PART I – FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and related notes for American Shared Hospital Services [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for American Shared Hospital Services, including the balance sheets, statements of operations, statements of shareholders' equity, and statements of cash flows for the periods ended June 30, 2024, and December 31, 2023 (balance sheet) or June 30, 2023 (income/cash flow) [Condensed Consolidated Balance Sheets](index=2&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This table presents the company's financial position, detailing assets, liabilities, and shareholders' equity as of June 30, 2024, and December 31, 2023 | ASSETS / LIABILITIES AND SHAREHOLDERS' EQUITY | June 30, 2024 ($) | December 31, 2023 ($) | | :-------------------------------------------- | :------------ | :---------------- | | **ASSETS** | | | | Total current assets | $25,639,000 | $20,456,000 | | Property and equipment, net | $32,994,000 | $25,844,000 | | Total assets | $60,825,000 | $48,162,000 | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Total current liabilities | $13,336,000 | $10,779,000 | | Total liabilities | $28,473,000 | $21,883,000 | | Total shareholders' equity | $32,352,000 | $26,279,000 | | Total liabilities and shareholders' equity | $60,825,000 | $48,162,000 | - Total assets increased by **$12,663,000** from December 31, 2023, to June 30, 2024, primarily driven by increases in current assets (especially accounts receivable) and property and equipment[4](index=4&type=chunk) - Total liabilities increased by **$6,590,000**, and total shareholders' equity increased by **$6,073,000** during the first six months of 2024[4](index=4&type=chunk)[5](index=5&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This table outlines the company's financial performance, including revenues, gross margin, operating results, and net income for the three and six-month periods ended June 30, 2024 and 2023 | Metric | Three Months Ended June 30, 2024 ($) | Three Months Ended June 30, 2023 ($) | Six Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2023 ($) | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $7,056,000 | $5,568,000 | $12,272,000 | $10,493,000 | | Gross margin | $2,468,000 | $2,518,000 | $4,611,000 | $4,426,000 | | Operating (loss) | $(1,000) | $(325,000) | $(86,000) | $(227,000) | | Bargain purchase gain RI Acquisition, net | $3,679,000 | - | $3,679,000 | - | | Net income (loss) | $3,768,000 | $(177,000) | $3,833,000 | $(77,000) | | Net income (loss) attributable to ASHS | $3,602,000 | $(111,000) | $3,721,000 | $77,000 | | Income (loss) per common share - basic ($) | $0.56 | $(0.02) | $0.58 | $0.01 | | Income (loss) per common share - diluted ($) | $0.55 | $(0.02) | $0.57 | $0.01 | - Revenues for the three and six-month periods ended June 30, 2024, increased by **$1,488,000** (**26.7%**) and **$1,779,000** (**17.0%**) respectively, compared to the prior year, primarily due to the RI Acquisition and higher volumes at international retail locations[7](index=7&type=chunk)[106](index=106&type=chunk) - Net income attributable to ASHS significantly increased to **$3,602,000** (**$0.55** diluted EPS) for the three months ended June 30, 2024, from a net loss of **$111,000** (**$0.02** diluted EPS) in the prior year, largely driven by a **$3,679,000** bargain purchase gain from the RI Acquisition[7](index=7&type=chunk)[117](index=117&type=chunk)[120](index=120&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20SHAREHOLDERS'%20EQUITY) This table details changes in shareholders' equity, including common stock, additional paid-in capital, retained earnings, and noncontrolling interests, from January 1 to June 30, 2024 | Metric | Balances at January 1, 2024 ($) | Balances at June 30, 2024 ($) | | :------------------------------------------ | :-------------------------- | :------------------------ | | Common Stock | $10,763,000 | $10,763,000 | | Additional Paid-in Capital | $8,232,000 | $8,429,000 | | Retained Earnings | $3,629,000 | $7,350,000 | | Sub-Total ASHS | $22,624,000 | $26,542,000 | | Noncontrolling Interests in Subsidiaries | $3,655,000 | $5,810,000 | | Total Shareholders' Equity | $26,279,000 | $32,352,000 | - Total shareholders' equity increased by **$6,073,000** from January 1, 2024, to June 30, 2024, primarily due to net income and a **$2,100,000** increase in non-controlling interests from the RI Acquisition[9](index=9&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This table summarizes the company's cash inflows and outflows from operating, investing, and financing activities for the six-month periods ended June 30, 2024 and 2023 | Activity | Six Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2023 ($) | | :---------------------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(579,000) | $5,214,000 | | Net cash used in investing activities | $(2,036,000) | $(2,561,000) | | Net cash provided by (used in) financing activities | $3,293,000 | $(1,312,000) | | Net change in cash, cash equivalents, and restricted cash | $678,000 | $1,341,000 | | Cash, cash equivalents, and restricted cash at end of period | $14,486,000 | $13,794,000 | - Net cash used in operating activities was **$(579,000)** for the six months ended June 30, 2024, a significant decrease from **$5,214,000** provided in the prior year, mainly due to changes in receivables and related party liabilities[11](index=11&type=chunk)[121](index=121&type=chunk) - Net cash provided by financing activities was **$3,293,000** for the six months ended June 30, 2024, driven by advances on the line of credit and long-term debt financing, offsetting cash used in operating and investing activities[11](index=11&type=chunk)[121](index=121&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes provide detailed information on the company's accounting policies, financial statement line items, recent acquisitions, debt financing, and commitments, offering context and further breakdown of the condensed consolidated financial statements [Note 1. Basis of Presentation and Significant Accounting Policies](index=8&type=section&id=Note%201.%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note details the company's consolidation principles, recent acquisitions (RI Companies, Newco JV), and segment reporting for leasing and retail operations - The Company's consolidated financial statements include ASHS and its wholly-owned and majority-owned subsidiaries, involved in radiosurgery and radiation therapy services[16](index=16&type=chunk) - On May 7, 2024, ASHS acquired a **60%** interest in Southern New England Regional Cancer Center (SNERCC) and Roger Williams Radiation Therapy, LLC (RWRT), collectively the 'RI Companies', which operate three radiation therapy cancer centers in Rhode Island[18](index=18&type=chunk) - ASHS-Mexico signed a Joint Venture Agreement on June 28, 2024, to establish Newco (**70% ASHS ownership**) for radiosurgery services in Guadalajara, Mexico, with operations expected to begin in the first half of 2025[19](index=19&type=chunk) Segment Revenues (Three and Six Months Ended June 30) | Segment | 3 Months 2024 ($) | 3 Months 2023 ($) | 6 Months 2024 ($) | 6 Months 2023 ($) | | :------- | :------------ | :------------ | :------------ | :------------ | | Leasing | $3,899,000 | $4,812,000 | $8,152,000 | $9,041,000 | | Retail | $3,157,000 | $756,000 | $4,120,000 | $1,452,000 | | **Total**| **$7,056,000**| **$5,568,000**| **$12,272,000**| **$10,493,000**| Net Income (Loss) Attributable to ASHS by Segment (Three and Six Months Ended June 30) | Segment | 3 Months 2024 ($) | 3 Months 2023 ($) | 6 Months 2024 ($) | 6 Months 2023 ($) | | :------- | :------------ | :------------ | :------------ | :------------ | | Leasing | $(427,000) | $(26,000) | $(258,000) | $229,000 | | Retail | $4,029,000 | $(85,000) | $3,979,000 | $(152,000) | | **Total**| **$3,602,000**| **$(111,000)**| **$3,721,000**| **$77,000** | [Note 2. Property and Equipment](index=14&type=section&id=Note%202.%20Property%20and%20Equipment) This note provides a breakdown of property and equipment, net, including medical equipment, construction in progress, and accumulated depreciation, along with depreciation expense details | Property and Equipment | June 30, 2024 ($) | December 31, 2023 ($) | | :-------------------------------------- | :------------ | :---------------- | | Medical equipment and facilities | $78,688,000 | $77,150,000 | | Construction in progress | $2,674,000 | $3,771,000 | | Accumulated depreciation | $(48,815,000) | $(55,383,000) | | Net property and equipment | $32,994,000 | $25,844,000 | Depreciation Expense | Depreciation Expense | Three Months 2024 ($) | Three Months 2023 ($) | Six Months 2024 ($) | Six Months 2023 ($) | | :------------------- | :---------------- | :---------------- | :-------------- | :-------------- | | Depreciation expense | $1,523,000 | $1,252,000 | $2,857,000 | $2,609,000 | - Depreciation for Gamma Knife and LINAC units is straight-line over **3-10 years**, while PBRT equipment uses a modified units of production method over an estimated **20-year** useful life[37](index=37&type=chunk) [Note 3. Long-Term Debt Financing](index=14&type=section&id=Note%203.%20Long-Term%20Debt%20Financing) This note outlines the company's credit agreements, term loans, revolving line of credit, and supplemental term loans, including interest rates, maturities, and covenant compliance - The Company has a **$22,000,000** credit agreement with Fifth Third Bank, N.A., including a **$9,500,000** Term Loan, a **$5,500,000** Delayed Draw Term Loan (DDTL), and a **$7,000,000** Revolving Line of Credit, all maturing in April 2026[41](index=41&type=chunk)[124](index=124&type=chunk) - On January 25, 2024, a First Amendment added a **$2,700,000** Supplemental Term Loan, maturing January 25, 2030, used for capital expenditures in Puebla, Mexico. All loans bear interest at SOFR plus **3.00%**[42](index=42&type=chunk)[125](index=125&type=chunk) Long-Term Debt Maturities (Year ending December 31) | Long-Term Debt Maturities (Year ending December 31) | Principal ($) | | :-------------------------------------------------- | :-------- | | 2024 (excluding six-months ended June 30, 2024) | $1,453,000| | 2025 | $3,402,000| | 2026 | $8,272,000| | 2027 | $1,033,000| | 2028 | $540,000 | | Thereafter | $585,000 | | **Total** | **$15,285,000**| - The Company was in compliance with all debt covenants under the Credit Agreement and the DFC Loan as of June 30, 2024[43](index=43&type=chunk)[45](index=45&type=chunk)[126](index=126&type=chunk)[128](index=128&type=chunk) [Note 4. Other Accrued Liabilities](index=16&type=section&id=Note%204.%20Other%20Accrued%20Liabilities) This note details the composition of other accrued liabilities, including professional services, operating costs, and other categories, and their changes over time | Other Accrued Liabilities | June 30, 2024 ($) | December 31, 2023 ($) | | :------------------------ | :------------ | :---------------- | | Professional services | $714,000 | $472,000 | | Operating costs | $667,000 | $450,000 | | Other | $1,017,000 | $304,000 | | **Total** | **$2,398,000**| **$1,226,000** | - Total other accrued liabilities increased by **$1,172,000** from December 31, 2023, to June 30, 2024, with significant increases in 'Other' and 'Professional services' categories[48](index=48&type=chunk) [Note 5. Leases](index=16&type=section&id=Note%205.%20Leases) This note describes the company's accounting for operating leases, including Gamma Knife and PBRT contracts, the impact of the RI Acquisition, and lease liability maturities - The Company classifies its Gamma Knife and PBRT contracts with hospitals as operating leases under ASC 842, with income based solely on procedure volume[50](index=50&type=chunk) - Following the RI Acquisition on May 7, 2024, two of the three acquired facilities contain operating leases, which are included in the condensed consolidated financial statements[52](index=52&type=chunk) Lease Liabilities Maturities (Year ending December 31) | Lease Liabilities Maturities (Year ending December 31) | Operating Leases ($) | | :----------------------------------------------------- | :--------------- | | 2024 (excluding six-months ended June 30, 2024) | $267,000 | | 2025 | $346,000 | | 2026 | $347,000 | | 2027 | $347,000 | | 2028 | $348,000 | | Thereafter | $958,000 | | **Total lease payments** | **$2,613,000** | | Less imputed interest | $(756,000) | | **Total** | **$1,857,000** | - As of June 30, 2024, operating ROU assets, net, were **$631,000**, and lease liabilities were **$1,857,000**, with a weighted-average remaining lease term of **8.38 years** and a weighted-average discount rate of **7.92%**[53](index=53&type=chunk)[57](index=57&type=chunk) [Note 6. Per Share Amounts](index=18&type=section&id=Note%206.%20Per%20Share%20Amounts) This note presents the calculation of basic and diluted earnings per share, including net income attributable to ASHS and weighted-average common shares outstanding | Per Share Amounts | Three Months 2024 ($) | Three Months 2023 ($) | Six Months 2024 ($) | Six Months 2023 ($) | | :---------------------------------------------- | :---------------- | :---------------- | :-------------- | :-------------- | | Net income (loss) attributable to ASHS ($) | $3,602,000 | $(111,000) | $3,721,000 | $77,000 | | Weighted average common shares for basic EPS (Shares) | 6,482,000 | 6,336,000 | 6,467,000 | 6,336,000 | | Weighted average common shares for diluted EPS (Shares) | 6,583,000 | 6,336,000 | 6,564,000 | 6,465,000 | | Basic earnings (loss) per share ($) | $0.56 | $(0.02) | $0.58 | $0.01 | | Diluted earnings (loss) per share ($) | $0.55 | $(0.02) | $0.57 | $0.01 | - Diluted EPS for the three and six-month periods ended June 30, 2024, significantly increased to **$0.55** and **$0.57**, respectively, compared to **$(0.02)** and **$0.01** in the prior year, reflecting the higher net income[60](index=60&type=chunk) [Note 7. Stock-based Compensation](index=19&type=section&id=Note%207.%20Stock-based%20Compensation) This note details stock-based compensation expense, unrecognized compensation cost, and stock option activity, including outstanding options and weighted-average exercise prices - Stock-based compensation expense was **$99,000** and **$197,000** for the three and six-month periods ended June 30, 2024, respectively, recognized in selling and administrative expense[62](index=62&type=chunk) - As of June 30, 2024, there was approximately **$28,000** of unrecognized compensation cost related to non-vested stock-based compensation arrangements, expected to be recognized over approximately **four years**[62](index=62&type=chunk) Stock Option Activity | Stock Option Activity | Outstanding at Jan 1, 2024 | Forfeited | Outstanding at Jun 30, 2024 | | :----------------------------- | :------------------------- | :-------- | :-------------------------- | | Stock Options | 146,000 | (84,000) | 62,000 | | Weighted-Average Exercise Price ($)| $2.83 | $2.87 | $2.76 | | Weighted-Average Remaining Contractual Life (in Years) | 5.44 | - | 2.81 | | Intrinsic Value ($) | - | - | $28,000 | [Note 8. Income Taxes](index=19&type=section&id=Note%208.%20Income%20Taxes) This note explains the company's approach to computing income tax provision, including the impact of non-recurring adjustments for unrecognized tax benefits related to foreign taxes - The Company computes its provision for income taxes using actual effective tax rates for year-to-date periods, as a reliable estimate of the annualized effective income tax rate cannot be made[65](index=65&type=chunk) - The income tax provision for the six-month period ended June 30, 2024, included a non-recurring adjustment of **$100,000** for unrecognized tax benefits related to foreign taxes[65](index=65&type=chunk) [Note 9. Commitments](index=19&type=section&id=Note%209.%20Commitments) This note outlines the company's significant commitments for purchasing new medical equipment (Gamma Knife, LINAC) and ongoing service agreements for existing equipment - As of June 30, 2024, the Company had commitments totaling **$15,651,000** to purchase and install five Leksell Gamma Knife Esprit Systems, one Gamma Plan workstation, and three Linear Accelerator (LINAC) systems, with intent to finance substantially all[66](index=66&type=chunk)[67](index=67&type=chunk) - The Company also had total service commitments of **$14,375,000** as of June 30, 2024, for Gamma Knife and PBRT equipment maintenance, expected to be covered by cash flow from operations[69](index=69&type=chunk) - The Company has a Maintenance and Support Agreement with Mevion for its PBRT unit, requiring an annual prepayment of **$1,865,000**[68](index=68&type=chunk) [Note 10. Related Party Transactions and Balances](index=21&type=section&id=Note%2010.%20Related%20Party%20Transactions%20and%20Balances) This note details transactions and balances with related parties, primarily Elekta, for equipment purchases, maintenance, and associated liabilities - The Company's Gamma Knife business involves significant related party transactions with Elekta (**19%** owner of GKF and Gamma Knife manufacturer) for equipment purchases, commitments, and maintenance[71](index=71&type=chunk) Related Party Activity | Related Party Activity | Three Months 2024 ($) | Three Months 2023 ($) | Six Months 2024 ($) | Six Months 2023 ($) | | :------------------------------------- | :---------------- | :---------------- | :-------------- | :-------------- | | Equipment purchases and de-install costs | $521,000 | $1,217,000 | $2,937,000 | $1,418,000 | | Costs incurred to maintain equipment | $170,000 | $295,000 | $340,000 | $590,000 | | **Total related party transactions** | **$691,000** | **$1,512,000** | **$3,277,000** | **$2,008,000** | - Related party liabilities, including accounts payable, asset retirement obligations, and other accrued liabilities, were **$1,675,000** as of June 30, 2024, down from **$2,361,000** at December 31, 2023[73](index=73&type=chunk) [Note 11. Rhode Island Acquisition](index=21&type=section&id=Note%2011.%20Rhode%20Island%20Acquisition) This note provides details on the acquisition of a 60% equity interest in the RI Companies, including the purchase consideration, acquired assets, and the resulting bargain purchase gain - On May 7, 2024, the Company completed the acquisition of a **60%** equity interest in the RI Companies (SNERCC and RWRT) for **$2,850,000**, expanding its retail business model in the U.S. with three radiation therapy cancer centers[74](index=74&type=chunk)[75](index=75&type=chunk) - The acquisition resulted in a bargain purchase gain of **$3,679,000**, net of deferred taxes, recorded in the condensed consolidated statements of operations for the three and six-month periods ended June 30, 2024[79](index=79&type=chunk) Acquired Assets (Preliminary Fair Value as of May 7, 2024) | Acquired Assets (Preliminary Fair Value as of May 7, 2024) | Amount ($) | | :------------------------------------------------------- | :---------- | | Cash and cash equivalents | $3,388,000 | | Accounts receivable | $919,000 | | Medical equipment | $2,403,000 | | Facilities | $4,697,000 | | ROU assets | $1,835,000 | | Unfavorable leasehold interest | $(1,227,000)| | **Total assets acquired** | **$12,015,000**| | Accounts payable | $(150,000) | | Deferred income taxes | $(1,226,000)| | Gain on bargain purchase | $(3,679,000)| | Lease liabilities | $(1,835,000)| | Base purchase consideration | $5,125,000 | | Non-controlling interest | $(2,100,000)| | CT Sim | $(175,000) | | **Cash paid by the Company** | **$2,850,000**| Net Impact of RI Acquisition (May 7 - June 30, 2024) | Net Impact of RI Acquisition (May 7 - June 30, 2024) | Three Months Ended June 30, 2024 ($) | | :--------------------------------------------------- | :------------------------------- | | **Revenue** | $1,892,000 | | **Operating income** | $612,000 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) [Overview](index=24&type=section&id=Overview) American Shared Hospital Services provides turn-key technology solutions for stereotactic radiosurgery and advanced radiation therapy, operating through two reportable segments: medical equipment leasing and direct patient services (retail). Revenue is driven by site numbers, procedure volume, and reimbursement rates - The Company's two reportable segments are medical equipment leasing (**10 Gamma Knife**, **1 PBRT system** in the U.S.) and direct patient services (retail) (**2 international Gamma Knife facilities**, **3 newly acquired radiation therapy facilities** in Rhode Island)[86](index=86&type=chunk) [Reimbursement](index=24&type=section&id=Reimbursement) This section discusses the Centers for Medicare and Medicaid (CMS) reimbursement rates for Gamma Knife and PBRT treatments and the delayed implementation of the Radiation Oncology Alternative Payment Method (RO APM) Treatment Type | Treatment Type | 2024 CMS Reimbursement Rate (~$) | 2023 CMS Reimbursement Rate (~$) | | :------------- | :-------------------------- | :-------------------------- | | **Gamma Knife** | ~$7,420 | ~$7,691 | | **PBRT (simple)** | $561 | $572 | | **PBRT (complex)** | $1,362 | $1,323 | - The Radiation Oncology Alternative Payment Method (RO APM), which would significantly alter CMS' payment methodology, has been delayed to a future date to be determined, with at least six months' notice prior to implementation[89](index=89&type=chunk) [Recent Developments](index=25&type=section&id=Recent%20Developments) Key recent developments include the completion of the Rhode Island Acquisition, expanding the Company's retail segment, and a new joint venture agreement in Guadalajara, Mexico, for radiosurgery services - The RI Acquisition, completed on May 7, 2024, involved acquiring a **60%** equity interest in SNERCC and RWRT for **$2,850,000**, adding **three radiation therapy cancer centers** to the Company's retail segment[90](index=90&type=chunk) - A Joint Venture Agreement was signed on June 28, 2024, with Hospital San Javier to establish Newco (**70% ASHS ownership**) in Guadalajara, Mexico, for radiosurgery services, with patient treatment expected to begin in H1 2025[91](index=91&type=chunk) [Application of Critical Accounting Policies and Estimates](index=26&type=section&id=Application%20of%20Critical%20Accounting%20Policies%20and%20Estimates) This section highlights critical accounting policies and estimates, including revenue recognition, salvage value on equipment, and business combinations, which require significant management judgment and can materially affect financial statements - The Company recognizes revenue under ASC 842 (Leases) for medical equipment leasing (fee-per-use or revenue sharing) and ASC 606 (Revenue from Contracts with Customers) for direct patient services (retail)[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - Business combinations are accounted for using the acquisition method under ASC 805, requiring significant estimates for fair value allocation of acquired assets, liabilities, and non-controlling interests[102](index=102&type=chunk) - The FASB issued ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Tax Disclosures), effective for annual periods beginning after December 15, 2024, which the Company is currently evaluating for potential impact[103](index=103&type=chunk)[104](index=104&type=chunk) [Second Quarter 2024 Results](index=28&type=section&id=Second%20Quarter%202024%20Results) This section provides a detailed analysis of the Company's financial performance for the three and six-month periods ended June 30, 2024, highlighting revenue changes by segment, cost of revenue fluctuations, and the impact of the RI Acquisition on net income Revenue Performance (YoY Change) | Metric | 3 Months Ended June 30, 2024 ($) | YoY Change (%) | 6 Months Ended June 30, 2024 ($) | YoY Change (%) | | :------------------------------------ | :--------------------------- | :--------- | :--------------------------- | :--------- | | **Total Revenues** | $7,056,000 | +26.7% | $12,272,000 | +17.0% | | **Leasing Segment Revenues** | $3,899,000 | -19.0% | $8,152,000 | -9.8% | | **Retail Segment Revenues** | $3,157,000 | +317.6% | $4,120,000 | +183.7% | | **PBRT System Revenues** | $2,420,000 | -4.9% | $5,069,000 | +4.3% | | **Gamma Knife Revenues** | $2,744,000 | -9.2% | $5,311,000 | -5.7% | | **RI Acquisition Radiation Therapy Revenues** | $1,892,000 | N/A | $1,892,000 | N/A | - The increase in retail revenue was primarily due to higher volumes at international locations and the inclusion of revenue from the RI Companies post-acquisition (May 7, 2024)[106](index=106&type=chunk) - Total costs of revenue increased by **$1,538,000** (**50.4%**) and **$1,594,000** (**26.3%**) for the three and six-month periods ended June 30, 2024, respectively, driven by operating costs from newly acquired Rhode Island facilities and higher volumes at existing retail locations[111](index=111&type=chunk)[114](index=114&type=chunk) - Net income attributable to ASHS increased significantly to **$3,602,000** (**$0.55** diluted EPS) for the three months and **$3,721,000** (**$0.57** diluted EPS) for the six months ended June 30, 2024, primarily due to the **$3,679,000** bargain purchase gain from the RI Acquisition[117](index=117&type=chunk)[120](index=120&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The Company's liquidity is primarily supported by cash on hand and its revolving line of credit, used to fund capital expenditures and working capital. It details debt obligations, working capital changes, and future financing plans for commitments - Cash, cash equivalents, and restricted cash increased by **$678,000** to **$14,486,000** at June 30, 2024, from **$13,808,000** at December 31, 2023[121](index=121&type=chunk) - Working capital increased by **$2,626,000** to **$12,303,000** at June 30, 2024, from **$9,677,000** at December 31, 2023, mainly due to increases in accounts receivable[122](index=122&type=chunk) - The Company has **$15,651,000** in commitments for new equipment (Gamma Knife Esprit, LINAC systems) and **$14,375,000** in service commitments, intending to finance these projects through existing cash, the **$7,000,000 Revolving Line**, and other financing resources[129](index=129&type=chunk)[131](index=131&type=chunk) - The Company borrowed **$3,950,000** on its Revolving Line as of June 30, 2024, which was repaid in July 2024[121](index=121&type=chunk)[129](index=129&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The Company states it does not engage in derivative instruments for trading, has no off-balance sheet financial transactions, and had no significant long-term, market-sensitive investments as of June 30, 2024, indicating minimal exposure to market risk - The Company does not hold or issue derivative instruments for trading purposes and is not involved in off-balance sheet financial transactions[136](index=136&type=chunk) - As of June 30, 2024, the Company had no significant long-term, market-sensitive investments[136](index=136&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the principal executive and financial officers, evaluated the effectiveness of disclosure controls and procedures, concluding they were effective as of June 30, 2024. New controls were implemented for the RI Acquisition's revenue cycle, with ongoing assessment for additional needs - The Company's disclosure controls and procedures were deemed **effective** as of June 30, 2024, ensuring timely and accurate communication of material information[138](index=138&type=chunk) - New controls were implemented for the revenue cycle of the RI Companies following the May 7, 2024, acquisition, with continuous assessment for further control needs[140](index=140&type=chunk) - **No other material changes** to internal control over financial reporting occurred during the six-month period ended June 30, 2024[140](index=140&type=chunk) PART II - OTHER INFORMATION This section provides additional information, including legal proceedings, risk factors, other disclosures, and the exhibit index [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) There are no legal proceedings to report - There are no legal proceedings to report[142](index=142&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The primary new risk factor identified is the Company's inability to file required financial statements for the RI Acquisition under SEC Regulation S-X, which will limit its ability to raise capital through registration statements and restrict affiliates' sales of securities - The Company's inability to provide audited and pro forma financial statements for the RI Companies (S-X financial information) due to lack of reliable data from GenesisCare's bankruptcy proceedings is a **material risk**[143](index=143&type=chunk)[144](index=144&type=chunk) - **Non-compliance** with SEC Rules 8-04 and 8-05 of Regulation S-X will prevent the SEC from declaring effective registration statements and prohibit affiliates from selling securities under Rule 144 for twelve months after compliance[144](index=144&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) This section reiterates the Company's non-compliance with SEC Regulation S-X regarding the RI Acquisition financial statements, explaining the reasons for the inability to provide the required information and the resulting limitations on capital raising and securities sales. It also confirms no Rule 10b5-1 trading arrangement changes by directors or officers - The Company is **unable to provide** the required S-X financial information for the RI Acquisition due to the lack of reliable historical financial data from GenesisCare following its bankruptcy proceedings[145](index=145&type=chunk)[146](index=146&type=chunk) - The absence of S-X financial information means the SEC will **not declare effective registration statements**, and affiliates **cannot sell securities** under Rule 144 until twelve months after compliance[146](index=146&type=chunk) - **No directors or officers adopted, modified, or terminated** a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three-month period ended June 30, 2024[147](index=147&type=chunk) [Item 6. Exhibit Index](index=37&type=section&id=Item%206.%20Exhibit%20Index) This section lists all exhibits filed with the Form 10-Q, including certifications, XBRL documents, and an amendment to a Gamma Knife service agreement - The exhibit index includes **certifications** from the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1), **Inline XBRL documents** (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104), and an **amendment to a Gamma Knife service agreement** (10.1)[149](index=149&type=chunk)[150](index=150&type=chunk) [Signatures](index=38&type=section&id=SIGNATURES) The report is duly signed on behalf of American Shared Hospital Services by Raymond C. Stachowiak, Executive Chairman of the Board and Chief Executive Officer, and Robert L. Hiatt, Chief Financial Officer, on August 14, 2024 - The report was signed by **Raymond C. Stachowiak**, Executive Chairman of the Board and Chief Executive Officer, and **Robert L. Hiatt**, Chief Financial Officer, on **August 14, 2024**[154](index=154&type=chunk)

Company Overview - American Shared Hospital Services (ASHS) is a leading provider of turnkey technology solutions for stereotactic radiosurgery and advanced radiation therapy equipment and services [3] - The company collaborates with major global Original Equipment Manufacturers (OEMs) to provide cutting-edge clinical treatment systems and software for cancer treatment [3] - ASHS offers a range of products including MR Guided Radiation Therapy Linacs, Advanced Digital Linear Accelerators, Proton Beam Therapy Systems, and Brachytherapy systems [3] Financial Results Announcement - The company will hold a conference call to discuss its second quarter 2024 financial results on August 14, 2024, at 6:30 PM ET [1] - A press release detailing the financial results will be issued after the market closes on the same day [1] Participation Information - Domestic callers can join the call by dialing 844.413.3972, while international callers can dial 412.317.5776 [2] - A simultaneous webcast will be available on the company's website and for institutional investors [2] - A replay of the call will be accessible until August 21, 2024, through specified phone numbers and the company's website [2]

Core Points - American Shared Hospital Services (AMS) has commenced patient treatments at its new Radiation Therapy Facility, A.B. Radiocirugía y Radioterapia de Puebla, in Puebla, Mexico, which is located 80 miles from Mexico City [1] - AMS has established a Joint Venture (JV) with Guadalupe Amor Y Bien, holding 85% and 15% ownership interests respectively, to provide cancer treatment services at the facility [2] - The facility is equipped with an Elekta Versa HD linear accelerator, which is an upgrade from the previous equipment, and aims to serve a population of over six million people in the region [2] - The introduction of advanced treatment modalities, including IMRT, VMAT, SBRT, and Radiosurgery, is expected to significantly enhance patient outcomes and drive demand for services [3] - The JV aims to reduce patient travel for advanced care, as previously patients had to travel to Mexico City for treatment [3][2] Company Strategy - The expansion into Mexico is part of AMS's international strategy, which also includes existing Gamma Knife centers in Peru and Ecuador [3] - The company has announced a joint venture with Hospital San Javier to treat patients with advanced Leksell Gamma Knife technology in Guadalajara, Mexico [3] - AMS's VP of Sales and Business Development-International emphasized that the ability to offer additional treatment modalities will provide a competitive advantage in the region [3] Market Context - The facility had not operated since 2020, and the reintroduction of services is seen as a critical need for the local population [2] - The upgrade to the Versa linear accelerator is expected to generate significant demand due to its advanced capabilities, allowing for single-session treatments compared to multiple sessions required by other options [3]

American Shared Hospital Services Announces Signing of Joint Venture Agreement for Gamma Knife Facility in Guadalajara, Mexico JV will Establish Company’s 4th International Center SAN FRANCISCO, CA, July 9, 2024 ‒ American Shared Hospital Services (NYSE American: AMS) (the “Company”), a leading provider of turnkey technology solutions for stereotactic radiosurgery and advanced radiation therapy equipment and services, today announced that it has signed a joint venture agreement to partner in a Gamma Knife t ...

Core Insights - GK Financing LLC (GKF), a subsidiary of American Shared Hospital Services (AMS), has extended its agreement with PeaceHealth Sacred Heart Medical Center to upgrade its Gamma Knife® system to the new Esprit model, with installation expected by October 1, 2024 [1][2] - The Esprit system offers advanced features such as superior visualization, remote treatment planning, and collaboration tools, enhancing workflow efficiency and clinical options for patient treatments [2] Company Overview - American Shared Hospital Services is a leading provider of financial and turnkey solutions for cancer treatment centers, hospitals, and large cancer networks globally, working with major Original Equipment Manufacturers [5][6] - GK Financing, LLC specializes in providing Gamma Knife radiosurgery equipment and offers innovative payment models, including pay-per-treatment and revenue-sharing options, with a focus on risk-sharing and project management [4] Partnership and Impact - The partnership between GKF and PeaceHealth has lasted for 10 years, and the upgrade to the Esprit system is expected to enhance the precision of clinical treatments, allowing patients to maintain their quality of life post-treatment [2] - The medical staff at PeaceHealth has successfully provided Gamma Knife® radiosurgery treatments and anticipates that the upgrade will offer more personalized and patient-friendly options, enabling same-day discharge for patients [2]

Core Insights - GK Financing LLC (GKF), a subsidiary of American Shared Hospital Services (AMS), has extended its agreement with PeaceHealth Sacred Heart Medical Center to upgrade its Gamma Knife® system to the new Esprit model, with installation expected by October 1, 2024 [1][2] Company Overview - American Shared Hospital Services is a leading provider of financial and turnkey solutions for cancer treatment centers, hospitals, and large cancer networks globally, working closely with major Original Equipment Manufacturers (OEMs) [5][6] - GK Financing, LLC specializes in providing Gamma Knife radiosurgery equipment and offers various creative payment models, including pay-per-treatment and revenue-sharing options [4] Technology and Innovation - The Esprit system features innovations that enhance visualization, remote treatment planning, and workflow efficiency, allowing for more personalized and patient-friendly treatments [2] - Gamma Knife® radiosurgery is a non-invasive treatment option that targets intracranial tumors with minimal impact on healthy tissue, preserving patients' quality of life [1][2] Partnership and Impact - The partnership between GKF and PeaceHealth has lasted for 10 years and aims to enhance clinical treatment options for patients, allowing them to return home the same day after treatment [2][3] - The upgrade to the Esprit system is expected to provide the medical staff with multiple clinical options, improving patient outcomes and satisfaction [2]

Company Overview - American Shared Hospital Services (ASHS) is a leading provider of financial and turnkey solutions for cancer treatment centers, hospitals, and large cancer networks globally [2] - The company collaborates with major global Original Equipment Manufacturers (OEMs) to provide advanced clinical treatment systems and software for cancer treatment using Radiation Therapy and Radiosurgery [2] - ASHS specializes in Gamma Knife radiosurgery equipment, a non-invasive treatment for various brain tumors and other conditions [2] Annual Shareholder Meeting - The Annual Meeting of Shareholders is scheduled for June 25, 2024, at 9:00 a.m. PT, to be held in-person at The Hilton Hotel, San Francisco, CA [1] - The record date for determining shareholders entitled to notice and to vote at the Annual Meeting is set for April 26, 2024 [1]

American Shared Hospital Services Announces Annual Shareholder Meeting to be Held on Tuesday, June 25, 2024 Meeting Will be Held at The Hilton Hotel, San Francisco, CA SAN FRANCISCO, CA, May 21, 2024—American Shared Hospital Services (NYSE American: AMS) (the “Company”), a leading provider of turnkey technology solutions for stereotactic radiosurgery and advanced radiation therapy equipment and services, today announced that its Annual Meeting of Shareholders will be held on Tuesday, June 25, 2024, at 9:00 ...

[Part I – Financial Information](index=2&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements detail the company's financial position and performance as of March 31, 2024 [Condensed Consolidated Balance Sheets](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (as of March 31, 2024 vs. December 31, 2023) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$50,124,000** | **$48,162,000** | | Cash and cash equivalents | $12,792,000 | $13,690,000 | | Property and equipment, net | $26,879,000 | $25,844,000 | | **Total Liabilities** | **$23,739,000** | **$21,883,000** | | Long-term debt, net | $15,602,000 | $13,125,000 | | **Total Shareholders' Equity** | **$26,385,000** | **$26,279,000** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Summary (Three Months Ended March 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | **Total Revenues** | **$5,216,000** | **$4,925,000** | | Gross Margin | $2,143,000 | $1,908,000 | | Operating (Loss) Income | ($85,000) | $98,000 | | **Net Income Attributable to ASHS** | **$119,000** | **$188,000** | | Diluted EPS | $0.02 | $0.03 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (Three Months Ended March 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($1,865,000) | $1,761,000 | | Net cash used in investing activities | ($1,183,000) | ($209,000) | | Net cash provided by (used in) financing activities | $2,282,000 | ($804,000) | | **Net change in cash** | **($766,000)** | **$748,000** | | Cash, cash equivalents, and restricted cash at end of period | $13,042,000 | $13,201,000 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company operates under two reportable segments: **'leasing'** (Gamma Knife and PBRT equipment) and **'retail'** (direct facility ownership)[30](index=30&type=chunk) - On May 7, 2024, the company acquired a **60% interest in two Rhode Island cancer centers** from GenesisCare for **$2.85 million**[21](index=21&type=chunk)[69](index=69&type=chunk) - A new **$2.7 million Supplemental Term Loan** was secured on January 25, 2024, to finance capital expenditures in Mexico[39](index=39&type=chunk) - As of March 31, 2024, the company had equipment purchase commitments of **$13.752 million** and service commitments of **$14.120 million**[60](index=60&type=chunk)[61](index=61&type=chunk)[63](index=63&type=chunk) Segment Revenue and Net Income (Three Months Ended March 31, 2024) | Segment | Revenue | Net Income (Loss) Attributable to ASHS | | :--- | :--- | :--- | | Leasing | $4,253,000 | $201,000 | | Retail | $963,000 | ($82,000) | | **Total** | **$5,216,000** | **$119,000** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 2024 performance, noting revenue growth offset by higher expenses and a decline in net income [First Quarter 2024 Results](index=23&type=section&id=First%20Quarter%202024%20Results) Q1 2024 vs Q1 2023 Performance | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $5,216,000 | $4,925,000 | +5.9% | | PBRT Revenue | $2,649,000 | $2,314,000 | +14.5% | | Gamma Knife Revenue | $2,567,000 | $2,611,000 | -1.7% | | Net Income (to ASHS) | $119,000 | $188,000 | -36.7% | - The **5.9% increase in total revenue** was driven by higher PBRT reimbursement and increased international retail volumes[87](index=87&type=chunk)[88](index=88&type=chunk) - Selling and administrative expenses rose by $340,000, largely due to **$377,000 in fees for new business opportunities**[92](index=92&type=chunk) - Gamma Knife procedures decreased by 20 to 273 due to expired contracts; **excluding these, procedures increased by 4%**[89](index=89&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) - The company's cash, cash equivalents, and restricted cash **decreased by $766,000** during Q1 2024 to **$13.042 million**[96](index=96&type=chunk) - Working capital **increased by $909,000 to $10.586 million** at March 31, 2024, compared to year-end 2023[97](index=97&type=chunk) - Total long-term debt stood at **$15.602 million** as of March 31, 2024, with the company in compliance with all debt covenants[101](index=101&type=chunk)[103](index=103&type=chunk) - The company has **commitments of $13.752 million for new equipment**, intending to finance these purchases with cash and a **$7.0 million revolving line of credit**[104](index=104&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate fluctuation on its floating-rate debt, with no derivative instruments held - The company does not use derivative instruments and had **no significant long-term, market-sensitive investments** at the end of the quarter[111](index=111&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective as of March 31, 2024 - Management concluded that as of March 31, 2024, the company's **disclosure controls and procedures were effective**[113](index=113&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter[114](index=114&type=chunk) [Part II - Other Information](index=29&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) New risks are identified concerning the integration and potential hidden liabilities of the recent Rhode Island acquisition - A new risk factor is the **potential difficulty in assimilating the newly acquired RI Target Companies**, which could divert management attention[117](index=117&type=chunk) - The company acknowledges the risk that its **due diligence may not have revealed all material liabilities** associated with the RI Acquisition[118](index=118&type=chunk)[119](index=119&type=chunk) [Other Part II Items](index=29&type=section&id=Other%20Part%20II%20Items) The company reports no legal proceedings, unregistered equity sales, or defaults upon senior securities for the quarter - The company reported **no legal proceedings** for the period[116](index=116&type=chunk) - **No unregistered sales of equity securities** or defaults upon senior securities occurred[120](index=120&type=chunk) [Item 6. Exhibit Index](index=31&type=section&id=Item%206.%20Exhibit%20Index) This section lists all exhibits filed with the report, including acquisition agreements and officer certifications - Exhibits filed include **amendments to the Investment Agreement with GenesisCare** and officer certifications pursuant to the Sarbanes-Oxley Act[123](index=123&type=chunk)

American Shared Hospital Services (NYSE:AMS) Q1 2024 Earnings Conference Call May 14, 2024 4:30 PM ET Company Participants Kirin Smith - PCG Advisory Raymond Stachowiak - Executive Chairman and Chief Executive Officer Robert Hiatt - Chief Financial Officer Conference Call Participants Ameren - Zacks Aaron Granowitz - Private Investor Operator Good afternoon, everyone and welcome to the American Shared Hospital Services First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this eve ...