amendment to Credit Agreement, TCB increased the current outstanding principal amount of the loan from TCB by $9,000,000 to finance a portion of the purchase price of the Cord:Use Purchase. In connection therewith, Cryo-Cell executed and delivered to TCB a Second Amended and Restated Promissory Note, in the principal amount of $15,500,000. As of the three and nine months ended August 31, 2019, the Company paid interest of $162,134 and $523,818, respectively, which is reflected in interest expense on the accompanying consolidated statements of comprehensive income (loss). As of the three month and nine months ended August 31, 2018, the Company paid interest of $204,609 and $393,254, respectively, which is reflected in interest expense on the accompanying consolidated statements of comprehensive income (loss).

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Collateral of the term and subordinated loans includes all money, securities and property of the Company.

The Company incurred debt issuance costs related to the term loan in the amount of $548,085 which is recorded as a direct reduction of the carrying amount of the note payable and amortized over the life of the loan. As of the three and nine months ended August 31, 2019, $28,014 and $86,014, respectively, of the debt issuance costs were amortized and are reflected in interest expense on the accompanying consolidated statements of comprehensive income (loss). As of the three and nine months ended August 31, 2018, $28,337 and $79,876, respectively, of the debt issuance costs were amortized and are reflected in interest expense on the accompanying consolidated statements of comprehensive income.

As of August 31, 2019 and November 30, 2018, the note payable obligation was as follows:

	August 31, 2019			November 30, 2018
Note payable	$	9,883,433		$	13,208,433
Unamortized debt issuance costs		(178,906	)		(264,923	)
Net note payable	$	9,704,527		$	12,943,510
Current portion of note payable	$	3,100,000		$	3,100,000
Long-term note payable, net of debt issuance costs		6,604,527			9,843,510
Total	$	9,704,527		$	12,943,510

Interest expense on the note payable for the three and nine months ended August 31, 2019 and August 31, 2018 was as follows:

	For the three months ended August 31, 2019		For the nine months ended August 31, 2019
Interest expense on notes payable	$	162,134	$	523,818
Debt issuance costs		28,014		86,014
Total interest expense	$	190,148	$	609,832
	For the three months ended August 31, 2018		For the nine months ended August 31, 2018
Interest expense on notes payable	$	204,609	$	393,254
Debt issuance costs		28,337		79,876
Total interest expense	$	232,946	$	473,130

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Note 7 – Income (Loss) per Common Share

The following table sets forth the calculation of basic and diluted net income (loss) per common share:

	Three Months Ended				Nine Months Ended
	August 31, 2019		August 31, 2018		August 31, 2019		August 31, 2018
Numerator:
Net Income (Loss)	$	1,116,259	$	244,984	$	1,445,809	($	1,745,582	)
Denominator:
Weighted-average shares outstanding-basic		7,803,333		7,694,662		7,802,676		7,350,868
Dilutive common shares issuable upon exercise of stock options		641,904		681,013		627,575		—
Weighted-average shares-diluted		8,445,237		8,375,675		8,430,251		7,350,868
Net income (loss) per common share:
Basic	$	0.14	$	0.03	$	0.19	($	0.24	)
Diluted	$	0.13	$	0.03	$	0.17	($	0.24	)

For the three months ended August 31, 2019, the Company excluded the effect of 43,636 outstanding options from the computation of diluted earnings per share, as the effect of potentially dilutive shares from the outstanding stock options would be anti-dilutive. For the nine months ended August 31, 2019, the Company excluded the effect of 154,601 outstanding options from the computation of diluted earnings per share, as the effect of potentially dilutive shares from the outstanding stock options would be anti-dilutive.

For the three months ended August 31, 2018, the Company did not exclude any of the options from the computation of diluted earnings per share, as the effect of potentially dilutive shares from the outstanding stock options would be anti-dilutive. For the nine months ended August 31, 2018, the Company excluded the effect of all options from the computation of diluted earnings per share, as the effect of potentially dilutive shares from the outstanding stock options would be anti-dilutive.

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Note 8 – Stockholders’ Equity

Employee Stock Incentive Plan

The Company maintains the 2006 Stock Incentive Plan (the “2006 Plan”) under which it has reserved 1,000,000 shares of the Company’s common stock for issuance pursuant to stock options, restricted stock, stock-appreciation rights (commonly referred to as “SARs”) and stock awards (i.e. performance options to purchase shares and performance units). As of August 31, 2019, and November 30, 2018, there were 370,000 and 380,000 options issued, but not yet exercised, under the 2006 Plan, respectively. As of August 31, 2019, there were 0 shares available for future issuance under the 2006 Plan.

The Company maintains the 2012 Equity Incentive Plan (the “2012 Plan”) which became effective December 1, 2011 as approved by the Board of Directors and approved by the stockholders at the 2012 Annual Meeting on July 10, 2012. The 2012 Plan originally reserved 1,500,000 shares of the Company’s common stock for issuance pursuant to stock options, restricted stock, SARs, and other stock awards (i.e. performance shares and performance units). In May 2012, the Board of Directors approved an amendment to the 2012 Plan to increase the number of shares of the Company’s common stock reserved for issuance to 2,500,000 shares. As of August 31, 2019, there were 732,330 service-based options issued, 129,729 service-based restricted common shares granted, 823,300 performance-based and 116,218 market-based restricted common shares granted under the 2012 Plan. As of August 31, 2019, there were 0 shares available for future issuance under the 2012 Plan. In March 2018, the Company received notice that shares of the Company’s common stock issued to certain executive officers pursuant to the Company’s 2012 Stock Incentive Plan had purportedly been issued in excess of the shares reserved for issuance under the Plan. The Company has established an independent committee of the Board of Directors to review this issue.

The Company granted 1,500 options to an optionee during the second fiscal quarter of 2019 as approved by the Board of Directors. These options are not currently issued out of the 2006 or 2012 Plan.

Service-based vesting condition options

The fair value of each option award is estimated on the date of the grant using the Black-Scholes valuation model that uses the assumptions noted in the following table. Expected volatility is based on the historical volatility of the Company’s stock over the most recent period commensurate with the expected life of the Company’s stock options. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected term of options granted to employees is calculated, in accordance with the “simplified method” for “plain vanilla” stock options allowed under GAAP. Expected dividends are based on the historical trend of the Company not issuing dividends.

There were 110,965 and 112,465 options granted during the three and nine months ended August 31, 2019, respectively.

There were 0 and 51,636 options granted during the three and nine months ended August 31, 2018, respectively.

Variables used to determine the fair value of the options granted for the three and nine months ended August 31, 2019 and August 31, 2018, respectively, are as follows:

	Three Months Ended			Three Months Ended		Nine Months Ended			Nine Months Ended
	August 31, 2019			August 31, 2018		August 31, 2019			August 31, 2018
Weighted average values:
Expected dividends		0	%		—		0	%		0	%
Expected volatility		49.7	%		—		49.7	%		50.8	%
Risk free interest rate		1.39	%		—		1.40	%		2.67	%
Expected life		5 years			—		5 years			5 years

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Stock option activity for options with only service-based vesting conditions for the nine months ended August 31, 2019, was as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at November 30, 2018		1,001,365		$	2.77		3.97	$	4,580,967
Granted		112,465			7.52				735
Exercised		(2,500	)		2.28				14,175
Expired/forfeited		(7,500	)		2.22				39,800
Outstanding at August 31, 2019		1,103,830		$	3.26		4.19	$	4,728,540
Exercisable at August 31, 2019		1,004,312		$	2.83		3.72	$	4,727,576

The weighted average grant date fair value of options granted during the nine months ended August 31, 2019 and August 31, 2018 was $3.32 and $3.23, respectively.

The aggregate intrinsic value represents the total value of the difference between the Company’s closing stock price on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money stock options that would have been received by the option holders had all option holders exercised their options on either August 31, 2019 or November 30, 2018, as applicable. The intrinsic value of the Company’s stock options changes based on the closing price of the Company’s stock.

During the three and nine months ended August 31, 2019, the Company issued 0 and 2,500 common shares to option holders who exercised options for $0 and $5,700, respectively.

During the three and nine months ended August 31, 2018, the Company issued 61,500 and 63,750 common shares to option holders who exercised options for $166,005 and $170,925, respectively.

Significant option groups outstanding and exercisable at August 31, 2019 and related price and contractual life information are as follows:

	Outstanding						Exercisable
Range of Exercise Prices	Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Outstanding		Weighted Average Exercise Price
$1.01 to $ 2.00		422,500		2.35	$	1.73		422,500	$	1.73
$2.01 to $ 3.00		265,000		2.36		2.72		265,000		2.72
$3.01 to $4.00		227,229		6.52		3.18		227,229		3.18
$6.01 to $7.00		25,000		7.59		6.95		24,167		6.97
$7.01 to $8.00		164,101		8.17		7.63		65,416		7.69
		1,103,830		4.19	$	3.26		1,004,312	$	2.83

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A summary of the status of the Company’s non-vested options as of August 31, 2019, and changes during the nine months ended August 31, 2019, is presented below:

	Shares			Weighted Average Grant-Date Fair Value
Non-vested at November 30, 2018		40,254		$	3.06
Granted		112,465			3.32
Vested		(53,201	)		3.16
Forfeited		—			—
Non-vested at August 31, 2019		99,518			3.30

As of August 31, 2019, there was approximately $295,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2006 Plan and the 2012 Plan. The cost is expected to be recognized over a weighted-average period of 1.33 years as of August 31, 2019. The total fair value of shares vested during the nine months ended August 31, 2019 was approximately $168,000.

During the second fiscal quarter of 2018, the Company entered into Amended and Restated Employment Agreements (“2018 Employment Agreements”) with each of the Company’s Co-CEOs. Per the Employment Agreements, each of the Co-CEOs is to receive base grant equity awards in the form of qualified stock options of the Company’s common stock. As of March 8, 2018, David Portnoy and Mark Portnoy were granted 23,636 and 20,000 stock options of the Company’s common stock, respectively. The options were issued under the Company’s 2012 Stock Plan and will vest 1/3 upon grant, 1/3 on December 1, 2018 and the remaining 1/3 on November 30, 2019. The fair value of the options that vested through the nine months ended August 31, 2019 and August 31, 2018 was approximately $57,000 and $50,000, respectively, and is reflected as selling, general and administrative expenses in the accompanying consolidated statement of comprehensive income (loss). As of August 31, 2019, there was approximately $19,000 of total unrecognized compensation cost related to the non-vested options of common stock and these will continue to vest as notated above and per the 2018 Employment Agreements through November 30, 2019.

During the second fiscal quarter of 2018, the Company entered into an Amendment Agreement (“CIO Agreement”) with the Company’s CIO. Per the CIO Agreement, the CIO is to receive a base grant equity award in the form of qualified stock options of the Company’s common stock. As of May 21, 2018, Oleg Mikulinsky was granted 8,000 stock options of the Company’s common stock. The options were issued under the Company’s 2012 Stock Plan and will vest 1/3 upon grant, 1/3 on December 1, 2018 and the remaining 1/3 on November 30, 2019. The fair value of the options that vested through the nine months ended August 31, 2019 and August 31, 2018 was approximately $14,000 and $9,000, respectively, and is reflected as selling, general and administrative expenses in the accompanying consolidated statement of comprehensive income (loss). As of August 31, 2019, there was approximately $5,000 of total unrecognized compensation cost related to the non-vested options of common stock and these will continue to vest as notated above and per the CIO Agreement through November 30, 2019.

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Performance and market-based vesting condition options

Per the 2018 Employment Agreements, based upon certain performance criteria, the Company shall grant David Portnoy and Mark Portnoy a percentage of up to 47,273 and 40,000, respectively, of qualified stock options of the Company’s common stock. For market-based vesting condition options, accounting principles do not require that the market condition be met in order for the compensation cost to be recognized. Fair value of these options has been determined using a Monte Carlo valuation approach and is being recognized over the requisite service period, regardless if the market condition will be met. During fiscal 2019, 15,756 and 13,332, respectively, of qualified stock options will be expensed over the requisite service period. The fair value of these options expensed through the nine months August 31, 2019 was approximately $136,000 and is reflected as selling, general and administrative expenses in the accompanying consolidated statement of comprehensive income (loss). As of August 31, 2019, there was approximately $45,000 of total unrecognized compensation cost related to these market-based vesting condition options of common stock. For performance-based vesting condition options, the Company estimates the fair value of qualified stock options that met certain performance targets by the end of the fiscal 2018 requisite service period using a Black-Scholes valuation model. As of August 30, 2019, the Company granted David Portnoy and Mark Portnoy 26,243 and 22,222 of non-qualified stock options of the Company’s common stock based upon certain performance criteria met by the end of the fiscal 2018 service period and per the 2018 Employment Agreements. These options were issued under the Company’s 2012 Stock Plan and will vest 1/3 upon date of grant, 1/3 on December 1, 2019 and 1/3 on November 30, 2020. The fair value of these options as of August 31, 2019 was approximately $54,000 and is reflected as selling, general and administrative expenses in the accompanying consolidated statements of comprehensive income (loss). As of August 31, 2019, there was approximately $107,000 of total unrecognized compensation cost related to the non-vested options of common stock.

Per the Amendment Agreement, based upon certain performance criteria, the Company shall grant Oleg Mikulinsky a percentage of up to 8,000 of qualified stock options of the Company’s common stock. For market-based vesting condition options, accounting principles do not require that the market condition be met in order for the compensation cost to be recognized. Fair value of these options has been determined using a Monte Carlo valuation approach and is being recognized over the requisite service period, regardless if the market condition will be met. During fiscal 2019, 2,666 of qualified stock options will be expensed over the requisite service period. The fair value of these options as of August 31, 2019 was approximately $14,000, and is reflected as selling, general and administrative expenses in the accompanying consolidated statement of comprehensive income (loss). As of August 31, 2019, there was approximately $5,000 of total unrecognized compensation cost related to these market-based vesting condition options of common stock. For performance-based vesting condition options, the Company estimated the fair value of the qualified stock options that met certain performance targets by the end of the fiscal 2018 requisite service period using a Black-Scholes valuation model. The total estimated fair value of 4,444 of qualified options was approximately $15,000 as of August 31, 2019. Since these options have not been granted, the Company re-values the fair value of these options each period and records an adjustment to compensation expense. The adjustment made to compensation expense related to these options during the three and nine months ended August 31, 2019 was approximately ($1,000) and $5,500, respectively, and is reflected as selling, general and administrative expenses in the accompanying consolidated statements of comprehensive income (loss).

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Restricted common shares

As of April 15, 2016, the Company entered into Amended and Restated Employment Agreements (“Employment Agreements”) with each of the Company’s Co-CEOs. The Employment Agreements provide for the grant of shares of the Company’s common stock based on certain performance measures being attained by each of the Company’s Co-CEOs during fiscal year 2016 and fiscal year 2017. The Employment Agreements state if David Portnoy and Mark Portnoy are employed by the Company on November 30, 2016 and November 30, 2017, then no later than February 28, 2017 and February 28, 2018, respectively, the Company will grant up to 186,487 and 162,163 shares of common stock for each fiscal year. Based upon the performance measures attained as of November 30, 2016, the Company granted 183,145 and 159,257 shares of common stock to David Portnoy and Mark Portnoy, respectively. There was $0 of total unrecognized compensation cost as of August 31, 2019 and August 31, 2018, respectively. Based upon the performance measures being attained as of November 30, 2017, David Portnoy and Mark Portnoy earned a total of 121,801 and 105,915 shares of common stock, respectively. Pursuant to the terms of the Employment Agreements, the Co-CEOs each opted to receive a lump sum cash payment in lieu of 30,000 shares of earned common stock which amounted to approximately $444,000. The Company then granted the remaining earned shares of 91,801 and 75,915 to David Portnoy and Mark Portnoy, respectively. The fair value of the shares granted was approximately $756,000. There was $0 and $0 of total unrecognized compensation cost as of August 31, 2019 and August 31, 2018, respectively.

As of April 18, 2016, the Company entered into a second Amendment Agreement (the “Amendment”), with the Company’s CIO Oleg Mikulinsky effective December 1, 2015, amending certain terms of the Amendment Agreement dated May 1, 2013 and Mikulinsky Employment Agreement dated March 5, 2012. The Amendment provides for the grant of shares of the Company’s common stock based on certain performance measures being attained by the Company during fiscal year 2016 and fiscal year 2017. The Amendment states if Executive is employed by the Company on November 30, 2016 and November 30, 2017, then no later than February 28, 2017 and February 28, 2018, respectively, the Company will grant Executive up to 20,000 shares of restricted stock based on performance as set forth in the Amendment per each fiscal year. Based upon performance measures being attained as of November 30, 2016, the Company granted 19,620 shares of common stock to Oleg Mikulinksy. There was $0 of total unrecognized compensation cost as of August 31, 2019 and August 31, 2018, respectively. Based upon performance measures being attained as of November 30, 2017, the Company will grant a total of 14,729 shares of common stock to Oleg Mikulinksy. The fair value of the shares to be granted is approximately $80,000. There was $0 and $0 of total unrecognized compensation cost as of August 31, 2019 and August 31, 2018, respectively.

Note 9 – 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.

Per the License and Royalty Agreement with Lifecell, there is a $1,000,000 cap on the amount of royalty due to the Company per year and a $10,000,000 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 approximately $9,000,000 in royalty income due under the terms of the License and Royalty Agreement, of which, Lifecell has paid the Company approximately $8,250,000 as of August 31, 2019. The balance of approximately $750,000 is reflected as Accounts Receivable on the accompanying consolidated balance sheets.

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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 initial license fees for the technology agreements and processing and storage royalties earned under the technology agreements for the three and nine months ended August 31, 2019 and August 31, 2018. The initial license fees and processing and storage royalties are reflected in licensee and royalty income in the accompanying consolidated statements of comprehensive income (loss).

Processing and Storage Royalties
	Three Months Ended August 31, 2019		Nine Months Ended August 31, 2019
License and royalty income	$	423,173	$	625,001
Total	$	423,173	$	625,001
	Three Months Ended August 31, 2018		Nine Months Ended August 31, 2018
License and royalty income	$	539,286	$	742,445
Total	$	539,286	$	742,445

Note 10 – Legal Proceedings

On December 3, 2015, a complaint styled Gary T. Brotherson, M.D., et al. v. Cryo-Cell International, Inc., Case No. 15-007461-CI, Circuit Court, Sixth Judicial Circuit, Pinellas County, Florida, was served on the Company, naming it as defendant and alleging, among other things, that the Company breached certain agreements with plaintiffs and seeking damages in excess of $15,000, the jurisdictional amount of the court in which the action is pending. On January 12, 2016, the Company served its answer, affirmative defenses, and counterclaim against the plaintiffs. The Company believes the plaintiffs’ claims are without merit and it intends to contest the action vigorously. At this time, it is not possible for the Company to estimate the loss or the range of possible loss in the event of an unfavorable outcome, as the ultimate resolution of the complaint is uncertain at this time. No amounts have been accrued as of August 31, 2019.

In addition, from time to time the Company is subject to proceedings, lawsuits, contract disputes and other claims in the normal course of its business. The Company believes that the ultimate resolution of current matters should not have a material adverse effect on the Company’s business, consolidated financial position or results of operations. It is possible, however, that there could be an unfavorable ultimate outcome for or resolution which could be material to the Company’s results of operations for a particular quarterly reporting period. Litigation is inherently uncertain and there can be no assurance that the Company will prevail. The Company does not include an estimate of legal fees and other related defense costs in its estimate of loss contingencies.

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Note 11 – Share Repurchase Plan

In December 2011, the Company’s Board of Directors authorized management at its discretion to repurchase up to one million (1,000,000) shares of the Company’s outstanding common stock. On June 6, 2012, the Board of Directors of the Company increased the number of shares of the Company’s outstanding common stock that management is authorized to repurchase to up to three million (3,000,000). On April 8, 2015, the Board of Directors of the Company increased the number of shares of the Company’s outstanding common stock that management is authorized to repurchase to up to six million (6,000,000) shares. On October 6, 2016, the Board of Directors of the Company increased the number of shares of the Company’s outstanding common stock that management is authorized to repurchase to up to eight million (8,000,000) shares. The repurchases must be effectuated through open market purchases, privately negotiated block trades, unsolicited negotiated transactions, and/or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission or in such other manner as will comply with the provisions of the Securities Exchange Act of 1934.

As of August 31, 2019, the Company had repurchased an aggregate of 5,801,086 shares of the Company’s common stock at an average price of $3.37 per share through open market and privately negotiated transactions. The Company did not purchase any of the Company’s common stock during the nine months ended August 31, 2019 and August 31, 2018.

The repurchased shares will be held as treasury stock at cost and have been removed from common shares outstanding as of August 31, 2019 and November 30, 2018. As of August 31, 2019, and November 30, 2018, 5,801,086 and 5,801,086 shares, respectively, were held as treasury stock.

Subsequent to the balance sheet date, the Company has not repurchased any additional shares of the Company’s common stock.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statements

This Form 10-Q, press releases and certain information provided periodically in writing or orally by the Company’s officers or its agents may contain statements which constitute “forward-looking statements”. The terms “Cryo-Cell International, Inc.,” “Cryo-Cell,” “Company,” “we,” “our” and “us” refer to Cryo-Cell International, Inc. The words “expect,” “anticipate,” “believe,” “goal,” “strategy,” “plan,” “intend,” “estimate” and similar expressions and variations thereof, if used, are intended to specifically identify forward-looking statements. Those statements appear in a number of places in this Form 10-Q and in other places, and include statements regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things:

(i) our future performance and operating results;

(ii) our future operating plans;

(iii) our liquidity and capital resources; and

(iv) our financial condition, accounting policies and management judgments.

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Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. The factors that might cause such differences include:

(i) any adverse effect or limitations caused by recent increases in government regulation of stem cell storage facilities;

(ii) any increased competition in our business including increasing competition from public cord blood banks particularly in overseas markets but also in the U.S.;

(iii) any decrease or slowdown in the number of people seeking to store umbilical cord blood stem cells or decrease in the number of people paying annual storage fees;

(iv) any new services relating to other types of stem cells that have not yet been offered commercially, and there is no assurance that other stem cell services will be launched or will gain market acceptance;

(v) any adverse impacts on revenue or operating margins due to the costs associated with increased growth in our business, including the possibility of unanticipated costs relating to the operation of our facility and costs relating to the commercial launch of new types of stem cells;

(vi) any unique risks posed by our international activities, including but not limited to local business laws or practices that diminish our affiliates’ ability to effectively compete in their local markets;

(vii) any technological or medical breakthroughs that would render our business of stem cell preservation obsolete;

(viii) any material failure or malfunction in our storage facilities; or any natural disaster or act of terrorism that adversely affects stored specimens;

(ix) any adverse results to our prospects, financial condition or reputation arising from any material failure or compromise of our information systems;

(x) the costs associated with defending or prosecuting litigation matters, particularly including litigation related to intellectual property, and any material adverse result from such matters;

(xi) the success of our licensing agreements and their ability to provide us with royalty fees;

(xii) any difficulties and increased expense in enforcing our international licensing agreements;

(xiii) any adverse performance by or relations with any of our licensees;

(xiv) any inability to enter into new licensing arrangements including arrangements with non-refundable upfront fees;

(xv) any inability to realize cost savings as a result of recent acquisitions;

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(xvi) any inability to realize a return on an investment;

(xvii) any adverse impact on our revenues and operating margins as a result of discounting of our services in order to generate new business in tough economic times where consumers are selective with discretionary spending;

(xviii) the success of our global expansion initiatives;

(xix) our actual future ownership stake in future therapies emerging from our collaborative research partnerships;

(xx) our ability to minimize our future costs related to R&D initiatives and collaborations and the success of such initiatives and collaborations;

(xxi) any inability to successfully identify and consummate strategic acquisitions;

(xxii) any inability to realize benefits from any strategic acquisitions;

(xxiii) the Company’s ability to realize a profit on the acquisition of PrepaCyte-CB and Cord:Use;

(xxiv) the costs associated with proxy contests and its impact on our business and

(xxv) other factors many of which are beyond our control.

We undertake no obligation to publicly update or revise the forward-looking statements made in this Form 10-Q to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events.

Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. Cryo-Cell International, Inc. undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risk factors described in other documents the Company files from time to time with the Securities and Exchange Commission, including the Annual Report on Form 10-K filed by the Company and any Current Reports on Form 8-K filed by the Company.

Overview

The Company is engaged in cellular processing and cryogenic storage, with a current focus on the collection and preservation of umbilical cord blood stem cells for family use. The Company’s principal sources of revenues are service fees for cord blood processing and preservation for new customers and recurring annual storage fees. Effective April 2016, the Company offers two pricing models, a standard plan and premium plan. The Company charges fees of $1,675 for the standard plan and $2,025 for the premium plan to new clients for the collection kit, processing, testing and return medical courier service, with discounts in the case of multiple children from the same family and in other circumstances. The Company charges an annual storage fee of $175 for new clients that enroll in the standard and premium plans; storage fees for existing customers depend on the contracts with such customers. The Company continues to offer a one-time payment plan for 21 years of storage and a life-time payment plan, pursuant to which the client is charged $4,580 for the standard plan and $4,930 for the premium plan and $5,595 for the standard plan and $6,595 for the premium plan, respectively, less discounts in the case of multiple children from the same family and in other circumstances. The one-time plan includes the collection kit,

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processing and testing, return medical courier service and 21 years of pre-paid storage fees. The life-time plan includes the collection kit, processing and testing, return medical courier service and pre-paid storage fees for the life of the client. The Company also receives other income from licensing fees and royalties from global affiliates.

On June 11, 2018, Cryo-Cell completed its acquisition of substantially all of the assets (the “Cord Purchase”) of Cord:Use Cord Blood Bank, Inc., a Florida corporation (“Cord:Use”), in accordance with the definitive Asset Purchase Agreement between Cryo-Cell and Cord:Use (the “Purchase Agreement”), including without limitation Cord:Use’s inventory of public cord blood units existing as of the closing date (the “Public Cord Blood Inventory”) and Cord:Use’s shares of common stock of Tianhe Stem Cell Biotechnologies, Inc., an Illinois corporation (the “Tianhe Capital Stock”). Cord:Use was in the business of public and private cord blood and tissue, collection, processing, storage and banking. The aggregate consideration payable at closing under the Purchase Agreement was $14,000,000, with $10,500,000 paid in cash and the balance paid through the delivery to Seller of 465,426 shares of Cryo-Cell’s common stock, par value $0.01 per share (“Common Stock”), at $7.52 per share. In addition, Cryo-Cell assumed certain limited liabilities incurred by Cord:Use in connection with its business that were unpaid as of the closing date and that directly relate to the services to be provided after closing by Cryo-Cell. Cryo-Cell also assumed certain of Cord:Use’s contracts and the obligations arising therefrom after the closing. Additionally, Cord:Use is entitled to an earnout from Cryo-Cell’s sale of the Public Cord Blood Inventory from and after closing. Each calendar year after the closing, Cryo-Cell is required to pay to Cord:Use 75% of all gross revenues, net of any returns, received from the sale of public cord blood inventory in excess of $500,000. Such payments are to be made quarterly, within 30 days of the end of the last month of each calendar quarter, until the public cord blood inventory is exhausted. In addition, each calendar year after closing, until the public cord blood inventory is exhausted, for every $500,000 of retained gross revenues, net of any returns, received and retained by Cryo-Cell in excess of the initial $500,000 retained by Cryo-Cell during such year, Cryo-Cell is to deliver $200,000 worth of Cryo-Cell Common stock to Cord:Use, up to an aggregate value of $5,000,000. Cord:Use is also entitled to a portion of the gross profits generated, or deemed to have been generated, by Cryo-Cell from its ownership of the Tianhe Capital Stock.

During the nine months ended August 31, 2019, total revenue increased 16% as compared to the same period in 2018. The Company reported net income of approximately $1,446,000 or $0.19 per basic common share for the nine months ended August 31, 2019 compared to a net loss of ($1,746,000) or ($0.24) per basic common share for the nine months ended August 31, 2018. Net income for the nine months ended August 31, 2019 principally resulted from a 16% increase in revenue and a 5% decrease in selling, general and administrative expenses, which were offset by a 31% increase in cost of sales. Also included in the net income for the nine months ended August 31, 2019 was an impairment charge of $2,332,763. Due to changes in sales trends and estimated recoverability of cost capitalized into inventory, an impairment charge of was recognized during the second quarter of fiscal 2019 to reduce inventory from cost to net realizable value. Included in the net loss for the nine months ended August 31, 2018 was approximately $2,985,000 of income tax expense related to the reduction of the federal tax rate to 21% as of January 1, 2018 as a result of the Tax Cuts and Jobs Act that was signed into law on December 22, 2017. The decrease in the federal tax rate caused a decrease in the Company’s deferred tax asset which resulted in an increase in the income tax expense.

At August 31, 2019, the Company had cash and cash equivalents of $7,338,789. The Company’s cash increased approximately $1,299,000 during the first nine months of fiscal 2019. Cash provided by operations was approximately $5,124,000 which was offset by approximately $507,000 used for the purchase of property and equipment and approximately $3,325,000 used to repay the note payable. On May 20, 2016, the Company entered into a Credit Agreement (“Agreement”) with Texas Capital Bank, National Association (“TCB”) for a term loan of $8.0 million in senior credit facilities. The proceeds of the term loan were used by the Company to fund repurchases of the Company’s common stock. Subject to the terms of the Agreement, on May 20, 2016, TCB advanced the Company $100.00. On July 1, 2016, TCB advanced the remaining principal amount of $7,999,900 per a promissory note dated May 20, 2016 between the Company and TCB.

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On August 26, 2016, the Company entered into a First Amendment to Credit Agreement with TCB. Pursuant to terms of the First Amendment to Credit Agreement, on August 26, 2016, TCB made an additional advance to the Company in principal amount of $2,133,433 per an Amended and Restated Promissory Note dated August 26, 2016 between the Company and TCB. The proceeds of the term loan were used by the Company to fund the extinguishment of some of the revenue sharing agreements.

On June 11, 2018, the Company entered into a Second Amendment to Credit Agreement with TCB. Pursuant to the terms of the Second Amendment to Credit Agreement, TCB made an additional advance to the Company in principal amount of $9,000,000 per an Amended and Restated Promissory Note dated June 11, 2018 between the Company and TCB in the principal amount of $15,500,000. The proceeds were used to finance a portion of the purchase price of the Cord:Use purchase. See Note 2.

Consistent with its fiduciary duties, the board of directors and management has reviewed and will continue to review strategic options and opportunities for the Company, in order to maximize shareholder value. These options may include, but are not limited to, strategic mergers or acquisitions, investments in other public and/or private companies, repurchases of RSA interests, a deregistration of the Company’s common stock under the Securities Exchange Act of 1934 or a going-private transaction.    These options may or may not be related to the Company’s current business. In order to undertake any of the aforementioned activities, the Company may take on substantial debt or equity capital which could increase the risk of investment in the Company.

Results of Operations – Nine Month Period Ended August 31, 2019 Compared to the Nine Month Period Ended August 31, 2018

Revenue. Revenue for the nine months ended August 31, 2019 was $23,846,357 as compared to $20,624,803 for the same period in 2018. The increase in revenue was primarily attributable to a 15% increase in processing and storage fees.

Processing and Storage Fees. The increase in processing and storage fee revenue is attributable to a 13% increase in domestic recurring annual storage fee revenue and a 16% increase in the number of new domestic cord blood specimens processed in the first nine months of fiscal 2019 versus the same period in 2018.

Product Revenue. For the nine months ended August 31, 2019, revenue from the product sales was $70,795 compared to $84,208 for the nine months ended August 31, 2018.

Public Cord Blood Banking Revenue. On June 11, 2018, the Company entered into an Asset Purchase Agreement as described in Note 2. For the nine months ended August 31, 2019, revenue from the public cord blood banking sales was $529,041 compared to $65,575 for the nine months ended August 31, 2018.

Licensee Income. Licensee income for the nine months ended August 31, 2019 was $625,001 as compared to $742,445 for the 2018 period. Licensee and royalty income for the nine months ended August 31, 2019 and August 31, 2018 consists of royalty income earned on the processing and storage of specimens in India where the Company has a definitive License and Royalty Agreement.

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Per the License and Royalty Agreement with Lifecell, there is a $1,000,000 cap on the amount of royalty due to the Company per year and a $10,000,000 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 approximately $9,000,000 in royalty income due under the terms of the License and Royalty Agreement, of which, Lifecell has paid the Company approximately $8,250,000 as of August 31, 2019. The balance of approximately $750,000 is reflected as Accounts Receivable on the accompanying consolidated balance sheets.

Cost of Sales. Cost of sales for the nine months ended August 31, 2019 was $7,683,853 as compared to $5,864,826 for the same period in 2018, representing a 31% increase. Cost of sales includes wages and supplies associated with process enhancements to the existing production procedures and quality systems in the processing of cord blood specimens at the Company’s facility in Oldsmar, Florida and depreciation expense of approximately $145,000 and $89,000 for the nine months ended August 31, 2019 and 2018, respectively. Cost of Sales also includes $189,806 and $124,805 for the nine months ended August 31, 2019 and August 31, 2018, respectively, related to the costs associated with production of the Prepacyte^®-CB processing and storage system. Also included in Cost of Sales is $996,259 and $308,662 for the nine months ended August 31, 2019 and August 31, 2018, respectively, related to the public banking due to the Purchase Agreement with Cord:Use. The increase in cost of sales for the nine months ended August 31, 2019 versus August 31, 2018 is due to the increased costs due to the public cord blood bank and the increased costs associated with the 16% increase in the number of new domestic cord blood specimens processed in the first nine months of fiscal 2019 versus the same period in 2018.

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the nine months ended August 31, 2019 were $10,949,831 as compared to $11,513,190 for the 2018 period representing a 5% decrease. These expenses are primarily comprised of selling and marketing expenses, salaries and wages for personnel and professional fees. The decrease in selling, general and administrative expenses is primarily due to costs associated with the Purchase Agreement with CordUse in the third quarter of fiscal 2018. As of the nine months ended August 31, 2019 and August 31, 2018, $0 and $580,000, respectively, of selling, general and administrative expenses are associated with the CordUse purchase. These expenses are non-recurring expenses related to the acquisition of CordUse. The decrease in selling, general and administrative expenses is partially offset by an increase in professional fees of $409,000.

Research, Development and Related Engineering Expenses. Research, development and related engineering expenses for the nine months ended August 31, 2019 were $13,281 as compared to $64,927 for the 2018 period.

Depreciation and Amortization. Depreciation and amortization (not included in Cost of Sales) for the nine months ended August 31, 2019 was $159,600 compared to $124,865 for the 2018 period.

Change in the Fair Value of Contingent Consideration. Change in the fair value of the contingent consideration for the nine months ended August 31, 2019 was $636,278 compared to $0 for the 2018 period. The contingent consideration is the earnout that Cord:Use is entitled to from the Company’s sale of the public cord blood inventory from and after closing, described above. The contingent consideration was remeasured to fair value as of August 31, 2019. The estimated fair value of the contingent earnout was determined using a Monte Carlo analysis examining the frequency and mean value of the resulting earnout payments. The resulting value captures the risk associated with the form of the payout structure. The risk-neutral method is applied, resulting in a value that captures the risk associated with the form of the payout structure and the projection risk. The carrying amount of the liability may fluctuate significantly and actual amounts paid may be materially different from the estimated value of the liability.

Impairment of Public Inventory. The impairment of public inventory for the nine months ended August 31, 2019 was $2,332,763 compared to $0 for the 2018 period. Due to changes in sales trends and estimated recoverability of cost capitalized into inventory, an impairment charge of $2,332,763 was recognized during the nine months ended August 31, 2019 to reduce inventory from cost to net realizable value.

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Interest Expense. Interest expense during the nine months ended August 31, 2019, was $1,245,154 compared to $995,437 during the comparable period in 2018, of which, $609,832 and $473,130, respectively, related to the credit and subordination agreements with Texas Capital Bank, National Association as described in Note 6. The remaining interest expense is comprised of amounts due to the parties to the Company’s revenue sharing agreements based on the Company’s storage revenue collected.

Income Taxes. U.S. income tax expense for the nine months ended August 31, 2019 was $586,764 compared to $3,741,365 for the nine months ended August 31, 2018. Included in the $3,821,660 tax expense for the nine months ended August 31, 2018 is approximately $2,985,000 of expense related to the reduction of the federal tax rate to 21% as of January 1, 2018 as a result of the Tax Cuts and Jobs Act that was signed into law on December 22, 2017. The decrease in the federal tax rate caused a decrease in the Company’s deferred tax asset which resulted in an increase in the income tax expense.

Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. The ultimate realization of our deferred tax assets depends upon generating sufficient future taxable income prior to the expiration of the tax attributes. In assessing the need for a valuation allowance, we must project future levels of taxable income. This assessment requires significant judgment. We examine the evidence related to the recent history of tax losses, the economic conditions in which we operate and our forecasts and projections to make that determination.

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 geographic areas where the Company has license agreements. The Company recorded $67,594 and $80,295 for the nine months ended August 31, 2019 and 2018, respectively, of foreign income tax expense which is included in income tax expense in the accompanying consolidated statements of comprehensive income (loss).

Results of Operations - Three Month Period Ended August 31, 2019 Compared to the Three-Month Period Ended August 31, 2018

Revenue. Revenue for the three months ended August 31, 2019 was $8,223,393 as compared to $7,871,222 for the same period in 2018, an increase of 4%.

Processing and Storage Fees. For the three months ended August 31, 2019, processing and storage fees revenue was $7,606,624 compared to $7,237,053 for the three months ended August 31, 2018. The increase in processing and storage fee revenue is attributable to a 10% increase in domestic recurring annual storage fee revenue.

Product Revenue. For the three months ended August 31, 2019, revenue from the product sales was $33,035 compared to $29,308 for the three months ended August 31, 2018.

Public Cord Blood Banking Revenue. On June 11, 2018, the Company entered into an Asset Purchase Agreement as described in Note 2. For the three months ended August 31, 2019, revenue from the public cord blood banking sales was $160,561 compared to $65,575 for the three months ended August 31, 2018.

Licensee Income. Licensee income for the three months ended August 31, 2019, was $423,173 as compared to $539,286 for the 2018 quarter. Licensee income for the three months ended August 31, 2019 and August 31, 2018 consisted of royalty income earned on the processing and storage of cord blood stem cell specimens in India where the Company has a definitive License and Royalty Agreement.

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Per the License and Royalty Agreement with Lifecell, there is a $1,000,000 cap on the amount of royalty due to the Company per year and a $10,000,000 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 approximately $9,000,000 in royalty income due under the terms of the License and Royalty Agreement, of which, Lifecell has paid the Company approximately $8,250,000 as of August 31, 2019. The balance of approximately $750,000 is reflected as Accounts Receivable on the accompanying consolidated balance sheets.

Cost of Sales. Cost of sales for the three months ended August 31, 2019 was $2,589,335 as compared to $2,486,180 for the same period in 2018, representing a 4% increase. Cost of sales includes wages and supplies associated with process enhancements to the existing production procedures and quality systems in the processing of cord blood specimens at the Company’s facility in Oldsmar, Florida and depreciation expense of approximately $49,000 and $42,000 for the three months ended August 31, 2019 and 2018, respectively. Also, included in cost of sales is $25,180 and $27,740 related to the costs associated with production of the Prepacyte^®-CB processing and storage system for the three months ended August 31, 2019 and August 31, 2018, respectively. Public cord blood banking costs included in cost of sales for the three months ended August 31, 2019 and 2018, are $323,898 and $308,662, respectively.

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended August 31, 2019 were $3,556,602 as compared to $4,390,614 for the 2018 period, representing a 19% decrease. Selling, general and administrative expenses is primarily comprised of expenses for selling and marketing expenses, salaries and wages for personnel and professional fees. As of the three months ended August 31, 2019 and August 31, 2108, $0 and $580,000, respectively, of selling, general and administrative expenses are associated with the CordUse purchase. These expenses were non-recurring expenses related to the acquisition of CordUse.

Research, Development and Related Engineering Expenses. Research, development and related engineering expenses for the three months ended August 31, 2019 were $2,440 as compared to $22,234 for the 2018 period.

Depreciation and Amortization. Depreciation and amortization (not included in Cost of Sales) for the three months ended August 31, 2019 was $47,286 compared to $52,072 for the 2018 period.

Change in the Fair Value of Contingent Consideration. Change in the fair value of the contingent consideration for the three months ended August 31, 2019 was $34,649 compared to $0 for the 2018 period. The contingent consideration is the earnout that Cord:Use is entitled to from the Company’s sale of the public cord blood inventory from and after closing, described above. The contingent consideration was remeasured to fair value as of August 31, 2019. The estimated fair value of the contingent earnout was determined using a Monte Carlo analysis examining the frequency and mean value of the resulting earnout payments. The resulting value captures the risk associated with the form of the payout structure. The risk-neutral method is applied, resulting in a value that captures the risk associated with the form of the payout structure and the projection risk. The carrying amount of the liability may fluctuate significantly and actual amounts paid may be materially different from the estimated value of the liability.

Interest Expense. Interest expense during the three months ended August 31, 2019, was $413,942 compared to $410,366 during the comparable quarter in 2018. Interest expense for the three months ended August 31, 2019 and August 31, 2018 consists of $190,148 and $232,946, respectively, related to the credit and subordination agreements with Texas Capital Bank, National Association as described in Note 6. The remaining interest expense is comprised of amounts due to the parties to the Company’s revenue sharing agreements based on the Company’s storage revenue collected.

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Income Taxes. U.S. income tax expense for the three months ended August 31, 2019 and August 31, 2018 was $452,982 and $244,749, respectively.

Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. The ultimate realization of our deferred tax assets depends upon generating sufficient future taxable income prior to the expiration of the tax attributes. In assessing the need for a valuation allowance, we must project future levels of taxable income. This assessment requires significant judgment. We examine the evidence related to the recent history of tax losses, the economic conditions in which we operate and our forecasts and projections to make that determination.

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 geographic areas where the Company has license agreements. The Company recorded $45,766 and $58,323 for the three months ended August 31, 2019 and 2018, respectively, of foreign income tax expense, which is included in income tax expense in the accompanying consolidated statements of comprehensive income (loss).

Liquidity and Capital Resources

On May 20, 2016, the Company entered into a Credit Agreement (“Agreement”) with Texas Capital Bank, National Association (“TCB”) for a term loan of $8.0 million in senior credit facilities. The proceeds of the term loan were used by the Company to fund repurchases of the Company’s common stock. Subject to the terms of the Agreement, on May 20, 2016, TCB advanced the Company $100.00. On July 1, 2016, TCB advanced the remaining principal amount of $7,999,900 per a promissory note dated May 20, 2016 between the Company and TCB.

On August 26, 2016, the Company entered into a First Amendment to Credit Agreement with TCB. Pursuant to terms of the First Amendment to Credit Agreement, on August 26, 2016, TCB made an additional advance to the Company in principal amount of $2,133,433 per an Amended and Restated Promissory Note dated August 26, 2016 between the Company and TCB. The additional proceeds of the term loan were used by the Company to fund the extinguishment of revenue sharing agreements.

On June 11, 2018, the Company entered into a Second Amendment to Credit Agreement with TCB. Pursuant to the terms of the Second Amendment to Credit Agreement, TCB made an additional advance to the Company in principal amount of $9,000,000 per an Amended and Restated Promissory Note dated June 11, 2018 between the Company and TCB in the principal amount of $15,500,000. The proceeds were used to finance a portion of the purchase price of the Cord:Use Purchase.

Prior to the loans, the Company’s principal source of cash has been from sales of its umbilical cord blood program to customers and royalties from licensees.

At August 31, 2018, the Company had cash and cash equivalents of $7,338,789 as compared to $6,040,033 at November 30, 2018. The increase in cash and cash equivalents during the nine months ended August 31, 2019 was primarily attributable to the following:

Net cash provided by operating activities for the nine months ended August 31, 2019 was $5,124,394, which was attributable to the Company’s operating activities and an increase in the Company’s new clients choosing the prepaid storage plans versus the annual storage fee plan.

42

Net cash provided by operating activities for the nine months ended August 31, 2018 was $4,489,342, which was attributable to the Company’s operating activities and an increase in the Company’s new clients choosing the prepaid storage plans versus the annual storage fee plan.

Net cash used in investing activities for the nine months ended August 31, 2019 was $506,341 which was primarily attributable to cash used to purchase property and equipment.

Net cash used in investing activities for the nine months ended August 31, 2018 was $11,213,483 which was primarily attributable to cash used to purchase CordUse in the amount of $10,500,000 and purchases of property, equipment and sales and purchases of marketable securities and other investments and intangibles of $713,483.

Net cash used in financing activities for the nine months ended August 31, 2019 was $3,319,297, which was primarily attributable to the payments of $3,324,997 to repay the note payable described above offset by the receipt of $5,700 from the exercise of stock options.

Net cash provided by financing activities for the nine months ended August 31, 2018 was $7,484,959, which was primarily attributable to the payments of $1,516,666 to repay the note payable described above offset by the receipt of $170,925 from the exercise of stock options and $9,000,000 received as part of the Second Amendment to Credit Agreement with TCB described above.

The Company does not have a line of credit.

The Company anticipates making discretionary capital expenditures of approximately $500,000 over the next twelve months for software enhancements and purchases of property and equipment. The Company anticipates funding future property and equipment purchases with cash-on-hand and cash flows from future operations.

The Company anticipates that its cash and cash equivalents, marketable securities and cash flows from future operations will be sufficient to fund its known cash needs for at least the next 12 months. Cash flows from operations will depend primarily upon increasing revenues from sales of its umbilical cord blood and cord tissue cellular storage services and managing discretionary expenses. If expected increases in revenues are not realized, or if expenses are higher than anticipated, the Company may be required to reduce or defer cash expenditures or otherwise manage its cash resources during the next 12 months so that they are sufficient to meet the Company’s cash needs for that period. In addition, the Company may consider seeking equity or debt financing if deemed appropriate for its plan of operations, and if such financing can be obtained on acceptable terms. There is no assurance that any reductions in expenditures, if necessary, will not have an adverse effect on the Company’s business operations, including sales activities and the development of new services and technology.

Critical Accounting Policies

This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and disclosures of contingent assets and liabilities. For a full discussion of our accounting policies please refer to Note 1 to the Consolidated Financial Statements included in our 2018 Annual Report on Form 10-K filed with the SEC on February 28, 2019. Our most critical accounting policies and estimates include: recognition of revenue and the related allowance for doubtful accounts, stock-based compensation, income taxes,

43

inventory and license and revenue sharing agreements. We continually evaluate our judgments, estimates and assumptions. We base our estimates on the terms of underlying agreements, historical experience and other factors that we believe are reasonable based on the circumstances, the results of which form our management’s basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. There have been changes to our critical accounting policies and estimates from the information provided in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2018 Annual Report on Form 10-K. Please refer to Note 1 to the Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

See Note 1 to the Consolidated Financial Statements.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonable likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on their most recent review, as of the end of the period covered by this report, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures are effective, and that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure and are effective to ensure that such information is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. In March 2018, the Company received notice that shares of the Company’s common stock issued to certain executive officers pursuant to the Company’s 2012 Stock Incentive Plan had purportedly been issued in excess of the shares reserved for issuance under the Plan. The Company has established an independent committee of the Board of Directors to review this issue. As part of this research, management is reviewing the Company’s disclosure controls and procedures.

The Company has not made an amended 8-K filing with respect to the Current Reports on Form 8-K that was filed on July 16, 2015 to announce the acquisition of PrepaCyte. Accordingly, the Company is not deemed a timely filer. Management intends to subsequently make this amended 8-K filing to include the required pre-acquisition financial statements of PrepaCyte as well as the required pro forma financial information.

44

Changes in Internal Control Over Financial Reporting

Other than as disclosed in “Evaluation of Disclosure Controls and Procedures” above with the respect to the matters reviewed in March 2018, there were no other changes in the Company’s internal controls over financial reporting during the nine months ended August 31, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Limitations on the Effectiveness of Controls

Our management, including our Co-CEOs and CFO, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

CEO and CFO Certifications

Appearing as exhibits 31.1, 31.2 and 31.3 to this report there are Certifications of the Co-CEOs and the CFO. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this report is the information concerning the evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On December 3, 2015, a complaint styled Gary T. Brotherson, M.D., et al. v. Cryo-Cell International, Inc., Case No. 15-007461-CI, Circuit Court, Sixth Judicial Circuit, Pinellas County, Florida, was served on the Company, naming it as defendant and alleging, among other things, that the Company breached certain agreements with plaintiffs and seeking damages in excess of $15,000, the jurisdictional amount of the court in which the action is pending. On January 12, 2016, the Company served its answer, affirmative defenses, and counterclaim against the plaintiffs. The Company believes the plaintiffs’ claims are without merit and it intends to contest the action vigorously. At this time, it is not possible for the Company to estimate the loss or the range of possible loss in the event of an unfavorable outcome, as the ultimate resolution of the complaint is uncertain at this time. No amounts have been accrued as of August 31, 2019.

45

In addition, from time to time the Company is subject to proceedings, lawsuits, contract disputes and other claims in the normal course of its business. The Company believes that the ultimate resolution of current matters should not have a material adverse effect on the Company’s business, consolidated financial position or results of operations. It is possible, however, that there could be an unfavorable ultimate outcome for or resolution which could be material to the Company’s results of operations for a particular quarterly reporting period. Litigation is inherently uncertain and there can be no assurance that the Company will prevail. The Company does not include an estimate of legal fees and other related defense costs in its estimate of loss contingencies.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On June 11, 2018, Cryo-Cell completed its acquisition of substantially all of the assets (the “Cord Purchase”) of Cord:Use Cord Blood Bank, Inc., a Florida corporation (“Cord:Use”), in accordance with the definitive Asset Purchase Agreement between Cryo-Cell and Cord:Use (the “Purchase Agreement”). In connection therewith, Cryo-Cell issued to Cord: Use 465,426 unregistered shares of Cryo-Cell’s common stock, par value $0.01 per share, at $7.52 per share.

ISSUER PURCHASE OF EQUITY SECURITIES

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
June 1 – 30, 2019		—	$	—		—		2,198,914
July 1 – 31, 2019		—	$	—		—		2,198,914
August 1 – 31, 2019		—	$	—		—		2,198,914

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

46

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

47

ITEM 6. EXHIBITS

(a) Exhibits

31.1	Certification of Co-CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Co-CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3	Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

48

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Cryo-Cell International, Inc.

/s/ David Portnoy

David Portnoy

Co-Chief Executive Officer

Cryo-Cell International, Inc.

/s/ Mark Portnoy

Mark Portnoy

Co-Chief Executive Officer

Cryo-Cell International, Inc.

/s/ Jill M. Taymans

Jill M. Taymans

Vice President, Finance, Chief Financial Officer

Date: October 15, 2019

49

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

I, David Portnoy, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cryo-Cell International, Inc. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d – 15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting;

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Dated: October 15, 2019	/s/ David Portnoy
	David Portnoy

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

I, Mark Portnoy, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cryo-Cell International, Inc. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d – 15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting;

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Dated: October 15, 2019	/s/ Mark Portnoy
	Mark Portnoy

EX-31.3

EXHIBIT 31.3

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Jill M. Taymans, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cryo-Cell International, Inc. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d – 15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting;

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Dated: October 15, 2019	/s/ Jill M. Taymans
	Jill M. Taymans

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cryo-Cell International, Inc. (the “Company”) on Form 10-Q for the quarter ended August 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Portnoy, Co-Chief Executive Officer of the Company, I, Mark Portnoy, Co-Chief Executive Officer of the Company, and I, Jill M. Taymans, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David Portnoy

David Portnoy

Co-Chief Executive Officer

October 15, 2019

/s/ Mark Portnoy

Mark Portnoy

Co-Chief Executive Officer

October 15, 2019

/s/ Jill M. Taymans

Jill M. Taymans

Vice President, Finance (Chief Financial Officer)

October 15, 2019

XML

Stockholders' Equity - Stock Option Activity (Detail) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2019	Aug. 31, 2018	Nov. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted			112,465
Service-Based Vesting Condition Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at November 30, 2018			1,001,365
Granted	110,965	0	112,465	51,636
Exercised			(2,500)
Expired/forfeited			(7,500)
Outstanding at August 31, 2019	1,103,830		1,103,830		1,001,365
Exercisable at August 31, 2019	1,004,312		1,004,312
Outstanding at November 30, 2018, Weighted Average Exercise Price			$ 2.77
Granted, Weighted Average Exercise Price			7.52
Exercised, Weighted Average Exercise Price			2.28
Expired/forfeited, Weighted Average Exercise Price			2.22
Outstanding at August 31, 2019, Weighted Average Exercise Price	$ 3.26		3.26		$ 2.77
Exercisable at August 31, 2019, Weighted Average Exercise Price	$ 2.83		$ 2.83
Outstanding, Weighted Average Remaining Contractual Term (Years)			4 years 2 months 8 days		3 years 11 months 19 days
Exercisable at August 31, 2019, Weighted Average Remaining Contractual Term (Years)			3 years 8 months 19 days
Outstanding at November 30, 2018			$ 4,580,967
Granted			735
Exercised			14,175
Expired/forfeited			39,800
Outstanding at August 31, 2019	$ 4,728,540		4,728,540		$ 4,580,967
Exercisable at August 31, 2019	$ 4,727,576		$ 4,727,576

XML

Intangible Assets - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2019	Aug. 31, 2018
Finite-Lived Intangible Assets, Net [Abstract]
Amortization expense	$ 19,000	$ 27,000	$ 73,000	$ 49,000

XML

Income (Loss) per Common Share - Calculation of Basic and Diluted Earnings (loss) per Share (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2019	Aug. 31, 2018
Net Income (Loss) Attributable to Parent [Abstract]
Net Income (Loss)	$ 1,116,259	$ 244,984	$ 1,445,809	$ (1,745,582)
Denominator:
Weighted-average shares outstanding-basic	7,803,333	7,694,662	7,802,676	7,350,868
Dilutive common shares issuable upon exercise of stock options	641,904	681,013	627,575
Weighted-average shares-diluted	8,445,237	8,375,675	8,430,251	7,350,868
Net income (loss) per common share:
Basic	$ 0.14	$ 0.03	$ 0.19	$ (0.24)
Diluted	$ 0.13	$ 0.03	$ 0.17	$ (0.24)

XML

Note Payable (Tables)

9 Months Ended

Aug. 31, 2019

Debt Disclosure [Abstract]

Schedule of Note Payable Obligation

As of August 31, 2019 and November 30, 2018, the note payable obligation was as follows:

	August 31, 2019			November 30, 2018
Note payable	$	9,883,433		$	13,208,433
Unamortized debt issuance costs		(178,906	)		(264,923	)
Net note payable	$	9,704,527		$	12,943,510
Current portion of note payable	$	3,100,000		$	3,100,000
Long-term note payable, net of debt issuance costs		6,604,527			9,843,510
Total	$	9,704,527		$	12,943,510

Summary of Interest Expense on Note Payable

Interest expense on the note payable for the three and nine months ended August 31, 2019 and August 31, 2018 was as follows:

	For the three months ended August 31, 2019		For the nine months ended August 31, 2019
Interest expense on notes payable	$	162,134	$	523,818
Debt issuance costs		28,014		86,014
Total interest expense	$	190,148	$	609,832

	For the three months ended August 31, 2018		For the nine months ended August 31, 2018
Interest expense on notes payable	$	204,609	$	393,254
Debt issuance costs		28,337		79,876
Total interest expense	$	232,946	$	473,130

XML

Acquisition (Tables)

9 Months Ended

Aug. 31, 2019

Business Combinations [Abstract]

Summary of Fair Value of Consideration

The following summarizes the fair value of the consideration of the Acquisition:

Consideration
Cash	$	10,500,000
Cryo-Cell common stock		3,500,000
Cord blood inventory earnout		4,698,255
Consideration	$	18,698,255

Summary of Preliminary Allocation of Total Purchase Price

The following summarizes the preliminary allocation of the total purchase price for the Acquisition:

Accounts receivable	$	188,019
Inventory		16,037,957
Prepaid expenses		68,867
Property and equipment		568,407
Other asset - Tiahne capital stock		308,000
Brand		31,000
Customer relationships		960,000
Total identifiable net assets acquired		18,162,250
Less: Deferred revenue		(1,405,406	)
Goodwill		1,941,411
Total	$	18,698,255

Schedule of Unaudited Pro Forma Results

The following table provides the Company’s consolidated unaudited pro forma revenues, net income per basic and diluted common share had the results of the acquired businesses’ operations been included in its operations commencing on December 1, 2016, based on available information related to the respective operations. This proforma information presented is not necessarily indicative either of the combined results of operations that actually would have been realized by the Company had the acquisition been consummated at the beginning of the period for which the pro forma information is presented, or of future results, and does not account for any operation improvements to be made by the Company post-acquisition.

	Three months ended  August 31, 2018		Nine months ended  August 31, 2018
Revenue	$	7,871,222	$	22,794,591
Net income (loss)	$	244,984	($	3,797,189	)
Earnings (loss) per share:
Basic	$	0.03	($	0.52	)
Diluted	$	0.03	($	0.52	)

XML

Description of Business, Basis of Presentation and Significant Accounting Policies - Additional Information (Detail)				1 Months Ended	3 Months Ended				6 Months Ended	9 Months Ended
	Dec. 01, 2018 USD ($)	Jun. 01, 2017 USD ($)	Feb. 01, 2012 USD ($)	Dec. 31, 2005 USD ($)	Aug. 31, 2019 USD ($) CompensationPlan	May 31, 2019 USD ($)	Feb. 28, 2019 USD ($)	Aug. 31, 2018 USD ($)	May 31, 2019 USD ($)	Aug. 31, 2019 USD ($) Segments CompensationPlan Unit shares	Aug. 31, 2018 USD ($) shares	Nov. 30, 2018 USD ($)
Debt Securities, Available-for-sale [Line Items]
Deferred revenue					$ 31,674,315					$ 31,674,315
Deferred revenue current					8,781,229					8,781,229
Warranty payment		$ 100,000	$ 75,000	$ 50,000
Offset personal expenses		10,000
Commission paid					10,747					25,216
Capitalized contract acquisition costs, net of amortization expense	$ 329,231
Cumulative amortization expense	66,533
Additional capitalized contract acquisition costs, net of amortization expense					23,180					67,668
Valuation allowance					1,634,000					1,634,000		$ 1,634,000
U.S. Income tax expense (benefit)					453,000			$ 245,000		587,000	$ 3,741,000
Income tax expense related to the reduction of the federal tax										$ 2,985,000
Federal tax rate										21.00%
Foreign Income Tax Expense					46,000			58,000		$ 68,000	80,000
Minimum percentage probability of realized tax benefit on settlement										50.00%
Provisions for interest or penalties related to uncertain tax positions					0			0		$ 0	0
Uncertain tax provisions					0			0		0	0
Impairment on long lived assets					0			0		0	0
Goodwill					$ 1,941,411					$ 1,941,411		$ 1,941,411
Number of employee stock based compensation plan | CompensationPlan					2					2
Stock-based option compensation expense										$ 240,000	324,000
Unrealized holding gains, trading securities								37,536		12,328
Unrealized (loss) gain on marketable securities, net of tax								$ 285,255			405,255
Cumulative-effect adjustment from accumulated other comprehensive income to retained earnings							$ 341,000
Unrealized holding gain (losses), marketable securities					$ 35,000					$ (1,000)
Payment warranty				$ 50,000
Increased payment warranty		$ 100,000	75,000
Additional payment warranty			$ 10,000
Stock compensation expense reversed											$ 444,000
Stock compensation, number of shares opted to lump sum cash payment | shares										30,000	30,000
Impairment charges						$ 2,332,763			$ 2,332,763	$ 2,332,763
Duke University [Member]
Debt Securities, Available-for-sale [Line Items]
Asset purchase agrrement closing date										Jan. 31, 2020
Accounting Standards Update 2014-09 [Member]
Debt Securities, Available-for-sale [Line Items]
Incremental contract acquisition cost	329,231
Reversed incremental acquisition cost	18,408
ASC 606 adoption adjustment, net of tax	253,447									$ 253,447
Cumulative effect on retained earnings, tax	$ 94,192
Option One [Member]
Debt Securities, Available-for-sale [Line Items]
Contracted storage amortization period					21 years					21 years
Option Two [Member]
Debt Securities, Available-for-sale [Line Items]
Contracted storage amortization period					1 year					1 year
Option Three [Member]
Debt Securities, Available-for-sale [Line Items]
Contracted storage amortization period										life-time
Contracted storage amortization description										The life-time storage plan is based on a life expectancy of 81 years, which is the current estimate by the Center for Disease Control for United States women’s life expectancy and concluded that additional data analysis would result in an immaterial difference in revenue
Previously Reported [Member]
Debt Securities, Available-for-sale [Line Items]
Unrealized (loss) gain on marketable securities, net of tax											$ 405,255
Accounts Receivables [Member]
Debt Securities, Available-for-sale [Line Items]
Period of doubtful for accounts receivable due from client										30 days
Umbilical Cord Blood and Cord Tissue Stem Cell Service and PrepaCyte-CB [Member]
Debt Securities, Available-for-sale [Line Items]
Number of reportable segments | Segments										3
Umbilical Cord Blood and Cord Tissue Stem Cell Service and PrepaCyte-CB [Member] | Duke University [Member]
Debt Securities, Available-for-sale [Line Items]
Inventory, in units | Unit										5,981
Number of units, per month | Unit										12
Umbilical Cord Blood and Cord Tissue Stem Cell Service and PrepaCyte-CB [Member] | Duke University [Member] | Maximum [Member]
Debt Securities, Available-for-sale [Line Items]
Inventory, in units | Unit										144

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Legal Proceedings

9 Months Ended

Aug. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings

Note 10 – Legal Proceedings

On December 3, 2015, a complaint styled Gary T. Brotherson, M.D., et al. v. Cryo-Cell International, Inc., Case No. 15-007461-CI, Circuit Court, Sixth Judicial Circuit, Pinellas County, Florida, was served on the Company, naming it as defendant and alleging, among other things, that the Company breached certain agreements with plaintiffs and seeking damages in excess of $15,000, the jurisdictional amount of the court in which the action is pending. On January 12, 2016, the Company served its answer, affirmative defenses, and counterclaim against the plaintiffs. The Company believes the plaintiffs’ claims are without merit and it intends to contest the action vigorously. At this time, it is not possible for the Company to estimate the loss or the range of possible loss in the event of an unfavorable outcome, as the ultimate resolution of the complaint is uncertain at this time. No amounts have been accrued as of August 31, 2019.

In addition, from time to time the Company is subject to proceedings, lawsuits, contract disputes and other claims in the normal course of its business. The Company believes that the ultimate resolution of current matters should not have a material adverse effect on the Company’s business, consolidated financial position or results of operations. It is possible, however, that there could be an unfavorable ultimate outcome for or resolution which could be material to the Company’s results of operations for a particular quarterly reporting period. Litigation is inherently uncertain and there can be no assurance that the Company will prevail. The Company does not include an estimate of legal fees and other related defense costs in its estimate of loss contingencies.

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Note Payable

9 Months Ended

Aug. 31, 2019

Debt Disclosure [Abstract]

Note Payable

Note 6 – Notes Payable

On May 20, 2016, the Company entered into a Credit Agreement (“Agreement”) with Texas Capital Bank, National Association (“TCB”) for a term loan of $8.0 million in senior credit facilities. The proceeds of the term loan were used by the Company to fund repurchases of the Company’s common stock. Subject to the terms of the Agreement, on May 20, 2016, TCB advanced the Company $100.00. On July 1, 2016, TCB advanced the remaining principal amount of $7,999,900 per a promissory note dated May 20, 2016 between the Company and TCB, at a rate of 3.75% per annum plus LIBOR, payable monthly with a maturity date of July 2021. On August 26, 2016, the Company entered into a First Amendment to Credit Agreement with TCB. Pursuant to terms of the First Amendment to Credit Agreement, on August 26, 2016, TCB made an additional advance to the Company in principal amount of $2,133,433 per an Amended and Restated Promissory Note dated August 26, 2016 between the Company and TCB. The additional proceeds of the term loan were used by the Company to fund the extinguishment of revenue sharing agreements. On June 11, 2018, the Company entered into a Second Amendment to Credit Agreement with TCB. Pursuant to the terms of the Second Amendment to Credit Agreement, TCB increased the current outstanding principal amount of the loan from TCB by $9,000,000 to finance a portion of the purchase price of the Cord:Use Purchase. In connection therewith, Cryo-Cell executed and delivered to TCB a Second Amended and Restated Promissory Note, in the principal amount of $15,500,000. As of the three and nine months ended August 31, 2019, the Company paid interest of $162,134 and $523,818, respectively, which is reflected in interest expense on the accompanying consolidated statements of comprehensive income (loss). As of the three month and nine months ended August 31, 2018, the Company paid interest of $204,609 and $393,254, respectively, which is reflected in interest expense on the accompanying consolidated statements of comprehensive income (loss).

Collateral of the term and subordinated loans includes all money, securities and property of the Company.

The Company incurred debt issuance costs related to the term loan in the amount of $548,085 which is recorded as a direct reduction of the carrying amount of the note payable and amortized over the life of the loan. As of the three and nine months ended August 31, 2019, $28,014 and $86,014, respectively, of the debt issuance costs were amortized and are reflected in interest expense on the accompanying consolidated statements of comprehensive income (loss). As of the three and nine months ended August 31, 2018, $28,337 and $79,876, respectively, of the debt issuance costs were amortized and are reflected in interest expense on the accompanying consolidated statements of comprehensive income.

As of August 31, 2019 and November 30, 2018, the note payable obligation was as follows:

	August 31, 2019			November 30, 2018
Note payable	$	9,883,433		$	13,208,433
Unamortized debt issuance costs		(178,906	)		(264,923	)
Net note payable	$	9,704,527		$	12,943,510
Current portion of note payable	$	3,100,000		$	3,100,000
Long-term note payable, net of debt issuance costs		6,604,527			9,843,510
Total	$	9,704,527		$	12,943,510

Interest expense on the note payable for the three and nine months ended August 31, 2019 and August 31, 2018 was as follows:

	For the three months ended August 31, 2019		For the nine months ended August 31, 2019
Interest expense on notes payable	$	162,134	$	523,818
Debt issuance costs		28,014		86,014
Total interest expense	$	190,148	$	609,832

	For the three months ended August 31, 2018		For the nine months ended August 31, 2018
Interest expense on notes payable	$	204,609	$	393,254
Debt issuance costs		28,337		79,876
Total interest expense	$	232,946	$	473,130

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Inventory - Components of Inventory (Detail) - USD ($)	Aug. 31, 2019	Nov. 30, 2018
Inventory [Line Items]
Raw materials	$ 0	$ 0
Collection kits	39,137	19,163
Inventory reserve	(7,718)	(7,718)
Total inventory	13,677,845	16,035,873
Inventory, current portion	1,031,845	1,260,557
Inventory, long-term portion	12,646,000	14,775,316
Total inventory	13,677,845	16,035,873
All Other [Member]
Inventory [Line Items]
Work-in-process	130,217	188,085
Finished goods	23,811	5,262
Public Banking [Member]
Inventory [Line Items]
Finished goods	$ 13,492,398	$ 15,831,081

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Description of Business, Basis of Presentation and Significant Accounting Policies - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($)	9 Months Ended
	Aug. 31, 2019	Nov. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 874,691	$ 875,689
Contingent consideration	3,601,697	4,282,975
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable Securities	874,691
Trading Securities		68,816
Available-for-sale		806,873
Total	874,691	875,689
Contingent consideration	3,601,697	4,282,975
Total	3,601,697	4,282,975
Fair Value, Measurements, Recurring [Member] | Contingent Consideration [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Beginning Balance	4,282,975
Subtractions – Cord:Use earnout	(45,000)
Fair value adjustment	(636,278)
Ending balance	3,601,697
Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable Securities	874,691
Trading Securities		68,816
Available-for-sale		806,873
Total	874,691	875,689
Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable Securities	0
Total	0
Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable Securities	0
Total	0
Contingent consideration	3,601,697	4,282,975
Total	$ 3,601,697	$ 4,282,975

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Acquisition - Schedule of Unaudited Pro Forma Results (Detail) - USD ($)	3 Months Ended	9 Months Ended
	Aug. 31, 2018	Aug. 31, 2018
Business Combinations [Abstract]
Revenue | $	$ 7,871,222	$ 22,794,591
Net income (loss) | $	$ 244,984	$ (3,797,189)
Earnings (loss) per share:
Basic | $ / shares	$ 0.03	$ (0.52)
Diluted | $ / shares	$ 0.03	$ (0.52)

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Acquisition

9 Months Ended

Aug. 31, 2019

Business Combinations [Abstract]

Acquisition

Note 2 – Acquisition

On June 11, 2018, Cryo-Cell completed its acquisition of substantially all of the assets (the “Cord Purchase”) of Cord:Use Cord Blood Bank, Inc., a Florida corporation (“Cord:Use”), in accordance with the definitive Asset Purchase Agreement between Cryo-Cell and Cord:Use (the “Purchase Agreement”), including without limitation Cord:Use’s inventory of public cord blood units existing as of the closing date (the “Public Cord Blood Inventory”) and Cord:Use’s shares of common stock of Tianhe Stem Cell Biotechnologies, Inc., an Illinois corporation (the “Tianhe Capital Stock”). Cord:Use was in the business of public and private cord blood and tissue, collection, processing, storage and banking.

The aggregate consideration payable at closing under the Purchase Agreement was $14,000,000, with $10,500,000 paid in cash and the balance paid through the delivery to Seller of 465,426 shares of Cryo-Cell’s common stock, par value $0.01 per share (“Common Stock”), at $7.52 per share. In addition, Cryo-Cell assumed certain limited liabilities incurred by Cord:Use in connection with its business that were unpaid as of the closing date and that directly relate to the services to be provided after closing by Cryo-Cell. Cryo-Cell also assumed certain of Cord:Use’s contracts and the obligations arising therefrom after the closing.

Additionally, Cord:Use is entitled to an earnout from Cryo-Cell’s sale of the public cord blood inventory from and after closing. Each calendar year after the closing, Cryo-Cell will pay to Cord:Use 75% of all gross revenues, net of any returns, received from the sale of public cord blood inventory in excess of $500,000. Such payments will be made quarterly, within 30 days of the end of the last month of each calendar quarter, until the public cord blood inventory is exhausted. In addition, each calendar year after closing, until the public cord blood inventory is exhausted, for every $500,000 of retained gross revenues, net of any returns, received and retained by Cryo-Cell in excess of the initial $500,000 retained by Cryo-Cell during such year, Cryo-Cell will deliver $200,000 worth of Cryo-Cell Common stock to Cord:Use, up to an aggregate value of $5,000,000.    Cord:Use is also entitled to a portion of the gross profits generated, or deemed to have been generated, by Cryo-Cell from its ownership of the Tianhe Capital Stock.

The Company incurred $580,000 in costs associated with the acquisition of Cord:Use.

The following summarizes the fair value of the consideration of the Acquisition:

Consideration
Cash	$	10,500,000
Cryo-Cell common stock		3,500,000
Cord blood inventory earnout		4,698,255
Consideration	$	18,698,255

The following summarizes the preliminary allocation of the total purchase price for the Acquisition:

Accounts receivable	$	188,019
Inventory		16,037,957
Prepaid expenses		68,867
Property and equipment		568,407
Other asset - Tiahne capital stock		308,000
Brand		31,000
Customer relationships		960,000
Total identifiable net assets acquired		18,162,250
Less: Deferred revenue		(1,405,406	)
Goodwill		1,941,411
Total	$	18,698,255

The Company has assigned goodwill to the segment reporting unit for cellular processing and cryogenic storage of umbilical cord blood and cord tissue stem cells for family use. Goodwill includes the fair value of the assembled workforce. The fair value of the assembled workforce was estimated by applying a cost approach, representing a level 2 measurement. The goodwill is not deductible for income tax purposes.

The property and equipment are stated at an estimate of fair value.

The Tiahne capital stock is an investment that is valued based on fair value. Cord:Use had a supply and equity participation agreement with Tiahne who is engaged in medical and life science research that involves the use of stem cells derived from umbilical cord blood units in clinical trials for humans.

The fair value of the company brand and customer relationships were estimated by applying an income approach, representing a level 3 measurement. The fair value estimates are based on (1) an assumed discount rate of 19%, (2) long-term sustainable growth rate of 3%, (3) market royalty rate of 1% and (4) one and thirty-year lives for the brand and customer relationships, respectively.

The fair values of the assets acquired includes public cord blood banking inventory of $16,037,957 which the Company expects to sell to outside customers. The Company also acquired accounts receivable of $188,019 and prepaid expenses of $68,867.

The fair values of the license agreement and customer relationships reflect the anticipated cash flows over their expected lives.

The fair value of deferred revenue is valued based on the cost method. Deferred revenues are pre-payment fees for future storage of umbilical cord blood and/or cord tissue specimens. The short- and long-term deferred revenue is $330,508 and $1,074,898, respectively.

Unaudited Pro forma Results

The following table provides the Company’s consolidated unaudited pro forma revenues, net income per basic and diluted common share had the results of the acquired businesses’ operations been included in its operations commencing on December 1, 2016, based on available information related to the respective operations. This proforma information presented is not necessarily indicative either of the combined results of operations that actually would have been realized by the Company had the acquisition been consummated at the beginning of the period for which the pro forma information is presented, or of future results, and does not account for any operation improvements to be made by the Company post-acquisition.

	Three months ended  August 31, 2018		Nine months ended  August 31, 2018
Revenue	$	7,871,222	$	22,794,591
Net income (loss)	$	244,984	($	3,797,189	)
Earnings (loss) per share:
Basic	$	0.03	($	0.52	)
Diluted	$	0.03	($	0.52	)

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Legal Proceedings - Additional Information (Detail)	Dec. 03, 2015 USD ($)
Case No.15-007461-CI [Member]
Commitment And Contingencies [Line Items]
Minimum jurisdictional amount	$ 15,000

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Stockholders' Equity - Significant Option Groups Outstanding and Exercisable Option and its Price and Contractual Life (Detail)	9 Months Ended
	Aug. 31, 2019 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding, Outstanding | shares	1,103,830
Outstanding, Weighted Average Remaining Contractual Life (Years)	4 years 2 months 8 days
Outstanding, Weighted Average Exercise Price	$ 3.26
Exercisable, Outstanding | shares	1,004,312
Exercisable, Weighted Average Exercise Price	$ 2.83
Range 1 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices Minimum	1.01
Range of Exercise Prices Maximum	$ 2.00
Outstanding, Outstanding | shares	422,500
Outstanding, Weighted Average Remaining Contractual Life (Years)	2 years 4 months 6 days
Outstanding, Weighted Average Exercise Price	$ 1.73
Exercisable, Outstanding | shares	422,500
Exercisable, Weighted Average Exercise Price	$ 1.73
Range 2 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices Minimum	2.01
Range of Exercise Prices Maximum	$ 3.00
Outstanding, Outstanding | shares	265,000
Outstanding, Weighted Average Remaining Contractual Life (Years)	2 years 4 months 9 days
Outstanding, Weighted Average Exercise Price	$ 2.72
Exercisable, Outstanding | shares	265,000
Exercisable, Weighted Average Exercise Price	$ 2.72
Range 3 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices Minimum	3.01
Range of Exercise Prices Maximum	$ 4.00
Outstanding, Outstanding | shares	227,229
Outstanding, Weighted Average Remaining Contractual Life (Years)	6 years 6 months 7 days
Outstanding, Weighted Average Exercise Price	$ 3.18
Exercisable, Outstanding | shares	227,229
Exercisable, Weighted Average Exercise Price	$ 3.18
Range 4 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices Minimum	6.01
Range of Exercise Prices Maximum	$ 7.00
Outstanding, Outstanding | shares	25,000
Outstanding, Weighted Average Remaining Contractual Life (Years)	7 years 7 months 2 days
Outstanding, Weighted Average Exercise Price	$ 6.95
Exercisable, Outstanding | shares	24,167
Exercisable, Weighted Average Exercise Price	$ 6.97
Range 5 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices Minimum	7.01
Range of Exercise Prices Maximum	$ 8.00
Outstanding, Outstanding | shares	164,101
Outstanding, Weighted Average Remaining Contractual Life (Years)	8 years 2 months 1 day
Outstanding, Weighted Average Exercise Price	$ 7.63
Exercisable, Outstanding | shares	65,416
Exercisable, Weighted Average Exercise Price	$ 7.69

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Consolidated Statements of Comprehensive Income (Loss) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2019	Aug. 31, 2018
Revenue	$ 8,223,393	$ 7,871,222	$ 23,846,357	$ 20,624,803
Costs and Expenses:
Cost of sales	2,589,335	2,486,180	7,683,853	5,864,826
Selling, general and administrative expenses	3,556,602	4,390,614	10,949,831	11,513,190
Impairment of public inventory			2,332,763
Change in fair value of contingent consideration	34,649		(636,278)
Research, development and related engineering	2,440	22,234	13,281	64,927
Depreciation and amortization	47,286	52,072	159,600	124,865
Total costs and expenses	6,230,312	6,951,100	20,503,050	17,567,808
Operating Income	1,993,081	920,122	3,343,307	3,056,995
Other Expense:
Other income (expense)	35,868	38,300	2,014	14,520
Interest expense	(413,942)	(410,366)	(1,245,154)	(995,437)
Total other expense	(378,074)	(372,066)	(1,243,140)	(980,917)
Income before income tax expense	1,615,007	548,056	2,100,167	2,076,078
Income tax expense	(498,748)	(303,072)	(654,358)	(3,821,660)
Net Income (Loss)	$ 1,116,259	$ 244,984	$ 1,445,809	$ (1,745,582)
Net income (loss) per common share—basic	$ 0.14	$ 0.03	$ 0.19	$ (0.24)
Weighted average common shares outstanding—basic	7,803,333	7,694,662	7,802,676	7,350,868
Net income (loss) per common share—diluted	$ 0.13	$ 0.03	$ 0.17	$ (0.24)
Weighted average common shares outstanding—diluted	8,445,237	8,375,675	8,430,251	7,350,868
Other Comprehensive Income
Unrealized gain on marketable securities (net of tax)		$ 285,255		$ 405,255
Comprehensive Income (Loss)	$ 1,116,259	530,239	$ 1,445,809	(1,340,327)
Processing and Storage Fees [Member]
Revenue	7,606,624	7,237,053	22,621,520	19,732,575
Public Banking [Member]
Revenue	160,561	65,575	529,041	65,575
Licensee and royalty income [Member]
Revenue	423,173	539,286	625,001	742,445
Product [Member]
Revenue	$ 33,035	$ 29,308	$ 70,795	$ 84,208

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Share Repurchase Plan

9 Months Ended

Aug. 31, 2019

Equity [Abstract]

Share Repurchase Plan

Note 11 – Share Repurchase Plan

In December 2011, the Company’s Board of Directors authorized management at its discretion to repurchase up to one million (1,000,000) shares of the Company’s outstanding common stock. On June 6, 2012, the Board of Directors of the Company increased the number of shares of the Company’s outstanding common stock that management is authorized to repurchase to up to three million (3,000,000). On April 8, 2015, the Board of Directors of the Company increased the number of shares of the Company’s outstanding common stock that management is authorized to repurchase to up to six million (6,000,000) shares. On October 6, 2016, the Board of Directors of the Company increased the number of shares of the Company’s outstanding common stock that management is authorized to repurchase to up to eight million (8,000,000) shares. The repurchases must be effectuated through open market purchases, privately negotiated block trades, unsolicited negotiated transactions, and/or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission or in such other manner as will comply with the provisions of the Securities Exchange Act of 1934.

As of August 31, 2019, the Company had repurchased an aggregate of 5,801,086 shares of the Company’s common stock at an average price of $3.37 per share through open market and privately negotiated transactions. The Company did not purchase any of the Company’s common stock during the nine months ended August 31, 2019 and August 31, 2018.

The repurchased shares will be held as treasury stock at cost and have been removed from common shares outstanding as of August 31, 2019 and November 30, 2018. As of August 31, 2019, and November 30, 2018, 5,801,086 and 5,801,086 shares, respectively, were held as treasury stock.

Subsequent to the balance sheet date, the Company has not repurchased any additional shares of the Company’s common stock.

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Income (Loss) per Common Share

9 Months Ended

Aug. 31, 2019

Earnings Per Share [Abstract]

Income (Loss) per Common Share

Note 7 – Income (Loss) per Common Share

The following table sets forth the calculation of basic and diluted net income (loss) per common share:

	Three Months Ended				Nine Months Ended
	August 31, 2019		August 31, 2018		August 31, 2019		August 31, 2018
Numerator:
Net Income (Loss)	$	1,116,259	$	244,984	$	1,445,809	($	1,745,582	)
Denominator:
Weighted-average shares outstanding-basic		7,803,333		7,694,662		7,802,676		7,350,868
Dilutive common shares issuable upon exercise of stock options		641,904		681,013		627,575		—
Weighted-average shares-diluted		8,445,237		8,375,675		8,430,251		7,350,868
Net income (loss) per common share:
Basic	$	0.14	$	0.03	$	0.19	($	0.24	)
Diluted	$	0.13	$	0.03	$	0.17	($	0.24	)

For the three months ended August 31, 2019, the Company excluded the effect of 43,636 outstanding options from the computation of diluted earnings per share, as the effect of potentially dilutive shares from the outstanding stock options would be anti-dilutive. For the nine months ended August 31, 2019, the Company excluded the effect of 154,601 outstanding options from the computation of diluted earnings per share, as the effect of potentially dilutive shares from the outstanding stock options would be anti-dilutive.

For the three months ended August 31, 2018, the Company did not exclude any of the options from the computation of diluted earnings per share, as the effect of potentially dilutive shares from the outstanding stock options would be anti-dilutive. For the nine months ended August 31, 2018, the Company excluded the effect of all options from the computation of diluted earnings per share, as the effect of potentially dilutive shares from the outstanding stock options would be anti-dilutive.

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Description of Business, Basis of Presentation and Significant Accounting Policies - Schedule of Assets and Liabilities From Contracts With Customers (Detail) - USD ($)	9 Months Ended
	Aug. 31, 2019	Nov. 30, 2018
Contract assets (sales commissions)	$ 383,399	$ 329,231
Accounts receivables	5,888,156	5,867,335
Short-term contract liabilities (deferred revenue)	8,781,229	8,365,284
Long-term contract liabilities (deferred revenue)	22,893,086	$ 20,317,231
Deferred Revenue [Member]
Contract with customer liability, Beginning Balance	28,682,515
Contract with customer liability, Additions	14,184,601
Contract with customer liability, Deductions	(11,192,801)
Contract with customer liability, Ending Balance	31,674,315
Accounts Receivables [Member]
Account Receivables, Beginning Balance	5,867,335
Account Receivables ,Additions	27,615,196
Account Receivables, Deductions	(27,594,375)
Account Receivables , Ending Balance	5,888,156
Sales commissions [Member]
Contract With customer asset, Beginning Balance	329,231
Contract With customer asset, Additions	67,668
Contract With customer asset, Deductions	(13,500)
Contract With customer asset,Ending Balance	$ 383,399

XML

Acquisition - Summary of Preliminary Allocation of Total Purchase Price (Detail) - USD ($)	Aug. 31, 2019	Nov. 30, 2018	Jun. 11, 2018
Business Acquisition [Line Items]
Goodwill	$ 1,941,411	$ 1,941,411
Blood Bank Inc and Tianhe Stem Cell Biotechnologies Inc [Member]
Business Acquisition [Line Items]
Accounts receivable			$ 188,019
Inventory			16,037,957
Prepaid expenses			68,867
Property and equipment			568,407
Other asset - Tiahne capital stock			308,000
Total identifiable net assets acquired			18,162,250
Less: Deferred revenue			(1,405,406)
Goodwill			1,941,411
Total			18,698,255
Blood Bank Inc and Tianhe Stem Cell Biotechnologies Inc [Member] | Brand [Member]
Business Acquisition [Line Items]
Intangible assets			31,000
Blood Bank Inc and Tianhe Stem Cell Biotechnologies Inc [Member] | Customer Relationships [Member]
Business Acquisition [Line Items]
Intangible assets			$ 960,000

XML

Inventory - Additional Information (Detail) - USD ($)	3 Months Ended	6 Months Ended	9 Months Ended
	May 31, 2019	May 31, 2019	Aug. 31, 2019
Other Asset Impairment Charges	$ 2,332,763	$ 2,332,763	$ 2,332,763

XML

Consolidated Statements of Cash Flows	9 Months Ended
	Aug. 31, 2019 USD ($)	Aug. 31, 2018 USD ($)
Cash flows from operating activities:
Net income (loss)	$ 1,445,809	$ (1,745,582)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense	304,463	214,275
Impairment of public inventory	2,332,763
Loss on disposal of property and equipment		153,756
Change in fair value of contingent consideration	(636,278)
Compensatory element of stock options	239,983	323,798
Provision for doubtful accounts	587,716	539,365
Deferred income tax expense		3,117,263
Amortization of debt issuance costs	86,014	79,876
Changes in assets and liabilities:
Accounts receivable	(608,537)	(805,183)
Prepaid expenses	(64,473)	(156,022)
Inventory	25,265	182,466
Other current assets	(5,506)	(3,066)
Deposits and other assets, net	30,832
Accounts payable	(248,616)	(808,839)
Accrued expenses	(1,311,841)	(99,555)
Deferred revenue	2,991,800	3,496,790
Net cash provided by operating activities	5,124,394	4,489,342
Cash flows used in investing activities:
Purchases of property and equipment	(507,339)	(408,297)
Purchase of intangible asset		(200,000)
Sales (purchases) of marketable securities and other investments, net	998	(105,186)
Purchase of Cord Use		(10,500,000)
Net cash used in investing activities	(506,341)	(11,213,483)
Cash flows from financing activities:
Repayments of note payable	(3,324,997)	(1,516,666)
Proceeds from the exercise of stock options	5,700	170,925
Proceeds from note payable		9,000,000
Issuance costs associated with the proceeds from the note payable		(169,300)
Net cash (used in) provided by financing activities	(3,319,297)	7,484,959
Increase in cash and cash equivalents	1,298,756	760,818
Cash and cash equivalents—beginning of period	6,040,033	6,279,154
Cash and cash equivalents—end of period	7,338,789	7,039,972
Supplemental non-cash investing activities:
Unrealized gain on marketable securities, net of tax		405,255
Cumulative-effect adjustment due to the adoption of ASU 2016-01	$ (340,984)
Assets acquired and liabilities assumed in acquisitions:
Assets acquired in acquisition		20,103,661
Liabilities assumed in acquisition		$ 1,405,406

XML

Cover Page - shares	9 Months Ended
	Aug. 31, 2019	Oct. 12, 2019
Cover [Abstract]
Document Type	10-Q
Entity Interactive Data Current	Yes
Amendment Flag	false
Document Period End Date	Aug. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Registrant Name	CRYO CELL INTERNATIONAL INC
Trading Symbol	CCEL
Entity Central Index Key	0000862692
Current Fiscal Year End Date	--11-30
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		7,803,333
Security Exchange Name	NONE
Entity Address, State or Province	FL
Title of 12(b) Security	Common Stock

XML

Segment Reporting

9 Months Ended

Aug. 31, 2019

Segment Reporting [Abstract]

Segment Reporting

Note 3 – Segment Reporting

During the third quarter of fiscal 2018, the Company purchased the assets and assumed contracts that Cord:Use used in the operation of its cord blood business (See Note 2). The Company evaluated and determined that this acquisition qualifies as a separate segment.

The Company is organized in three reportable segments:

1. The cellular processing and cryogenic storage of umbilical cord blood and cord tissue stem cells for family use. Revenue is generated from the initial processing and testing fees and the annual storage fees charged each year for storage (the “Umbilical cord blood and cord tissue stem cell service”).

2. The manufacture of Prepacyte® CB units, the processing technology used to process umbilical cord blood stem cells. Revenue is generated from the sales of the Prepacyte® CB units (the “Prepacyte®-CB”).

3. The cellular processing and cryogenic storage of umbilical cord blood stem cells for public use. Revenue is generated from the sale of the cord blood units to the National Marrow Donor Program (“NMDP”), which distributes the cord blood units to transplant centers located in the United States, and around the world.

The following table shows, by segment: net revenue, cost of sales, depreciation and amortization, operating profit, interest expense, and income tax (expense) benefit for the three months and nine months ended August 31, 2019 and August 31, 2018:

	For the three months ended August 31, 2019			For the three months ended August 31, 2018
Net revenue
Umbilical cord blood and cord tissue stem cell service	$	8,029,797		$	7,776,339
Prepacyte®-CB		33,035			29,308
Public cord blood banking		160,561			65,575
Total net revenue	$	8,223,393		$	7,871,222
Cost of sales
Umbilical cord blood and cord tissue stem cell service	$	2,240,257		$	2,149,778
Prepacyte®-CB		25,180			27,740
Public cord blood banking		323,898			308,662
Total cost of sales	$	2,589,335		$	2,486,180
Depreciation and amortization
Umbilical cord blood and cord tissue stem cell service	$	38,223		$	43,008
Prepacyte®-CB		9,063			9,064
Public cord blood banking		—			—
Total depreciation and amortization	$	47,286		$	52,072
Operating (loss) income
Umbilical cord blood and cord tissue stem cell service	$	2,175,563		$	1,170,704
Prepacyte®-CB		(19,146	)		( 7,496	)
Public cord blood banking		(163,336	)		(243,086	)
Total operating income	$	1,993,081		$	920,122
Interest expense
Umbilical cord blood and cord tissue stem cell service	$	413,942		$	410,366
Prepacyte®-CB		—			—
Public cord blood banking		—			—
Total interest expense	$	413,942		$	410,366
Income tax expense
Umbilical cord blood and cord tissue stem cell service	$	498,748		$	303,072
Prepacyte®-CB		—			—
Public cord blood banking		—			—
Total income tax expense	$	498,748		$	303,072

	For the nine months ended August 31, 2019			For the nine months ended August 31, 2018
Net revenue
Umbilical cord blood and cord tissue stem cell service	$	23,246,521		$	20,475,020
Prepacyte®-CB		70,795			84,208
Public cord blood banking		529,041			65,575
Total net revenue	$	23,846,357		$	20,624,803
Cost of sales
Umbilical cord blood and cord tissue stem cell service	$	6,497,788		$	5,431,359
Prepacyte®-CB		189,806			124,805
Public cord blood banking		996,259			308,662
Total cost of sales	$	7,683,853		$	5,864,826
Depreciation and amortization
Umbilical cord blood and cord tissue stem cell service	$	132,409		$	97,674
Prepacyte®-CB		27,191			27,191
Public cord blood banking		—			—
Total depreciation and amortization	$	159,600		$	124,865
Operating (loss) income
Umbilical cord blood and cord tissue stem cell service	$	6,307,426		$	3,521,625
Prepacyte®-CB		(164,141	)		(67,788	)
Public cord blood banking		(2,799,978	)		(243,087	)
Total operating income	$	3,343,307		$	3,056,995
Interest expense
Umbilical cord blood and cord tissue stem cell service	$	1,245,154		$	995,437
Prepacyte®-CB		—			—
Public cord blood banking		—			—
Total interest expense	$	1,245,154		$	995,437
Income tax expense
Umbilical cord blood and cord tissue stem cell service	$	654,358		$	3,821,660
Prepacyte®-CB		—			—
Public cord blood banking		—			—
Total income tax expense	$	654,358		$	3,821,660

The following table shows the assets by segment as of August 31, 2019 and November 30, 2018:

	As of August 31, 2019		As of November 30, 2018
Assets
Umbilical cord blood and cord tissue stem cell service	$	28,132,949	$	26,239,260
Prepacyte®-CB		202,408		319,802
Public cord blood banking		13,492,399		15,831,081
Total assets	$	41,827,756	$	42,390,143

XML

Share Repurchase Plan - Additional Information (Detail) - $ / shares	9 Months Ended
	Aug. 31, 2019	Nov. 30, 2018	Oct. 06, 2016	Apr. 08, 2015	Jun. 06, 2012	Dec. 31, 2011
Equity, Class of Treasury Stock [Line Items]
Number of shares authorized to repurchase			8,000,000	6,000,000	3,000,000	1,000,000
Share repurchase plan	Open market purchases, privately negotiated block trades, unsolicited negotiated transactions, and/or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission
Treasury stock, shares	5,801,086
Common Stock [Member]
Equity, Class of Treasury Stock [Line Items]
Treasury stock, shares	5,801,086	5,801,086
Repurchase agreement, purchase price per share	$ 3.37
Number of shares repurchased	0

XML

Stockholders' Equity - Summary of Non-Vested Options (Detail) - $ / shares	9 Months Ended
	Aug. 31, 2019	Aug. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Non-vested at November 30, 2018 Shares	40,254
Granted, Shares	112,465
Vested, Shares	(53,201)
Forfeited, Shares	0
Non-vested at August 31, 2019 Shares	99,518
Non-vested at November 30, 2018, Weighted Average Grant-Date Fair Value	$ 3.06
Granted, Weighted Average Grant-Date Fair Value	3.32	$ 3.23
Vested, Weighted Average Grant-Date Fair Value	3.16
Forfeited, Weighted Average Grant-Date Fair Value	0
Non-vested at August 31, 2019, Weighted Average Grant-Date Fair Value	$ 3.30

XML

Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($)	9 Months Ended
	Aug. 31, 2019	Nov. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Net Intangible Assets	$ 1,268,400	$ 1,341,336
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets, gross	234,570	234,570
Less: Accumulated amortization	$ (32,560)	(23,663)
Patents [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives	10 years
Patents [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives	20 years
License Agreement [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives	10 years
Finite lived intangible assets, gross	$ 470,000	470,000
Less: Intangible asset impairment	(185,000)	(185,000)
Less: Accumulated amortization	$ (147,277)	(123,528)
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives	15 years
Finite lived intangible assets, gross	$ 41,000	41,000
Less: Intangible asset impairment	(26,267)	(26,267)
Less: Accumulated amortization	$ (6,066)	(5,276)
Brand [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives	1 year
Finite lived intangible assets, gross	$ 31,000	31,000
Less: Accumulated amortization	$ (31,000)	(15,500)
Customer Relationships One [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives	30 years
Finite lived intangible assets, gross	$ 960,000	960,000
Less: Accumulated amortization	$ (40,000)	$ (16,000)

XML

Note Payable - Summary of Interest Expense on Note Payable (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2019	Aug. 31, 2018
Interest Expense, Debt [Abstract]
Interest expense on notes payable	$ 162,134	$ 204,609	$ 523,818	$ 393,254
Debt issuance costs	28,014	28,337	86,014	79,876
Total interest expense	$ 190,148	$ 232,946	$ 609,832	$ 473,130

XML

Stockholders' Equity - Fair Value of Options Granted (Detail) - Service-Based Vesting Condition Options [Member]	3 Months Ended		9 Months Ended
	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2019	Aug. 31, 2018
Weighted average values:
Expected life	5 years	0 years	5 years	5 years
Measurement Input, Expected Dividend Rate [Member]
Weighted average values:
Expected dividends	0	0	0	0
Measurement Input, Price Volatility [Member]
Weighted average values:
Expected dividends	49.7	50.8	49.7	50.8
Measurement Input, Risk Free Interest Rate [Member]
Weighted average values:
Expected dividends	1.39	2.67	1.39	2.67

XML

Description of Business, Basis of Presentation and Significant Accounting Policies - Disaggregation of Revenue (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2019	Aug. 31, 2018
Revenues	$ 8,223,393	$ 7,871,222	$ 23,846,357	$ 20,624,803
Processing and Storage Fees [Member]
Revenues	7,606,624	7,237,053	22,621,520	19,732,575
Public Banking Revenue [Member]
Revenues	160,561	65,575	529,041	65,575
Licensee and royalty income [Member]
Revenues	423,173	539,286	625,001	742,445
Product Revenue [Member]
Revenues	$ 33,035	$ 29,308	$ 70,795	$ 84,208

XML

Income (Loss) per Common Share (Tables)

9 Months Ended

Aug. 31, 2019

Earnings Per Share [Abstract]

Calculation of Basic and Diluted Earnings (Loss) per Share

The following table sets forth the calculation of basic and diluted net income (loss) per common share:

	Three Months Ended				Nine Months Ended
	August 31, 2019		August 31, 2018		August 31, 2019		August 31, 2018
Numerator:
Net Income (Loss)	$	1,116,259	$	244,984	$	1,445,809	($	1,745,582	)
Denominator:
Weighted-average shares outstanding-basic		7,803,333		7,694,662		7,802,676		7,350,868
Dilutive common shares issuable upon exercise of stock options		641,904		681,013		627,575		—
Weighted-average shares-diluted		8,445,237		8,375,675		8,430,251		7,350,868
Net income (loss) per common share:
Basic	$	0.14	$	0.03	$	0.19	($	0.24	)
Diluted	$	0.13	$	0.03	$	0.17	($	0.24	)

XML

Segment Reporting (Tables)

9 Months Ended

Aug. 31, 2019

Segment Reporting [Abstract]

Summary of Net Revenue, Cost of Sales, Operating Profit, Depreciation and Amortization, Interest Expense, Income Tax Benefit (Expense), Other Comprehensive Income, and Assets by Segment

The following table shows, by segment: net revenue, cost of sales, depreciation and amortization, operating profit, interest expense, and income tax (expense) benefit for the three months and nine months ended August 31, 2019 and August 31, 2018:

	For the three months ended August 31, 2019			For the three months ended August 31, 2018
Net revenue
Umbilical cord blood and cord tissue stem cell service	$	8,029,797		$	7,776,339
Prepacyte®-CB		33,035			29,308
Public cord blood banking		160,561			65,575
Total net revenue	$	8,223,393		$	7,871,222
Cost of sales
Umbilical cord blood and cord tissue stem cell service	$	2,240,257		$	2,149,778
Prepacyte®-CB		25,180			27,740
Public cord blood banking		323,898			308,662
Total cost of sales	$	2,589,335		$	2,486,180
Depreciation and amortization
Umbilical cord blood and cord tissue stem cell service	$	38,223		$	43,008
Prepacyte®-CB		9,063			9,064
Public cord blood banking		—			—
Total depreciation and amortization	$	47,286		$	52,072
Operating (loss) income
Umbilical cord blood and cord tissue stem cell service	$	2,175,563		$	1,170,704
Prepacyte®-CB		(19,146	)		( 7,496	)
Public cord blood banking		(163,336	)		(243,086	)
Total operating income	$	1,993,081		$	920,122
Interest expense
Umbilical cord blood and cord tissue stem cell service	$	413,942		$	410,366
Prepacyte®-CB		—			—
Public cord blood banking		—			—
Total interest expense	$	413,942		$	410,366
Income tax expense
Umbilical cord blood and cord tissue stem cell service	$	498,748		$	303,072
Prepacyte®-CB		—			—
Public cord blood banking		—			—
Total income tax expense	$	498,748		$	303,072

	For the nine months ended August 31, 2019			For the nine months ended August 31, 2018
Net revenue
Umbilical cord blood and cord tissue stem cell service	$	23,246,521		$	20,475,020
Prepacyte®-CB		70,795			84,208
Public cord blood banking		529,041			65,575
Total net revenue	$	23,846,357		$	20,624,803
Cost of sales
Umbilical cord blood and cord tissue stem cell service	$	6,497,788		$	5,431,359
Prepacyte®-CB		189,806			124,805
Public cord blood banking		996,259			308,662
Total cost of sales	$	7,683,853		$	5,864,826
Depreciation and amortization
Umbilical cord blood and cord tissue stem cell service	$	132,409		$	97,674
Prepacyte®-CB		27,191			27,191
Public cord blood banking		—			—
Total depreciation and amortization	$	159,600		$	124,865
Operating (loss) income
Umbilical cord blood and cord tissue stem cell service	$	6,307,426		$	3,521,625
Prepacyte®-CB		(164,141	)		(67,788	)
Public cord blood banking		(2,799,978	)		(243,087	)
Total operating income	$	3,343,307		$	3,056,995
Interest expense
Umbilical cord blood and cord tissue stem cell service	$	1,245,154		$	995,437
Prepacyte®-CB		—			—
Public cord blood banking		—			—
Total interest expense	$	1,245,154		$	995,437
Income tax expense
Umbilical cord blood and cord tissue stem cell service	$	654,358		$	3,821,660
Prepacyte®-CB		—			—
Public cord blood banking		—			—
Total income tax expense	$	654,358		$	3,821,660

The following table shows the assets by segment as of August 31, 2019 and November 30, 2018:

	As of August 31, 2019		As of November 30, 2018
Assets
Umbilical cord blood and cord tissue stem cell service	$	28,132,949	$	26,239,260
Prepacyte®-CB		202,408		319,802
Public cord blood banking		13,492,399		15,831,081
Total assets	$	41,827,756	$	42,390,143

XML

Acquisition - Additional Information (Detail) - USD ($)		9 Months Ended
	Jun. 11, 2018	Aug. 31, 2019	Aug. 31, 2018	Nov. 30, 2018
Business Acquisition [Line Items]
Payment under asset purchase agreement			$ 10,500,000
Common stock par value		$ 0.01		$ 0.01
Brand [Member]
Business Acquisition [Line Items]
Useful lives		1 year
Customer Relationships [Member]
Business Acquisition [Line Items]
Useful lives		15 years
Blood Bank Inc and Tianhe Stem Cell Biotechnologies Inc [Member]
Business Acquisition [Line Items]
Aggregate consideration payable at closing under the Purchase Agreement	$ 14,000,000
Payment under asset purchase agreement	$ 10,500,000
Shares issued under asset purchase agreement	465,426
Common stock par value	$ 0.01
Sale of stock price per share	$ 7.52
Percentage of earn out to be paid from gross revenues	75.00%
Common stock deliver	$ 200,000
Common stock value	5,000,000
Costs associated with the acquisition	$ 580,000
Discount rate	19.00%
Long-term sustainable growth rate	3.00%
Market royalty rate	1.00%
Fair value of inventory	$ 16,037,957
Fair value of accounts receivable	188,019
Fair value of prepaid expenses	68,867
Short term deferred revenue	330,508
Long term deferred revenue	1,074,898
Blood Bank Inc and Tianhe Stem Cell Biotechnologies Inc [Member] | Minimum [Member]
Business Acquisition [Line Items]
Amount of earn out to be paid from sale of public cord blood inventory	$ 500,000
Blood Bank Inc and Tianhe Stem Cell Biotechnologies Inc [Member] | Brand [Member]
Business Acquisition [Line Items]
Useful lives	1 year
Blood Bank Inc and Tianhe Stem Cell Biotechnologies Inc [Member] | Customer Relationships [Member]
Business Acquisition [Line Items]
Useful lives	30 years

XML

Segment Reporting - Additional Information (Detail)	9 Months Ended
	Aug. 31, 2019 Segments
Umbilical Cord Blood and Cord Tissue Stem Cell Service and PrepaCyte-CB [Member]
Segment Reporting Information [Line Items]
Number of reportable segments	3

XML

License Agreements

9 Months Ended

Aug. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

License Agreements

Note 9 – 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.

Per the License and Royalty Agreement with Lifecell, there is a $1,000,000 cap on the amount of royalty due to the Company per year and a $10,000,000 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 approximately $9,000,000 in royalty income due under the terms of the License and Royalty Agreement, of which, Lifecell has paid the Company approximately $8,250,000 as of August 31, 2019. The balance of approximately $750,000 is reflected as Accounts Receivable on the accompanying consolidated balance sheets.

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 initial license fees for the technology agreements and processing and storage royalties earned under the technology agreements for the three and nine months ended August 31, 2019 and August 31, 2018. The initial license fees and processing and storage royalties are reflected in licensee and royalty income in the accompanying consolidated statements of comprehensive income (loss).

Processing and Storage Royalties

	Three Months Ended August 31, 2019		Nine Months Ended August 31, 2019
License and royalty income	$	423,173	$	625,001
Total	$	423,173	$	625,001
	Three Months Ended August 31, 2018		Nine Months Ended August 31, 2018
License and royalty income	$	539,286	$	742,445
Total	$	539,286	$	742,445

XML

Intangible Assets

9 Months Ended

Aug. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Note 5 – Intangible Assets

The Company incurs certain legal and related costs in connection with patent and trademark applications. If a future economic benefit is anticipated from the resulting patent or trademark or an alternate future use is available to the Company, such costs are capitalized and amortized over the expected life of the patent or trademark. The Company’s assessment of future economic benefit involves considerable management judgment. A different conclusion could result in the reduction of the carrying value of these assets.

Intangible assets were as follows as of August 31, 2019 and November 30, 2018:

	Useful lives	August 31, 2019			November 30, 2018
Patents and Domain Names	10-20 years		234,570			234,570
Less: Accumulated amortization			(32,560	)		(23,663	)
License agreement	10 years		470,000			470,000
Less: Intangible asset impairment			(185,000	)		(185,000	)
Less: Accumulated amortization			(147,277	)		(123,528	)
Customer relationships-Prepacyte CB	15 years		41,000			41,000
Less: Intangible asset impairment			(26,267	)		(26,267	)
Less: Accumulated amortization			(6,066	)		(5,276	)
Brand	1 year		31,000			31,000
Less: Accumulated amortization			(31,000	)		(15,500	)
Customer relationships-Cord:Use	30 years		960,000			960,000
Less: Accumulated amortization			(40,000	)		(16,000	)
Net Intangible Assets		$	1,268,400		$	1,341,336

Amortization expense of intangibles was approximately $19,000 and $27,000 for the three months ended August 31, 2019 and August 31, 2018, respectively. Amortization expense of intangibles was approximately $73,000 and $49,000 for the nine months ended August 31, 2019 and August 31, 2018, respectively.

XML

Description of Business, Basis of Presentation and Significant Accounting Policies (Tables)

9 Months Ended

Aug. 31, 2019

Accounting Policies [Abstract]

Disaggregation of Revenue

The following table provides information about disaggregated revenue by products and services:

	Three months ended
	August 31, 2019		August 31, 2018
Processing and storage fees	$	7,606,624	$	7,237,053
Public banking revenue		160,561		65,575
Licensee and royalty income		423,173		539,286
Product revenue		33,035		29,308
	$	8,223,393	$	7,871,222

	Nine months ended
	August 31, 2019		August 31, 2018
Processing and storage fees	$	22,621,520	$	19,732,575
Public banking revenue		529,041		65,575
Licensee and royalty income		625,001		742,445
Product revenue		70,795		84,208
	$	23,846,357	$	20,624,803

Schedule of Assets and Liabilities From Contracts With Customers

The following table provides information about assets and liabilities from contracts with customers:

	August 31, 2019		At Adoption
Contract assets (sales commissions)	$	383,399	$	329,231
Accounts receivables	$	5,888,156	$	5,867,335
Short-term contract liabilities (deferred revenue)	$	8,781,229	$	8,365,284
Long-term contract liabilities (deferred revenue)	$	22,893,086	$	20,317,231

The Company, in general, requires the customer to pay for processing and storage services at the time of processing. Contract assets include deferred contract acquisition costs, which will be amortized along with the associated revenue. Contract liabilities include payments received in advance of performance under the contract and are realized with the associated revenue recognized under the contract. Accounts receivable consists of amounts due from clients that have enrolled and processed in the umbilical cord blood stem cell processing and storage programs related to renewals of annual plans and amounts due from license affiliates, and sublicensee territories. The Company did not have asset impairment charges related to contract assets in the three and nine months ended August 31, 2019.

The following table presents changes in the Company’s contract assets and liabilities during the nine months ended August 31, 2019:

	Balance at December 1, 2018		Additions		Deductions			Balance at August 31, 2019
Contract assets (sales commissions)	$	329,231	$	67,668	($	13,500	)	$	383,399
Accounts receivables	$	5,867,335	$	27,615,196	($	27,594,375	)	$	5,888,156
Contract liabilities (deferred revenue)	$	28,682,515	$	14,184,601	($	11,192,801	)	$	31,674,315

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of August 31, 2019 and November 30, 2018, respectively, segregated among the appropriate levels within the fair value hierarchy:

	Fair Value at			Fair Value Measurements at August 31, 2019 Using
Description	August 31, 2019			Level 1		Level 2		Level 3
Assets:
Marketable securities	$	874,691		$	874,691		—		—
Total	$	874,691		$	874,691		—		—
Liabilities:
Contingent consideration	$	3,601,697		$	—		—	$	3,601,697
Total	$	3,601,697		$	—		—	$	3,601,697
Contingent Consideration:
Beginning Balance as of November 30, 2018	$	4,282,975
Subtractions – Cord:Use earnout		(45,000	)
Fair value adjustment as of August 31, 2019		(636,278	)
Ending balance as of August 31, 2019	$	3,601,697
	Fair Value at			Fair Value Measurements at November 30, 2018 Using
Description	November 30, 2018			Level 1		Level 2		Level 3
Assets:
Trading securities	$	68,816		$	68,816		—		—
Available-for-sale securities		806,873			806,873		—		—
Total	$	875,689		$	875,689		—		—
Liabilities
Contingent consideration	$	4,282,975		$	—		—	$	4,282,975
Total	$	4,282,975		$	—		—	$	4,282,975

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Description of Business, Basis of Presentation and Significant Accounting Policies

9 Months Ended

Aug. 31, 2019

Accounting Policies [Abstract]

Description of Business, Basis of Presentation and Significant Accounting Policies

Note 1 - Description of Business, Basis of Presentation and Significant Accounting Policies

Cryo-Cell International, Inc. (“the Company” or “Cryo-Cell”) was incorporated in Delaware on September 11, 1989 and is headquartered in Oldsmar, Florida. The Company is organized in three reportable segments, cellular processing and cryogenic cellular storage, with a current focus on the collection and preservation of umbilical cord blood stem cells for family use, the manufacture of PrepaCyte CB units, the processing technology used to process umbilical cord blood stem cells and cellular processing and cryogenic storage of umbilical cord blood stem cells for public use. Revenues recognized for the cellular processing and cryogenic cellular storage represent sales of the umbilical cord blood stem cells program to customers and income from licensees selling the umbilical cord blood stem cells program to customers outside the United States. Revenues recognized for the manufacture of PrepaCyte CB units represent sales of the PrepaCyte CB units to customers. Revenue recognized for the cryogenic storage of umbilical cord blood stem cells for public use is generated from the sale of the cord blood units to the National Marrow Donor Program (“NMDP”), which distributes the cord blood units to transplant centers located in the United States and around the world. The Company’s headquarters facility in Oldsmar, Florida handles all aspects of its U.S.-based business operations including the processing and storage of specimens, including specimens obtained from certain of its licensees’ customers. The specimens are stored in commercially available cryogenic storage equipment.

The unaudited consolidated financial statements including the Consolidated Balance Sheets as of August 31, 2019 and November 30, 2018, the related Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended August 31, 2019 and August 31, 2018, Cash Flows for the nine months ended August 31, 2019 and 2018 and Stockholders’ Deficit for the three and nine months ended August 21, 2019 and August 31, 2018 have been prepared by Cryo-Cell International, Inc. and its subsidiaries pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Certain financial information and note disclosures, which are normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to those rules and regulations. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s November 30, 2018 Annual Report on Form 10-K. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and changes in cash flows for all periods presented have been made. The results of operations for the three and nine months ended August 31, 2019 are not necessarily indicative of the results expected for any interim period in the future or the entire year ending November 30, 2019.

Revenue Recognition

Effective December 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective transition method. The Company recognized the cumulative effect of applying the new revenue standard to all contracts with customers that were not completed as of December 1, 2018 as an adjustment to the opening balance of stockholders’ deficit at the beginning of fiscal year 2019. The reported results for 2019 reflect the application of ASC 606 guidance while the reported results for 2018 were prepared under the guidance of ASC 605, Revenue Recognition (ASC 605). ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. ASC 606 also impacts certain other areas, such as the accounting for costs to obtain or fulfill a contract. ASC 606 also requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

The adoption of ASC 606 did not have an impact on the amount of reported revenues with respect to the Company’s product or service revenues. In connection with the adoption of ASC 606, the Company is required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed and amortize these costs on a systematic basis, consistent with the pattern of transfer of the storage services provided over time for which the asset relates. As of December 1, 2018, the Company capitalized in deposits and other assets, net, $329,231 in incremental contract acquisition costs related to sales commissions on prepaid storage contracts and reversed $18,408 of its variable consideration that the Company determined to be fully constrained, with a corresponding change in the opening balance of stockholders’ deficit of $253,447, net of tax, of $94,192.

Under ASC 606, revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised services are transferred to the customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring services to a customer (“transaction price”).

At contract inception, if the contract is determined to be within the scope of ASC 606, the Company evaluates its contracts with customers using the five-step model: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenue when (or as) each performance obligation is satisfied. The Company evaluates its contracts for legal enforceability at contract inception and subsequently throughout the Company’s relationship with its customers. If legal enforceability with regards to the rights and obligations exist for both the Company and the customer, then the Company has an enforceable contract and revenue recognition is permitted subject to the satisfaction of the other criteria. If, at the outset of an arrangement, the Company determines that a contract with enforceable rights and obligations does not exist, revenues are deferred until all criteria for an enforceable contract are met. The Company only applies the five-step model to contracts when it is probable that collection of the consideration that the Company is entitled to in exchange for the goods or services being transferred to the customer, will occur.

Contract modifications exist when the modification either creates new or changes in the existing enforceable rights and obligations. The Company’s contracts are occasionally modified to account for changes in contract terms and conditions, which the Company refers to as an upgrade or downgrade. An upgrade occurs when a customer wants to pay for additional years of storage. A downgrade occurs when a customer originally entered into a long-term contract (such as twenty-one year or life-time plan) but would like to change the term to a one-year contract. Upgrade modifications qualify for treatment as a separate contract as the additional services are distinct and the increase in contract price reflects the Company’s stand-alone selling price for the additional services and will be accounted for on a prospective basis. Downgrade modifications do not qualify for treatment as a separate contract as there is no increase in price over the original contract, thus failing the separate contract criteria. As such, the Company separately considers downgrade modifications to determine if these should be accounted for as a termination of the existing contract and creation of a new contract (prospective method) or as part of the existing contract (cumulative catch-up adjustment). ASC 606 requires that an entity account for the contract modification as if it were a termination of the existing contract, and the creation of a new contract, if the remaining goods or services are distinct from the goods or services transferred on or before the date of the contract modification. As the services after the modification were previously determined to be distinct, the Company concluded that downgrade modifications qualify under this method and will be accounted for on a prospective basis. Although contract modifications do occur, they are infrequent.

Performance Obligations

At contract inception, the Company assesses the goods and services promised in the contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company determined that the following distinct goods and services represent separate performance obligations involving the sale of its umbilical cord blood product:

• Collection and processing services

• Storage services

• Public cord blood banking

• License and royalties

• Sale of PrepaCyte CB product

a) Processing and Storage Fees

Processing and storage fees include the Company providing umbilical cord blood and tissue cellular processing and cryogenic cellular storage for private use. Revenues recognized for the cellular processing and cryogenic cellular storage represent sales of the umbilical cord blood stem cells program to customers and income from licensees who are selling the umbilical cord blood stem cells program to customers outside the United States.

The Company recognizes revenue from processing fees at the point in time of the successful completion of processing and recognizes storage fees over time, which is ratably over the contractual storage period as well as other income from royalties paid by licensees related to long-term storage contracts which the Company has under license agreements. Contracted storage periods are annual, twenty-one years and life-time. The life-time storage plan is based on a life expectancy of 81 years, which is the current estimate by the Center for Disease Control for United States women’s life expectancy and concluded that additional data analysis would result in an immaterial difference in revenue. Deferred revenue on the accompanying consolidated balance sheets includes the portion of the annual, the twenty-one-year and the life-time storage fees that are being recognized over the contractual storage period as well as royalties received from foreign licensees relating to long-term storage contracts for which the Company has future obligations under the license agreement. The Company classifies deferred revenue as current if the Company expects to recognize the related revenue over the next 12 months from the balance sheet date.

Significant financing

When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. For all plans being annual, twenty-one years and life-time, the storage fee is paid at the beginning of the storage period (prepaid plans). Alternatively, the Company offers payment plans (including a stated service fee) for customers to pay over time for a period of one to twenty-four plus months. The one-time plan includes the collection kit, processing and testing, return medical courier service and twenty-one years of pre-paid storage fees. The life-time plan includes the collection kit, processing and testing, return medical courier service and pre-paid storage fees for the life of the customer. The Company concluded that a significant financing component is not present within either the prepaid or overtime payment plans. The Company has determined that the twenty-one year and life-time prepayment options do not include a significant financing component as the payment terms were structured primarily for reasons other than the provision of financing and to maximize profitability.

The Company has determined that the majority of plans that are paid over time are paid in less than a year. When considered over a twenty-four-month payment plan, the difference between the cash selling price and the consideration paid is nominal. As such, the Company believes that its payment plans do not include significant financing components as they are not significant in the aggregate when considered in the context of all contracts entered into nor significant at the individual contract level.

The Company elected to apply the practical expedient where the Company does not need to assess whether a significant financing component exists if the period between when it performs its obligations under the contract and when the customer pays is one year or less.

As of August 31, 2019, the total aggregate transaction price allocated to the unsatisfied performance obligations was recorded as deferred revenue amounting to $31,674,315, which will be recognized ratably on a straight-line basis over the contractual period of which $8,781,229 will be recognized over the next twelve months.

Variable consideration

In December 2005, the Company began providing its customers that enrolled after December 2005 a payment warranty under which the Company agrees to pay $50,000 to its client if the umbilical cord blood product retrieved is used for a stem cell transplant for the donor or an immediate family member and fails to engraft, subject to various restrictions. Effective February 1, 2012, the Company increased the $50,000 payment warranty to a $75,000 payment warranty to all of its new clients. Effective June 1, 2017, the Company increased the payment warranty to $100,000 to all new clients who choose the premium processing method, Prepacyte CB. Additionally, under the Cryo-Cell CaresTM program, the Company will pay $10,000 to the client to offset personal expenses if the umbilical cord blood product is used for bone marrow reconstitution in a myeloblative transplant procedure. The product warranty and the Cryo-Cell Cares program are available to clients who enroll under this structure for as long as the specimen is stored with the Company. In the processing and storage agreements, the Company provides limited rights which are offered to customers automatically upon contract execution. The Company has determined that the payment warranty represents variable consideration payable to the customer.

Based on the Company’s historical experience to date, the Company has determined the payment warranty to be fully constrained under the most likely amount method. Consequently, the transaction price does not currently reflect any expectation of service level credits. At the end of each reporting period, the Company will update the estimated transaction price related to the payment warranty including updating its assessment of whether an estimate of variable consideration is constrained to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period.

Allocation of transaction price

As the Company’s processing and storage agreements contain multiple performance obligations, ASC 606 requires an allocation of the transaction price based on the estimated relative standalone selling prices of the promised services underlying each performance obligation. The Company has selected an adjusted market assessment approach to estimate the stand-alone selling prices of the processing services and storage services and concluded that the published list price is the price that a customer in that market would be willing to pay for those goods or services. The Company also considered the fact that all customers are charged the list prices current at the time of their enrollment where the Company has separately stated list prices for processing and storage.

Costs to Obtain a Contract

Prior to the adoption of ASC 606, the Company expensed in the period, all commissions paid to its internal and external sales representatives the Company employs and to its customers for generating new contracts. With the adoption of ASC 606 as of December 1, 2018, the Company capitalizes commissions that are incremental in obtaining customer contracts and the costs incurred to fulfill a customer contract if those costs are not within the scope of another topic within the accounting literature and meet the specified criteria. These costs are deferred in other current or long-term assets and are expensed to selling, general and administrative expenses as the Company satisfies the performance obligations by transferring the service to the customer. These assets will be periodically assessed for impairment. As a practical expedient, the Company elected to recognize the incremental costs of obtaining its annual contracts as an expense when incurred, as the amortization period of the asset recognized would have been one year.

The Company has determined that payments under the Company’s refer-a-friend program (“RAF program”) are incremental costs of obtaining a contract as they provide an incentive for existing customers to refer new customers to the Company and is referred to as commission. The amount paid under the RAF program (either through issuance of credits to customers or check payments) which exceeds the typical commission payment to a sales representative is recorded as a reduction to revenue under ASC 606. During the three and nine months ended August 31, 2019, the Company recorded $10,747 and $25,216, respectively, in commission payments to customers under the RAF program as a reduction to revenue. As of December 1, 2018, the Company capitalized $329,231 in incremental contract acquisition costs related to contracts that were not completed, net of the cumulative amortization expense of $66,533 through the adoption date. The Company did not record any impairment losses in relation to costs capitalized. For the three and nine months ended August 31, 2019, the Company capitalized additional contract acquisition costs of $23,180 and $67,668, respectively, net of amortization expense.

b) Public banking revenue

The Company sells and provides units not likely to be of therapeutic use for research to qualified organizations and companies operating under Institutional Review Board approval. Control is transferred at the point in time when the shipment has occurred, at which time, the Company records revenue.

c) Licensee and royalty income

Licensee and royalty income consist of royalty income earned on the processing and storage of cord blood stem cell specimens by an affiliate where the Company has a License and Royalty Agreement. The Company records revenue from processing and storage of specimens and pursuant to agreements with licensees. The Company records the royalty revenue in same period that the related processing and storage is being completed by the affiliate.

d) Product Revenue

The Company records revenue from the sale of the PrepaCyte CB product line upon shipment of the product to the Company’s customers.

e) Shipping and handling

The Company elected to apply the practical expedient to account for shipping and handling activities performed after the control of a good has been transferred to the customer as a fulfillment cost. Shipping and handling costs that the Company incurs are therefore expensed and included in cost of sales.

The adoption of ASC 606 did not have an impact on the timing of revenue recognition for any of the Company’s revenue streams.

Disaggregation of Revenue

The following table provides information about disaggregated revenue by products and services:

	Three months ended
	August 31, 2019		August 31, 2018
Processing and storage fees	$	7,606,624	$	7,237,053
Public banking revenue		160,561		65,575
Licensee and royalty income		423,173		539,286
Product revenue		33,035		29,308
	$	8,223,393	$	7,871,222

	Nine months ended
	August 31, 2019		August 31, 2018
Processing and storage fees	$	22,621,520	$	19,732,575
Public banking revenue		529,041		65,575
Licensee and royalty income		625,001		742,445
Product revenue		70,795		84,208
	$	23,846,357	$	20,624,803

The following table provides information about assets and liabilities from contracts with customers:

	August 31, 2019		At Adoption
Contract assets (sales commissions)	$	383,399	$	329,231
Accounts receivables	$	5,888,156	$	5,867,335
Short-term contract liabilities (deferred revenue)	$	8,781,229	$	8,365,284
Long-term contract liabilities (deferred revenue)	$	22,893,086	$	20,317,231

The Company, in general, requires the customer to pay for processing and storage services at the time of processing. Contract assets include deferred contract acquisition costs, which will be amortized along with the associated revenue. Contract liabilities include payments received in advance of performance under the contract and are realized with the associated revenue recognized under the contract. Accounts receivable consists of amounts due from clients that have enrolled and processed in the umbilical cord blood stem cell processing and storage programs related to renewals of annual plans and amounts due from license affiliates, and sublicensee territories. The Company did not have asset impairment charges related to contract assets in the three and nine months ended August 31, 2019.

The following table presents changes in the Company’s contract assets and liabilities during the nine months ended August 31, 2019:

	Balance at December 1, 2018		Additions		Deductions			Balance at August 31, 2019
Contract assets (sales commissions)	$	329,231	$	67,668	($	13,500	)	$	383,399
Accounts receivables	$	5,867,335	$	27,615,196	($	27,594,375	)	$	5,888,156
Contract liabilities (deferred revenue)	$	28,682,515	$	14,184,601	($	11,192,801	)	$	31,674,315

Accounts Receivable

Accounts receivable consist of uncollateralized amounts due from clients that have enrolled and processed in the umbilical cord blood stem cell processing and storage programs and amounts due from license affiliates, and sublicensee territories. Accounts receivable are due within 30 days and are stated at amounts net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering the length of time accounts receivable are past due, the Company’s previous loss history, and the client’s current ability to pay its obligations. Therefore, if the financial condition of the Company’s clients were to deteriorate beyond the estimates, the Company may have to increase the allowance for doubtful accounts which could have a negative impact on earnings. The Company writes-off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts.

Inventories

As part of the Asset Purchase Agreement, (see Note 2), the Company has an agreement with Duke University (“Duke”) expiring on January 31, 2020 for Duke to receive, process, and store cord blood units for the Public Cord Blood Bank (“Duke Services”). As of August 31, 2019, the Company had 5,981 cord blood units in inventory. These units are valued at the lower of cost or net realizable value. Costs include the cost of collecting, transporting, processing and storing the unit. Costs charged by Duke for their Duke Services are based on a monthly fixed fee for storing 12 blood units per month. The Company computes the cost per unit for these Duke Services and capitalizes the unit cost on all blood units shipped and stored in a year at Duke. If the Company ships and stores less than 144 blood units with Duke in a one-year period, a portion of these fixed costs are expensed and included in facility operating costs. Certain costs of collection incurred, such as the cost of collection staff and transportation costs incurred to ship Public Bank units from hospitals to the stem cell laboratory are allocated to banked units based on an average cost method. Costs incurred related to cord blood units that cannot be sold are expensed in the period incurred and are included in facility operating costs in the accompanying statements of operations. The Company records a reserve against inventory for units which have been processed and frozen but may not ultimately become distributable (see Note 4). Due to changes in sales trends and estimated recoverability of cost capitalized into inventory, an impairment charge of $2,332,763 was recognized during the second quarter of fiscal 2019 to reduce inventory from cost to net realizable value and is included in the accompanying consolidated statements of comprehensive income (loss).

Income Taxes

Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. The Company has recorded a valuation allowance of $1,634,000 and $1,634,000 as of August 31, 2019 and November 30, 2018, as the Company does not believe it is “more likely than not” that all future income tax benefits will be realized. When the Company changes its determination as to the amount of deferred income tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact to income tax expense in the period in which such determination is made. The ultimate realization of the Company’s deferred income tax assets depends upon generating sufficient taxable income prior to the expiration of the tax attributes. In assessing the need for a valuation allowance, the Company projects future levels of taxable income. This assessment requires significant judgment. The Company examines the evidence related to the recent history of losses, the economic conditions in which the Company operates and forecasts and projections to make that determination.

The Company recorded U.S. income taxes of approximately $453,000 and $245,000 for the three months ended August 31, 2019 and August 31, 2018, respectively. The Company recorded U.S. income taxes of approximately $587,000 and $3,741,000, for the nine months ended August 31, 2019 and August 31, 2018, respectively. Included in the $3,741,000 tax expense for the nine months ended August 31, 2018 is approximately $2,985,000 of expense related to the reduction of the federal tax rate to 21% as of January 1, 2018 as a result of the Tax Cuts and Jobs Act that was signed into law on December 22, 2017. The decrease in the federal tax rate caused a decrease in the Company’s deferred tax asset which resulted in an increase in the income tax expense.

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 geographic areas where the Company has license agreements. The Company recognized approximately $46,000 and $58,000 for the three months ended August 31, 2019 and 2018, respectively, of foreign income tax expense. The Company recognized approximately $68,000 and $80,000 for the nine months ended August 31, 2019 and 2018, respectively, of foreign income tax expense. Foreign income tax expense is included in income tax expense in the accompanying consolidated statements of comprehensive income (loss).

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.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. For the three and nine months ended August 31, 2019 and August 31, 2018, the Company had no provisions for interest or penalties related to uncertain tax positions.

Long-Lived Assets

The Company evaluates the realizability of its long-lived assets, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment, such as reductions in demand or when significant economic slowdowns are present. Reviews are performed to determine whether the carrying value of an asset is impaired, based on comparisons to undiscounted expected future cash flows. If this comparison indicates that there is impairment and carrying value is in excess of fair value, the impaired asset is written down to fair value, which is typically calculated using: (i) quoted market prices or (ii) discounted expected future cash flows utilizing a discount rate. The Company did not note any impairment for the three and nine months ended August 31, 2019 and 2018.

Goodwill

Goodwill represents the excess of the purchase price of the assets acquired from Cord:Use (Note 2) over the estimated fair value of the net tangible and identifiable assets acquired. The annual assessment of the reporting unit is performed as of September 1st, and an assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. Step one of the impairment assessment compares the fair value of the reporting unit to its carrying value and if the fair value exceeds its carrying value, goodwill is not impaired. If the carrying value exceeds the fair value, the implied fair value of goodwill is compared to the carrying value of goodwill. If the implied fair value exceeds the carrying value then goodwill is not impaired; otherwise, an impairment loss would be recorded by the amount the carrying value exceeds the implied fair value. As of August 31, 2019, and November 30, 2018, goodwill, is reflected on the consolidated balance sheets at $1,941,411 and $1,941,411.

Stock Compensation

As of August 31, 2019, the Company has two stock-based compensation plans, which are described in Note 8 to the unaudited consolidated financial statements. The Company’s stock-based employee compensation plan became effective December 1, 2011 as approved by the Board of Directors and approved by the stockholders at the 2012 Annual Meeting. The Company recognized approximately $240,000 and $324,000 for the nine months ended August 31, 2019 and August 31, 2018 respectively, of stock compensation expense. The Company reversed $444,000 of stock compensation expense during the nine months ended August 31, 2018 as the Co-CEOs each opted to receive a lump sum cash payment in lieu of 30,000 shares of earned common stock pursuant to the terms of their Employment Agreements. The reversal had no impact on the accompanying consolidated statements of comprehensive income (loss) as other compensation expense was recognized to offset the reversal.

The Company recognizes stock-based compensation based on the fair value of the related awards. Under the fair value recognition guidance of stock-based compensation accounting rules, stock-based compensation expense is estimated at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the award. The fair value of service-based vesting condition and performance-based vesting condition stock option awards is determined using the Black-Scholes valuation model. For stock option awards with only service-based vesting conditions and graded vesting features, the Company recognizes stock compensation expense based on the graded-vesting method. To value awards with market-based vesting conditions the Company uses a binomial valuation model. The Company recognizes compensation cost for awards with market-based vesting conditions on a graded-vesting basis over the derived service period calculated by the binomial valuation model. The use of these valuation models involves assumptions that are judgmental and highly sensitive in the determination of compensation expense and include the expected life of the option, stock price volatility, risk-free interest rate, dividend yield, exercise price, and forfeiture rate. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period.

The estimation of stock awards that will ultimately vest requires judgment and to the extent that actual results or updated estimates differ from current estimates, such amounts will be recorded as a cumulative adjustment in the period they become known. The Company considered many factors when estimating forfeitures, including the recipient groups and historical experience. Actual results and future changes in estimates may differ substantially from current estimates.

The Company issues performance-based equity awards which vest upon the achievement of certain financial performance goals, including revenue and income targets. Determining the appropriate amount to expense based on the anticipated achievement of the stated goals requires judgment, including forecasting future financial results. The estimate of the timing of the expense recognition is revised periodically based on the probability of achieving the required performance targets and adjustments are made as appropriate. The cumulative impact of any revision is reflected in the period of the change. If the financial performance goals are not met, the award does not vest, so no compensation cost is recognized and any previously stock-recognized stock-based compensation expense is reversed.

The Company issues equity awards with market-based vesting conditions which vest upon the achievement of certain stock price targets. If the awards are forfeited prior to the completion of the derived service period, any recognized compensation is reversed. If the awards are forfeited after the completion of the derived service period, the compensation cost is not reversed, even if the awards never vest.

Fair Value of Financial Instruments

Management uses a fair value hierarchy, which gives the highest priority to quoted prices in active markets. The fair value of financial instruments is estimated based on market trading information, where available. Absent published market values for an instrument or other assets, management uses observable market data to arrive at its estimates of fair value. Management believes that the carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term nature of these instruments. The Company believes that the fair value of its Revenue Sharing Agreements (”RSA”) liability recorded on the balance sheet is between the recorded book value and up to the Company’s previous settlement experience, due to the various terms and conditions associated with each RSA.

The Company uses an accounting standard that defines fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities.
Level 2	Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of August 31, 2019 and November 30, 2018, respectively, segregated among the appropriate levels within the fair value hierarchy:

	Fair Value at			Fair Value Measurements at August 31, 2019 Using
Description	August 31, 2019			Level 1		Level 2		Level 3
Assets:
Marketable securities	$	874,691		$	874,691		—		—
Total	$	874,691		$	874,691		—		—
Liabilities:
Contingent consideration	$	3,601,697		$	—		—	$	3,601,697
Total	$	3,601,697		$	—		—	$	3,601,697
Contingent Consideration:
Beginning Balance as of November 30, 2018	$	4,282,975
Subtractions – Cord:Use earnout		(45,000	)
Fair value adjustment as of August 31, 2019		(636,278	)
Ending balance as of August 31, 2019	$	3,601,697
	Fair Value at			Fair Value Measurements at November 30, 2018 Using
Description	November 30, 2018			Level 1		Level 2		Level 3
Assets:
Trading securities	$	68,816		$	68,816		—		—
Available-for-sale securities		806,873			806,873		—		—
Total	$	875,689		$	875,689		—		—
Liabilities
Contingent consideration	$	4,282,975		$	—		—	$	4,282,975
Total	$	4,282,975		$	—		—	$	4,282,975

The following is a description of the valuation techniques used for these items, as well as the general classification of such items pursuant to the fair value hierarchy:

Trading securities – Fair values for these investments are based on quoted prices of identical securities in active markets and are therefore classified within Level 1 of the fair value hierarchy. For trading securities, there was $37,536 in unrealized holding gains recorded in other income and expense on the accompanying consolidated statements of comprehensive income (loss) for the three months ended August 31, 2018. For trading securities, there was $12,328 in unrealized holding gains recorded in other income on the accompanying consolidated statements of comprehensive income (loss) for the nine months ended August 31, 2018.

Available-for-sale securities – These investments are classified as available for sale and consist of marketable equity securities that we intend to hold for an indefinite period of time. Investments are stated at fair value and unrealized holding gains and losses are reported as a component of accumulated other comprehensive income until realized. Realized gains or losses on disposition of investments are computed using the first in, first out (FIFO) method and reported as income or loss in the period of disposition in the accompanying consolidated statements of comprehensive income (loss). For available-for-sale securities, there was $285,255 unrealized holding gains, net of tax, reported as comprehensive income (loss) on the accompanying statements of comprehensive income (loss) for the three months ended August 31, 2018. For available-for-sale securities, there was $405,255 unrealized holding gains, net of tax, reported as a component of comprehensive income (loss) on the accompanying consolidated statements of comprehensive income (loss) for the nine-month period ended August 31, 2018.

Marketable securities - Effective December 1, 2018, the Company adopted ASU 2016-01, which requires equity securities with readily determinable fair values to be measured at fair value with the changes in fair value recognized through net income. Such securities are no longer reflected as trading or available-for-sale but are noted as marketable securities. As a result of this accounting change, in the first quarter of 2019, the Company recognized a cumulative-effect adjustment from accumulated other comprehensive income to retained earnings of approximately $341,000 in the consolidated statements of stockholders’ deficit as of the date of adoption. Prior periods have not been restated for the impact of this accounting change. There was $35,000 and ($1,000) in unrealized holding gain (losses), respectively, recorded in other income and expense on the accompanying consolidated statements of comprehensive income (loss) for the three and nine months ended August 31, 2019, respectively.

Contingent consideration - The contingent consideration is the earnout that Cord:Use is entitled to from the Company’s sale of the public cord blood inventory from and after closing. See Note 2. The estimated fair value of the contingent earnout was determined using a Monte Carlo analysis examining the frequency and mean value of the resulting earnout payments. The resulting value captures the risk associated with the form of the payout structure. The risk-neutral method is applied, resulting in a value that captures the risk associated with the form of the payout structure and the projection risk. The carrying amount of the liability may fluctuate significantly and actual amounts paid may be materially different from the estimated value of the liability.

Product Warranty and Cryo-Cell CaresTM Program

In December 2005, the Company began providing its customers that enrolled after December 2005 a payment warranty under which the Company agrees to pay $50,000 to its client if the umbilical cord blood product retrieved is used for a stem cell transplant for the donor or an immediate family member and fails to engraft, subject to various restrictions. Effective February 1, 2012, the Company increased the $50,000 payment warranty to a $75,000 payment warranty to all of its new clients. Effective June 1, 2017, the Company increased the payment warranty to $100,000 to all new clients who choose the premium processing method, Prepacyte CB. Additionally, under the Cryo-Cell CaresTM program, the Company will pay $10,000 to the client to offset personal expenses if the umbilical cord blood product is used for bone marrow reconstitution in a myeloblative transplant procedure. The product warranty and the Cryo-Cell Cares program are available to clients who enroll under this structure for as long as the specimen is stored with the Company. The Company has not experienced any claims under the warranty program nor has it incurred costs related to these warranties.

As discussed above, the Company has determined that the payment warranty represents variable consideration payable to the customer. Upon the adoption of ASC 606, the Company has concluded the payment warranty be fully constrained under the most likely amount method, therefore, the transaction price does not reflect any expectation of service level credits at August 31, 2019. At the end of each reporting period, the Company shall update the estimated transaction price related to the payment guarantee including updating its assessment of whether an estimate of variable consideration is constrained to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period.

Recently Issued Accounting Pronouncements

In August 2018, the FASB issued Accounting Standards Update No. 2018-15, Intangibles – Goodwill and Other Internal-Use Software (Topic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This update addresses how a customer should account for the costs of implementing a cloud computing service arrangement (also referred to as a “hosting arrangement”). Entities should account for costs associated with implementing a cloud computing arrangement that is considered a service contract in the same way as accounting for implementation costs incurred to develop or obtain software for internal use using the guidance in Topic 350-40. The amendments address when costs should be capitalized rather than expensed, the term to use when amortizing capitalized costs, and how to evaluate the unamortized portion of these capitalized implementation costs for impairment. The ASU also includes guidance on how to present implementation costs in the financial statements and creates additional disclosure requirements. The guidance is effective for annual periods beginning after December 15, 2019, and interim periods within that reporting period. The Company is currently evaluating the effect that the updated standard will have on our financial statements.

In June 2018, the FASB issued Accounting Standards Update No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This update simplifies the accounting for nonemployee share-based payment transactions by expanding the scope of Topic 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance is effective for annual periods beginning after December 15, 2018, and interim periods within that reporting period. The Company is currently evaluating the effect that the updated standard will have on our financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The update removes Step 2 from the goodwill impairment test. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, although early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on our financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842). This update requires organizations that lease assets with lease terms of more than 12 months to recognize assets and liabilities for the rights and obligations created by those leases on their balance sheets. It also requires new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated balance sheets and related disclosures.

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Consolidated Balance Sheets (Parenthetical) - USD ($)	Aug. 31, 2019	Nov. 30, 2018
Accounts receivable, allowance for doubtful accounts	$ 2,535,513	$ 2,264,848
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	13,598,909	13,596,409
Common stock, shares outstanding	7,803,333	7,800,833
Series A Junior Participating Preferred Stock [Member]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	20,000	20,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

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License Agreements - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Aug. 31, 2019 USD ($)	Aug. 31, 2018 USD ($)	Aug. 31, 2019 USD ($) Agreement	Aug. 31, 2018 USD ($)
License Agreements [Line Items]
Types of agreements | Agreement			2
Revenue	$ 8,223,393	$ 7,871,222	$ 23,846,357	$ 20,624,803
LifeCell License and Agreement [Member]
License Agreements [Line Items]
Royalty income since inception of license and royalty agreement	9,000,000		9,000,000
Royalty collected since inception of license and royalty agreement	8,250,000		8,250,000
LifeCell License and Agreement [Member] | Accounts Receivables [Member]
License Agreements [Line Items]
Royalties receivable	750,000		750,000
LifeCell License and Agreement [Member] | Maximum [Member]
License Agreements [Line Items]
Royalties receivable	$ 1,000,000		1,000,000
LifeCell License and Agreement [Member] | Maximum [Member] | Royalty [Member]
License Agreements [Line Items]
Revenue			$ 10,000,000

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Note Payable - Additional Information (Detail) - USD ($)		3 Months Ended		9 Months Ended
	May 20, 2016	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2019	Aug. 31, 2018	Jun. 11, 2018	Aug. 26, 2016	Jul. 01, 2016
Debt Instrument [Line Items]
Interest expense		$ 413,942	$ 410,366	$ 1,245,154	$ 995,437
Debt issuance costs		548,085		548,085
Amortization of debt issuance costs		28,014	28,337	86,014	79,876
Texas Capital Bank National Association [Member] | Amended And Restated Promissory Notes [Member]
Debt Instrument [Line Items]
Interest expense		$ 162,134	$ 204,609	$ 523,818	$ 393,254
Texas Capital Bank National Association [Member] | Amended And Restated Promissory Notes [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Second amended and restated promissory note principal amount						$ 15,500,000
Senior Credit Facilities [Member] | Texas Capital Bank National Association [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Line of credit facility, description				Subject to the terms of the Agreement, on May 20, 2016, TCB advanced the Company $100.00. On July 1, 2016, TCB advanced the remaining principal amount of $7,999,900 per a promissory note dated May 20, 2016 between the Company and TCB, at a rate of 3.75% per annum plus LIBOR​​​​​​​, payable monthly with a maturity date of July 2021.
Line of credit facility, frequency of payment				monthly
Line of credit facility, interest rate description				3.75% per annum plus LIBOR
Senior Credit Facilities [Member] | Texas Capital Bank National Association [Member] | Promissory Notes [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Line of credit facility, amount advanced								$ 7,999,900
Senior Credit Facilities [Member] | London Interbank Offered Rate (LIBOR) [Member] | Texas Capital Bank National Association [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Term loan, maximum borrowing capacity	$ 8,000,000
Line of credit facility, amount advanced	$ 100.00
Line of credit facility, interest rate	3.75%
Line of credit facility, expiration date	Jul. 31, 2021
Amended Senior Credit Facility [Member] | Texas Capital Bank National Association [Member] | Amended And Restated Promissory Notes [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Line of credit facility, amount advanced							$ 2,133,433
Second Amended Senior Credit Facility [Member] | Texas Capital Bank National Association [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Line of credit facility, amount advanced						$ 9,000,000

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Income (Loss) per Common Share - Additional Information (Detail) - shares	3 Months Ended	9 Months Ended
	Aug. 31, 2019	Aug. 31, 2019
Employee Stock Incentive Plan [Member]
Earnings Per Share Basic And Diluted [Line Items]
Number of outstanding options excluded from computation of diluted earnings per share	43,636	154,601

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License Agreements (Tables)

9 Months Ended

Aug. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of License Fees Earned

The following table details the initial license fees for the technology agreements and processing and storage royalties earned under the technology agreements for the three and nine months ended August 31, 2019 and August 31, 2018. The initial license fees and processing and storage royalties are reflected in licensee and royalty income in the accompanying consolidated statements of comprehensive income (loss).

Processing and Storage Royalties

	Three Months Ended August 31, 2019		Nine Months Ended August 31, 2019
License and royalty income	$	423,173	$	625,001
Total	$	423,173	$	625,001
	Three Months Ended August 31, 2018		Nine Months Ended August 31, 2018
License and royalty income	$	539,286	$	742,445
Total	$	539,286	$	742,445

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Intangible Assets (Tables)

9 Months Ended

Aug. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible assets were as follows as of August 31, 2019 and November 30, 2018:

	Useful lives	August 31, 2019			November 30, 2018
Patents and Domain Names	10-20 years		234,570			234,570
Less: Accumulated amortization			(32,560	)		(23,663	)
License agreement	10 years		470,000			470,000
Less: Intangible asset impairment			(185,000	)		(185,000	)
Less: Accumulated amortization			(147,277	)		(123,528	)
Customer relationships-Prepacyte CB	15 years		41,000			41,000
Less: Intangible asset impairment			(26,267	)		(26,267	)
Less: Accumulated amortization			(6,066	)		(5,276	)
Brand	1 year		31,000			31,000
Less: Accumulated amortization			(31,000	)		(15,500	)
Customer relationships-Cord:Use	30 years		960,000			960,000
Less: Accumulated amortization			(40,000	)		(16,000	)
Net Intangible Assets		$	1,268,400		$	1,341,336

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Note Payable - Schedule of Note Payable Obligation (Detail) - USD ($)	Aug. 31, 2019	Nov. 30, 2018
Debt Disclosure [Abstract]
Note payable	$ 9,883,433	$ 13,208,433
Unamortized debt issuance costs	(178,906)	(264,923)
Net note payable	9,704,527	12,943,510
Current portion of note payable	3,100,000	3,100,000
Long-term note payable, net of debt issuance costs	6,604,527	9,843,510
Total	$ 9,704,527	$ 12,943,510

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Stockholders' Equity - Additional Information (Detail) - USD ($)			1 Months Ended		3 Months Ended				9 Months Ended		12 Months Ended
	May 21, 2018	Mar. 08, 2018	Aug. 30, 2019	May 31, 2012	Aug. 31, 2019	May 31, 2019	Aug. 31, 2018	Feb. 28, 2017	Aug. 31, 2019	Aug. 31, 2018	Nov. 30, 2019	Nov. 30, 2018	Nov. 30, 2017	Nov. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares									112,465
Weighted average grant date fair value									$ 3.32	$ 3.23
Description on second amendment to employment agreement									The Amendment provides for the grant of shares of the Company’s common stock based on certain performance measures being attained by the Company during fiscal year 2016 and fiscal year 2017. The Amendment states if Executive is employed by the Company on November 30, 2016 and November 30, 2017, then no later than February 28, 2017 and February 28, 2018, respectively, the Company will grant Executive up to 20,000 shares of restricted stock based on performance as set forth in the Amendment per each fiscal year.
Plan modification description and terms									The options were issued under the Company’s 2012 Stock Plan and will vest 1/3 upon grant, 1/3 on December 1, 2018 and the remaining 1/3 on November 30, 2019
Shares earned paid in cash													$ 444,000
Stock compensation, number of shares opted to lump sum cash payment									30,000	30,000
Unrecognized compensation cost related to non-vested options					$ 19,000				$ 19,000
Amended And Restated Employment Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs					0		$ 0		0	$ 0
Second Amendment Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs					0		$ 0		0	0
Unrecognized compensation cost related to non-vested options					5,000				5,000
David Portnoy [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock for issuance pursuant to stock options or restricted stock													186,487
Granted, Shares		23,636
Shares granted during period													91,801	183,145
Shares earned during period													121,801
Mark Portnoy [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock for issuance pursuant to stock options or restricted stock													162,163
Granted, Shares		20,000
Shares granted during period													75,915	159,257
Shares earned during period													105,915
Oleg Mikulinksy [Member] | Second Amendment Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock for issuance pursuant to stock options or restricted stock								20,000
Granted, Shares	8,000
Share based compensation options fair value									14,000	9,000			$ 80,000
Shares granted during period								19,620					14,729
Optionee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares						1,500
Performance And Market Based Vesting Condition Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non-vested share-based compensation arrangements granted					$ 45,000				$ 45,000
2006 Plan [Member] | Employee Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock for issuance pursuant to stock options or restricted stock					1,000,000				1,000,000
Option issued					370,000				370,000			380,000
Shares issued under stock incentive plan					0				0
2012 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock for issuance pursuant to stock options or restricted stock					1,500,000				1,500,000
Shares issued under stock incentive plan					0				0
2012 Plan [Member] | Employee Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase in common stock reserved for issuance				2,500,000
Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation options fair value									$ 57,000	$ 50,000
Service Based Stock Options [Member] | 2012 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares									732,330
Service Based Restricted Shares [Member] | 2012 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares									129,729
Performance Based Options [Member] | 2012 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares									823,300
Market Based Options [Member] | 2012 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares									116,218
Service-Based Vesting Condition Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares					110,965		0		112,465	51,636
Service-Based Vesting Condition Options [Member] | 2006 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non-vested share-based compensation arrangements granted					$ 295,000				$ 295,000
Service-Based Vesting Condition Options [Member] | 2012 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non-vested share-based compensation arrangements granted					295,000				$ 295,000
Performance And Market Based Vesting Condition Options [Member] | David Portnoy [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted during period												47,273
Performance And Market Based Vesting Condition Options [Member] | Mark Portnoy [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted during period												40,000
Performance And Market Based Vesting Condition Options [Member] | Oleg Mikulinksy [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted during period									8,000
Performance And Market Based Vesting Condition Options [Member] | 2018 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non-vested share-based compensation arrangements granted					5,000				$ 5,000
Performance And Market Based Vesting Condition Options [Member] | Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non-vested share-based compensation arrangements granted					107,000				107,000
Share based compensation options fair value									54,000
Performance And Market Based Vesting Condition Options [Member] | Selling, General and Administrative Expenses [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation options fair value									136,000
Performance And Market Based Vesting Condition Options [Member] | Selling, General and Administrative Expenses [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation options fair value									14,000
Market-Based Vesting Condition Options [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation options fair value									$ 15,000
Shares forfeited during period									4,444
Market-Based Vesting Condition Options [Member] | Scenario, Forecast [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares forfeited during period											2,666
Market-Based Vesting Condition Options [Member] | David Portnoy [Member] | Scenario, Forecast [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares forfeited during period											15,756
Market-Based Vesting Condition Options [Member] | Mark Portnoy [Member] | Scenario, Forecast [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares forfeited during period											13,332
Market-Based Vesting Condition Options [Member] | Selling, General and Administrative Expenses [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation options fair value					(1,000)				$ 5,500
Restricted Common Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non-vested share-based compensation arrangements granted					$ 0		$ 0		$ 0	$ 0
Share based compensation options fair value													$ 756,000
Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of share issued to option holder					0		61,500		2,500	63,750
Options exercised					$ 0		$ 166,005		$ 5,700	$ 170,925
Stock Option [Member] | Service-Based Vesting Condition Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average period									1 year 3 months 29 days
Total fair value of shares vested									$ 168,000
Non Qualified Stock Options [Member] | Performance And Market Based Vesting Condition Options [Member] | David Portnoy [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted during period			26,243
Non Qualified Stock Options [Member] | Performance And Market Based Vesting Condition Options [Member] | Mark Portnoy [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted during period			22,222

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Stockholders' Equity (Tables)

9 Months Ended

Aug. 31, 2019

Fair Value of Options Granted

Variables used to determine the fair value of the options granted for the three and nine months ended August 31, 2019 and August 31, 2018, respectively, are as follows:

	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	August 31, 2019		August 31, 2018		August 31, 2019		August 31, 2018
Weighted average values:
Expected dividends		0%		—		0%		0%
Expected volatility		49.7%		—		49.7%		50.8%
Risk free interest rate		1.39%		—		1.40%		2.67%
Expected life		5 years		—		5 years		5 years

Service-Based Vesting Condition Options [Member]

Stock Option Activity

Stock option activity for options with only service-based vesting conditions for the nine months ended August 31, 2019, was as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at November 30, 2018		1,001,365		$	2.77		3.97	$	4,580,967
Granted		112,465			7.52				735
Exercised		(2,500	)		2.28				14,175
Expired/forfeited		(7,500	)		2.22				39,800
Outstanding at August 31, 2019		1,103,830		$	3.26		4.19	$	4,728,540
Exercisable at August 31, 2019		1,004,312		$	2.83		3.72	$	4,727,576

Significant Option Groups Exercisable Option and its Price and Contractual Life

Significant option groups outstanding and exercisable at August 31, 2019 and related price and contractual life information are as follows:

	Outstanding						Exercisable
Range of Exercise Prices	Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Outstanding		Weighted Average Exercise Price
$1.01 to $ 2.00		422,500		2.35	$	1.73		422,500	$	1.73
$2.01 to $ 3.00		265,000		2.36		2.72		265,000		2.72
$3.01 to $4.00		227,229		6.52		3.18		227,229		3.18
$6.01 to $7.00		25,000		7.59		6.95		24,167		6.97
$7.01 to $8.00		164,101		8.17		7.63		65,416		7.69
		1,103,830		4.19	$	3.26		1,004,312	$	2.83

Summary of Non-Vested Options

A summary of the status of the Company’s non-vested options as of August 31, 2019, and changes during the nine months ended August 31, 2019, is presented below:

	Shares			Weighted Average Grant-Date Fair Value
Non-vested at November 30, 2018		40,254		$	3.06
Granted		112,465			3.32
Vested		(53,201	)		3.16
Forfeited		—			—
Non-vested at August 31, 2019		99,518			3.30

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Inventory (Tables)

9 Months Ended

Aug. 31, 2019

Inventory Disclosure [Abstract]

Components of Inventory

The components of inventory at August 31, 2019 and November 30, 2018 are as follows:

	As of August 31, 2019			As of November 30, 2018
Raw materials	$	—		$	—
Work-in-process		130,217			188,085
Work-in-process – Public Bank		—			—
Finished goods		23,811			5,262
Finished goods – Public Bank		13,492,398			15,831,081
Collection kits		39,137			19,163
Inventory reserve		(7,718	)		(7,718	)
Total inventory	$	13,677,845		$	16,035,873
Inventory, current portion		1,031,845			1,260,557
Inventory, long-term portion		12,646,000			14,775,316
Total inventory	$	13,677,845		$	16,035,873

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Acquisition - Summary of Fair Value of Consideration (Detail) - USD ($)		9 Months Ended
	Jun. 11, 2018	Aug. 31, 2018	Aug. 31, 2019	Nov. 30, 2018
Consideration
Cash		$ 10,500,000
Cord blood inventory earnout			$ 3,601,697	$ 4,282,975
Blood Bank Inc and Tianhe Stem Cell Biotechnologies Inc [Member]
Consideration
Cash	$ 10,500,000
Cryo-Cell common stock	3,500,000
Cord blood inventory earnout	4,698,255
Consideration	$ 18,698,255

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Segment Reporting - Summary of Net Revenue, Cost of Sales, Depreciation and Amortization, Operating Profit, Interest Expense, Income Tax (Expense) Benefit and Assets by Segment (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2019	Aug. 31, 2018	Nov. 30, 2018
Segment Reporting Information [Line Items]
Total net revenue	$ 8,223,393	$ 7,871,222	$ 23,846,357	$ 20,624,803
Total cost of sales	2,589,335	2,486,180	7,683,853	5,864,826
Total operating income	1,993,081	920,122	3,343,307	3,056,995
Total depreciation and amortization	47,286	52,072	159,600	124,865
Total interest expense	413,942	410,366	1,245,154	995,437
Total income tax expense	498,748	303,072	654,358	3,821,660
Total assets	41,827,756		41,827,756		$ 42,390,143
Umbilical Cord Blood and Cord Tissue Stem Cell Service [Member]
Segment Reporting Information [Line Items]
Total net revenue	8,029,797	7,776,339	23,246,521	20,475,020
Total cost of sales	2,240,257	2,149,778	6,497,788	5,431,359
Total operating income	2,175,563	1,170,704	6,307,426	3,521,625
Total interest expense	413,942	410,366	1,245,154	995,437
Total income tax expense	498,748	303,072	654,358	3,821,660
Total assets	28,132,949		28,132,949		26,239,260
PrepaCyte CB [Member]
Segment Reporting Information [Line Items]
Total net revenue	33,035	29,308	70,795	84,208
Total cost of sales	25,180	27,740	189,806	124,805
Total operating income	(19,146)	(7,496)	(164,141)	(67,788)
Total interest expense
Total income tax expense
Total assets	202,408		202,408		319,802
Public Cord Blood Banking [Member]
Segment Reporting Information [Line Items]
Total net revenue	160,561	65,575	529,041	65,575
Total cost of sales	323,898	308,662	996,259	308,662
Total operating income	(163,336)	(243,086)	(2,799,978)	(243,087)
Total interest expense
Total income tax expense
Total assets	13,492,399		13,492,399		$ 15,831,081
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total depreciation and amortization	47,286	52,072	159,600	124,865
Operating Segments [Member] | Umbilical Cord Blood and Cord Tissue Stem Cell Service [Member]
Segment Reporting Information [Line Items]
Total depreciation and amortization	38,223	43,008	132,409	97,674
Operating Segments [Member] | PrepaCyte CB [Member]
Segment Reporting Information [Line Items]
Total depreciation and amortization	9,063	$ 9,064	27,191	27,191
Operating Segments [Member] | Public Cord Blood Banking [Member]
Segment Reporting Information [Line Items]
Total depreciation and amortization

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Description of Business, Basis of Presentation and Significant Accounting Policies (Policies)

9 Months Ended

Aug. 31, 2019

Accounting Policies [Abstract]

Revenue Recognition

Revenue Recognition

Effective December 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective transition method. The Company recognized the cumulative effect of applying the new revenue standard to all contracts with customers that were not completed as of December 1, 2018 as an adjustment to the opening balance of stockholders’ deficit at the beginning of fiscal year 2019. The reported results for 2019 reflect the application of ASC 606 guidance while the reported results for 2018 were prepared under the guidance of ASC 605, Revenue Recognition (ASC 605). ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. ASC 606 also impacts certain other areas, such as the accounting for costs to obtain or fulfill a contract. ASC 606 also requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

The adoption of ASC 606 did not have an impact on the amount of reported revenues with respect to the Company’s product or service revenues. In connection with the adoption of ASC 606, the Company is required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed and amortize these costs on a systematic basis, consistent with the pattern of transfer of the storage services provided over time for which the asset relates. As of December 1, 2018, the Company capitalized in deposits and other assets, net, $329,231 in incremental contract acquisition costs related to sales commissions on prepaid storage contracts and reversed $18,408 of its variable consideration that the Company determined to be fully constrained, with a corresponding change in the opening balance of stockholders’ deficit of $253,447, net of tax, of $94,192.

Under ASC 606, revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised services are transferred to the customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring services to a customer (“transaction price”).

At contract inception, if the contract is determined to be within the scope of ASC 606, the Company evaluates its contracts with customers using the five-step model: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenue when (or as) each performance obligation is satisfied. The Company evaluates its contracts for legal enforceability at contract inception and subsequently throughout the Company’s relationship with its customers. If legal enforceability with regards to the rights and obligations exist for both the Company and the customer, then the Company has an enforceable contract and revenue recognition is permitted subject to the satisfaction of the other criteria. If, at the outset of an arrangement, the Company determines that a contract with enforceable rights and obligations does not exist, revenues are deferred until all criteria for an enforceable contract are met. The Company only applies the five-step model to contracts when it is probable that collection of the consideration that the Company is entitled to in exchange for the goods or services being transferred to the customer, will occur.

Contract modifications exist when the modification either creates new or changes in the existing enforceable rights and obligations. The Company’s contracts are occasionally modified to account for changes in contract terms and conditions, which the Company refers to as an upgrade or downgrade. An upgrade occurs when a customer wants to pay for additional years of storage. A downgrade occurs when a customer originally entered into a long-term contract (such as twenty-one year or life-time plan) but would like to change the term to a one-year contract. Upgrade modifications qualify for treatment as a separate contract as the additional services are distinct and the increase in contract price reflects the Company’s stand-alone selling price for the additional services and will be accounted for on a prospective basis. Downgrade modifications do not qualify for treatment as a separate contract as there is no increase in price over the original contract, thus failing the separate contract criteria. As such, the Company separately considers downgrade modifications to determine if these should be accounted for as a termination of the existing contract and creation of a new contract (prospective method) or as part of the existing contract (cumulative catch-up adjustment). ASC 606 requires that an entity account for the contract modification as if it were a termination of the existing contract, and the creation of a new contract, if the remaining goods or services are distinct from the goods or services transferred on or before the date of the contract modification. As the services after the modification were previously determined to be distinct, the Company concluded that downgrade modifications qualify under this method and will be accounted for on a prospective basis. Although contract modifications do occur, they are infrequent.

Performance Obligations

At contract inception, the Company assesses the goods and services promised in the contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company determined that the following distinct goods and services represent separate performance obligations involving the sale of its umbilical cord blood product:

• Collection and processing services

• Storage services

• Public cord blood banking

• License and royalties

• Sale of PrepaCyte CB product

a) Processing and Storage Fees

Processing and storage fees include the Company providing umbilical cord blood and tissue cellular processing and cryogenic cellular storage for private use. Revenues recognized for the cellular processing and cryogenic cellular storage represent sales of the umbilical cord blood stem cells program to customers and income from licensees who are selling the umbilical cord blood stem cells program to customers outside the United States.

The Company recognizes revenue from processing fees at the point in time of the successful completion of processing and recognizes storage fees over time, which is ratably over the contractual storage period as well as other income from royalties paid by licensees related to long-term storage contracts which the Company has under license agreements. Contracted storage periods are annual, twenty-one years and life-time. The life-time storage plan is based on a life expectancy of 81 years, which is the current estimate by the Center for Disease Control for United States women’s life expectancy and concluded that additional data analysis would result in an immaterial difference in revenue. Deferred revenue on the accompanying consolidated balance sheets includes the portion of the annual, the twenty-one-year and the life-time storage fees that are being recognized over the contractual storage period as well as royalties received from foreign licensees relating to long-term storage contracts for which the Company has future obligations under the license agreement. The Company classifies deferred revenue as current if the Company expects to recognize the related revenue over the next 12 months from the balance sheet date.

Significant financing

When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. For all plans being annual, twenty-one years and life-time, the storage fee is paid at the beginning of the storage period (prepaid plans). Alternatively, the Company offers payment plans (including a stated service fee) for customers to pay over time for a period of one to twenty-four plus months. The one-time plan includes the collection kit, processing and testing, return medical courier service and twenty-one years of pre-paid storage fees. The life-time plan includes the collection kit, processing and testing, return medical courier service and pre-paid storage fees for the life of the customer. The Company concluded that a significant financing component is not present within either the prepaid or overtime payment plans. The Company has determined that the twenty-one year and life-time prepayment options do not include a significant financing component as the payment terms were structured primarily for reasons other than the provision of financing and to maximize profitability.

The Company has determined that the majority of plans that are paid over time are paid in less than a year. When considered over a twenty-four-month payment plan, the difference between the cash selling price and the consideration paid is nominal. As such, the Company believes that its payment plans do not include significant financing components as they are not significant in the aggregate when considered in the context of all contracts entered into nor significant at the individual contract level.

The Company elected to apply the practical expedient where the Company does not need to assess whether a significant financing component exists if the period between when it performs its obligations under the contract and when the customer pays is one year or less.

As of August 31, 2019, the total aggregate transaction price allocated to the unsatisfied performance obligations was recorded as deferred revenue amounting to $31,674,315, which will be recognized ratably on a straight-line basis over the contractual period of which $8,781,229 will be recognized over the next twelve months.

Variable consideration

In December 2005, the Company began providing its customers that enrolled after December 2005 a payment warranty under which the Company agrees to pay $50,000 to its client if the umbilical cord blood product retrieved is used for a stem cell transplant for the donor or an immediate family member and fails to engraft, subject to various restrictions. Effective February 1, 2012, the Company increased the $50,000 payment warranty to a $75,000 payment warranty to all of its new clients. Effective June 1, 2017, the Company increased the payment warranty to $100,000 to all new clients who choose the premium processing method, Prepacyte CB. Additionally, under the Cryo-Cell CaresTM program, the Company will pay $10,000 to the client to offset personal expenses if the umbilical cord blood product is used for bone marrow reconstitution in a myeloblative transplant procedure. The product warranty and the Cryo-Cell Cares program are available to clients who enroll under this structure for as long as the specimen is stored with the Company. In the processing and storage agreements, the Company provides limited rights which are offered to customers automatically upon contract execution. The Company has determined that the payment warranty represents variable consideration payable to the customer.

Based on the Company’s historical experience to date, the Company has determined the payment warranty to be fully constrained under the most likely amount method. Consequently, the transaction price does not currently reflect any expectation of service level credits. At the end of each reporting period, the Company will update the estimated transaction price related to the payment warranty including updating its assessment of whether an estimate of variable consideration is constrained to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period.

Allocation of transaction price

As the Company’s processing and storage agreements contain multiple performance obligations, ASC 606 requires an allocation of the transaction price based on the estimated relative standalone selling prices of the promised services underlying each performance obligation. The Company has selected an adjusted market assessment approach to estimate the stand-alone selling prices of the processing services and storage services and concluded that the published list price is the price that a customer in that market would be willing to pay for those goods or services. The Company also considered the fact that all customers are charged the list prices current at the time of their enrollment where the Company has separately stated list prices for processing and storage.

Costs to Obtain a Contract

Prior to the adoption of ASC 606, the Company expensed in the period, all commissions paid to its internal and external sales representatives the Company employs and to its customers for generating new contracts. With the adoption of ASC 606 as of December 1, 2018, the Company capitalizes commissions that are incremental in obtaining customer contracts and the costs incurred to fulfill a customer contract if those costs are not within the scope of another topic within the accounting literature and meet the specified criteria. These costs are deferred in other current or long-term assets and are expensed to selling, general and administrative expenses as the Company satisfies the performance obligations by transferring the service to the customer. These assets will be periodically assessed for impairment. As a practical expedient, the Company elected to recognize the incremental costs of obtaining its annual contracts as an expense when incurred, as the amortization period of the asset recognized would have been one year.

The Company has determined that payments under the Company’s refer-a-friend program (“RAF program”) are incremental costs of obtaining a contract as they provide an incentive for existing customers to refer new customers to the Company and is referred to as commission. The amount paid under the RAF program (either through issuance of credits to customers or check payments) which exceeds the typical commission payment to a sales representative is recorded as a reduction to revenue under ASC 606. During the three and nine months ended August 31, 2019, the Company recorded $10,747 and $25,216, respectively, in commission payments to customers under the RAF program as a reduction to revenue. As of December 1, 2018, the Company capitalized $329,231 in incremental contract acquisition costs related to contracts that were not completed, net of the cumulative amortization expense of $66,533 through the adoption date. The Company did not record any impairment losses in relation to costs capitalized. For the three and nine months ended August 31, 2019, the Company capitalized additional contract acquisition costs of $23,180 and $67,668, respectively, net of amortization expense.

b) Public banking revenue

The Company sells and provides units not likely to be of therapeutic use for research to qualified organizations and companies operating under Institutional Review Board approval. Control is transferred at the point in time when the shipment has occurred, at which time, the Company records revenue.

c) Licensee and royalty income

Licensee and royalty income consist of royalty income earned on the processing and storage of cord blood stem cell specimens by an affiliate where the Company has a License and Royalty Agreement. The Company records revenue from processing and storage of specimens and pursuant to agreements with licensees. The Company records the royalty revenue in same period that the related processing and storage is being completed by the affiliate.

d) Product Revenue

The Company records revenue from the sale of the PrepaCyte CB product line upon shipment of the product to the Company’s customers.

e) Shipping and handling

The Company elected to apply the practical expedient to account for shipping and handling activities performed after the control of a good has been transferred to the customer as a fulfillment cost. Shipping and handling costs that the Company incurs are therefore expensed and included in cost of sales.

The adoption of ASC 606 did not have an impact on the timing of revenue recognition for any of the Company’s revenue streams.

Disaggregation of Revenue

The following table provides information about disaggregated revenue by products and services:

	Three months ended
	August 31, 2019		August 31, 2018
Processing and storage fees	$	7,606,624	$	7,237,053
Public banking revenue		160,561		65,575
Licensee and royalty income		423,173		539,286
Product revenue		33,035		29,308
	$	8,223,393	$	7,871,222

	Nine months ended
	August 31, 2019		August 31, 2018
Processing and storage fees	$	22,621,520	$	19,732,575
Public banking revenue		529,041		65,575
Licensee and royalty income		625,001		742,445
Product revenue		70,795		84,208
	$	23,846,357	$	20,624,803

The following table provides information about assets and liabilities from contracts with customers:

	August 31, 2019		At Adoption
Contract assets (sales commissions)	$	383,399	$	329,231
Accounts receivables	$	5,888,156	$	5,867,335
Short-term contract liabilities (deferred revenue)	$	8,781,229	$	8,365,284
Long-term contract liabilities (deferred revenue)	$	22,893,086	$	20,317,231

The Company, in general, requires the customer to pay for processing and storage services at the time of processing. Contract assets include deferred contract acquisition costs, which will be amortized along with the associated revenue. Contract liabilities include payments received in advance of performance under the contract and are realized with the associated revenue recognized under the contract. Accounts receivable consists of amounts due from clients that have enrolled and processed in the umbilical cord blood stem cell processing and storage programs related to renewals of annual plans and amounts due from license affiliates, and sublicensee territories. The Company did not have asset impairment charges related to contract assets in the three and nine months ended August 31, 2019.

The following table presents changes in the Company’s contract assets and liabilities during the nine months ended August 31, 2019:

	Balance at December 1, 2018		Additions		Deductions			Balance at August 31, 2019
Contract assets (sales commissions)	$	329,231	$	67,668	($	13,500	)	$	383,399
Accounts receivables	$	5,867,335	$	27,615,196	($	27,594,375	)	$	5,888,156
Contract liabilities (deferred revenue)	$	28,682,515	$	14,184,601	($	11,192,801	)	$	31,674,315

Accounts Receivable

Accounts Receivable

Accounts receivable consist of uncollateralized amounts due from clients that have enrolled and processed in the umbilical cord blood stem cell processing and storage programs and amounts due from license affiliates, and sublicensee territories. Accounts receivable are due within 30 days and are stated at amounts net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering the length of time accounts receivable are past due, the Company’s previous loss history, and the client’s current ability to pay its obligations. Therefore, if the financial condition of the Company’s clients were to deteriorate beyond the estimates, the Company may have to increase the allowance for doubtful accounts which could have a negative impact on earnings. The Company writes-off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts.

Inventories

Inventories

As part of the Asset Purchase Agreement, (see Note 2), the Company has an agreement with Duke University (“Duke”) expiring on January 31, 2020 for Duke to receive, process, and store cord blood units for the Public Cord Blood Bank (“Duke Services”). As of August 31, 2019, the Company had 5,981 cord blood units in inventory. These units are valued at the lower of cost or net realizable value. Costs include the cost of collecting, transporting, processing and storing the unit. Costs charged by Duke for their Duke Services are based on a monthly fixed fee for storing 12 blood units per month. The Company computes the cost per unit for these Duke Services and capitalizes the unit cost on all blood units shipped and stored in a year at Duke. If the Company ships and stores less than 144 blood units with Duke in a one-year period, a portion of these fixed costs are expensed and included in facility operating costs. Certain costs of collection incurred, such as the cost of collection staff and transportation costs incurred to ship Public Bank units from hospitals to the stem cell laboratory are allocated to banked units based on an average cost method. Costs incurred related to cord blood units that cannot be sold are expensed in the period incurred and are included in facility operating costs in the accompanying statements of operations. The Company records a reserve against inventory for units which have been processed and frozen but may not ultimately become distributable (see Note 4). Due to changes in sales trends and estimated recoverability of cost capitalized into inventory, an impairment charge of $2,332,763 was recognized during the second quarter of fiscal 2019 to reduce inventory from cost to net realizable value and is included in the accompanying consolidated statements of comprehensive income (loss).

Income Taxes

Income Taxes

Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. The Company has recorded a valuation allowance of $1,634,000 and $1,634,000 as of August 31, 2019 and November 30, 2018, as the Company does not believe it is “more likely than not” that all future income tax benefits will be realized. When the Company changes its determination as to the amount of deferred income tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact to income tax expense in the period in which such determination is made. The ultimate realization of the Company’s deferred income tax assets depends upon generating sufficient taxable income prior to the expiration of the tax attributes. In assessing the need for a valuation allowance, the Company projects future levels of taxable income. This assessment requires significant judgment. The Company examines the evidence related to the recent history of losses, the economic conditions in which the Company operates and forecasts and projections to make that determination.

The Company recorded U.S. income taxes of approximately $453,000 and $245,000 for the three months ended August 31, 2019 and August 31, 2018, respectively. The Company recorded U.S. income taxes of approximately $587,000 and $3,741,000, for the nine months ended August 31, 2019 and August 31, 2018, respectively. Included in the $3,741,000 tax expense for the nine months ended August 31, 2018 is approximately $2,985,000 of expense related to the reduction of the federal tax rate to 21% as of January 1, 2018 as a result of the Tax Cuts and Jobs Act that was signed into law on December 22, 2017. The decrease in the federal tax rate caused a decrease in the Company’s deferred tax asset which resulted in an increase in the income tax expense.

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 geographic areas where the Company has license agreements. The Company recognized approximately $46,000 and $58,000 for the three months ended August 31, 2019 and 2018, respectively, of foreign income tax expense. The Company recognized approximately $68,000 and $80,000 for the nine months ended August 31, 2019 and 2018, respectively, of foreign income tax expense. Foreign income tax expense is included in income tax expense in the accompanying consolidated statements of comprehensive income (loss).

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.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. For the three and nine months ended August 31, 2019 and August 31, 2018, the Company had no provisions for interest or penalties related to uncertain tax positions.

Long-Lived Assets

Long-Lived Assets

The Company evaluates the realizability of its long-lived assets, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment, such as reductions in demand or when significant economic slowdowns are present. Reviews are performed to determine whether the carrying value of an asset is impaired, based on comparisons to undiscounted expected future cash flows. If this comparison indicates that there is impairment and carrying value is in excess of fair value, the impaired asset is written down to fair value, which is typically calculated using: (i) quoted market prices or (ii) discounted expected future cash flows utilizing a discount rate. The Company did not note any impairment for the three and nine months ended August 31, 2019 and 2018.

Goodwill

Goodwill

Goodwill represents the excess of the purchase price of the assets acquired from Cord:Use (Note 2) over the estimated fair value of the net tangible and identifiable assets acquired. The annual assessment of the reporting unit is performed as of September 1st, and an assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. Step one of the impairment assessment compares the fair value of the reporting unit to its carrying value and if the fair value exceeds its carrying value, goodwill is not impaired. If the carrying value exceeds the fair value, the implied fair value of goodwill is compared to the carrying value of goodwill. If the implied fair value exceeds the carrying value then goodwill is not impaired; otherwise, an impairment loss would be recorded by the amount the carrying value exceeds the implied fair value. As of August 31, 2019, and November 30, 2018, goodwill, is reflected on the consolidated balance sheets at $1,941,411 and $1,941,411.

Stock Compensation

Stock Compensation

As of August 31, 2019, the Company has two stock-based compensation plans, which are described in Note 8 to the unaudited consolidated financial statements. The Company’s stock-based employee compensation plan became effective December 1, 2011 as approved by the Board of Directors and approved by the stockholders at the 2012 Annual Meeting. The Company recognized approximately $240,000 and $324,000 for the nine months ended August 31, 2019 and August 31, 2018 respectively, of stock compensation expense. The Company reversed $444,000 of stock compensation expense during the nine months ended August 31, 2018 as the Co-CEOs each opted to receive a lump sum cash payment in lieu of 30,000 shares of earned common stock pursuant to the terms of their Employment Agreements. The reversal had no impact on the accompanying consolidated statements of comprehensive income (loss) as other compensation expense was recognized to offset the reversal.

The Company recognizes stock-based compensation based on the fair value of the related awards. Under the fair value recognition guidance of stock-based compensation accounting rules, stock-based compensation expense is estimated at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the award. The fair value of service-based vesting condition and performance-based vesting condition stock option awards is determined using the Black-Scholes valuation model. For stock option awards with only service-based vesting conditions and graded vesting features, the Company recognizes stock compensation expense based on the graded-vesting method. To value awards with market-based vesting conditions the Company uses a binomial valuation model. The Company recognizes compensation cost for awards with market-based vesting conditions on a graded-vesting basis over the derived service period calculated by the binomial valuation model. The use of these valuation models involves assumptions that are judgmental and highly sensitive in the determination of compensation expense and include the expected life of the option, stock price volatility, risk-free interest rate, dividend yield, exercise price, and forfeiture rate. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period.

The estimation of stock awards that will ultimately vest requires judgment and to the extent that actual results or updated estimates differ from current estimates, such amounts will be recorded as a cumulative adjustment in the period they become known. The Company considered many factors when estimating forfeitures, including the recipient groups and historical experience. Actual results and future changes in estimates may differ substantially from current estimates.

The Company issues performance-based equity awards which vest upon the achievement of certain financial performance goals, including revenue and income targets. Determining the appropriate amount to expense based on the anticipated achievement of the stated goals requires judgment, including forecasting future financial results. The estimate of the timing of the expense recognition is revised periodically based on the probability of achieving the required performance targets and adjustments are made as appropriate. The cumulative impact of any revision is reflected in the period of the change. If the financial performance goals are not met, the award does not vest, so no compensation cost is recognized and any previously stock-recognized stock-based compensation expense is reversed.

The Company issues equity awards with market-based vesting conditions which vest upon the achievement of certain stock price targets. If the awards are forfeited prior to the completion of the derived service period, any recognized compensation is reversed. If the awards are forfeited after the completion of the derived service period, the compensation cost is not reversed, even if the awards never vest.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Management uses a fair value hierarchy, which gives the highest priority to quoted prices in active markets. The fair value of financial instruments is estimated based on market trading information, where available. Absent published market values for an instrument or other assets, management uses observable market data to arrive at its estimates of fair value. Management believes that the carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term nature of these instruments. The Company believes that the fair value of its Revenue Sharing Agreements (”RSA”) liability recorded on the balance sheet is between the recorded book value and up to the Company’s previous settlement experience, due to the various terms and conditions associated with each RSA.

The Company uses an accounting standard that defines fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities.
Level 2	Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of August 31, 2019 and November 30, 2018, respectively, segregated among the appropriate levels within the fair value hierarchy:

	Fair Value at			Fair Value Measurements at August 31, 2019 Using
Description	August 31, 2019			Level 1		Level 2		Level 3
Assets:
Marketable securities	$	874,691		$	874,691		—		—
Total	$	874,691		$	874,691		—		—
Liabilities:
Contingent consideration	$	3,601,697		$	—		—	$	3,601,697
Total	$	3,601,697		$	—		—	$	3,601,697
Contingent Consideration:
Beginning Balance as of November 30, 2018	$	4,282,975
Subtractions – Cord:Use earnout		(45,000	)
Fair value adjustment as of August 31, 2019		(636,278	)
Ending balance as of August 31, 2019	$	3,601,697
	Fair Value at			Fair Value Measurements at November 30, 2018 Using
Description	November 30, 2018			Level 1		Level 2		Level 3
Assets:
Trading securities	$	68,816		$	68,816		—		—
Available-for-sale securities		806,873			806,873		—		—
Total	$	875,689		$	875,689		—		—
Liabilities
Contingent consideration	$	4,282,975		$	—		—	$	4,282,975
Total	$	4,282,975		$	—		—	$	4,282,975

The following is a description of the valuation techniques used for these items, as well as the general classification of such items pursuant to the fair value hierarchy:

Trading securities – Fair values for these investments are based on quoted prices of identical securities in active markets and are therefore classified within Level 1 of the fair value hierarchy. For trading securities, there was $37,536 in unrealized holding gains recorded in other income and expense on the accompanying consolidated statements of comprehensive income (loss) for the three months ended August 31, 2018. For trading securities, there was $12,328 in unrealized holding gains recorded in other income on the accompanying consolidated statements of comprehensive income (loss) for the nine months ended August 31, 2018.

Available-for-sale securities – These investments are classified as available for sale and consist of marketable equity securities that we intend to hold for an indefinite period of time. Investments are stated at fair value and unrealized holding gains and losses are reported as a component of accumulated other comprehensive income until realized. Realized gains or losses on disposition of investments are computed using the first in, first out (FIFO) method and reported as income or loss in the period of disposition in the accompanying consolidated statements of comprehensive income (loss). For available-for-sale securities, there was $285,255 unrealized holding gains, net of tax, reported as comprehensive income (loss) on the accompanying statements of comprehensive income (loss) for the three months ended August 31, 2018. For available-for-sale securities, there was $405,255 unrealized holding gains, net of tax, reported as a component of comprehensive income (loss) on the accompanying consolidated statements of comprehensive income (loss) for the nine-month period ended August 31, 2018.

Marketable securities - Effective December 1, 2018, the Company adopted ASU 2016-01, which requires equity securities with readily determinable fair values to be measured at fair value with the changes in fair value recognized through net income. Such securities are no longer reflected as trading or available-for-sale but are noted as marketable securities. As a result of this accounting change, in the first quarter of 2019, the Company recognized a cumulative-effect adjustment from accumulated other comprehensive income to retained earnings of approximately $341,000 in the consolidated statements of stockholders’ deficit as of the date of adoption. Prior periods have not been restated for the impact of this accounting change. There was $35,000 and ($1,000) in unrealized holding gain (losses), respectively, recorded in other income and expense on the accompanying consolidated statements of comprehensive income (loss) for the three and nine months ended August 31, 2019, respectively.

Contingent consideration - The contingent consideration is the earnout that Cord:Use is entitled to from the Company’s sale of the public cord blood inventory from and after closing. See Note 2. The estimated fair value of the contingent earnout was determined using a Monte Carlo analysis examining the frequency and mean value of the resulting earnout payments. The resulting value captures the risk associated with the form of the payout structure. The risk-neutral method is applied, resulting in a value that captures the risk associated with the form of the payout structure and the projection risk. The carrying amount of the liability may fluctuate significantly and actual amounts paid may be materially different from the estimated value of the liability.

Product Warranty and Cryo-Cell CaresTM Program

Product Warranty and Cryo-Cell CaresTM Program

In December 2005, the Company began providing its customers that enrolled after December 2005 a payment warranty under which the Company agrees to pay $50,000 to its client if the umbilical cord blood product retrieved is used for a stem cell transplant for the donor or an immediate family member and fails to engraft, subject to various restrictions. Effective February 1, 2012, the Company increased the $50,000 payment warranty to a $75,000 payment warranty to all of its new clients. Effective June 1, 2017, the Company increased the payment warranty to $100,000 to all new clients who choose the premium processing method, Prepacyte CB. Additionally, under the Cryo-Cell CaresTM program, the Company will pay $10,000 to the client to offset personal expenses if the umbilical cord blood product is used for bone marrow reconstitution in a myeloblative transplant procedure. The product warranty and the Cryo-Cell Cares program are available to clients who enroll under this structure for as long as the specimen is stored with the Company. The Company has not experienced any claims under the warranty program nor has it incurred costs related to these warranties.

As discussed above, the Company has determined that the payment warranty represents variable consideration payable to the customer. Upon the adoption of ASC 606, the Company has concluded the payment warranty be fully constrained under the most likely amount method, therefore, the transaction price does not reflect any expectation of service level credits at August 31, 2019. At the end of each reporting period, the Company shall update the estimated transaction price related to the payment guarantee including updating its assessment of whether an estimate of variable consideration is constrained to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In August 2018, the FASB issued Accounting Standards Update No. 2018-15, Intangibles – Goodwill and Other Internal-Use Software (Topic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This update addresses how a customer should account for the costs of implementing a cloud computing service arrangement (also referred to as a “hosting arrangement”). Entities should account for costs associated with implementing a cloud computing arrangement that is considered a service contract in the same way as accounting for implementation costs incurred to develop or obtain software for internal use using the guidance in Topic 350-40. The amendments address when costs should be capitalized rather than expensed, the term to use when amortizing capitalized costs, and how to evaluate the unamortized portion of these capitalized implementation costs for impairment. The ASU also includes guidance on how to present implementation costs in the financial statements and creates additional disclosure requirements. The guidance is effective for annual periods beginning after December 15, 2019, and interim periods within that reporting period. The Company is currently evaluating the effect that the updated standard will have on our financial statements.

In June 2018, the FASB issued Accounting Standards Update No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This update simplifies the accounting for nonemployee share-based payment transactions by expanding the scope of Topic 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance is effective for annual periods beginning after December 15, 2018, and interim periods within that reporting period. The Company is currently evaluating the effect that the updated standard will have on our financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The update removes Step 2 from the goodwill impairment test. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, although early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on our financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842). This update requires organizations that lease assets with lease terms of more than 12 months to recognize assets and liabilities for the rights and obligations created by those leases on their balance sheets. It also requires new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated balance sheets and related disclosures.

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Stockholders' Equity

9 Months Ended

Aug. 31, 2019

Equity [Abstract]

Stockholders' Equity

Note 8 – Stockholders’ Equity

Employee Stock Incentive Plan

The Company maintains the 2006 Stock Incentive Plan (the “2006 Plan”) under which it has reserved 1,000,000 shares of the Company’s common stock for issuance pursuant to stock options, restricted stock, stock-appreciation rights (commonly referred to as “SARs”) and stock awards (i.e. performance options to purchase shares and performance units). As of August 31, 2019, and November 30, 2018, there were 370,000 and 380,000 options issued, but not yet exercised, under the 2006 Plan, respectively. As of August 31, 2019, there were 0 shares available for future issuance under the 2006 Plan.

The Company maintains the 2012 Equity Incentive Plan (the “2012 Plan”) which became effective December 1, 2011 as approved by the Board of Directors and approved by the stockholders at the 2012 Annual Meeting on July 10, 2012. The 2012 Plan originally reserved 1,500,000 shares of the Company’s common stock for issuance pursuant to stock options, restricted stock, SARs, and other stock awards (i.e. performance shares and performance units). In May 2012, the Board of Directors approved an amendment to the 2012 Plan to increase the number of shares of the Company’s common stock reserved for issuance to 2,500,000 shares. As of August 31, 2019, there were 732,330 service-based options issued, 129,729 service-based restricted common shares granted, 823,300 performance-based and 116,218 market-based restricted common shares granted under the 2012 Plan. As of August 31, 2019, there were 0 shares available for future issuance under the 2012 Plan. In March 2018, the Company received notice that shares of the Company’s common stock issued to certain executive officers pursuant to the Company’s 2012 Stock Incentive Plan had purportedly been issued in excess of the shares reserved for issuance under the Plan. The Company has established an independent committee of the Board of Directors to review this issue.

The Company granted 1,500 options to an optionee during the second fiscal quarter of 2019 as approved by the Board of Directors. These options are not currently issued out of the 2006 or 2012 Plan.

Service-based vesting condition options

The fair value of each option award is estimated on the date of the grant using the Black-Scholes valuation model that uses the assumptions noted in the following table. Expected volatility is based on the historical volatility of the Company’s stock over the most recent period commensurate with the expected life of the Company’s stock options. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected term of options granted to employees is calculated, in accordance with the “simplified method” for “plain vanilla” stock options allowed under GAAP. Expected dividends are based on the historical trend of the Company not issuing dividends.

There were 110,965 and 112,465 options granted during the three and nine months ended August 31, 2019, respectively.

There were 0 and 51,636 options granted during the three and nine months ended August 31, 2018, respectively.

Variables used to determine the fair value of the options granted for the three and nine months ended August 31, 2019 and August 31, 2018, respectively, are as follows:

	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	August 31, 2019		August 31, 2018		August 31, 2019		August 31, 2018
Weighted average values:
Expected dividends		0%		—		0%		0	%
Expected volatility		49.7%		—		49.7%		50.8	%
Risk free interest rate		1.39%		—		1.40%		2.67	%
Expected life		5 years		—		5 years		5 years

Stock option activity for options with only service-based vesting conditions for the nine months ended August 31, 2019, was as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at November 30, 2018		1,001,365		$	2.77		3.97	$	4,580,967
Granted		112,465			7.52				735
Exercised		(2,500	)		2.28				14,175
Expired/forfeited		(7,500	)		2.22				39,800
Outstanding at August 31, 2019		1,103,830		$	3.26		4.19	$	4,728,540
Exercisable at August 31, 2019		1,004,312		$	2.83		3.72	$	4,727,576

The weighted average grant date fair value of options granted during the nine months ended August 31, 2019 and August 31, 2018 was $3.32 and $3.23, respectively.

The aggregate intrinsic value represents the total value of the difference between the Company’s closing stock price on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money stock options that would have been received by the option holders had all option holders exercised their options on either August 31, 2019 or November 30, 2018, as applicable. The intrinsic value of the Company’s stock options changes based on the closing price of the Company’s stock.

During the three and nine months ended August 31, 2019, the Company issued 0 and 2,500 common shares to option holders who exercised options for $0 and $5,700, respectively.

During the three and nine months ended August 31, 2018, the Company issued 61,500 and 63,750 common shares to option holders who exercised options for $166,005 and $170,925, respectively.

Significant option groups outstanding and exercisable at August 31, 2019 and related price and contractual life information are as follows:

	Outstanding						Exercisable
Range of Exercise Prices	Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Outstanding		Weighted Average Exercise Price
$1.01 to $ 2.00		422,500		2.35	$	1.73		422,500	$	1.73
$2.01 to $ 3.00		265,000		2.36		2.72		265,000		2.72
$3.01 to $4.00		227,229		6.52		3.18		227,229		3.18
$6.01 to $7.00		25,000		7.59		6.95		24,167		6.97
$7.01 to $8.00		164,101		8.17		7.63		65,416		7.69
		1,103,830		4.19	$	3.26		1,004,312	$	2.83

A summary of the status of the Company’s non-vested options as of August 31, 2019, and changes during the nine months ended August 31, 2019, is presented below:

	Shares			Weighted Average Grant-Date Fair Value
Non-vested at November 30, 2018		40,254		$	3.06
Granted		112,465			3.32
Vested		(53,201	)		3.16
Forfeited		—			—
Non-vested at August 31, 2019		99,518			3.30

As of August 31, 2019, there was approximately $295,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2006 Plan and the 2012 Plan. The cost is expected to be recognized over a weighted-average period of 1.33 years as of August 31, 2019. The total fair value of shares vested during the nine months ended August 31, 2019 was approximately $168,000.

During the second fiscal quarter of 2018, the Company entered into Amended and Restated Employment Agreements (“2018 Employment Agreements”) with each of the Company’s Co-CEOs. Per the Employment Agreements, each of the Co-CEOs is to receive base grant equity awards in the form of qualified stock options of the Company’s common stock. As of March 8, 2018, David Portnoy and Mark Portnoy were granted 23,636 and 20,000 stock options of the Company’s common stock, respectively. The options were issued under the Company’s 2012 Stock Plan and will vest 1/3 upon grant, 1/3 on December 1, 2018 and the remaining 1/3 on November 30, 2019. The fair value of the options that vested through the nine months ended August 31, 2019 and August 31, 2018 was approximately $57,000 and $50,000, respectively, and is reflected as selling, general and administrative expenses in the accompanying consolidated statement of comprehensive income (loss). As of August 31, 2019, there was approximately $19,000 of total unrecognized compensation cost related to the non-vested options of common stock and these will continue to vest as notated above and per the 2018 Employment Agreements through November 30, 2019.

During the second fiscal quarter of 2018, the Company entered into an Amendment Agreement (“CIO Agreement”) with the Company’s CIO. Per the CIO Agreement, the CIO is to receive a base grant equity award in the form of qualified stock options of the Company’s common stock. As of May 21, 2018, Oleg Mikulinsky was granted 8,000 stock options of the Company’s common stock. The options were issued under the Company’s 2012 Stock Plan and will vest 1/3 upon grant, 1/3 on December 1, 2018 and the remaining 1/3 on November 30, 2019. The fair value of the options that vested through the nine months ended August 31, 2019 and August 31, 2018 was approximately $14,000 and $9,000, respectively, and is reflected as selling, general and administrative expenses in the accompanying consolidated statement of comprehensive income (loss). As of August 31, 2019, there was approximately $5,000 of total unrecognized compensation cost related to the non-vested options of common stock and these will continue to vest as notated above and per the CIO Agreement through November 30, 2019.

Performance and market-based vesting condition options

Per the 2018 Employment Agreements, based upon certain performance criteria, the Company shall grant David Portnoy and Mark Portnoy a percentage of up to 47,273 and 40,000, respectively, of qualified stock options of the Company’s common stock. For market-based vesting condition options, accounting principles do not require that the market condition be met in order for the compensation cost to be recognized. Fair value of these options has been determined using a Monte Carlo valuation approach and is being recognized over the requisite service period, regardless if the market condition will be met. During fiscal 2019, 15,756 and 13,332, respectively, of qualified stock options will be expensed over the requisite service period. The fair value of these options expensed through the nine months August 31, 2019 was approximately $136,000 and is reflected as selling, general and administrative expenses in the accompanying consolidated statement of comprehensive income (loss). As of August 31, 2019, there was approximately $45,000 of total unrecognized compensation cost related to these market-based vesting condition options of common stock. For performance-based vesting condition options, the Company estimates the fair value of qualified stock options that met certain performance targets by the end of the fiscal 2018 requisite service period using a Black-Scholes valuation model. As of August 30, 2019, the Company granted David Portnoy and Mark Portnoy 26,243 and 22,222 of non-qualified stock options of the Company’s common stock based upon certain performance criteria met by the end of the fiscal 2018 service period and per the 2018 Employment Agreements. These options were issued under the Company’s 2012 Stock Plan and will vest 1/3 upon date of grant, 1/3 on December 1, 2019 and 1/3 on November 30, 2020. The fair value of these options as of August 31, 2019 was approximately $54,000 and is reflected as selling, general and administrative expenses in the accompanying consolidated statements of comprehensive income (loss). As of August 31, 2019, there was approximately $107,000 of total unrecognized compensation cost related to the non-vested options of common stock.

Per the Amendment Agreement, based upon certain performance criteria, the Company shall grant Oleg Mikulinsky a percentage of up to 8,000 of qualified stock options of the Company’s common stock. For market-based vesting condition options, accounting principles do not require that the market condition be met in order for the compensation cost to be recognized. Fair value of these options has been determined using a Monte Carlo valuation approach and is being recognized over the requisite service period, regardless if the market condition will be met. During fiscal 2019, 2,666 of qualified stock options will be expensed over the requisite service period. The fair value of these options as of August 31, 2019 was approximately $14,000, and is reflected as selling, general and administrative expenses in the accompanying consolidated statement of comprehensive income (loss). As of August 31, 2019, there was approximately $5,000 of total unrecognized compensation cost related to these market-based vesting condition options of common stock. For performance-based vesting condition options, the Company estimated the fair value of the qualified stock options that met certain performance targets by the end of the fiscal 2018 requisite service period using a Black-Scholes valuation model. The total estimated fair value of 4,444 of qualified options was approximately $15,000 as of August 31, 2019. Since these options have not been granted, the Company re-values the fair value of these options each period and records an adjustment to compensation expense. The adjustment made to compensation expense related to these options during the three and nine months ended August 31, 2019 was approximately ($1,000) and $5,500, respectively, and is reflected as selling, general and administrative expenses in the accompanying consolidated statements of comprehensive income (loss).

Restricted common shares

As of April 15, 2016, the Company entered into Amended and Restated Employment Agreements (“Employment Agreements”) with each of the Company’s Co-CEOs. The Employment Agreements provide for the grant of shares of the Company’s common stock based on certain performance measures being attained by each of the Company’s Co-CEOs during fiscal year 2016 and fiscal year 2017. The Employment Agreements state if David Portnoy and Mark Portnoy are employed by the Company on November 30, 2016 and November 30, 2017, then no later than February 28, 2017 and February 28, 2018, respectively, the Company will grant up to 186,487 and 162,163 shares of common stock for each fiscal year. Based upon the performance measures attained as of November 30, 2016, the Company granted 183,145 and 159,257 shares of common stock to David Portnoy and Mark Portnoy, respectively. There was $0 of total unrecognized compensation cost as of August 31, 2019 and August 31, 2018, respectively. Based upon the performance measures being attained as of November 30, 2017, David Portnoy and Mark Portnoy earned a total of 121,801 and 105,915 shares of common stock, respectively. Pursuant to the terms of the Employment Agreements, the Co-CEOs each opted to receive a lump sum cash payment in lieu of 30,000 shares of earned common stock which amounted to approximately $444,000. The Company then granted the remaining earned shares of 91,801 and 75,915 to David Portnoy and Mark Portnoy, respectively. The fair value of the shares granted was approximately $756,000. There was $0 and $0 of total unrecognized compensation cost as of August 31, 2019 and August 31, 2018, respectively.

As of April 18, 2016, the Company entered into a second Amendment Agreement (the “Amendment”), with the Company’s CIO Oleg Mikulinsky effective December 1, 2015, amending certain terms of the Amendment Agreement dated May 1, 2013 and Mikulinsky Employment Agreement dated March 5, 2012. The Amendment provides for the grant of shares of the Company’s common stock based on certain performance measures being attained by the Company during fiscal year 2016 and fiscal year 2017. The Amendment states if Executive is employed by the Company on November 30, 2016 and November 30, 2017, then no later than February 28, 2017 and February 28, 2018, respectively, the Company will grant Executive up to 20,000 shares of restricted stock based on performance as set forth in the Amendment per each fiscal year. Based upon performance measures being attained as of November 30, 2016, the Company granted 19,620 shares of common stock to Oleg Mikulinksy. There was $0 of total unrecognized compensation cost as of August 31, 2019 and August 31, 2018, respectively. Based upon performance measures being attained as of November 30, 2017, the Company will grant a total of 14,729 shares of common stock to Oleg Mikulinksy. The fair value of the shares to be granted is approximately $80,000. There was $0 and $0 of total unrecognized compensation cost as of August 31, 2019 and August 31, 2018, respectively.

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Inventory

9 Months Ended

Aug. 31, 2019

Inventory Disclosure [Abstract]

Inventory

Note 4 – Inventory

Inventory is comprised of public cord blood banking specimens, collection kits, finished goods, work-in-process and raw materials. Collection kits are used in the collection and processing of umbilical cord blood and cord tissue stem cells, finished goods include products purchased or assumed for resale and for the use in the Company’s processing and storage service. Inventory in the Public Cord Blood Bank includes finished goods that are specimens that are available for resale. The Company considers inventory in the Public Cord Blood Bank that has not completed all testing to determine viability to be work in process. The components of inventory at August 31, 2019 and November 30, 2018 are as follows:

	As of August 31, 2019			As of November 30, 2018
Raw materials	$	—		$	—
Work-in-process		130,217			188,085
Work-in-process – Public Bank		—			—
Finished goods		23,811			5,262
Finished goods – Public Bank		13,492,398			15,831,081
Collection kits		39,137			19,163
Inventory reserve		(7,718	)		(7,718	)
Total inventory	$	13,677,845		$	16,035,873
Inventory, current portion		1,031,845			1,260,557
Inventory, long-term portion		12,646,000			14,775,316
Total inventory	$	13,677,845		$	16,035,873

During the second quarter of fiscal 2019, due to changes in sales trends and estimated recoverability of cost capitalized into inventory for the public banking inventory, the Company prepared an analysis and determined that the value of the public inventory should be reduced from cost to net realizable value and this led to an impairment charge to the public inventory of $2,332,763.

Due to the nature of the units of public inventory, the net realizable value of those units that are expected to be sold during the next twelve months are included in current inventory. The remaining balance of the public inventory is considered to be long-term. In order to conform to the current period presentation, the Company made certain reclassifications to the Public Bank inventory prior period balance in the Consolidated Balance Sheets. This reclassification had no effect on the previously reported total assets or liabilities, net income or cash flows from operating activities.

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License Agreements - Summary of License Fees Earned (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2019	Aug. 31, 2018
License Agreements [Line Items]
Revenue	$ 8,223,393	$ 7,871,222	$ 23,846,357	$ 20,624,803
License and royalty income [Member]
License Agreements [Line Items]
Revenue	423,173	539,286	625,001	742,445
Processing and Storage Royalties [Member]
License Agreements [Line Items]
Revenue	$ 423,173	$ 539,286	$ 625,001	$ 742,445

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Consolidated Statements of Stockholders' Deficit - USD ($)	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income [Member]	Accumulated Deficit [Member]
Beginning balance at Nov. 30, 2017	$ (12,502,896)	$ 128,995	$ 31,373,048	$ (19,571,113)	$ 40,865	$ (24,474,691)
Beginning balance, shares at Nov. 30, 2017		12,899,517
Common stock issued	3,670,925	$ 6,970	3,663,955
Common stock issued, shares		696,992
Compensatory element of stock options	323,798		323,798
Unrealized gain on available for sale securities	405,255				405,255
Net income (loss)	(1,745,582)					(1,745,582)
Ending balance at Aug. 31, 2018	(9,848,500)	$ 135,965	35,360,801	(19,571,113)	446,120	(26,220,273)
Ending balance, shares at Aug. 31, 2018		13,596,509
Beginning balance at May. 31, 2018	(14,100,156)	$ 130,695	31,644,654	(19,571,113)	160,865	(26,465,257)
Beginning balance, shares at May. 31, 2018		13,069,483
Common stock issued	3,666,005	$ 5,270	3,660,735
Common stock issued, shares		527,026
Compensatory element of stock options	55,412		55,412
Unrealized gain on available for sale securities	285,255				285,255
Net income (loss)	244,984					244,984
Ending balance at Aug. 31, 2018	(9,848,500)	$ 135,965	35,360,801	(19,571,113)	446,120	(26,220,273)
Ending balance, shares at Aug. 31, 2018		13,596,509
Beginning balance at Nov. 30, 2018	(8,908,298)	$ 135,964	35,515,382	(19,571,113)	340,984	(25,329,515)
Beginning balance, shares at Nov. 30, 2018		13,596,409
Common stock issued	5,700	$ 25	5,675
Common stock issued, shares		2,500
Compensatory element of stock options	239,983		239,983
Cumulative-effect adjustment due to the adoption of ASU 2016-01 | Accounting Standards Update 2016-01 [Member]					$ (340,984)	340,984
ASC 606 adoption adjustment, net of tax | Accounting Standards Update 2014-09 [Member]	253,447					253,447
Net income (loss)	1,445,809					1,445,809
Ending balance at Aug. 31, 2019	(6,963,359)	$ 135,989	35,761,040	(19,571,113)		(23,289,275)
Ending balance, shares at Aug. 31, 2019		13,598,909
Beginning balance at May. 31, 2019	(8,093,792)	$ 135,989	35,746,866	(19,571,113)		(24,405,534)
Beginning balance, shares at May. 31, 2019		13,598,909
Compensatory element of stock options	14,174		14,174
Net income (loss)	1,116,259					1,116,259
Ending balance at Aug. 31, 2019	$ (6,963,359)	$ 135,989	$ 35,761,040	$ (19,571,113)		$ (23,289,275)
Ending balance, shares at Aug. 31, 2019		13,598,909

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Consolidated Balance Sheets - USD ($)	Aug. 31, 2019	Nov. 30, 2018
Current Assets
Cash and cash equivalents	$ 7,338,789	$ 6,040,033
Marketable securities	874,691	875,689
Accounts receivable (net of allowance for doubtful accounts of $2,535,513 and $2,264,848, respectively)	5,888,156	5,867,335
Prepaid expenses	526,288	461,815
Inventory, current portion	1,031,845	1,260,557
Other current assets	259,971	254,465
Total current assets	15,919,740	14,759,894
Property and Equipment-net	1,769,213	1,493,401
Other Assets
Intangible assets, net	1,268,400	1,341,336
Inventory, net of current portion	12,646,000	14,775,316
Goodwill	1,941,411	1,941,411
Deferred tax assets	7,562,705	7,656,897
Deposits and other assets, net	412,287	113,888
Total other assets	24,138,803	26,136,848
Total assets	41,827,756	42,390,143
Current Liabilities
Accounts payable	1,013,037	1,261,653
Accrued expenses	1,372,539	2,702,788
Current portion of note payable	3,100,000	3,100,000
Deferred revenue	8,781,229	8,365,284
Total current liabilities	14,266,805	15,429,725
Other Liabilities
Deferred revenue, net of current portion	22,893,086	20,317,231
Contingent Consideration	3,601,697	4,282,975
Note payable, net of current portion and debt issuance costs	6,604,527	9,843,510
Long-term liability—revenue sharing agreements	1,425,000	1,425,000
Total other liabilities	34,524,310	35,868,716
Total liabilities	48,791,115	51,298,441
Commitments and contingencies (Note 10)
Stockholders' Deficit
Preferred stock
Common stock ($.01 par value, 20,000,000 authorized; 13,598,909 issued and 7,803,333 outstanding as of August 31, 2019 and 13,596,409 issued and 7,800,833 outstanding as of November 30, 2018)	135,989	135,964
Additional paid-in capital	35,761,040	35,515,382
Treasury stock, at cost	(19,571,113)	(19,571,113)
Accumulated other comprehensive income		340,984
Accumulated deficit	(23,289,275)	(25,329,515)
Total stockholders' deficit	(6,963,359)	(8,908,298)
Total liabilities and stockholders' deficit	41,827,756	42,390,143
Series A Junior Participating Preferred Stock [Member]
Stockholders' Deficit
Preferred stock
Tianhe Stem Cell Biotechnologies Inc [Member]
Other Assets
Investment	$ 308,000	$ 308,000