ITEM 1. FINANCIAL STATEMENTS
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
|
Note 1.
|
Basis of Presentation
|
In
the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting
of normal recurring accruals and entries to record the impairment of the Company’s investment in equity securities) necessary
to present fairly American Shared Hospital Services’ consolidated financial position as of September 30, 2016 and the results
of its operations for the three and nine month periods ended September 30, 2016 and 2015, which results are not necessarily indicative
of results on an annualized basis. Consolidated balance sheet amounts as of December 31, 2015 have been derived from audited consolidated
financial statements.
These
unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements
for the year ended December 31, 2015 included in the Company’s 10-K filed with the Securities and Exchange Commission.
These
condensed consolidated financial statements include the accounts of American Shared Hospital Services (the “Company”)
and its subsidiaries as follows: The Company wholly-owns the subsidiaries OR21, Inc. (“OR21 LLC”), MedLeader.com,
Inc. (“MedLeader”), PBRT Orlando, LLC (“Orlando”) and American Shared Radiosurgery Services (“ASRS”).
The Company is also the majority owner of Long Beach Equipment, LLC (“LBE”). ASRS is the majority-owner of GK Financing,
LLC (“GKF”) which wholly-owns the subsidiaries GK Financing U.K., Limited (“GKUK”), and Instituto de Gamma
Knife del Pacifico S.A.C. (“GKPeru”). GKF is also the majority-owner of the subsidiaries Albuquerque GK Equipment,
LLC (“AGKE”) and Jacksonville GK Equipment, LLC (“JGKE”).
The
Company through its majority-owned subsidiary, GKF, provided Gamma Knife units to seventeen medical centers as of September 30,
2016 in the states of Arkansas, California, Connecticut, Florida, Illinois, Massachusetts, Mississippi, Nevada, New Jersey, New
Mexico, New York, Tennessee, Oklahoma, Ohio, Oregon and Texas.
The
Company through its wholly-owned subsidiary, Orlando, provided proton beam radiation therapy (“PBRT”) and related
equipment, to a new customer in the United States, which treated its first patient during the second quarter of 2016. The Company
also directly provides radiation therapy and related equipment, including Intensity Modulated Radiation Therapy (“IMRT”),
Image Guided Radiation Therapy (“IGRT”) and a CT Simulator to the radiation therapy department at an existing Gamma
Knife site in the United States.
The
Company formed the subsidiaries GKUK and GKPeru, for the purposes of expanding its business internationally into the United Kingdom
and Peru; LBE and Orlando to provide proton beam therapy services in Long Beach, California and Orlando, Florida; and AGKE and
JGKE to provide Gamma Knife services in Albuquerque, New Mexico and Jacksonville, Florida. AGKE began operation in the second
quarter of 2011 and JGKE began operation in the fourth quarter of 2011. Orlando treated its first patient in April 2016. GKPeru
is expected to begin operation in the first quarter of 2017. GKUK is inactive and LBE is not expected to generate revenue within
the next two years.
The
Company continues to develop its design and business model for “The Operating Room for the 21st Century”
SM
(“OR21”
SM
), through its 50% owned OR21, LLC. The remaining 50% is owned by an architectural design company.
OR21 is not expected to generate significant revenue within the next two years.
MedLeader
was formed to provide continuing medical education online and through videos for doctors, nurses and other healthcare workers.
This subsidiary is not operational at this time.
Based
on the guidance provided in accordance with Accounting Standards Codification (“ASC”) 280
Segment Reporting
(“ASC 280”), the Company has analyzed its subsidiaries which are all in the business of leasing radiosurgery and radiation
therapy equipment to healthcare providers, and concluded there is one reportable segment, Medical Services Revenue. The Company
provides Gamma Knife, PBRT, and IGRT equipment to eighteen hospitals in the United States as of September 30, 2016. These eighteen
locations operate under different subsidiaries of the Company, but offer the same service, radiosurgery and radiation therapy.
The operating results of the subsidiaries are reviewed by the Company’s Chief Executive Officer and Chief Financial Officer,
who are also deemed the Company’s Chief Operating Decision Makers (“CODMs”) and this is done in conjunction
with all of the subsidiaries and locations.
On
January 14, 2016, the Company entered into a definitive lease agreement for financing of its MEVION S250 at UF Health Cancer Center
at Orlando Health (“Orlando Health”). The total proceeds of $8,400,000 were used to pay-down the $1,000,000 in Promissory
Notes (the “Notes”) with four members of the Company’s Board of Directors, reimburse the Company for freight
costs associated with the MEVION S250, and to fund the remaining milestone payments for the MEVION S250 of approximately $7,300,000.
Total proceeds from capital lease financing for reimbursement of payments for acquisition of equipment, were approximately $1,137,000.
Based
on the guidance provided in accordance with ASC 405
Extinguishment of Liabilities
(“ASC 405”) and ASC 470
Debt
Modifications and Extinguishments
(“ASC 470”), the pay-down of the Notes is considered an extinguishment of debt
and, as such, the difference between the net carrying amount of the Notes and the costs of extinguishment was recognized as a
loss on the Company’s condensed consolidated Statements of Operations. During the nine month period ended September 30,
2016, the Company recorded a loss on early extinguishment of debt of $108,000. The Notes were issued with common stock warrants
with an estimated fair value of $145,000. The unamortized balance of the discount on the Notes, of $80,000, and deferred fees
incurred from the issuance of the Note of approximately $28,000, were recorded as a loss on early extinguishment.
Based on the guidance
provided in ASC 410
Asset Retirement Obligations
(“ASC 410”), the Company analyzed the lease agreement with
Orlando Health for the PBRT system and determined an asset retirement obligation (“ARO”) exists to remove the unit
at the end of the lease term. The fair value of the ARO liability is not reasonable to estimate at this time, due to uncertainties
about timing, cost and, outcome of the ARO, therefore no liability has been recorded as of September 30, 2016. The Company will
re-evaluate this position on a periodic basis when facts and circumstances change that could affect this conclusion.
During
the nine month period ended September 30, 2016, the Company adopted a new accounting policy for the depreciation of PBRT property
and equipment. Property and equipment are stated at cost less accumulated depreciation. Depreciation is determined using the modified
units of production method, which is a function of both time and usage of the equipment. This depreciation method allocates costs
considering the volume of usage through the useful life of the PBRT unit, which has been estimated at 20 years. Based on the guidance
provided in ASC 840
Leases
(“ASC 840”), assets under capital lease where ownership is transferred at the end
of the lease, or there is a bargain purchase option, should be amortized over the economic useful life of that asset. The estimated
useful life of the PBRT unit is consistent with the estimated economic life of 20 years.
In
July 2016, an existing customer provided notice of their intent to exercise the option to purchase the Gamma Knife unit at their
hospital at the end of the lease term for a predetermined purchase price, pursuant to the lease agreement. The lease will terminate
April 2017 and the unit will be depreciated to the purchase price at the time of the sale. Based on the guidance provided in ASC
360
Property, Plant and Equipment
(“ASC 360”), because the Gamma Knife unit is not available for immediate sale,
the Company has not classified and measured the asset as held for sale.
On
August 13, 2016, the Company entered into a 7 year operating lease for an office space located in San Francisco, CA. The commencement
date of the new lease coincided with the termination of the Company’s existing lease space.
In
May 2014, the Financial Accounting Standards Board “(FASB”) issued Accounting Standards Update (“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 United States Generally Accepted Accounting Principles (“GAAP”)
when it becomes effective. The new standard is effective for the Company for annual reporting periods beginning after December
15, 2017. Early application is permitted for reporting periods beginning after December 15, 2016. The standard permits the use
of either the retrospective or cumulative effect transition method. In July 2015, the FASB voted to delay the effective date of
this standard until the first quarter of 2018. 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.
In
August 2014, FASB issued ASU No. 2014-15,
Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going
Concern
(“ASU 2014-15”), which provides guidance on determining when and how to disclose going-concern uncertainties
in financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability
to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain
disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. ASU
2014-15 applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter,
with early adoption permitted. The Company is currently evaluating the impact of this update on future disclosures concerning
its liquidity position.
In
January 2015, the FASB issued ASU No. 2015-01,
Income Statement-Extraordinary and Unusual Items (Subtopic 225-20): Simplifying
Income Statement Presentation by Eliminating the Concept of Extraordinary Items
(“ASU 2015-01”), which eliminates
from GAAP the concept of extraordinary items and requires that an entity separately classify, present, and disclose extraordinary
events and transactions. This ASU will also align more closely GAAP income statement presentation guidance with International
Accounting Standards (“IAS”) 1
, Presentation of Financial Statements
, which prohibits the presentation and
disclosure of extraordinary items. The new standard was effective for the Company on January 1, 2016. The standard permits the
use of either the retrospective or prospective application. The Company adopted ASU 2015-01 on January 1, 2016 and the adoption
did not have a material impact on the condensed consolidated financial statements and related disclosures.
In
February 2015, the FASB issued ASU No. 2015-02,
Consolidation (Topic 810): Amendments to the Consolidation Analysis
(“ASU
2015-02”), which is intended to improve targeted areas of consolidation guidance for legal entities. The ASU focuses on
the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain
legal entities. In addition to reducing the number of consolidation models from four to two, the new standard simplifies the FASB
ASC and improves current GAAP. The new standard was effective for the Company on January 1, 2016. The Company adopted ASU 2015-02
on January 1, 2016 and the adoption did not have a material impact on the condensed consolidated financial statements and related
disclosures.
In
April 2015, the FASB issued ASU No. 2015-03,
Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation
of Debt Issuance Costs
(“ASU 2015-03”), which requires that debt issuance costs related to a recognized debt liability,
be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt
discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The
new standard was effective for the Company on January 1, 2016.
The
Company adopted ASU 2015-03 on January 1, 2016, on a retrospective basis. Debt issuance costs that were previously recorded as
other assets on the Company’s condensed consolidated Balance Sheets were reclassified as an offset to the respective debt
instrument for which they were derived. During the nine month period ended September 30, 2016 and as of December 31, 2015, $67,000
and $72,000 were reclassified from current and noncurrent other assets to current and noncurrent debt, respectively.
In
January 2016, the FASB issued ASU No. 2016-01
Recognition and Measurement of Financial Assets and Financial Liabilities
(“ASU 2016-01”) which requires equity investments, except those accounted for under the equity method of accounting
or those that result in consolidation of the investee, to be measured at fair value with changes in fair value recognized in net
income. The new guidance is effective for the Company on January 1, 2018. Early adoption is permitted. The standard permits the
use of cumulative-effect transition method. The Company is evaluating the effect that ASU 2016-01 will have on its consolidated
financial statements and related disclosures.
In
February 2016, the FASB issued ASU No. 2016-02
Leases
(“ASU 2016-02”), which requires lessees to recognize,
for all leases, at the commencement date, a lease liability and a right-of-use asset. Under the new guidance, lessor accounting
is largely unchanged. The new guidance is effective for the Company on January 1, 2019. Early adoption is permitted. The Company
is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures.
In
March 2016, the FASB issued ASU No. 2016-09
Compensation – Stock Compensation
(Topic 718)
(“ASU 2016-09”)
which changes five aspects of accounting for share-based payment award transactions including 1) accounting for income taxes;
2) classification of excess tax benefits on the statement of cash flows; 3) forfeitures; 4) minimum statutory tax withholding
requirements; and 5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for
tax-withholding purposes. The new guidance is effective for the Company for interim and annual periods beginning after December
15, 2016. Early adoption is permitted. The Company is evaluating the effect that ASU 2016-09 will have on its consolidated financial
statements and related disclosures.
In June 2016, the FASB issued ASU No. 2016-13
Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
(“ASU
2016-13”), which requires measurement and recognition of expected credit losses for financial assets held. The new guidance
is effective for fiscal periods beginning after December 15, 2019. Early adoption is permitted for fiscal periods beginning after
December 15, 2018. The Company is evaluating the effect that ASU 2016-13 will have on its consolidated financial statements and
related disclosures.
In August 2016, the FASB issued ASU No.
2016-15
Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments
(“ASU
2016-15”), which provides guidance on eight specific cash flow issues: debt prepayment or extinguishment costs; settlement
of zero-coupon or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest
rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance
claims; proceeds from the settlement of corporate-owned life insurance policies; distributions received from equity method investees;
beneficial interests in securitization transactions; and separately identifiable cash flows and application of the Predominance
Principle. The new guidance is effective for fiscal periods beginning after December 15, 2017 and interim periods within those
fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is evaluating the effect that
ASU 2016-15 will have on its consolidated financial statements and related disclosures.
|
Note 2.
|
Per Share Amounts
|
Per
share information has been computed based on the weighted average number of common shares and dilutive common share equivalents
outstanding. The computation for the three month period ended September 30, 2016 excluded approximately 571,000 stock options
and the nine month period ended September 30, 2016 excluded approximately 600,000 stock options and 200,000 common stock warrants,
because the exercise price of the options was higher than the average market price during those periods.
Pursuant
to GAAP, potentially dilutive common stock equivalents, such as dilutive stock options, are not considered when their inclusion
in reporting earnings per share would be dilutive to reported losses incurred per share. Because the Company reported a loss for
the nine month period ended September 30, 2015, the potentially dilutive effects of approximately 25,000 of the Company’s
stock options, 200,000 warrants, and 7,000 unvested restricted stock units were not considered for the reporting period, respectively.
The
following table sets forth the computation of basic and diluted earnings per share for the three and nine month periods ended
September 30, 2016 and 2015:
|
|
Three Months ended
September 30,
|
|
|
Nine Months ended
September 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net income (loss) attributable to American Shared Hospital Services
|
|
$
|
334,000
|
|
|
$
|
43,000
|
|
|
$
|
478,000
|
|
|
$
|
(1,799,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares for basic earnings per share
|
|
|
5,554,000
|
|
|
|
5,494,000
|
|
|
|
5,553,000
|
|
|
|
5,485,000
|
|
Diluted effect of stock options, restricted stock & common stock warrants
|
|
|
39,000
|
|
|
|
22,000
|
|
|
|
11,000
|
|
|
|
-
|
|
Weighted average common shares for diluted earnings per share
|
|
|
5,593,000
|
|
|
|
5,516,000
|
|
|
|
5,564,000
|
|
|
|
5,485,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
$
|
0.06
|
|
|
$
|
0.01
|
|
|
$
|
0.09
|
|
|
$
|
(0.33
|
)
|
Diluted earnings (loss) per share
|
|
$
|
0.06
|
|
|
$
|
0.01
|
|
|
$
|
0.09
|
|
|
$
|
(0.33
|
)
|
|
Note 3.
|
Stock-based Compensation
|
On
June 2, 2010, the Company’s shareholders approved an amendment and restatement of the 2006 Stock Incentive Plan (the “2006
Plan”). Among other things, the amendment and restatement renamed the 2006 Plan to the Incentive Compensation Plan (the
“Plan”) and increased the number of shares of the Company’s common stock reserved for issuance under the Plan
by an additional 880,000 shares from 750,000 shares to 1,630,000 shares. The shares are reserved for issuance to officers of the
Company, other key employees, non-employee directors, and advisors. The Plan serves as successor to the Company’s previous
two stock-based employee compensation plans, the 1995 and 2001 Stock Option Plans. The shares reserved under those two plans,
including the shares of common stock subject to currently outstanding options under the plans, were transferred to the Plan, and
no further grants or share issuances will be made under the 1995 and 2001 Plans. On June 16, 2015, the Company’s shareholders
approved an amendment and restatement of the Plan in order to extend the term of the Plan by two years.
Stock-based
compensation expense associated with the Company’s stock-based options to employees is calculated using the Black-Scholes
valuation model. The Company’s stock-based awards have characteristics significantly different from those of traded options,
and changes in the subjective input assumptions can materially affect the fair value estimates. The estimated fair value of the
Company’s option grants is estimated using assumptions for expected life, volatility, dividend yield, and risk-free interest
rate which are specific to each award. The estimated fair value of the Company’s options is amortized over the period during
which an employee is required to provide service in exchange for the award (requisite service period), usually the vesting period.
Accordingly, stock-based compensation cost before income tax effect, for the Company’s options and restricted stock awards,
in the amount of $42,000 and $161,000 is reflected in net income for the three and nine month periods ended September 30, 2016
compared to $58,000 and $152,000 in the same periods prior year, respectively. At September 30, 2016, there was approximately
$399,000 of unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan.
This cost is expected to be recognized over a period of approximately four years.
The following table
summarizes restricted stock awards, consisting primarily of annual automatic grants and deferred compensation to non-employee
directors, for the nine month period ended September 30, 2016:
|
|
Restricted
Stock
Awards/Units
|
|
|
Grant Date
Weighted-
Average Fair
Value
|
|
|
Intrinsic
Value
|
|
Outstanding at January 1, 2016
|
|
|
3,000
|
|
|
$
|
2.58
|
|
|
$
|
-
|
|
Granted
|
|
|
40,000
|
|
|
$
|
1.95
|
|
|
$
|
-
|
|
Vested
|
|
|
(26,000
|
)
|
|
$
|
1.92
|
|
|
$
|
-
|
|
Forfeited
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Outstanding at September 30, 2016
|
|
|
17,000
|
|
|
$
|
2.10
|
|
|
$
|
17,000
|
|
The
following table summarizes stock option activity for the nine month period ended September 30, 2016:
|
|
Stock
Options
|
|
|
Grant Date
Weighted-
Average
Exercise
Price
|
|
|
Weighted-
Average
Remaining
Contractual
Life (in
Years)
|
|
Outstanding at January 1, 2016
|
|
|
614,000
|
|
|
$
|
2.86
|
|
|
|
5.10
|
|
Granted
|
|
|
20,000
|
|
|
$
|
2.19
|
|
|
|
6.70
|
|
Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
Forfeited
|
|
|
(9,000
|
)
|
|
$
|
2.50
|
|
|
|
-
|
|
Outstanding at September 30, 2016
|
|
|
625,000
|
|
|
$
|
2.85
|
|
|
|
4.51
|
|
Exercisable at September 30, 2016
|
|
|
85,000
|
|
|
$
|
2.76
|
|
|
|
2.94
|
|
|
Note 4.
|
Investment in Equity
Securities
|
As
of September 30, 2016 and December 31, 2015 the Company had a $579,000 investment in the common stock of Mevion Medical Systems,
Inc. (“Mevion”), formerly Still River Systems, representing an approximate 0.46% interest in Mevion. The Company accounts
for this investment under the cost method. The Company carries its investment in Mevion at cost and reviews it for impairment on
a quarterly basis, or as events or circumstances might indicate that the carrying value of the investment may not be recoverable.
Based on guidance provided
in ASC 320
Investments–Debt and Equity Securities
(“ASC 320”) and Staff Accounting Bulletins (“SAB”)
Topic 5M
Other Than Temporary Impairment (“OTTI”) of Certain Investments in Equity Securities
(“SAB Topic
5M”), the Company analyzed the related events of Mevion, that occurred in the second and third quarters of 2015 and its impact
on the Company’s investment. The Company determined that these circumstances indicated a decline in value of its Mevion investment
that was other-than-temporary, and concluded that a write-down of the carrying value should be recognized. As of June 30, 2015,
the Company adjusted its investment in Mevion to the estimated fair value of $600,000 and recorded a $2,114,000 impairment loss.
The $2,114,000 other than temporary impairment of its investment in Mevion is recorded in other income (loss) on the Company’s
Condensed Consolidated Statement of Operations.
During the period ended
December 31, 2015, the Company engaged a third party expert to review and corroborate its assessment of the fair value of the Mevion
investment. Based on the third party analysis, an additional impairment loss of $26,000 was recognized by the Company during the
three months ended December 31, 2015. The fair value of the Company’s investment in Mevion, as of December 31, 2015 and September
30, 2016 was approximately $579,000. The impairment loss for the year ended December 31, 2015 was $2,140,000.
The
Company reviewed this investment at September 30, 2016 in light of both current market conditions and the ongoing needs of Mevion
to raise cash to continue its development of the first compact, single room PBRT system. Based on its analysis, the Company determined
no additional impairment needs to be recognized as of September 30, 2016.
The Company’s first MEVION S250 PBRT
unit was contracted with Orlando Health, Inc. under a ten (10) year, revenue sharing arrangement. The Marjorie and Leonard
Williams Center for Proton Therapy at Orlando Health treated its first patient on April 6, 2016.
|
Note 5.
|
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.
The
estimated fair value of the Company’s assets and liabilities as of September 30, 2016 and December 31, 2015 were as follows
(in thousands):
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Carrying
Value
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, restricted cash
|
|
$
|
2,096
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,096
|
|
|
$
|
2,096
|
|
Investment in equity securities
|
|
|
-
|
|
|
|
-
|
|
|
|
579
|
|
|
|
579
|
|
|
|
579
|
|
Total
|
|
$
|
2,096
|
|
|
$
|
-
|
|
|
$
|
579
|
|
|
$
|
2,675
|
|
|
$
|
2,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt obligations
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
6,499
|
|
|
$
|
6,499
|
|
|
$
|
6,472
|
|
Total
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
6,499
|
|
|
$
|
6,499
|
|
|
$
|
6,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, restricted cash
|
|
$
|
2,259
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,259
|
|
|
$
|
2,259
|
|
Investment in equity securities
|
|
|
-
|
|
|
|
-
|
|
|
|
579
|
|
|
|
579
|
|
|
|
579
|
|
Total
|
|
$
|
2,259
|
|
|
$
|
-
|
|
|
$
|
579
|
|
|
$
|
2,838
|
|
|
$
|
2,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt obligations
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
9,744
|
|
|
$
|
9,744
|
|
|
$
|
9,597
|
|
Total
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
9,744
|
|
|
$
|
9,744
|
|
|
$
|
9,597
|
|
|
Note 6.
|
Repurchase of Common
Stock
|
In
1999 and 2001, the Board of Directors approved resolutions authorizing the Company to repurchase up to a total of 1,000,000 shares
of its own stock on the open market, which the Board reaffirmed in 2008. There were no shares repurchased in 2016 or 2015. There
are approximately 72,000 shares remaining under this repurchase authorization.
The
Company generally calculates its effective income tax rate at the end of an interim period using an estimate of the annualized
effective income tax rate expected to be applicable for the full fiscal year. However, when a reliable estimate of the annualized
effective income tax rate cannot be made, the Company computes its provision for income taxes using the actual effective income
tax rate for the results of operations reported within the year-to-date periods. The Company’s effective income tax rate
is highly influenced by relative income or losses reported and the amount of the nondeductible stock-based compensation associated
with grants of its common stock options and historically from the results of foreign operations. A small change in estimated annual
pretax income (loss) can produce a significant variance in the annualized effective income tax rate given the expected amount
of these items. As a result, the Company has computed its provision for income taxes for the three and nine month periods ended
September 30, 2016 and 2015 by applying the actual effective tax rates to income or (loss) reported within the condensed consolidated
financial statements through those periods.