2 unchanged sentences
CONDENSED CONSOLIDATED BALANCE SHEETS
−Removed: June 30, 2024
+Added: September 30, 2024
December 31, 2023
4 unchanged sentences
250,000 118,000
−Removed: Accounts receivable, net of allowance for credit losses of $ 100,000 at June 30, 2024 and at December 31, 2023
+Added: Accounts receivable, net of allowance for credit losses of $ 100,000 at September 30, 2024 and at December 31, 2023
8,635,000 4,343,000
1 unchanged sentence
1,306,000 504,000
−Removed: Due from expired customer contract
Prepaid maintenance
24 unchanged sentences
3,544,000 1,961,000
−Removed: Asset retirement obligations, related party (includes $ 271,000 and $ 250,000 non-related party at June 30, 2024 and December 31, 2023)
+Added: Asset retirement obligations, related party (includes $ 156,000 and $ 250,000 non-related party at September 30, 2024 and December 31, 2023)
750,000 650,000
18 unchanged sentences
Common stock, no par value ( 10,000,000 authorized shares;
−Removed: Issued and outstanding shares - 6,360,000 at June 30, 2024 and 6,300,000 at December 31, 2023)
+Added: Issued and outstanding shares - 6,390,000 at September 30, 2024 and 6,300,000 at December 31, 2023)
10,763,000 10,763,000
14 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Rental revenue from medical equipment leasing
2 unchanged sentences
3,687,000 988,000 7,807,000 2,440,000
+Added: Equipment sales, net
- 200,000 - 200,000
+Added: 6,999,000 5,134,000 19,271,000 15,627,000
Costs of revenue:
15 unchanged sentences
- - 188,000 578,000
−Removed: Operating (loss)
+Added: Operating (loss) income
( 889,000 ) 90,000 ( 975,000 ) ( 137,000 )
−Removed: Bargain purchase gain RI Acquisition, net of deferred income taxes of $ 1,226,000
+Added: Bargain purchase gain RI Acquisition, net of deferred income taxes of $ 88,000 and $ 1,314,000
263,000 - 3,942,000 -
1 unchanged sentence
47,000 135,000 212,000 318,000
−Removed: Income (loss) before income taxes
+Added: (Loss) income before income taxes
( 579,000 ) 225,000 3,179,000 181,000
−Removed: Income tax expense (benefit)
+Added: Income tax (benefit) expense
( 169,000 ) 60,000 ( 244,000 ) 93,000
−Removed: Net income (loss)
+Added: Net (loss) income
( 410,000 ) 165,000 3,423,000 88,000
−Removed: net (income) loss attributable to non-controlling interests
+Added: net loss (income) attributable to non-controlling interests
203,000 ( 47,000 ) 91,000 107,000
−Removed: Net income (loss) attributable to American Shared Hospital Services
+Added: Net (loss) income attributable to American Shared Hospital Services
$ ( 207,000 ) $ 118,000 $ 3,514,000 $ 195,000
−Removed: Net income (loss) per share:
−Removed: Income (loss) per common share - basic
+Added: Net (loss) income per share:
+Added: (Loss) income per common share - basic
$ ( 0.03 ) $ 0.02 $ 0.54 $ 0.03
−Removed: Income (loss) per common share - diluted
+Added: (Loss) income per common share - diluted
$ ( 0.03 ) $ 0.02 $ 0.54 $ 0.03
−Removed: Weighted average common shares for basic earnings per share
+Added: Weighted average common shares for basic (loss) earnings per share
6,482,000 6,366,000 6,482,000 6,336,000
−Removed: Weighted average common shares for diluted earnings per share
+Added: Weighted average common shares for diluted (loss) earnings per share
6,482,000 6,432,000 6,520,000 6,406,000
2 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
−Removed: FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2024 AND 2023
−Removed: Common Shares Common Stock Additional Paid-in Capital Retained Earnings
+Added: FOR THE THREE AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2024 AND 2023
+Added: Common Shares
+Added: Additional Paid-in Capital
+Added: Retained Earnings
Sub-Total ASHS
1 unchanged sentence
Balances at January 1, 2023
−Removed: 6,184,000 $ 10,763,000 $ 7,843,000 $ 3,019,000 $ 21,625,000 $ 4,000,000 $ 25,625,000
Stock-based compensation expense
−Removed: - - 96,000 - 96,000 - 96,000
Net income (loss)
−Removed: - - - 188,000 188,000 ( 88,000 ) 100,000
Balances at March 31, 2023
−Removed: 6,184,000 10,763,000 7,939,000 3,207,000 21,909,000 3,912,000 25,821,000
Stock-based compensation expense
−Removed: - - 97,000 - 97,000 - 97,000
Vested restricted stock awards
−Removed: 30,000 - - - - - -
−Removed: - - - ( 111,000 ) ( 111,000 ) ( 66,000 ) ( 177,000 )
Balances at June 30, 2023
−Removed: 6,214,000 $ 10,763,000 $ 8,036,000 $ 3,096,000 $ 21,895,000 $ 3,846,000 $ 25,741,000
+Added: Stock-based compensation expense
+Added: Vested restricted stock awards
+Added: Balances at September 30, 2023
Balances at January 1, 2024
−Removed: 6,300,000 $ 10,763,000 $ 8,232,000 $ 3,629,000 $ 22,624,000 $ 3,655,000 $ 26,279,000
Stock-based compensation expense
−Removed: - - 98,000 - 98,000 - 98,000
Vested restricted stock awards
−Removed: 30,000 - - - - - -
Capital contribution non-controlling interests
−Removed: - - - - - 38,000 38,000
Cash distributions to non-controlling interests
−Removed: - - - - - ( 95,000 ) ( 95,000 )
Net income (loss)
−Removed: - - - 119,000 119,000 ( 54,000 ) 65,000
Balances at March 31, 2024
−Removed: 6,330,000 10,763,000 8,330,000 3,748,000 22,841,000 3,544,000 26,385,000
Stock-based compensation expense
−Removed: - - 99,000 - 99,000 - 99,000
Vested restricted stock awards
−Removed: 30,000 - - - - - -
RI Acquisition non-controlling interests
−Removed: - - - - - 2,100,000 2,100,000
−Removed: - - - 3,602,000 3,602,000 166,000 3,768,000
Balances at June 30, 2024
−Removed: 6,360,000 $ 10,763,000 $ 8,429,000 $ 7,350,000 $ 26,542,000 $ 5,810,000 $ 32,352,000
+Added: Stock-based compensation expense
+Added: Vested restricted stock awards
+Added: RI Acquisition non-controlling interests
+Added: Balances at September 30, 2024
See accompanying notes
1 unchanged sentence
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Operating activities:
−Removed: Net income (loss)
−Removed: $ 3,833,000 $ ( 77,000 )
−Removed: Adjustments to reconcile net income (loss) to net cash from operating activities:
+Added: Adjustments to reconcile net income to net cash from operating activities:
Depreciation, amortization, and other
−Removed: 2,857,000 2,609,000
Loss on write down of impaired assets and associated removal costs, net
−Removed: 188,000 578,000
Accretion of debt issuance costs
−Removed: 58,000 37,000
Bargain purchase gain RI Acquisition, net of deferred income taxes
−Removed: ( 3,679,000 ) -
Non cash lease expense
−Removed: 35,000 171,000
+Added: Accretion of unfavorable lease position
Deferred income taxes
Stock-based compensation expense
−Removed: 197,000 193,000
Changes in operating assets and liabilities:
−Removed: ( 3,831,000 ) ( 1,187,000 )
Prepaid expenses and other assets
−Removed: 977,000 1,230,000
Asset retirement obligations, related party
Related party liabilities
−Removed: ( 1,877,000 ) 656,000
Accounts payable, accrued liabilities, and deferred revenue
−Removed: 1,744,000 627,000
Income taxes payable
−Removed: ( 1,229,000 ) -
Lease liabilities
−Removed: ( 35,000 ) ( 201,000 )
Net cash (used in) provided by operating activities
−Removed: ( 579,000 ) 5,214,000
Investing activities:
−Removed: Payment for RI Acquisition, net of cash received
+Added: Cash received in excess of cash paid for the RI Acquisition
Payment for purchases of property and equipment
−Removed: ( 2,399,000 ) ( 2,561,000 )
Net cash used in investing activities
−Removed: ( 2,036,000 ) ( 2,561,000 )
Financing activities:
Principal payments on long-term debt
−Removed: ( 703,000 ) ( 1,160,000 )
Payments on line of credit
−Removed: ( 4,950,000 ) -
Advances on line of credit
1 unchanged sentence
Principal payments on short-term financing
−Removed: - ( 152,000 )
Capital contribution non-controlling interests
2 unchanged sentences
Net cash provided by (used in) financing activities
−Removed: 3,293,000 ( 1,312,000 )
Net change in cash, cash equivalents, and restricted cash
−Removed: 678,000 1,341,000
Cash, cash equivalents, and restricted cash at beginning of period
−Removed: 13,808,000 12,453,000
Cash, cash equivalents, and restricted cash at end of period
−Removed: $ 14,486,000 $ 13,794,000
Supplemental cash flow disclosure
Cash paid during the period for:
−Removed: $ 676,000 $ 507,000
−Removed: $ 1,339,000 $ 229,000
Schedule of noncash investing and financing activities
Equipment included in accounts payable and accrued liabilities
−Removed: $ 524,000 $ -
Non-controlling interest RI Acquisition
−Removed: $ 2,100,000 $ -
−Removed: Changes to asset removal obligations, net
−Removed: $ 688,000 $ -
Detail of cash, cash equivalents and restricted cash at end of period
Cash and cash equivalents
−Removed: $ 14,236,000 $ 13,676,000
Restricted cash
−Removed: 250,000 118,000
Cash, cash equivalents, and restricted cash at end of period
−Removed: $ 14,486,000 $ 13,794,000
See accompanying notes
2 unchanged sentences
Basis of Presentation
−Removed: In the opinion of the management of American Shared Hospital Services (“ASHS”), the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary for the fair presentation of ASHS consolidated financial position as of June 30, 2024 , the results of its operations for the three and six -month periods ended June 30, 2024 and 2023 , and the cash flows for the six -month periods ended June 30, 2024 and 2023 .
−Removed: The results of operations for the three and six -month periods ended June 30, 2024 are not necessarily indicative of results on an annualized basis.
+Added: In the opinion of the management of American Shared Hospital Services (“ASHS”), the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary for the fair presentation of ASHS consolidated financial position as of September 30, 2024 , the results of its operations for the three and nine -month periods ended September 30, 2024 and 2023 , and the cash flows for the nine -month periods ended September 30, 2024 and 2023 .
+Added: The results of operations for the three and nine -month periods ended September 30, 2024 are not necessarily indicative of results on an annualized basis.
Consolidated balance sheet amounts as of December 31, 2023 have been derived from the audited consolidated financial statements.
12 unchanged sentences
The Company (through ASRS) and Elekta AB (“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.
−Removed: As of June 30, 2024 , GKF provides Gamma Knife units to ten medical centers in the United States in the states of Florida, Illinois, Indiana, Mississippi, Nebraska, New Mexico, New York, Ohio, Oregon, and Texas.
+Added: As of September 30, 2024 , GKF provides Gamma Knife units to ten medical centers in the United States in the states of Florida, Illinois, Indiana, Mississippi, Nebraska, New Mexico, New York, Ohio, Oregon, and Texas.
GKF also owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador.
20 unchanged sentences
Puebla was formed on December 15, 2022 and began treating patients in July 2024.
−Removed: Operating costs incurred during the three and six -month periods ended June 30, 2024 by Puebla, are included in the condensed consolidated statement of operations.
+Added: Operating costs incurred during the three and nine -month periods ended September 30, 2024 by Puebla, are included in the condensed consolidated statement of operations.
The Company formed the subsidiaries GKPeru, Puebla, and acquired GKCE for the purposes of expanding its business internationally;
17 unchanged sentences
The Company is currently evaluating ASU 2023 - 09 to determine the impact it may have on its consolidated financial statements.
+Added: In November 2024, the FASB issued ASU 2024 - 03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ASU 2024 - 03” ) which requires entities to 1.
+Added: disclose amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities, 2.
+Added: include certain amounts that are already required to be disclosed under current Generally Accepted Accounting Principles in the same disclosures as other disaggregation requirements, 3.
+Added: disclose a qualitative description of the amounts remaining in relevant expense captions that are not necessarily disaggregated quantitatively, and 4.
+Added: disclose the total amount of selling expenses, in annual reporting periods, an entity’s definition of selling expense.
+Added: ASU 2024 - 03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.
+Added: Early adoption is permitted.
+Added: The Company is currently evaluating ASU 2024 - 03 to determine the impact it may have on its consolidated financial statements.
Revenue recognition - The Company recognizes revenues under Accounting Standards Codification (“ASC”) 842 Leases (“ASC 842” ) and ASC 606 Revenue from Contracts with Customers (“ASC 606” ).
9 unchanged sentences
The operating costs and estimated net operating profit are recorded as other direct operating costs in the condensed consolidated statements of operations.
−Removed: For the three and six -month periods ended June 30, 2024 , the Company recognized leasing revenue of approximately $ 3,899,000 and $ 8,152,000 compared to $ 4,812,000 and $ 9,041,000 for the same periods in the prior year, respectively.
−Removed: Of the ASC 842 revenue, for the three and six -month periods ended June 30, 2024 , approximately $ 2,420,000 and $ 5,069,000 were for PBRT services, compared to $ 2,545,000 and $ 4,859,000 for the same periods in the prior year, respectively.
−Removed: Direct patient services income ( “ retail ”) – The Company has stand-alone facilities in Lima, Peru and Guayaquil, Ecuador, where contracts exist between the Company’s facilities and the individual patients treated at the facility.
−Removed: Under ASC 606, the Company acts as the principal in these transactions and provides, at a point in time, a single performance obligation, in the form of a Gamma Knife treatment.
−Removed: Revenue related to a Gamma Knife treatment is recognized on a gross basis at the time when the patient receives treatment.
+Added: For the three and nine -month periods ended September 30, 2024 , the Company recognized leasing revenue of approximately $ 3,312,000 and $ 11,464,000 compared to $ 3,946,000 and $ 12,987,000 for the same periods in the prior year, respectively.
+Added: Of the ASC 842 revenue, for the three and nine -month periods ended September 30, 2024 , approximately $ 2,316,000 and $ 7,386,000 were for PBRT services, compared to $ 2,219,000 and $ 7,078,000 for the same periods in the prior year, respectively.
+Added: Direct patient services income ( “ retail ”) – The Company has stand-alone facilities in Lima, Peru, Guayaquil, Ecuador, and Puebla, Mexico where contracts exist between the Company’s facilities and the individual patients treated at the facility.
+Added: Under ASC 606, the Company acts as the principal in these transactions and provides, at a point in time, a single performance obligation, in the form of a Gamma Knife or radiation therapy treatment.
+Added: Revenue related to these treatments 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.
1 unchanged sentence
GKCE’s patient population is primarily covered by a government payor and payments are paid between three and six months following issuance of an invoice.
+Added: The facility in Puebla currently has a contract with one local hospital to cover its eligible patient base and is also treating self-pay patients.
+Added: Puebla’s payment terms are typically prepaid for self-pay patients and net 30 days for the hospital patients.
The Company did not capitalize any incremental costs related to the fulfillment of its customer contracts.
5 unchanged sentences
Payment terms at these facilities are typically prepaid for self-pay patients and insurance providers are paid net 30 to 60 days.
−Removed: The Company expects to capitalize customer acquisition costs, incremental costs related to its customer contracts.
The Company did not capitalize any incremental costs related to the fulfillment of its customer contracts.
The Company also concluded the three facilities are part of its retail segment, see further discussion below.
−Removed: Accounts receivable balances under ASC 606 at June 30, 2024 and January 1, 2024 were $ 4,558,000 and $ 1,626,000 , respectively.
−Removed: Accounts receivable balances under ASC 606 at June 30, 2023 and January 1, 2023 were $ 980,000 and $ 1,118,000 , respectively.
−Removed: For the three and six -month periods ended June 30, 2024 , the Company recognized retail revenues of approximately $ 3,157,000 and $ 4,120,000 compared to $ 756,000 and $ 1,452,000 for the same periods in the prior year, respectively.
+Added: Accounts receivable balances under ASC 606 at September 30, 2024 and January 1, 2024 were $ 5,357,000 and $ 1,626,000 , respectively.
+Added: Accounts receivable balances under ASC 606 at September 30, 2023 and January 1, 2023 were $ 1,416,000 and $ 1,118,000 , respectively.
+Added: For the three and nine -month periods ended September 30, 2024 , the Company recognized retail revenues of approximately $ 3,687,000 and $ 7,807,000 compared to $ 988,000 and $ 2,440,000 for the same periods in the prior year, respectively.
Business Combinations - Business combinations are accounted for under ASC 805 Business Combinations (“ASC 805” ) using the acquisition method of accounting.
2 unchanged sentences
The allocation of purchase price requires management to make significant estimates and assumptions, especially with respect to tangible assets, any intangible assets identified and non-controlling interests.
−Removed: These estimates includes, but are not limited to, a market participant ’ s expectation of future cash flows from acquired customers, acquired trade names, useful lives of acquired assets, and discount rates.
+Added: These estimates include, but are not limited to, a market participant ’ s expectation of future cash flows from acquired customers, acquired trade names, useful lives of acquired assets, and discount rates.
See Note 11 - Rhode Island Acquisition to the condensed consolidated financial statements for further discussion on acquisitions.
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 providing radiosurgery and radiation therapy services, either through leasing to healthcare providers or directly to patients, and concluded there are two reportable segments, leasing and retail.
−Removed: As of June 30, 2024 , the Company provided Gamma Knife and PBRT equipment to eleven hospitals in the United States, which constitutes the leasing segment.
−Removed: As of June 30, 2024, the Company owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador and following the RI Acquisition on May 7, 2024, the Company also owns and operates three single-unit radiation therapy facilities in Rhode Island, which collectively constitute the retail segment.
−Removed: An operating segment is defined by ASC 280 as it engages in business activities in which it may recognize revenues and incur expenses, its operating results are regularly reviewed by the Company’s Chief Operating Decision Maker (“CODM”), and its discrete financial information is available.
+Added: As of September 30, 2024 , the Company provided Gamma Knife and PBRT equipment to eleven hospitals in the United States, which constitutes the leasing segment.
+Added: As of September 30, 2024 , the Company owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador, one single-unit radiation therapy facility in Puebla, Mexico, and following the RI Acquisition on May 7, 2024, the Company also owns and operates three single-unit radiation therapy facilities in Rhode Island, which collectively constitute the retail segment.
+Added: An operating segment is defined by ASC 280 as a component of an entity that engages in business activities in which it may recognize revenues and incur expenses, that has operating results that are regularly reviewed by the Company’s Chief Operating Decision Maker (“CODM”), and for which its discrete financial information is available.
The Company determined two reportable segments existed due to similarities in economics of business operations and how the Company recognizes revenue for the patient treatment.
The operating results of the two reportable segments are reviewed by the Company’s Executive Chairman of the Board and Chief Executive Officer, who is also the CODM.
−Removed: For the six -month period ended June 30, 2024 , the Company’s PBRT operations represented a significant majority of the net income attributable to the Company, disclosed below.
−Removed: The revenues, depreciation, interest expense, interest income, tax expense and net income attributable to American Shared Hospital Services for the Company’s two reportable segments as of June 30, 2024 and 2023 consist of the following:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: The revenues, depreciation, interest expense, interest income, tax expense and net income attributable to American Shared Hospital Services for the Company’s two reportable segments as of September 30, 2024 and 2023 consist of the following:
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
+Added: Leasing (includes equipment sales, net)
$ 3,312,000 $ 4,146,000 $ 11,464,000 $ 13,187,000
12 unchanged sentences
6,000 - 6,000 -
+Added: $ 63,000 $ 149,000 $ 252,000 $ 346,000
Income tax (benefit) expense
2 unchanged sentences
$ ( 169,000 ) $ 60,000 $ ( 244,000 ) $ 93,000
−Removed: Net income (loss) attributable to American Shared Hospital Services
+Added: Net (loss) income attributable to American Shared Hospital Services
$ ( 602,000 ) $ 100,000 $ ( 2,096,000 ) $ 328,000
1 unchanged sentence
$ ( 207,000 ) $ 118,000 $ 3,514,000 $ 195,000
−Removed: Reclassifications - Certain comparative balances as of and for the year ended have been reclassified to make them consistent with the current year presentation.
+Added: Reclassifications - Certain comparative balances as of September 30, 2023 and December 31, 2023 have been reclassified to make them consistent with the current year presentation.
Property and Equipment
5 unchanged sentences
The estimated useful life of the PBRT unit is consistent with the estimated economic life of 20 years.
−Removed: The following table summarizes property and equipment as of June 30, 2024 and December 31, 2023 :
+Added: The following table summarizes property and equipment as of September 30, 2024 and December 31, 2023 :
+Added: September 30,
Medical equipment and facilities
11 unchanged sentences
$ 5,934,000 $ 6,174,000
−Removed: Depreciation expense in the condensed consolidated statements of operations for the three and six -month periods ended June 30, 2024 and 2023 is as follows:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Depreciation expense in the condensed consolidated statements of operations for the three and nine -month periods ended September 30, 2024 and 2023 is as follows:
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Depreciation expense
7 unchanged sentences
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.
−Removed: The Company borrowed $ 3,950,000 on the Revolving Line as of June 30, 2024 , which was paid off in July 2024.
+Added: The Company borrowed $ 4,500,000 on the Revolving Line as of September 30, 2024 .
The facilities have a five -year maturity and carry a floating interest of based on the Secured Overnight Financing Rate (“SOFR”) plus 3.0 % and are secured by a lien on substantially all of the assets of the Loan Parties and guaranteed by ASHS.
7 unchanged sentences
Pursuant to the First Amendment, advances under the Credit Agreement bear interest at a floating rate per annum equal to SOFR plus 3.00 %, subject to a SOFR floor of 0.00 %.
−Removed: The long-term debt on the condensed consolidated balance sheets related to the Term Loan and DDTL was $ 13,150,000 and $ 10,825,000 as of June 30, 2024 and December 31, 2023 , respectively.
−Removed: The Company capitalized debt issuance costs of $ 97,000 as of June 30, 2024 related to issuance of the Supplemental Term Loan.
+Added: The long-term debt on the condensed consolidated balance sheets related to the Term Loan and DDTL was $ 12,588,000 and $ 10,825,000 as of September 30, 2024 and December 31, 2023 , respectively.
+Added: The Company capitalized debt issuance costs of $ 97,000 as of September 30, 2024 related to issuance of the Supplemental Term Loan.
The Credit Agreement contains customary covenants and representations, including without limitation, a minimum fixed charge coverage ratio of
3 unchanged sentences
The Loan Parties are in compliance with the Credit Agreement covenants as of
−Removed: June 30, 2024 .
+Added: September 30, 2024 .
The loan entered into with United States International Development Finance Corporation (“DFC”) in connection with the acquisition of GKCE in June 2020 ( the “DFC Loan”) was obtained through the Company’s wholly-owned subsidiary, HoldCo and is guaranteed by GKF.
4 unchanged sentences
The amount outstanding under the second tranche of the DFC Loan is payable in 16 quarterly installments with a fixed interest rate of 7.49 %.
−Removed: The long-term debt on the condensed consolidated balance sheets related to the DFC Loan was $ 2,135,000 and $ 2,464,000 as of June 30, 2024 and December 31, 2023 , respectively.
−Removed: The Company capitalized debt issuance costs of $ 0 and $ 9,000 as of June 30, 2024 and December 31, 2023 , respectively, related to maintenance and administrative fees on the DFC Loan.
+Added: The long-term debt on the condensed consolidated balance sheets related to the DFC Loan was $ 1,970,000 and $ 2,464,000 as of September 30, 2024 and December 31, 2023 , respectively.
+Added: The Company capitalized debt issuance costs of $ 0 and $ 9,000 as of September 30, 2024 and December 31, 2023 , respectively, related to maintenance and administrative fees on the DFC Loan.
The DFC Loan contains customary covenants including without limitation, requirements that HoldCo maintain certain financial ratios related to liquidity and cash flow as well as depository requirements.
On March 28, 2024 the HoldCo received a waiver and amendment from DFC for certain covenants as of December 31, 2023 and through December 31, 2024 and amended other covenants and definitions permanently.
−Removed: HoldCo was in compliance with all debt covenants pursuant to the DFC Loan as amended and waived at June 30, 2024 .
−Removed: The accretion of debt issuance costs for the three and six -month periods ended June 30, 2024 was $ 20,000 and $ 58,000 compared to $ 19,000 and $ 37,000 for the same periods in the prior year, respectively.
−Removed: As of June 30, 2024 and December 31, 2023 , the unamortized deferred issuance costs on the consolidated balance sheet was $ 202,000 and $ 164,000 , respectively.
−Removed: As of June 30, 2024 , long-term debt on the condensed consolidated balance sheets was $ 15,083,000 .
−Removed: The following are contractual maturities of long-term debt as of June 30, 2024 , excluding deferred issuance costs of $ 202,000 :
+Added: HoldCo was in compliance with all debt covenants pursuant to the DFC Loan as amended and waived at September 30, 2024 .
+Added: The accretion of debt issuance costs for the three and nine -month periods ended September 30, 2024 was $ 19,000 and $ 77,000 compared to $ 7,000 and $ 44,000 for the same periods in the prior year, respectively.
+Added: As of September 30, 2024 and December 31, 2023 , the unamortized deferred issuance costs on the consolidated balance sheet was $ 184,000 and $ 164,000 , respectively.
+Added: As of September 30, 2024 , long-term debt on the condensed consolidated balance sheets was $ 14,375,000 .
+Added: The following are contractual maturities of long-term debt as of September 30, 2024 , excluding deferred issuance costs of $ 184,000 :
Year ending December 31,
−Removed: 2024 (excluding the six-months ended June 30, 2024)
+Added: 2024 (excluding the nine-months ended September 30, 2024)
Other Accrued Liabilities
−Removed: Other accrued liabilities consist of the following as of June 30, 2024 and December 31, 2023 :
+Added: Other accrued liabilities consist of the following as of September 30, 2024 and December 31, 2023 :
+Added: September 30,
Professional services
18 unchanged sentences
The Sublease was for $ 16,195 per month through the contract expiration date.
−Removed: The Company also entered into a lease agreement (the “Lease”) for new corporate office space at 601 Montgomery, Suite 1112, San Francisco, CA for approximately 900 square feet for $ 4,500 per month with a lease expiration date in November 2024.
+Added: The Company also entered into a lease agreement (the “Lease”) for new corporate office space at 601 Montgomery St., Suite 1112, San Francisco, CA for approximately 900 square feet for $ 4,500 per month with a lease expiration date in November 2024.
+Added: The Company did not renew this lease.
On May 7, 2024, the Company completed the RI Acquisition and acquired 60 % of the equity interests of the RI Companies.
1 unchanged sentence
The Company assessed the existing lease agreements under ASC 842 and concluded two of the three facilities contained operating leases.
−Removed: The Company included these leases in its presentation of the condensed consolidated financial statements for the three and six -month periods ended June 30, 2024 .
+Added: The Company included these leases in its presentation of the condensed consolidated financial statements for the three and nine -month periods ended September 30, 2024 .
The Company’s operating lease in Woonsocket is with a related party and contains a sublease for a 1,950 square feet of the clinic space.
The sublease is also with a related party.
−Removed: Sublease income, related party, for the three and six -month periods ended June 30, 2024 was $ 9,000 .
−Removed: Rent payable to related parties was approximately $50,000 as of June 30, 2024 .
+Added: Sublease income, related party, for the three and nine -month periods ended September 30, 2024 was $ 15,000 and $ 24,000 , respectively.
+Added: Rent payable to related parties was approximately $ 184,000 as of September 30, 2024 .
The Company’s lessee operating leases are accounted for as ROU assets, current portion of lease liabilities, and lease liabilities on the condensed consolidated balance sheets.
6 unchanged sentences
These leases have remaining lease terms of approximately 5 to 17 years, some of which include options to renew or extend the lease.
−Removed: As of June 30, 2024 , operating ROU assets, net of unfavorable leasehold interests were $ 631,000 , and lease liabilities were $ 1,857,000 .
−Removed: The following table summarizes the maturities of the Company's lessee operating lease liabilities as of June 30, 2024 :
+Added: As of September 30, 2024 , operating ROU assets, net of unfavorable leasehold interests were $ 986,000 , and lease liabilities were $ 1,735,000 .
+Added: The following table summarizes the maturities of the Company's lessee operating lease liabilities as of September 30, 2024 :
Year ending December 31,
Operating Leases
−Removed: 2024 (excluding the six-months ended June 30, 2024)
+Added: 2024 (excluding the nine-months ended September 30, 2024)
Total lease payments
Less imputed interest
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Operating lease cost
14 unchanged sentences
The Company calculates diluted shares using the treasury stock method.
−Removed: The computation for the three and six -month periods ended June 30, 2024 excluded approximatel y 20,000 of the Company’s stock options b ecause the exercise price of the options was higher than the average market price during the periods.
−Removed: The computation for the six -month period ended June 30, 2023 excluded approximately 64,000 of the Company’s stock options because the price of the options was higher than the average market price during the period.
−Removed: Because the Company reported a loss for the three -month period ended June 30, 2023, the potentially dilutive effects of approximately 82,000 of the Company’s stock options and 121,000 of the Company’s unvested restricted stock awards were not considered for the reporting period.
−Removed: The weighted average common shares outstanding for basic earnings per share for the three and six -month periods ended June 30, 2024 and 2023 included approximately 123,000 and 123,000 , respectively, of the Company's restricted stock awards that are fully vested but are deferred for issuance.
−Removed: The following table sets forth the computation of basic and diluted earnings per share for the three and six -month periods ended June 30, 2024 and 2023 :
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
−Removed: Net income (loss) attributable to American Shared Hospital Services
+Added: Because the Company reported a loss for the three -month period ended September 30, 2024, the potentially dilutive effects of approximately 62,000 of the Company’s stock options and 33,000 of the Company’s unvested restricted stock awards were not considered for the reporting period.
+Added: The computation for the nine -month period ended September 30, 2024 excluded approximatel y 4,000 of the Company’s stock options b ecause the exercise price of the options was higher than the average market price during the periods.
+Added: The computation for the three and nine -month periods ended September 30, 2023 excluded approximately 118,000 and 91,000 of the Company’s stock options because the price of the options was higher than the average market price during the period.
+Added: The weighted average common shares outstanding for basic earnings per share for the three and nine -month periods ended September 30, 2024 and 2023 included approximately 123,000 and 123,000 , respectively, of the Company's restricted stock awards that are fully vested but are deferred for issuance.
+Added: The following table sets forth the computation of basic and diluted earnings per share for the three and nine -month periods ended September 30, 2024 and 2023 :
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
+Added: Net (loss) income attributable to American Shared Hospital Services
$ ( 207,000 ) $ 118,000 $ 3,514,000 $ 195,000
−Removed: Weighted average common shares for basic earnings (loss) per share
+Added: Weighted average common shares for basic (loss) earnings per share
6,482,000 6,366,000 6,482,000 6,336,000
1 unchanged sentence
- 66,000 38,000 70,000
−Removed: Weighted average common shares for diluted earnings (loss) per share
+Added: Weighted average common shares for diluted (loss) earnings per share
6,482,000 6,432,000 6,520,000 6,406,000
−Removed: Basic earnings (loss) per share
+Added: Basic (loss) earnings per share
$ ( 0.03 ) $ 0.02 $ 0.54 $ 0.03
−Removed: Diluted earnings (loss) per share
+Added: Diluted (loss) earnings per share
$ ( 0.03 ) $ 0.02 $ 0.54 $ 0.03
7 unchanged sentences
The estimated fair value of the Company’s options is expensed over the period during which an employee is required to provide service in exchange for the award (requisite service period), usually the vesting period.
−Removed: Accordingly, stock-based compensation cost before income tax effect for the Company’s options and restricted stock awards in the amo unt of $ 99,000 and $ 197,000 for the three and six -month periods ended June 30, 2024 and $ 97,000 and $ 193,000 for the three and six -month periods ended June 30, 2023 , respectively, is reflected in selling and administrative expense in the condensed consolidated statements of operations.
−Removed: For the six -month period ended June 30, 2024 , there was approximately $ 28,000 o f unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plan.
−Removed: This cost is expected to be recognized over a period of approximately four years.
−Removed: The following table summarizes stock option activity for the six -month periods ended June 30, 2024 and 2023 :
+Added: Accordingly, stock-based compensation cost before income tax effect for the Company’s options and restricted stock awards in the amo unt of $ 88,000 and $ 285,000 for the three and nine -month periods ended September 30, 2024 and $ 98,000 and $ 291,000 for the three and nine -month periods ended September 30, 2023 , respectively, is reflected in selling and administrative expense in the condensed consolidated statements of operations.
+Added: For the nine -month period ended September 30, 2024 , there was approximately $ 26,000 o f unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plan.
+Added: This cost is expected to be recognized over a period of approximately three years.
+Added: The following table summarizes stock option activity for the nine -month periods ended September 30, 2024 and 2023 :
Stock Options
5 unchanged sentences
( 84,000 ) $ 2.87 - $ -
−Removed: Outstanding at June 30, 2024
+Added: Outstanding at September 30, 2024
62,000 $ 2.76 2.56 $ 20,000
−Removed: Exercisable at June 30, 2024
+Added: Exercisable at September 30, 2024
35,000 $ 2.76 1.32 $ -
3 unchanged sentences
( 19,000 ) $ 2.69 - $ -
−Removed: Outstanding at June 30, 2023
+Added: Outstanding at September 30, 2023
146,000 $ 2.80 5.51 $ -
−Removed: Exercisable at June 30, 2023
+Added: Exercisable at September 30, 2023
38,000 $ 2.86 3.35 $ -
3 unchanged sentences
A small change in estimated annual pretax income can produce a significant variance in the annualized effective income tax rate given the expected amount of these items.
−Removed: As a result, the Company has computed its provision for income taxes for the three and six -month periods ended June 30, 2024 and 2023 by applying the actual effective tax rates to income or reported within the condensed consolidated financial statements through those periods.
−Removed: The provision for income taxes for the six -month period ended June 30, 2024 included a non-recurring adjustment for unrecognized tax benefits related to foreign taxes of $ 100,000 which offset income tax expense for the same period.
−Removed: As of June 30, 2024 , the Company had commitments to purchase and install five Leksell Gamma Knife Esprit Systems (“Esprit”), one Gamma Plan workstation, and three Linear Accelerator (“LINAC”) systems.
+Added: As a result, the Company has computed its provision for income taxes for the three and nine -month periods ended September 30, 2024 and 2023 by applying the actual effective tax rates to income or reported within the condensed consolidated financial statements through those periods.
+Added: The provision for income taxes for the nine -month period ended September 30, 2024 included a non-recurring adjustment for unrecognized tax benefits related to foreign taxes of $ 100,000 which offset income tax expense for the same period.
+Added: As of September 30, 2024 , the Company had commitments to purchase and install four Leksell Gamma Knife Esprit Systems (“Esprit”), one Gamma Plan workstation, and two Linear Accelerator (“LINAC”) systems.
One LINAC and one Esprit will be placed at future customer sites.
−Removed: The remaining Esprit upgrades and LINACs are scheduled to occur in the later half of 2024 and 2025 at existing customer sites.
−Removed: Total Gamma Knife and LINAC commitments as of June 30, 2024 were $ 15,651,000 .
−Removed: There are no deposits on the condensed consolidated balance sheets related to these commitments as of June 30, 2024 .
+Added: The remaining Esprit upgrades and LINACs are scheduled to occur during 2025 or later at existing customer sites.
+Added: Total Gamma Knife and LINAC commitments as of September 30, 2024 were $ 13,383,000 .
+Added: There are no deposits on the condensed consolidated balance sheets related to these commitments as of September 30, 2024 .
It is the Company’s intent to finance substantially all of these commitments.
1 unchanged sentence
However, the Company currently has cash on hand of $ 14,077,000 and its Revolving Line of $ 7,000,000 and is actively engaged with financing resources to fund these projects.
−Removed: The Company borrowed $ 3,950,000 on the Revolving Line as of June 30, 2024 , which was paid off in July 2024.
+Added: The Company borrowed $ 4,500,000 on the Revolving Line as of September 30, 2024 .
September 4, 2022, the Company entered into a Maintenance and Support Agreement with Mevion Medical Systems, Inc.
3 unchanged sentences
$ 1,939,000 for the current contractual period (
−Removed: This payment portion was recorded as a prepaid contract and is being amortized over the
+Added: September 30, 2024 , half of the prepayment was recorded as a prepaid contract and is being amortized over the
one -year service period.
−Removed: As of June 30, 2024 , the Company had commitments to service and maintain its Gamma Knife and PBRT equipment.
+Added: As of September 30, 2024 , the Company had commitments to service and maintain its Gamma Knife, LINAC, and PBRT equipment.
The service commitments are carried out via contracts with Mevion, Elekta and Mobius Imaging, LLC.
The Company’s commitment to purchase one LINAC system also includes a 5 -year agreement to service the equipment, respectively.
−Removed: Total service commitments as of June 30, 2024 were $ 14,375,000 .
+Added: Total service commitments as of September 30, 2024 were $ 13,712,000 .
The Gamma Knife and certain other service contracts are paid monthly, as service is performed.
7 unchanged sentences
See Note 5 - Leases to the condensed consolidated financial statements for further discussion.
−Removed: The following table summarizes related party activity for the three and six -month periods ended June 30, 2024 and 2023 :
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: The following table summarizes related party activity for the three and nine -month periods ended September 30, 2024 and 2023 :
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Equipment purchases and de-install costs
4 unchanged sentences
$ 694,000 $ 2,338,000 $ 3,971,000 $ 4,346,000
−Removed: The Company also had commitments to purchase and install five Esprit units, purchase two LINACs and service the related equipment of $ 21,479,000 as of June 30, 2024 .
−Removed: Related party liabilities on the condensed consolidated balance sheets consist of the following as of June 30, 2024 and December 31, 2023
+Added: The Company also had commitments to purchase and install four Esprit units, purchase two LINACs, and service the related equipment of $ 19,068,000 as of September 30, 2024 .
+Added: Related party liabilities on the condensed consolidated balance sheets consist of the following as of September 30, 2024 and December 31, 2023
+Added: September 30,
Accounts payable, asset retirement obligation and other accrued liabilities
4 unchanged sentences
The RI Companies operate three functional radiation therapy cancer centers in Rhode Island.
−Removed: The Company entered into the IPA to expand its growing retail business model in the United States and continue to diversify its cancer treatment product offerings.
+Added: The Company acquired the RI Companies to expand its growing retail business model in the United States and continue to diversify its cancer treatment product offerings.
On March 1, 2024, the Company, GenesisCare and GC Holdings entered into a First Amendment to the Investment Agreement pursuant to which the parties agreed to extend the date on which a party could terminate the IPA if the closing conditions had not been met (the “Permitted Termination Date”) from March 10, 2024 to April 30, 2024.
3 unchanged sentences
The parties completed the remaining closing conditions pursuant to the IPA and closed the RI Acquisition on May 7, 2024 ( the “Closing Date”).
−Removed: The RI acquisition has been accounted for as a business combination under ASC 805 Business Combinations (“ASC 805” ), which requires, among other things, that purchase consideration, assets acquired, liabilities assumed and non-controlling interest be measured at their fair values as of the acquisition date.
+Added: The RI acquisition has been accounted for as a business combination under ASC 805, which requires, among other things, that purchase consideration, assets acquired, liabilities assumed and non-controlling interest be measured at their fair values as of the acquisition date.
The allocation of purchase price considerations is preliminary, and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available.
3 unchanged sentences
The Company expects to finalize the valuations as soon as practicable, but no later than one year from the Closing Date.
−Removed: While the Company believes its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired, and the resulting amount of the bargain purchase.
+Added: While the Company believes its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired, and the resulting amount of the bargain purchase gain.
+Added: During the three -month period ended September 30, 2024 , the Company concluded some of the fair value estimates for accounts receivable, non-controlling interests, and unfavorable leasehold interests required adjustment.
+Added: The adjusted preliminary allocations provided below reflect these changes.
The Company recorded medical equipment, facilities and non-controlling interest at fair value as of the Closing Date.
4 unchanged sentences
The non-controlling interest was recorded at fair value based on the purchase price paid for the acquisition, after any premium or discount derived from the operating agreement with the minority owners.
−Removed: The major classes of assets and liabilities to which the Company has preliminarily allocated the fair value of the purchase price consideration were as follows:
+Added: The Company recorded a preliminary allocation of the purchase price consideration as of the Closing Date, for the three -month period ended June 30, 2024.
+Added: During the three -month period ended September 30, 2024 , the Company concluded some of the fair value estimates for accounts receivable, non-controlling interests, and unfavorable leasehold interests required adjustment.
+Added: The net effect of these changes was an increase to the bargain purchase gain of $ 263,000 , net of deferred taxes of $88,000.
+Added: The net impact to the condensed consolidated statement of operations, outside of the change in the bargain purchase gain, was not material for the three and nine -month periods ended September 30, 2024 .
+Added: The major classes of assets and liabilities to which the Company has preliminarily allocated the fair value of the purchase price consideration as of September 30, 2024 were as follows:
+Added: Remeasurement
+Added: September 30, 2024
Cash and cash equivalents
+Added: $ 3,388,000 $ - $ 3,388,000
Accounts receivable
+Added: 919,000 ( 300,000 ) 619,000
Medical equipment
−Removed: Unfavorable leasehold interest
2,403,000 - 2,403,000
+Added: 4,697,000 - 4,697,000
+Added: 1,835,000 - 1,835,000
+Added: Unfavorable leasehold interests
+Added: ( 1,227,000 ) 451,000 ( 776,000 )
Total assets acquired
+Added: 12,015,000 151,000 12,166,000
Accounts payable
+Added: ( 150,000 ) - ( 150,000 )
+Added: Lease liabilities
+Added: ( 1,835,000 ) - ( 1,835,000 )
Deferred income taxes
2 unchanged sentences
( 3,679,000 ) ( 263,000 ) ( 3,942,000 )
−Removed: Lease liabilities
−Removed: ( 1,835,000 )
Base purchase consideration
+Added: 5,125,000 ( 200,000 ) 4,925,000
Non-controlling interest
( 2,100,000 ) 200,000 ( 1,900,000 )
+Added: ( 175,000 ) - ( 175,000 )
Cash paid by the Company
+Added: $ 2,850,000 $ - $ 2,850,000
The Company recognized a bargain purchase, as defined by ASC 805, in connection with the RI Acquisition.
The Company purchased the RI Companies as part of the sale of certain of GenesisCare’s assets in its bankruptcy proceedings, resulting in a bargain purchase.
−Removed: A bargain purchase gain of $ 3,679,000 , net of deferred taxes of $ 1,226,000 is reflected in other income in the condensed consolidated statements of operations for the three and six -month periods ended June 30, 2024 .
+Added: A bargain purchase gain of $ 263,000 and $ 3,942,000 , net of deferred taxes of $ 88,000 and $ 1,314,000 , respectively is reflected in other income in the condensed consolidated statements of operations for the three and nine -month periods ended September 30, 2024 .
None of the purchase price was allocated to intangible assets because none were acquired as part of the transaction.
5 unchanged sentences
Total medical equipment and facilities acquired
−Removed: Costs related to legal, financial and due diligence services performed in connection with the RI Acquisition recorded in selling and administrative expense in the condensed consolidated statement of operations were $ 341,000 for the six -month period ended June 30, 2024 .
+Added: Costs related to legal, financial and due diligence services performed in connection with the RI Acquisition recorded in selling and administrative expense in the condensed consolidated statement of operations were $ 560,000 for the nine -month period ended September 30, 2024 .
The net impact of the RI Acquisition on the consolidated results of operations, since the date of acquisition, are as follows:
Three Months Ended
−Removed: June 30, 2024
+Added: Nine Months Ended
+Added: September 30, 2024
+Added: September 30, 2024
+Added: $ 2,635,000 $ 4,527,000
Operating income
+Added: $ 188,000 $ 800,000
Per the guidance in ASC 805, the Company determined its consolidated financial results as if the RI Acquisition occurred on January 1, 2024.
8 unchanged sentences
The supplemental proforma disclosure excludes the non-recurring impact from the bargain purchase gain generated from the RI Acquisition.
−Removed: Six Months Ended
−Removed: June 30, 2024
+Added: Nine Months Ended
+Added: September 30, 2024
Operating income
16 unchanged sentences
The medical equipment leasing segment, which we also refer to as the Company’s leasing segment, operates by fee-per-use contracts or revenue sharing contracts where the Company shares in the revenue and operating costs of the equipment.
−Removed: The Company leases ten Gamma Knife systems and one PBRT system as of June 30, 2024, where a contract exists between the hospital and the Company.
+Added: The Company leases ten Gamma Knife systems and one PBRT system as of September 30, 2024, where a contract exists between the hospital and the Company.
On May 7, 2024, the Company acquired 60% of the equity interests of the RI Companies, which operate three single-unit radiation therapy facilities in Rhode Island.
−Removed: The Company, through GKF, also owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador.
−Removed: The Company’s facilities in Rhode Island, Peru, and Ecuador are considered direct patient services, which we also refer to as the Company’s retail segment, where a contract exists between the Company’s facilities and the individual treated at the facility.
+Added: The Company, through GKF, owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador.
+Added: The Company also owns and operates a single-unit radiation therapy center in Puebla, Mexico, which began treating patients in July 2024.
+Added: The Company’s facilities in Rhode Island, Peru, Ecuador, and Mexico are considered direct patient services, which we also refer to as the Company’s retail segment, where a contract exists between the Company’s facilities and the individual treated at the facility.
Based on the guidance provided in accordance with ASC 280, the Company determined it has two reportable segments, leasing and retail.
11 unchanged sentences
If a start date for the RO APM is proposed, CMS will provide at least six months’ notice in advance of the proposed start date, and the proposed start date will be subject to public comment.
−Removed: Recent Developments
−Removed: Rhode Island Acquisition
−Removed: On November 10, 2023, the Company entered into the IPA with GenesisCare and GC Holdings, pursuant to which GenesisCare agreed to sell to the Company its entire equity interest in each of SNERCC and RWRT, (collectively, the “RI Companies”) and to assign certain payor contacts to the Company for a purchase price of $2,850,000 (such transaction, the “RI Acquisition”).
−Removed: The equity interests acquired by the Company under the IPA equates to a 60% interest in each RI Company.
−Removed: The RI Companies operate three functional radiation therapy cancer centers in Rhode Island which use linear accelerators.
−Removed: The parties completed the remaining closing conditions pursuant to the IPA and closed the RI Acquisition on May 7, 2024.
−Removed: See Note 11 - Rhode Island Acquisition to the condensed consolidated financial statements for further information.
−Removed: Joint Venture Agreement
−Removed: On June 28, 2024, ASHS-Mexico, S.A.P.I.
−Removed: signed a Joint Venture Agreement with Hospital San Javier, S.A.
−Removed: (“HSJ”) to establish Newco to treat public- and private-paying cancer patients and provide radiosurgery services in Guadalajara, Mexico.
−Removed: The Company and HSJ hold 70% and 30% ownership interests, respectively, in Newco.
−Removed: Under the agreement, the Company is responsible for upgrading HSJ’s existing Gamma Knife Perfexion system to a Gamma Knife Esprit and paying 50% of all site modification costs required to install the Esprit.
−Removed: The Company does not expect that Newco will begin treating patients until the first half of 2025.
Application of Critical Accounting Policies and Estimates
10 unchanged sentences
The Company recognizes revenues under ASC 842 and ASC 606.
−Removed: The Company had ten domestic Gamma Knife units, two international Gamma Knife units, three domestic LINAC units, and one PBRT system in operation in the United States as of June 30, 2024 and twelve domestic Gamma Knife units, two international Gamma Knife units, and one PBRT system in operation in the United States as of June 30, 2023.
+Added: The Company had ten domestic Gamma Knife units, two international Gamma Knife units, three domestic LINAC units, and one PBRT system in operation in the United States as of September 30, 2024 and twelve domestic Gamma Knife units, two international Gamma Knife units, and one PBRT system in operation in the United States as of September 30, 2023.
Five of the Company’s ten domestic Gamma Knife customers are under fee-per-use contracts, and five customers are under revenue sharing arrangements.
14 unchanged sentences
The operating costs and estimated net operating profit are recorded as other direct operating costs in the condensed consolidated statements of operations.
−Removed: For the three and six-month periods ended June 30, 2024, the Company recognized leasing revenue of approximately $3,899,000 and $8,152,000 compared to $4,812,000 and $9,041,000 for the same periods in the prior year, respectively.
−Removed: Of the ASC 842 revenue, for the three and six-month periods ended June 30, 2024, approximately $2,420,000 and $5,069,000 were for PBRT services compared to $2,545,000 and $4,859,000 for the same periods in the prior year, respectively.
−Removed: Direct patient services income ( “ retail ”) – The Company has stand-alone facilities in Lima, Peru and Guayaquil, Ecuador, where contracts exist between the Company’s facilities and the individual patients treated at the facility.
−Removed: Under ASC 606, the Company acts as the principal in these transactions and provides, at a point in time, a single performance obligation, in the form of a Gamma Knife treatment.
−Removed: Revenue related to a Gamma Knife treatment is recognized on a gross basis at the time when the patient receives treatment.
+Added: For the three and nine-month periods ended September 30, 2024, the Company recognized leasing revenue of approximately $3,312,000 and $11,464,000 compared to $3,946,000 and $12,987,000 for the same periods in the prior year, respectively.
+Added: Of the ASC 842 revenue, for the three and nine-month periods ended September 30, 2024, approximately $2,316,000 and $7,386,000 were for PBRT services compared to $2,219,000 and $7,078,000 for the same periods in the prior year, respectively.
+Added: Direct patient services income ( “ retail ”) – The Company has stand-alone facilities in Lima, Peru, Guayaquil, Ecuador, and Puebla, Mexico where contracts exist between the Company’s facilities and the individual patients treated at the facility.
+Added: Under ASC 606, the Company acts as the principal in these transactions and provides, at a point in time, a single performance obligation, in the form of a Gamma Knife or radiation therapy treatment.
+Added: Revenue related to these treatments 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.
1 unchanged sentence
GKCE’s patient population is primarily covered by a government payor and payments are paid between three and six months following issuance of an invoice.
+Added: The facility in Puebla currently has a contract with one local hospital to cover its eligible patient base and is also treating self-pay patients.
+Added: Puebla’s payment terms are typically prepaid for self-pay patients and net 30 days for the hospital patients.
The Company did not capitalize any incremental costs related to the fulfillment of its customer contracts.
5 unchanged sentences
Payment terms at these facilities are typically prepaid for self-pay patients and insurance providers are paid net 30 to 60 days.
−Removed: The Company expects to capitalize customer acquisition costs, incremental costs related to its customer contracts.
The Company did not capitalize any incremental costs related to the fulfillment of its customer contracts.
The Company also concluded the three radiation therapy facilities are part of its retail segment, see further discussion at Note 1 - Basis of Presentation to the condensed consolidated financial statements.
−Removed: Accounts receivable balances under ASC 606 at June 30, 2024 and January 1, 2024 were $4,558,000 and $1,626,000, respectively.
−Removed: Accounts receivable balances under ASC 606 at June 30, 2023 and January 1, 2023 were $980,000 and $1,118,000 , respectively.
−Removed: For the three and six-month periods ended June 30, 2024, the Company recognized retail revenues of approximately $3,157,000 and $4,120,000 compared to $756,000 and $1,452,000 for the same periods in the prior year, respectively.
+Added: Accounts receivable balances under ASC 606 at September 30, 2024 and January 1, 2024 were $5,357,000 and $1,626,000, respectively.
+Added: Accounts receivable balances under ASC 606 at September 30, 2023 and January 1, 2023 were $1,416,000 and $1,118,000 , respectively.
+Added: For the three and nine-month periods ended September 30, 2024, the Company recognized retail revenues of approximately $3,687,000 and $7,807,000 compared to $988,000 and $2,440,000 for the same periods in the prior year, respectively.
Salvage Value on Equipment
1 unchanged sentence
The Company determines salvage value based on the estimated fair value of the equipment at the end of its useful life.
−Removed: There is no active resale market of Gamma Knife or PBRT equipment, but the Company believes its salvage value estimates were a reasonable assessment of the economic value of the equipment when the contract ends.
−Removed: There is no salvage value assigned to the two international Gamma Knife units as of June 30, 2024.
−Removed: The Company has not assigned salvage value to its PBRT equipment.
+Added: There is no active resale market of Gamma Knife, LINAC or PBRT equipment, but the Company believes its salvage value estimates were a reasonable assessment of the economic value of the equipment when the contract ends.
+Added: There is no salvage value assigned to the two international Gamma Knife units as of September 30, 2024.
+Added: The Company also has not assigned salvage value to its PBRT or LINAC equipment as of September 30, 2024.
Business Combinations
3 unchanged sentences
The allocation of purchase price requires management to make significant estimates and assumptions, especially with respect to tangible assets, any intangible assets identified and non-controlling interests.
−Removed: These estimates includes, but are not limited to, a market participant ’ s expectation of future cash flows from acquired customers, acquired trade names, useful lives of acquired assets, and discount rates.
+Added: These estimates include, but are not limited to, a market participant ’ s expectation of future cash flows from acquired customers, acquired trade names, useful lives of acquired assets, and discount rates.
See Note 11 - Rhode Island Acquisition to the condensed consolidated financial statements for further discussion on acquisitions.
9 unchanged sentences
The Company is currently evaluating ASU 2023-09 to determine the impact it may have on its consolidated financial statements.
−Removed: Second Quarter 2024 Results
−Removed: Revenues increased by $1,488,000 and $1,779,000 to $7,056,000 and $12,272,000 for the three and six-month periods ended June 30, 2024 compared to $5,568,000 and $10,493,000 for the same periods in the prior year, respectively.
−Removed: Revenues from the Company’s leasing segment decreased by $913,000 and $889,000 to $3,899,000 and $8,152,000 for the three and six-month periods ended June 30, 2024 compared to $4,812,000 and $9,041,000 for the same periods in the prior year, respectively.
−Removed: The decrease in leasing revenue was driven by lower Gamma Knife and PBRT volumes.
−Removed: Revenues from the Company’s retail segment increased by $2,401,000 and $2,668,000 to $3,157,000 and $4,120,000 for the three and six-month periods ended June 30, 2024 compared to $756,000 and $1,452,000 for the same periods in the prior year, respectively.
−Removed: The increase in retail revenue was due to higher volumes at the Company’s international locations and the inclusion of revenue generated by the RI Companies following the closing of the RI Acquisition on May 7, 2024.
−Removed: Revenues generated from the Company’s PBRT system decreased by $125,000 and increased by $210,000 to $2,420,000 and $5,069,000 for the three and six-month periods ended June 30, 2024 compared to $2,545,000 and $4,859,000 for the same periods in the prior year, respectively.
−Removed: The decrease for the three-month period ended June 30, 2024, was driven by lower volumes.
−Removed: The increase for the six-month period ended June 30, 2024 was due to an increase in average reimbursement due to a shift in payor mix from Medicare to commercial or other payors, which are reimbursed at a higher rate.
−Removed: This increase was offset by lower volumes.
−Removed: The number of PBRT fractions decreased by 134 and 394 to 1,236 and 2,512 for the three and six-month periods ended June 30, 2024 compared to 1,370 and 2,906 for the same periods in the prior year, respectively.
−Removed: The decrease in PBRT volumes for the three and six-month periods ended June 30, 2024 was due to normal, cyclical fluctuations.
−Removed: Gamma Knife revenue decreased by $279,000 and $323,000 to $2,744,000 and $5,311,000 for the three and six-month periods ended June 30, 2024 compared to $3,023,000 and $5,634,000 for the same periods in the prior year, respectively.
−Removed: The decrease in Gamma Knife revenue for the three and six-month periods ended June 30, 2024 was due to a decrease in average reimbursement at the Company’s revenue sharing locations, offset by higher procedure volume at the Company’s international retail locations.
−Removed: The number of Gamma Knife procedures increased by 31 and 11 to 340 and 613 for the three and six-month periods ended June 30, 2024 compared to 309 and 602 for the same periods in the prior year, respectively.
−Removed: The increase in Gamma Knife procedures for the three and six-month periods ended June 30, 2024 was driven by the Company’s international retail locations, offset by the expiration of two leasing customer contracts in the second and third quarters of 2023.
−Removed: Excluding the two customer contracts that expired, Gamma Knife procedures increased by 65 and 75 for the three and six-month periods ended June 30, 2024.
−Removed: Gamma Knife procedures for the Company’s leasing segment decreased by 31 and 84 for the three and six-month periods ended June 30, 2024, compared to the same periods in the prior year, due to the expiration of two customer contracts.
−Removed: Gamma Knife procedures for the Company’s retail segment increased by 62 and 95 for the three and six-month periods ended June 30, 2024, compared to the same periods in the prior year, due to improved marketing and physician outreach at the Company’s international locations.
+Added: In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ASU 2024-03”) which requires entities to 1.
+Added: disclose amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities, 2.
+Added: include certain amounts that are already required to be disclosed under current Generally Accepted Accounting Principles in the same disclosures as other disaggregation requirements, 3.
+Added: disclose a qualitative description of the amounts remaining in relevant expense captions that are not necessarily disaggregated quantitatively, and 4.
+Added: disclose the total amount of selling expenses, in annual reporting periods, an entity’s definition of selling expense.
+Added: ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.
+Added: Early adoption is permitted.
+Added: The Company is currently evaluating ASU 2024-03 to determine the impact it may have on its consolidated financial statements.
+Added: Third Quarter 2024 Results
+Added: Revenues increased by $1,865,000 and $3,644,000 to $6,999,000 and $19,271,000 for the three and nine-month periods ended September 30, 2024 compared to $5,134,000 and $15,627,000 for the same periods in the prior year, respectively.
+Added: Revenues from the Company’s leasing segment decreased by $634,000 and $1,523,000 to $3,312,000 and $11,464,000 for the three and nine-month periods ended September 30, 2024 compared to $3,946,000 and $12,987,000 for the same periods in the prior year, respectively.
+Added: The decrease in leasing revenue was driven by lower Gamma Knife volumes.
+Added: Revenues from the Company’s retail segment increased by $2,699,000 and $5,367,000 to $3,687,000 and $7,807,000 for the three and nine-month periods ended September 30, 2024 compared to $988,000 and $2,440,000 for the same periods in the prior year, respectively.
+Added: The increase in retail revenue was primarily due to revenue generated by the RI Companies following the closing of the RI Acquisition on May 7, 2024.
+Added: Revenues generated from the Company’s PBRT system increased by $97,000 and $308,000 to $2,316,000 and $7,386,000 for the three and nine-month periods ended September 30, 2024 compared to $2,219,000 and $7,078,000 for the same periods in the prior year, respectively.
+Added: The increase for the three-month period ended September 30, 2024, was driven by higher volumes.
+Added: The increase for the nine-month period ended September 30, 2024 was due to an increase in average reimbursement due to a shift in payor mix from Medicare to commercial or other payors, which are reimbursed at a higher rate.
+Added: The number of PBRT fractions increased by 64 and decreased by 330 to 1,252 and 3,764 for the three and nine-month periods ended September 30, 2024 compared to 1,188 and 4,094 for the same periods in the prior year, respectively.
+Added: The decrease in PBRT volumes for the nine-month period ended September 30, 2024 was partially due to severe weather in Florida near the hospital where PBRT is provided, impacting patient scheduling.
+Added: Gamma Knife revenue decreased by $895,000 and $1,218,000 to $1,821,000 and $7,131,000 for the three and nine-month periods ended September 30, 2024 compared to $2,716,000 and $8,349,000 for the same periods in the prior year, respectively.
+Added: The decrease in Gamma Knife revenue for the three and nine-month periods ended September 30, 2024 was due to a decrease in procedure volume from both the retail and leasing segments .
+Added: The number of Gamma Knife procedures decreased by 98 and 87 to 218 and 831 for the three and nine-month periods ended September 30, 2024 compared to 316 and 918 for the same periods in the prior year, respectively.
+Added: The decrease in Gamma Knife procedures for the three-month period ended September 30, 2024 was driven by the leasing segment.
+Added: The decrease in Gamma Knife procedures for the nine-month period was also due to the leasing segment and due to two customer contracts that expired during the second and third quarters of 2023.
+Added: The decrease in Gamma Knife procedure volume for the nine-month period ended September 30, 2024 was offset by increases in procedure volume from the Company’s retail segment .
+Added: Gamma Knife procedures for the Company’s leasing segment decreased by 82 and 166 for the three and nine-month periods ended September 30, 2024, compared to the same periods in the prior year.
+Added: The decrease in Gamma Knife procedures for the Company’s leasing segment for the three-month period ended September 30, 2024 was driven by downtime for an equipment upgrade at one customer location, one contract expiration that occurred in the third quarter of 2023 and staffing shortages at two of the customer locations.
+Added: The decrease in Gamma Knife for the Company’s leasing segment procedures for the nine-month period ended September 30, 2024, was primarily due to two customer contracts that expired during the second and third quarters of 2023.
+Added: The nine-month period ended September 30, 2024, was also impacted by downtime for equipment upgrades at two customer locations and staffing shortages at two of the customer locations.
+Added: Gamma Knife procedures for the Company’s retail segment decreased by 16 and increased by 79 for the three and nine-month periods ended September 30, 2024, compared to the same periods in the prior year, due to improved marketing and physician outreach at the Company’s international locations.
The Company also performed a Cobalt-60 reload and upgrade of the equipment at it s site in Ecuador in the fourth quarter of 2023.
The replacement of the Cobalt-60 provides for faster treatment times.
−Removed: The Company acquired the RI Companies on May 7, 2024 and included the financial results from their operations from May 7, 2024, the closing date of the transaction, through June 30, 2024.
−Removed: Radiation therapy revenues generated from the three stand-alone facilities acquired through the RI Acquisition were $1,892,000 for the three and six-month periods ended June 30, 2024.
−Removed: Radiation therapy procedures were 1,464 for the three and six-month periods ended June 30, 2024.
−Removed: Total costs of revenue increased by $1,538,000 and $1,594,000 to $4,588,000 and $7,661,000 for the three and six-month periods ended June 30, 2024 compared to $3,050,000 and $6,067,000 for the same periods in the prior year, respectively.
−Removed: Maintenance and supplies and other direct operating costs, related party, decreased by $85,000 and $183,000 to $715,000 and $1,398,000 for the three and six-month periods ended June 30, 2024 compared to $800,000 and $1,581,000 for the same periods in the prior year, respectively.
−Removed: The decrease in maintenance and supplies and other direct operating costs, related party, was primarily due to the expiration of two service contracts that expired in the second and third quarters of 2023, with the related customer contracts.
−Removed: Depreciation and amortization increased by $228,000 and $168,000 to $1,455,000 and $2,752,000 for the three and six-month periods ended June 30, 2024 compared to $1,227,000 and $2,584,000 for the same periods in the prior year, respectively.
−Removed: The increase in depreciation and amortization for the three and six-month periods ended June 30, 2024 was due higher depreciation for upgraded equipment at three of the Company’s operating locations and depreciation incurred for the equipment acquired in the RI Acquisition.
+Added: The Company acquired the RI Companies on May 7, 2024 and included the financial results from their operations from May 7, 2024, the Closing Date of the transaction, through September 30, 2024.
+Added: The Company’s stand-alone radiation therapy facility in Puebla, Mexico also began treating patients in July 2024.
+Added: Radiation therapy revenues generated from the three stand-alone facilities acquired through the RI Acquisition and the radiation therapy facility in Puebla were $2,862,000 and $4,754,000 for the three and nine-month periods ended September 30, 2024, compared to $0 for the same periods in the prior year, respectively.
+Added: Radiation therapy procedures for the three stand-alone facilities acquired through the RI Acquisition and the radiation therapy facility in Puebla were 5,186 and 7,785 for the three and nine-month periods ended September 30, 2024.
+Added: Total costs of revenue increased by $2,597,000 and $4,191,000 to $5,629,000 and $13,290,000 for the three and nine-month periods ended September 30, 2024 compared to $3,032,000 and $9,099,000 for the same periods in the prior year, respectively.
+Added: Maintenance and supplies and other direct operating costs, related party, increased by $74,000 and decreased by $109,000 to $783,000 and $2,181,000 for the three and nine-month periods ended September 30, 2024 compared to $709,000 and $2,290,000 for the same periods in the prior year, respectively.
+Added: The increase in maintenance and supplies and other direct operating costs, related party, for the three-month period ended September 30, 2024, was driven by maintenance contracts for the equipment in Rhode Island.
+Added: The decrease in maintenance and supplies and other direct operating costs, related party, for the nine-month period ended September 30, 2024 was due to the expiration of two service contracts that completed in the second and third quarters of 2023, with the related customer contracts.
+Added: Since the fourth quarter of 2023, the Company has upgraded four of its existing Gamma Knife units to the Esprit.
+Added: The new Esprit units are under warranty for the first year of service, also driving lower maintenance expense.
+Added: Depreciation and amortization increased by $438,000 and $606,000 to $1,666,000 and $4,418,000 for the three and nine-month periods ended September 30, 2024 compared to $1,228,000 and $3,812,000 for the same periods in the prior year, respectively.
+Added: The increase in depreciation and amortization for the three and nine-month periods ended September 30, 2024 was due higher depreciation for upgraded equipment at four of the Company’s Gamma Knife locations, depreciation incurred for the equipment acquired in the RI Acquisition, and the Company’s new facility in Puebla, Mexico.
These increases were offset by depreciation from the Company’s contract that expired in the third quarter of 2023.
−Removed: Other direct operating costs increased by $1,395,000 and $1,609,000 to $2,418,000 and $3,511,000 for the three and six-month periods ended June 30, 2024 compared to $1,023,000 and $1,902,000 for the same periods in the prior year, respectively.
−Removed: The increase in other direct operating costs for the three and six-month periods ended June 30, 2024 was due to operating costs from the Company’s recently acquired facilities in Rhode Island and higher volumes, and therefore higher operating costs from the Company’s existing retail locations.
−Removed: Selling and administrative expense decreased by $92,000 and increased by $248,000 to $1,896,000 and $3,775,000 for the three and six-month periods ended June 30, 2024 compared to $1,988,000 and $3,527,000 for the same periods in the prior year, respectively.
−Removed: The decrease for the three-month period ended June 30, 2024 was primarily due to lower rent expense driven by the expiration of the Company’s corporate office space lease, offset by related sublease income.
−Removed: The increase in selling and administrative expense for the six-month period ended June 30, 2024 was due to expenses associated with new business opportunities, including the Company’s RI Acquisition, offset by lower rent expense.
−Removed: Interest expense increased by $108,000 and $186,000 to $385,000 and $734,000 for the three and six-month periods ended June 30, 2024 compared to $277,000 and $548,000 for the same periods in the prior year, respectively.
+Added: The equipment related to the second customer contract that expired, was fully depreciated prior to 2023.
+Added: Other direct operating costs increased by $2,085,000 and $3,694,000 to $3,180,000 and $6,691,000 for the three and nine-month periods ended September 30, 2024 compared to $1,095,000 and $2,997,000 for the same periods in the prior year, respectively.
+Added: The increase in other direct operating costs for the three and nine-month periods ended September 30, 2024 was due to operating costs from the Company’s recently acquired facilities in Rhode Island and the Company’s new facility in Puebla, Mexico, which are part of the Company’s retail segment and have higher operating costs compared to facilities in the Company’s leasing segment.
+Added: Selling and administrative expense increased by $188,000 and $436,000 to $1,923,000 and $5,698,000 for the three and nine-month periods ended September 30, 2024 compared to $1,735,000 and $5,262,000 for the same periods in the prior year, respectively.
+Added: The increase for the three-month period ended September 30, 2024 was due to higher personnel related costs and legal fees, partially attributable to the Company’s pursuit of new business opportunities, including the RI Acquisition.
+Added: The increase in selling and administrative expense for the nine-month period ended September 30, 2024 was due to higher personnel related and other expense, partially attributable to the Company’s pursuit of new business opportunities, including the RI Acquisition, offset by lower rent expense.
+Added: Interest expense increased by $59,000 and $245,000 to $336,000 and $1,070,000 for the three and nine-month periods ended September 30, 2024 compared to $277,000 and $825,000 for the same periods in the prior year, respectively.
The debt under the Credit Agreement carries a floating interest rate of SOFR plus 3%.
−Removed: The increase for the six-month period ended June 30, 2024 was due to an increase in SOFR and borrowings, including the Supplemental Term Loan received in January 2024, compared to the same period of the prior year.
+Added: The increase for the three and nine-month periods ended September 30, 2024 was due to an increase in SOFR and borrowings, including the Supplemental Term Loan received in January 2024, compared to the same periods of the prior year.
The Company recorded a $3,942,000 net bargain purchase gain related to the RI Acquisition that closed on May 7, 2024.
The Company acquired 60% of the equity interests of the RI Companies, which operate three radiation therapy facilities, for $2,850,000.
−Removed: The assets acquired exceeded the total purchase price by the bargain purchase amount and the Company recorded this difference as a gain for the three and six-month periods ended June 30, 2024 .
−Removed: Interest and other income, net, decreased by $54,000 and $18,000 to $59,000 and $165,000 for the three and six-month periods ended June 30, 2024 compared to $113,000 and $183,000 for the same periods in the prior year, respectively.
−Removed: The decrease for the three and six-month periods ended June 30, 2024 was due to decreases in the interest received on the Company’s cash, due to lower average cash balances, compared to the same periods in the prior year, respectively.
−Removed: Income tax expense increased by $4,000 and $108,000 to an income tax benefit of $31,000 and $75,000 for the three and six-month periods ended June 30, 2024 compared to an income tax benefit of $35,000 and income tax expense of $33,000 for the same periods in the prior year, respectively.
−Removed: The increase in income tax expense for the three and six-month periods ended June 30, 2024 was primarily due to higher earnings at the Company’s existing operations.
−Removed: Net (income) loss attributable to non-controlling interests increased by $232,000 and $266,000 to $166,000 and $112,000 for the three and six-month periods ended June 30, 2024 compared to a loss of $66,000 and $154,000 for the same periods in the prior year, respectively.
+Added: The assets acquired exceeded the total purchase price by the bargain purchase amount and the Company recorded this difference as a gain for the nine-month period ended September 30, 2024.
+Added: During the three-month period ended September 30, 2024, the Company made adjustments to the initial provisional accounting for the RI Acquisition.
+Added: The net impact of the adjustments resulted in an increase to the net bargain purchase gain of $263,000.
+Added: Interest and other income, net, decreased by $88,000 and $106,000 to $47,000 and $212,000 for the three and nine-month periods ended September 30, 2024 compared to $135,000 and $318,000 for the same periods in the prior year, respectively.
+Added: The decrease for the three and nine-month periods ended September 30, 2024 was due to decreases in the interest received on the Company’s cash, due to lower average cash balances, compared to the same periods in the prior year, respectively.
+Added: Income tax expense decreased by $229,000 and $337,000 to an income tax benefit of $169,000 and $244,000 for the three and nine-month periods ended September 30, 2024 compared to income tax expense of $60,000 and $93,000 for the same periods in the prior year, respectively.
+Added: The decrease in income tax expense for the three and nine-month periods ended September 30, 2024 was primarily due to losses incurred by the Company’s leasing segment, driven by lower Gamma Knife volume.
+Added: Net (income) loss attributable to non-controlling interests decreased by $250,000 and increased by $16,000 to a loss of $203,000 and $91,000 for the three and nine-month periods ended September 30, 2024 compared to income of $47,000 and a loss of $107,000 for the same periods in the prior year, respectively.
Net income or loss attributable to non-controlling interests represents net income or loss earned by the 40% non-controlling interest in the Rhode Island facilities, the 19% non-controlling interest in GKF, and net income or loss of the non-controlling interests in various subsidiaries controlled by GKF.
−Removed: The decrease or increase in net income or loss attributable to non-controlling interests reflects the relative profitability of the three Rhode Island locations and GKF.
−Removed: Net income attributable to American Shared Hospital Services increased by $3,713,000 and $3,644,000 to $3,602,000, or $0.55 per diluted share and $3,721,000 or $0.57 for the three and six-month periods ended June 30, 2024 compared to a net loss of $111,000, or $0.02 per diluted share and net income of $77,000 or $0.01 per diluted share for the same periods in the prior year, respectively.
−Removed: Net income increased for the three and six-month periods ended June 30, 2024 primarily due to the bargain purchase gain generated from the RI Acquisition and net income earned from the Rhode Island facilities acquired, partially offset by increased total costs of revenue.
+Added: The decrease or increase in net income or loss attributable to non-controlling interests reflects the relative profitability of the three Rhode Island facilities and GKF.
+Added: Net (loss) income attributable to American Shared Hospital Services decreased by $325,000 and increased by $3,319,000 to a loss of $207,000, or $0.03 per diluted share and income of $3,514,000 or $0.54 per diluted share for the three and nine-month periods ended September 30, 2024 compared to net income of $118,000, or $0.02 per diluted share and net income of $195,000 or $0.03 per diluted share for the same periods in the prior year, respectively.
+Added: The Company incurred a net loss for the three-month period ended September 30, 2024, primarily due to losses incurred by the leasing segment, driven by lower Gamma Knife volume, partially offset by net income from the retail segment.
+Added: Net income increased for the nine-month period ended September 30, 2024 due to the bargain purchase gain generated from the RI Acquisition and net income earned from the Rhode Island facilities acquired, partially offset by increased total costs of revenue.
Liquidity and Capital Resources
1 unchanged sentence
In general, the Company’s principal sources of liquidity are cash and cash equivalents on hand and the $7,000,000 Revolving Line.
−Removed: As of June 30, 2024, the Company borrowed $3,950,000 on its Revolving Line, which was repaid in July 2024.
−Removed: The Company had cash, cash equivalents and restricted cash of $14,486,000 at June 30, 2024 compared to $13,808,000 at December 31, 2023.
−Removed: The Company’s cash position increased by $678,000 during the first six months of 2024 due to net advances on the Revolving Line of $1,450,000, net cash received from the RI Acquisition of $363,000, and long-term debt financing of $2,700,000.
−Removed: These increases were offset by cash use by operating activities of $579,000, payment for the purchase of property and equipment of $2,399,000, payments on long-term debt of $703,000, debt issuance costs of $97,000 and distributions to non-controlling interests of $95,000.
+Added: As of September 30, 2024, the Company borrowed $4,500,000 on its Revolving Line.
+Added: The Company had cash, cash equivalents and restricted cash of $14,077,000 at September 30, 2024 compared to $13,808,000 at December 31, 2023.
+Added: The Company’s cash position increased by $269,000 during the first nine months of 2024 due to net advances on the Revolving Line of $2,000,000, net cash received from the RI Acquisition of $538,000, long-term debt financing of $2,700,000, and capital contributions of $38,000.
+Added: These increases were offset by cash used by operating activities of $107,000, payment for the purchase of property and equipment of $3,278,000, payments on long-term debt of $1,430,000, debt issuance costs of $97,000 and distributions to non-controlling interests of $95,000.
The Company’s expected primary cash needs on both a short and long-term basis are for capital expenditures, business expansion, working capital, and other general corporate purposes.
1 unchanged sentence
Working Capital
−Removed: The Company had working capital at June 30, 2024 of $12,303,000 compared to $9,677,000 at December 31, 2023.
−Removed: The $2,626,000 increase in working capital was primarily due to increases in accounts receivable offset by increases in advances on the Revolving Line and an increase in current portion of long-term debt.
+Added: The Company had working capital at September 30, 2024 of $8,159,000 compared to $9,677,000 at December 31, 2023.
+Added: The $1,518,000 decrease in working capital was primarily due to increases in accounts payable, other and related party accrued liabilities, advances on the Revolving Line, and an increase in current portion of long-term debt offset by increases in accounts receivable.
The Company believes that its cash on hand, cash flow from operations, and other cash resources are adequate to meet its scheduled debt obligations and working capital requirements during the next 12 months.
9 unchanged sentences
and (3) a $7,000,000 revolving line of credit (the “Revolving Line”), which is available for the Company’s future projects and general corporate purposes.
−Removed: The Company borrowed $3,950,000 under the Revolving Line as of June 30, 2024, which the Company repaid in July 2024.
+Added: The Company borrowed $4,500,000 under the Revolving Line as of September 30, 2024.
The Credit Agreement is 48% amortized over a 58-month period with a balloon payment upon maturity and is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries.
11 unchanged sentences
Pursuant to the First Amendment, advances under the Credit Agreement bear interest at a floating rate per annum equal to SOFR plus 3.00%, subject to a SOFR floor of 0.00%.
−Removed: As of June 30, 2024, the Company was subject to customary covenants under the Credit Agreement which included, among other covenants and obligations, a minimum fixed charge coverage ratio of 1.25 to 1.0 and a total 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), along with an annual clean-up covenant that requires the Company to cause the outstanding principal balance under the Revolving Loan to be less than $3,500,000 for at least 30 consecutive days during each calendar year (the “Credit Agreement Covenants”).
−Removed: The Company was in compliance with the Credit Agreement Covenants as of June 30, 2024.
+Added: As of September 30, 2024, the Company was subject to customary covenants under the Credit Agreement which included, among other covenants and obligations, a minimum fixed charge coverage ratio of 1.25 to 1.0 and a total 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), along with an annual clean-up covenant that requires the Company to cause the outstanding principal balance under the Revolving Loan to be less than $3,500,000 for at least 30 consecutive days during each calendar year (the “Credit Agreement Covenants”).
+Added: The Company was in compliance with the Credit Agreement Covenants as of September 30, 2024.
The Company’s acquisition of GKCE and the Gamma Knife Esprit in Ecuador is financed with DFC.
7 unchanged sentences
On March 28, 2024, HoldCo received a waiver and amendment from DFC for certain covenants as of December 31, 2023 and through December 31, 2024 and amended other covenants and definitions permanently.
−Removed: HoldCo was in compliance with all debt covenants pursuant to the DFC Loan as amended and waived at June 30, 2024.
−Removed: The Company’s combined long-term debt, net of deferred issuance costs, totaled $15,083,000 as of June 30, 2024.
+Added: HoldCo was in compliance with all debt covenants pursuant to the DFC Loan as amended and waived at September 30, 2024.
+Added: The Company’s combined long-term debt, net of deferred issuance costs, totaled $14,375,000 as of September 30, 2024.
See Note 3 - Long Term Debt to the condensed consolidated financial statements for additional information.
−Removed: As of June 30, 2024, the Company had commitments to purchase and install five Leksell Gamma Knife Esprit Systems (“Esprit”), one Gamma Plan workstation, and three Linear Accelerator (“LINAC”) systems.
+Added: As of September 30, 2024, the Company had commitments to purchase and install four Leksell Gamma Knife Esprit Systems (“Esprit”), one Gamma Plan workstation, and two Linear Accelerator (“LINAC”) systems.
One LINAC and one Esprit will be placed at future customer sites.
−Removed: The remaining Esprit upgrades and LINACs are scheduled to occur in the later half of 2024 and 2025 at existing customer sites.
−Removed: Total Gamma Knife and LINAC commitments as of June 30, 2024 were $15,651,000.
−Removed: There are no deposits on the condensed consolidated balance sheets related to these commitments as of June 30, 2024 .
+Added: The remaining Esprit upgrades and LINACs are scheduled to occur during 2025 or later at existing customer sites.
+Added: Total Gamma Knife and LINAC commitments as of September 30, 2024 were $13,383,000.
+Added: There are no deposits on the condensed consolidated balance sheets related to these commitments as of September 30, 2024 .
It is the Company’s intent to finance substantially all of these commitments.
1 unchanged sentence
However, the Company currently has cash on hand of $14,077,000 and its Revolving Line of $7,000,000 and is actively engaged with financing resources to fund these projects.
−Removed: The Company borrowed $3,950,000 on the Revolving Line as of June 30, 2024, which was paid off in July 2024.
+Added: The Company borrowed $4,500,000 on the Revolving Line as of September 30, 2024.
On September 4, 2022, the Company entered into a Maintenance and Support Agreement with Mevion, which provides for maintenance and support of the Company’s PBRT unit at Orlando Health from September 2022 through April 2026.
The agreement requires the Company to make an annual prepayment of $1,939,000 for the current contractual period (one year).
−Removed: This payment portion was recorded as a prepaid contract and is being amortized over the one-year service period.
−Removed: As of June 30, 2024, the Company had commitments to service and maintain its Gamma Knife and PBRT equipment.
+Added: As of September 30, 2024, half of this prepayment was recorded as a prepaid contract and is being amortized over the one-year service period.
+Added: As of September 30, 2024, the Company had commitments to service and maintain its Gamma Knife, LINAC and PBRT equipment.
The service commitments are carried out via contracts with Mevion, Elekta and Mobius Imaging, LLC.
The Company’s commitment to purchase one LINAC system also includes a 5-year agreement to service the equipment, respectively.
−Removed: Total service commitments as of June 30, 2024 were $14,375,000.
+Added: Total service commitments as of September 30, 2024 were $13,712,000.
The Gamma Knife and certain other service contracts are paid monthly, as service is performed.
5 unchanged sentences
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.
−Removed: The following table summarizes related party activity for the three and six-month periods ended June 30, 2024 and 2023:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: The following table summarizes related party activity for the three and nine-month periods ended September 30, 2024 and 2023:
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Equipment purchases and de-install costs
1 unchanged sentence
Total related party transactions
−Removed: The Company also had commitments to purchase and install five Esprit units, purchase two LINACs and service the related equipment of $21,479,000 as of June 30, 2024.
−Removed: Related party liabilities on the condensed consolidated balance sheets consist of the following as of June 30, 2024 and December 31, 2023
+Added: The Company also had commitments to purchase and install four Esprit units, purchase two LINACs and service the related equipment of $19,068,000 as of September 30, 2024.
+Added: Related party liabilities on the condensed consolidated balance sheets consist of the following as of September 30, 2024 and December 31, 2023
+Added: September 30,
Accounts payable, asset retirement obligation and other accrued liabilities
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.