Deferred Revenue

12 Months Ended

Nov. 30, 2013

Note 6 – Deferred Revenue

Corning Incorporated

The Company has an exclusive license and purchase agreement (the “Agreement”) with Corning of Corning, New York. Under the terms of the Agreement, Corning has the right to develop, use, manufacture, and sell the Company’s Fa2N-4 cell lines and related cell culture media for use as a drug discovery assay tool, including biomarker identification for the development of drug development assay tools, and for the performance of absorption, distribution, metabolism, elimination and toxicity assays (“ADME/Tox assays”). The Company retained and will continue to support all of its existing licensees. The Company retains the right to use the Fa2N-4 cells for use in applications not related to drug discovery or ADME/Tox assays. The Company also retains rights to use the Fa2N-4 cell lines and other cell lines to further develop its Sybiol® liver assist device, to produce therapeutic proteins using the Company’s BioFactories™ technology, to identify drug targets and for other applications related to the Company’s internal drug development programs. In consideration for the license granted, Corning paid the Company $375,000 upon execution of the Agreement, and an additional $375,000 upon the completion of a transition period. In addition, Corning purchased inventory and equipment from the Company and reimbursed the Company for laboratory costs and other expenses during a transition period. The Company is recognizing the income ratably over a 17 year period. The Company recognized $44,118 in income for each of the fiscal years ended November 30, 2013 and 2012. The balance of deferred revenue from this license is $477,942 and $522,059 at November 30, 2013 and 2012, respectively, and will be amortized into revenue through October 2024.

Pfizer Inc.

The Company has another license agreement with Pfizer Inc., for which revenue is being deferred. During the years ended November 30, 2013 and 2012, the Company recognized $5,200 in each year and the balance of the deferred revenue from this license is $20,800 and $26,000 at November 30, 2013 and 2012, respectively, and will be amortized into revenue through January 2018.