
PART I – FINANCIAL INFORMATION Item 1. Financial Statements This section presents American Shared Hospital Services' unaudited condensed consolidated financial statements as of June 30, 2025, including balance sheets, statements of operations, shareholders' equity, and cash flows, with detailed notes on presentation basis, significant accounting policies, acquisitions, debt, leases, and other financial details Condensed Consolidated Balance Sheets Summary (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $24,433 | $26,258 | | Total Assets | $63,494 | $60,197 | | Total Current Liabilities | $20,860 | $10,405 | | Total Liabilities | $34,646 | $30,170 | | Total Shareholders' Equity | $28,848 | $30,027 | Condensed Consolidated Statements of Operations Summary (in thousands, except per share data) | | Three Months Ended June 30 | Six Months Ended June 30 | | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Total Revenue | $7,071 | $7,056 | $13,183 | $12,272 | | Gross Profit | $1,630 | $2,468 | $2,572 | $4,611 | | Operating Loss | ($544) | ($1) | ($1,843) | ($86) | | Net (Loss) Income Attributable to ASHS | ($280) | $3,602 | ($905) | $3,721 | | Diluted (Loss) Earnings Per Share | ($0.04) | $0.55 | ($0.14) | $0.57 | Condensed Consolidated Statements of Cash Flows Summary (in thousands) | | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Provided by (Used in) Operating Activities | $2,131 | ($579) | | Net Cash Used in Investing Activities | ($5,916) | ($2,036) | | Net Cash Provided by Financing Activities | $3,841 | $3,293 | | Net Change in Cash, Cash Equivalents, and Restricted Cash | $56 | $678 | - The company identified two reportable segments: leasing and direct patient services, with the latter expanding through the Rhode Island (RI) acquisition and operations of a new facility in Mexico3738 - In Q2 2024, a net bargain purchase gain of $3.679 million related to the RI acquisition significantly impacted current period earnings986126 - A new tax law, the One Big Beautiful Bill Act (OBBBA), was enacted on July 4, 2025 (post-reporting period), and the company is evaluating its impact, with adjustments to be reflected in Q3 20258891 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2025 financial performance, noting a slight increase in total revenue driven by the direct patient services segment, offsetting a decline in the leasing segment, and covers revenue drivers, cost fluctuations, RI acquisition impact, liquidity, capital resources, debt obligations, and significant new equipment commitments Second Quarter 2025 Results Total revenue for Q2 2025 remained flat year-over-year at $7.1 million, with direct patient services revenue increasing by $0.343 million offsetting a $0.328 million decrease in leasing revenue, resulting in a net loss of $0.28 million or ($0.04) per share, contrasting sharply with Q2 2024's $3.6 million net income primarily due to a one-time RI acquisition bargain purchase gain recognized in the prior year Segment Revenue (in millions) | Revenue Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Leasing | $3.57 | $3.90 | $6.56 | $8.15 | | Direct Patient Services | $3.50 | $3.16 | $6.62 | $4.12 | | Total | $7.07 | $7.06 | $13.18 | $12.27 | Key Operating Metrics (Number of Treatments) | Operating Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | PBRT Fractions | 1,114 | 1,236 | 1,945 | 2,512 | | Gamma Knife Treatments | 264 | 340 | 472 | 613 | | Radiation Therapy (RI & Puebla) | 6,320 | 2,599 | 13,046 | 2,599 | - The decline in leasing revenue was primarily due to reduced Gamma Knife and PBRT treatment volumes, partly attributable to expiring customer contracts112 - Growth in direct patient services revenue was driven by the full-period contribution from RI (acquired May 2024) and the new Puebla facility in Mexico112 - Net loss for Q2 2025 was $0.28 million, compared to a net income of $3.602 million in the prior-year period, with the latter including a $3.679 million bargain purchase gain9130 Liquidity and Capital Resources As of June 30, 2025, the company held $11.3 million in cash, cash equivalents, and restricted cash, with working capital significantly decreasing from $15.9 million at year-end 2024 to $3.6 million, primarily due to revolving credit line utilization and increased current portion of long-term debt, though the company believes existing cash, operating cash flow, and available credit are sufficient for the next 12 months' debt and operating needs - As of June 30, 2025, total cash, cash equivalents, and restricted cash amounted to $11.331 million131 - Working capital decreased by $12.28 million from December 31, 2024, to $3.573 million, primarily due to a $5 million revolving credit line draw and reclassification of long-term debt to current liabilities132 - As of June 30, 2025, the company was not in compliance with its maximum financed debt to EBITDA ratio covenant but regained compliance on July 1, 202550137 Commitments As of June 30, 2025, the company had significant commitments totaling $8.4 million for the purchase and installation of three Gamma Knife Esprit systems and two LINAC systems, in addition to $11.9 million in equipment service and maintenance commitments, with plans to finance these purchases and confidence in cash flow and available credit to cover service fees - The company has $8.385 million in commitments for the purchase of three Esprit systems and two LINAC systems73145 - Total service and maintenance commitments for equipment amount to $11.928 million75147 Item 3. Quantitative and Qualitative Disclosures about Market Risk The company states that as of June 30, 2025, it does not hold or issue derivative instruments for trading purposes, nor does it have significant long-term market-sensitive investments, and has no exposure to entities designed to facilitate off-balance sheet financial transactions or similar arrangements - As of June 30, 2025, the company does not use derivative instruments for trading purposes and has no significant market-sensitive investments151 Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were ineffective as of June 30, 2025, due to previously disclosed material weaknesses in internal control over financial reporting, specifically the lack of a sufficient number of experienced personnel, with a remediation plan underway including hiring a new CFO and accounting manager, and internalizing outsourced billing processes - Disclosure controls and procedures were deemed ineffective as of June 30, 2025, due to material weaknesses in internal control152 - The material weakness relates to the lack of a sufficient number of personnel with the necessary experience to maintain an appropriate control environment152 - Remediation efforts include the appointment of a new CFO (December 2024), hiring an accounting manager (March 2025), and plans to internalize the billing cycle for the Rhode Island facility by Q4 2025154 PART II – OTHER INFORMATION Item 1. Legal Proceedings The company reported no legal proceedings during this period - The company reported no legal proceedings158 Item 1A. Risk Factors The company stated that no material changes occurred to the risk factors previously disclosed in its annual report on Form 10-K for the year ended December 31, 2024, during this reporting period - No material changes to risk factors occurred during this reporting period159