Core Insights - American Shared Hospital Services reported a revenue increase of 36.3% year-over-year for Q3 2024, reaching $6,999,000, driven by the acquisition of Rhode Island radiation therapy facilities and a new facility in Puebla, Mexico [2][4][6] Financial Performance - Total revenue for Q3 2024 was $6,999,000, up from $5,134,000 in Q3 2023 [6] - Revenue from direct patient services ("retail") surged 273.2% to $3,687,000, primarily due to the new Rhode Island and Puebla facilities [2][7] - Medical equipment leasing revenue decreased by 16.1% to $3,312,000, attributed to lower Gamma Knife treatment volumes [2][8] - Proton beam radiation therapy revenue increased by 4.4% to $2,316,000, with treatment volumes rising by 5.4% [9] - Gamma Knife operations revenue fell by 32.9% to $1,821,000, with procedures down 31.0% due to contract expirations and equipment downtime [10] - Gross margin decreased to $1,370,000, representing 19.6% of revenue, down from 40.9% in the previous year [2][4] - Operating income turned to a loss of $889,000 compared to an income of $90,000 in Q3 2023, mainly due to increased operating costs [12] - Net loss for Q3 2024 was $207,000, or ($0.03) per diluted share, compared to a net income of $118,000, or $0.02 per diluted share, in Q3 2023 [14] - Adjusted EBITDA for Q3 2024 was $1,366,000, down from $1,669,000 in Q3 2023 [15] Balance Sheet Highlights - Cash and cash equivalents as of September 30, 2024, were $14,077,000, an increase from $13,808,000 at the end of 2023 [3][21] - Shareholders' equity increased to $26,423,000 as of September 30, 2024, compared to $22,624,000 at the end of 2023 [21] Strategic Outlook - The company is focused on long-term growth strategies, including improving operational efficiencies and expanding its product portfolio [4][5] - The CEO expressed confidence in the company's growth trajectory, supported by a strong balance sheet and increasing sales pipeline [5]

Core Points - American Shared Hospital Services (AMS) will hold a conference call to discuss its third quarter 2024 financial results on November 13, 2024, at 1:00 PM ET [1] - The financial results press release will be issued before the market opens on the same day [1] Company Overview - AMS is a leading provider of turnkey technology solutions for stereotactic radiosurgery and advanced radiation therapy equipment and services [1] - The company collaborates with major global Original Equipment Manufacturers (OEMs) to provide clinical treatment systems and software for cancer treatment [4] - AMS offers a range of products including MR Guided Radiation Therapy Linacs, Advanced Digital Linear Accelerators, Proton Beam Radiation Therapy Systems, and Brachytherapy systems [4]

Core Insights - American Shared Hospital Services (AMS) has appointed Gary Delanois as Chief Operating Officer, bringing extensive experience in radiation oncology services management [1][2] - Ranjit Pradhan has been promoted to Senior Vice President of Sales and Marketing, having successfully renewed and expanded five Gamma Knife agreements in the past 18 months [1][2] Company Leadership Changes - Gary Delanois has 28 years of healthcare management experience, with a strong track record in operating performance and relationship building with physicians and partners [2][3] - Prior to joining AMS, Delanois served as CFO for a major primary care provider and held senior operational roles at 21st Century Oncology [3][4] - Ranjit Pradhan will lead strategic marketing initiatives and drive growth in new business, leveraging his extensive experience in global healthcare markets [5] Company Overview - AMS is a leading provider of technology solutions for cancer treatment, working with major global Original Equipment Manufacturers (OEMs) [6][7] - The company offers a range of products including MR Guided Radiation Therapy, Advanced Digital Linear Accelerators, and Proton Beam Radiation Therapy Systems [7]

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $7.1 million, a year-over-year increase of 27% from $5.7 million in Q2 2023 [11][14] - Net income attributable to the company was $3.6 million or $0.55 per diluted share, compared to a net loss of $111,000 or $0.02 per diluted share in Q2 2023 [17] - Adjusted EBITDA for Q2 2024 was $2 million, slightly up from $1.9 million in Q2 2023 [18] Business Line Data and Key Metrics Changes - Revenue from the leasing segment was $3.9 million, a decrease of 19% compared to $4.81 million in the prior year [14] - Revenue from the retail segment surged to $3.16 million, marking a 318% increase from $756,000 in the year-ago quarter, driven by the Rhode Island acquisition and increased volumes [14] - Proton therapy revenue decreased by 5% to $2.42 million, while total proton therapy fractions fell by 10% [15] Market Data and Key Metrics Changes - International retail results showed growth, particularly in Ecuador and Peru, with the upgrade of equipment contributing to increased volumes [9] - The Gamma Knife procedures revenue decreased by 9% to $2.74 million, but excluding expired contracts, procedures increased by 24% [15] Company Strategy and Development Direction - The company is focusing on expanding its retail segment, as evidenced by the Rhode Island acquisition and new centers in Mexico [9][23] - Plans include building a proton beam radiation therapy center in Rhode Island, which would be the only system between New York City and Boston [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the strong performance in Q2 and the strategic acquisition in Rhode Island [7][32] - The company anticipates stronger international growth and additional revenue streams from new centers and acquisitions [12][32] Other Important Information - The company ended Q2 2024 with over $14.5 million in cash, approximately $2.24 per share [12] - Shareholders' equity increased to $26.5 million or $4.17 per share at the end of Q2 2024, up from $22.6 million or $3.59 per share at the end of 2023 [20] Q&A Session Summary Question: Confirmation on growth opportunities in direct business and potential service interruptions at Sacred Heart - Management confirmed focus on both leasing and retail segments, with a stronger emphasis on retail opportunities [23] Question: Clarification on the timing of the Rhode Island acquisition - Management confirmed that the acquisition concluded in early May, thus not reflecting a full three months in the reported quarter [25] Question: Insights from the direct relationship and updates on the proton beam project - Management noted delays in the CON application process but expressed confidence in the outcome and highlighted ongoing learning from the new operations [27][28] Question: Marketing strategies for Rhode Island centers and sales pipeline updates - Management indicated a robust sales pipeline and ongoing market engagement to identify new opportunities [30]

Financial Performance - Total revenue for Q2 2024 was $7.1 million, a 27% increase year-over-year, driven by the acquisition of Rhode Island facilities which contributed $1.9 million to the revenue growth[1][5] - Net income for Q2 2024 was $3.6 million, or $0.55 per diluted share, compared to a net loss of $111,000, or $0.02 per diluted share in Q2 2023, primarily due to a $3.7 million bargain purchase gain from the Rhode Island acquisition[2][9] - Adjusted EBITDA for Q2 2024 was $2,010,000, up from $1,938,000 in Q2 2023, reflecting contributions from the newly acquired Rhode Island facilities[3][9] - Revenues for the three months ended June 30, 2024, increased to $7,056,000, up 27% from $5,568,000 in the same period last year[21] - Net income attributable to American Shared Hospital Services for the three months ended June 30, 2024, was $3,602,000, compared to a net loss of $111,000 in the same period last year[21] - Basic earnings per share for the three months ended June 30, 2024, was $0.56, compared to a loss of $0.02 in the same period last year[21] Cash and Assets - Cash and cash equivalents at June 30, 2024, were $14.5 million, an increase from $13.8 million at December 31, 2023[3][12] - Total assets as of June 30, 2024, increased to $60,825,000, up from $48,162,000 as of December 31, 2023[22] - Cash and cash equivalents as of June 30, 2024, were $14,486,000, compared to $13,808,000 as of December 31, 2023[22] Revenue Segments - Revenue from the retail segment increased by 318% to $3,157,000 in Q2 2024, compared to $756,000 in the same period last year, attributed to the Rhode Island acquisition and increased patient volumes[5][6] - Proton beam radiation therapy revenue decreased by 5% to $2.4 million in Q2 2024, with a 10% decline in therapy fractions compared to the same period last year[6][8] Operational Metrics - Total Gamma Knife procedures increased by 10% to 340 in Q2 2024, compared to 309 in Q2 2023, despite a 9% decrease in overall Gamma Knife revenue due to contract expirations[6][7] - Gross margin for Q2 2024 was $2.5 million, or 35% of revenue, down from 45% in the prior year, reflecting the expansion in the retail segment[2][7] - Gross margin for the six months ended June 30, 2024, was $4,611,000, representing a 4% increase compared to $4,426,000 for the same period in 2023[21] Liabilities and Expenses - Current liabilities as of June 30, 2024, were $13,336,000, compared to $10,779,000 as of December 31, 2023[22] - Interest expense for the three months ended June 30, 2024, was $385,000, an increase from $277,000 in the same period last year[21] Strategic Developments - The company signed a joint venture agreement for a Gamma Knife facility in Guadalajara, Mexico, marking its fourth international center[4] - The company reported a bargain purchase gain of $3,679,000 for the three months ended June 30, 2024[21]

Core Insights - American Shared Hospital Services reported a 27% year-over-year increase in revenue for Q2 2024, reaching $7.1 million, primarily driven by the acquisition of three Rhode Island radiation therapy facilities [2][3][5]. Financial Performance - Total revenue for Q2 2024 was $7,056,000, up from $5,568,000 in Q2 2023, with a significant contribution of $1.9 million from the Rhode Island acquisition [2][5]. - Proton beam radiation therapy revenue decreased by 5% to $2,420,000, while Gamma Knife revenue decreased by 9% to $2,744,000 due to lower average reimbursement rates [2][6]. - The gross margin for Q2 2024 was $2,468,000, representing 35% of revenue, down from 45% in the previous year [7]. - Net income for Q2 2024 was $3,602,000, or $0.55 per diluted share, compared to a net loss of $111,000, or $0.02 per diluted share, in Q2 2023 [9][10]. Operational Highlights - The company signed a joint venture agreement for a Gamma Knife facility in Guadalajara, Mexico, marking its fourth international center [2][3]. - The new facility in Puebla, Mexico has begun treating patients, expected to contribute positively to future revenues [2][3]. Strategic Developments - The acquisition of the Rhode Island facilities resulted in a bargain purchase gain of $3.7 million, significantly impacting net income [3][9]. - The company continues to see growth in international patient volumes, particularly in Ecuador and Peru, where it operates the only Gamma Knife facilities [3][4]. Balance Sheet and Cash Flow - As of June 30, 2024, cash and cash equivalents were $14,486,000, an increase from $13,808,000 at the end of 2023 [13][21]. - Shareholders' equity increased to $26,542,000, or $4.17 per share, compared to $22,624,000, or $3.59 per share, at the end of 2023 [13][21].

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 ...