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			&lt;font style="display: inline;font-size:10pt;"&gt;We recognize revenue from the sale of Cooled ThermoTherapy control units upon delivery to the customer, which include urologists, urology practices, mobile units, clinics and hospitals. We recognize revenue from the sale of Prostiva generators upon shipment to the customer. Revenue is recognized in accordance with generally accepted accounting principles as outlined in Accounting Standards Codification (&amp;#x201C;ASC&amp;#x201D;) 605-10-S99, &lt;/font&gt;&lt;font style="display: inline;font-style:italic;font-size:10pt;"&gt;Revenue Recognition&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;, which requires that four basic criteria be met before revenue can be recognized: (i) persuasive evidence of an arrangement exists; (ii) the price is fixed or determinable; (iii) collectability is reasonably assured; and (iv) product delivery has occurred or services have been rendered.&amp;nbsp;&amp;nbsp;The Company recognizes revenue as products are shipped based on FOB shipping point terms when title passes to customers.&amp;nbsp;&amp;nbsp;In addition to our sales of Cooled ThermoTherapy control units and Prostiva generators, we place our control units and generators with customers free of charge under a variety of programs for both evaluation and long-term use, and also provide access to Cooled ThermoTherapy and Prostiva RF Therapy treatments via our Urologix mobile service. We retain title to the control units and generators placed with our customers for evaluation and longer-term use. These programs, as well as our Urologix mobile service, are designed to expand access to our technology, and thus expand the market for our single-use treatment catheters and Prostiva handpieces. The free use of our Cooled ThermoTherapy control units and Prostiva generators are bundled with the sale of single-use treatment catheters or Prostiva handpieces and scopes, respectively, and are considered a single unit of accounting. Revenue from the bundled sales is recognized when the single-use treatment catheters or handpieces and scopes are shipped to our customers. Revenue from our mobile service is recognized upon treatment of the patient. Revenue for extended warranty service contracts is deferred and recognized over the contract period on a straight-line basis. We record a provision for estimated sales returns on product sales in the same period as the related revenue is recorded. The provision for estimated sales returns is based on historical sales returns, analysis of credit memo data and specific customer-based circumstances. Should actual sales returns differ from our estimates, revisions to the sales return reserve would be required. Sales and use taxes are reported on a net basis, excluding them from revenue. &lt;/font&gt;
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 -Publisher AICPA

 -Name Accounting Principles Board Opinion (APB)

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</LabelSeparator><Level>2</Level><ElementName>us-gaap_ReceivablesTradeAndOtherAccountsReceivableAllowanceForDoubtfulAccountsPolicy</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>terseLabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="Duration_7_1_2012_To_6_30_2013" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>Allowance for Doubtful AccountsWe maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments.  We consider factors such as past experience, credit quality of the customer base, age of the receivable balances, both individually and in the aggregate, and current economic conditions that may affect a customer's ability to pay when determining the adequacy of the allowance.  Invoices are generally due 30 days after presentation.  Accounts receivable over 30 days are considered past due.  Accounts receivable are written-off after management determines they are uncollectible</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>xbrli:stringItemType</ElementDataType><SimpleDataType>string</SimpleDataType><ElementDefenition>Describes how an entity determines the level of its allowance for doubtful accounts for its trade and other accounts receivable balances, and when impairments, charge-offs or recoveries are recognized. The description identifies the factors that influence management's establishment of the level of the allowance (for example, historical losses and existing economic conditions) and may also include discussion of the risk elements relevant to particular categories of receivables.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

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 -Publisher AICPA

 -Name Statement of Position (SOP)

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			&lt;font style="display: inline;font-size:10pt;"&gt;Inventories are stated at the lower of cost or market on a first-in, first-out (FIFO) basis&lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:11pt;"&gt;Valuation of Long-Lived Assets and Goodwill&lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:11pt;"&gt;&amp;nbsp;&lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;We assess the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An asset or asset group is considered impaired if its carrying amount exceeds the undiscounted future net cash flows the asset or asset group is expected to generate. If an asset or asset group is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. If estimated fair value is less than the book value, the asset is written down to the estimated fair value and an impairment loss is recognized. &lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;Goodwill is tested for impairment annually on April 30&lt;/font&gt;&lt;sup style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;th&lt;/sup&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt; or more frequently if changes in circumstance or the occurrence of events suggests an impairment may exist. &lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;To determine if there is goodwill impairment, the fair value of the reporting unit is compared to its carrying amount.&amp;nbsp;&amp;nbsp;If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill is less than the carrying value of the goodwill. &lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;The test for impairment requires us to make several estimates about fair value, most of which are based on projected future cash flows.&lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;Considerable management judgment is necessary in estimating future cash flows and other factors affecting the valuation of long-lived assets and goodwill, including the operating and macroeconomic factors that may affect them. We use historical financial information, internal plans and projections and industry information in making such estimates. &lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;As a result of the delisting of our common stock from the NASDAQ exchange on June 7, 2013 and the continued decline of our stock price, we tested our long-lived assets and goodwill for impairment as of June 30, 2013.&amp;nbsp;&amp;nbsp;Based on this impairment testing it was determined that our intangible assets acquired as part of the Prostiva acquisition were impaired.&amp;nbsp;&amp;nbsp;As a result, we recorded an impairment charge of &lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;$274,000&lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt; on our developed technology asset which was recorded in cost of goods sold, a &lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;$95,000&lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt; impairment charge on our customer base asset and a &lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;$65,000&lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt; impairment charge on trademarks both of which were recorded in operating expense.&amp;nbsp;&amp;nbsp;There was &lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;no&lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt; impairment of goodwill as it was determined that the fair value of the reporting unit exceeded its carrying amount as of June 30, 2013.&amp;nbsp;&amp;nbsp;&amp;nbsp;See Footnote 11 for a description of our intangible assets and the impairment charges recorded as of June 30, 2013.&lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;"&gt;Property and Equipment &lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;"&gt;Property and equipment are stated at cost.&amp;nbsp;&amp;nbsp;Company owned Cooled ThermoTherapy control units and Prostiva RF Therapy generators located at customer sites for evaluation and long-term use programs are transferred from inventory and classified as property and equipment that are valued at cost to manufacture and depreciated on a straight-line basis over a useful life of &lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;"&gt;four&lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;"&gt; years.&amp;nbsp;&amp;nbsp;Improvements that extend the useful lives of property and equipment are capitalized at cost and depreciated over their remaining useful lives.&amp;nbsp;&amp;nbsp;Repairs and maintenance are charged to expense as incurred.&amp;nbsp;&amp;nbsp;Depreciation is calculated using the straight-line method based upon estimated useful lives of &lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;"&gt;three&lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;"&gt; to &lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;"&gt;seven&lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;"&gt; years for machinery, equipment, furniture and vehicles.&amp;nbsp;&amp;nbsp;Leasehold improvements are amortized over the shorter of the useful life of the assets or term of the lease.&lt;/font&gt;
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			&lt;font style="display: inline;font-weight:bold;font-style:italic;font-size:11pt;"&gt;Contingent Consideration&lt;/font&gt;
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			&lt;font style="display: inline;font-size:10pt;"&gt;Contingent consideration was recorded on the balance sheet at the acquisition date fair value based on the consideration expected to be transferred, discounted back to present value.&amp;nbsp;&amp;nbsp;The discount rate used is determined at the time of measurement in accordance with accepted valuation methods.&amp;nbsp;&amp;nbsp;The fair value of the contingent consideration is remeasured at the estimated fair value at each reporting period with the change in fair value recognized as income or expense in operating income.&amp;nbsp;&amp;nbsp;Any changes in fair value will impact earnings in such reporting period until the contingencies are resolved.&lt;/font&gt;
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			&lt;font style="display: inline;font-weight:bold;font-style:italic;font-size:11pt;"&gt;Leases and Deferred Rent &lt;/font&gt;
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			&lt;font style="display: inline;font-size:11pt;"&gt;&amp;nbsp;&lt;/font&gt;
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			&lt;font style="display: inline;font-size:10pt;"&gt;We lease all of our office space. We evaluate and classify all of our leases as operating or capital leases for financial reporting purposes. As of June 30, 2013, all of our leases were accounted for as operating leases. For leases that contain rent escalations, we record the total rent payable during the lease term, as determined above, on a straight-line basis over the term of the lease and record the difference between the rents paid and the straight-line rent as a deferred rent.&amp;nbsp;&amp;nbsp;Any lease incentives we receive for items such as leasehold improvements, we&lt;/font&gt;&lt;font style="display: inline;"&gt;&amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;record a deferred credit for the amount of the lease incentive and amortize it over the lease term, which may or may not equal the amortization period of the leasehold improvements.&lt;/font&gt;
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Reference 7: http://www.xbrl.org/2003/role/presentationRef

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 -Name Statement of Financial Accounting Standard (FAS)

 -Number 98

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			&lt;font style="display: inline;font-weight:bold;font-style:italic;font-size:11pt;"&gt;Warranty Costs&lt;/font&gt;
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			&lt;font style="display: inline;font-size:10pt;"&gt;Certain of our products, including the newly acquired Prostiva products, are covered by warranties against defects in material and workmanship for periods of up to &lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;24&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt; months.&amp;nbsp;&amp;nbsp;We record a liability for warranty claims at the time of sale.&amp;nbsp;&amp;nbsp;The amount of the liability is based on the trend in the historical ratio of product failure rates, material usage and service delivery costs to sales, the historical length of time between the sale and resulting warranty claim and other factors.&lt;/font&gt;&lt;font style="display: inline;font-family:Courier New;font-size:10pt;"&gt;&amp;nbsp;&lt;/font&gt;
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			&lt;font style="display: inline;font-weight:bold;font-style:italic;font-size:11pt;"&gt;Income Taxes&lt;/font&gt;
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			&lt;font style="text-indent:0pt;margin-left:0pt; width:36pt;"&gt;&lt;/font&gt;&lt;font style="text-indent:0pt;margin-left:0pt; width:-1pt;text-align:left"&gt;&lt;font style="display: inline;font-weight:bold;font-size:10pt;"&gt;&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;We utilize the asset and liability method of accounting for income taxes.&amp;nbsp;&amp;nbsp;We recognize deferred tax liabilities or assets for the expected future tax consequences of temporary differences between the book and tax basis of assets and liabilities.&amp;nbsp;&amp;nbsp;We regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income.&amp;nbsp;&amp;nbsp;We consider projected future taxable income and ongoing tax planning strategies in assessing the amount of the valuation allowance necessary to offset our deferred tax assets that will not be recoverable.&amp;nbsp;&amp;nbsp;We have recorded and continue to carry a full valuation allowance against our gross deferred tax assets that will not reverse against deferred tax liabilities within the scheduled reversal period.&amp;nbsp;&amp;nbsp;If we determine in the future that it is more likely than not that we will realize all or a portion of our deferred tax assets, we will adjust our valuation allowance in the period we make the determination.&amp;nbsp;&amp;nbsp;We expect to provide a full valuation allowance on our future tax benefits until we can sustain a level of profitability that demonstrates our ability to realize these assets.&amp;nbsp;&amp;nbsp;At June 30, 2013, we carried a valuation allowance of $30.2 million against our net deferred tax assets. &lt;/font&gt;&lt;/font&gt;
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			&lt;font style="display: inline;font-weight:bold;font-style:italic;font-size:11pt;"&gt;Stock-Based Compensation&lt;/font&gt;
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			&lt;font style="display: inline;font-size:10pt;"&gt;The Company uses the fair value recognition provisions of the revised authoritative guidance for equity-based compensation and applies the modified prospective method in determining stock compensation expense.&amp;nbsp;&amp;nbsp;Stock&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt; compensation expense is based on the fair value of the award at the date of grant and is recognized over the requisite service period which corresponds to the vesting period.&amp;nbsp;&amp;nbsp;Options typically vest &lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;25&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt; percent after the first year of service with the remaining vesting 1/&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;36&lt;/font&gt;&lt;sup style="display: inline;font-size:10pt;"&gt;th&lt;/sup&gt;&lt;font style="display: inline;font-size:10pt;"&gt; each month thereafter.&amp;nbsp;&amp;nbsp;Generally, options granted to non-employee directors are immediately exercisable at the date of grant while restricted stock awards generally vest after one year.&amp;nbsp;&amp;nbsp;Options are priced based on the closing price of a share of our common stock at the date of grant.&amp;nbsp;&amp;nbsp;The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model.&amp;nbsp;&amp;nbsp;To determine the inputs for the Black-Scholes option pricing model, we use historical data to estimate expected volatility and the period of time that option grants are expected to be outstanding.&amp;nbsp;&amp;nbsp;The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option.&amp;nbsp;&amp;nbsp;The range of these assumptions and the range of option pricing and number of options granted at the different grant dates will impact our calculation of the fair value of the awards and will therefore impact the amount of expense reflected in our statement of operations for any given period.&amp;nbsp;&amp;nbsp;The Company also grants restricted stock awards which typically vest over a period of &lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;one&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt; year to &lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;four&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt; years.&amp;nbsp;&amp;nbsp;Fair value for restricted stock is based on the market price on the day of grant.&amp;nbsp;&amp;nbsp;See Note 6 for additional discussion.&amp;nbsp; &lt;/font&gt;
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			&lt;font style="display: inline;font-size:10pt;"&gt;Basic loss per share was computed by dividing the net loss by the weighted average number of shares of common stock and participating securities outstanding during the periods presented.&amp;nbsp;&amp;nbsp;&amp;nbsp;Diluted net loss per share was computed by dividing the net loss by the weighted average number of shares of common stock outstanding plus all potentially dilutive common shares that result from stock options.&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt; &amp;nbsp; &amp;nbsp;&lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;font-weight:bold;font-style:italic;font-size:11pt;"&gt;Shipping and Handling Costs&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;&amp;nbsp;&lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;&amp;nbsp;&lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;The Company includes shipping and handling revenues in sales and shipping and handling costs in cost of goods sold. &lt;/font&gt;
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 -Publisher FASB

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			&lt;font style="display: inline;font-size:10pt;"&gt;&amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;font-family:Times New Roman;font-size:10pt;"&gt;The Company deposits its cash in what management believes are high credit quality financial institutions. The balance, at times, may exceed federally insured limits. &lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;"&gt;Financial Instruments&lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;"&gt;The carrying amounts of our accounts receivable and accounts payable approximate fair value due to their short-term nature.&lt;/font&gt;
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 -Name Statement of Financial Accounting Standard (FAS)

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			&lt;font style="display: inline;font-size:10pt;"&gt;The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates and assumptions are based on management&amp;#x2019;s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. The Company adjusts such estimates and assumptions when facts and circumstances dictate. These include, among others, the continued difficult economic conditions, tight credit markets, Medicare reimbursement rate uncertainty, and a decline in consumer spending and confidence, all of which have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual amounts could differ significantly from those estimated at the time the financial statements are prepared. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.&lt;/font&gt;
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			&lt;font style="display: inline;font-family:Times New Roman;"&gt;Recently Issued Accounting Standards&lt;/font&gt;
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			&lt;font style="display: inline;font-size:10pt;"&gt;In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-08 &amp;#x201C;Testing Goodwill for Impairment&amp;#x201D; (ASU 2011-08), which amends ASC 350 &amp;#x201C;Intangibles &amp;#x2013; Goodwill and Other.&amp;#x201D;&amp;nbsp;&amp;nbsp;This update permits entities to make a qualitative assessment of whether it is more likely than not that a reporting unit&amp;#x2019;s fair value is less than its carrying amount before applying the two-step goodwill impairment test.&amp;nbsp;&amp;nbsp;If an entity concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it would not be required to perform the two-step impairment test for that reporting unit.&amp;nbsp;&amp;nbsp;This update is effective for fiscal years beginning after December 15, 2011.&amp;nbsp;&amp;nbsp;The adoption of this statement did not&amp;nbsp;&amp;nbsp;have an impact on our financial position or results of operations.&lt;/font&gt;
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			&lt;font style="display: inline;font-size:10pt;"&gt;In May 2011, the FASB issued ASU No. 2011-04, &amp;#x201C;Fair Value Measurements (Topic 820) &amp;#x2013; Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs&amp;#x201D;, which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements.&amp;nbsp;&amp;nbsp;The adoption of this statement did not have an impact on our financial position or results of operations.&lt;/font&gt;
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			&lt;font style="display: inline;font-size:10pt;"&gt;In July 2012, the FASB issued ASU 2012-02 &amp;#x201C;&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;Intangibles &amp;#x2013; Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment&amp;#x201D;.&amp;nbsp; &lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;This update permits entities to make a qualitative assessment to determine whether it is necessary to perform the quantitative impairment test for an indefinite-lived intangible asset if it is &lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;more likely than not &lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;that the asset is impaired.&amp;nbsp;&amp;nbsp;This update is effective for interim and annual impairment tests performed for fiscal years beginning after September 15, 2012.&amp;nbsp;&amp;nbsp;We do not anticipate the adoption of this statement to have an impact on our financial position or results of operations&lt;/font&gt;&lt;font style="display: inline;font-size:10pt;"&gt;.&lt;/font&gt;
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