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RAPTOR RESOURCES HOLDINGS INC. - 10-K - Management's Discussion and Analysis of Financial Condition and Results of Operations(Edgar Glimpses Via Acquire Media NewsEdge) The information set forth and discussed in this Management's Discussion and Analysis is derived from our financial statements and the related notes. You should read the following discussion of our financial condition and results of operations together with the audited financial statements and the notes thereto included in this Annual Report on Form 10-K for the year ended December 31, 2013. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements, including those set forth in this Annual Report on Form 10-K. -7- Overview We were incorporated in Nevada in February 1998 under the name Beekman Enterprises, Inc. In February 2001, we changed our name to Virtual Internet Communications, Inc., and in April 2002, we changed our name to Hypervelocity, Inc. Until September 2002, Hypervelocity was a consulting firm specializing in voice, data and video communications convergence, network design and integration. In September 2002, Hypervelocity dissolved its operating subsidiary and assigned its assets to an individual holding a note payable that was secured by the assets. From September 2002 until November 2004, Hypervelocity was non-trading public shell company, with no operations. In November 2004, we acquired Lantis Laser, Inc., a New Jersey corporation formed in January 1998 ("Lantis New Jersey"), in a reverse-triangular merger and succeeded to its business as our sole line of business. In connection with the merger, we changed our name to "Lantis Laser Inc." Lantis Laser Inc. was formed to commercialize the application of novel technologies in the dental industry. On April 22, 2011, through a reverse triangular merger, we acquired both TAG Minerals Inc. ("TAG") and its 49%-owned operating subsidiary, TAG Minerals Zimbabwe (Private) Limited. TAG became our second wholly-owned subsidiary. We issued 50% of our outstanding shares at the date of the merger to TAG's shareholders and our existing directors resigned and become the directors of Lantis New Jersey. Lantis New Jersey continued our dental technology business. As a result of the December 17, 2012 settlement and restructuring agreement with PAX ORAL IMAGING INC. ("POII") and former principals Stan Baron (former Chief Executive Officer of Lantis Laser Inc.) and Craig Gimbel (former Executive Vice President of Lantis Laser Inc.) the Company is now focused solely on the mining of industrial minerals. Through our operating affiliate, TAG Minerals Zimbabwe (PVT) Ltd. ("TAG-Z"), we entered into a Sale of Shares Agreement dated September 19, 2011, pursuant to which TAG-Z, for a total cash payment of $433,000, paid in installments through November 30, 2012, purchased 100% of the mineral assets of Dodge mine blocks 1-6, located in Zimbabwe. The transfer of all six blocks has been completed. The property consists of three hydrothermal mountains representing 123 hectares containing multiple deposits of superior grade barite, limestone and talc based on the drilling reports that management received from the previous owner of the Dodge mine blocks. We believe that in light of the significant recent oil and gas discoveries off the coast of neighboring Mozambique and new drilling contracts expected in the Middle East, Central Africa, South Africa and Western Australia the high grade barite alone, which serves as a weighting agent for drilling fluids in oil and gas drilling applications, will be of significant future cash value to us. Along with the purchase of Dodge mine blocks 1-6 TAG-Z received 50% of the issued and outstanding shares of common stock of Chiroswa Minerals (PVT) Limited ("Chiroswa"), an inactive company originally formed to conduct mining operations on the Dodge mine. Since Chiroswa is not an operating company TAG-Z has canceled the Chiroswa shares it received under the Sale of Share Agreement and intends to conduct mining operations on the Dodge blocks itself. On December 5, 2011, we entered into a Stock Purchase Agreement, dated effective as of December 2, 2011 ("Stock Purchase Agreement"), with Raptor Networks Technology, Inc. (RPTN.QB) ("Raptor") pursuant to which we issued 5,000,000 restricted shares of our common stock to the holder of certain Raptor convertible notes, California Capital Equity, LLC ("CCE"), and we received 109,928,311 restricted shares of Raptor's common stock or 55% of its issued and outstanding shares of common stock. We effected a 1:10 reverse stock split, acquired 80% of the fully diluted shares of Raptor's common stock on a post-split basis, changed the name of Raptor to Mabwe Minerals Inc. (MBMI:QB) and then engaged in the exploration and mining of barite and industrial minerals and ceased any involvement with the historical business of Raptor. On March 5, 2012 we amended our Articles of Incorporation to change our name to Raptor Resources Holdings Inc. to more clearly reflect our new focus on the mining of industrial minerals and to help build a new brand identity. On June 28, 2012 Mabwe Minerals Inc. ("MBMI") issued 79,078,817 additional shares of common stock to Raptor Resources Holdings Inc. to bring the total percentage equity owned by Raptor Resources Holdings Inc. to 80%, and also issued 13,510,752 shares of MBMI common stock to CCE in consideration of the conversion of the convertible notes outstanding to CCE. The convertible notes previously issued by Raptor Networks Technology, Inc. were converted and MBMI engaged in a 1:10 reverse stock split. Former shareholders of Raptor Networks Technology, Inc. ("RPTN") were reissued one share of Mabwe Minerals Inc. for each 10 shares of RPTN common shares held. No fractional shares were issued resulting in a negligible increase to the total outstanding shares on a post-split basis. -8- On October 29, 2012, MBMI, MAB-C, and WGB Kinsey & Company ("Kinsey") entered into an Equity Exchange Agreement ("Equity Exchange Agreement"). In accordance with the Equity Exchange Agreement, MBMI issued 5,000,000 shares of their common stock to Kinsey in exchange for a 25% ownership for MAB-C in Kinsey. Originally, should the value of the 5,000,000 shares of common stock fail to be valued at $5,000,000 on December 31, 2013, MBMI would have been obligated to issue additional shares of common stock to achieve that value for Kinsey. As of December 5, 2013 this provision was mutually agreed to be removed from the original equity exchange agreement. No further compensation or additional shares will be issued to Kinsey from MBMI. The common shares issued have been valued at $500,000, as the price of MBMI common stock was trading at $0.10 per share, and no valuation has been provided for Kinsey at this time. Kinsey, based in Zimbabwe, Africa, has operated since 1955 in the mining and construction industry. They own their own mining equipment, including a fleet of articulated dump trucks, front and wheeled loaders, excavators, dozers and graders. With both open pit and open cast mining experience ranging from chrome to platinum to gold, they possess all the experience necessary to efficiently perform all the mining operations at the Dodge Mines. On November 7, 2012 the principals of Mabwe Minerals Zimbabwe (PVT) LTD ("MAB-Z") received approval from the Government of Zimbabwe to form a new parent holding corporation for the purpose of holding MAB-Z and the percentage investment stake in WGB Kinsey & Company ("Kinsey".) The new company was named Mabwe Corporation (PVT) LTD ("MAB-C".) The new corporation owns 100% of MAB-Z and 25% of Kinsey. The Company owns a 49% stake in MAB-C and the remaining 51% ownership in MAB-C is held by a director of the Company, Zimbabwean resident, Tapiwa Gurupira (41% ownership), with the remaining portion owned by Asswell Gurupira (10% ownership). MAB-C is the operating arm of Mabwe Minerals Inc., with MBMI being the primary beneficiary of all the activities of MAB-C. MAB-C is a Variable Interest Entity (VIE) with respect to guidance under ASC 810-10-5 and is therefore consolidated. On December 17, 2012 we entered into a settlement and restructuring agreement with PAX ORAL IMAGING INC. ("POII") and former principals Stan Baron (former Chief Executive Officer of the Company and Lantis New Jersey) and Craig Gimbel (former Executive Vice President of the Company and Lantis New Jersey) to acquire their interest in the Company (54,358,923 common shares collectively), terminate their employment agreements with the Company, extinguish the Company's liabilities to Baron and Gimbel and obtain an option to purchase their 14,400,000 warrants. As a result of this agreement all licenses, contract rights, trademarks, patents, copyrights and assets related to the Near Infrared Technology Business in which Lantis New Jersey was then engaged, including OCT and NIR, were transferred to POII. As further consideration, Baron and Gimbel were given a combined 3,000,000 common shares of our majority owned subsidiary Mabwe Minerals Inc. (MBMI). On December 31, 2012, the July 2011 TAG-Z acquisition of 100% of the capital stock of Ontage has been deemed to be worthless. The investment has been deemed worthless because Ontage, a wholly owned subsidiary of TAG-Z a consolidated variable interest entity of the Company, had as its only activity the acquisition of a 10% stake in an existing operating gold mining producer, Slashwood Mining. The Company has permanently impaired the investment in Slashwood Mining, originally valued at $150,000 to $0 thus determining that it was necessary to recognize a loss of $150,000 related to the write-off of the investment. On July 31, 2013 the Company entered into a Master Distributer Agreement ("MDA") with Steinbock Minerals Ltd. ("Steinbock".) Steinbock is engaged and specialize in the worldwide marketing, distribution and sale of industrial minerals, including but not limited to, all barite grade types and talc. Steinbock together with its affiliate Yasheya Ltd. ("Yasheya") were granted the exclusive right to market, sell, distribute, ship and deliver Dodge Mine barite to their customer base. This agreement remains in effect until cancelled by either party upon six months written notice. -9- Fiscal Year Ended December 31, 2013 and 2012 Total Operating Revenues The Company recognized no revenue during the years ended December 31, 2013 and 2012, respectively. Revenues are anticipated to commence within the second quarter of 2014 for the mining of barite and other industrial minerals. Total Operating Expenses Total operating expenses for the year ended December 31, 2013 were $2,778,115 compared to $1,430,566 for the same period in 2012. This represented an increase of $1,347,549, or 94%, primarily due to extraction and site development cost at the Dodge Mine. We depreciate fixed assets. This resulted in an expense of $2,169 and $2,846 for the years ended December 31, 2013 and 2012, respectively. We determine the fair value of the undiscounted cash flows annually and sooner if circumstances change and determination is required, to value any impairment on our intangible assets and long-lived assets. As of December 31, 2013 and December 31, 2012, we determined there was no impairment charge. Other Income (Expense) Interest expense, net of interest income, of $75,135 is the amount of interest payable on the notes for the year ended December 31, 2013 compared to interest of $43,734 for the year ended December 31, 2012. This increase is due to the establishment of a loan facility of MAB-Z with CBZ Bank in the amount of $420,000. During 2013, the Company recognized a loss from investments of $542,911 compared to a gain of $55,275 for the same period last year related to MAB-C's 25% ownership of Kinsey. For the year ended December 31, 2012, a $13,110 gain on conversion of accrued interest and note payable to common stock, a forgiveness of debt of $132,917 on the Dodge Mines, and a loss of $150,000 related to the write-off of the investment in the Slashwood Mines that was 10% owned by Ontage. Net Loss We reported net losses of $(2,505,394) for the year ended December 31, 2013 compared to $(1,366,913) for the year ended December 31, 2012. The increase in the net loss is attributable to the increase in total operating expenses, discussed above. Provision for Income Taxes There was no provision for income taxes for the year ended December, 2013 and 2012. There was no provision due to the carry forward of approximately $14,959,565 of net operating losses as of December 31, 2013 that we reserved in valuation allowances against this deferred tax asset. Liquidity and Capital Resources During the year ended 2013, the balance in cash and cash equivalents increased by $34,193 from $22,897 to $57,090. The increase of $34,193 is reflective of cash used in operating activities of $1,290,255, includes an increase in accounts payable and accrued expenses of $654,460. The Company also had cash provided for financing activities for the year ended December 31, 2013 in the amount of $1,330,025, from the proceeds of private placement sales in the amount of $910,500 and proceeds from a loan in the amount of $420,000. As of December 31, 2013, we had current assets of $289,573 consisting of cash and equivalents, prepaid expenses and an investment amounting to $12,367, and other fixed assets, net of depreciation, amounting to $9,590, goodwill of $25,000 and mineral rights of $433,000. -10- As of December 31, 2013, we had $2,209,455 in current liabilities, consisting of accrued interest payable on the 5% convertible note of $226,309, and accounts payable and accrued expenses of $1,040,470, as well as other notes payable due in the current period of $425,000 ($40,000 of which is due to a related party). We had a working capital deficit of $1,919,882 as of December 31, 2013. As an exploration stage company, financial resources have been directed to the site development and mineral extraction of barite at Dodge Mines and no revenue has yet been generated. We expect to generate revenues in the second quarter of 2014 from our industrial minerals business, primarily consisting from our barite extraction and commercial sales from Dodge Mines through MAB-Z. As a result of the December 17, 2012 settlement and restructuring agreement with POII, as described above the Company is solely focused on the hard asset, natural resource and industrial minerals business. The items discussed above raise substantial doubts about the Company's ability to continue as a going concern. In light of these factors, management believes that with the investment in Kinsey and production commenced in the third quarter of 2013 on the Dodge Mines, the Company believes it will be well positioned to succeed. The financial statements do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Critical Accounting Policies Critical accounting polices include the areas where we have made what we consider to be particularly subjective or complex judgments in making estimates and where these estimates can significantly impact our financial results under different assumptions and conditions. We prepare our financial statements in conformity with U.S. generally accepted accounting principles. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimate, judgments and assumptions affect the reported amounts of assets and liabilities at the date of the financial statement and the reported amounts of revenue and expenses during the periods presented. Actual results could be different than those estimates. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements: Deferred Income Taxes We record a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. We have considered estimated future taxable income an ongoing tax planning strategies in assessing the amount needed for the valuation allowance. Exploration Stage Company On June 29, 2012 we entered into exploration stage activities. In accordance with ASC 915 the Company will be reporting and disclosing additional information in addition to reporting and disclosure requirements otherwise prepared in accordance with U.S. generally accepted accounting principles (GAAP). As of December 31, 2013 we have not recognized any revenue or capitalize and significant production costs. -11- Revenue Recognition and Unearned Revenue Revenue is recognized when the following criteria were met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the price to the customer is fixed or determinable; and (iv) collection of the sales price is reasonably assured. Delivery occurs when goods are shipped and title and risk of loss have passed to the customer. Revenue is deferred in all instances where the earnings process is incomplete. Payments received before all of the relevant criteria for revenue recognition are satisfied will be recorded as deferred revenue in the accompanying consolidated balance sheets. Since the Company entered the Exploration Stage, no revenues have been recorded.Inventory and Stockpile Reserves Inventories, including stockpiles and mineralized material are carried at the lower of cost or net realizable value. Cost is comprised of production costs for mineralized material produced and processed. Production costs include the costs of materials, costs of processing, refinement, extraction, direct labor, mine site and processing facility overhead costs and site development cost, depreciation, depletion and amortization. Stockpiles represent mineralized material that has been extracted from the mine and is available for further processing. Stockpiles are measured by estimating the number of tons added and removed from the stockpile. Costs are allocated to stockpiles based on relative values of material stockpiled and processed using current mining costs incurred up to the point of stockpiling the material, including applicable overhead, depreciation, and depletion relating to mining operations, and removed at each stockpile's average cost per ton. As of December 31, 2013, we had approximately 4,000 tons of barite in stockpile. We believe that based on several factors that the associated extraction costs would best be reflected in the financial statements as representing no certain future net realizable value. Derivative Financial Instruments Our senior convertible notes are classified as non-conventional convertible debt. In the case of non-conventional convertible debt, we bifurcate our embedded derivative instruments and record them at their fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any prior change in fair value will be recorded as non-operating, non-cash income or expense at each reporting date. If the fair value of the derivatives is higher at the subsequent balance sheet date, we will record a non-operating, non-cash charge. If the fair value of the derivative is lower at the subsequent balance sheet date, we will record non-operating, non-cash income. To determine the fair value of the derivative instruments, we make certain assumptions regarding the expected term of exercise. Because the expected term of the warrants impacts the volatility and risk-free interest rates used in the Black-Scholes calculations, these must be selected for the same time period as the expected term of the warrants. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, majority-owned subsidiaries and variable interest entities ("VIEs") for which the Company is the primary beneficiary. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company has adopted the provisions of ASC 810-10-5, "Consolidation of VIEs". ASC 810-10-5 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIEs residual returns. -12- TAG Minerals Inc. on January 4, 2011, then amended on April 2, 2011, acquired a 49% interest in TAG - Z for a 33% interest in TAG. The remaining 51% ownership in TAG - Z is held by a Director of the Company, a Zimbabwe resident, Tapiwa Gurupira. TAG - Z will be the operating arm of TAG, initially, with the Company being the primary beneficiary of all the activities of its subsidiary, TAG, and their affiliated company TAG - Z. As a result of this investment by TAG, TAG - Z has been identified by the Company as a VIE. Mabwe Minerals Inc. on July 18, 2012, acquired a 49% interest in Mabwe Minerals Zimbabwe (PVT) LTD (MAB-Z) through the issuance of 25,000 shares of Raptor Resources Holdings Inc. Series B Preferred Convertible Stock. Each share of the Series B Preferred Convertible Stock is convertible into 50 common shares of Raptor Resources Holdings Inc. and 25 common shares of Mabwe Minerals Inc. both subject to a one year holding period. The remaining 51% ownership in MAB-Z is held by a Director of MBMI, a Zimbabwe resident, Tapiwa Gurupira (41%) with the remaining portion owned by Asswell Gurupira (10%). MAB-Z will be the operating arm of Mabwe Minerals Inc., with MBMI being the primary beneficiary of all the activities of its subsidiary, Mabwe Minerals Zimbabwe (PVT) LTD. As a result of this investment by Mabwe Minerals Inc. funded by Preferred Convertible Series B Stock of Raptor Resources Holdings Inc., MAB - Z has been identified by MBMI as a VIE. The value of the Series B Preferred Convertible Stock is $25,000, which is reflected as Goodwill on the Consolidated Balance Sheet at Balance sheet at December 31, 2013 and 2012. The initial transaction is recorded at cost. On November 7, 2012 the principals of MAB-Z received approval from the Government of Zimbabwe to form a new parent holding corporation for the purpose of holding MAB-Z and its percentage investment stake in WGB Kinsey & Company ("Kinsey".) The new company was Mabwe Corporation (PVT) LTD ("MAB-C".) The new corporation owns 100% of MAB-Z and 25% of Kinsey. The Company's majority owned subsidiary, MBMI, owns a 49% stake in MAB-C the newly formed corporation; the remaining 51% ownership in MAB-C held by a director of the Company, Zimbabwean resident, Tapiwa Gurupira (41% ownership), with the remaining portion owned by Asswell Gurupira (10% ownership). MAB-C will be the operating arm of Mabwe Minerals Inc., with the Company being the primary beneficiary of all the activities of MAB-C. MAB-C is a Variable Interest Entity (VIE) with respect to guidance under ASC 810-10-5 and is therefore consolidated. Fair Value of Financial Instruments (other than Derivative Financial Instruments) The carrying amounts reported in our consolidated balance sheets for cash and cash equivalents and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. For the notes payable, the carrying amount reported is based upon the incremental borrowing rates otherwise available to us for similar borrowings. Research and Development We annually incur costs on activities that relate to exploration and development of current and potential sites including mapping and drilling reports. Research and development costs are expensed as incurred. Income Taxes Under ASC 740 the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Uncertainty in Income Taxes Under ASC 740-10-25 recognition and measurement of uncertain income tax positions is required using a "more-likely-than-not" approach. We evaluate our tax positions on an annual basis and have determined that as of December 31, 2013 no additional accrual for income taxes is necessary. -13- Advertising Costs We expense the costs associated with advertising as incurred. Advertising expenses are included in professional, consulting and marketing fees in the consolidated statements of operations. Fixed Assets Fixed assets are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets; computer - 3-5 years, and furniture and fixtures - 5 years. Scientific and measurement equipment is recorded with a useful life of 7 years. When assets are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments are capitalized. Deduction is made for retirements resulting from renewals or betterments. Impairment of Long-Lived Assets Long-lived assets, primarily fixed assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. We do not perform a periodic assessment of assets for impairment in the absence of such information or indicators. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, we recognize an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amounts and estimated fair value. (Loss) Per Share of Common Stock Basic net (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share ("EPS") include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. The common stock equivalents were not included in the computation of diluted earnings per share on the consolidated statement of operations due to the fact that we reported a net loss and to do so would be anti-dilutive for the periods presented. Stock-Based Compensation In 2006, we adopted the provisions of ASC 718-10 "Share Based Payments". The adoption of this principle had no effect on the Company's operations. ASC 718-10 requires recognition of stock-based compensation expense for all share-based payments based on fair value. Prior to January 1, 2006, we measured compensation expense for all of its share-based compensation using the intrinsic value method. We have elected to use the modified-prospective approach method. Under that transition method, the calculated expense in 2006 is equivalent to compensation expense for all awards granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair values. Stock-based compensation expense for all awards granted after January 1, 2006 is based on the grant-date fair values. We recognize these compensation costs, net of an estimated forfeiture rate, on a pro rata basis over the requisite service period of each vesting tranche of each award. We consider voluntary termination behavior as well as trends of actual option forfeitures when estimating the forfeiture rate. -14- We measure compensation expense for non-employee stock-based compensation under ASC 505-50, "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services". The fair value of the option issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of the Company's common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty's performance is complete. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital. For common stock issuances to non-employees that are fully vested and are for future periods, we classify these issuances as prepaid expenses and expenses the prepaid expenses over the service period. Debt Issuance Costs Debt issuance costs relate to the fees paid in connection with our outstanding convertible notes. These fees are being amortized over the life of the convertible notes, which is three years. Should the notes be converted prior to the maturity date of three years, then the debt issuance costs will be amortized sooner. Beneficial Conversion Features ASC 470-20 applies to convertible securities with beneficial conversion features that must be settled in stock and to those that give the issuer a choice in settling the obligation in either stock or cash. ASC 470-20 requires that the beneficial conversion feature should be valued at the commitment date as the difference between the conversion price and the fair market value of the common stock into which the security is convertible, multiplied by the number of shares into which the security is convertible. ASC 470-20 further limits this amount to the proceeds allocated to the convertible instrument Recent Issued Accounting Standards In July 2012, the FASB issued ASU 2012-02, "Intangibles Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment",on testing for indefinite-lived intangible assets for impairment. The new guidance provides an entity to simplify the testing for a drop in value of intangible assets such as trademarks, patents, and distribution rights. The amended standard reduces the cost of accounting for indefinite-lived intangible assets, especially in cases where the likelihood of impairment is low. The changes permit businesses and other organizations to first use subjective criteria to determine if an intangible asset has lost value. The amendments to U.S. GAAP will be effective for fiscal years starting after September 15, 2012. The Company's adoption of this accounting guidance does not have a material impact on the consolidated financial statements and related disclosures. In July 2013, the FASB issued ASU 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." ASU 2013-11 provides guidance on the presentation of unrecognized tax benefits related to any disallowed portion of net operating loss carryforwards, similar tax losses, or tax credit carryforwards, if they exist. ASU 2013-11 is effective for fiscal years beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on the Company's consolidated financial statements. There were other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company's financial position, results of operations or cash flows. |