AMERICAN SHARED HOSPITAL SERVICES 10-K

ITEM 9A. CONTROLS AND PROCEDURES   (a) Evaluation of disclosure controls and procedures.       Our Chief Executive Officer and our Chief Financial Officer, after evaluating the effectiveness of the Company’s “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 (“Exchange Act”) Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this annual report, have concluded that our disclosure controls and procedures are effective based on their evaluation of these controls and procedures required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15.     (b) Management ’ s report on internal control over financial reporting.       The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control system was designed to provide reasonable assurance to its management and Board of Directors regarding the preparation and fair presentation of published financial statements.       All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.       Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013). Based on this assessment management believes that, as of December 31, 2021, the Company’s internal control over financial reporting is effective based on those criteria.               23 Table of Contents   (c) Changes in internal controls over financial reporting.       Our Chief Executive Officer and our Chief Financial Officer have evaluated the changes to the Company’s internal control over financial reporting that occurred during our last fiscal quarter ended December 31, 2021, as required by paragraph (d) of Exchange Act Rules 13a-15 and 15d-15, and have concluded that there were no such changes that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.   ITEM 9B. OTHER INFORMATION   None.   ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS   Not applicable.   PART III   ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE   Information regarding directors is incorporated herein by reference from the Company’s definitive Proxy Statement for the 2022 Annual Meeting of Shareholders (the “2022 Proxy Statement”). Information regarding executive officers of the Company, included herein under the caption “Executive Officers of the Company” in Part I, Item 1 above, is incorporated herein by reference.   Information concerning the identification of our standing audit committee required by this Item is incorporated by reference from the 2022  Proxy Statement.   Information concerning our audit committee financial experts required by this Item is incorporated by reference from the 2022  Proxy Statement .   Information concerning compliance with Section 16(a) of the Exchange Act required by this Item is incorporated by reference from the 2022 Proxy Statement.   We have adopted a Code of Ethics that is available on our website at www.ashs.com . The information on our website is not part of this report. You may also request a copy of this document free of charge by writing our Corporate Secretary.   ITEM 11. EXECUTIVE COMPENSATION   Information required by this Item is incorporated herein by reference from the 2022 Proxy Statement.   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS   Information required by this Item is incorporated herein by reference from the 2022 Proxy Statement.   ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE   Information required by this Item is incorporated herein by reference from the 2022 Proxy Statement.   ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES   The information required by this item is incorporated by reference to the section entitled “Ratification of the Appointment of Our Independent Registered Public Accounting Firm” in our Proxy Statement for the 2022 Annual Meeting of Stockholders.   Auditor Firm Id: 659 Auditor Name: Moss Adams LLP Auditor Location: Seattle, WA United States       PART IV   ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES   (a) Financial Statements and Schedules.       The following Financial Statements and Schedules are filed with this Report:     Report of Independent Registered Public Accounting Firm     Audited Consolidated Financial Statements     Consolidated Balance Sheets     Consolidated Statements of Operations     Consolidated Statement of Shareholders' Equity     Consolidated Statements of Cash Flows     Notes to Consolidated Financial Statements     Financial Statement Schedules- no schedules are included since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements and notes thereto.   24 Table of Contents   (b) Exhibits.       The following Exhibits are filed with this Report.   Exhibit       Incorporated by reference herein Number   Description   Form   Exhibit   Date 3.1   Articles of Incorporation of the Company.   10-Q 001-08789   3.1   5/15/2017                   3.1a   Certificate of Amendment to Articles of Incorporation of the Company.   10-K 001-08789   3.1   3/27/2017                   3.2   By-laws of the Company, as amended and restated dated as of January 27, 2021.   8-K 001-08789   3.1   2/2/2021                   4.1   Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934   10-K 001-08789   4.1   4/6/2021                   10.1   Operating Agreement for GK Financing, LLC dated as of October 17, 1995 between American Shared Radiosurgery Services, Inc. and GKV Investments, Inc.   S-1 033-63721   10.12   10/26/1995                   10.1a   Amendment Agreement dated as of October 26, 1995 to the GK Financing, LLC Operating Agreement between American Shared Radiosurgery Services, Inc. and GKV Investments, Inc.   S-1/A 033-63721   10.13   3/29/1996                   10.1b   Second Amendment Agreement dated as of December 20, 1995 to the GK Financing, LLC Operating Agreement between American Shared Radiosurgery Services, Inc. and GKV Investments, Inc.   S-1/A 033-63721   10.13   3/29/1996                   10.1c   Third Amendment Agreement dated as of October 16, 1996 to the GK Financing, LLC Operating Agreement between American Shared Radiosurgery Services, Inc. and GKV Investments, Inc.   10-K 001-08789   10.13b   3/31/1998                   10.1d   Amendment Four Agreement dated as of March 31, 1998 to the GK Financing, LLC Operating Agreement between American Shared Radiosurgery Services, Inc. and GKV Investments, Inc.   10-K 001-08789   10.8   3/31/1999                   10.1e   Fifth Amendment Agreement dated as of March 31, 1998 to the GK Financing, LLC Operating Agreement between American Shared Radiosurgery Services, Inc. and GKV Investments, Inc.   10-K 001-08789   10.9   3/31/1999                   10.1f   Sixth Amendment Agreement dated as of June 5, 1998 to the GK Financing, LLC Operating Agreement between American Shared Radiosurgery Services, Inc. and GKV Investments, Inc.   10-K 001-08789   10.10   3/31/1999                   10.1g   Seventh Amendment Agreement dated as of October 18, 2006 to the GK Financing, LLC Operating Agreement between American Shared Radiosurgery Services, Inc. and GKV Investments, Inc.   10-K 001-08789   10.52   4/2/2007                   10.1h   Eighth Amendment Agreement dated as of April 28, 2010 to the GK Financing, LLC Operating Agreement between American Shared Radiosurgery Services, Inc. and GKV Investments, Inc.   10-K 001-08789   10.1h   3/30/2016                   10.1i   Ninth Amendment Agreement dated as of May 16, 2011 to the GK Financing, LLC Operating Agreement between American Shared Radiosurgery Services, Inc. and GKV Investments, Inc.   10-K 001-08789   10.1i   3/30/2016                   10.1j * Tenth Amendment Agreement dated as of March 25, 2021 to the GK Financing, LLC Operating Agreement between American Shared Radiosurgery Services, Inc. and GKV Investments, Inc.   10-K 001-08789   10.1j   3/30/2022   25 Table of Contents   10.2   Lease Agreement for a Gamma Knife Unit dated as of October 29, 1996 between GK Financing, LLC and Methodist Healthcare Systems of San Antonio, Ltd., dba Southwest Texas Methodist Hospital.   10-K 001-08789   10.2   3/30/2016                   10.2a   Addendum to Lease Agreement for a Gamma Knife Unit dated as of October 31, 1996 between GK Financing, LLC and Methodist Healthcare System of San Antonio, Ltd., dba Southwest Texas Methodist Hospital.     10-K 001-08789   10.2a   3/30/2016                   10.2b   Addendum Two to Lease Agreement for a Gamma Knife Unit dated as of October 16, 1997 between Methodist Healthcare System of San Antonio, Ltd., d.b.a. Southwest Texas Methodist Hospital and GK Financing, LLC.   10-K 001-08789   10.2b   3/30/2016                   10.2c   Amendment to Lease Agreement for a Gamma Knife Unit dated as of December 13, 2003 between Methodist Healthcare Systems of San Antonio, Ltd., d/b/a Southwest Texas Methodist Hospital and GK Financing, LLC.   10-K 001-08789   10.2c   3/30/2016                   10.2d # Second Amendment to Lease Agreement for a Gamma Knife Unit (Perfexion Upgrade) dated as of December 23, 2009 between GK Financing, LLC and Methodist Healthcare Systems of San Antonio, Ltd., d/b/a Southwest Texas Methodist Hospital.     10-Q 001-08789   10.18b   11/15/2010                   10.4   Purchased Services Agreement (for a Gamma Knife Unit) dated as of November 19, 2008 between GK Financing, LLC and Kettering Medical Center.   10-Q 001-08789   10.1   8/11/2016                   10.4a   First Amendment to Purchased Services Agreement (for a Gamma Knife Unit) dated as of June 11, 2009 between GK Financing, LLC and Kettering Medical Center.     10-Q 001-08789   10.1a   8/11/2016                   10.4b # Second Amendment to Purchased Services Agreement (for a Gamma Knife Unit) dated as of February 27, 2014 between GK Financing, LLC and Kettering Medical Center.   10-K 001-08789   10.21c   4/1/2015                   10.4c # Third Amendment to Purchased Services Agreement (for a Gamma Knife Unit) dated as of March 28, 2019 between GK Financing, LLC and Kettering Medical Center   10-Q 001-08789   10.1   11/7/2019                   10.5 # Lease Agreement for a Gamma Knife Unit (Perfexion Upgrade) dated as of July 30, 2013 between Tufts Medical Center, Inc. (FKA New England Medical Center Hospitals, Inc.) and GK Financing, LLC.   10-K 001-08789   10.22b   3/31/2014                   10.5a # First Amendment to Lease Agreement for a Gamma Knife Unit (Perfexion Upgrade) dated as of April 23, 2020 between Tufts Medical Center, Inc. (FKA New England Medical Center Hospitals, Inc.) and GK Financing, LLC.   10-Q 001-08789   10.1   8/14/2020                   10.6 # Amended and Restated Equipment Lease Agreement (for a Gamma Knife Unit) dated as of December 12, 2014, between GK Financing, LLC and the Board of Trustees of the University of Arkansas on behalf of the University of Arkansas for Medical Sciences.   10-Q 001-08789   10.4   8/19/2015                   10.10   Lease Agreement for a Gamma Knife Unit dated as of November 1, 1999 between GK Financing, LLC and Jackson HMA, Inc. d/b/a Central Mississippi Medical Center.     10-K 001-08789   10.10   3/30/2016                   10.10a   Addendum to Lease Agreement for a Gamma Knife Unit dated as of November 1, 1999 between Jackson HMA, Inc. dba Central Mississippi Medical Center and GK Financing, LLC.   10-Q 001-08789   10.34   8/10/2001                   10.10b # Addendum Two to Lease Agreement for a Gamma Knife Unit dated as of November 6, 2006 between GK Financing, LLC and Jackson HMA, Inc. d/b/a Central Mississippi Medical Center.   10-K 001-08789   10.51   4/2/2007   26 Table of Contents   10.10c   Amendment Three to Lease Agreement for a Gamma Knife Unit dated as of February 23, 2010 between GK Financing, LLC and Jackson HMA, LLC d/b/a Central Mississippi Medical Center.   10-K 001-08789   10.10c   3/30/2016                   10.10d   Amendment Four to Lease Agreement for a Gamma Knife Unit dated as of May 1, 2019 between GK Financing, LLC and Jackson HMA, LLC d/b/a Central Mississippi Medical Center.   10-Q 001-08789   10.1   5/11/2020                   10.11   Lease Agreement for a Gamma Knife Unit dated as of February 18, 2000 between GK Financing, LLC and OSF HealthCare System.   10-K 001-08789   10.11   3/30/2016                   10.11a   Addendum to Lease Agreement for a Gamma Knife Unit dated as of April 13, 2007, between GK Financing, LLC and OSF Healthcare System.   10-Q 001-08789   10.2   8/11/2016                   10.11b   Addendum Two to Lease Agreement for a Gamma Knife Unit dated as of October 31, 2012 between GK Financing, LLC and OSF Healthcare System.   10-Q 001-08789   10.2a   8/11/2016                   10.11c # Addendum Three to Lease Agreement for a Gamma Knife Unit dated as of June 7, 2016 between GK Financing, LLC and OSF Healthcare System.   10-Q 001-08789   10.2b   8/11/2016                   10.11d   Addendum Four to Lease Agreement for a Gamma Knife Unit dated as of February 6, 2020 between GK Financing, LLC and OSF Healthcare System.   10-K 001-08789   10.11d   4/6/2021                   10.11e *# Addendum Five to Lease Agreement for a Gamma Knife Unit dated as of  April 28, 2021 between GK Financing, LLC and OSF Healthcare System.   10-K 001-08789   10.11e   3/30/2022                   10.13   Equipment Lease Agreement (for a Gamma Knife Unit) dated as of February 13, 2003 between GK Financing, LLC and AHS Albuquerque Regional Medical Center, LLC.   10-K 001-08789   10.13   3/30/2016                   10.13a # Amendment to Equipment Lease Agreement (Perfexion Upgrade) dated as of April 8, 2011 between GK Financing, LLC and Lovelace Health System, Inc., d/b/a Lovelace Medical Center.     10-Q 001-08789   10.62   8/15/2011                   10.13b   Assignment and Assumption of Purchase and License Agreement dated as of February 2, 2011 between Elekta, Inc., GK Financing, LLC and Albuquerque GK Equipment, LLC.   10-Q 001-08789   10.62a   8/15/2011                   10.13c # Icon Upgrade and Amendment Two to Equipment Lease Agreement for a Gamma Knife Unit dated as of October 15, 2019 between GK Financing, LLC and Lovelace Health System, Inc., d/b/a Lovelace Medical Center.     10-Q 001-08789   10.1   11/13/2020                   10.14   Equipment Lease Agreement (for a Gamma Knife Unit) dated as of March 21, 2003 between GK Financing, LLC and Northern Westchester Hospital Center.   10-K 001-08789   10.14   3/30/2016                   10.14a # Amendment to Equipment Lease Agreement (Perfexion Upgrade) dated as of June 8, 2012 between GK Financing, LLC and Northern Westchester Hospital Center.   10-Q 001-08789   10.46a   8/14/2013                   10.14b # Amendment Two to Equipment Lease Agreement (Reload) dated as of October 7, 2020 between GK Financing, LLC and Northern Westchester Hospital Association.   10-Q 001-08789   10.1   5/13/2021                   10.16 # Purchased Services Agreement (for a Gamma Knife Unit) dated as of March 5, 2008 between GK Financing, LLC and USC University Hospital, Inc.   10-Q 001-08789   10.57   5/14/2008                   10.16a # First Amendment to Purchased Services Agreement (for a Gamma Knife Unit) dated as of April 1, 2009 between GK Financing, LLC and University of Southern California.   10-Q 001-08789   10.57a   8/14/2009                   10.16b # Second Amendment to Purchased Services Agreement (for a Gamma Knife Unit) dated as of October 1, 2013 between GK Financing, LLC and University of Southern California.   10-Q 001-08789   10.57b   8/14/2014   27 Table of Contents   10.16c   Third Amendment to Purchased Services Agreement dated as June 30, 2020 between GK Financing, LLC and University of Southern California.   10-Q 001-08789   10.2   11/13/2020                   10.16d   Fourth Amendment to Purchased Services Agreement dated as of July 28, 2021 between GK Financing, LLC and University of Southern California.   10-Q 001-08789   10.1   11/10/2021                   10.17 # Equipment Lease Agreement (for a Gamma Knife Unit) dated as of May 1, 2010 between GK Financing, LLC and Fort Sanders Regional Medical Center.     10-Q 001-08789   10.60   5/16/2011                   10.17a   Amendment to Lease Agreement (for a Gamma Knife Unit) dated as of January 3, 2012 between GK Financing, LLC and Fort Sanders Regional Medical Center.   10-K 001-08789   10.17a   3/30/2016                   10.17b   Second Amendment to Equipment Lease Agreement (for a Gamma Knife Unit) dated as of June 1, 2017 between GK Financing, LLC and Fort Sanders Regional Medical Center.   10-Q 001-08789   10.2   8/10/2017                   10.18 # Leksell Gamma Knife Perfexion Purchased Services Agreement dated as of August 5, 2011 between Jacksonville GK Equipment, LLC and St. Vincent’s Medical Center, Inc.   10-K 001-08789   10.63   3/30/2012                   10.18a # First Amendment to the Leksell Gamma Knife Perfexion Purchased Services Agreement dated as of October 10, 2011 between Jacksonville GK Equipment, LLC and St. Vincent’s Medical Center, Inc.   10-K 001-08789   10.63a   3/30/2012                   10.19 # Leksell Gamma Knife Perfexion Purchased Services Agreement dated as of January 19, 2012 between GK Financing, LLC and Sacred Heart Health System, Inc.   10-Q 001-08789   10.65   5/15/2013                   10.20 # Leksell Gamma Knife Perfexion Purchased Services Agreement dated as of March 27, 2014 between GK Financing, LLC and PeaceHealth doing business through its operating division PeaceHealth Sacred Heart Medical Center at RiverBend.   10-K 001-08789   10.67   4/1/2015                   10.20a   Amendment One to Leksell Gamma Knife Perfexion Purchased Services Agreement dated as of March 27, 2014 between GKF Financing, LLC and PeaceHealth Sacred Heart Medical Center at Riverbend.   10-Q 001-08789   10.2   5/13/2021                   10.21 # Equipment Lease Agreement (for a Gamma Knife Unit) dated as of February 21, 2017 between Bryan Medical Center, and GK Financing, LLC.   10-Q 001-08789   10.1   11/13/2017                   10.21a # First Amendment to Equipment Lease Agreement (for a Gamma Knife unit) dated as of February 14, 2018 between Bryan Medical Center and GK Financing, LLC   10-Q 001-08789   10.1   5/10/2018                   10.22 # Proton Beam Radiation Therapy Lease Agreement dated as of October 18, 2006 between American Shared Hospital Services and Orlando Regional Healthcare System, Inc.   10-Q 001-08789   10.3   8/11/2016                   10.22a # Amendment One to Proton Beam Radiation Therapy Lease Agreement dated as of August 12, 2012 between American Shared Hospital Services and Orlando Health, Inc., formerly known as Orlando Regional Healthcare System, Inc.   10-Q 001-08789   10.3a   8/11/2016                   10.23 # Equipment Lease Agreement (for a Gamma Knife Unit) dated as of May 8, 2018 between The Methodist Hospitals, Inc. and GK Financing, LLC   10-Q 001-08789   10.1   5/13/2019                   10.24 • American Shared Hospital Services Incentive Compensation Plan as Amended and Restated effective June 25, 2021   8-K 001-08789   10.1   7/1/2021                   10.25 • Form of Indemnification Agreement between American Shared Hospital Services and members of its Board of Directors.   10-K 001-08789   10.26   3/30/2016                   10.26 • Form of American Shared Hospital Services Incentive Compensation Plan Performance Share Award Agreement.   10-K 001-08789   10.25   3/27/2017                   10.27 • Offer Letter between the Company and Mr. Raymond C. Stachowiak dated April 22, 2020   8-K 001-08789   99.1   4/22/2020                   1 0.28   Credit Agreement dated as of April 9, 2021 among American Shared Hospital Services, PBRT Orlando, LLC and GK Financing, LLC as the initial co-Borrowers, and American Shared Radiosurgery Services as the initial additional Loan Party and Fifth Third Bank, National Association, as Lender.   8-K 001-08789   10.1   4/15/2021                   21.1 * Subsidiaries of American Shared Hospital Services                               23.1 * Consent of Independent Registered Public Accounting Firm               28 Table of Contents   31.1 * Certification of Chief Executive Officer pursuant to Rule 13a-14a/15d-14a, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                               31.2 * Certification of Chief Financial Officer pursuant to Rule 13a-14a/15d-14a, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                               32.1 ǂ Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                               101.INS * Inline XBRL Instance Document             101.SCH * Inline XBRL Taxonomy Extension Schema Document             101.CAL * Inline XBRL Taxonomy Calculation Linkbase Document             101.DEF * Inline XBRL Taxonomy Definition Linkbase Document             101.LAB * Inline XBRL Taxonomy Label Linkbase Document             101.PRE * Inline XBRL Taxonomy Extension Presentation Linkbase Document             104 * Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline Instance XBRL contained in Exhibit 101                                 * Filed herewith.               ǂ Furnished herewith.               # Confidential material appearing in this document has been omitted and filed separately with the Securities and Exchange Commission in accordance with Rule 24b-2, promulgated under the Securities and Exchange Act of 1934, as amended.  Omitted information has been replaced with asterisks.   • Indicates management compensatory plan, contract, or arrangement.   ITEM 16. FORM 10-K SUMMARY   The Optional summary in Item 16 has not been included in this Form 10-K.   29 Table of Contents   SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.     AMERICAN SHARED HOSPITAL SERVICES   (Registrant)       March 30, 2022 By: /s/ Raymond C. Stachowiak     Raymond C. Stachowiak     Chief Executive Officer   Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.   Signature   Title   Date           /s/ Raymond C. Stachowiak   Chief Executive Officer, Director   March 30, 2022 Raymond C. Stachowiak                   /s/ Daniel G. Kelly Jr.   Director   March 30, 2022 Daniel G. Kelly JR.                   /s/ Ernest A. Bates   Director   March 30, 2022 Ernest A. Bates, M.D.                   /s/ Kathleen Miles   Director   March 30, 2022 Kathleen Miles                   /s/ Vicki L. Wilson   Director   March 30, 2022 Vicki Wilson                   /s/ Craig K. Tagawa   President, Chief Operating Officer and   March 30, 2022 Craig K. Tagawa   Chief Financial Officer (Principal Accounting Officer)       30 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM and CONSOLIDATED FINANCIAL STATEMENTS   AS OF December 31, 2021 and 2020 , and FOR THE YEARS ENDED December 31, 2021     CONTENTS         PAGE     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F- 1     CONSOLIDATED FINANCIAL STATEMENTS   Balance sheets F- 3 Statements of operations F- 4 Statement of shareholders’ equity F- 5 Statements of cash flows F- 6 Notes to financial statements F- 8   31 Table of Contents       Report of Independent Registered Public Accounting Firm   To the Shareholders and the Board of Directors of American Shared Hospital Services, Inc.   Opinion on the Financial Statements   We have audited the accompanying consolidated balance sheets of American Shared Hospital Services, Inc. (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, shareholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.   Basis for Opinion   These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.   Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.   Critical Audit Matters   The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.   Retail Revenue Recognition – Estimates of Reimbursement Rates and Payor Mix   As discussed in Note 2 in the Company’s consolidated financial statements, retail revenue amounted to approximately $10,651,000, which was approximately 60% of total consolidated revenue, during the year ended  December 31, 2021. The related accounts receivable balance for total retail sites accounted for 63% of total accounts receivable at December 31, 2021. The Company has retail customer revenue classified as either turn-key or revenue sharing that are recognized under Accounting Standards Codification (“ASC”) 842 Leases (“ASC 842”). Under revenue sharing arrangements, the Company receives a contracted percentage of the reimbursement received by the hospital. Under turn-key arrangements, the Company receives payment from the hospital based on the amount of the hospital’s reimbursement from third party payors.   We identified management’s estimates of reimbursement rates and payor mix to record retail revenue and related accounts receivable, as a critical audit matter.  Retail revenue and related accounts receivable involves significant judgment and estimation, including measurement uncertainty, by management based on the estimates and assumptions used and are subject to adjustments based on actual reimbursements received by the Company. In turn, auditing management’s judgments and estimates related to retail revenue and related accounts receivable involved a high degree of subjectivity, as they are based on estimates of reimbursement rates and payor mix.   The primary procedures we performed to address this critical audit matter included:     a. Obtaining management’s reconciliation of retail revenue and accounts receivable by site agreeing to supporting documentation related to the estimated reimbursement rates and payor mix used in the calculation.   F- 1 Table of Contents     b. Obtaining third party confirmations, confirming number of procedures, payment dates and amounts paid, and reconciling confirmed amounts to management’s reconciliation, in order to validate approximate rate per procedure.     c. Testing subsequent cash receipts and evaluating the reasonableness of the estimates through a look-back analysis over retail revenue as compared to accounts receivable balances previously recognized.     d. Developing an independent expectation of reimbursement rates per procedure based on historical trends, procedures, and payment amounts received through confirmation directly with the hospital, and comparing to management’s estimates.   Property and Equipment - Salvage Value on Equipment   As described in Note 2 to the consolidated financial statements, property and equipment are stated at cost less accumulated depreciation. Depreciation for Gamma Knife, and other equipment is determined using the straight-line method over the estimated useful lives of the assets, which for medical and office equipment is generally 3 – 10 years, and after accounting for salvage value on the equipment where indicated. Salvage value is based on the estimated fair value of the equipment at the end of its useful life.   We identified management’s estimates of salvage value including qualitative assessments of certain equipment as a critical audit matter.  Determination of salvage values involves significant judgment and estimation, involving measurement uncertainty, as there is no active resale market for the Gamma Knife units due to limited sellers and buyers and trade-ins for the equipment are not guaranteed. Trade-ins are highly dependent on future demand, values and the Company’s relationship with supplier, a related party of the Company.  In turn, auditing management’s judgments and estimates related to salvage value of certain equipment, involved a high degree of subjectivity.   The primary procedure we performed to address this critical audit matter included:     a Evaluating management’s determination of salvage values by comparing determined salvages values with historical trade-in transactions and publicly available transaction information, which included reviewing relevant purchase agreements, supplier agreements and evaluating publicly available transaction information.   /s/ Moss Adams LLP   San Francisco, California March 30, 2022   We have served as the Company’s auditor since 2000.   F- 2 Table of Contents     AMERICAN SHARED HOSPITAL SERVICES CONSOLIDATED BALANCE SHEETS       December 31,       2021     2020   ASSETS                 CURRENT ASSETS                 Cash and cash equivalents   $ 8,145,000     $ 3,961,000   Restricted cash     118,000       364,000   Accounts receivable, net of allowance for doubtful accounts of $ 100,000 at At December 31, 2021 and December 31, 2020     4,211,000       4,303,000   Other receivables     613,000       272,000   Prepaid maintenance     1,174,000       1,169,000   Prepaid expenses and other current assets     826,000       781,000   Total current assets     15,087,000       10,850,000   PROPERTY AND EQUIPMENT, net     28,254,000       30,418,000   LAND     19,000       19,000   GOODWILL     1,265,000       1,265,000   INTANGIBLE ASSETS     78,000       78,000   RIGHT OF USE ASSETS     654,000       886,000   OTHER ASSETS     73,000       137,000   TOTAL ASSETS   $ 45,430,000     $ 43,653,000   LIABILITIES AND SHAREHOLDERS’ EQUITY                 CURRENT LIABILITIES                 Accounts payable   $ 746,000     $ 683,000   Employee compensation and benefits     423,000       405,000   Other accrued liabilities     2,419,000       2,045,000   Asset retirement obligations     757,000       1,270,000   Income taxes payable     96,000       373,000   Working capital payment due     —       197,000   Current portion of lease liabilities     369,000       305,000   Current portion of long-term debt, net     1,081,000       1,157,000   Current portion of finance leases     —       5,945,000   Total current liabilities     5,891,000       12,380,000   LONG-TERM LEASE LIABILITIES, less current portion     359,000       581,000   LONG-TERM DEBT, net, less current portion     14,323,000       3,440,000   LONG-TERM FINANCE LEASES, less current portion     —       2,974,000   DEFERRED REVENUE, less current portion     140,000       210,000   DEFERRED INCOME TAXES     478,000       418,000   COMMITMENTS AND CONTINGENCIES (See Note 12)                     SHAREHOLDERS’ EQUITY                 Common stock, no par value                 Common stock, no par value ( 10,000,000 authorized; Issued and outstanding shares – 6,049,000 at December 31, 2021 and 5,791,000 at December 31, 2020     10,758,000       10,753,000   Additional paid-in capital     7,444,000       7,024,000   Retained earnings     1,691,000       1,497,000   Total equity- American Shared Hospital Services     19,893,000       19,274,000   Non-controlling interests in subsidiaries     4,346,000       4,376,000   Total shareholders’ equity     24,239,000       23,650,000   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 45,430,000     $ 43,653,000     See accompanying notes   F- 3 Table of Contents     AMERICAN SHARED HOSPITAL SERVICES CONSOLIDATED STATEMENTS OF OPERATIONS       YEARS ENDED December 31,       2021     2020                     Revenues   $ 17,628,000     $ 17,837,000         17,628,000       17,837,000   Costs of revenue:                 Maintenance and supplies     2,490,000       2,385,000   Depreciation and amortization     4,856,000       6,789,000   Other direct operating costs     3,556,000       4,197,000         10,902,000       13,371,000   Gross margin     6,726,000       4,466,000                     Selling and administrative expense     4,531,000       4,608,000   Interest expense     739,000       1,057,000   Loss on write down of impaired assets and associated removal costs     105,000       8,264,000                     Operating income (loss)     1,351,000       ( 9,463,000 )                   (Loss) on early extinguishment of debt     ( 401,000 )     -   Interest and other (loss) income     ( 3,000 )     10,000   Income (loss) before income taxes     947,000       ( 9,453,000 ) Income tax expense (benefit)     269,000       ( 1,737,000 )                   Net income (loss)     678,000       ( 7,716,000 )                   Less: net (income) loss attributable to non-controlling interests     ( 484,000 )     658,000   Net income (loss) attributable to American Shared Hospital Services   $ 194,000     $ ( 7,058,000 )                   Net income (loss) per share attributable to American Shared Hospital Services:                 Income (loss) per common share- basic   $ 0.03     $ ( 1.14 ) Income (loss) per common share- diluted   $ 0.03     $ ( 1.14 )   See accompanying notes   F- 4 Table of Contents     AMERICAN SHARED HOSPITAL SERVICES CONSOLIDATED STATEMENT OF SHAREHOLDERS ’  EQUITY       THREE YEARS ENDED December 31, 2021       Common Shares     Common Stock     Additional Paid-in Capital     Retained Earnings     Sub-Total ASHS     Non-controlling Interests in Subsidiaries     Total   Balances at December 31, 2019     5,817,000     $ 10,753,000     $ 6,725,000     $ 8,555,000     $ 26,033,000     $ 5,778,000     $ 31,811,000   Stock-based compensation expense     103,000       —       299,000       —       299,000       —       299,000   Cash distributions to non-controlling interests     —       —       —       —       —       ( 761,000 )     ( 761,000 ) NCI investment in acquisition     —       —       —       —       —       17,000       17,000   Restricted common shares returned to plan     ( 129,000 )     —       —       —       —       —       —   Net (loss)     —       —       —       ( 7,058,000 )     ( 7,058,000 )     ( 658,000 )     ( 7,716,000 ) Balances at December 31, 2020     5,791,000     $ 10,753,000     $ 7,024,000     $ 1,497,000     $ 19,274,000     $ 4,376,000     $ 23,650,000   Stock-based compensation expense     130,000       —       420,000       —       420,000       —       420,000   Options exercised     5,000       5,000       —       —       5,000       —       5,000   Issuance of deferred restricted stock awards     123,000       —       —       —       —       —       —   Cash distributions to non-controlling interests     —       —       —       —       —       ( 514,000 )     ( 514,000 ) Net income     —       —       —       194,000       194,000       484,000       678,000   Balances at December 31, 2021     6,049,000     $ 10,758,000       7,444,000       1,691,000       19,893,000       4,346,000       24,239,000     S ee accompanying notes   F- 5 Table of Contents     AMERICAN SHARED HOSPITAL SERVICES CONSOLIDATED STATEMENTS OF CASH FLOWS       YEARS ENDED December 31,       2021     2020   OPERATING ACTIVITIES                 Net income (loss)   $ 678,000     $ ( 7,716,000 ) Adjustments to reconcile net income (loss) to net cash from operating activities (excluding assets acquired and liabilities assumed):                 Depreciation and amortization     4,972,000       6,970,000   Non cash lease expense     309,000       288,000   Amortization of deferred issuance costs     59,000       —   Loss on write down impaired assets     105,000       8,184,000   Loss on sublease impairment, net     74,000       —   Loss on extinguishment of debt     401,000       —   Deferred income taxes     60,000       ( 2,162,000 ) Stock-based compensation expense     420,000       299,000   Interest expense associated with lease liabilities     42,000       65,000   Changes in operating assets and liabilities:                 Receivables     ( 519,000 )     2,966,000   Prepaid expenses and other assets     14,000       762,000   Accounts payable, accrued liabilities and deferred revenue     851,000       263,000   Asset retirement obligations     ( 618,000 )     —   Lease liability     ( 351,000 )     ( 353,000 ) Income taxes payable     ( 230,000 )     179,000   Net cash from operating activities     6,267,000       9,745,000   INVESTING ACTIVITIES                 Payment for purchase of property and equipment     ( 1,674,000 )     ( 455,000 ) Payment for acquisition, net of cash acquired     —       ( 2,084,000 ) Proceeds from sale of equipment     —       150,000   Net cash (used in) investing activities     ( 1,674,000 )     ( 2,389,000 ) FINANCING ACTIVITIES                 Principal payments on long-term debt     ( 3,927,000 )     ( 1,726,000 ) Principal payments on finance leases     ( 8,919,000 )     ( 3,199,000 ) Proceeds from financing for acquisition     —       1,425,000   Long-term debt financing     13,897,000       —   Prepayment penalties     ( 401,000 )     —   Distributions to non-controlling interests     ( 514,000 )     ( 761,000 ) Debt issuance costs long-term debt     ( 325,000 )     ( 30,000 ) Proceeds from options exercised     5,000       —   Principal payments on short-term financing prepaid insurance     ( 471,000 )     ( 519,000 ) Net cash (used in) financing activities     ( 655,000 )     ( 4,810,000 ) Net change in cash and cash equivalents     3,938,000       2,546,000   CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of year     4,325,000       1,779,000   CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of year   $ 8,263,000     $ 4,325,000     F- 6 Table of Contents   SUPPLEMENTAL CASH FLOW DISCLOSURE                 Cash paid for interest   $ 680,000     $ 938,000   Cash paid for income taxes   $ 712,000     $ 339,000                     SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES                 Lease reassessment right of use assets and lease liabilities   $ —     $ 67,000   Right of use assets and lease liabilities   $ 151,000     $ 135,000   Interest capitalized to property and equipment   $ —     $ 119,000   Acquisition of equipment with finance leases   $ —     $ 496,000   Acquisition of equipment with long-term debt financing   $ 1,103,000     $ 1,184,000   Acquisition of insurance with short-term financing   $ —     $ 634,000   First working capital payment related to acquisition, withholding taxes   $ —     $ 43,000   Subsequent working capital payment for acquisition   $ —     $ 154,000     S ee accompanying notes   F- 7 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 1 – BUSINESS AND BASIS OF PRESENTATION   Business – These consolidated financial statements include the accounts of American Shared Hospital Services and its subsidiaries (the “Company”) as follows: the Company wholly-owns the subsidiaries American Shared Radiosurgery Services (“ASRS”), PBRT Orlando, LLC (“Orlando”), OR21, Inc., and MedLeader.com, Inc. (“MedLeader”); the Company is the majority owner of Long Beach Equipment, LLC (“LBE”); ASRS is the majority-owner of GK Financing, LLC (“GKF”) which wholly-owns the subsidiary Instituto de Gamma Knife del Pacifico S.A.C. (“GKPeru”). GKF is the majority owner of the subsidiaries Albuquerque GK Equipment, LLC (“AGKE”) and Jacksonville GK Equipment, LLC (“JGKE”). GKF formed HoldCo GKC S.A. (“HoldCo”) to acquire Gamma Knife Center Ecuador S.A. (“GKCE”).   The Company (through ASRS) and Elekta AG (“Elekta”), the manufacturer of the Gamma Knife (through its wholly-owned United States subsidiary, GKV Investments, Inc.), entered into an operating agreement and formed GKF. During 2021 GKF provided Gamma Knife units to fourteen medical centers in the United States in the states of Arkansas, California, Florida, Illinois, Indiana, Mississippi, Nebraska, New Mexico, New York, Ohio, Oregon, Tennessee, and Texas. GKF also owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador. The Company through its wholly-owned subsidiary, Orlando, provided proton beam radiation therapy (“PBRT”) and related equipment to a customer in the United States.   The Company formed the subsidiary GKPeru and acquired GKCE for the purposes of expanding its business internationally; Orlando and LBE to provide PBRT equipment and services in Orlando, Florida and Long Beach, California, respectively; and AGKE and JGKE to provide Gamma Knife equipment and services in Albuquerque, New Mexico and Jacksonville, Florida, respectively. AGKE began operations in the second quarter of 2011 and JGKE began operations in the fourth quarter of 2011. Orlando treated its first patient in April 2016. GKPeru treated its first patient in July 2017. LBE is not expected to generate revenue within the next two years.   On June 12, 2020, GKF, through HoldCo, purchased approximately 98 % of the total outstanding shares of GKCE, from GKCE’s majority shareholders (the “Acquisition”). As of December 31, 2021 , the Company had acquired approximately 99.3 % of the total outstanding shares of GKCE and intends to acquire the remaining 0.7 % at a later date. The base purchase price for the Acquisition, including acquisition of the minority shares was approximately $ 2,000,000 . This purchase price was paid with $ 575,000  in cash and a $ 1,425,000  loan from the United States International Development Finance Corporation (“DFC”, the “DFC Loan”). The purchase price was subject to certain post-closing adjustments, including adjustment for GKCE's working capital and excess cash. The DFC Loan is denominated in U.S. dollars, which is also the currency of Ecuador. See Note 5  - GKCE Acquisition for further discussion.   The Company continues to develop its design and business model for The Operating Room for the 21st CenturySM through its 50 % owned OR21, LLC ( “OR21” ). The remaining 50 % of OR21 is owned by an architectural design company. OR21 is not expected to generate significant revenue within the next two years.   MedLeader was formed to provide continuing medical education online and through videos for doctors, nurses, and other healthcare workers. This subsidiary is not operational at this time.   All significant intercompany accounts and transactions have been eliminated in consolidation.   The Company is subject to risks and uncertainties as a result of the COVID- 19 pandemic and the extent and duration of the future impact on the Company's business is highly uncertain and difficult to predict. The COVID- 19 pandemic has adversely impacted, and may further adversely impact, the Company’s business and markets, including its employees, operations, contractors, customers, government and third party payors and others. The full extent to which the pandemic will directly or indirectly impact the Company's business, results of operations and financial condition will depend on future developments that are highly uncertain and difficult to predict.   F- 8 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 2 – ACCOUNTING POLICIES   Use of estimates in the preparation of financial statements – In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates reflected in the Company’s consolidated financial statements include the estimated useful lives of fixed assets and its salvage values, revenues and costs of sales for turn-key and revenue sharing arrangements.  Actual results could differ from those estimates.   Advertising costs – The Company expenses advertising costs as incurre d. Advertising costs were  $ 211,000 and $ 237,000  during the years ended December 31, 2021 and 2020 . Advertising costs are recorded in other direct operating costs and sales and administrative costs in the consolidated statements of operations.   Cash and cash equivalents – The Company considers all liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Restricted cash is not considered a cash equivalent for purposes of the consolidated statements of cash flows.   Restricted cash – Restricted cash represents the minimum cash that must be maintained in GKF to fund operations, per the subsidiary’s operating agreement, the minimum cash that must be maintained by GKF per it’s financing agreement with DFC, and the minimum cash that must be maintained in Orlando per the subsidiary’s financing agreement.  The minimum cash requirement in Orlando was released when the Company refinanced its debt and finance lease portfolio in the second quarter of 2021.   See further discussion at Note 6  - Long Term Debt.   Business and credit risk – The Company maintains its cash balances, which exceed federally insured limits, in financial institutions. The Company believes it is not exposed to any significant credit risk on cash, cash equivalents. The Company monitors the financial condition of the financial institutions it uses on a regular basis.   All of the Company’s revenue was provided by seventeen and eighteen customers in 2021 and 2020 , respectively. One customer accounted for approximately 34 % and  35 % of the Company’s total revenue in 2021 and 2020 . At December 31, 2021 , two  customers each individually accounted for 31 % and 10 % of total accounts receivable, respectively. At December 31, 2020 , four customers each individually accounted for 11 %, 11 %, 11 % and 20 % of total accounts receivable, respectively. The Company performs credit evaluations of its customers and generally does not require collateral. The Company has not experienced significant losses related to receivables from individual customers or groups of customers in any particular geographic area.   All of the Company’s radiosurgery devices have been purchased through Elekta, to date. However, there are other manufacturers that also make radiosurgery devices.   Accounts receivable and doubtful accounts – Accounts receivable are recorded at net realizable value. An allowance for doubtful accounts is estimated based on historical collections plus an allowance for probable losses. Receivables are considered past due based on contractual terms and are charged off in the period that they are deemed uncollectible. Recoveries of receivables previously charged off are offset against bad debt expense when received.   Non-controlling interests - The Company reports its non-controlling interests as a separate component of shareholders’ equity. The Company also presents the consolidated net income and the portion of the consolidated net income allocable to the non-controlling interests and to the shareholders of the Company separately in its consolidated statements of operations.   Property and equipment – Property and equipment are stated at cost less accumulated depreciation. Depreciation for Gamma Knife and other equipment is determined using the straight-line method over the estimated useful lives of the assets, which for medical and office equipment is generally 3 – 10 years, and after accounting for salvage value on the equipment where indicated. Salvage value is based on the estimated fair value of the equipment at the end of its useful life. The Company acquired a building as part of the Acquisition in June 2020. Depreciation for buildings is determined using the straight-line method over 20 years. The Company determines salvage value based on the estimated fair value of the equipment at the end of its useful life. As of   April 1, 2021,  the Company reduced its estimate for salvage value for  nine  of its domestic Gamma Knife Perfexion 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.   F- 9 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 2 – ACCOUNTING POLICIES (CONTINUED)   Depreciation for PBRT and related equipment is determined using the modified units of production method, which is a function of both time and usage of the equipment. This depreciation method allocates costs considering the projected volume of usage through the useful life of the PBRT unit, which has been estimated at 20 years. The estimated useful life of the PBRT unit is consistent with the estimated economic life of 20 years.   The Company capitalizes interest incurred on property and equipment that is under construction, for which deposits or progress payments have been made. When a rate is not readily available, imputed interest is calculated using the Company’s incremental borrowing rate. The interest capitalized for property and equipment is the portion of interest cost incurred during the acquisition periods that could have been avoided if expenditures for the equipment had not been made. The Company capitalized interest of $ 0  and $ 119,000 in 2021 and 2020 , respectively, as costs of medical equipment.   The Company leases Gamma Knife and radiation therapy equipment to its customers under arrangements accounted for as operating leases. At December 31, 2021 , the Company held equipment under operating lease contracts with customers with an original cost of $ 72,972,000 and accumulated depreciation of $ 45,061,000 . At December 31, 2020 , the Company held equipment under operating lease contracts with customers with an original cost of $ 75,241,000 and accumulated depreciation of $ 45,416,000 .   As of December 31, 2021 and 2020 , the Company recognized a loss on the write down of impaired assets of $ 105,000 and $ 8,264,000 , respectively. 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. See further discussion under Note 2 - Long-lived asset impairment and Note 3 - Property and Equipment.   F- 10 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 2 – ACCOUNTING POLICIES (CONTINUED)   Revenue recognition - The Company recognizes revenues under ASC 842 Leases (“ASC 842” ) and ASC 606 Revenue from Contracts with Customers (“ASC 606” ).   Rental income from medical services – The Company recognizes revenues under ASC 842 when services have been rendered and collectability is reasonably assured, on either a fee per use or revenue sharing basis. The terms of the contracts do not contain any guaranteed minimum payments. The Company’s contracts are typically for a 10 -year term and are classified as either fee per use or retail. Retail arrangements are further classified as either turn-key or revenue sharing. Revenues from fee per use contracts is determined by each hospital’s contracted rate. Revenues are recognized at the time the procedures are performed, based on each hospital’s contracted rate and the number of procedures performed. Under revenue sharing arrangements, the Company receives a contracted percentage of the reimbursement received by the hospital. The amount the Company expects to receive is recorded as revenue and estimated based on historical experience. Revenue estimates are reviewed periodically and adjusted as necessary. Under turn-key arrangements, the Company receives payment from the hospital in the amount of the hospital’s reimbursement from third party payors, and the Company is responsible for paying all the operating costs of the equipment. Operating costs are determined primarily based on historical treatment protocols and cost schedules with the hospital. The Company records an estimate of operating costs which are reviewed on a regular basis and adjusted as necessary to more accurately reflect the actual operating costs. For turn-key sites, the Company also shares a percentage of net operating profit. The Company records an estimate of net operating profit based on estimated revenues, less estimated operating costs. The operating costs and estimated net operating profit are recorded as other direct operating costs in the consolidated statement of operations . As of December 31, 2021 and 2020 , the Company recognized revenues of approximately $ 14,719,000  and $ 16,204,000 under ASC 842, respectively.   Patient income – The Company has stand-alone facilities in Lima, Peru and Guayaquil, Ecuador, where a contract exists between the Company’s facilities and the individual patient treated at the facility. Under ASC 606, the Company acts as the principal in this transaction and provides, at a point in time, a single performance obligation, in the form of a Gamma Knife treatment. Revenue related to a Gamma Knife treatment is recognized on a gross basis at the time when the patient receives treatment. There is no variable consideration present in the Company’s performance obligation and the transaction price is agreed upon per the stated contractual rate. GKPeru's payment terms are typically prepaid for self-pay patients and insurance provider payments are paid net 30 days. GKCE's patient population is primarily covered by a government payor and payments are paid approximately 30 to 60 days upon invoice. The Company did not capitalize any incremental costs related to the fulfillment of its customer contracts. Accounts receivable earned by GKPeru were not significant for the year ended December 31, 2021 and 2020 . GKCE's accounts receivable were $ 435,000  and $ 467,000  for the years ended December 31, 2021 and 2020 . As of December 31, 2021 and 2020 , the Company recognized revenues of approximately $ 2,909,000 and $ 1,633,000  under ASC 606, respectively.   Stock-based compensation – The Company measures all stock-based compensation awards at fair value and records such expense in its consolidated financial statements over the requisite service period of the related award. See Note 10  - Stock-Based Compensation Expense for additional information on the Company’s stock-based compensation programs.   Costs of revenue – The Company's costs of revenue consist primarily of maintenance and supplies, depreciation and amortization, and other operating expenses (such as insurance, property taxes, sales taxes, marketing costs and operating costs from the Company’s retail sites). Costs of revenues are recognized as incurred.   Sales and Marketing – The Company markets its services through its preferred provider status with Elekta and a direct sales effort led by its Senior Vice President of Sales and Business Development, its President and Chief Financial and Operating Officer and its Chief Executive Officer (“CEO”).   The Company typically provides the equipment, as well as planning, installation, reimbursement and marketing support services.   Income taxes – The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between the 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.   F- 11 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 2 – ACCOUNTING POLICIES (CONTINUED)   The Company accounts for uncertainty in income taxes as required by the provisions of ASC 740 Income taxes (“ASC 740” ), which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to estimate and measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as this requires the Company to determine the probability of various possible outcomes. The Company considers many factors when evaluating and estimating the Company’s tax positions and tax benefits, which may require periodic adjustments and may not accurately anticipate actual outcomes.   See Note 9  - Income Taxes for further discussion on income taxes.   Functional currency – Based on guidance provided in accordance with ASC 830, Foreign Currency Matters (“ASC 830” ), the Company analyzes its operations outside the United States to determine the functional currency of each operation. Management has determined that these operations are initially accounted for in U.S. dollars since the primary transactions incurred are in U.S. dollars and the Company provides significant funding towards the startup of the operation. When Management determines that an operation has become predominantly self-sufficient, the Company will change its accounting for the operation to the local currency from the U.S. dollar. The Company analyzed it’s Gamma Knife site in Peru under ASC 830 as of December 31, 2021 and 2020 and concluded the functional currency was the U.S. dollar. As facts and circumstances change, the Company will revisit this conclusion.  The functional currency of the Company’s Gamma Knife site in Ecuador is the U.S. dollar because that is the local currency of Ecuador.    Asset Retirement Obligations – Based on the guidance provided in ASC 410 Asset Retirement Obligations (“ASC 410” ), the Company analyzed its existing lease agreements and determined an asset retirement obligation (“ARO”)  exists to remove the respective units at the end of the lease terms. As of December 31, 2020 , four of the Company's Gamma Knife customers notified the Company of their intent to terminate their contracts at the contract lease term. The Company recorded an ARO liability for these four  sites, using estimates from Elekta. The Company increased its estimate for one of the AROs as of  December 31, 2021  by $ 105,000 . No liability has been recorded as of December 31, 2021 for the remaining Gamma Knife sites, or as of December 31, 2020 , because it is uncertain these units will be removed and the Company historically has not removed the Gamma Knife equipment at the end of the lease term. The Company will re-evaluate the need to record additional ARO liabilities on a periodic basis when facts and circumstances change that could affect this conclusion.   Earnings per share – Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the year. The fully vested restricted stock units not issued and outstanding, are also included therein. Diluted earnings per share reflect the potential dilution that could occur if common shares were issued pursuant to the exercise of options or warrants.   Because the Company reported a loss for the year ended December 31, 2020 , the potentially dilutive effects of approximately 13,000 , of the Company's unvested restricted stock awards were not considered for the reporting periods.   F- 12 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 2 – ACCOUNTING POLICIES (CONTINUED)   The following table illustrates the computations of basic and diluted earnings per share for the years ended December 31, 2021 and 2020 .       2021     2020   Numerator for basic and diluted earnings (loss) per share   $ 194,000     $ ( 7,058,000 ) Denominator:                 Denominator for basic and diluted earnings per share – weighted-average shares     6,044,000       6,182,000   Effect of dilutive securities Employee stock options and restricted stock     15,000       -   Denominator for diluted earnings per share – adjusted weighted-average shares     6,059,000       6,182,000   Earnings (loss) per common share- basic   $ 0.03     $ ( 1.14 ) Earnings (loss) per common share- diluted   $ 0.03     $ ( 1.14 )   In 2020 , options outstanding to purchase 406,000 shares of common stock at an exercise price range of $ 2.25 - $ 3.90 per share and 13,000 restricted stock units were not included in the calculation of diluted earnings per share because they would be anti-dilutive.   Business segment information - Based on the guidance provided in accordance with ASC 280 Segment Reporting (“ASC 280” ), the Company analyzed its subsidiaries which are all in the business of leasing radiosurgery and radiation therapy equipment to healthcare providers, and concluded there are two reportable segments, domestic and foreign. The Company provides Gamma Knife and PBRT equipment to fourteen hospitals in the United States and owns and operates two single-unit facilities in Lima, Peru and Guayaquil, Ecuador as of December 31, 2021 . The Company determined two reportable segments existed due to similarities in economics of business operations and geographic location. The operating results of the two reportable segments are reviewed by the Company’s CEO and President, Chief Operating and Financial Officer, who are also deemed the Company’s Chief Operating Decision Makers (“CODMs”).    The revenues, profit or loss, and net property and equipment allocations for the Company's two reportable segments as of December 31, 2021  and  2020 consists of the following:       2021     2020   Revenues                 Domestic   $ 14,719,000     $ 16,204,000   Foreign     2,909,000       1,633,000   Total   $ 17,628,000     $ 17,837,000         2021     2020   Profit or (loss)                 Domestic   $ 245,000     $ ( 7,082,000 ) Foreign     ( 51,000 )     24,000   Total   $ 194,000     $ ( 7,058,000 )       2021     2020   Property and equipment, net                 Domestic   $ 25,557,000     $ 27,223,000   Foreign     2,697,000       3,195,000   Total   $ 28,254,000     $ 30,418,000     F- 13 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 2 – ACCOUNTING POLICIES (CONTINUED)   Long lived asset impairment – The Company assesses the recoverability of its long-lived assets when events or changes in circumstances indicate their carrying value may not be recoverable. Such events or changes in circumstances may include: a significant adverse change in the extent or manner in which a long-lived asset is being used, significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company assesses recoverability of a long-lived asset by determining whether the carrying value of the asset group can be recovered through projected undiscounted cash flows over their remaining lives. If the carrying value of the asset group exceeds the forecasted undiscounted cash flows, an impairment loss is recognized, measured as the amount by which the carrying amount exceeds estimated fair value. An impairment loss is charged to the consolidated statement of operations in the period in which management determines such impairment. As of December 31, 2020 , the Company determined circumstances existed indicating its assets could be impaired, concluded an impairment existed, and recognized a loss on the write down of impaired assets of $ 8,264,000 . As of December 31, 2021 , an additional impairment of $ 105,000 related to the removal costs of one of the Gamma Knife units that was impaired at December 31, 2020  was recorded.  No other additional impairment has been noted as of December 31, 2021 . See Note 3 - Property and Equipment for further discussion.   Goodwill and intangible assets - The Company recorded goodwill of $ 1,265,000 and an intangible asset with a fair value of $ 78,000 as part of the Acquisition in June 2020. The intangible asset identified was GKCE's trade name and the Company assigned an indefinite useful life to the asset. Based on the guidance provided in accordance with ASC 350 Intangibles-Goodwill and Other (“ASC 350” ), the Company does not amortize the intangible asset because it has an indefinite life. The Company assesses goodwill at the reporting unit level, which has been determined to be GKCE. Each reporting period, the Company assesses whether events or circumstances continue to support an indefinite useful life for the intangible asset. Per ASC 350, the Company tests goodwill and intangibles for impairment annually or as events or circumstances change that indicate the fair value may be below the carrying amount. As of December 31, 2021  and 2020,  there has been no change to the Company's assessment of the value of intangible assets or goodwill.   Acquisitions - The Company records acquisitions according to ASC 805 Business Combinations (“ASC 805” ) using the acquisition method of accounting. Under the acquisition method of accounting, all assets acquired, including goodwill and other intangible assets, should be stated at fair value at the time of acquisition. See Note 5  - GKCE Acquisition for further discussion on acquisitions.   Accounting pronouncements issued and not yet adopted - In January 2021, the FASB issued ASU 2021 - 01   Reference Rate Reform (Topic 848 )  (“ASU 2021 - 01” ) which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in ASU 2021 - 01  apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2021 - 01 is effective any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications. The Company is currently evaluating ASU 2021 - 01 to determine the impact it may have on its consolidated financial statements. See Note 6  - Long-term debt for additional disussion on transition from LIBOR.    Reclassifications – Certain comparative balances as of and for the year ended December 31, 2020  have been reclassified to make them consistent with the current year presentation.   F- 14 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     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.   F- 15 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS       NOTE 4 - OTHER ACCRUED LIABILITIES   Other accrued liabilities consists of the following:       December 31,       2021     2020   Equipment maintenance and upgrades   $ 1,281,000     $ —   Insurance     340,000       471,000   Professional services     90,000       211,000   Operating costs     397,000       703,000   Other     311,000       660,000   Total other accrued liabilities   $ 2,419,000     $ 2,045,000     F- 16 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 5 - GKCE ACQUISITION   On June 18, 2019, the Company entered into a Stock Purchase Agreement to acquire Gamma Knife Center Ecuador S.A. (“GKCE”) from GKCE’s selling majority shareholders. GKCE is a well-established Gamma Knife operation founded in 2009 as a private clinic to introduce advanced stereotactic radiosurgery into Ecuador and continues to operate the only Gamma Knife unit in the country. The Company acquired GKCE for the continued expansion of its business internationally.   On June 12, 2020 ( the “Closing Date”), the Company acquired approximately 98 % of the total outstanding shares of GKCE. As of December 31, 2021 , the Company acquired approximately 99.3 % of the total outstanding shares of GKCE and intends to acquire the remaining 0.7 % at a later date. The fair value of the non-controlling interests (“NCI”) on the Closing Date was approximately $ 58,000 , which was consistent with the purchase price in the executed NCI agreements. The total purchase consideration for 100 % of the outstanding shares of GKCE was $ 2,883,000 , which included $ 2,000,000 of base purchase price, and certain price adjustments for current assets and liabilities and tax withholding.  During the yea r ended  December 31, 2021 , accounting for the Closing Date accounts receivable balances, allowance on the uncollected accounts receivable balances, and related liabilities, was completed.   The base purchase price of $ 2,000,000 was paid with $ 575,000 of cash and $ 1,425,000 from the DFC Loan. The DFC Loan is denominated in U.S. dollars, which is also the currency of Ecuador. The price adjustments were paid by the Company in the post-closing period with the adjustments related to the amount of working capital that GKCE had as of the Closing Date. The first price adjustment for working capital as of the Closing Date was approximately $ 515,000 , which was paid by the Company in August 2020. The Company estimated an additional contingent consideration of approximately $ 368,000 would be remitted to the seller based on the collection of Closing Date accounts receivable balances, net of related costs, during the three -month, six -month and twelve -month periods after the Closing Date. As of December 31, 2021 , $ 368,000 of the contingent consideration was paid and no further payment is required. The Company reviewed historical patient treatments, invoice, and collection data from GKCE to determine an appropriate estimate of the contingent consideration at the Closing Date. The acquisition has been accounted for according to ASC 805 using the acquisition method of accounting. Under the acquisition method of accounting, all assets acquired, including goodwill and other intangible assets, should be stated at fair value at the time of acquisition. The acquisition accounting was final during the year ended December 31, 2021 . During the measurement period, which can be no more than one year from the Closing Date, the Company obtained information to assist in determining the final fair value of assets acquired. The assets acquired were recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company.    F- 17 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 5 - GKCE ACQUISITION (CONTINUED)   The fair value of assets acquired and liabilities assumed were as follows:       June 12, 2020   Cash and cash equivalents   $ 432,000   Accounts receivable     854,000   Prepaid expense and other     22,000   Building     385,000   Land     19,000   Medical equipment     319,000   Purchased intangible assets     78,000   Goodwill     1,265,000   Total assets acquired   $ 3,374,000             Accounts payable   $ ( 193,000 ) Income taxes payable     ( 141,000 ) Deferred income taxes     ( 66,000 ) Employee compensation and benefits     ( 91,000 ) Total liabilities assumed     ( 491,000 ) Consideration allocated to assets acquired and liabilities assumed   $ 2,883,000             First working capital payment   $ ( 515,000 ) Subsequent working capital payment     ( 368,000 ) Base purchase consideration   $ 2,000,000     The Company has allocated the purchase price of GKCE to the tangible assets, liabilities, and intangible asset acquired, based on their estimated fair values. Goodwill represents the excess of the purchase price consideration over the fair value of the identifiable tangible and intangible assets assumed. The Company believes the amount of goodwill resulting from the acquisition is primarily attributable to expected synergies from an assembled and trained workforce and enhanced opportunities for growth and innovation. The goodwill resulting from the acquisition is not tax deductible.   The value of the acquired tangible assets acquired are as follows:       Fair Value     Useful Life (in Years)                     Building   $ 385,000       20   Land     19,000           Medical equipment     302,000       2   Other fixed assets     17,000       2   Total tangible assets   $ 723,000             The Company also acquired intangible assets with a fair value of $ 78,000 . The intangible asset identified was GKCE's trade name and the Company assigned an indefinite useful life to the asset.   The Company incurred costs related to the acquisition of approximately $ 162,000 for the year ended December 31, 2020. All acquisition related costs were expensed as incurred and have been recorded in selling and administrative expense in the Company's consolidated statement of operations.   The revenue and earnings of GKCE have been included in the Company’s consolidated results since the Closing Date and are not material to the Company’s consolidated financial results. Historical financial statements and pro forma results of the operations of GKCE as of the Acquisition occurred earlier than the Closing Date have not been presented, as the applicable significance thresholds are not exceeded by the Acquisition and the corresponding requirements to provide historical financial statements and corresponding pro forma financial information are not applicable to the Acquisition. In addition, the Company believes that the financial impact of the Acquisition to the Company’s consolidated financial statements is not material and such historical financial information and pro forma financial information would not be meaningful for investors and financial statement users.   F- 18 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 6 - LONG TERM DEBT   As of December 31, 2020 , the Company had seven  notes with three financing companies collateralized by the Gamma Knife equipment having an aggregate net book value of $ 11,023,000 , the individual customer contracts, and related accounts receivable of $ 1,718,000 .   On  April 9, 2021  the Company along with certain of its domestic subsidiaries (“collectively, the “Loan Parties”) entered into a  five  year $ 22,000,000  credit agreement with Fifth Third Bank, N.A.. The Credit Agreement includes  three  loan facilities. The  first loan facility is a $ 9,500,000  term loan (the “Term Loan”) of which $ 6,774,000  was used to refinance the domestic Gamma Knife debt and finance leases, and associated closing costs, $ 1,665,000  was used to finance  two  Gamma Knife reloads and to pay for the unload costs for  two  customer contracts in the  first  quarter of  2021, with the remaining $ 1,061,000  available for future projects. The  second  loan facility is a $ 5,500,000 delayed draw term loan (the “DDTL”) of which $ 5,026,000  was used to refinance the Company's PBRT finance leases and associated closing costs as well as to provide additional working capital. The  third  loan facility provides for a $ 7,000,000  revolving line of credit (the “Revolving Line”) available for future projects and general corporate purposes. The facilities have a  five -year maturity, carry a floating interest of LIBOR plus  3.0 % and are secured by a lien on substantially all of the assets of the Loan Parties and guaranteed by American Shared Hospital Services. The Company recorded a loss on extinguishment of debt of $ 401,000  during the  twelve -month period ended  December 31, 2021 , related to the prepayment penalties charged by the existing lenders.  The Company capitalized debt issuance costs of $ 310,000  related to legal and transaction fees for the Credit Agreement during the  twelve -month period ended  December 31, 2021 .    As of  December 31, 2021,  LIBOR will no longer be used to price new loans, but 1 -month, 3 -month, 6 -month and 12 -month maturities will continue to be published through 2023. At that time, the Company will work with Fifth Third Bank to determine an alternative base rate.  The Revolving Line is charged an unused line fee of 0.25 % per annum. The Term Loan and DDTL have interest and principal payments due quarterly. Principal amortization on an annual basis for the Term Loan and DDTL equates to 48 % of the original principal loan commitments in years one through five and an end of term payment of the remaining principal balance.   The Credit Agreement contains customary covenants and representations, including without limitation, a minimum fixed charge coverage ratio of  1.25  and maximum funded debt to EBITDA ratio of  3.0  to  1.0  (tested on a trailing  twelve -month basis at the end of each fiscal quarter), reporting obligations, limitations on dispositions, changes in ownership, mergers and acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and capital expenditures.  The Loan Parties are in compliance with the Credit Agreement covenants as of  December 31, 2021 .   The DFC Loan entered into in connection with the acquisition of GKCE was obtained through the Company’s wholly-owned subsidiary, HoldCo and is guaranteed by GKF. The DFC Loan is secured by a lien on GKCE’s assets. The amount outstanding under the DFC Loan is payable in 29  quarterly installments with a fixed interest rate of 3.67%. The Company’s loan with DFC also contains customary covenants and representations which the Company is in compliance with as of  December 31, 2021 .     The following are contractual maturities of long-term debt by year at December 31, 2021 , excluding debt issuance costs of $294,000:   Year ending December 31,   Principal   2022   $ 1,157,000   2023     1,719,000   2024     2,094,000   2025     2,469,000   2026     8,094,000   Thereafter     165,000       $ 15,698,000     F- 19 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 7 - FINANCE LEASES   The Company's finance lease obligations were refinanced by long-term debt on  April 9, 2021.   See further details on the refinancing under Note 6  - Long-Term Debt.   F- 20 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 8 - LEASES   The Company determines if a contract is a lease at inception. Under ASC 842, the Company is a lessor of equipment to various customers. Leases that commenced prior to ASC 842 adoption date were classified as operating leases under historical guidance. As the Company has elected the package of practical expedients allowing it to not reassess lease classification, these leases are classified as operating leases under ASC 842 as well. All of the Company’s lessor arrangements entered into after ASC 842 adoption are also classified as operating leases. Some of these lease terms have an option to extend the lease after the initial term, but do not contain the option to terminate early or purchase the asset at the end of the term.   The Company’s Gamma Knife and PBRT contracts with hospitals are classified as operating leases under ASC 842. The related equipment is included in medical equipment and facilities on the Company’s consolidated balance sheets (see further discussion at Note 2 ). As all income from the Company’s lessor arrangements is solely based on procedure volume, all income is considered variable payments not dependent on an index or a rate. As such, the Company does not measure future operating lease receivables.   On November 3, 2021, the Company entered into an agreement to sublease (the “Sublease”) its corporate office located at Two Embarcadero Center, Suite 410, San Francisco, California, where it leases approximately 3,253 square feet for $ 21,370  per month with a lease expiration date in August 2023. The Sublease is for $ 15,723 per month through the existing contract expiration date. The Company also entered into a lease (the “Lease”) agreement for new corporate office space at 601 Montgomery, Suite 1112, San Francisco, CA for approximately 900 square feet for $ 4,425 per month with a lease expiration date in November 2024.  The Company assessed the Lease under ASC 842 and concluded the Lease should be classified as an operating lease. The Company recorded $ 151,000 right-of-use (“ROU”) asset, other current liabilities and lease liabilities on the condensed consolidated balance sheets related to the Lease as of December 1, 2021, the effective date of the Lease.  The Company assessed the Sublease under ASC 842 and ASC 360 Property and Equipment (“ASC 360” ) and concluded the ROU asset for the corporate offices at Two Embarcadero Center was impaired.  The Company recorded an impairment loss on the Sublease of $ 77,000 as of December 1, 2021.  The impairment loss will be amortized over the remaining lease term as an adjustment to total lease expense.  As of December 31, 2021, the Company recognized $ 3,000 of the sublease impairment loss.     The Company’s lessee operating leases are accounted for as ROU assets, other current liabilities, and lease liabilities on the consolidated balance sheets. Operating lease ROU assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The Company’s operating lease contracts do not provide an implicit rate for calculating the present value of future lease payments, so the Company determined its incremental borrowing rate to be in the range of approximately 4.0 % and 6.0 % by using available market rates and expected lease terms. The operating lease ROU assets and liabilities also include any lease payments made and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company’s lessee operating lease agreements are for administrative office space and related equipment, and the agreement to lease clinic space for its stand-alone facility in Lima, Peru. These leases have remaining lease terms between 2 and 3 years, some of which include options to renew or extend the lease. As of December 31, 2021 , operating ROU assets, net of impairment, were $ 654,000  and lease liabilities were $ 728,000 .   During the year ended December 31, 2020, the Company elected to not renew its lease for a satellite office in Fairfield, California. The Company previously included the renewal term in its assessment of the lease term for the ROU asset and liability. The Company accounted for this change as a lease reassessment under ASC 842. At the reassessment date, the remaining lease balance was not material to the Company's consolidated balance sheets and the Company wrote off the related ROU assets and liabilities of $ 67,000 . Also during the year ended December 31, 2020, the Company agreed to a rent increase for its clinic space for its stand-alone facility in Lima, Peru. The rent increase was effective as of January 1, 2020 and the Company increased the related ROU assets and liabilities by $ 135,000 .   The following table summarizes maturities of lessee operating lease ROU assets and liabilities as of December 31, 2021 :   Year ending December 31,   Operating Leases             2022   $ 406,000   2023     302,000   2024     58,000   Total lease payments     766,000   Less imputed interest     ( 38,000 ) Total   $ 728,000     F- 21 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 9 – INCOME TAXES   As of December 31, 2021 and 2020 the Company recorded an income tax expense of $ 269,000  and income tax benefit of $ 1,737,000 , respectively. The increase in the Company’s provision for income taxes as of December 31, 2021 is due to a loss on the write down of impaired assets in the prior year and decreased operating costs for the current period.   The components of the provision (benefit) for income taxes as of December 31, 2021 and 2020 consist of the following:       YEARS ENDED December 31,       2021     2020   Current:                 Federal   $ 9,000     $ 209,000   State     93,000       88,000   Foreign     107,000       117,000   Total current     209,000       414,000                     Deferred:                 Federal     98,000       ( 1,909,000 ) State     ( 18,000 )     ( 266,000 ) Foreign     ( 20,000 )     24,000   Total deferred     60,000       ( 2,151,000 )     $ 269,000     $ ( 1,737,000 )   Significant components of the Company’s deferred tax liabilities and assets as of December 31, 2021 and 2020 are as follows:       December 31,       2021     2020   Deferred tax liabilities:                 Property and equipment   $ ( 1,055,000 )   $ ( 564,000 )                   Total deferred tax liabilities     ( 1,055,000 )     ( 564,000 )                   Deferred tax assets:                 Net operating loss carryforwards     360,000       99,000   Accruals and allowances     41,000       43,000   Lease liabilities     136,000       -   Tax credits     4,000       5,000   Other – net     87,000       50,000   Capital loss carryover     646,000       627,000                     Total deferred tax assets     1,274,000       824,000                     Valuation allowance     ( 697,000 )     ( 678,000 )                   Deferred tax assets net of valuation allowance     577,000       146,000                     Net deferred tax liabilities   $ ( 478,000 )   $ ( 418,000 )   F- 22 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 9 – INCOME TAXES (CONTINUED)   These amounts are presented in the financial statements as follows:       December 31,       2021     2020   Deferred income taxes (non-current)   $ ( 478,000 )   $ ( 418,000 )     $ ( 478,000 )   $ ( 418,000 )   The provision (benefit) for income taxes differs from the amount computed by applying the U.S. federal statutory tax rate ( 21 % in 2021 and 2020 ) to income before taxes as follows:       YEARS ENDED December 31,       2021     2020   Computed expected federal income tax   $ 79,000     $ ( 1,844,000 ) State income taxes, net of federal benefit     69,000       ( 199,000 ) Non-deductible expenses     28,000       6,000   Return to Provision True-up     19,000       22,000   Uncertain Tax Positions     14,000       16,000   Capital loss carryforward expiration     -       246,000   Change in valuation allowance     19,000       ( 243,000 ) Other deferred tax adjustments     41,000       259,000                         $ 269,000     $ ( 1,737,000 )   As of  December 31, 2021 , the Company has net operating loss carryforwards for federal and state income tax return purposes of approximately $ 1,100,000 and $ 3,167,000 , respectively, that begin to expire in 2029. The Company has net operating loss carryforwards for its international subsidiaries of approximately $ 46,000 .   Utilization of the net operating loss and credit carryforwards may be subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions. Any annual limitation may result in the expiration of net operating losses and credits before utilization.   At December 31, 2021 , the Company has a capital loss carryforward for federal income tax return purposes of approximately $ 2,679,000  which starts to expire in 2024. The Company has capital loss carryforwards for state income tax purposes of approximately $ 129,000  which starts to expire in 2024.   Due to uncertainty surrounding the realization of impairment losses, capital losses and foreign operating losses in future years, the Company has placed a valuation allowance against a portion of its net domestic and foreign deferred tax assets. The net valuation allowance decreased by $ 465,000  and $ 243,000  for the tax years ended December 31, 2021 and 2020 , respectively.   The tax return years 2017  through 2020  remain open to examination by the major domestic taxing jurisdictions to which the Company is subject. Net operating losses generated on a tax return basis by the Company for calendar years 1999 through 2004, 2009, 2010, 2012, 2014, 2015, 2016, 2017 and 2018 remain open to examination by the major domestic taxing jurisdictions.   F- 23 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 9 – INCOME TAXES (CONTINUED)   The Company has adopted accounting standards which prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a company's income tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Additionally, these accounting standards specify that tax positions for which the timing of the ultimate resolution is uncertain should be recognized as long-term liabilities. The Company has made no reclassifications between current taxes payable and long term taxes payable under this guidance.   As of December 31, 2021 , the unrecognized tax benefit was $ 295,000  which, if recognized, will not affect the annual effective tax rate as these unrecognized tax benefits would increase deferred tax assets which would be subject to a full valuation allowance. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:       YEARS ENDED December 31,       2021     2020   Balance at beginning of year   $ 275,000     $ 259,000   Additions based on tax positions of prior years     20,000       16,000                     Balance at end of year   $ 295,000     $ 275,000     The Company's policy for deducting interest and penalties is to treat interest as interest expense and penalties as taxes. As of December 31, 2021 , the Company had $ 28,000  accrued for the payment of penalties and zero interest related to unrecognized tax benefits. The Company does not expect any material changes to our uncertain tax positions within the next 12 months.     NOTE 10   – STOCK-BASED COMPENSATION EXPENSE   Incentive Compensation Plan   In  June 2021,  the Company’s shareholders approved an amendment and restatement of the Company’s Incentive Compensation Plan (the “Plan”), that among other things, increases the number of shares of the Company’s common stock reserved for issuance under the Plan to  2,580,000  and extends the term of the Plan by  five  years to  February 22, 2027.  The Plan provides that the shares reserved under the Plan are available for issuance to officers of the Company, other key employees, non-employee directors, and advisors.  No  further grants or share issuances will be made under the previous plans. As of December 31, 2021 , approximately 1,453,000  shares remain available for grant under the Plan.   Under the Plan, a total of 621,000 restricted stock units have been granted, consisting o f 53,000 o f annual automatic grants to non-employee directors, 328,000 of deferred retainer fees to non-employee members of the Board, 20,000 grants issued in lieu of commission, to two employees of the Company and 220,000 restricted stock units issued to the CEO during 2021  and 2020, see further discussion below. Of the total restricted stock units granted under the Plan 123,000 of them are fully vested but not yet deemed issued and outstanding, 487,000 are fully vested and outstanding, and 10,000 are outstanding as of December 31, 2021 .   F- 24 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 10   – STOCK-BASED COMPENSATION EXPENSE (CONTINUED)   Changes in restricted stock units, consisting primarily of annual automatic grants, deferred compensation to non-employee directors, and restricted stock units awards to the CEO, under the Incentive Compensation Plans during 2021 and 2020 are as follows:       Restricted Stock Units     Grant Date Weighted- Average Fair Value     Intrinsic Value   Outstanding at January 1, 2020     3,000     $ 3.03     $ —   Granted     144,000     $ 1.96     $ —   Vested     ( 134,000 )   $ 1.98     $ —                             Outstanding at December 31, 2020     13,000     $ 1.97     $ 2,000   Granted     165,000     $ 2.61     $ —   Vested     ( 168,000 )   $ 2.57     $ —   Outstanding at December 31, 2021     10,000     $ 2.57     $ —     For the year ended December 31, 2021 , total compensation expense recorded in the consolidated statements of operations related to restricted stock units in lieu of retainer fees was $ 75,000 . For the year ended December 31, 2021 , total compensation expense recorded in the consolidated statements of income for annual restricted stock units awarded was $ 12,000 , with an offsetting tax benefit of $ 3,000 , as this expense is deductible for income tax purposes. As of December 31, 2021 , there was $ 20,000 of total unrecognized compensation cost related to annual restricted stock units which is expected to be recognized over a period of four  years.    Certain Executive Equity Awards   Effective May 4, 2020, the Company appointed Raymond C. Stachowiak as Interim President and Chief Executive Officer (“Interim CEO”). As part of his Offer Letter, the Interim CEO was granted 50,000 restricted stock awards that vested in full on August 3, 2020. The Interim CEO was granted additional restricted stock awards totaling 10,000 common shares per month, which vest in full at the end of each 30 -day period following issuance. On October 1, 2020, the Interim CEO was appointed the CEO. For the year ended December 31, 2020, 100,000 restricted stock awards were issued to the CEO and 90,000 became fully vested. Additionally, Ernest R. Bates, Senior Vice President, Sales and Business Development, International Operations, was awarded 10,000 restricted stock awards, which vested in full on December 31, 2020. For the year ended December 31, 2020, total compensation expense recorded in the consolidated financial statements of operations related to executive equity awards was $ 195,000 .  For the year ended December 31, 2021, 120,000 restricted stock awards were issued to the CEO and became fully vested.  Total compensation expense recorded in the consolidated financial statements of operations related to the executive equity awards was $ 331,000 .   On January 4, 2017, the Company entered into a Performance Share Award Agreement with three executive officers of the Company (the “Award Agreements”) for 161,766 restricted stock awards which vest upon the achievement of certain performance metrics. The Award Agreements expired on March 31, 2020. Based on the guidance in ASC 718 Stock Compensation (“ASC 718” ), the Company concluded these were performance-based awards with vesting criteria tied to performance metrics. As of December 31, 2017, the Company achieved one of the certain performance metrics under the Award Agreements and recognized stock compensation expense of approximately $ 108,000 related to these awards. The unrecognized stock-based compensation expense for these awards was approximately $ 421,000 and unvested restricted stock awards of approximately 129,000 were returned to the plan as of March 31, 2020.   F- 25 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 10   – STOCK-BASED COMPENSATION EXPENSE (CONTINUED)   As of December 31, 2021 , stock compensation expense recorded in the consolidated financial statements is summarized as follows:               Stock-Based       Awards Issued     Compensation       and Vested     Expense   Options     —     $ 2,000   Options Exercised     5,000       —   RSUs Issued in Lieu of Retainer Fees     —       75,000   RSUs Issued in Lieu of Retainer Fees - vested and issued     121,000       —   Annual RSU Awards     2,000       12,000   Executive Compensation     130,000       331,000         258,000     $ 420,000     Stock Options   Changes in stock options outstanding under the Incentive Compensation Plans during 2021 and 2020 are as follows:   Options   Number of Options     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term (Years)     Aggregate Intrinsic Value   Balance at December 31, 2019     450,000     $ 2.78       2.44     $ 27,000   Granted     10,000     $ 1.88       7.00     $ —   Forfeited     ( 43,000 )   $ 2.54       —     $ —                                     Balance at December 31, 2020     417,000     $ 2.79       1.61     $ 2,000   Granted     6,000     $ 2.92       7.00     $ —   Exercised     ( 22,000 )   $ 2.65                   Forfeited     ( 334,000 )   $ 2.81       —     $ —                                     Balance at December 31, 2021     67,000     $ 2.72       3.33     $ -                                     Exercisable at December 31, 2020     405,000     $ 2.80       1.48     $ —                                     Exercisable at December 31, 2021     58,000     $ 2.72       2.96     $ —     The weighted average grant-date fair value of the options granted during the years 2021 and 2020 was  $ 1.10  and $ 0.78 , respectively. There were 5,000 options exercised during the year ended  December 31, 2021 . There were no options exercised and accordingly, no intrinsic value of options exercised during the year ended  December 31, 2020 . Total stock-based compensation expense recognized for stock options for the years ended December  2021  and  2020  was $ 2,000 and $ 17,000 , respectively.   The Company received approximately $ 5,000 from the exercise of 2,000 options under the share-based arrangements for the year ended December 31, 2021 . The remaining options exercised during the year were cashless exercises. There was no cash received from options exercised under any share-based payment arrangements for the year ended  December 31, 2020 , and as a result, there was no actual tax benefit realized for tax deductions from option exercises in that year.   F- 26 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 10   – STOCK-BASED COMPENSATION EXPENSE (CONTINUED)   A summary of the status of the Company’s non-vested stock options as of December 31, 2021 and 2020 , and ch anges during the years ended December 31, 2021 and 2020 is presen ted below: Nonvested Options   Number of Options     Weighted Average Grant-Date Fair Value   Nonvested at December 31, 2019     25,000     $ 1.40   Granted     10,000     $ 0.78   Vested     ( 23,000 )   $ 1.22                     Nonvested at December 31, 2020     12,000     $ 1.07   Granted     6,000     $ 1.10   Vested     ( 9,000 )   $ 0.91                     Nonvested at December 31, 2021     9,000     $ 1.10     At December 31, 2021 , there was approximately $ 10,000 of unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. This cost is expected to be recognized over a period of approximately four  years.   The Company’s stock-based awards to employees are calculated using the Black-Scholes options valuation model. The Black-Scholes model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, the Black-Scholes model requires the input of highly subjective assumptions including the expected stock price volatility. The Company’s stock-based awards have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the present value estimates. For these reasons, management believes that the existing models do not necessarily provide a reliable single measure of the fair value of its stock-based awards to employees.   The fair value of the Company’s option grants issued during 2021 and 2020 were estimated using assumptions for expected life, volatility, dividend yield, forfeiture rate, and risk-free interest rate which are specific to each award as summarized in the following table. The estimated fair value of the Company’s options is amortized over the period during which the optionee is required to provide service in exchange for the award, usually the vesting period.   The fair value of the Compan y’s option grants under the Plan in 2021 and 2020 was estimated using the following assumptions:     2021     2020   Expected life (years)     7.0       7.0   Expected forfeiture rate     0.0 %     0.0 % Expected volatility     40 %     40 % Dividend yield     0 %     0 % Risk-free interest rate     1.2 %     0.4 %   Repurchase of Common Stock, Common Stock Warrants and Stock Options   In 1999 and 2001, the Board of Directors approved resolutions authorizing the Company to repurchase up to a total of 1,000,000 shares of its own stock on the open market, which the Board reaffirmed in 2008. There were no shares of the Company repurchased during 2021 or 2020 . There are approximately 72,000 shares remaining under this repurchase authorization.   F- 27 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 11   – RETIREMENT PLAN   The Company has a defined-contribution retirement plan (the “Retirement Plan”) that allows for a matching safe harbor contribution. For 2021 , the Board of Directors elected to match participant deferred salary contributions up to a maximum of 4 % of the participant’s annual compensation. Discretionary profit sharing contributions are allowed under the Retirement Plan in years that the Board does not elect a safe harbor match. The Company has accrued approximately $ 38,000 for the estimated safe harbor matching contribution for the year ended December 31, 2021 . The Company contributed $ 39,000 to the Retirement Plan for the safe harbor match for the year ended December 31, 2020 .   F- 28 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 12 – OPERATING LEASES   The Company’s corporate offices are located at 601 Montgomery Street, Suite 1112, San Francisco, California, where it leases approximately 900 square feet for $ 4,425 per month with a lease expiration date in November 2024.  The Company subleased its existing corporate offices located at Two Embarcadero Center, Suite 410, San Francisco, California, where it leases approximately 3,253 square feet for $ 21,370 per month with a lease expiration date in August 2023. The monthly lease expense is offset by sublease income of $ 15,723 . The sublease term is consistent with the existing lease term. The Company owns and operates a stand-alone Gamma Knife facility in Lima, Peru where it leases approximately 1,600 square feet for approximately $ 7,800 per month with a lease expiration date in January 2024.   Future minimum payments under non-cancelable operating l eases, excluding expected sublease income, havin g initial terms of more than one year consisted of the following:   Year ending December 31,                   2022   $ 406,000   2023     302,000   2024     58,000                 $ 766,000     Payments for repair and maintenance agreements incorporated in operating lease agreements are not included in the future minimum operating lease payments shown above.   Net rent expense was $ 377,000 and $ 404,000 for the years ended December 31, 2021 and 2020 , respectively, and includes the above operating leases as well as month-to-month rental and certain executory costs. The sublease of the Company's existing office space through the remainder of its lease term at a rate lower than its lease rate resulted in an impairment loss of $ 77,000 . The impairment loss will be amortized over the remaining lease term as an adjustment to total lease expense. As of December 31, 2021, the Company recognized $ 3,000 of the sublease impairment loss.     F- 29 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 13 – COMMITMENTS AND CONTINGENCIES   On December 20, 2018, the Company signed Second Amendments to two System Build Agreements for the Company’s second and third Mevion PBRT units. The Company and Mevion have agreed to upgrade the second and third PBRT units for which the Company has purchase commitments. The Company is actively seeking sites for these units but, to date, has not entered into agreements with any party for either placement of a PBRT unit or the related financing. The Company projects that it will be required to commence delivery of the second and third PBRT units no later than 2023. In the event the Company is unable to enter into customer agreements within the requisite time frame or receive an extension from Mevion, the Company could forfeit its deposits. As of December 31, 2021 , the Company had commitments, after deposits, to purchase two MEVION S250i PBRT systems for $ 34,000,000 .   As of December 31, 2021 , the Company had commitments to install four Leksell Gamma Knife Icon Systems (“Icon”) at existing customer sites, and purchase two Linear Accelerator (“LINAC”) systems, one to be placed at an existing customer site and one at a new customer site. The Company also has a commitment to upgrade the Gamma Knife unit at its stand-alone facility in Ecuador to an Icon. The Icon upgrades and LINAC purchases are scheduled to occur between 2022 and 2023. The Company expects to upgrade the equipment in Ecuador by the third quarter of  2022.  The Company has a commitment from DFC to finance this upgrade.  Total Gamma Knife and LINAC commitments as of December 31, 2021 were $ 10,760,000 . There are no significant cash requirements, pending financing, for these commitments in the next 12 months. There can be no assurance that financing will be available for the Company’s current or future projects, or at terms that are acceptable to the Company. However, the Company currently has cash on hand of $ 8,263,000  and a line of credit of $ 7,000,000  to fund these projects.   On July 21, 2017, the Company entered into a Maintenance and Support Agreement (the “Mevion Service Agreement”) with Mevion, which provides for maintenance and support of the Company’s PBRT unit at Orlando Health. The Mevion Service Agreement began September 5, 2017, was amended in 2018, and renews annually over a five year period. The agreement requires an annual prepayment of $ 1,649,000 for the current contractual period. This payment portion was recorded as a prepaid contract and will be amortized over the one -year service period.     As of December 31, 2021 , the Company had commitments to service and maintain its Gamma Knife and PBRT equipment. The service commitments are carried out via contracts with Mevion, Elekta and Mobius Imaging, LLC. In addition, in April 2019, the Company signed agreements to service the Icon upgrades which will be installed at various dates between 2022  and 2023. The Company’s commitments to purchase t wo LINAC systems also include a 9 -year and 5 -year agreement to service the equipment, respectively. Total service commitments as of December 31, 2021 were $ 8,408,000 . The Gamma Knife and certain other service contracts are paid monthly, as service is performed. The Company believes that cash flow from cash on hand and operations will be sufficient to cover these payments.   The Company estimates the following commitments for each of the equipment systems, with expected timing of payments as follows as of December 31, 2021 :               Payments Due by Period           Contractual Obligations   Total amounts committed     2022       2023 - 2024       2025 - 2026     After 5 years                                             Long-term debt (includes interest)   $ 17,650,000     $ 1,651,000     $ 4,672,000     $ 11,156,000     $ 171,000   Future equipment purchases     44,760,000       2,000,000       42,760,000       —       —   Equipment service contracts     8,408,000       453,000       2,618,000       2,709,000       2,628,000   Operating leases     766,000       406,000       302,000       58,000       —                                             Total contractual obligations   $ 71,584,000     $ 4,510,000     $ 50,352,000     $ 13,923,000     $ 2,799,000     F- 30 Table of Contents   AMERICAN SHARED HOSPITAL SERVICES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 14 – RELATED PARTY TRANSACTIONS   The Company’s Gamma Knife business is operated through its 81 % indirect interest in its GKF subsidiary. The remaining 19 % of GKF is owned by a wholly owned U.S. subsidiary of Elekta, which is the manufacturer of the Gamma Knife. Since the Company purchases its Gamma Knife units from Elekta, there are significant related party transactions with Elekta such as equipment purchases, commitments to purchase and service equipment, and costs to maintain the equipment . During the years ended  December 31, 2021  and  2020 , related party transactions for equipment purchases were $ 1,906,000 and $ 1,103,000 and costs incurred to maintain equipment were $ 759,000 and $ 701,000 , respectively.  The Company also had commitments to purchase one Icon, install four Icon upgrades and service the related equipment of $ 6,624,000 and $ 8,397,000 as of  December 31, 2021  and  2020 , respectively.  See Note 13  – Commitments and Contingencies for further discussion on commitments. At December 31, 2021 , the Company owed Elekta approximately $ 1,992,000 for the Cobalt- 60 reload completed in the fourth quarter, software, contract maintenance, and de-install costs.  At December 31, 2020 , The Company owed Elekta approximately $ 1,382,000 for parts, contract maintenance and de-install costs. The Company believes that all its transactions with Elekta are arm’s-length transactions.     F- 31