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* June 30, 2025*, the results of its operations for thethree andsix-month periods ended* June 30, 2025and2024*, and the cash flows for thesix-month periods ended* June 30, 2025and2024*. The results of operations for thethree andsix-month periods ended* June 30, 2025* arenot necessarily indicative of results on an annualized basis. Consolidated balance sheet amounts as of* December 31, 2024* have been derived from the audited consolidated financial statements.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended* December 31, 2024* included in the ASHS Annual Report on Form10-K filed with the Securities and Exchange Commission (“SEC”) on* April 4, 2025.*

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 (“RI-PBRT”), ASHS-Bristol Radiation Therapy, LLC (“Bristol”),OR21, Inc., and MedLeader.com, Inc. (“MedLeader”); ASHS is the majority owner of Southern New England Regional Cancer Center, LLC (“SNERCC”), Roger Williams Radiation Therapy, LLC (“RWRT”) and Long Beach Equipment, LLC (“LBE”); ASRS is the majority-owner of GK Financing, LLC (“GKF”), which wholly owns the subsidiaries Instituto de Gamma Knife del Pacifico S.A.C. (“GKPeru”) and HoldCo GKC S.A. (“HoldCo”). HoldCo wholly owns the subsidiary Gamma Knife Center Ecuador S.A. (“GKCE”). ASHS-Mexico is the majority owner of AB Radiocirugia y Radioterapia de Puebla, S.A.P.I. de C.V. of Puebla (“Puebla”). 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* June 30, 2025*, GKF provides Gamma Knife units toseven medical centers in the United States in the states of Illinois, Indiana, Mississippi, New Mexico, New York, 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 medical center in Florida.

On* November 10, 2023,the Company entered into an Investment Purchase Agreement (the “IPA”) with GenesisCare USA, Inc. (the “GenesisCare”) and GenesisCare USA Holdings, Inc. (“GC Holdings”), pursuant to which GenesisCare agreed to sell to the Company its entire equity interest in each of SNERCC and RWRT, (collectively, the “RI Companies”) and to assign certain payor contacts to the RI Companies for a purchase price of $2,850,000 (such transaction, the “RI Acquisition”). The equity interests acquired by the Company under the IPA equate to a 60% interest in each RI Target Company. The RI Companies operate three functional radiation therapy cancer centers in Rhode Island. The parties closed the RI Acquisition on May 7, 2024.See Note10* - Rhode Island Acquisition to the condensed consolidated financial statements for further information.

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 Puebla to treat public- and private-paying cancer patients and provide radiation therapy and radiosurgery services in Guadalupe, Mexico. The Company and Guadalupe hold 85% and 15% ownership interests, respectively, in Puebla. Under the agreement, the Company was responsible for providing a linear accelerator upgrade to an Elekta Versa HD, and Guadalupe was accountable for all site modification costs. The Company formed ASHS-Mexico on October 3, 2022to establish Puebla. Puebla was formed on December 15, 2022and began treating patients in July**2024.*

On* June 28, 2024,ASHS-Mexico, signed a Joint Venture Agreement with Hospital San Javier, S.A. de C.V. (“HSJ”) to establish Newco to treat public- and private-paying cancer patients and provide radiosurgery services in Guadalajara, Mexico. The Company and HSJ will hold 70% and 30% ownership interests, respectively, in Newco. Under the agreement, the Company is responsible for upgrading HSJ’s existing Gamma Knife Perfexion system to a Gamma Knife Esprit and paying 50% of all site modification costs required to install the Esprit. The Company doesnot* expect that Newco will begin treating patients until thefourth quarter of2025.

On* February 6, 2025,the Company’s subsidiary, Bristol, closed on the acquisition of certain parcels of real property located on Gooding Avenue, Bristol, Rhode Island. The purchase price for the property was $1,185,000. The transaction was effected pursuant to the terms of a Real Estate Purchase and Sale Agreement dated November 21, 2024by and between the Company and the sellers identified therein, with the Company having assigned its rights under that agreement to Bristol effective February 5, 2025.*

The Company formed the subsidiaries Puebla, GKPeru, ASHS-Mexico, and acquired GKCE for the purposes of expanding its business internationally; Orlando and LBE to provide PBRT equipment and services in Orlando, Florida and Long Beach, California, respectively; 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 owns 50% ofOR21, LLC (“OR21”). The remaining 50% is owned by an architectural design company.OR21 isnot operational at this time.

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

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

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Accounting pronouncements issued and not yet adopted - In* December 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2023-09 Income Taxes (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,and interim reporting periods beginning after December 15, 2025.The Company adopted ASU2023*-09 effective* January 1, 2025.The adoption of ASU2023*-09 will modify the Company’s disclosures but willnot have an impact on our financial position or results of operations.

In* November 2024,the FASB issued ASU2024*-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures(“ASU2024-03”) which requires entities to1. disclose amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities,2. include certain amounts that are already required to be disclosed under current Generally Accepted Accounting Principles in the same disclosures as other disaggregation requirements,3. disclose a qualitative description of the amounts remaining in relevant expense captions that arenot necessarily disaggregated quantitatively, and4. disclose the total amount of selling expenses, in annual reporting periods, including an entity’s definition of selling expense. ASU2024-03 is effective for annual reporting periods beginning after* December 15, 2026,and interim reporting periods beginning after December 15, 2027.Early adoption is permitted. The Company is currently evaluating ASU2024*-03 to determine the impact it* may*have on its consolidated financial statements.

In* July**2025,* the FASB issued ASU2025-05 Measurement of Credit Losses for Accounts Receivable and Contract Assets(“ASU2025-05”) which provides (1) all entities with a practical expedient and (2) entities other than public business entities, with an accounting policy election when estimating credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic606. ASU2025-05 is effective for annual reporting periods beginning after* December 15, 2025and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements havenot* yet been issued or made available for issuance. The Company is currently evaluating ASU2025-05 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. The Company records an estimate of operating costs which are reviewed on a regular basis and adjusted as necessary to more accurately reflect the actual operating costs. The operating costs are recorded as other direct operating costs in the condensed consolidated statements of operations. For thethree andsix-month periods ended* June 30, 2025*, the Company recognized leasing revenue of approximately $3,571,000 and $6,562,000 compared to $3,899,000 and $8,152,000 for the same periods in the prior year, respectively. For thethree andsix-month periods ended* June 30, 2025*, $1,921,000 and $3,563,000 of the ASC842 revenues were for PBRT services compared to $2,420,000 and $5,069,000, respectively.

Direct patient services income – The Company has stand-alone facilities in Lima, Peru, Guayaquil, Ecuador, and Puebla, Mexico where contracts exist between the Company’s facilities and the individual patients treated at the facility. Under 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 or radiation therapy treatment. Revenue related to these treatments 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 facility in Puebla currently has a contract withone local hospital to cover its eligible patient base and is also treating self-pay patients. Puebla’s payment terms are typically prepaid for self-pay patients and net30 days for the hospital patients. The Company didnot capitalize any incremental costs related to the fulfillment of its customer contracts.

On* May 7, 2024,the Company acquired 60% of the interests of the RI Companies. The RI Companies operate three, existing, stand-alone radiation therapy cancer centers in Woonsocket, Warwick and Providence, Rhode Island, 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 radiation therapy treatment. Revenue related to radiation therapy is recognized at the expected amount to be received, based on insurance contracts and payor mix, 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. Payment terms at these facilities are typically prepaid for self-pay patients and insurance providers are paid net 30 to 60 days. The Company didnot capitalize any incremental costs related to the fulfillment of its customer contracts. The Company also concluded thethree facilities are part of its direct patient services segment, see further discussion below.

Accounts receivable balances under ASC606 at* June 30, 2025* and* January 1, 2025were $6,657,000 and $6,073,000, respectively. Accounts receivable balances under ASC606* at* June 30, 2024* and* January 1, 2024were $4,558,000 and $1,626,000, respectively. For thethree* andsix-month periods ended* June 30, 2025*, the Company recognized direct patient services revenues of approximately $3,500,000 and $6,621,000 compared to $3,157,000 and $4,120,000 for the same periods in the prior year, respectively.

**Business Combinations -*Business combinations are accounted for under ASC805 Business Combinations (“ASC805”) using the acquisition method of accounting. Under the acquisition method of accounting, all assets acquired, identifiable intangible assets acquired, liabilities assumed, and applicable non-controlling interests are recognized at fair value as of the acquisition date. Costs incurred associated with the acquisition of a business are expensed as incurred. The allocation of purchase price requires management to make significant estimates and assumptions, especially with respect to tangible assets, any intangible assets identified and non-controlling interests. These estimates include, but arenot limited to, a market participant’s expectation of future cash flows from acquired customers, acquired trade names, useful lives of acquired assets, and discount rates. See Note10 - Rhode Island Acquisition *to the condensed consolidated financial statements for further discussion on acquisitions.

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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 direct patient services. As of* June 30, 2025*, the Company provided Gamma Knife and PBRT equipment toeight hospitals in the United States, which constitutes the leasing segment. As of* June 30, 2025*, the Company owns and operatestwo single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador, one single-unit radiation therapy facility in Puebla, Mexico, and following the RI Acquisition on* May 7, 2024,*the Company also owns a majority interest in and operates, three single-unit radiation therapy facilities in Rhode Island, which collectively constitute the direct patient services segment.

An operating segment is defined by ASC280 as a component of an entity that engages in business activities in which it* may*recognize revenues and incur expenses, that has operating results that are regularly reviewed by the Company’s Chief Operating Decision Maker (“CODM”), and for which its discrete financial information is available. The Company 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 Chief Executive Officer, who is also the CODM.

For the periods ended* June 30, 2025and2024*, the Company’s PBRT operations represented a majority of the net (loss) income attributable to American Shared Hospital Services from the leasing segment, disclosed below. The revenues, depreciation, interest expense, interest income, tax expense, net (loss) income attributable to American Shared Hospital Services, and total assets for the Company’stwo reportable segments as of* June 30, 2025and2024* consist of the following:

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Note2. Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation for Gamma Knife equipment, LINAC 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.

The Company determines salvage value based on the estimated fair value of the equipment at the end of its useful life. As of* December 31, 2024,the Company reduced its estimate of salvage value for all remaining domestic Gamma Knife units to $0. The net effect of the change in estimate, for thethree* andsix-month periods ended* June 30, 2025*, was a decrease in net income of approximately$10,000 or $0.00 per diluted share and $93,000 or $0.01 per diluted share, respectively. This change in estimate will be $10,000, or $0.00 per share in future periods, following the expiration ofone customer contract in thefirst quarter of2025.

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* June 30, 2025* and* December 31, 2024*:

Depreciation expense recorded in costs of revenue and selling and administrative expense in the condensed consolidated statements of operations for thethree andsix-month periods ended* June 30, 2025and2024* is as follows:

Note3. Long-Term Debt Financing

On* April 9, 2021,the 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 $5,000,000 on the Revolving Line as of* June 30, 2025*, which was repaid in* July 2025.The facilities have afive-year maturity, which mature on April 9, 2026,and carry a floating interest rate based on the Secured Overnight Financing Rate (“SOFR”) plus 3.0% (7.49% as of June 30, 2025*) and are secured by a lien on substantially all of the assets of the Loan Parties and guaranteed by ASHS.

On* January 25, 2024 (the “First Amendment Effective Date”), the Company and Fifth Third entered into a First Amendment to Credit Agreement (the “First Amendment”), which amended the Credit Agreement to add a new term loan in the aggregate principal amount of $2,700,000 (the “Supplemental Term Loan”). The proceeds of the Supplemental Term Loan were advanced in a single borrowing on January 25, 2024,and were used for capital expenditures related to the Company’s operations in Puebla, Mexico and other related transaction costs. The Supplemental Term Loan will mature on January 25, 2030 (the “Maturity Date”). Interest on the Supplemental Term Loan was payable monthly during the initialtwelve* month period following the First Amendment Effective Date. Following thattwelve 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 replaced the LIBOR-based rates in the Credit Agreement with SOFR-based rates. Pursuant to the First Amendment, advances under the Credit Agreement bear interest at a floating rate per annum equal to SOFR plus 3.00%, subject to a SOFR floor of 0.00%.

On* December 18, 2024 (the “Second Amendment Effective Date”), the Company and Fifth Third entered into a Second Amendment to the Credit Agreement (the “Second Amendment”), which amended the Credit Agreement to add a new term loan in the aggregate principal amount of $7,000,000 (the “Second Supplemental Term Loan”). The proceeds of the Second Supplemental Term Loan were advanced in a single borrowing on December 18, 2024,and were used for capital expenditures related to the Company’s domestic Gamma Knife leasing operations and the RI Acquisition and related transaction costs. The Second Supplemental Term Loan will mature on December 18, 2029 (the “Second Maturity Date”). Interest on the Second Supplemental Term Loan is payable monthly during the initialtwelve* month period following the Second 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 Second Supplemental Term Loan over a period ofseven years. All unpaid principal of the Second Supplemental Term Loan and accrued and unpaid interest thereon is due and payable in full on the Second Maturity Date. The Second Supplemental Term Loan is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. Pursuant to the First Amendment, advances under the Credit Agreement bear interest at a floating rate per annum equal to SOFR plus 3.00%, subject to a SOFR floor of 0.00%.

The long-term debt on the condensed consolidated balance sheets related to the Term Loan, DDTL, Revolving Line, Supplemental Term Loan and Second Supplemental Term Loan was $17,675,000 and $18,462,000 as of* June 30, 2025* and* December 31, 2024*, respectively. The Company capitalized debt issuance costs of $0 and $164,000 as of* June 30, 2025* and* December 31, 2024,*related to the issuance of the Supplemental Term Loan and Second Supplemental Term Loan.

The Credit Agreement contains customary covenants and representations, including without limitation, a minimum fixed charge coverage ratio of 1.25 and maximum funded debt to EBITDA ratio of 3.0 to1.0 (tested on a trailingtwelve-month basis at the end of each fiscal quarter), an obligation that the Company maintain $5,000,000 of unrestricted cash, reporting obligations, limitations on dispositions, changes in ownership, mergers and acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and capital expenditures. The Loan Parties werenot in compliance with the maximum funded debt to EBITDA ratio covenant in the Credit Agreement as of* June 30, 2025*, but regained compliance on* July 1, 2025.*

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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 in 29 quarterly installments with a fixed interest rate of 3.67%. The amount outstanding under thesecond tranche of the DFC Loan is payable in 16 quarterly installments with a fixed interest rate of 7.49%. The long-term debt on the condensed consolidated balance sheets related to the DFC Loan was $1,478,000 and $1,806,000 as of* June 30, 2025* and* December 31, 2024*, respectively.

The DFC Loan contains customary covenants including without limitation, requirements that HoldCo maintain certain financial ratios related to liquidity and cash flow as well as depository requirements. On* March 28, 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. On March 3, 2025,the Company received an additional waiver from DFC for certain covenants as of December 31, 2024and through December 31, 2025.HoldCo was in compliance with all debt covenants pursuant to the DFC Loan as amended and waived at June 30, 2025*.

In* Novemberand December 2024,GKCE obtainedtwo* loans with banks locally in Ecuador (the “GKCE Loans”). The GKCE Loans carry interest rates of 12.60% and 12.78% and are payable intwelve andthirty-six equal monthly installments of principal and interest, respectively. Total long-term debt on the condensed consolidated balance sheets related to the GKCE Loans was $93,000 and $145,000 as of* June 30, 2025* and* December 31, 2024*, respectively. The Company didnot capitalize any debt issuance costs related to the GKCE Loans.

If the Company fails to comply with the Credit Agreement covenants or the DFC Loan covenants, the Company’s credit commitments could be terminated and the principal of any outstanding borrowings, together with any accrued but unpaid interest, under the Credit Agreement or the DFC Loan could be declared immediately due and payable. Furthermore, the lenders under the Credit Agreement and the DFC Loan could also exercise their rights to take possession of, and to dispose of, the collateral securing the credit facilities and loans and could pursue additional remedies upon default as set forth in each such agreement.

The accretion of debt issuance costs for thethree andsix-month periods ended* June 30, 2025* was $55,000 and $79,000 compared to $20,000 and $58,000 for the same periods in the prior year, respectively. As of* June 30, 2025* and* December 31, 2024*, the unamortized deferred issuance costs on the condensed consolidated balance sheet was $152,000 and $231,000, respectively.

As of* June 30, 2025*, long-term debt on the condensed consolidated balance sheets was $19,094,000. The following are contractual maturities of long-term debt as of* June 30, 2025*, excluding deferred issuance costs of $152,000:

Note4. Other Accrued Liabilities

Other accrued liabilities consist of the following as of* June 30, 2025* and* December 31, 2024*:

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, as applicable. 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 health systems 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.

The Company’s corporate offices were located in San Francisco, California, where it leased approximately 900 square feet for $4,500 per month and the lease term ended in* November 2024.In November 2024,the Company closed this office and signedtwo* sublease agreements for small, office spaces in San Francisco, California and Downers Grove, Illinois. The sublease in San Francisco is for 80 square feet for $1,003 per month. Total ROU assets and lease liabilities for the San Francisco sublease were $15,000. The sublease in Downers Grove was signed in* February 2025*for $2,300 per month. Total ROU assets and lease liabilities for the Downers Grove sublease were$26,000.

On* May 7, 2024,the Company completed the RI Acquisition and acquired 60% of the equity interests of the RI Companies. The RI Companies operate three single-unit radiation therapy facilities. The Company assessed the existing lease agreements under ASC842* and concludedtwo of thethree facilities contained operating leases. The facility in Woonsocket, RI has a ground lease with a sublease for 1,950 square feet of the clinic space, which is leased back to the lessor. The Woonsocket ground lease has an annual prepayment of approximately $44,000. The facility in Warwick, RI has a lease for 10,236 square feet for $32,790 per month. The facility in Providence, RI also has a ground lease, which was contributed byone of the minority partners. On* January 1, 2025,the Company entered into the Amended and Restated Lease Agreement (the “Amended Lease”) for the facility lease in Warwick, Rhode Island. The Amended Lease extended the lease to December 31, 2039and modified the monthly lease payment to $26,443. The Company assessed the Amended Lease under ASC842* and concluded it was a lease modification. On* January 1, 2025,*the effective date of the Amended Lease, the Company recorded additional ROU asset and lease liability in the amount of $2,071,000.

The Company owns and operates a stand-alone Gamma Knife facility in Lima, Peru where it leases approximately 1,600 square feet for approximately $8,850 per month. This lease expired in* January 2024and is currently on a month-to-month basis. The Company also owns and operates a stand-alone Gamma Knife facility in Guayaquil, Ecuador where it owns 864 square feet of condominium space in an office building and approximately 10,135 of related land and parking spaces. The Company’s stand-alone radiation therapy facility in Puebla, Mexico has a lease for approximately 536 square meters for $1,800 per month with a lease expiration in July**3034.* Total ROU asset and lease liability for the Puebla lease was $149,000.

Sublease income for thethree andsix-month periods ended* June 30, 2025* was $15,000 and $30,000 compared to $9,000 and $9,000 for the same periods in the prior year.

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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 approximately 8% by using available market rates and expected lease terms. The operating lease ROU assets and liabilities include any lease payments made and there 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 for its direct patient service facilities in Puebla, Mexico andtwo stand-alone facilities in Rhode Island in which the Company acquired an interest in the RI Acquisition. These leases have remaining lease terms of approximately 9 to 16 years, some of which include options to renew or extend the lease. As of* June 30, 2025*, operating ROU assets, net of unfavorable leasehold interests of $658,000, were $3,011,000, and lease liabilities were $3,727,000.

The following table summarizes the maturities of the Company's lessee operating lease liabilities as of* June 30, 2025*:

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. Because the Company reported a loss for thethree andsix-month periods ended* June 30, 2025*, the potentially dilutive effects of approximately 8,000 and 16,000 of the Company’s stock options and 253,000 of the Company’s unvested restricted stock awards werenot considered for the reporting period. The weighted average common shares outstanding for basic earnings per share for thethree andsix-month periods ended* June 30, 2025and2024* 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 andsix-month periods ended* June 30, 2025and2024*:

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Note7. 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 andsix-month periods ended* June 30, 2025and2024* 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 andsix-month periods ended* June 30, 2025*, included a non-recurring adjustment for unrecognized tax benefits related to foreign taxes of $71,000. For thesix-month period ended* June 30, 2024*, the Company recorded a $100,000 adjustment for unrecognized tax benefits related to foreign taxes.

Note8. Commitments

As of* June 30, 2025*, the Company had commitments to purchase and installthree Leksell Gamma Knife Esprit Systems (“Esprit”) andtwo Linear Accelerator (“LINAC”) systems. One of the Esprit upgrades was installed at the Company’s facility in Peru in* July 2025.The remaining Esprit upgrades andone* LINAC installation are scheduled to occur around thefourth quarter of2025 or later at existing customer sites. The remaining LINAC is reserved for a future customer site. Total Gamma Knife and LINAC commitments as of* June 30, 2025* were $8,385,000. There areno deposits on the condensed consolidated balance sheets related to these commitments as of* June 30, 2025*. 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$11,331,000 and its Revolving Line of $7,000,000 and is actively engaged with financing resources to fund these projects. The Company borrowed $5,000,000 on the Revolving Line as of* June 30, 2025*, which was repaid in* July 2025.*

On* September 4, 2022,the Company entered into a Maintenance and Support Agreement with Mevion Medical Systems, Inc. (“Mevion”), which provides for maintenance and support of the Company’s PBRT unit at Orlando Health from September 2022through April 2026.*The agreement requires the Company to make an annual prepayment of $1,939,000 for the current contractual period (one year). This payment was recorded as a prepaid contract and is being amortized over theone-year service period.

As of* June 30, 2025*, the Company had commitments to service and maintain its Gamma Knife, LINAC, and PBRT equipment. The service commitments are carried out via contracts with Mevion, Elekta, Solutech, and Mobius Imaging, LLC. The Company’s commitment to purchaseone LINAC system also includes a 5-year agreement to service the equipment, respectively. Total service commitments as of* June 30, 2025* were $11,928,000. The 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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Note9. Related Party Transactions and Balances

The Company’s Gamma Knife business is operated through its GKF subsidiary in which the Company holds an indirect 81% interest. 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 andsix-month periods ended* June 30, 2025and2024*:

The Company also had commitments to purchase and installthree Esprit units,two LINACs, and service the related equipment of $13,387,000 as of* June 30, 2025*.

Related party liabilities on the condensed consolidated balance sheets consist of the following as of* June 30, 2025* and* December 31, 2024*

Note10. Rhode Island Acquisition

On* November 10, 2023,*the Company entered into the IPA with GenesisCare and GC Holdings, pursuant to which GenesisCare agreed to sell to the Company its entire equity interest in each of the RI Companies and to assign certain payor contacts to the Company for a cash purchase price of $2,850,000 (such transaction, the “RI Acquisition”). The equity interests acquired by the Company under the IPA equate to a 60% interest in each RI Company. The RI Companies operate three functional radiation therapy cancer centers in Rhode Island. The Company acquired the RI Companies to expand its growing direct patient services business model in the United States and continue to diversify its cancer treatment product offerings.

On* March 1, 2024,the Company, GenesisCare and GC Holdings entered into a First Amendment to the Investment Agreement pursuant to which the parties agreed to extend the date on which a party could terminate the IPA if the closing conditions 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 GE Discovery RT CT Simulator (“CT Sim”) to the Company for $175,000, payment for which was 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 Companies, rather than transferring such assets and payor contracts to the Company. The parties completed the closing conditions pursuant to the IPA and closed the RI Acquisition on May 7, 2024 (*the “Closing Date”).

The RI Acquisition has been accounted for as a business combination under ASC805, which requires, among other things, that purchase consideration, assets acquired, liabilities assumed and non-controlling interest be measured at their fair values as of the acquisition date. The assets acquired were recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. While the Company believes its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired, and the resulting amount of the bargain purchase gain. During thethree-month periods ended* September 30, 2024and December 31, 2024,*the Company concluded some of the fair value estimates for accounts receivable, non-controlling interests, and unfavorable leasehold interests required adjustment. The adjusted allocations provided below reflect these changes.

The Company recorded medical equipment, facilities and non-controlling interest at fair value as of the Closing Date. Sales comparison and cost approaches were used to value the medical equipment, including assumptions of estimated direct costs associated with acquiring the equipment. Where appropriate, adjustments were made to the direct replacement cost to reflect depreciation and obsolescence. The sales comparison approach was also utilized to value certain assets, involving secondary market research. The cost approach was also used to value the facilities acquired and the unfavorable leasehold interest. The non-controlling interest was recorded at fair value based on the purchase price paid for the acquisition, after any premium or discount derived from the operating agreement with the minority owners.

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The Company recorded the preliminary allocation of the purchase price consideration as of the Closing Date, for thethree-month period ended* June 30, 2024.During each of thethree*-month periods ended* September 30, 2024and December 31, 2024,the Company concluded some of the fair value estimates for accounts receivable, non-controlling interests, and unfavorable leasehold interests required adjustment. The net effect of these changes was an increase to the bargain purchase gain of $115,000, net of deferred taxes of $6,000. The net impact to the condensed consolidated statement of operations wasnot* material for the year-ended* December 31, 2024.*

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

The Company recognized a bargain purchase, as defined by ASC805, in connection with the RI Acquisition. The Company purchased the interest in the RI Companies as part of the sale of certain of GenesisCare’s assets in its bankruptcy proceedings, resulting in a bargain purchase. A bargain purchase gain of $3,794,000, net of deferred taxes of $1,220,000 was recorded for the year-ended* December 31, 2024.None of the purchase price was allocated to intangible assets becausenone were acquired as part of the transaction. The Company recorded the unfavorable lease position received as part of the RI Acquisition as a reduction to ROU assets on the condensed consolidated balance sheet as of the Closing Date and December 31, 2024.*

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

Note11. Subsequent Event

On* July 4, 2025,*President Donald Trump signed the One Big Beautiful Bill Act (“OBBBA”) into law, which is considered the enactment date under U.S. GAAP.

This legislation introduces several provisions affecting businesses, including the permanent extension of certain expiring elements of the Tax Cuts and Jobs Act, modifications to the international tax framework, and favorable tax treatment for certain other business provisions.

Key corporate tax provisions include the restoration of100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to Section163(j) interest limitations, updates to Global Intangible Low Tax Income (GILTI) and Foreign- Derived Intangible Income (FDII) rules, amendments to energy credits, and expanded Section162(m) aggregation requirements.

The OBBBA contains multiple effective dates, with some provisions applicable beginning in2025. The legislation doesnot impact the Company’s prior years’ financial statements.

In accordance with ASC740 Income Taxes, the effects of the new tax law will be recognized in the period of enactment. As the enactment occurred after the* June30,* 2025 reporting date, the Company hasnot adjusted its current or deferred tax balances as of* June30,* 2025. The Company is currently evaluating the impact of the legislation and will reflect any required adjustments in thethird quarter ended* September 30, 2025.*