Acquisition and Expansion - The Company acquired a 60% interest in three existing linear accelerator facilities in Rhode Island for a purchase price of 2,850,000,closingthetransactiononMay7,2024[22][28].−TheCompanybegantreatingpatientsatastand−aloneradiationtherapyfacilityinPuebla,MexicoinJuly2024[37].−TheCompanyhasestablishedajointventureinPuebla,Mexico,withan851,185,000 for the property, anticipating patient treatment to begin in approximately 18 to 24 months[33]. - The Company completed the acquisition of 60% of the equity interests of the RI Companies on May 7, 2024, which operate three radiation therapy facilities in Rhode Island[168]. - The Company acquired real property in Bristol, Rhode Island for 1,185,000onFebruary6,2025[150].RevenueandFinancialPerformance−Totalrevenuefor2024was28,340,000, representing a 32.9% increase from 21,325,000in2023,drivenbynewfacilitiesinPuebla,Mexico,andtheacquisitionofRICompanies[192].−RevenuefromGammaKnifeservicesin2024was9,716,000, representing 34.3% of total revenue, down from 10,992,000and51.59,952,000 in 2024, with the number of fractions down 4.3% to 5,139, while average revenue per fraction increased by 2.6% to 1,937[194].−GammaKniferevenuefell11.69,716,000, with the number of procedures decreasing by 9.3% to 1,084 due to contract expirations[196]. - For the year ended December 31, 2024, 56% of the Company's revenue was derived from the leasing segment, while 44% came from the retail segment[191]. - Revenue sharing arrangements accounted for approximately 47% of total revenue for the year ended December 31, 2024, down from 70% in 2023[175]. - The Company recognized retail revenues of approximately 12,556,000fortheyearendedDecember31,2024,comparedto3,553,000 in 2023[179]. Debt and Financing - The Company entered into a 22millioncreditagreementinApril2021,whichincludesa7 million revolving line of credit for future projects[54]. - A Supplemental Term Loan of 2.7millionwasaddedtothecreditagreementinJanuary2024,maturingonJanuary25,2030,tofinancecapitalexpendituresinPuebla,Mexico[55].−ASecondSupplementalTermLoanof7 million was added in December 2024, maturing on December 18, 2029, for capital expenditures related to domestic Gamma Knife leasing operations[56]. - The Company has incurred additional debt through various amendments to its credit agreements, including a 2,700,000termloananda7,000,000 term loan[102]. - As of December 31, 2024, the Company's combined long-term debt, net, totaled 20,182,000,witha7,000,000 Revolving Line available for future projects[103]. Operational Challenges and Risks - The Company is not in compliance with certain covenants of the DFC Loan as of December 31, 2023, but has received waivers and amendments to address these issues[57]. - The integration of the RI Companies poses risks, including potential disruptions to existing operations and added costs for regulatory compliance[110]. - The Company is addressing a material weakness in internal controls over financial reporting, which could impact its ability to report financial results accurately[114]. - The Company has experienced equipment impairment, with its Gamma Knife portfolio determined to have no remaining salvage value as of December 31, 2024[131]. - The Company faces competition from conventional neurosurgery and radiation therapy, with Gamma Knife radiosurgery being an alternative due to its favorable morbidity outcomes[59]. - The Company is not in compliance with certain debt covenants, but has received waivers to avoid default, which could adversely affect financial condition if future waivers are not granted[107]. Market and Regulatory Environment - The repeal of the Affordable Care Act's individual mandate could lead to a decrease in the number of insured patients seeking Gamma Knife or radiation therapy treatment[78]. - The Company believes it is in compliance with the federal anti-kickback statute, which has been subject to evolving interpretations and could impact its operations[77]. - The Company is subject to various federal civil and criminal laws targeting false claims and fraudulent billing activities, and it believes it is in compliance with the Federal False Claims Act[81]. - The Federal reimbursement rate for outpatient Gamma Knife treatment has been significantly reduced, potentially impacting the Company's return on investment[98]. - The average Medicare reimbursement delivery rate for Gamma Knife is projected to decrease from 7,691in2023to7,420 in 2024, before rising to 7,645in2025[71].EmployeeandOperationalStructure−TheCompanyhasaworkforceof43full−timeemployeesintheUnitedStatesandadditionalstaffinPeru,Ecuador,andMexico,withnounionrepresentation[88].−TheCompanymaintainsgeneralandprofessionalliabilityinsuranceintheUnitedStates,whichitbelievesisadequateforitsbusinessoperations[87].−TheCompanyhaslong−termleasesformanyfacilities,andfailuretorenewtheseleasescouldrequirerelocationorclosureoffacilities,impactingoperations[119].TechnologyandEquipment−TheCompanyhasbeguntheprocesstoupgradeitsGammaKnifeunitinPeruwithanEsprit,expectedtobecompletedaroundApril2025[42].−TheCompanyupgradeditsGammaKnifeunitinEcuadortotheEsprit,enhancingprocedureefficiency[167].−TheCompanycompletedtwoEspritupgradesandbeganinstallationatathirdsiteduring2024,indicatingongoinginvestmentintechnology[219].CashFlowandLiquidity−TheCompanyhadcashandcashequivalentsof11,275,000 at December 31, 2024, down from 13,808,000atDecember31,2023,adecreaseof2,533,000[215]. - Operating activities generated 167,000incashin2024,drivenbynetincomeof1,532,000 and non-cash charges for depreciation and amortization of 6,174,000[216].−Tradeaccountsreceivableincreasedby7,267,000 to $11,610,000 at December 31, 2024, with days sales outstanding (DSO) rising to 150 days from 74 days[217]. - The increase in DSO was attributed to the addition of four retail sites during 2024, which generally have longer collection periods[217]. Cybersecurity and Macroeconomic Factors - The Company has established cybersecurity guidelines to protect its IT infrastructure, but there is no guarantee against evolving cyber threats[137]. - The Company has established a comprehensive cybersecurity governance framework overseen by the IT Manager and the Board of Directors to manage cybersecurity risks[144]. - Macroeconomic conditions, including inflation and geopolitical tensions, could negatively impact the Company's business and capital investment decisions[129].
