Acquisitions (Policies) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||
| Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Business Combinations |
Purchase Price Allocation Pursuant to ASC 805, “Business Combinations,” the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the Closing Date. The purchase price allocation was primarily based upon a valuation using income and cost approaches and management’s estimates and assumptions. The excess of the purchase price over the net tangible and identifiable intangible assets was preliminary recorded as goodwill. For tax purposes, goodwill consisted of both identifiable intangible assets (customer relationships and non-competition agreements from the table below) and unidentifiable intangible assets (goodwill from the table below). The Company expects goodwill to be partially deductible for tax purposes. The purchase price allocation was based on a preliminary analysis and is subject to further adjustments. Upon completion of the final purchase price allocation, the Company expects goodwill to significantly decrease and the corresponding intangible assets, including customer relationships and non-competition agreements, to significantly increase. The allocation of the purchase price to the fair values of the assets acquired and liabilities assumed as of the Closing Date is presented below (in thousands):
The asset purchase agreement provided for an adjustment to the purchase price based on the final number of pumps acquired and the associated treatments, which will be generated during the 90 day period post-closing from the approximately 100 medical facility relationships Ciscura had prior to the acquisition. The Company currently estimates that the total purchase price, which is based on the estimated number of acquired pumps and associated treatments, will be approximately $5.4 million. The Company does not expect the total purchase price to exceed $5.9 million based on management’s current estimates. On the Closing Date, the Company made an initial payment of $3.8 million. Any increase adjustment to the purchase price above the initial payment will be based on the factors referred to above as of the 110th day and the 140th day after the Closing Date. As of June 30, 2015, the Company recorded an estimated remaining liability of $1.6 million, which is recorded in the balance sheet under the heading for accounts payable. The Company has estimated that the associated integration and transaction costs will be approximately $0.7 million, of which $0.6 million has been recognized as of June 30, 2015. Acquired property and equipment are being depreciated on a straight-line basis with estimated remaining lives ranging from 1 year to 7 years. |
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| Recent Accounting Pronouncements and Developments |
In April 2015, the Financial Accounting Standards Board (“FASB”) issued additional guidance on “Intangibles – Goodwill and Other—Internal-Use Software” and how a customer should account for fees paid in a cloud computing arrangement. Guidance for determining whether an arrangement includes the sale or license of software already existed for cloud service providers. The new guidance requires that if a cloud computing arrangement includes a software license, the customer should account for the software license element in the arrangement consistent with the acquisition of software licenses. If the cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This new standard does not change the GAAP for a customer’s accounting for service contracts. The effective date of this new standard is for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. The Company may elect a retrospective or prospective transition. The Company is currently evaluating its Information Technology arrangements and their applicability to this new guidance. In May 2014, the FASB issued a comprehensive new standard, which amends revenue recognition principles and provides a single set of criteria for revenue recognition among all industries. The new standard provides a five step framework whereby revenue is recognized when promised goods or services are transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires enhanced disclosure relating to revenue recognition in both the interim and annual periods. On April 1, 2015, the FASB proposed to defer the effective date for annual reporting periods beginning after December 15, 2017 and allows for adoption using a full retrospective method, or a modified retrospective method. Early adoption is allowed but not before the original public organization date of December 15, 2016. The Company is currently assessing the method of adoption and the expected impact the new standard has on its financial position and results of operations. In August 2014, the FASB issued guidance requiring management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements. Entities must provide certain disclosures if “conditions or events raise substantial doubt about the entity’s ability to continue as a going concern.” The disclosure requires identifying the principal conditions and events contributing to the “doubt” to continue as a going concern, as well as management’s evaluations and plans to try to alleviate these uncertainties. This guidance is effective for annual reporting periods, within those annual periods ending after December 15, 2016. The Company is currently evaluating the impact of adopting this standard to determine the impact, if any, it may have on its current practices. |
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