Note 2 - Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Significant Accounting Policies [Text Block]

(2)

               

Summary of Significant Accounting Policies

(a)

              

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on certain assumptions which they believe are reasonable in the circumstances and actual results could differ from those estimates. The more significant estimates reflected in these consolidated financial statements include purchase price allocations, useful lives of intangible assets, potential impairment of goodwill and intangible assets, the allowance for doubtful accounts, the portion of accounts receivable deemed to be long term in nature, the valuation of deferred tax assets, the valuation of equity and share-based compensation and derivative instruments.

(b)

              

Foreign Currencies

Assets and liabilities recorded in foreign currencies are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (loss) and are reported net of the effect of income taxes on the consolidated financial statements (See Note 2 (p)).

(c)

              

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of December 31, 2015 and March 31, 2016.

(d)

              

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable consist of amounts owed to the Company for services provided in the normal course of business and are reported net of allowance for doubtful accounts, which amounted to $12.2 million and $12.5 million as of December 31, 2015 and March 31, 2016, respectively. Generally, no collateral is received from customers and additions to the allowance are based on ongoing credit evaluations of customers with general credit experience being within the range of management’s expectations. Accounts are reviewed regularly for collectability and those deemed uncollectible are written off.  The Company assumes, that on average, all accounts receivable will be collected within one year and thus classifies these as current assets; however there are certain receivables, principally in the U.K., that have aged longer than one year as of December 31, 2015 and March 31, 2016, and the Company has recorded an estimate for those receivables that will not be collected within one year as long-term in the consolidated balance sheets.

(e)

              

Concentrations of Credit Risk

The Company routinely assesses the financial strength of its customers and establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. For the three months ended March 31, 2015 and 2016, no individual customer accounted for more than 10% of revenues. At December 31, 2015 and March 31, 2016, there was an individual customer that accounted for approximately 14% and 13%, respectively, of the accounts receivable balance.

As of March 31, 2016, the Company had cash and cash equivalents totaling approximately $16.0 million. These amounts were held for future acquisition and working capital purposes and were held in non-interest bearing accounts, of which $1.6 million was held in the U.S. The U.S. amounts were insured under standard FDIC insurance coverage for deposit accounts up to $250,000, per depositor and account ownership category, at each separately insured depository institution.

 

(f)

              

Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets and accelerated methods for income tax purposes. Leasehold improvements are amortized over the lesser of their expected useful life or the remaining lease term. Maintenance and repair costs are expensed as incurred.

(g)

              

Long-Lived Assets

In accordance with Impairment or Disposal of Long-Lived Assets, Subsections of Financial Accounting Standards Board (“FASB”) ASC Subtopic 360-10 (“ASC 360”),

  Property, Plant, and Equipment — Overall

, long-lived assets, such as equipment and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models (using market participant assumptions), quoted market values and third-party independent appraisals, as considered necessary. At December 31, 2015 and March 31, 2016, no impairment was noted.

 

(h)

               

Goodwill and Other Intangible Assets

Goodwill is an asset representing the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is reviewed for impairment at least annually in accordance with the provisions of FASB ASC Topic 350,

 Intangibles — Goodwill and Other

 (“ASC 350”). The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting units are compared with their carrying values (including goodwill). If the fair value of a reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting units' goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis (using market participant assumptions). If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

The Company performed its annual impairment review of goodwill in October of 2015, and it was determined that the carrying amount of goodwill was not impaired, as the fair value of the reporting units substantially exceeded their carrying values and there have been no subsequent developments that would indicate impairment existed as of March 31, 2016. The goodwill impairment review will continue to be performed annually or more frequently if facts and circumstances warrant a review.

ASC 350 also requires that intangible assets with definite lives be amortized over their estimated useful lives. Currently, customer relationships, trade names, covenants not-to-compete and technology are amortized using the straight-line method over estimated useful lives.

(i)

              

Deferred Financing Costs

In November 2010, the Company entered into a senior secured revolving credit facility with Bank of America N.A. (“Senior Secured Revolving Credit Facility”) (see Note 10). The Company has incurred deferred financing costs of $8.5 million associated with the Senior Secured Revolving Credit Facility and related amendments and restatements, none of which were incurred in the three months ended March 31, 2015 and 2016. In the second quarter of 2015, the Company amended and restated the Senior Secured Revolving Credit Facility in connection with the offering of the Notes as defined in Note 10, pursuant to an amended and restated credit agreement (the “Amended and Restated Credit Facility”), which resulted in a loss on extinguishment of debt of approximately $274,000 for the write-off of unamortized deferred financing costs in accordance with ASC Topic 470,

 Debt

 (“ASC 470”).

The deferred financing costs associated with the Senior Secured Revolving Credit Facility are being amortized to interest expense over the five-year term of the facility, using the straight-line method, which approximates the effective interest method.

The Company amortized $361,000 and $148,000 for the three months ended March 31, 2015 and 2016, respectively, to interest expense.

(j)

                

Revenue Recognition

Revenue related to IMEs, peer reviews, bill reviews, administrative support services and Medicare compliance services is recognized at the time services have been performed and the report is shipped to the end user. The Company believes that recognizing revenue at the time the report is shipped is appropriate because the Company’s revenue policies meet the following four criteria in accordance with ASC 605-10-S25,

  Revenue Recognition: Overall,

  (i) persuasive evidence that arrangement exists, (ii) shipment has occurred, (iii) the price is fixed and determinable and (iv) collectability is reasonably assured. The Company reports revenues net of any sales, use and value added taxes.

Revenue related to other IME services, including litigation support services, medical record retrieval services, document management services and case management services, where no report is generated, is recognized at the time the service is performed. The Company believes that recognizing revenue at the time the service is performed is appropriate because the Company’s revenue policies meet the following four criteria in accordance with ASC 605-10-S25, (i) persuasive evidence that arrangement exists, (ii) services have been rendered, (iii) the price is fixed and determinable and (iv) collectability is reasonably assured.

Certain agreements with customers in the U.K. include provisions whereby collection of the amounts billed are contingent on the favorable outcome of the claim.  The Company has deemed these provisions to preclude revenue recognition at the time of performance, as collectability is not reasonably assured and the cash payments are contingent, and is deferring these revenues, net of estimated costs, until the case has been settled, the contingency has been resolved and the cash has been collected.   As of December 31, 2015 and March 31, 2016, the Company had $2.7 million and $2.5 million, respectively, in U.K. net deferred revenues associated with such agreements.

Should changes in conditions cause management to determine these criteria are not met for certain future transactions, revenue recognized for any subsequent reporting period could be adversely affected.

(k)

              

Costs of Revenues

Costs of revenues are comprised of fees paid to members of the Company’s medical panel; other direct costs including transcription, film and medical record obtainment and transportation; and other indirect costs including labor and overhead related to the generation of revenues.

 

(l)

                

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company applies the provisions of FASB Interpretation No. 48, 

Accounting for Uncertainty in Income Taxes

, (included in FASB ASC Subtopic 740-10, 

Income Taxes — Overall

 ), and recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense.

(m)

Income (Loss) Per Common Share

Basic income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during each period. Diluted income (loss) per common share is calculated by dividing net income (loss), adjusted on an “as if converted” basis, by the weighted-average number of actual shares outstanding and, when dilutive, the share equivalents that would arise from the assumed conversion of convertible instruments. The effect of potentially dilutive stock options, warrants, shares of restricted stock with service restrictions that have not yet been satisfied and unvested restricted stock units (“RSUs”) is calculated using the treasury stock method.

The following table sets forth basic and diluted net income per share computational data for the three months ended March 31, 2015 and 2016 (amounts in thousands):

	Three months ended March 31,
	2015		2016
Net income	$	2,024	$	3,260
Basic shares outstanding:
Common stock		40,418		40,805
Diluted shares outstanding:
Common stock		40,418		40,805
Dilutive securities (1)		2,262		1,557
Total		42,680		42,362

(1) For the three months ended March 31, 2015 and 2016, the Company's dilutive securities excluded options potentially exercisable in the future into 32,000 shares and 86,000 shares, respectively, because their inclusion would have been anti-dilutive.

(n

)

               

Share-Based Compensation

The Company has an Amended and Restated 2008 Stock Incentive Plan, as amended, (the “Plan”) that provides for granting of stock options, restricted stock, RSUs and other equity awards. The Company accounts for share-based awards in accordance with ASC Topic 718,

 Compensation — Stock Compensation

 (“ASC 718”). ASC 718 requires measurement of compensation cost for all share-based awards at fair value on the grant date (or measurement date if different) and recognition of compensation expense, net of forfeitures, over the requisite service period for awards expected to vest.

Stock Options

The fair value of stock option grants is determined using the Black-Scholes valuation model. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable, characteristics not present in the Company’s stock options. Additionally, option valuation models require the input of highly subjective assumptions, including the expected volatility of the stock price. Because the Company’s stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimates, in management’s opinion, the existing models may not provide a reliable single measure of the fair value of its share-based awards.

 The Company’s expected volatility assumptions are based upon the weighted average of the Company’s implied volatility, the Company’s mean reversion volatility and the median of the Company’s peer group’s most recent historical volatilities for 2015 stock option grants. Expected life assumptions are based upon the “simplified” method as for those options issued in 2015, which were determined to be issued approximately at-the-money. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued.

In the three months ended March 31, 2016, the Company issued no stock option awards to employees. Share-based compensation expense related to stock option awards was $1.9 million and $1.2 million for the three months ended March 31, 2015 and 2016, respectively, of which $469,000 and $307,000, respectively, was included in costs of revenues, and $1.4 million and $921,000, respectively, was recorded in selling, general and administrative (“SGA”) expenses.

At March 31, 2016, the unrecognized compensation expense related to stock option awards was $3.4 million, with a remaining weighted average life of 1.2 years.

A summary of option activity for the three months ended March 31, 2016 is as follows:

	Number of options			Weighted average exercise price		Weighted average remaining contractual life ( years )		Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2015		3,766,868		$	13.28
Options granted		—			—
Options forfeited		(46,346	)		33.13
Options exercised		(74,121	)		9.99
Outstanding at March 31, 2016		3,646,401		$	13.10
Exercisable at March 31, 2016		3,377,368		$	11.51		5.1	$	61,718

Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the fiscal period in excess of the weighted average exercise price multiplied by the number of options outstanding or exercisable. The total intrinsic value of stock options exercised was approximately $860,000 during the three months ended March 31, 2016.

Restricted Stock and Restricted Stock Units

The Company has granted members of the Board of Directors, certain employees and outside consultants, time lapse restricted stock and RSUs which vest after a stipulated number of years from the grant date depending on the terms of the issue. The fair value of shares of restricted stock and RSUs is determined based upon the market price of the underlying common stock as of the date of grant. Time lapse restricted shares issued and RSUs vest over one to five-year periods. The agreements under which the restricted stock and RSUs are issued provide that shares awarded may not be sold or otherwise transferred until restrictions established under the stock plans have been satisfied. The restriction on a majority of these awards could expire earlier than the stipulated time frame in the event of a change in control or merger or other acquisition. Share-based compensation expense related to shares of restricted stock and RSUs was $4.1 million and $4.2 million for the three months ended March 31, 2015 and 2016, respectively, all of which is included in SGA expenses.

The following is a summary of restricted share and RSU activity for the three months ended March 31, 2016:

	Number of awards			Weighted average grant date fair value
Non-vested awards at December 31, 2015		1,315,522		$	34.30
Awards granted		685,280			27.68
Awards vested		(238,094	)		24.28
Awards forfeited		(130,237	)		35.96
Non-vested awards at March 31, 2016		1,632,471		$	32.85

The total fair value of vested RSUs and shares of restricted stock during the three months ended March 31, 2015 and 2016 was $3.2 million and $5.8 million, respectively. At March 31, 2016, total unrecognized compensation costs related to non-vested restricted shares and RSUs was $41.4 million, which is expected to be recognized over a weighted average period of 2.2 years.

During the three months ended March 31, 2015 the Company recorded share-based compensation expense of $130,000 related to an annual incentive compensation plan established by the Compensation Committee of the Board of Directors, all of which was recorded in SGA expenses. No such share-based compensation expense was recorded for the three months ended March 31, 2016, as all amounts paid under the incentive compensation plan for the year ended December 31, 2016 will be settled in cash.

(o)

             

Fair Value Measurements

 

The Company’s financial assets and (liabilities), which are measured at fair value on a recurring basis, are categorized using the fair value hierarchy at December 31, 2015 and March 31, 2016, and are as follows (in thousands):

	Level 1		Level 2			Level 3			Total
As of December 31, 2015
Financial instruments:
Foreign currency derivative asset	$	—	$	848		$	—		$	848
Foreign currency derivative liability		—		(1,215	)		—			(1,215	)
As of March 31, 2016
Financial instruments:
Contingent consideration	$	—	$	—		$	(7,635	)	$	(7,635	)
Foreign currency derivative liability		—		(2,122	)		—			(2,122	)

The contingent consideration relates to earnout provisions recorded in conjunction with a 2016 acquisition (see Note 3). The fair value of the foreign currency derivative was determined using observable market inputs such as foreign currency exchange rates and considers nonperformance risk of the Company and that of its counterparties. 

(p)

              

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) refers to revenues, expenses, gains and losses that under U.S. GAAP are recorded as a component of stockholders’ equity but are excluded from net income (loss). The Company’s accumulated other comprehensive income (loss) consists of foreign currency translation adjustments, reported net of tax as appropriate, from those subsidiaries not using the U.S. dollar as their functional currency and unrealized gains and losses, reported net of tax as appropriate, resulting from its net investment hedge of its Australian and U.K. subsidiaries.

Accumulated other comprehensive income (loss) consists of the following (in thousands):

 

	Foreign Currency Translation			Net investment hedge - foreign exchange contract			Total
Balance at December 31, 2015	$	(33,716	)	$	7,713		$	(26,003	)
Change during 2016:
Before-tax amount		818			(107	)		711
Tax (expense) benefit		484			42			526
Total activity in 2016		1,302			(65	)		1,237
Balance at March 31, 2016	$	(32,414	)	$	7,648		$	(24,766	)

(q)

               

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

 In August 2014, the FASB issued ASU No. 2014-15, “

Presentation of Financial Statements – Going Concern

 

(Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern

” (“ASU 2014-05”), which define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Currently, financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. This going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. This ASU provides guidance regarding management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern and the related footnote disclosures. The amendments are effective for the year ending December 31, 2016, and for interim periods beginning the first quarter of 2017, with early adoption permitted. The Company has adopted the provisions during the year ending December 31, 2016 and will provide such disclosures as required if there are conditions and events that raise substantial doubt about its ability to continue as a going concern. Adoption did not have a material impact on the Company's financial position, results of operations or cash flows.

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 ASU 2015-03. Additionally, in August 2015, the FASB issued ASU No. 2015-15,

“Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements”

(“ASU 2015-15”) which amends ASU 2015-03, which did not address the balance sheet presentation of debt issuance costs incurred in connection with line-of-credit arrangements. Under ASU 2015-15, a Company may defer debt issuance costs associated with line-of-credit arrangements and present such costs as an asset, subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. The amendments in these updates were effective for fiscal periods beginning on or after December 15, 2015, and interim periods within those fiscal years, were applied retrospectively and represent a change in accounting principle.

The Company adopted the provisions of these amendments in January of 2016. As a result, approximately $6.9 million and $6.6 million of debt issuance costs related to the Company’s $500.0 million 5.625% Senior Unsecured Notes Payable due April 2023 (the "Notes") were reclassified from deferred financing costs to Notes payable in the accompanying consolidated balance sheets as of December 31, 2015 and March 31, 2016, respectively. The Company elected to continue presenting the deferred financing costs associated with its Senior Secured Revolving Credit Facility as deferred financing costs, net in the accompanying consolidated balance sheets.

In September 2015, the FASB issued ASU No. 2015-16, “

Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments

” (“ASU 2015-16”) which requires that an acquirer recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments also require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the estimated amounts had been recognized as of the acquisition date. The amendments in this update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. The Company adopted the provisions of this ASU prospectively in the first quarter of 2016, and did not retrospectively adjust the prior periods. The adoption of ASU 2015-16 did not have a significant impact on the Company’s financial position, results of operations or cash flows.

In November 2015, the FASB issued ASU No. 2015-17, “

Balance Sheet Classification of Deferred Taxes

” (“ASU 2015-17”), which requires deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The guidance is effective for financial statements issued for interim and annual periods beginning after December 15, 2016. Earlier adoption is permitted. This amendment may be applied either prospectively or retrospectively to all periods presented. The Company adopted the provisions of this ASU prospectively in the fourth quarter of 2015, and did not retrospectively adjust the prior periods. The adoption of ASU 2015-17 did not have a significant impact on the Company’s financial position, results of operations or cash flows.

Accounting Pronouncements Not Yet Adopted

 

In May 2014, the FASB issued ASU No. 2014-09, (Topic 606): 

Revenue from Contracts with Customers

 (“ASU 2014-09”) which supersedes the revenue recognition requirements in “

Topic 605, Revenue Recognition

” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective retrospectively for annual or interim reporting periods beginning after December 15, 2017, with early adoption permitted for annual and interim reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

In January 2016, the FASB issued ASU 2016-01,

“Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities

” (“ASU 2016-01”), which addresses certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company plans to adopt the provisions for the year ending December 31, 2018 and currently does not expect the adoption to have a material impact on its financial position, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02,

“Leases (Topic 842)”

(“ASU 2016-02”), which requires lessees to recognize on the balance sheet a right-of-use asset, representing their right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than twelve months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

In March 2016, the FASB issued ASU 2016-06,

“

Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments”

(“ASU 2016-06”), which will reduce diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. The amendments in this update are effective for fiscal period beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company plans to adopt the provisions for the year ending December 31, 2017 and currently does not expect the adoption to have a material impact on its financial position, results of operations or cash flows.

In March 2016, the FASB issued ASU 2016-08,

“Revenue from Contracts with Customers (Topic 606):

Principal versus Agent Considerations (Reporting Revenue Gross versus Net)

”

(“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations. The amendments in this update are effective for fiscal period beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

In March 2016, the FASB issued ASU 2016-09,

“Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”

(“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The amendments in this update are effective for fiscal period beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

There were various other accounting standards and interpretations issued during 2015 and 2016 the Company has not yet been required to adopt, none of which are expected to have a material impact on its financial position, results of operations and cash flows.