What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 372 added, 363 removed, 579 unchanged (56% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2024

March 31, 2025

December 31, 2024

4 unchanged sentences

250,000 250,000

Accounts receivable, net of allowance for credit losses of $ 100,000 at September 30, 2024 and at December 31, 2023

Accounts receivable, net of allowance for credit losses of $ 280,000 and $ 265,000 at March 31, 2025 and at December 31, 2024

8,737,000 11,610,000

Tax receivables

1,009,000 550,000

Other receivables

26 unchanged sentences

2,365,000 1,320,000

Asset retirement obligations, related party (includes $ 156,000 and $ 250,000 non-related party at September 30, 2024 and December 31, 2023)

Asset retirement obligations, related party (includes $ 250,000 and $ 250,000 non-related party at March 31, 2025 and December 31, 2024)

1,200,000 1,200,000

Income taxes payable

Current portion of lease liabilities

1 unchanged sentence

Line of credit

4,500,000 2,500,000

Current portion of long-term debt, net

3 unchanged sentences

Long-term lease liabilities, less current portion

3,667,000 1,500,000

Long-term debt, net, less current portion

7 unchanged sentences

Common stock, no par value ( 10,000,000 authorized shares;

Issued and outstanding shares - 6,390,000 at September 30, 2024 and 6,300,000 at December 31, 2023)

Issued and outstanding shares - 6,450,000 at March 31, 2025 and 6,420,000 at December 31, 2024)

10,763,000 10,763,000

14 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Rental revenue from medical equipment leasing

2 unchanged sentences

3,121,000 963,000

Equipment sales, net

6,112,000 5,216,000

6,999,000 5,134,000 19,271,000 15,627,000

Costs of revenue:

13 unchanged sentences

433,000 349,000

Loss on write down of impaired assets and associated removal costs, net

- - 188,000 578,000

Operating (loss) income

( 889,000 ) 90,000 ( 975,000 ) ( 137,000 )

Bargain purchase gain RI Acquisition, net of deferred income taxes of $ 88,000 and $ 1,314,000

Operating loss

( 1,299,000 ) ( 85,000 )

3 unchanged sentences

( 1,235,000 ) 21,000

Income tax (benefit) expense

Income tax benefit

( 323,000 ) ( 44,000 )

1 unchanged sentence

( 912,000 ) 65,000

net loss (income) attributable to non-controlling interests

net loss attributable to non-controlling interests

287,000 54,000

13 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE THREE AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2024 AND 2023

Common Shares

Additional Paid-in Capital

Retained Earnings

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2025 AND 2024

Common Shares Common Stock Additional Paid-in Capital Retained Earnings

Sub-Total ASHS

1 unchanged sentence

Balances at January 1, 2024

Stock-based compensation expense

Net income (loss)

Balances at March 31, 2023

Stock-based compensation expense

Vested restricted stock awards

Balances at June 30, 2023

Stock-based compensation expense

Vested restricted stock awards

Balances at September 30, 2023

Balances at January 1, 2024

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

- - 98,000 - 98,000 - 98,000

Vested restricted stock awards

Capital contribution non-controlling interests

30,000 - - - - - -

Capital contributions from non-controlling interests

- - - - - 38,000 38,000

Cash distributions to non-controlling interests

- - - - - ( 95,000 ) ( 95,000 )

Net income (loss)

- - - 119,000 119,000 ( 54,000 ) 65,000

Balances at March 31, 2024

Stock-based compensation expense

Vested restricted stock awards

RI Acquisition non-controlling interests

Balances at June 30, 2024

6,330,000 $ 10,763,000 $ 8,330,000 $ 3,748,000 $ 22,841,000 $ 3,544,000 $ 26,385,000

Balances at January 1, 2025

6,420,000 $ 10,763,000 $ 8,605,000 $ 5,815,000 $ 25,183,000 $ 4,844,000 $ 30,027,000

Stock-based compensation expense

- - 89,000 - 89,000 - 89,000

Vested restricted stock awards

RI Acquisition non-controlling interests

Balances at September 30, 2024

30,000 - - - - - -

Capital contributions from non-controlling interests

- - - - - 8,000 8,000

- - - ( 625,000 ) ( 625,000 ) ( 287,000 ) ( 912,000 )

Balances at March 31, 2025

6,450,000 $ 10,763,000 $ 8,694,000 $ 5,190,000 $ 24,647,000 $ 4,565,000 $ 29,212,000

See accompanying notes

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

Operating activities:

Adjustments to reconcile net income to net cash from operating activities:

Net (loss) income

$ ( 912,000 ) $ 65,000

Adjustments to reconcile net (loss) income to net cash from operating activities:

Depreciation, amortization, and other

Loss on write down of impaired assets and associated removal costs, net

1,449,000 1,334,000

Accretion of debt issuance costs

Bargain purchase gain RI Acquisition, net of deferred income taxes

24,000 38,000

Non cash lease expense

157,000 21,000

Accretion of unfavorable lease position

1 unchanged sentence

Stock-based compensation expense

89,000 98,000

Changes in operating assets and liabilities:

2,127,000 ( 2,138,000 )

Prepaid expenses and other assets

Asset retirement obligations, related party

576,000 412,000

Related party liabilities

Accounts payable, accrued liabilities, and deferred revenue

59,000 ( 1,898,000 )

Accounts payable and accrued liabilities

( 883,000 ) 268,000

Income taxes payable

Lease liabilities

Net cash (used in) provided by operating activities

( 157,000 ) ( 21,000 )

Net cash provided by (used in) operating activities

2,503,000 ( 1,865,000 )

Investing activities:

Cash received in excess of cash paid for the RI Acquisition

Payment for purchases of property and equipment

( 4,015,000 ) ( 1,183,000 )

Net cash used in investing activities

( 4,015,000 ) ( 1,183,000 )

Financing activities:

Principal payments on long-term debt

( 280,000 ) ( 164,000 )

Payments on line of credit

- ( 2,500,000 )

Advances on line of credit

2,000,000 2,400,000

Long-term debt financing

Principal payments on short-term financing

Capital contribution non-controlling interests

1 unchanged sentence

Debt issuance costs long-term debt

Net cash provided by (used in) financing activities

Net cash provided by financing activities

1,728,000 2,282,000

Net change in cash, cash equivalents, and restricted cash

216,000 ( 766,000 )

Cash, cash equivalents, and restricted cash at beginning of period

11,275,000 13,808,000

Cash, cash equivalents, and restricted cash at end of period

$ 11,491,000 $ 13,042,000

Supplemental cash flow disclosure

Cash paid during the period for:

$ 409,000 $ 311,000

$ 129,000 $ 17,000

Schedule of noncash investing and financing activities

Equipment included in accounts payable and accrued liabilities

Non-controlling interest RI Acquisition

$ 2,160,000 $ 1,174,000

Right of use assets and lease liabilities

$ 175,000 $ -

Increase to right of use assets and lease liabilities due to a lease modification

$ 2,071,000 $ -

Detail of cash, cash equivalents and restricted cash at end of period

Cash and cash equivalents

$ 11,241,000 $ 12,792,000

Restricted cash

250,000 250,000

Cash, cash equivalents, and restricted cash at end of period

$ 11,491,000 $ 13,042,000

See accompanying notes

2 unchanged sentences

Basis of Presentation

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 .

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.

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 March 31, 2025 , the results of its operations for the three -month periods ended March 31, 2025 and 2024 , and the cash flows for the three -month periods ended March 31, 2025 and 2024 .

The results of operations for the three -month periods ended March 31, 2025 are not necessarily indicative of results on an annualized basis.

Consolidated balance sheet amounts as of December 31, 2024 have been derived from the audited consolidated financial statements.

2 unchanged sentences

ASHS wholly owns the subsidiaries American Shared Radiosurgery Services (“ASRS”), PBRT Orlando, LLC (“Orlando”), ASHS-Mexico, S.A.

(“ASHS-Mexico”), ASHS-Rhode Island Proton Beam Radiation Therapy, LLC, ASHS-Bristol Radiation Therapy, LLC, OR21, Inc., and MedLeader.com, Inc.

(“ASHS-Mexico”), ASHS-Rhode Island Proton Beam Radiation Therapy, LLC (“RI-PBRT”), ASHS-Bristol Radiation Therapy, LLC (“Bristol”), OR21, Inc., and MedLeader.com, Inc.

(“MedLeader”);

ASHS is the majority owner of Southern New England Regional Cancer Center (“SNERCC”), Roger Williams Radiation Therapy, LLC (“RWRT”) and Long Beach Equipment, LLC (“LBE”);

ASHS is the majority owner of Southern New England Regional Cancer Center, LLC (“SNERCC”), Roger Williams Radiation Therapy, LLC (“RWRT”) and Long Beach Equipment, LLC (“LBE”);

ASRS is the majority-owner of GK Financing, LLC (“GKF”), which wholly owns the subsidiaries Instituto de Gamma Knife del Pacifico S.A.C.

5 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.

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.

As of March 31, 2025 , GKF provides Gamma Knife units to eight medical centers in the United States in the states of Florida, Illinois, Indiana, Mississippi, New Mexico, New York, Oregon, and Texas.

GKF also owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador.

The Company through its wholly-owned subsidiary, Orlando, provided proton beam radiation therapy (“PBRT”) and related equipment to a customer in the United States.

The Company through its wholly-owned subsidiary, Orlando, provided proton beam radiation therapy (“PBRT”) and related equipment to a medical center in Florida.

On November 10, 2023, the Company entered into an Investment Purchase Agreement (the “IPA”) with GenesisCare USA, Inc.

(the “GenesisCare”) and GenesisCare USA Holdings, Inc.

(“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”).

The equity interests acquired by the Company under the IPA equates to a 60 % interest in each RI Target Company.

(“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 RI Companies for a purchase price of $ 2,850,000 (such transaction, the “RI Acquisition”).

The equity interests acquired by the Company under the IPA equate to a 60 % interest in each RI Target Company.

The RI Companies operate three functional radiation therapy cancer centers in Rhode Island.

The parties completed the remaining closing conditions pursuant to the IPA and closed the RI Acquisition on May 7, 2024.

Accordingly, activity from May 7, 2024 forward is included in the condensed consolidated financial statements.

The parties closed the RI Acquisition on May 7, 2024.

See Note 11 - Rhode Island Acquisition to the condensed consolidated financial statements for further information.

On June 28, 2024, ASHS-Mexico, S.A.P.I.

signed a Joint Venture Agreement with Hospital San Javier, S.A.

(“HSJ”) to establish Newco to treat public- and private-paying cancer patients and provide radiosurgery services in Guadalajara, Mexico.

The Company and HSJ will hold 70 % and 30 % ownership interests, respectively, in Newco.

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.

The Company does not expect that Newco will begin treating patients until the first half of 2025.

On April 27, 2022, the Company signed a Joint Venture Agreement with the principal owners of Guadalupe Amor y Bien S.A.

1 unchanged sentence

The Company and Guadalupe hold 85 % and 15 % ownership interests, respectively, in Puebla.

Under the agreement, the Company is responsible for providing a linear accelerator upgrade to an Elekta Versa HD, and Guadalupe will be accountable for all site modification costs.

Under the agreement, the Company was responsible for providing a linear accelerator upgrade to an Elekta Versa HD, and Guadalupe was accountable for all site modification costs.

The Company formed ASHS-Mexico on October 3, 2022 to establish Puebla.

Puebla was formed on December 15, 2022 and began treating patients in July 2024.

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;

On June 28, 2024, ASHS-Mexico, signed a Joint Venture Agreement with Hospital San Javier, S.A.

(“HSJ”) to establish Newco to treat public- and private-paying cancer patients and provide radiosurgery services in Guadalajara, Mexico.

The Company and HSJ will hold 70 % and 30 % ownership interests, respectively, in Newco.

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.

The Company does not expect that Newco will begin treating patients until the fourth quarter of 2025.

February 6, 2025, the Company’s subsidiary, Bristol, closed on the acquisition of certain parcels of real property located on Gooding Avenue, Bristol, Rhode Island.

The purchase price for the property was

$ 1,185,000 .

The transaction was effected pursuant to the terms of a Real Estate Purchase and Sale Agreement dated

November 21, 2024 by and between the Company and the sellers identified therein, with the Company having assigned its rights under that agreement to Bristol effective

February 5, 2025.

At closing the parties entered into other agreements related to the transaction, including with respect to the grant of certain easements and restrictive covenants imposed on the sellers.

The Company formed the subsidiaries Puebla, GKPeru, ASHS-Mexico, and acquired GKCE for the purposes of expanding its business internationally;

Orlando and LBE to provide PBRT equipment and services in Orlando, Florida and Long Beach, California, respectively;

1 unchanged sentence

LBE is not expected to generate revenue within the next two years.

The Company continues to develop its design and business model for The Operating Room for the 21st Century SM through its 50 %-owned subsidiary OR21, LLC ( “OR21 LLC”).

The Company owns 50 % of OR21, LLC ( “OR21” ).

The remaining 50 % is owned by an architectural design company.

OR21 LLC is not expected to generate significant revenue for at least the next two years.

OR21 is not operational at this time.

MedLeader was formed to provide continuing medical education online and through videos for doctors, nurses, and other healthcare workers.

This subsidiary is not operational at this time.

MedLeader is not operational at this time.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Accounting pronouncements issued and not yet adopted - In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023 - 07 Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures (“ASU 2023 - 07” ) which enhances the disclosure requirements for segment reporting, primarily disclosures around significant segment expenses.

The key provisions of the amendments require disclosure of significant segment expense reviewed by the Chief Operating Decision Maker (the “CODM”), require disclosure of an “other” segment category, require disclosure of segment profit or loss and assets for interim periods, clarify and require disclosure of other measurements used by the CODM in assessing segment performance and allocating resources, and require disclosure of the CODM’s title and position and an explanation of how the CODM assesses segment performance.

ASU 2023 - 07 is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company is currently evaluating ASU 2023 - 07 to determine the impact it may have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023 - 09 Income Taxes (Topic 740 ) Improvements to Income Tax Disclosures (“ASU 2023 - 09” ) which requires entities, on an annual basis, to disclose:

Accounting pronouncements issued and not yet adopted - In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023 - 09 Income Taxes (Topic 740 ) Improvements to Income Tax Disclosures (“ASU 2023 - 09” ) which requires entities, on an annual basis, to disclose:

specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, the amount of income taxes paid, net of refunds, disaggregated by jurisdiction, income or loss from continuing operations before income tax, income tax expense from continuing operations disaggregated between foreign and domestic, and income tax expense from continuing operations disaggregated by federal, state and foreign.

ASU 2023 - 09 is effective for annual periods beginning after December 15, 2024.

The Company is currently evaluating ASU 2023 - 09 to determine the impact it may have on its consolidated financial statements.

ASU 2023 - 09 is effective for annual periods beginning after December 15, 2024, and interim reporting periods beginning after December 15, 2025.

The Company is currently evaluating ASU 2023 - 09 to determine the impact it may have on its disclosures to the consolidated financial statements.

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.

2 unchanged sentences

disclose a qualitative description of the amounts remaining in relevant expense captions that are not necessarily disaggregated quantitatively, and 4.

disclose the total amount of selling expenses, in annual reporting periods, an entity’s definition of selling expense.

disclose the total amount of selling expenses, in annual reporting periods, including an entity’s definition of selling expense.

ASU 2024 - 03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

9 unchanged sentences

Revenue estimates are reviewed periodically and adjusted as necessary.

Some of the Company’s revenue sharing arrangements also have a cost sharing component and net profit share for the operating costs of the center.

The Company records an estimate of operating costs which are reviewed on a regular basis and adjusted as necessary to more accurately reflect the actual operating costs and profit.

The operating costs and estimated net operating profit are recorded as other direct operating costs in the condensed consolidated statements of operations.

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.

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.

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.

Some of the Company’s revenue sharing arrangements also have a cost sharing component.

The Company records an estimate of operating costs which are reviewed on a regular basis and adjusted as necessary to more accurately reflect the actual operating costs.

The operating costs are recorded as other direct operating costs in the condensed consolidated statements of operations.

For the three -month periods ended March 31, 2025 and 2024 , the Company recognized leasing revenue of approximately $ 2,991,000 and $ 4,253,000 of which approximately $ 1,642,000 and $ 2,649,000 were for PBRT services, respectively.

Direct patient services income – 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.

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.

13 unchanged sentences

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.

Accounts receivable balances under ASC 606 at September 30, 2024 and January 1, 2024 were $ 5,357,000 and $ 1,626,000 , respectively.

Accounts receivable balances under ASC 606 at September 30, 2023 and January 1, 2023 were $ 1,416,000 and $ 1,118,000 , respectively.

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.

The Company also concluded the three facilities are part of its direct patient services segment, see further discussion below.

Accounts receivable balances under ASC 606 at March 31, 2025 and January 1, 2025 were $ 6,120,000 and $ 6,073,000 , respectively.

Accounts receivable balances under ASC 606 at March 31, 2024 and January 1, 2024 were $ 1,882,000 and $ 1,626,000 , respectively.

For the three -month periods ended March 31, 2025 and 2024 , the Company recognized direct patient services revenues of approximately $ 3,121,000 and $ 963,000 , respectively.

Business Combinations - Business combinations are accounted for under ASC 805 Business Combinations (“ASC 805” ) using the acquisition method of accounting.

Under the acquisition method of accounting, all assets acquired, identifiable intangible assets, liabilities assumed and applicable non-controlling interests are recognized at fair value as of the acquisition date.

Under the acquisition method of accounting, all assets acquired, identifiable intangible assets acquired, liabilities assumed, and applicable non-controlling interests are recognized at fair value as of the acquisition date.

Costs incurred associated with the acquisition of a business are expensed as incurred.

2 unchanged sentences

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.

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.

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.

As of March 31, 2025 , the Company provided Gamma Knife and PBRT equipment to nine hospitals in the United States, which constitutes the leasing segment.

As of March 31, 2025 , 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 a majority interest in and operates, three single-unit radiation therapy facilities in Rhode Island, which collectively constitute the direct patient services segment.

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.

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:

Three Months Ended September 30,

Nine Months Ended September 30,

Leasing (includes equipment sales, net)

The operating results of the two reportable segments are reviewed by the Company’s Chief Executive Officer, who is also the CODM.

For the periods ended March 31, 2025 and 2024 , the Company’s PBRT operations represented a significant majority of the net (loss) income attributable to American Shared Hospital Services from the leasing segment, disclosed below.

The revenues, depreciation, interest expense, interest income, tax expense, net (loss) income attributable to American Shared Hospital Services, and total assets for the Company’s two reportable segments as of March 31, 2025 and 2024 consist of the following:

Three Months Ended March 31,

$ 2,991,000 $ 4,253,000

Direct patient services

3,121,000 963,000

$ 6,112,000 $ 5,216,000

Depreciation expense

Depreciation, amortization, and other expense

$ 899,000 $ 1,092,000

Direct patient services

550,000 242,000

2 unchanged sentences

$ 398,000 $ 316,000

Direct patient services

35,000 33,000

2 unchanged sentences

$ 58,000 $ 111,000

6,000 - 6,000 -

Direct patient services

$ 74,000 $ 111,000

1 unchanged sentence

$ ( 257,000 ) $ 42,000

Direct patient services

( 66,000 ) ( 86,000 )

2 unchanged sentences

$ ( 303,000 ) $ 201,000

Direct patient services

( 322,000 ) ( 82,000 )

$ ( 625,000 ) $ 119,000

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.

$ 35,446,000 $ 35,455,000

Direct patient services

27,865,000 24,742,000

$ 63,311,000 $ 60,197,000

Property and Equipment

2 unchanged sentences

The Company determines salvage value based on the estimated fair value of the equipment at the end of its useful life.

As of December 31, 2024, the Company reduced its estimate of salvage value for all remaining domestic Gamma Knife units to $ 0 .

The net effect of the change in estimate, for the three -month period ended March 31, 2025 , was a decrease in net income of approximately $ 83,000 or $ 0.01 per diluted share.

This change in estimate will be $ 10,000 , or $ 0.00 per share in future periods, following the expiration of one customer contract.

Depreciation for PBRT equipment is determined using the modified units of production method, which is a function of both time and usage of the equipment.

1 unchanged sentence

The estimated useful life of the PBRT unit is consistent with the estimated economic life of 20 years.

The following table summarizes property and equipment as of September 30, 2024 and December 31, 2023 :

September 30,

The following table summarizes property and equipment as of March 31, 2025 and December 31, 2024 :

Medical equipment and facilities

11 unchanged sentences

$ 7,115,000 $ 6,104,000

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:

Three Months Ended September 30,

Nine Months Ended September 30,

Depreciation expense recorded in costs of revenue and selling and administrative expense in the condensed consolidated statements of operations for the three -month periods ended March 31, 2025 and 2024 is as follows:

Three Months Ended March 31,

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.

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.

The Company borrowed $ 2,000,000 on the Revolving Line as of March 31, 2025 .

The facilities have a five -year maturity and carry a floating interest based on the Secured Overnight Financing Rate (“SOFR”) plus 3.0 % ( 7.49 % as of March 31, 2025) and are secured by a lien on substantially all of the assets of the Loan Parties and guaranteed by ASHS.

On January 25, 2024 ( the “First Amendment Effective Date”), the Company and Fifth Third entered into a First Amendment to Credit Agreement (the “First Amendment”), which amended the Credit Agreement to add a new term loan in the aggregate principal amount of $ 2,700,000 (the “Supplemental Term Loan”).

4 unchanged sentences

The Supplemental Term Loan is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries.

The First Amendment also replaces the LIBOR-based rates in the Credit Agreement with SOFR-based rates.

The First Amendment also replaced the LIBOR-based rates in the Credit Agreement with SOFR-based rates.

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 %.

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.

The Company capitalized debt issuance costs of $ 97,000 as of September 30, 2024 related to issuance of the Supplemental Term Loan.

On December 18, 2024 ( the “Second Amendment Effective Date”), the Company and Fifth Third entered into a Second Amendment to the Credit Agreement (the “Second Amendment”), which amended the Credit Agreement to add a new term loan in the aggregate principal amount of $ 7,000,000 (the “Second Supplemental Term Loan”).

The proceeds of the Second Supplemental Term Loan were advanced in a single borrowing on December 18, 2024, and were used for capital expenditures related to the Company’s domestic Gamma Knife leasing operations and the RI Acquisition and related transaction costs.

The Second Supplemental Term Loan will mature on December 18, 2029 ( the “Second Maturity Date”).

Interest on the Second Supplemental Term Loan is payable monthly during the initial twelve month period following the Second Amendment Effective Date.

Following such twelve month period, the Company is required to make equal monthly payments of principal and interest to fully amortize the amount outstanding under the Second Supplemental Term Loan over a period of seven years.

All unpaid principal of the Second Supplemental Term Loan and accrued and unpaid interest thereon is due and payable in full on the Second Maturity Date.

The Second Supplemental Term Loan is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries.

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 %.

The long-term debt on the condensed consolidated balance sheets related to the Term Loan, DDTL, Revolving Line, Supplemental Term Loan and Second Supplemental Term Loan was $ 18,372,000 and $ 18,462,000 as of March 31, 2025 and December 31, 2024 , respectively.

The Company capitalized debt issuance costs of $ 0 and $ 164,000 as of March 31, 2025 and December 31, 2024, related to the issuance of the Supplemental Term Loan and Second Supplemental Term Loan.

The Credit Agreement contains customary covenants and representations, including without limitation, a minimum fixed charge coverage ratio of

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1.0 (tested on a trailing

twelve -month basis at the end of each fiscal quarter), reporting obligations, limitations on dispositions, changes in ownership, mergers and acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and capital expenditures.

twelve -month basis at the end of each fiscal quarter), an obligation that the Company maintain

$ 5,000,000 of unrestricted cash, reporting obligations, limitations on dispositions, changes in ownership, mergers and acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and capital expenditures.

The Loan Parties are in compliance with the Credit Agreement covenants as of

September 30, 2024 .

March 31, 2025 .

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.

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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 %.

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.

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 long-term debt on the condensed consolidated balance sheets related to the DFC Loan was $ 1,642,000 and $ 1,806,000 as of March 31, 2025 and December 31, 2024 , respectively.

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.

HoldCo was in compliance with all debt covenants pursuant to the DFC Loan as amended and waived at September 30, 2024 .

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.

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.

As of September 30, 2024 , long-term debt on the condensed consolidated balance sheets was $ 14,375,000 .

The following are contractual maturities of long-term debt as of September 30, 2024 , excluding deferred issuance costs of $ 184,000 :

On March 3, 2025, the Company received an additional waiver from DFC for certain covenants as of December 31, 2024 and through December 31, 2025.

HoldCo was in compliance with all debt covenants pursuant to the DFC Loan as amended and waived at March 31, 2025 .

In November and December 2024, GKCE obtained two loans with banks locally in Ecuador (the “GKCE Loans”).

The GKCE Loans carry interest rates of 12.60 % and 12.78 % and are payable in twelve and thirty-six equal monthly installments of principal and interest, respectively.

Total long-term debt on the condensed consolidated balance sheets related to the GKCE Loans was $ 119,000 and $ 145,000 as of March 31, 2025 and December 31, 2024 , respectively.

The Company did not capitalize any debt issuance costs related to the GKCE Loans.

If the Company fails to comply with the Credit Agreement covenants or the DFC Loan covenants, the Company’s credit commitments could be terminated and the principal of any outstanding borrowings, together with any accrued but unpaid interest, under the Credit Agreement or the DFC Loan could be declared immediately due and payable.

Furthermore, the lenders under the Credit Agreement and the DFC Loan could also exercise their rights to take possession of, and to dispose of, the collateral securing the credit facilities and loans and could pursue additional remedies upon default as set forth in each such agreement.

The accretion of debt issuance costs for the three -month periods ended March 31, 2025 and 2024 was $ 24,000 and $ 38,000 , respectively.

As of March 31, 2025 and December 31, 2024 , the unamortized deferred issuance costs on the condensed consolidated balance sheet was $ 207,000 and $ 231,000 , respectively.

As of March 31, 2025 , long-term debt on the condensed consolidated balance sheets was $ 19,926,000 .

The following are contractual maturities of long-term debt as of March 31, 2025 , excluding deferred issuance costs of $ 207,000 :

Year ending December 31,

2024 (excluding the nine-months ended September 30, 2024)

2025 (excluding the three-months ended March 31, 2025)

Other Accrued Liabilities

Other accrued liabilities consist of the following as of September 30, 2024 and December 31, 2023 :

September 30,

Other accrued liabilities consist of the following as of March 31, 2025 and December 31, 2024 :

Professional services

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Leases that commenced prior to the ASC 842 adoption date were classified as operating leases under historical guidance.

As the Company has elected the package of practical expedients allowing it to not reassess lease classification, these leases are classified as operating leases under ASC 842 as well.

As the Company has elected the package of practical expedients allowing it to not reassess lease classification, these leases are classified as operating leases under ASC 842 as well, as applicable.

All of the Company’s lessor arrangements entered into or modified after ASC 842 adoption are also classified as operating leases.

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The Company has elected not to recognize right-of-use (“ROU”) assets and lease liabilities that arise from short-term ( 12 months or less) leases for any class of underlying asset.

The Company’s Gamma Knife and PBRT contracts with hospitals are classified as operating leases under ASC 842.

The Company’s Gamma Knife and PBRT contracts with health systems are classified as operating leases under ASC 842.

The related equipment is included in medical equipment and facilities on the Company’s condensed consolidated balance sheets.

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As such, the Company does not measure future operating lease receivables.

On November 3, 2021, the Company entered into an agreement to sublease (the “Sublease”) its corporate office located at Two Embarcadero Center, Suite 410, San Francisco, California, where it leased approximately 3,253 square feet for $ 22,011 per month and the lease expired in August 2023.

The Sublease was for $ 16,195 per month through the contract expiration date.

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.

The Company did not renew this lease.

The Company’s corporate offices were located in San Francisco, California, where it leased approximately 900 square feet for $ 4,500 per month and the lease term ended in November 2024.

In November 2024, the Company closed this office and signed two sublease agreements for small, office spaces in San Francisco, California and Downers Grove, Illinois.

The sublease in San Francisco is for 80 square feet for $ 1,003 per month.

Total ROU assets and lease liabilities for the San Francisco sublease were $ 15,000 .

The sublease in Downers Grove was signed in February 2025 and is for two offices and three cubicle spaces for $ 2,300 per month.

Total ROU assets and lease liabilities for the Downers Grove sublease were $ 26,000 .

On May 7, 2024, the Company completed the RI Acquisition and acquired 60 % of the equity interests of the RI Companies.

The RI Companies operate three single-unit LINAC facilities.

The RI Companies operate three single-unit radiation therapy facilities.

The Company assessed the existing lease agreements under ASC 842 and concluded two of the three facilities contained operating leases.

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.

Sublease income, related party, for the three and nine -month periods ended September 30, 2024 was $ 15,000 and $ 24,000 , respectively.

Rent payable to related parties was approximately $ 184,000 as of September 30, 2024 .

The facility in Woonsocket, RI has a ground lease with a sublease for 1,950 square feet of the clinic space, which is leased back to the lessor.

The Woonsocket ground lease has an annual prepayment of approximately $ 44,000 .

The facility in Warwick, RI has a lease for 10,236 square feet for $ 32,790 per month.

The facility in Providence, RI also has a ground lease, which was contributed by one of the minority partners.

On January 1, 2025, the Company entered into the Amended and Restated Lease Agreement (the “Amended Lease”) for the facility lease in Warwick, Rhode Island.

The Amended Lease includes a lease extension to December 31, 2039 and modified the monthly lease payment to $ 26,443 .

The Company assessed the Amended Lease under ASC 842 and concluded it was a lease modification.

On January 1, 2025, the effective date of the Amended Lease, the Company recorded additional ROU asset and lease liability in the amount of $ 2,071,000 .

The Company owns and operates a stand-alone Gamma Knife facility in Lima, Peru where it leases approximately 1,600 square feet for approximately $ 8,850 per month with a lease expiration date in January 2024.

The lease in Peru is currently on a month-to-month basis.

The Company also owns and operates a stand-alone Gamma Knife facility in Guayaquil, Ecuador where it owns 864 square feet of condominium space in an office building and approximately 10,135 of related land and parking spaces.

The Company’s stand-alone radiation therapy facility in Puebla, Mexico also has a lease for approximately 536 square meters for $ 1,800 per month with a lease expiration in July 3034.

Total ROU asset and lease liability for the Puebla lease was $ 149,000 .

Sublease income for the three -month periods ended March 31, 2025 and 2024 was $ 15,000 and $ 0 , respectively.

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.

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The Company’s operating lease contracts do not provide an implicit rate for calculating the present value of future lease payments.

The Company determined its incremental borrowing rate to be in the range of approximately 4 % and 8 % by using available market rates and expected lease terms.

The Company determined its incremental borrowing rate to be approximately 8 % by using available market rates and expected lease terms.

The operating lease ROU assets and liabilities include any lease payments made and there were no lease incentives or initial direct costs incurred.

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The Company’s lessee operating lease agreements are for administrative office space and related equipment and two of its recently acquired stand-alone facilities in Rhode Island.

These leases have remaining lease terms of approximately 5 to 17 years, some of which include options to renew or extend the lease.

As of September 30, 2024 , operating ROU assets, net of unfavorable leasehold interests were $ 986,000 , and lease liabilities were $ 1,735,000 .

The following table summarizes the maturities of the Company's lessee operating lease liabilities as of September 30, 2024 :

These leases have remaining lease terms of approximately 9 to 16 y ears, some of which include options to renew or extend the lease.

As of March 31, 2025 , operating ROU assets, net of unfavorable leasehold interests of $ 685,000 , were $ 3,064,000 , and lease liabilities were $ 3,749,000 .

The following table summarizes the maturities of the Company's lessee operating lease liabilities as of March 31, 2025 :

Year ending December 31,

Operating Leases

2024 (excluding the nine-months ended September 30, 2024)

2025 (excluding the three-months ended March 31, 2025)

Total lease payments

Less imputed interest

Three Months Ended September 30,

Nine Months Ended September 30,

Operating lease cost

( 2,908,000 )

Sublease income, related party

Three Months Ended March 31,

Operating lease cost

$ 157,000 $ 21,000

Sublease income

Total lease cost

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Weighted-average remaining lease term - Operating leases in years

7.85 0.89 7.85 0.89

Weighted-average discount rate - Operating leases

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The Company calculates diluted shares using the treasury stock method.

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.

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.

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.

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.

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 :

Three Months Ended September 30,

Nine Months Ended September 30,

Because the Company reported a loss for the three -month period ended March 31, 2025 , the potentially dilutive effects of approximately 38,000 of the Company’s stock options and 173,000 of the Company’s unvested restricted stock awards were not considered for the reporting period.

The computation for the three -month period ended March 31, 2024 excluded approximately 138,000 of the Company’s stock options because the exercise price of the options was higher than the average market price during the period.

The weighted average common shares outstanding for basic earnings per share for the three -month periods ended March 31, 2025 and 2024 included approximately 123,000 and 123,000 , respectively, of the Company's restricted stock awards that are fully vested but are deferred for issuance.

The following table sets forth the computation of basic and diluted earnings per share for the three -month periods ended March 31, 2025 and 2024 :

Three Months Ended March 31,

Net (loss) income attributable to American Shared Hospital Services

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Dilutive effect of stock options and restricted stock awards

- 66,000 38,000 70,000

Weighted average common shares for diluted (loss) earnings per share

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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.

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.

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.

Accordingly, stock-based compensation cost before income tax effect for the Company’s options and restricted stock awards in the amo unt of $ 89,000 and $ 98,000 for the three -month periods ended March 31, 2025 and 2024 , respectively, is reflected in selling and administrative expense in the condensed consolidated statements of operations.

As of March 31, 2025 , there was approximately $ 21,000 o f unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plan.

This cost is expected to be recognized over a period of approximately three years.

The following table summarizes stock option activity for the nine -month periods ended September 30, 2024 and 2023 :

The following table summarizes stock option activity for the three -month periods ended March 31, 2025 and 2024 :

Stock Options

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42,000 $ 2.74 3.65 $ 17,000

( 84,000 ) $ 2.87 - $ -

Outstanding at September 30, 2024

Outstanding at March 31, 2025

42,000 $ 2.74 3.40 $ 5,000

Exercisable at September 30, 2024

Exercisable at March 31, 2025

24,000 $ 2.70 2.22 $ -

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146,000 $ 2.83 5.44 $ -

70,000 $ 2.82 7.00 $ -

( 19,000 ) $ 2.69 - $ -

Outstanding at September 30, 2023

Outstanding at March 31, 2024

146,000 $ 2.83 5.19 $ 5,000

Exercisable at September 30, 2023

Exercisable at March 31, 2024

42,000 $ 2.86 3.84 $ -

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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.

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.

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.

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.

The remaining Esprit upgrades and LINACs are scheduled to occur during 2025 or later at existing customer sites.

Total Gamma Knife and LINAC commitments as of September 30, 2024 were $ 13,383,000 .

There are no deposits on the condensed consolidated balance sheets related to these commitments as of September 30, 2024 .

As a result, the Company has computed its provision for income taxes for the three -month periods ended March 31, 2025 and 2024 by applying the actual effective tax rates to income or reported within the condensed consolidated financial statements through those periods.

The provision for income taxes for the three -month period ended March 31, 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.

As of March 31, 2025 , the Company had commitments to purchase and install three Leksell Gamma Knife Esprit Systems (“Esprit”) and two Linear Accelerator (“LINAC”) systems.

One of the Esprit upgrades is in the process of being installed at the Company’s facility in Peru.

The remaining Esprit upgrades and one LINAC installation are scheduled to occur around the fourth quarter of 2025 or later at existing customer sites.

The remaining LINAC is reserved for a future customer site.

Total Gamma Knife and LINAC commitments as of March 31, 2025 were $ 9,618,000 .

There are no deposits on the condensed consolidated balance sheets related to these commitments as of March 31, 2025 .

It is the Company’s intent to finance substantially all of these commitments.

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However, the Company currently has cash on hand of $ 11,491,000 and its Revolving Line of $ 7,000,000 and is actively engaged with financing resources to fund these projects.

The Company borrowed $ 4,500,000 on the Revolving Line as of September 30, 2024 .

The Company borrowed $ 2,000,000 on the Revolving Line as of March 31, 2025 .

September 4, 2022, the Company entered into a Maintenance and Support Agreement with Mevion Medical Systems, Inc.

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$ 1,939,000 for the current contractual period (

September 30, 2024 , half of the prepayment was recorded as a prepaid contract and is being amortized over the

This payment was recorded as a prepaid contract and is being amortized over the

one -year service period.

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.

As of March 31, 2025 , 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, RSA, and Mobius Imaging, LLC.

The Company’s commitment to purchase one LINAC system also includes a 5 -year agreement to service the equipment, respectively.

Total service commitments as of September 30, 2024 were $ 13,712,000 .

Total service commitments as of March 31, 2025 were $ 12,252,000 .

The Gamma Knife and certain other service contracts are paid monthly, as service is performed.

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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.

The Company’s operating lease in Woonsocket, Rhode Island is with a related party.

See Note 5 - Leases to the condensed consolidated financial statements for further discussion.

The following table summarizes related party activity for the three and nine -month periods ended September 30, 2024 and 2023 :

Three Months Ended September 30,

Nine Months Ended September 30,

The following table summarizes related party activity for the three -month periods ended March 31, 2025 and 2024 :

Three Months Ended March 31,

Equipment purchases and de-install costs

4 unchanged sentences

$ 1,558,000 $ 2,586,000

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 .

Related party liabilities on the condensed consolidated balance sheets consist of the following as of September 30, 2024 and December 31, 2023

September 30,

The Company also had commitments to purchase and install three Esprit units, two LINACs, and service the related equipment of $ 14,869,000 as of March 31, 2025 .

Related party liabilities on the condensed consolidated balance sheets consist of the following as of March 31, 2025 and December 31, 2024

Accounts payable, asset retirement obligation and other accrued liabilities

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The RI Companies operate three functional radiation therapy cancer centers in Rhode Island.

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.

The Company acquired the RI Companies to expand its growing direct patient services 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.

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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.

During the measurement period, which can be no more than one year from the Closing Date, the Company expects to continue to obtain information to assist in determining the final fair value of assets acquired.

The assets acquired were recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company.

Thus, the provisional measurements of fair value discussed below are subject to change.

The Company expects to finalize the valuations as soon as practicable, but no later than one year from the Closing Date.

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.

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.

The adjusted preliminary allocations provided below reflect these changes.

During the three -month periods ended September 30, 2024 and December 31, 2024, the Company concluded some of the fair value estimates for accounts receivable, non-controlling interests, and unfavorable leasehold interests required adjustment.

The adjusted allocations provided below reflect these changes.

The Company recorded medical equipment, facilities and non-controlling interest at fair value as of the Closing Date.

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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.

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.

The Company recorded the preliminary allocation of the purchase price consideration as of the Closing Date, for the three -month period ended June 30, 2024.

The net effect of these changes was an increase to the bargain purchase gain of $ 115,000 , net of deferred taxes of $ 6,000 .

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 .

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:

The net impact to the condensed consolidated statement of operations was not material for the year-ended December 31, 2024.

The major classes of assets and liabilities to which the Company allocated the fair value of the purchase price consideration as of May 7, 2024 and December 31, 2024 were as follows:

Remeasurement

September 30, 2024

December 31, 2024

Cash and cash equivalents

26 unchanged sentences

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.

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 .

The Company purchased the interest in the RI Companies as part of the sale of certain of GenesisCare’s assets in its bankruptcy proceedings, resulting in a bargain purchase.

A bargain purchase gain of $ 3,794,000 , net of deferred taxes of $ 1,220,000 was recorded for the year-ended December 31, 2024.

None of the purchase price was allocated to intangible assets because none were acquired as part of the transaction.

The Company recorded the unfavorable lease position received as part of the RI Acquisition as a reduction to ROU assets on the condensed consolidated balance sheet.

The preliminary value of the acquired tangible assets acquired were as follows:

The Company recorded the unfavorable lease position received as part of the RI Acquisition as a reduction to ROU assets on the condensed consolidated balance sheet as of May 7, 2024 and December 31, 2024.

The value of the acquired tangible assets acquired were as follows:

Average Useful Life (in Years)

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Total medical equipment and facilities acquired

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

Nine Months Ended

September 30, 2024

$ 2,635,000 $ 4,527,000

Operating income

$ 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.

These pro forma results were based on estimates and assumptions, which the Company believes are reasonable.

They are not the results that would have been realized had the Company and the RI Companies been combined during the periods presented and are not necessarily indicative of the Company’s consolidated results of operations in future periods.

The pro forma results include adjustments related to purchase accounting.

Acquisition costs and other nonrecurring charges are included in the earlier period presented.

ASC 805 also requires presentation of proforma information for the comparable period, when the comparable period is presented.

Due to the lack of reliable financial information for the RI Companies following the protracted bankruptcy proceedings, the Company was not able to obtain financial information sufficient to make these disclosures.

Therefore, the Company has not made the comparable period proforma disclosure because it would be impracticable to do.

Following are the supplemental consolidated financial results of the Company on an unaudited, pro forma basis, as if the acquisition occurred on January 1, 2024.

The supplemental proforma disclosure excludes the non-recurring impact from the bargain purchase gain generated from the RI Acquisition.

Nine Months Ended

September 30, 2024

Operating income

Diluted earnings per share

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

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These lists are not all-inclusive because it is not possible to predict all factors.

Further information on potential factors that could affect the financial condition, results of operations and future plans of American Shared Hospital Services is included in the filings of the Company with the SEC, including the Annual Report on Form 10-K for the year ended December 31, 2023 and the definitive Proxy Statement for the Annual Meeting of Shareholders held on June 25, 2024.

Any forward-looking statement speaks only as of the date such statement was made, and we are not obligated to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made, except as required by applicable laws or regulations.

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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.

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.

The Company leases eight Gamma Knife systems and one PBRT system as of March 31, 2025, 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.

1 unchanged sentence

The Company also owns and operates a single-unit radiation therapy center in Puebla, Mexico, which began treating patients in July 2024.

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.

The Company’s facilities in Rhode Island, Peru, Ecuador, and Mexico are considered direct patient services, 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 direct patient services.

See Note 1 - Basis of Presentation to the condensed consolidated financial statements for additional information.

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The approximate CMS reimbursement rates for delivery of PBRT for a simple treatment without compensation for 2025 is $578 ($561 in 2024) and $1,276 ($1,362 in 2024) for simple with compensation, intermediate and complex treatments, respectively.

On September 29, 2020, CMS published a final rule that would have implemented a new mandatory payment model for radiation oncology services delivered to certain Medicare beneficiaries:

the Radiation Oncology Alternative Payment Method (“RO APM”).

On August 29, 2022, CMS published a final rule that delayed the start date of the RO APM to a date to be determined through future rulemaking and amended the definition of “model performance period” to provide that the start and end dates of the five-year model performance period will be established by CMS through future rulemaking.

If the RO APM had not been delayed, it would have significantly altered CMS’ payment methodology from a fee for service paradigm to a set reimbursement by cancer type methodology for radiation services provided within a 90 day episode of care.

Under the RO APM, hospital based and free-standing radiation therapy providers would have been required to participate in the model based on whether the radiation therapy provider is located within a randomly selected core-based statistical area.

At this time, it is not clear if the RO APM will be implemented and, if it is implemented, the timing for implementation and in what form it will be implemented.

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.

Application of Critical Accounting Policies and Estimates

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These policies along with the disclosures presented in the other condensed consolidated financial statement notes and, in this discussion, and analysis, provide information on how significant assets and liabilities are valued in the condensed consolidated financial statements and how those values are determined.

Based on the valuation techniques used and the sensitivity of financial statement amounts, and the methods, assumptions and estimates underlying those amounts, management has identified revenue recognition and costs of sales for turn-key and revenue sharing arrangements, accounting for business combinations, and the carrying value of property and equipment and useful lives, and as such the aforementioned could be most subject to revision as new information becomes available.

Based on the valuation techniques used and the sensitivity of financial statement amounts, and the methods, assumptions and estimates underlying those amounts, management has identified revenue recognition for revenue sharing arrangements, accounting for business combinations, salvage value on equipment, and the carrying value of property and equipment and useful lives, and as such the aforementioned could be most subject to revision as new information becomes available.

The following are our critical accounting policies in which management’s estimates, assumptions and judgments most directly and materially affect the condensed consolidated financial statements:

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The Company recognizes revenues under ASC 842 and ASC 606.

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.

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 March 31, 2025 and twelve domestic Gamma Knife units, two international Gamma Knife units, and one PBRT system in operation in the United States as of March 31, 2024.

Five of the Company’s ten domestic Gamma Knife customers are under fee-per-use contracts, and five customers are under revenue sharing arrangements.

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The Company’s PBRT system at Orlando Health is considered a revenue share contract operating under the leasing segment.

The Company’s three single-unit facilities, acquired in Rhode Island in May 2024, operate under the Company’s retail segment.

The Company’s three single-unit facilities, acquired in Rhode Island in May 2024, operate under the Company’s direct patient services segment.

The Company, through GKF, also owns and operates two single-unit, international Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador.

These two units economically operate under the Company’s retail segment.

These two units economically operate under the Company’s direct patient services segment.

Rental revenue from medical equipment leasing ( “ leasing ” ) – The Company recognizes revenues under ASC 842 when services have been rendered and collectability is reasonably assured, on either a fee per use or revenue sharing basis.

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Revenue estimates are reviewed periodically and adjusted as necessary.

Some of the Company’s revenue sharing arrangements also have a cost sharing component and net profit share for the operating costs of the center.

The Company records an estimate of operating costs which are reviewed on a regular basis and adjusted as necessary to more accurately reflect the actual operating costs and profit.

The operating costs and estimated net operating profit are recorded as other direct operating costs in the condensed consolidated statements of operations.

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.

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.

Some of the Company’s revenue sharing arrangements also have a cost sharing component.

The Company records an estimate of operating costs which are reviewed on a regular basis and adjusted as necessary to more accurately reflect the actual operating costs.

The operating costs are recorded as other direct operating costs in the condensed consolidated statements of operations.

For the three-month periods ended March 31, 2025 and 2024, the Company recognized leasing revenue of approximately $2,991,000 and $4,253,000 of which approximately $1,642,000 and $2,649,000 were for PBRT services, respectively.

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.

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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.

Accounts receivable balances under ASC 606 at September 30, 2024 and January 1, 2024 were $5,357,000 and $1,626,000, respectively.

Accounts receivable balances under ASC 606 at September 30, 2023 and January 1, 2023 were $1,416,000 and $1,118,000 , respectively.

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.

The Company also concluded the three radiation therapy facilities are part of its direct patient services segment, see further discussion at Note 1 - Basis of Presentation to the condensed consolidated financial statements.

Accounts receivable balances under ASC 606 at March 31, 2025 and January 1, 2025 were $6,120,000 and $6,073,000, respectively.

Accounts receivable balances under ASC 606 at March 31, 2024 and January 1, 2024 were $1,882,000 and $1,626,000, respectively.

For the three-month periods ended March 31, 2025 and 2024, the Company recognized direct patient services revenues of approximately $3,121,000 and $963,000, respectively.

Salvage Value on Equipment

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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.

There is no salvage value assigned to the two international Gamma Knife units as of September 30, 2024.

The Company also has not assigned salvage value to its PBRT or LINAC equipment as of September 30, 2024.

Prior to January 1, 2025, the Company had five domestic Gamma Knife units with salvage value of $1,050,000.

During the year-ended December 31, 2024, the Company concluded the salvage value should be $0 and accounted for this as a change in estimate.

There is no salvage value assigned to the two international Gamma Knife units as of March 31, 2025.

The Company also has not assigned salvage value to its PBRT or LINAC equipment as of March 31, 2025.

Impairment of Long-lived Assets

The Company assesses the recoverability of its long-lived assets when events or changes in circumstances indicate their carrying value may not be recoverable.

Such events or changes in circumstances may include:

a significant adverse change in the extent or manner in which a long-lived asset is being used, significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

The Company assesses recoverability of a long-lived asset by determining whether the carrying value of the asset group can be recovered through projected undiscounted cash flows over their remaining lives.

If the carrying value of the asset group exceeds the forecasted undiscounted cash flows, an impairment loss is recognized, measured as the amount by which the carrying amount exceeds estimated fair value.

An impairment loss is charged to the condensed consolidated statement of operations in the period in which management determines such impairment.

Business Combinations

Business combinations are accounted for under ASC 805 Business Combinations (“ASC 805”) using the acquisition method of accounting.

Costs incurred associated with the acquisition of a business are expensed as incurred.

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Accounting Pronouncements Issued and N ot Y et Adopted

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”) which enhances the disclosure requirements for segment reporting, primarily disclosures around significant segment expenses.

The key provisions of the amendments require disclosure of significant segment expense reviewed by the CODM, require disclosure of an “other” segment category, require disclosure of segment profit or loss and assets for interim periods, clarify and require disclosure of other measurements used by the CODM in assessing segment performance and allocating resources, and require disclosure of the CODM's title and position and explanation of how the CODM assesses segment performance.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company is currently evaluating ASU 2023-07 to determine the impact it may have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”) which requires entities, on an annual basis, to disclose:

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”) which requires entities, on an annual basis, to disclose:

ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

The Company is currently evaluating ASU 2023-09 to determine the impact it may have on its consolidated financial statements.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and interim reporting periods beginning after December 15, 2025.

The Company is currently evaluating ASU 2023-09 to determine the impact it may have on its disclosures to the consolidated financial statements.

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.

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The Company is currently evaluating ASU 2024-03 to determine the impact it may have on its consolidated financial statements.

Third Quarter 2024 Results

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.

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.

The decrease in leasing revenue was driven by lower Gamma Knife volumes.

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.

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.

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.

The increase for the three-month period ended September 30, 2024, was driven by higher volumes.

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.

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.

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.

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.

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 .

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.

The decrease in Gamma Knife procedures for the three-month period ended September 30, 2024 was driven by the leasing segment.

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.

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 .

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.

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.

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.

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.

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.

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.

First Quarter 2025 Results

Revenues increased by $896,000 to $6,112,000 for the three-month period ended March 31, 2025 compared to $5,216,000 for the same period in the prior year.

Revenues from the Company’s leasing segment decreased by $1,262,000 to $2,991,000 for the three-month period ended March 31, 2025 compared to $4,253,000 for the same period in the prior year.

The decrease in leasing revenue was driven by lower Gamma Knife volumes, due to the expiration of two customer contracts, and lower PBRT volumes.

Revenues from the Company’s direct patient services segment increased by $2,158,000 to $3,121,000 for the three-month period ended March 31, 2025 compared to $963,000 for the same period in the prior year.

The increase in direct patient services revenue was primarily due to revenue generated by the RI Companies following the closing of the RI Acquisition on May 7, 2024 and the Company’s radiation therapy facility in Puebla, which began treating patients in July 2024.

The Company acquired its interests in 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 March 31, 2025.

The Company’s stand-alone radiation therapy facility in Puebla, Mexico also began treating patients in July 2024.

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.

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.

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.

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.

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.

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.

Since the fourth quarter of 2023, the Company has upgraded four of its existing Gamma Knife units to the Esprit.

The new Esprit units are under warranty for the first year of service, also driving lower maintenance expense.

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.

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.

The equipment related to the second customer contract that expired, was fully depreciated prior to 2023.

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.

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.

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.

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.

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.

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%.

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.

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.

During the three-month period ended September 30, 2024, the Company made adjustments to the initial provisional accounting for the RI Acquisition.

The net impact of the adjustments resulted in an increase to the net bargain purchase gain of $263,000.

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.

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.

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.

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.

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.

Radiation therapy revenues generated from the three stand-alone facilities acquired through the RI Acquisition and the radiation therapy facility in Puebla were $2,374,000 for the three-month period ended March 31, 2025, compared to $0 for the same period in the prior year.

Radiation therapy procedures for the three stand-alone facilities acquired through the RI Acquisition and the radiation therapy facility in Puebla were 6,726 for the three-month period ended March 31, 2025.

Revenues generated from the Company’s PBRT system decreased by $1,007,000 to $1,642,000 for the three-month period ended March 31, 2025 compared to $2,649,000 for the same period in the prior year.

The decrease for the three-month period ended March 31, 2025, was driven by lower volumes.

The number of PBRT fractions decreased by 445 to 831 for the three-month period ended March 31, 2025 compared to 1,276 for the same period in the prior year.

The decrease in PBRT volumes for the three-month period ended March 31, 2025 was due to normal, cyclical fluctuations.

Gamma Knife revenue decreased by $471,000 to $2,096,000 for the three-month period ended March 31, 2025 compared to $2,567,000 for the same period in the prior year.

The decrease in Gamma Knife revenue for the three-month period ended March 31, 2025 was due to a decrease in procedure volume from both the direct patient services and leasing segments .

The number of Gamma Knife procedures decreased by 65 to 208 for the three-month period ended March 31, 2025 compared to 273 for the same period in the prior year.

Gamma Knife procedures from the Company’s leasing segment decreased 21% for the three-month period ended March 31, 2025 due to the expiration of two customer contracts in December 2024 and February 2025, and downtime to upgrade a third customer to the Esprit.

Gamma Knife procedures from the Company’s direct patient services segment, which are the two international Gamma Knife locations, decreased 27% for the three-month period ended March 31, 2025 .

The patient populations in Peru and Ecuador are primarily insured by local government therefore volumes can be impacted by local legislation changes or social and economic factors.

The stand-alone facility in Peru signed a new contract with social security, which held up treatment of patients covered by this payor during the first quarter.

This contract was executed in late February 2025 and is expected to bring additional volumes into the facility going forward.

Total costs of revenue increased by $2,097,000 to $5,170,000 for the three-month period ended March 31, 2025 compared to $3,073,000 for the same period in the prior year.

Maintenance and supplies and other direct operating costs, related party, increased by $178,000 to $861,000 for the three-month period ended March 31, 2025 compared to $683,000 for the same period in the prior year.

The increase in maintenance and supplies and other direct operating costs, related party, for the three-month period ended March 31, 2025, was due to maintenance at the Company’s radiation therapy facilities in Rhode Island, that were acquired during 2024, maintenance at the Company’s new site in Puebla, Mexico, and maintenance of the recently installed Gamma Knife Esprit systems that were previously under warranty.

Depreciation and amortization increased by $148,000 to $1,445,000 for the three-month period ended March 31, 2025 compared to $1,297,000 for the same period in the prior year.

The increase in depreciation and amortization for the three-month period ended March 31, 2025 was due to 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.

As of December 31, 2024, the Company reduced its estimate of salvage value for all remaining domestic Gamma Knife units to $0.

The net effect of the change in estimate, for the three-month period ended March 31, 2025, was a decrease in net income of approximately $83,000 or $0.01 per diluted share.

This change in estimate will be $10,000, or $0.00 per share in future periods, following the expiration of one customer contract.

These increases were offset by depreciation from the Company’s contracts that expired in the fourth quarter of 2024 and first quarter of 2025.

Other direct operating costs increased by $1,771,000 to $2,864,000 for the three-month period ended March 31, 2025 compared to $1,093,000 for the same period in the prior year.

The increase in other direct operating costs for the three-month period ended March 31, 2025 was due to operating costs from the acquired facilities in Rhode Island and the Company’s new facility in Puebla, Mexico, which are part of the Company’s direct patient services segment and have higher operating costs compared to facilities in the Company’s leasing segment.

Selling and administrative expense decreased by $71,000 to $1,808,000 for the three-month period ended March 31, 2025 compared to $1,879,000 for the same period in the prior year.

The decrease for the three-month period ended March 31, 2025 was due to lower legal and other costs attributable to the Company’s pursuit of new business opportunities, including the RI Acquisition, that were incurred during the three-month period ended March 31, 2024.

These decreases were offset by increased staffing in the sales, finance, and customer retention areas.

Interest expense increased by $84,000 to $433,000 for the three-month period ended March 31, 2025 compared to $349,000 for the same period in the prior year.

The increase for the three-month period ended March 31, 2025 was due to an increase in borrowings, including the Second Supplemental Term Loan received in December, 2024 and the Supplemental Term Loan received in January 2024.

Interest and other income, net, decreased by $42,000 to $64,000 for the three-month period ended March 31, 2025 compared to $106,000 for the same period in the prior year.

The decrease for the three-month periods ended March 31, 2025 was due to a decrease in the interest received on the Company’s cash, due to lower average cash balances, compared to the same period in the prior year.

Income tax benefit increased by $279,000 to an income tax benefit of $323,000 for the three-month period ended March 31, 2025 compared to an income tax benefit of $44,000 for the same period in the prior year.

The income tax benefit for the three-month period ended March 31, 2024 included a non-recurring adjustment for unrecognized tax benefits related to foreign taxes of $100,000.

Excluding this non-recurring item in the prior period, income tax benefit for the three-month period ended March 31, 2025 increased $179,000 primarily due to losses incurred by the Company’s leasing and direct patient services segments, driven by lower overall volume.

Net loss attributable to non-controlling interests increased by $233,000 to a loss of $287,000 for the three-month period ended March 31, 2025 compared to a loss of $54,000 for the same period in the prior year.

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.

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.

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.

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.

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.

The change in net income or loss attributable to non-controlling interests reflects the relative profitability of the three Rhode Island facilities and GKF and its subsidiaries.

Net loss attributable to American Shared Hospital Services increased by $744,000 to a loss of $625,000, or $0.10 per diluted share for the three-month period ended March 31, 2025 compared to net income of $119,000, or $0.02 per diluted share for the same period in the prior year.

The Company incurred a net loss for the three-month period ended March 31, 2025, primarily due to losses incurred by the leasing and direct patient services segments, driven by lower procedure volume.

Liquidity and Capital Resources

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In general, the Company’s principal sources of liquidity are cash and cash equivalents on hand and the $7,000,000 Revolving Line.

As of September 30, 2024, the Company borrowed $4,500,000 on its Revolving Line.

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.

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.

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.

As of March 31, 2025, the Company borrowed $2,000,000 on its Revolving Line.

The Company had cash, cash equivalents and restricted cash of $11,491,000 at March 31, 2025 compared to $11,275,000 at December 31, 2024.

The Company’s cash position increased by $216,000 during the first three months of 2025 due to net advances on the Revolving Line of $2,000,000, cash provided by operating activities of $2,503,000, and capital contributions of $8,000.

These increases were offset by payment for the purchase of property and equipment of $4,015,000 and payments on long-term debt of $280,000.

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.

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Working Capital

The Company had working capital at September 30, 2024 of $8,159,000 compared to $9,677,000 at December 31, 2023.

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 had working capital at March 31, 2025 of $11,032,000 compared to $15,853,000 at December 31, 2024.

The $4,821,000 decrease in working capital was primarily due to increases in related party accrued liabilities, advances on the Revolving Line, and decreases 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.

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Long-Term Debt

On April 9, 2021, the Company and certain of its domestic subsidiaries entered into a five year $22,000,000 credit agreement with Fifth Third Bank, N.A., which refinanced its existing domestic Gamma Knife portfolio.

The lease financing previously obtained by Orlando was also refinanced as long-term debt by the Credit Agreement.

On April 9, 2021, the Company along with certain of its domestic subsidiaries (collectively, the “Loan Parties”) entered into a five year $22,000,000 credit agreement (the “Credit Agreement”) with Fifth Third Bank, N.A.

(“Fifth Third”).

The Credit Agreement includes three loan facilities.

(1) a $9,500,000 term loan (the “Term Loan”), which was used to refinance the domestic Gamma Knife debt and finance leases and the associated closing costs;

(2) a $5,500,000 delayed draw term loan (the “DDTL”), which was used to refinance the Company’s PBRT finance leases and associated closing costs and to provide additional working capital for the Company;

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.

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.

The Revolving Loan, the Term Loan, and the DDTL will mature on April 9, 2026 unless accelerated due to the occurrence of certain events specified in the Credit Agreement.

The Revolving Line is charged an unused line fee of 0.25% per annum.

The Term Loan and DDTL have interest and principal payments due quarterly.

Principal amortization on an annual basis for the Term Loan and DDTL equates to 48% of the original principal loan commitments in years one through five and an end of term payment of the remaining principal balance.

On January 25, 2024, the, the Company entered into a First Amendment to Credit Agreement with Fifth Third which amended the Credit Agreement to add the Supplemental Term Loan, a new term loan in the aggregate principal amount of $2,700,000.

The proceeds of the Supplemental Term Loan were advanced in a single borrowing on January 25, 2024, and were used to finance capital expenditures that the Company paid cash for during 2023 for its operations in Puebla, Mexico and other related transaction costs.

The Supplemental Term Loan will mature on January 25, 2030 (the “Maturity Date”), unless accelerated due to the occurrence of certain events specified in the Credit Agreement.

The first loan facility is a $9,500,000 term loan (the “Term Loan”) which was used to refinance the domestic Gamma Knife debt and finance leases, and associated closing costs.

The second loan facility of $5,500,000 is a delayed draw term loan (the “DDTL”) which was used to refinance the Company’s PBRT finance leases and associated closing costs, as well as to provide additional working capital.

The third loan facility provides for a $7,000,000 revolving line of credit (the “Revolving Line”) available for future projects and general corporate purposes.

The Company borrowed $2,000,000 on the Revolving Line as of March 31, 2025.

The facilities have a five-year maturity and carry a floating interest of based on the Secured Overnight Financing Rate (“SOFR”) plus 3.0% (7.49% as of March 31, 2025) and are secured by a lien on substantially all of the assets of the Loan Parties and guaranteed by ASHS.

On January 25, 2024 (the “First Amendment Effective Date”), the Company and Fifth Third entered into a First Amendment to Credit Agreement (the “First Amendment”), which amended the Credit Agreement to add a new term loan in the aggregate principal amount of $2,700,000 (the “Supplemental Term Loan”).

The proceeds of the Supplemental Term Loan were advanced in a single borrowing on January 25, 2024, and were used for capital expenditures related to the Company’s operations in Puebla, Mexico and other related transaction costs.

The Supplemental Term Loan will mature on January 25, 2030 (the “Maturity Date”).

Interest on the Supplemental Term Loan is payable monthly during the initial twelve month period following the First Amendment Effective Date.

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The Supplemental Term Loan is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries.

The First Amendment also replaces the LIBOR-based rates in the Credit Agreement with SOFR-based rates.

The First Amendment also replaced the LIBOR-based rates in the Credit Agreement with SOFR-based rates.

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%.

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”).

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.

The loan entered into with DFC in June 2020 was obtained through the Company's wholly-owned subsidiary, HoldCo, and is guaranteed by GKF.

On December 18, 2024 (the “Second Amendment Effective Date”), the Company and Fifth Third entered into a Second Amendment to the Credit Agreement (the “Second Amendment”), which amended the Credit Agreement to add a new term loan in the aggregate principal amount of $7,000,000 (the “Second Supplemental Term Loan”).

The Second Supplemental Term Loan will mature on December 18, 2029 (the “Second Maturity Date”).

Interest on the Second Supplemental Term Loan is payable monthly during the initial twelve month period following the Second Amendment Effective Date.

All unpaid principal of the Second Supplemental Term Loan and accrued and unpaid interest thereon is due and payable in full on the Second Maturity Date.

The Second Supplemental Term Loan is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries.

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%.

The long-term debt on the condensed consolidated balance sheets related to the Term Loan, DDTL, Revolving Line, Supplemental Term Loan, and Second Supplemental Term Loan was $18,372,000 and $18,462,000 as of March 31, 2025 and December 31, 2024, respectively.

The Company capitalized debt issuance costs of $0 and $164,000 as of March 31, 2025 and December 31, 2024, related to the issuance of the Supplemental Term Loan and Second Supplemental Term Loan.

The Credit Agreement contains customary covenants and representations, including without limitation, a minimum fixed charge coverage ratio of 1.25 and maximum funded debt to EBITDA ratio of 3.0 to 1.0 (tested on a trailing twelve-month basis at the end of each fiscal quarter), an obligation that the Company maintain $5,000,000 of unrestricted cash, reporting obligations, limitations on dispositions, changes in ownership, mergers and acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and capital expenditures.

The Loan Parties are in compliance with the Credit Agreement covenants as of

March 31, 2025.

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.

The DFC Loan is secured by a lien on GKCE’s assets.

The first tranche of the DFC Loan was funded in June 2020.

In October 2023, the second tranche of the DFC Loan was funded in the amount of $1,750,000 to finance its equipment upgrade in Ecuador.

During the fourth quarter of 2023, the second tranche of the DFC loan was funded to finance the equipment upgrade in Ecuador.

The amount outstanding under the first tranche of the DFC Loan is payable in 29 quarterly installments with a fixed interest rate of 3.67%.

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%.

The long-term debt on the condensed consolidated balance sheets related to the DFC Loan was $1,642,000 and $1,806,000 as of March 31, 2025 and December 31, 2024, respectively.

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.

HoldCo was in compliance with all debt covenants pursuant to the DFC Loan as amended and waived at September 30, 2024.

The Company’s combined long-term debt, net of deferred issuance costs, totaled $14,375,000 as of September 30, 2024.

On March 3, 2025, the Company received an additional waiver from DFC for certain covenants as of December 31, 2024 and through December 31, 2025.

HoldCo was in compliance with all debt covenants pursuant to the DFC Loan as amended and waived at March 31, 2025.

In November and December 2024, GKCE obtained two loans with banks locally in Ecuador (the “GKCE Loans”).

The GKCE Loans carry interest rates of 12.60% and 12.78% and are payable in twelve and thirty-six equal monthly installments of principal and interest, respectively.

Total long-term debt on the condensed consolidated balance sheets related to the GKCE Loans was $119,000 and $145,000 as of March 31, 2025 and December 31, 2024, respectively.

The Company did not capitalize any debt issuance costs related to the GKCE Loans.

Furthermore, the lenders under the Credit Agreement and the DFC Loan could also exercise their rights to take possession of, and to dispose of, the collateral securing the credit facilities and loans and could take any additional remedies upon default as set forth in each such agreement.

As of March 31, 2025, long-term debt on the condensed consolidated balance sheets was $19,926,000.

See Note 3 - Long Term Debt to the condensed consolidated financial statements for additional information.

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.

The remaining Esprit upgrades and LINACs are scheduled to occur during 2025 or later at existing customer sites.

Total Gamma Knife and LINAC commitments as of September 30, 2024 were $13,383,000.

There are no deposits on the condensed consolidated balance sheets related to these commitments as of September 30, 2024 .

As of March 31, 2025, the Company had commitments to purchase and install three Leksell Gamma Knife Esprit Systems (“Esprit”) and two Linear Accelerator (“LINAC”) systems.

One of the Esprit upgrades is in the process of being installed at the Company’s facility in Peru.

The remaining Esprit upgrades and one LINAC installation are scheduled to occur around the fourth quarter of 2025 or later at existing customer sites.

The remaining LINAC is reserved for a future customer site.

Total Gamma Knife and LINAC commitments as of March 31, 2025 were $9,618,000.

There are no deposits on the condensed consolidated balance sheets related to these commitments as of March 31, 2025 .

It is the Company’s intent to finance substantially all of these commitments.

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However, the Company currently has cash on hand of $11,491,000 and its Revolving Line of $7,000,000 and is actively engaged with financing resources to fund these projects.

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 Company borrowed $2,000,000 on the Revolving Line as of March 31, 2025.

On September 4, 2022, the Company entered into a Maintenance and Support Agreement with Mevion Medical Systems, Inc.

(“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).

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.

As of September 30, 2024, the Company had commitments to service and maintain its Gamma Knife, LINAC and PBRT equipment.

As of March 31, 2025, half of the prepayment was recorded as a prepaid contract and is being amortized over the one-year service period.

As of March 31, 2025, 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.

Total service commitments as of September 30, 2024 were $13,712,000.

Total service commitments as of March 31, 2025 were $12,252,000.

The Gamma Knife and certain other service contracts are paid monthly, as service is performed.

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The following table summarizes related party activity for the three and nine-month periods ended September 30, 2024 and 2023:

Three Months Ended September 30,

Nine Months Ended September 30,

The following table summarizes related party activity for the three-month periods ended March 31, 2025 and 2024:

Three Months Ended March 31,

Equipment purchases and de-install costs

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Total related party transactions

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.

Related party liabilities on the condensed consolidated balance sheets consist of the following as of September 30, 2024 and December 31, 2023

September 30,

The Company also had commitments to purchase and install three Esprit units, two LINACs, and service the related equipment of $14,869,000 as of March 31, 2025.

Related party liabilities on the condensed consolidated balance sheets consist of the following as of March 31, 2025 and December 31, 2024

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.

What changed 10-Q

Item 1. Financial Statements