ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2014 |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Use of estimates in the preparation of financial statements – In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates reflected in the Company’s consolidated financial statements include the allowance for doubtful accounts, estimated useful lives of fixed assets and its salvage values, revenues and costs of sales for turn-key and revenue sharing arrangements, and the carrying value of its Mevion investment. Actual results could differ from those estimates. |
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Advertising Costs, Policy [Policy Text Block] | Advertising costs – The Company expenses advertising costs as incurred. Advertising costs were $155,000, $119,000, and $103,000 during the years ended December 31, 2014, 2013, and 2012, respectively. Advertising costs are recorded in other direct operating costs and sales and administrative costs in the consolidated statements of operations |
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Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents – The Company considers all liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Restricted cash is not considered a cash equivalent for purposes of the consolidated statements of cash flows. |
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Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted cash – Restricted cash represents the minimum cash that must be maintained in GKF to fund operations. |
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Business Combinations And Credit Risk [Policy Text Block] | Business and credit risk – The Company maintains its cash balances, which exceed federally insured limits, in financial institutions. Currently much of the Company’s cash is invested in a certificate of deposit. The Company has not experienced any losses and believes it is not exposed to any significant credit risk on cash, cash equivalents and securities. The Company monitors the financial condition of the financial institutions it uses on a regular basis. |
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All of the Company’s revenue was provided by twenty and nineteen customers in 2014 and 2013, and these customers constitute accounts receivable at December 31, 2014 and 2013, respectively. The Company performs credit evaluations of its customers and generally does not require collateral. The Company has not experienced significant losses related to receivables from individual customers or groups of customers in any particular geographic area. |
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Trade and Other Accounts Receivable, Policy [Policy Text Block] | Accounts receivable and doubtful accounts – Accounts receivable are recorded at net realizable value. An allowance for doubtful accounts is estimated based on historical collections plus an allowance for probable losses. Receivables are considered past due based on contractual terms and are charged off in the period that they are deemed uncollectible. Recoveries of receivables previously charged off are recorded as revenue when received. |
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Non-controlling Interests [Policy Text Block] | Non-controlling interests - The Company reports its non-controlling interests as a separate component of shareholders’ equity. The Company also presents the consolidated net income and the portion of the consolidated net income and other comprehensive income allocable to the non-controlling interests and to the shareholders of the Company separately in its consolidated statements of operations and comprehensive income (loss). |
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Property, Plant and Equipment, Policy [Policy Text Block] | Property and equipment – Property and equipment are stated at cost less accumulated depreciation. Depreciation is determined using the straight-line method over the estimated useful lives of the assets, which for medical and office equipment is generally 3 – 15 years, and after accounting for salvage value on the equipment where indicated. Salvage value is based on the estimated fair value of the equipment at the end of its useful life. The Company capitalized interest of $371,000, $390,000, and $196,000 in 2014, 2013, and 2012, respectively, as costs of medical equipment. |
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The Company leases Gamma Knife and radiation therapy equipment to its customers under arrangements typically accounted for as operating leases. At December 31, 2014, the Company held equipment under operating lease contracts with customers with an original cost of $82,151,000 and accumulated depreciation of $46,138,000. At December 31, 2013, the Company held equipment under operating lease contracts with customers with an original cost of $86,712,000 and accumulated depreciation of $43,805,000 |
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Certificate Of Deposit [Policy Text Block] | Certificate of deposit – As of December 31, 2014 and 2013, the Company had a $9,000,000 investment in a certificate of deposit with a bank. On January 2, 2015 proceeds from the certificate of deposit were used to pay-off the Company’s line of credit agreement with the same bank who issued the certificate of deposit. |
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Investment, Policy [Policy Text Block] | Investment in equity securities – As of December 31, 2014 the Company had common stock representing an approximate 0.77% interest in Mevion Medical Systems, Inc. (“Mevion”), and accounts for this investment under the cost method. The cost of the Company’s investment in Mevion was $2,709,000 and $2,701,000 as of December 31, 2014 and December 31, 2013, respectively. The Company reviews its investment in Mevion for impairment on a quarterly basis, or as events or circumstances might indicate that the carrying value of the investment may not be recoverable. See Note 4 – Investment in Equity Securities for further discussion. |
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Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair value of financial instruments – The Company’s disclosures of the fair value of financial instruments is based on a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three levels. Level 1 inputs are unadjusted quoted market prices in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for assets or liabilities, and reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. |
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The estimated fair value of the Company’s assets and liabilities as of December 31, 2014 and December 31, 2013 were as follows (in thousands): |
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| | Level 1 | | Level 2 | | Level 3 | | Total | | Value | |
31-Dec-14 | | | | | | | | | | | | | | | | |
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Assets: | | | | | | | | | | | | | | | | |
Cash, cash equivalents, restricted cash | | $ | 1,109 | | $ | - | | $ | - | | $ | 1,109 | | $ | 1,109 | |
Certificate of deposit | | | 9,000 | | | - | | | | | | 9,000 | | | 9,000 | |
Investment in equity securities | | | - | | | - | | | 330 | | | 330 | | | 2,709 | |
Total | | $ | 10,109 | | $ | - | | $ | 330 | | $ | 10,439 | | $ | 12,818 | |
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Liabilities | | | | | | | | | | | | | | | | |
Advances on line of credit | | | 8,780 | | | - | | | - | | | 8,780 | | | 8,780 | |
Debt obligations | | | - | | | 10,658 | | | - | | | 10,658 | | | 10,591 | |
Total | | $ | 8,780 | | $ | 10,658 | | $ | - | | $ | 19,438 | | $ | 19,371 | |
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31-Dec-13 | | | | | | | | | | | | | | | | |
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Assets: | | | | | | | | | | | | | | | | |
Cash, cash equivalents, restricted cash | | $ | 1,959 | | $ | - | | $ | - | | $ | 1,959 | | $ | 1,959 | |
Certificate of deposit | | | 9,000 | | | - | | | - | | | 9,000 | | | 9,000 | |
Investment in equity securities | | | - | | | - | | | 300 | | | 300 | | | 2,701 | |
Total | | $ | 10,959 | | $ | - | | $ | 300 | | $ | 11,259 | | $ | 13,660 | |
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Liabilities | | | | | | | | | | | | | | | | |
Advances on line of credit | | | 8,840 | | | - | | | - | | | 8,840 | | | 8,840 | |
Debt obligations | | | - | | | 15,082 | | | - | | | 15,082 | | | 15,544 | |
Total | | $ | 8,840 | | $ | 15,082 | | $ | - | | $ | 23,922 | | $ | 24,384 | |
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Revenue Recognition, Policy [Policy Text Block] | Revenue recognition - Revenue is recognized when services have been rendered and collectability is reasonably assured, on either a fee per use or revenue sharing basis. As of December 31, 2014, there are no guaranteed minimum payments. The Company’s contracts are typically for a ten year term and are classified as either fee per use or retail. Retail arrangements are further classified as either turn-key or revenue sharing. |
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Revenue from fee per use contracts is determined by each hospital’s contracted rate. Revenue is recognized at the time the procedures are performed, based on each hospital’s contracted rate. Under revenue sharing arrangements, the Company receives a contracted percentage of the reimbursement received by the hospital. The amount the Company expects to receive is recorded as revenue and estimated based on historical experience. Under turn-key arrangements, the Company receives payment from the hospital in the amount of its reimbursement from third party payors, and the Company is responsible for paying all the operating costs of the Gamma Knife. The Company also records an estimate of net operating profit based on estimated revenues, less estimated operating costs. The gross amount the Company expects to receive is recorded as revenue and estimated based on historical experience and hospital contracts with third party payors. Revenue estimates are reviewed periodically and adjusted as necessary. Revenue recognition is consistent with guidelines provided under the applicable accounting standards for revenue recognition. |
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Compensation Related Costs, Policy [Policy Text Block] | Stock-based compensation – The Company measures all stock-based compensation awards at fair value and records such expense in its consolidated financial statements over the requisite service period of the related award. See Note 9 for additional information on the Company’s stock-based compensation programs. |
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Cost of Sales, Policy [Policy Text Block] | Costs of revenue – The Company's costs of revenue consist primarily of maintenance and supplies, depreciation and amortization, and other operating expenses (such as insurance, property taxes, sales taxes, marketing costs and operating costs from the Company’s retail sites). Costs of revenues are recognized as incurred. |
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Selling, General and Administrative Expenses, Policy [Policy Text Block] | Sales and Marketing – The Company markets its services through its preferred provider status with Elekta and a direct sales effort led by its Vice President of Sales and Business Development and its Chief Operating Officer. The Company’s current business is the outsourcing of stereotactic radiosurgery services and radiation therapy services. The Company typically provides the equipment, as well as planning, installation, reimbursement and marketing support services. |
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Income Tax, Policy [Policy Text Block] | Income taxes – The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. See Note 8 for further discussion on income taxes. |
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Comprehensive Income, Policy [Policy Text Block] | Comprehensive income (loss) – Comprehensive income (loss) encompasses all changes in shareholders’ equity other than those arising from transactions with stockholders, and consists of net loss and foreign currency translation adjustments. |
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Foreign Currency Transactions and Translations Policy [Policy Text Block] | Functional currency – Based on guidance provided in accordance with ASC 830, Foreign Currency Matters (“ASC 830”), the Company analyzes its operations outside the United States to determine the functional currency of each operation. Management has determined that these operations are initially accounted for in U.S. dollars since the primary transactions incurred are in U.S. dollars and the Company provides significant funding towards the startup of the operation. When Management determines that an operation has become predominantly self-sufficient, the Company will change its accounting for the operation to the local currency from the U.S. dollar. |
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The Company determined that the functional currency of its Turkish operation, EWRS Turkey, should change from the U.S. dollar to the Turkish lira effective in the third quarter 2012. Therefore, in accordance with ASC 830, EWRS Turkey’s balance sheet accounts were translated at rates in effect as of August 31, 2012, or other rates in accordance with guidance provided under ASC 830, and accumulated gains and losses and translation differences were recorded in accumulated other comprehensive loss, which is a separate component of shareholders’ equity. Monthly, the Company's balance sheet accounts were translated at rates in effect as of the balance sheet date, and income and expense accounts were translated at the weighted average rates of exchange during the period following the change. Translation adjustments resulting from this process were also recognized under accumulated other comprehensive loss. |
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Gains and losses from foreign currency transactions and remeasurement are listed in the Company’s consolidated statements of operations. The net foreign currency gain for 2014, prior to the sale of EWRS Turkey, was $161,000 compared to a loss in 2013 of $1,174,000, and a gain of $132,000 in 2012. |
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Cumulative Translation Adjustment [Policy Text Block] | Cumulative translation adjustment – Based on guidance provided in accordance with ASU No 2013-05 Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries of Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (“ASU 2013-05”), the Company no longer holds a financial interest in EWRS Turkey. As such, the cumulative translation adjustments previously recognized under accumulated other comprehensive income (loss) were released into net income as a component of the loss for the sale of EWRS Turkey in the statement of operations. The total cumulative translation adjustment of $779,000, previously recognized under accumulated other comprehensive income (loss), was included as a component of the loss calculation for the sale of EWRS Turkey, reported in the statement of operations for the year ended 2014. |
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Discontinued Operations, Policy [Policy Text Block] | Discontinued Operations – Based on guidance provided in accordance with ASU No. 2014-08 Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”), the Company has analyzed the factors that define a discontinued operation and determined that the sale of EWRS Turkey is considered the sale of a significant component, but does not represent a major shift in the business, and therefore is not a discontinued operation. |
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Effective May 31, 2014 (with closing occurring June 10, 2014) the Company sold EWRS Turkey for EUR 4.2 million (approximately $6.0M). The proceeds were used to reduce outstanding debt and the excess was cash to the Company of $768,000. Cash transactions were recorded for the time period June 1 to June 10, 2014, the date of closing. The Company recorded a loss on sale of subsidiary of $572,000. The Company is also eligible for an earn-out in fiscal years 2014 and 2015 based on future revenue derived from the units sold to Euromedic. It is not practicable to estimate the revenue from the earn-outs at this time and therefore no amounts have been recorded as of December 31, 2014 |
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Earnings Per Share, Policy [Policy Text Block] | Earnings per share – Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the year. The fully vested restricted stock units not issued and outstanding, are also included therein. Diluted earnings per share reflect the potential dilution that could occur if common shares were issued pursuant to the exercise of options or warrants. The following table illustrates the computations of basic and diluted earnings per share for the years ended December 31, 2014, 2013 and 2012. |
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| | 2014 | | 2013 | | 2012 | | | | | | | |
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Numerator for basic and diluted (loss) earnings per share | | $ | -952,000 | | $ | -312,000 | | $ | 38,000 | | | | | | | |
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Denominator: | | | | | | | | | | | | | | | | |
Denominator for basic (loss) earnings per share – weighted-average shares | | | 5,028,000 | | | 4,608,000 | | | 4,609,000 | | | | | | | |
Effect of dilutive securities | | | | | | | | | | | | | | | | |
Employee stock options/restricted stock units | | | 3,000 | | | 3,000 | | | 3,000 | | | | | | | |
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Denominator for diluted (loss) earnings per share – adjusted weighted- average shares | | | 5,031,000 | | | 4,611,000 | | | 4,612,000 | | | | | | | |
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(Loss) earnings per common share- basic | | $ | -0.19 | | $ | -0.07 | | $ | 0.01 | | | | | | | |
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(Loss) earnings per common share- diluted | | $ | -0.19 | | $ | -0.07 | | $ | 0.01 | | | | | | | |
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In 2014, options outstanding to purchase 633,000 shares of common stock at an exercise price range of $2.43 - $6.16 per share, and warrants to purchase 200,000 sharesof common stock, issued with promissory notes, at an exercise price of $2.20, were not included in the calculation of diluted earnings per share because they would be anti-dilutive. |
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In 2013, options outstanding to purchase 576,000 shares of common stock at an exercise price range of $2.30 - $6.50 per share were not included in the calculation of diluted earnings per share because they would be anti-dilutive. |
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In 2012, options outstanding to purchase 588,000 shares of common stock at an exercise price range of $2.76 - $6.50 per share were not included in the calculation of diluted earnings per share because they would be anti-dilutive. |
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Segment Reporting, Policy [Policy Text Block] | Business segment information - The Company, which engages in the business of leasing radiosurgery and radiation therapy equipment to health care providers, has one reportable segment, Medical Services Revenue. |
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The following table provides a break out of domestic and foreign allocations of medical services revenues and net property and equipment: |
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| | 2014 | | 2013 | | 2012 | | | | | | | | | | |
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Medical services revenues | | | | | | | | | | | | | | | | |
Domestic | | 97 | % | 91 | % | 93 | % | | | | | | | | | |
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Foreign | | 3 | % | 9 | % | 7 | % | | | | | | | | | |
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Total | | 100 | % | 100 | % | 100 | % | | | | | | | | | |
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| | 2014 | | 2013 | | | | | | | | | | | | |
Property and equipment, net | | | | | | | | | | | | | | | | |
Domestic | | 94 | % | 84 | % | | | | | | | | | | | |
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Foreign | | 6 | % | 16 | % | | | | | | | | | | | |
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Total | | 100 | % | 100 | % | | | | | | | | | | | |
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Nonmonetary transactions [Policy Text Block] | Nonmonetary transactions – Based on guidance provided in accordance with ASC No. 845 Nonmonetary Transactions (“ASC 845”), barter transactions with commercial substance are recorded at the estimated fair value of the products exchanged, unless the products received have a more readily determinable estimated fair value. The Company entered into a lease agreement in December 2014 where the lessee exchanged certain medical services equipment for a nominal amount and more beneficial contract terms related to the revenue sharing arrangement. The Company estimated and recorded the fair value of the equipment received and recognized deferred revenue. The fair value of the equipment received during the year ended December 31, 2014 was $700,000. |
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Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long lived asset impairment – The Company assesses the recoverability of its long-lived assets when events or changes in circumstances indicate their carrying value may not be recoverable. Such events or changes in circumstances may include: a significant adverse change in the extent or manner in which a long-lived asset is being used, significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company assesses recoverability of a long-lived asset by determining whether the carrying value of the asset group can be recovered through projected undiscounted cash flows over their remaining lives. If the carrying value of the asset group exceeds the forecasted undiscounted cash flows, an impairment loss is recognized, measured as the amount by which the carrying amount exceeds estimated fair value. An impairment loss is charged to operations in the period in which management determines such impairment. No such impairment has been noted as of December 31, 2014 and 2013. |
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Reclassification, Policy [Policy Text Block] | Out-of-Period Adjustment: During the fourth quarter of 2014, the Company reclassified $400,000 to non-controlling interests and $235,000 to additional paid-in capital that were incorrectly classified as liabilities. The corrections were not material to any previously reported financial periods or to the year ended December 31, 2014. |
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New Accounting Pronouncements, Policy [Policy Text Block] | Recently issued accounting pronouncements – In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), ("ASU 2014-09"), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures and has not yet selected a transition method. |
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In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern ("ASU 2014-15 "). ASU 2014-15 provides guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for reporting periods ending after December 15, 2016. Early adoption is permitted. The adoption of ASU 2014-15 is not expected to affect the Company's consolidated financial position, results of operations or cash flows. |
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