XML 29 R18.htm IDEA: XBRL DOCUMENT
v3.24.2.u1

Note 11 - Rhode Island Acquisition | 6 Months Ended
--- | ---
Jun. 30, 2024
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | Note 11. Rhode Island Acquisition On November 10, 2023, the Company entered into the IPA with GenesisCare and GC Holdings, pursuant to which GenesisCare agreed to sell to the Company its entire equity interest in each of the RI Companies and to assign certain payor contacts to the Company for a cash purchase price of $2,850,000 (such transaction, the RI Acquisition). The equity interests acquired by the Company under the IPA equates to a 60% interest in each RI Company. The RI Companies operate three functional radiation therapy cancer centers in Rhode Island. The Company entered into the IPA to expand its growing retail business model in the United States and continue to diversify its cancer treatment product offerings. On March 1, 2024, the Company, GenesisCare and GC Holdings entered into a First Amendment to the Investment Agreement pursuant to which the parties agreed to extend the date on which a party could terminate the IPA if the closing conditions had not been met (the “Permitted Termination Date”) from March 10, 2024 to April 30, 2024. On April 18, 2024, the parties agreed to a Second Amendment to the Investment Agreement pursuant to which GenesisCare agreed to sell a GE Discovery RT CT Simulator (“CT Sim”) to the Company for $175,000, payment for which was required 5 days following the close of the acquisition. On April 24 2024, the Company, GenesisCare and GC Holdings, entered into a Third Amendment to the Investment Agreement that further extended the Permitted Termination Date to May 31, 2024. On May 7, 2024, the parties entered into a Fourth Amendment to the Investment Purchase Agreement, pursuant to which GenesisCare agreed to transfer certain assets and payor contracts to the RI Companies, rather than transferring such assets and payor contracts to the Company. The parties completed the remaining closing conditions pursuant to the IPA and closed the RI Acquisition on May 7, 2024 (“the Closing Date”). The RI acquisition has been accounted for as a business combination under ASC 805 Business Combinations (“ASC 805”), which requires, among other things, that purchase consideration, assets acquired, liabilities assumed and non-controlling interest be measured at their fair values as of the acquisition date. The allocation of purchase price considerations is preliminary, and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available. During the measurement period, which can be no more than one year from the Closing Date, the Company expects to continue to obtain information to assist in determining the final fair value of assets acquired. The assets acquired were recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. Thus, the provisional measurements of fair value discussed below are subject to change. The Company expects to finalize the valuations as soon as practicable, but no later than one year from the Closing Date. While the Company believes its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired, and the resulting amount of the bargain purchase. The Company recorded medical equipment, facilities and non-controlling interest at fair value as of the Closing date. Sales comparison and cost approaches were used to value the medical equipment, including assumptions of estimated direct costs associated with acquiring the equipment. Where appropriate, adjustments were made to the direct replacement cost to reflect depreciation and obsolescence. The sales comparison approach was also utilized to value certain assets, involving secondary market research. The cost approach was also used to value the facilities acquired and the unfavorable leasehold interest. The non-controlling interest was recorded at fair value based on the purchase price paid for the acquisition, after any premium or discount derived from the operating agreement with the minority owners. The major classes of assets and liabilities to which the Company has preliminarily allocated the fair value of the purchase price consideration were as follows:
|  | May 7, 2024 |
Cash and cash equivalents |  | $ | 3,388,000 |
Accounts receivable |  |  | 919,000 |
Medical equipment |  |  | 2,403,000 |
Facilities |  |  | 4,697,000 |
ROU assets |  |  | 1,835,000 |
Unfavorable leasehold interest |  |  | (1,227,000 | )
Total assets acquired |  |  | 12,015,000 |
Accounts payable |  |  | (150,000 | )
Deferred income taxes |  |  | (1,226,000 | )
Gain on bargain purchase |  |  | (3,679,000 | )
Lease liabilities |  |  | (1,835,000 | )
Base purchase consideration |  |  | 5,125,000 |
Non-controlling interest |  |  | (2,100,000 | )
CT Sim |  |  | (175,000 | )
Cash paid by the Company |  | $ | 2,850,000 |
The Company recognized a bargain purchase, as defined by ASC 805, in connection with the RI Acquisition. The Company purchased the RI Companies as part of the sale of certain of GenesisCare’s assets in its bankruptcy proceedings, resulting in a bargain purchase. A bargain purchase gain of $3,679,000, net of deferred taxes of $1,226,000 is reflected in other income in the condensed consolidated statements of operations for the three and six-month periods ended June 30, 2024. None of the purchase price was allocated to intangible assets because none were acquired as part of the transaction. The Company recorded the unfavorable lease position received as part of the RI Acquisition as a reduction to ROU assets on the condensed consolidated balance sheet. The preliminary value of the acquired tangible assets acquired were as follows:
|  | Fair Value |  |  | Average Useful Life (in Years) |
Facilities |  | $ | 4,697,000 |  |  |  | 15 |
Medical equipment |  |  | 2,403,000 |  |  |  | 4 |
Total medical equipment and facilities acquired |  | $ | 7,100,000 |  |  |  |  |
Costs related to legal, financial and due diligence services performed in connection with the RI Acquisition recorded in selling and administrative expense in the condensed consolidated statement of operations were $341,000 for the six-month period ended June 30, 2024. The net impact of the RI Acquisition on the consolidated results of operations, since the date of acquisition, are as follows:
|  | Three Months Ended |
|  | June 30, 2024 |
Revenue |  | $ | 1,892,000 |
Operating income |  | $ | 612,000 |
Per the guidance in ASC 805, the Company determined its consolidated financial results as if the RI Acquisition occurred on January 1, 2024. These pro forma results were based on estimates and assumptions, which the Company believes are reasonable. They are not the results that would have been realized had the Company and the RI Companies been combined during the periods presented and are not necessarily indicative of the Company’s consolidated results of operations in future periods. The pro forma results include adjustments related to purchase accounting. Acquisition costs and other nonrecurring charges are included in the earlier period presented. ASC 805 also requires presentation of proforma information for the comparable period, when the comparable period is presented. Due to the lack of reliable financial information for the RI Companies following the protracted bankruptcy proceedings, the Company was not able to obtain financial information sufficient to make these disclosures. Therefore, the Company has not made the comparable period proforma disclosure because it would be impracticable to do. Following are the supplemental consolidated financial results of the Company on an unaudited, pro forma basis, as if the acquisition occurred on January 1, 2024. The supplemental proforma disclosure excludes the non-recurring impact from the bargain purchase gain generated from the RI Acquisition.
|  | Six Months Ended |
|  | June 30, 2024 |
Revenue |  | $ | 13,396,000 |
Operating income |  | $ | 1,045,000 |
Diluted earnings per share |  | $ | 0.21 |

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration