AMERICAN SHARED HOSPITAL SERVICES

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

AMERICAN SHARED HOSPITAL SERVICES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note1. Basis of Presentation

In the opinion of the management of American Shared Hospital Services (“ASHS”), the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary for the fair presentation of ASHS consolidated financial position as of* March 31, 2024*, the results of its operations for thethree-month periods ended* March 31, 2024and2023*, and the cash flows for thethree-month periods ended* March 31, 2024and2023*. The results of operations for thethree-month periods ended* March 31, 2024* arenot necessarily indicative of results on an annualized basis. Consolidated balance sheet amounts as of* December 31, 2023* have been derived from the audited consolidated financial statements.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended* December 31, 2023* included in the ASHS Annual Report on Form10-K filed with the Securities and Exchange Commission (“SEC”) on* April 1, 2024.*

These condensed consolidated financial statements include the accounts of ASHS and its subsidiaries (the “Company”) including as follows: ASHS wholly owns the subsidiaries American Shared Radiosurgery Services (“ASRS”), PBRT Orlando, LLC (“Orlando”), ASHS-Mexico, S.A. de C.V. (“ASHS-Mexico”), ASHS-Rhode Island Proton Beam Radiation Therapy, LLC, ASHS-Bristol Radiation Therapy, LLC,OR21, Inc., and MedLeader.com, Inc. (“MedLeader”); ASHS is the majority owner of Long Beach Equipment, LLC (“LBE”); ASRS is the majority-owner of GK Financing, LLC (“GKF”), which wholly owns the subsidiary Instituto de Gamma Knife del Pacifico S.A.C. (“GKPeru”) and HoldCo GKC S.A. (“HoldCo”). HoldCo wholly owns the subsidiary Gamma Knife Center Ecuador S.A. (“GKCE”). GKF is the majority owner of the subsidiaries Albuquerque GK Equipment, LLC (“AGKE”) and Jacksonville GK Equipment, LLC (“JGKE”).

The Company (through ASRS) and Elekta AB (“Elekta”), the manufacturer of the Gamma Knife (through its wholly-owned United States subsidiary, GKV Investments, Inc.), entered into an operating agreement and formed GKF. As of* March 31, 2024*, GKF provides Gamma Knife units toten medical centers in the United States in the states of Florida, Illinois, Indiana, Mississippi, Nebraska, New Mexico, New York, Ohio, Oregon, and Texas. GKF also owns and operatestwo single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador. The Company through its wholly-owned subsidiary, Orlando, provided proton beam radiation therapy (“PBRT”) and related equipment to a customer in the United States.

On* April 27, 2022**,* the Company signed a Joint Venture Agreement with the principal owners of Guadalupe Amor y Bien S.A. de C.V. (“Guadalupe”) to establish AB Radiocirugia y Radioterapia de Puebla, S.A.P.I. de C.V. of Puebla (“Puebla”) to treat public- and private-paying cancer patients and provide radiation therapy and radiosurgery services locally in Mexico. The Company and Guadalupe hold 85% and 15% ownership interests, respectively, in Puebla. Under the agreement, the Company is responsible for providing a linear accelerator upgrade to an Elekta Versa HD, and Guadalupe will be accountable for all site modification costs. The Company formed ASHS-Mexico on* October** 3, 2022 to establish Puebla. Puebla was formed on December 15, 2022and the Company expects Puebla to begin treating patients in June 2024.Operating costs incurred during thethree*-month period ended* March 31, 2024* by Puebla, are included in the condensed consolidated statement of operations.

The Company formed the subsidiaries GKPeru and Puebla and acquired GKCE for the purposes of expanding its business internationally; Orlando and LBE to provide PBRT equipment and services in Orlando, Florida and Long Beach, California, respectively; and AGKE and JGKE to provide Gamma Knife equipment and services in Albuquerque, New Mexico and Jacksonville, Florida, respectively. LBE isnot expected to generate revenue within the nexttwo years.

The Company continues to develop its design and business model for The Operating Room for the21st Century SM through its 50%-owned subsidiaryOR21, LLC (“OR21 LLC”). The remaining 50% is owned by an architectural design company.OR21 LLC isnot expected to generate significant revenue for at least the nexttwo years.

MedLeader was formed to provide continuing medical education online and through videos for doctors, nurses, and other healthcare workers. This subsidiary isnot operational at this time.

On* November 10, 2023,the Company entered into an Investment Purchase Agreement (the “IPA”) with GenesisCare USA, Inc. (the “GenesisCare”) and GenesisCare USA Holdings, Inc. (“GC Holdings”), pursuant to which GenesisCare agreed to sell to the Company its entire equity interest in each of Southern New England Regional Cancer Center, LLC and Roger Williams Radiation Therapy, LLC, (collectively, the “RI Target Companies”) and to assign certain payor contacts to the Company for a purchase price of $2,850,000 (such transaction, the “RI Acquisition”). The equity interests to be acquired by the Company under the IPA equates to a 60% interest in each RI Target Company. The RI Target Companies operatethree* functional radiation therapy cancer centers in Rhode Island. The RI Acquisition was contingent upon certain closing conditions, including GenesisCare and the Company entering into a consent agreement with the Rhode Island Department of Health and approval of all equity holders and managers of each RI Target Company. On* March 1, 2024,the Company, GenesisCare and GC Holding entered into a First Amendment to the Investment Agreement pursuant to which the parties agreed to extend the date on which a party could terminate the IPA if the closing conditions hadnot* been met (the “Permitted Termination Date”) from* March 10, 2024to April 30, 2024.On April 18, 2024,the parties agreed to a Second Amendment to the Investment Agreement pursuant to which GenesisCare agreed to sell a Discovery RT OPEN OC Mid CTM to the Companyfor $175,000, payment for which is required5* days following the close of the acquisition. On* April 24 2024,the Company, GenesisCare and GC Holdings, entered into a Third Amendment to the Investment Agreement that further extended the Permitted Termination Date to May 31, 2024.On May 7, 2024,the parties entered into a Fourth Amendment to the Investment Purchase Agreement, pursuant to which GenesisCare agreed to transfer certain assets and payor contracts to the RI Target Companies, rather than transferring such assets and payor contracts to the Company. The parties completed the remaining closing conditions pursuant to the IPA and closed the RI Acquisition on May 7, 2024.*

The RI acquisition will be accounted for as a business combination under ASC805 Business Combinations, which requires, among other things, that purchase consideration, assets acquired, and liabilities assumed be measured at their fair values as of the acquisition date. The initial purchase allocation for the business combination is incomplete at this time, subject to initial accounting. Disclosures regarding amounts recognized for major classes of assets acquired and liabilities assumed will be provided once the initial accounting is completed.

Costs related to legal, financial and due diligence services performed in connection with the RI Acquisition recorded in selling and administrative expense in the condensed consolidated statement of operations were$322,000 forthree-month period ended* March 31, 2024*.

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

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Accounting pronouncements issued and not yet adopted - In* November 2023,the FASB issued ASU2023*-07 Segment Reporting (Topic280*): Improvements to Reportable Segment Disclosures*(“ASU2023-07”) which enhances the disclosure requirements for segment reporting, primarily disclosures around significant segment expenses. The key provisions of the amendments require disclosure of significant segment expense reviewed by the Chief Operating Decision Maker (the “CODM”), require disclosure of an “other” segment category, require disclosure of segment profit or loss and assets for interim periods, clarify and require disclosure of other measurements used by the CODM in assessing segment performance and allocating resources, and require disclosure of the CODM’s title and position and an explanation of how the CODM assesses segment performance. ASU2023-07 is effective for annual periods beginning after* December 15, 2023and interim periods within fiscal years beginning after December 15, 2024.The Company is currently evaluating ASU2023*-07 to determine the impact it* may*have on its consolidated financial statements.

In* December 2023,the FASB issued ASU2023*-09 Income Taxes (Topic740*) Improvements to Income Tax Disclosures* (“ASU2023-09”) which requires entities, on an annual basis, to disclose: specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, the amount of income taxes paid, net of refunds, disaggregated by jurisdiction, income or loss from continuing operations before income tax, income tax expense from continuing operations disaggregated between foreign and domestic, and income tax expense from continuing operations disaggregated by federal, state and foreign. ASU2023-09 is effective for annual periods beginning after* December 15, 2024.The Company is currently evaluating ASU2023*-09 to determine the impact it* may*have on its consolidated financial statements.

Revenue recognition - The Company recognizes revenues under Accounting Standards Codification (“ASC”)842 Leases (“ASC842”) and ASC606 Revenue from Contracts with Customers (“ASC606”).

Rental revenue from medical equipment leasing (“leasing”) – The Company recognizes revenues under ASC842 when services have been rendered and collectability is reasonably assured, on either a fee per use or revenue sharing basis. The terms of the contracts donot contain any guaranteed minimum payments. The Company’s lease contracts typically have aten-year term and are classified as either fee per use or revenue sharing. Fee per use revenues are recognized at the time the procedures are performed, based on each hospital’s contracted rate and the number of procedures performed. Under revenue sharing arrangements, the Company receives a contracted percentage of the reimbursement received by the hospital. The amount the Company expects to receive is recorded as revenue and estimated based on historical experience. Revenue estimates are reviewed periodically and adjusted as necessary. Some of the Company’s revenue sharing arrangements also have a cost sharing component and net profit share for the operating costs of the center. The Company records an estimate of operating costs which are reviewed on a regular basis and adjusted as necessary to more accurately reflect the actual operating costs and profit. The operating costs and estimated net operating profit are recorded as other direct operating costs in the condensed consolidated statements of operations. For thethree-month periods ended* March 31, 2024and2023*, the Company recognized leasing revenue of approximately $4,253,000 and $4,229,000 of which approximately $2,649,000 and $2,314,000 were for PBRT services, respectively.

Direct patient services income (“retail”) – The Company has stand-alone facilities in Lima, Peru and Guayaquil, Ecuador, where contracts exist between the Company’s facilities and the individual patients treated at the facility. Under ASC606, the Company acts as the principal in these transactions and provides, at a point in time, a single performance obligation, in the form of a Gamma Knife treatment. Revenue related to a Gamma Knife treatment is recognized on a gross basis at the time when the patient receives treatment. There isno variable consideration present in the Company’s performance obligation and the transaction price is agreed upon per the stated contractual rate. GKPeru’s payment terms are typically prepaid for self-pay patients and insurance provider payments are paid net30 days. GKCE’s patient population is primarily covered by a government payor and payments are paid betweenthree andsix months following issuance of an invoice. The Company didnot capitalize any incremental costs related to the fulfillment of its customer contracts. Accounts receivable balances under ASC606 at* March 31, 2024* and* January 1, 2024were $1,882,000 and $1,626,000, respectively. Accounts receivable balances under ASC606* at* March 31, 2023* and* January 1, 2023were $1,058,000 and $1,021,000, respectively. For thethree*-month periods ended* March 31, 2024*, the Company recognized revenues of approximately $963,000 and $696,000 under ASC606, respectively.

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Business segment information - Based on the guidance provided in accordance with ASC280 Segment Reporting (“ASC280”), the Company analyzed its subsidiaries which are all in the business of providing radiosurgery and radiation therapy services, either through leasing to healthcare providers or directly to patients, and concluded there aretwo reportable segments, leasing and retail. As of* March 31, 2024*, the Company provided Gamma Knife and PBRT equipment toeleven hospitals in the United States and owns and operatestwo single-unit facilities in Lima, Peru and Guayaquil, Ecuador. An operating segment is defined by ASC280 as it engages in business activities in which it* mayrecognize revenues and incur expenses, its operating results are regularly reviewed by the Company’s Chief Operating Decision Maker (“CODM”), and its discrete financial information is available. The Company determinedtwo* reportable segments existed due to similarities in economics of business operations and how the Company recognizes revenue for the patient treatment. The operating results of thetwo reportable segments are reviewed by the Company’s Executive Chairman of the Board and Chief Executive Officer, who is also the CODM.

For thethree-month period ended* March 31, 2024*, the Company’s PBRT operations represented a significant majority of the net income attributable to the Company, disclosed below. The revenues, depreciation, interest expense, interest income, tax expense and net income attributable to American Shared Hospital Services for the Company’stwo reportable segments as of* March 31, 2024and2023* consist of the following:

Reclassifications - Certain comparative balances as of and for the year ended have been reclassified to make them consistent with the current year presentation.

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Note2. Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation for Gamma Knife units and other equipment is determined using the straight-line method over the estimated useful lives of the assets, which for medical and office equipment is generally between three andten years, and after accounting for salvage value on the equipment where indicated. The Company determines salvage value based on the estimated fair value of the equipment at the end of its useful life.

Depreciation for PBRT equipment is determined using the modified units of production method, which is a function of both time and usage of the equipment. This depreciation method allocates costs considering the projected volume of usage through the useful life of the PBRT unit, which has been estimated at 20 years. The estimated useful life of the PBRT unit is consistent with the estimated economic life of 20 years.

The following table summarizes property and equipment as of* March 31, 2024* and* December 31, 2023*:

Depreciation expense in the condensed consolidated statements of operations for thethree-month periods ended* March 31, 2024and2023* is as follows:

Note3. Long-Term Debt Financing

On* April 9, 2021the Company along with certain of its domestic subsidiaries (collectively, the “Loan Parties”) entered into afive* year $22,000,000 credit agreement (the “Credit Agreement”) with Fifth Third Bank, N.A. (“Fifth Third”). The Credit Agreement includes three loan facilities. Thefirst loan facility is a $9,500,000 term loan (the “Term Loan”) which was used to refinance the domestic Gamma Knife debt and finance leases, and associated closing costs. Thesecond loan facility of $5,500,000 is a delayed draw term loan (the “DDTL”) which was used to refinance the Company’s PBRT finance leases and associated closing costs, as well as to provide additional working capital. Thethird loan facility provides for a $7,000,000 revolving line of credit (the “Revolving Line”) available for future projects and general corporate purposes. The Company borrowed $2,400,000 on the Revolving Line as of* March 31, 2024*, which was paid off in* April 2024.*The facilities have afive-year maturity and carry a floating interest of SOFR plus 3.0% and are secured by a lien on substantially all of the assets of the Loan Parties and guaranteed by ASHS.

On* January 25, 2024 (the “First Amendment Effective Date”), the Company and Fifth Third entered into a First Amendment to Credit Agreement (the “First Amendment”), which amended the Credit Agreement to add a new term loan in the aggregate principal amount of $2,700,000 (the “Supplemental Term Loan”). The proceeds of the Supplemental Term Loan were advanced in a single borrowing on January 25, 2024,and were used for capital expenditures related to the Company’s operations in Puebla, Mexico and other related transaction costs. The Supplemental Term Loan will mature on January 25, 2030 (the “Maturity Date”). Interest on the Supplemental Term Loan is payable monthly during the initialtwelve* month period following the First Amendment Effective Date. Following suchtwelve month period, the Company is required to make equal monthly payments of principal and interest to fully amortize the amount outstanding under the Supplemental Term Loan by the Maturity Date. The Supplemental Term Loan is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. The First Amendment also replaces the LIBOR-based rates in the Credit Agreement with SOFR-based rates. Pursuant to the First Amendment, advances under the Credit Agreement bear interest at a floating rate per annum equal to SOFR plus 3.00%, subject to a SOFR floor of 0.00%. The long-term debt on the condensed consolidated balance sheets related to the Term Loan and DDTL was $13,525,000 and $10,825,000 as of* March 31, 2024* and* December 31, 2023*, respectively. The Company capitalized debt issuance costs of $97,000 as of* March 31, 2024* related to issuance of the Supplemental Term Loan.

The Credit Agreement contains customary covenants and representations, including without limitation, a minimum fixed charge coverage ratio of 1.25 and maximum funded debt to EBITDA ratio of 3.0 to1.0 (tested on a trailingtwelve-month basis at the end of each fiscal quarter), reporting obligations, limitations on dispositions, changes in ownership, mergers and acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and capital expenditures. The Loan Parties are in compliance with the Credit Agreement covenants as of* March 31, 2024*.

The loan entered into with United States International Development Finance Corporation (“DFC”) in connection with the acquisition of GKCE in* June 2020 (the “DFC Loan”) was obtained through the Company’s wholly-owned subsidiary, HoldCo and is guaranteed by GKF. The DFC Loan is secured by a lien on GKCE’s assets. Thefirst* tranche of the DFC Loan was funded in* June 2020.During thefourth* quarter of2023, thesecond tranche of the DFC loan was funded to finance the equipment upgrade in Ecuador. The amount outstanding under thefirst tranche of the DFC Loan is payable in29 quarterly installments with a fixed interest rate of 3.67%. The amount outstanding under thesecond tranche of the DFC Loan is payable in16 quarterly installments with a fixed interest rate of 7.49%. The long-term debt on the condensed consolidated balance sheets related to the DFC Loan was $2,299,000 and $2,464,000 as of* March 31, 2024* and* December 31, 2023*, respectively. The Company capitalized debt issuance costs of $0 and $9,000 as of* March 31, 2024* and* December 31, 2023*, respectively, related to maintenance and administrative fees on the DFC Loan.

The DFC Loan contains customary covenants including without limitation, requirements that HoldCo maintain certain financial ratios related to liquidity and cash flow as well as depository requirements. On* March 28, 2024the HoldCo received a waiver and amendment from DFC for certain covenants as of December 31, 2023and through December 31, 2024and amended other covenants and definitions permanently. HoldCo was in compliance with all debt covenants pursuant to the DFC Loan as amended and waived at March 31, 2024*.

The accretion of debt issuance costs for thethree-month periods ended* March 31, 2024and2023* was $38,000 and $18,000, respectively. As of* March 31, 2024* and* December 31, 2023*, the unamortized deferred issuance costs on the consolidated balance sheet was $222,000 and $164,000, respectively.

As of* March 31, 2024*, long-term debt on the condensed consolidated balance sheets was $15,602,000. The following are contractual maturities of long-term debt as of* March 31, 2024*, excluding deferred issuance costs of $222,000:

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Note4. Other Accrued Liabilities

Other accrued liabilities consist of the following as of* March 31, 2024* and* December 31, 2023*:

Note5. Leases

The Company determines if a contract is a lease at inception. Under ASC842, the Company is a lessor of equipment to various customers. Leases that commenced prior to the ASC842 adoption date were classified as operating leases under historical guidance. As the Company has elected the package of practical expedients allowing it tonot reassess lease classification, these leases are classified as operating leases under ASC842 as well. All of the Company’s lessor arrangements entered into or modified after ASC842 adoption are also classified as operating leases. Some of these lease terms have an option to extend the lease after the initial term, but donot contain the option to terminate early or purchase the asset at the end of the term. The Company has electednot to recognize right-of-use (“ROU”) assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset.

The Company’s Gamma Knife and PBRT contracts with hospitals are classified as operating leases under ASC842. The related equipment is included in medical equipment and facilities on the Company’s condensed consolidated balance sheets. As all income from the Company’s lessor arrangements is solely based on procedure volume, all income is considered variable paymentsnot dependent on an index or a rate. As such, the Company doesnot measure future operating lease receivables.

On* November 3, 2021,the Company entered into an agreement to sublease (the “Sublease”) its corporate office located at Two Embarcadero Center, Suite410,* San Francisco, California, where it leased approximately 3,253 square feet for $22,011 per month and the lease expired in* August 2023.The Sublease was for $16,195 per month through the contract expiration date. The Company also entered into a lease agreement (the “Lease”) for new corporate office space at601* Montgomery, Suite1112, San Francisco, CA for approximately 900 square feet for $4,500 per month with a lease expiration date in* November 2024.*

The Company’s lessee operating leases are accounted for as ROU assets, current portion of lease liabilities, and lease liabilities on the condensed consolidated balance sheets. Operating lease ROU assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The Company’s operating lease contracts donot provide an implicit rate for calculating the present value of future lease payments. The Company determined its incremental borrowing rate to be in the range of approximately 4% and 6% by using available market rates and expected lease terms. The operating lease ROU assets and liabilities include any lease payments made and there wereno lease incentives or initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company’s lessee operating lease agreements are for administrative office space and related equipment, and the agreement to lease clinic space for its stand-alone facility in Lima, Peru. These leases have remaining lease terms of approximately 8 months, some of which include options to renew or extend the lease. As of* March 31, 2024*, operating ROU assets and lease liabilities were $36,000.

The following table summarizes the maturities of the Company's lessee operating lease liabilities as of* March 31, 2024*:

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Note6. Per Share Amounts

Per share information has been computed based on the weighted average number of common shares and dilutive common share equivalents outstanding. The Company calculates diluted shares using the treasury stock method. The computation for thethree-month periods ended* March 31, 2024and2023* excluded approximately 138,000 and6,000, respectively, of the Company’s stock options because the exercise price of the options was higher than the average market price during the period. The weighted average common shares outstanding for basic earnings per share for thethree-month periods ended* March 31, 2024and2023* included approximately 123,000 and 123,000, respectively, of the Company's restricted stock awards that are fully vested but are deferred for issuance.

The following table sets forth the computation of basic and diluted earnings per share for thethree-month periods ended* March 31, 2024and2023*:

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Note7. Stock-based Compensation

In* June 2021,the Company’s shareholders approved an amendment and restatement of the Company’s Incentive Compensation Plan (the “Plan”), that among other things, increased the number of shares of the Company’s common stock reserved for issuance under the Plan to 2,580,000 and extended the term of the Plan byfive* years to* February 22, 2027.*The Plan provides that the shares reserved under the Plan are available for issuance to officers of the Company, other key employees, non-employee directors, and advisors. No further grants or share issuances will be made under the previous plans.

Stock-based compensation expense associated with the Company’s stock options to employees is calculated using the Black-Scholes valuation model. The Company’s stock awards have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value estimates. The estimated fair value of the Company’s option grants is estimated using assumptions for expected life, volatility, dividend yield, and risk-free interest rate which are specific to each award. The estimated fair value of the Company’s options is expensed over the period during which an employee is required to provide service in exchange for the award (requisite service period), usually the vesting period. Accordingly, stock-based compensation cost before income tax effect for the Company’s options and restricted stock awards in the amount of $98,000 and $96,000 for thethree-month periods ended* March 31, 2024and2023*, respectively, is reflected in selling and administrative expense in the condensed consolidated statements of operations. For thethree-month period ended* March 31, 2024*, there was approximately $146,000 of unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plan. This cost is expected to be recognized over a period of approximately four years.

The following table summarizes stock option activity for thethree-month periods ended* March 31, 2024and2023*:

Note8. Income Taxes

The Company generally calculates its effective income tax rate at the end of an interim period using an estimate of the annualized effective income tax rate expected to be applicable for the full fiscal year. However, when a reliable estimate of the annualized effective income tax rate cannot be made, the Company computes its provision for income taxes using the actual effective income tax rate for the results of operations reported within the year-to-date periods. The Company’s effective income tax rate is highly influenced by relative income or losses reported and the amount of the nondeductible stock-based compensation associated with grants of its common stock options and from the results of international operations. A small change in estimated annual pretax income can produce a significant variance in the annualized effective income tax rate given the expected amount of these items. As a result, the Company has computed its provision for income taxes for thethree-month periods ended* March 31, 2024and2023* by applying the actual effective tax rates to income or reported within the condensed consolidated financial statements through those periods. The provision for income taxes for thethree-month period ended* March 31, 2024* included a non-recurring adjustment for unrecognized tax benefits related to foreign taxes of $100,000 which offset income tax expense for the same period.

Note9. Commitments

As of* March 31, 2024*, the Company had commitments to purchase and installtwo Leksell Gamma Knife Esprit Systems (“Esprit”),one Gamma Plan workstation,one Linear Accelerator (“LINAC”) system, andone Magnetic Resonance imaging guided LINAC (“MR LINAC”). The LINAC, MR LINAC andone Esprit will be placed at future customer sites. The remaining Esprit upgrade is scheduled to occur during2024 at an existing customer site. The Company also hasone commitment to de-install a Gamma Knife unit at an existing customer site. Total Gamma Knife and LINAC commitments as of* March 31, 2024* were $13,752,000. There areno deposits on the condensed consolidated balance sheets related to these commitments as of* March 31, 2024*. It is the Company’s intent to finance substantially all of these commitments. There can beno assurance that financing will be available for the Company’s current or future projects, or at terms that are acceptable to the Company. However, the Company currently has cash on hand of$13,042,000 and a line of credit of $7,000,000 and is actively engaged with financing resources to fund these projects. The Company borrowed $2,400,000 on the Revolving Line as of* March 31, 2024*, which was paid off in* April 2024.*

On* September 4, 2022,the Company entered into a Maintenance and Support Agreement, which provides for maintenance and support of the Company’s PBRT unit at Orlando Health from September 2022through April 2026.*The agreement requires an annual prepayment of $1,865,000 for the current contractual period (one year). This payment portion was recorded as a prepaid contract and is being amortized over theone-year service period.

As of* March 31, 2024*, the Company had commitments to service and maintain its Gamma Knife and PBRT equipment. The service commitments are carried out via contracts with Mevion, Elekta and Mobius Imaging, LLC. The Company’s commitments to purchasetwo LINAC systems also include a 9-year and 5-year agreement to service the equipment, respectively. Total service commitments as of* March 31, 2024* were $14,120,000. The Gamma Knife and certain other service contracts are paid monthly, as service is performed. The Company believes that cash flow from cash on hand and operations will be sufficient to cover these payments.

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Note10. Related Party Transactions and Balances

The Company’s Gamma Knife business is operated through its 81% indirect interest in its GKF subsidiary. The remaining 19% of GKF is owned by a wholly owned U.S. subsidiary of Elekta, which is the manufacturer of the Gamma Knife. Since the Company purchases its Gamma Knife units from Elekta, there are significant related party transactions with Elekta, such as equipment purchases, commitments to purchase and service equipment, and costs to maintain the equipment.

The following table summarizes related party activity for thethree-month periods ended* March 31, 2024and2023*:

The Company also had commitments to purchase and install Gamma Knife units, purchase a LINAC and MR LINAC system and service the related equipment of $16,625,000 as of* March 31, 2024*.

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

Note11. Subsequent Events

On* May 7, 2024,the Company completed its purchase of GenesisCare’s 60% interest in thetwo* RI Target Companies in accordance with the terms of the IPA. In exchange, the Company paid a purchase price of $2,850,000. Pursuant to the Second Amendment executed on* April 18, 2024,the Company paid an additional $175,000 to GenesisCare for a Discovery RT OPEN OC Mid CTM on May 14, 2024*.

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