Note 3 - Property and Equipment

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	December 31,
	2021			2020
Medical equipment and facilities	$	73,388,000		$	75,657,000
Office equipment		472,000			330,000
Construction in progress		91,000			170,000
		73,951,000			76,157,000
Accumulated depreciation		(45,697,000	)		(45,739,000	)
Net property and equipment	$	28,254,000		$	30,418,000

As of December 31, 2021 and 2020, approximately $2,697,000 and $3,195,000, respectively, of the net property and equipment balance is outside of the United States.

As of   April 1, 2021, the Company reduced its estimate for salvage value for nine of its Gamma Knife units. The net effect of this change in estimate for the year ended  December 31, 2021, was a decrease in net income of approximately $342,000 or $0.06 per diluted share. This change in estimate will also impact future periods. Salvage value is based on the estimated fair value of the equipment at the end of its useful life.

As December 31, 2020, the Company recognized a loss on the write down of impaired assets of $8,264,000. The impaired assets included six Gamma Knife units and related removal costs, and two deposits towards the purchase of proton beam systems and related capitalized interest. The six Gamma Knife units that were impaired consisted of two units that had been taken out of service in prior years, one unit that was taken out of service in 2020, one unit that was taken out of service in 2021, one that was taken out of service in January 2022, and a fourth that the Company anticipates will be removed later in 2022, totaling $3,051,000. In addition to this impairment write-off of $3,051,000 were estimated costs of de-install and removal, which constitutes an ARO, of four of the Gamma Knife units of $1,350,000 (of which, the Company has paid $80,000) as of December 31, 2020. The Company removed a second unit in 2021 and paid $618,000 of the ARO. Total impairment related to the Gamma Knife business was $4,401,000 for the year ended December 31, 2021.  As of December 31, 2021, an additional impairment of $105,000 related to one of the AROs was recorded.

The Company reviews the carrying value of its long-lived assets for impairment on a quarterly basis, or as events or circumstances might indicate that the carrying value may not be recoverable. The Company reviewed its Gamma Knife equipment, in light of available information as of December 31, 2021 and concluded no additional impairment exists.

Prior to December 31, 2020, the Company had $2,250,000 in deposits toward the purchase of two MEVION S250i PBRT systems from Mevion. The Company reviews the carrying value of its deposits for impairment on a quarterly basis, or as events or circumstances might indicate that the carrying value may not be recoverable. The Company has reviewed the deposits, in light of available information, as of December 31, 2020 and based on its current customer prospects, the impact that the COVID-19 pandemic has had on medical centers undertaking large capital expenditure projects for a limited patient base, and the length of time required to negotiate and implement a proton therapy project, the Company determined that its deposits of $2,250,000, related capitalized interest and other charges of $1,613,000 were other-than temporarily impaired. Total impairment related to the proton therapy business was $3,863,000.  The Company reviewed it's PBRT equipment, in light of available information as of December 31, 2021 and concluded no additional impairment exists.