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Note 5 - Leases | 9 Months Ended
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Sep. 30, 2024
Notes to Financial Statements |
Lessee, Operating Leases [Text Block] | Note 5. Leases The Company determines if a contract is a lease at inception. Under ASC 842, the Company is a lessor of equipment to various customers. Leases that commenced prior to the ASC 842 adoption date were classified as operating leases under historical guidance. As the Company has elected the package of practical expedients allowing it to not reassess lease classification, these leases are classified as operating leases under ASC 842 as well. All of the Company’s lessor arrangements entered into or modified after ASC 842 adoption are also classified as operating leases. Some of these lease terms have an option to extend the lease after the initial term, but do not contain the option to terminate early or purchase the asset at the end of the term. The Company has elected not to recognize right-of-use (“ROU”) assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. The Company’s Gamma Knife and PBRT contracts with hospitals are classified as operating leases under ASC 842. The related equipment is included in medical equipment and facilities on the Company’s condensed consolidated balance sheets. As all income from the Company’s lessor arrangements is solely based on procedure volume, all income is considered variable payments not dependent on an index or a rate. As such, the Company does not measure future operating lease receivables. On November 3, 2021, the Company entered into an agreement to sublease (the “Sublease”) its corporate office located at Two Embarcadero Center, Suite 410, San Francisco, California, where it leased approximately 3,253 square feet for $22,011 per month and the lease expired in August 2023. The Sublease was for $16,195 per month through the contract expiration date. The Company also entered into a lease agreement (the “Lease”) for new corporate office space at 601 Montgomery St., Suite 1112, San Francisco, CA for approximately 900 square feet for $4,500 per month with a lease expiration date in November 2024. The Company did not renew this lease. On May 7, 2024, the Company completed the RI Acquisition and acquired 60% of the equity interests of the RI Companies. The RI Companies operate three single-unit LINAC facilities. The Company assessed the existing lease agreements under ASC 842 and concluded two of the three facilities contained operating leases. The Company included these leases in its presentation of the condensed consolidated financial statements for the three and nine-month periods ended September 30, 2024. The Company’s operating lease in Woonsocket is with a related party and contains a sublease for a 1,950 square feet of the clinic space. The sublease is also with a related party. Sublease income, related party, for the three and nine-month periods ended September 30, 2024 was $15,000 and $24,000, respectively. Rent payable to related parties was approximately $184,000 as of September 30, 2024. The Company’s lessee operating leases are accounted for as ROU assets, current portion of lease liabilities, and lease liabilities on the condensed consolidated balance sheets. Operating lease ROU assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The Company’s operating lease contracts do not provide an implicit rate for calculating the present value of future lease payments. The Company determined its incremental borrowing rate to be in the range of approximately 4% and 8% by using available market rates and expected lease terms. The operating lease ROU assets and liabilities include any lease payments made and there were no lease incentives or initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company’s lessee operating lease agreements are for administrative office space and related equipment and two of its recently acquired stand-alone facilities in Rhode Island. These leases have remaining lease terms of approximately 5 to 17 years, some of which include options to renew or extend the lease. As of September 30, 2024, operating ROU assets, net of unfavorable leasehold interests were $986,000, and lease liabilities were $1,735,000. The following table summarizes the maturities of the Company's lessee operating lease liabilities as of September 30, 2024:
Year ending December 31, |  | Operating Leases |
2024 (excluding the nine-months ended September 30, 2024) |  | $ | 109,000 |
2025 |  |  | 346,000 |
2026 |  |  | 347,000 |
2027 |  |  | 347,000 |
2028 |  |  | 348,000 |
Thereafter |  |  | 958,000 |
Total lease payments |  |  | 2,455,000 |
Less imputed interest |  |  | (720,000 | )
Total |  | $ | 1,735,000 |
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Lease cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating lease cost |  | $ | 133,000 |  |  | $ | 59,000 |  |  | $ | 219,000 |  |  | $ | 265,000 |
Sublease income, related party |  |  | (15,000 | ) |  |  | (30,000 | ) |  |  | (24,000 | ) |  |  | (129,000 | )
Total lease cost |  | $ | 118,000 |  |  | $ | 29,000 |  |  | $ | 195,000 |  |  | $ | 136,000 |
Other information |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities - Operating leases |  | $ | 133,000 |  |  | $ | 59,000 |  |  | $ | 219,000 |  |  | $ | 265,000 |
Weighted-average remaining lease term - Operating leases in years |  |  | 7.85 |  |  |  | 0.89 |  |  |  | 7.85 |  |  |  | 0.89 |
Weighted-average discount rate - Operating leases |  |  | 8.00 | % |  |  | 4.99 | % |  |  | 8.00 | % |  |  | 4.99 | %

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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