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Organization and Summary of Significant Accounting Policies
12 Months Ended
Nov. 30, 2012
Accounting Policies [Abstract]  
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

Note 1 - Organization and Summary of Significant Accounting Policies

 

Organization – MultiCell Technologies, Inc. (“MultiCell”), has two subsidiaries, Xenogenics Corporation (“Xenogenics”), and MultiCell Immunotherapeutics, Inc. (“MCTI”). Prior to October 14, 2010, MultiCell owned 56.4% of Xenogenics. Commencing October 14, 2010, MultiCell has increased its ownership of Xenogenics to 95.3% (on an as-if-converted basis). MultiCell holds approximately 67% of the outstanding shares (on an as-if-converted basis) of MCTI. As used herein, the “Company” refers to MultiCell, together with MCT, Xenogenics, and MCTI.

 

The Company is a biopharmaceutical company developing novel therapeutics and discovery tools to address unmet medical needs for the treatment of neurological disorders, hepatic disease, cancer and interventional cardiology and peripheral vessel applications.

 

Principles of Consolidation and Basis of Presentation – The accompanying consolidated financial statements of MultiCell Technologies Inc. and its subsidiaries were prepared in accordance with accounting principles generally accepted in the United States of America and include the assets, liabilities, revenues and expenses of all majority-owned subsidiaries over which MultiCell exercises control. All significant intercompany balances and transactions have been eliminated in consolidation.

 

Cash and Cash Equivalents – The Company considers all unrestricted highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

 

Fair Value of Financial Instruments – The carrying amounts of cash and cash equivalents, grant receivable, accounts payable, accrued expenses, and advance from debenture holder approximate fair value because of the short maturity of those instruments. The fair value of convertible debentures was approximately $56,026 and $64,596 at November 30, 2012 and 2011, respectively.

 

Credit Risk – It is the Company’s practice to place its cash equivalents in high quality money market securities with major banking institutions. Periodically, the Company maintains cash balances at this institution that exceeds the Federal Deposit Insurance Corporation insurance limit of $250,000 per bank. The Company considers its credit risk associated with cash and cash equivalents to be minimal. The Company does not require collateral from its customers. The Company closely monitors the extension of credit to its customers while maintaining an allowance for potential credit losses. On a periodic basis, management evaluates its accounts receivable and, if warranted, adjusts its allowance for doubtful accounts based on historical experience and current credit considerations. Typically, accounts receivable consist primarily of amounts due under contractual agreements.

 

Revenue Recognition – In the years covered by these financial statements, the Company's operating revenues have been generated primarily from license revenue under agreements with Corning and Pfizer. Management believes such sources of revenue will be part of the Company's ongoing operations. When applicable, the Company recognizes revenue from licensing and research agreements as services are performed, provided a contractual arrangement exists, the contract price is fixed or determinable and the collection of the contractual amounts is reasonably assured. In situations where the Company receives payment in advance of the performance of services, such amounts are deferred and recognized as revenue as the related services are performed. Deferred revenues associated with services expected to be performed within the 12 - month period subsequent to the balance sheet date are classified as a current liability. Deferred revenues associated with services expected to be performed at a later date are classified as non-current liabilities.

 

Grant revenue under the Qualifying Therapeutic Discovery Project for the year ended November 30, 2011 was recognized as other income during the period in which the corresponding expenses were incurred.

 

Property and Equipment – Property and equipment are recorded at cost. Depreciation of property and equipment is provided using the straight-line method over the estimated useful lives of the assets, generally three to ten years. As of November 30, 2012, all property and equipment is fully depreciated.

 

Intangible Assets The Company does not amortize intangible assets with indefinite useful lives. The Company amortizes identifiable intangible assets over the estimated useful lives of the assets. The Company performs its annual intangible asset impairment tests during the fourth quarter of its fiscal year and more frequently if an event or circumstance indicates that impairment has occurred. If the assets were considered to be impaired, the impairment charge would be the amount by which the carrying value of the assets exceeds the fair value of the assets. As of November 30, 2012, all intangible assets are fully amortized or otherwise fully impaired such that there is no carrying value for intangible assets.

 

Impairment of Long-Lived Assets The impairment of long-lived assets that do not have indefinite lives, such as equipment, patents, and license agreements, is recognized when events or changes in circumstances indicate that the undiscounted cash flows estimated to be generated by such assets are less than their carrying value and, accordingly, all or a portion of such carrying value may not be recoverable. Impairment losses are then measured by comparing the fair value of assets to their carrying amounts.

 

Stock Based CompensationThe Company has stockholder-approved stock incentive plans for employees, directors, officers and consultants. The Company recognizes compensation expense for stock-based awards to employees expected to vest on a straight-line basis over the requisite service period of the award, based on their grant-date fair value. The Company estimates the fair value of stock options using the Black-Scholes option-pricing model, which requires management to make estimates for certain assumptions regarding risk-free interest rate, expected life of options, expected volatility of stock, and expected dividend yield of stock.

 

Research and Development CostsResearch and development costs are expensed as incurred. Research and development costs primarily consist of external clinical and preclinical study costs, consulting fees, legal fees associated with the Company’s intellectual property, and materials and supplies.

 

Acquired In-Process Research and DevelopmentThe Company recognizes as incurred the cost of directly acquiring assets to be used in the research and development process that have not yet received regulatory approval for marketing and for which no alternative future use has been identified. Acquired in-process research and development costs are expensed as incurred. Once the product has obtained regulatory approval, the Company will capitalize any milestone payments made and amortize them over the period benefitted. Milestone payments made prior to regulatory approval of the product will generally be expensed when the event requiring payment of the milestones occurs.

 

Income Taxes – Deferred income taxes are provided for the estimated tax effects of temporary differences between income for tax and financial reporting purposes. A valuation allowance is provided against deferred tax assets, where realization is uncertain. Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions are judged to not meet the “more-likely-than-not” threshold based on the technical merits of the positions. Estimated interest and penalties related to uncertain tax positions are included as a component of selling, general and administrative expense.

 

Loss Per Common Share – Basic loss per common share is computed by dividing the net loss applicable to common stockholders by the weighted average common shares outstanding during each period. Since the Company incurred losses during the years ended November 30, 2012 and 2011, the assumed effects of the exercise of outstanding stock options and warrants, and the conversion of convertible preferred stock and convertible debentures were anti-dilutive and, accordingly, diluted per common share amounts equal basic loss per share amounts and have not been separately presented in the accompanying consolidated statements of operations. The total number of common shares potentially issuable upon exercise or conversion excluded from the calculation of diluted loss per common share for the years ended November 30, 2012 and 2011 was 7,049,066,807 and 1,884,958,275, respectively.

 

Use of Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the dates of these financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

Risks and Uncertainties – The Company is dependent on continued financing from investors and obtaining new research grants to sustain the development and other activities necessary to commercialize new products. Management is seeking additional financing in order to fund its future activities. There is no assurance, however, that such financing will be available, if and when needed, or if available, that such financing will be completed on commercially favorable terms, or that such development and other activities in connection with its planned products will be successful.

 

Accounting For Warrants Issued With Convertible Debentures The Company accounts for the value of warrants and the intrinsic value of beneficial conversion rights arising from the issuance of convertible debentures with non-detachable conversion rights that are in-the-money at the commitment date by allocating an appropriate portion of the proceeds received from the debt instruments to the warrants or any other detachable instruments included in the exchange. The proceeds allocated to the warrants or any other detachable instruments are recorded as a discount to the debt. The intrinsic value of the beneficial conversion rights at the commitment date is recorded as additional paid-in capital and as additional discount to the debt as of that date. The discount has been amortized and charged to interest expense over the original term of the debt instrument.

 

Derivative Liability The Company accounts for the conversion feature of its Series B preferred stock as a derivative liability. The fair value of the conversion feature is estimated using the Black-Scholes option-pricing model.

 

Recently Enacted Accounting Standards – In July 2012, the Financial Accounting Standards Board issued updated guidance on the periodic testing of indefinite-lived intangible assets, other than goodwill, for impairment. This updated guidance will allow companies the option to first assess qualitative factors to determine if it is more-likely-than-not that an indefinite-lived intangible asset might be impaired and whether it is necessary to perform the quantitative impairment test required under current accounting standards. This guidance is applicable for reporting periods beginning after September 15, 2012, with early adoption permitted, and is applicable to the Company’s fiscal year beginning December 1, 2012. The Company currently does not have any indefinite-life intangible assets other than goodwill and does not expect the adoption of this guidance will have a material effect on its consolidated financial statements.

 

Reclassifications - Certain amounts of operating expenses from the 2011 consolidated statement of operations have been reclassified in the current presentation to conform to the 2012 presentation of operating expenses. These reclassifications had no effect on the total amount of operations expenses, on the amount of net loss, or on the basic and diluted loss per common share for the year ended November 30, 2011.