AMERICAN SHARED HOSPITAL SERVICES

Previous wording

American Shared Hospital Services is a leading provider of turn-key technology solutions for stereotactic radiosurgery and advanced radiation therapy equipment and services. The main drivers of the Company’s revenue are numbers of sites, procedure volume, and reimbursement. The Company delivers radiation therapy through medical equipment leasing and direct patient services, its two reportable segments. The medical equipment leasing segment, which we also refer to as the Company’s leasing segment, operates by fee-per-use contracts or revenue sharing contracts where the Company shares in the revenue and operating costs of the equipment. The Company leases nine Gamma Knife systems and one PBRT system as of December 31, 2024, where a contract exists between the hospital and the Company. The Company also owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador, one single-unit radiation therapy facility in Puebla, Mexico, and as a result of the completion of the RI Acquisition on May 7, 2024, the Company also has an interest in and operates three single-unit radiation therapy facilities in Rhode Island. These facilities constitute the direct patient services segment, which we also refer to as the Company’s retail segment, where a contract exists between the Company's facilities and the individual treated at the facility. A summary of the Company’s medical equipment leases and direct patient service sites is set forth in the table below:

Current wording

American Shared Hospital Services is a leading provider of turn-key technology solutions for stereotactic radiosurgery and advanced radiation therapy equipment and services. The main drivers of the Company’s revenue are numbers of sites, procedure volume, and reimbursement. The Company delivers radiation therapy through medical equipment leasing and direct patient services, its two reportable segments. The medical equipment leasing segment, which we also refer to as the Company’s leasing segment, operates by fee-per-use contracts or revenue sharing contracts where the Company shares in the revenue and operating costs of the equipment. The Company leases seven Gamma Knife systems and one PBRT system as of December 31, 2025, where a contract exists between the hospital and the Company. The Company also owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador, one single-unit radiation therapy facility in Puebla, Mexico, and as a result of the completion of the RI Acquisition on May 7, 2024, the Company also has an interest in and operates three single-unit radiation therapy facilities in Rhode Island. These facilities constitute the direct patient services segment, where a contract exists between the Company’s facilities and the individual treated at the facility. A summary of the Company’s medical equipment leases and direct patient service sites is set forth in the table below:

Previous wording

The Company had two contracts expire in the second and third quarters of 2023, respectively, and one in November 2024. In February 2025, the Company and one of its customer mutually agreed to terminate their lease agreement prior to the contract term, and the Company expects a fourth contract to expire in the second quarter of 2025. The Company has one customer contract that was upgraded to the Esprit in January 2025. A summary of the Company’s procedure volumes for fiscal years 2024 and 2023 are set forth in the table below.

Current wording

In February 2025, the Company and one of its customers mutually agreed to terminate their lease agreement prior to the contract term. The Company had one Gamma Knife contract expire in April 2025. The Company expects a third contract to expire in the second quarter of 2026. A summary of the Company’s procedure volumes for fiscal years 2025 and 2024 are set forth in the table below.

Previous wording

The LINAC procedure volume during 2024 was the result of the completion of the RI Acquisition in May 2024 and the beginning of the Company’s treatment of patients at its LINAC facility in Puebla, Mexico. 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. In July 2024, the Company began treating patients at a stand-alone LINAC facility in Puebla, Mexico.

Current wording

The increase in LINAC procedure volume during 2025 was the result of the completion of the RI Acquisition in May 2024 and the beginning of the Company’s treatment of patients at its LINAC facility in Puebla, Mexico. 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. In July 2024, the Company began treating patients at a stand-alone LINAC facility in Puebla, Mexico. All four LINAC locations operated for the twelve-month period ended December 31, 2025, compared to a partial period during 2024.

Previous wording

CMS established a 2025 delivery code reimbursement rate of approximately $7,645 ($7,420 in 2024) for a Medicare Gamma Knife treatment. The approximate CMS reimbursement rates for delivery of PBRT for a simple treatment without compensation for 2025 is $578 ($561 in 2024) and $1,276 ($1,362 in 2024) for simple with compensation, intermediate and complex treatments, respectively.

Current wording

CMS established a 2026 delivery code reimbursement rate of approximately $7,525 ($7,645 in 2025) for a Medicare Gamma Knife treatment. The approximate CMS reimbursement rates for delivery of PBRT for a simple treatment without compensation for 2026 is $565 ($578 in 2025) and $1,277 ($1,276 in 2025) for simple with compensation, intermediate and complex treatments, respectively.

Previous wording

The Company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles and follow general practices within the industry in which it operates. Application of these principles requires management to make estimates, assumptions and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates, assumptions and judgments are based on information available as of the date of the consolidated financial statements; accordingly, as this information changes, consolidated the financial statements could reflect different estimates, assumptions and judgments. Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and as such have a greater possibility of producing results that could be materially different than originally reported.

Current wording

The Company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles and follow general practices within the industry in which it operates. Application of these principles requires management to make estimates, assumptions and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates, assumptions and judgments are based on information available as of the date of the consolidated financial statements; accordingly, as this information changes, the consolidated financial statements could reflect different estimates, assumptions and judgments. Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and as such have a greater possibility of producing results that could be materially different than originally reported.

Previous wording

The most significant accounting policies followed by the Company are presented in Note 2 – Accounting Policies to the consolidated financial statements. These policies along with the disclosures presented in the other consolidated financial statement notes and, in this discussion, and analysis, provide information on how significant assets and liabilities are valued in the consolidated financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of the consolidated financial statement amounts, and the methods, assumptions and estimates underlying those amounts, management has identified

Current wording

The most significant accounting policies followed by the Company are presented in Note 2 – Accounting Policies to the consolidated financial statements. These policies along with the disclosures presented in the other consolidated financial statement notes and, in this discussion, and analysis, provide information on how significant assets and liabilities are valued in the consolidated financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of the consolidated financial statement amounts and the methods, assumptions and estimates underlying those amounts, management has identified estimated useful lives of property and equipment, impairment of property and equipment, business combinations, and revenue recognition for revenue sharing customers, and as such the aforementioned could be most subject to revision as new information becomes available. The following are our critical accounting policies in which management’s estimates, assumptions and judgments most directly and materially affect the consolidated financial statements:

Previous wording

The Company recognizes revenues under Accounting Standards Codification (“ASC”) 842Leases (“ASC 842”) and ASC 606Revenue from Contracts with Customers (“ASC 606”). The Company delivers radiation therapy through medical equipment leasing (“leasing”) and direct patient services (“retail”). The Company leased nine Gamma Knife systems and one PBRT system as of December 31, 2024. The leasing business operates by fee-per-use contracts or revenue sharing, where the Company shares in the revenue and operating costs of the equipment. The Company also owns and operates two 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 60% interest in and operates three single-unit radiation therapy facilities in Rhode Island, collectively, the retail segment.

Current wording

The Company recognizes revenues under Accounting Standards Codification (“ASC”) 842Leases (“ASC 842”) and ASC 606Revenue from Contracts with Customers (“ASC 606”). The Company delivers radiation therapy through medical equipment leasing (“leasing”) and direct patient services. The Company leased seven Gamma Knife systems and one PBRT system as of December 31, 2025. The leasing business operates by fee-per-use contracts or revenue sharing, where the Company shares in the revenue and operating costs of the equipment. The Company also owns and operates two 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 60% interest in and operates three single-unit radiation therapy facilities in Rhode Island, collectively, the direct patient service segment.

Previous wording

The Company recognizes revenues under ASC 842 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 do not contain any guaranteed minimum payments. The Company’s lease contracts typically have a ten-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 consolidated statements of income. For the years ended, December 31, 2024 and 2023, the Company recognized leasing revenue of approximately $15,629,000 and $17,772,000 under ASC 842, respectively, of which approximately $9,952,000 and $10,133,000 were for PBRT services, respectively.

Current wording

The Company recognizes revenues under ASC 842 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 do not contain any guaranteed minimum payments. The Company’s lease contracts typically have a ten-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 consolidated statements of operations. For the years ended, December 31, 2025 and 2024, the Company recognized leasing revenue of approximately $12,553,000 and $15,629,000 under ASC 842, respectively, of which approximately $7,369,000 and $9,952,000 were for PBRT services, respectively.

Previous wording

Revenue sharing arrangements amounted to approximately 47% and 70% of total revenue for the years ended December 31, 2024 and 2023, respectively. Because the revenue estimates are reviewed on a quarterly basis, any adjustments required for past revenue estimates would result in an increase or reduction in revenue during the current quarterly period. Payor mix is a significant variable in the Company’s estimate for revenue sharing revenues. Fluctuations in payor mix that may result in a 5% to 10% change in the estimate could increase or decrease revenues as of December 31, 2024, by approximately $113,000 to $226,000.

Current wording

Revenue sharing arrangements amounted to approximately 36% and 47% of total revenue for the years ended December 31, 2025 and 2024, respectively. Because the revenue estimates are reviewed on a quarterly basis, any adjustments required for past revenue estimates would result in an increase or reduction in revenue during the current quarterly period. Payor mix is a significant variable in the Company’s estimate for revenue sharing revenues. Fluctuations in payor mix that may result in a 5% to 10% change in the estimate could increase or decrease revenues as of December 31, 2025, by approximately$101,000 to $202,000.

Previous wording

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 ASC 606, 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. The Company’s stand alone radiation therapy facility in Puebla, Mexico is also accounted for under ASC 606. 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 is no 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 did not capitalize any incremental costs related to the fulfillment of its customer contracts. The Company also concluded these facilities are part of its retail segment, see further discussion below.

Current wording

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 ASC 606, 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. The Company’s stand alone radiation therapy facility in Puebla, Mexico is also accounted for under ASC 606. 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 is no 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 did not capitalize any incremental costs related to the fulfillment of its customer contracts. The Company also concluded these facilities are part of its direct patient service segment, see further discussion below.

Previous wording

Accounts receivable under ASC 606 at December 31, 2024 and January 1, 2024 were $11,229,000 and $1,626,000. Accounts receivable under ASC 606 at December 31, 2023 and January 1, 2023 were $1,626,000 and $1,119,000. For the years ended December 31, 2024 and 2023, the Company recognized retail revenues of approximately $12,556,000 and $3,553,000 under ASC 606, respectively.

Current wording

Accounts receivable under ASC 606 at December 31, 2025 and January 1, 2025 were $8,138,000 and $6,073,000. Accounts receivable under ASC 606 at December 31, 2024 and January 1, 2024 were $6,073,000 and $1,626,000. For the years ended December 31, 2025 and 2024, the Company recognized direct patient service revenues of approximately $15,529,000 and $12,556,000 under ASC 606, respectively.

Previous wording

During the year-ended December 31, 2024, the Company sold one of its Gamma Knife Perfexion units with an Icon upgrade to the customer it was leased to and recorded a net gain on equipment sale. During the year-ended December 31, 2023, the Company completed a sale of equipment to a new customer. The Company assessed this transaction under ASC 606 and concluded the Company acted as the agent in this transaction and provided, at a point in time, two performance obligations, in the form of an equipment sale of an Icon and Cobalt-60 reload. The performance obligation to sell, assign, transfer and deliver the equipment to the customer was carried out via Elekta. Revenue related to the equipment sale is recognized on a net basis when the sale is complete. The Company recognized net revenues of $155,000 and $200,000 on the sale of equipment for the years ended December 31, 2024 and 2023.

Current wording

During the year ended December 31, 2024, the Company sold one of its Gamma Knife Perfexion units with an Icon upgrade to the customer it was leased to and recorded a net gain on equipment sale. The Company assessed this transaction under ASC 606 and concluded the Company acted as the agent in this transaction and provided, at a point in time, a single performance obligation, in the form of an equipment sale of an Icon. The performance obligation to sell, assign, transfer and deliver the equipment to the customer was carried out via Elekta. Revenue related to the equipment sale is recognized on a net basis when the sale is complete. The Company recognized net revenues of $155,000 on the sale of equipment for the year ended December 31, 2024.

Previous wording

The Company assesses the recoverability of its long-lived assets when events or changes in circumstances indicate their carrying value may not be recoverable. Such events or changes in circumstances may include: a significant adverse change in the extent or manner in which a long-lived asset is being used, significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company assesses recoverability of a long-lived asset by determining whether the carrying value of the asset group can be recovered through projected undiscounted cash flows over their remaining lives. If the carrying value of the asset group exceeds the forecasted undiscounted cash flows, an impairment loss is recognized, measured as the amount by which the carrying amount exceeds estimated fair value. An impairment loss is charged to the consolidated statement of operations in the period in which management determines such impairment. As of December 31, 2024 and 2023, the Company recognized a loss on the write down of impaired assets of $3,084,000 and $940,000, respectively. Fluctuations in the Company’s projections of cash flows may result in a 5% to 10% change in the impairment write-down by approximately $87,000 to $174,000, as of December 31, 2024.

Current wording

The Company assesses the recoverability of its long-lived assets when events or changes in circumstances indicate their carrying value may not be recoverable. Such events or changes in circumstances may include: a significant adverse change in the extent or manner in which a long-lived asset is being used, significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company assesses recoverability of a long-lived asset by determining whether the carrying value of the asset group can be recovered through projected undiscounted cash flows over their remaining lives. If the carrying value of the asset group exceeds the forecasted undiscounted cash flows, an impairment loss is recognized, measured as the amount by which the carrying amount exceeds estimated fair value. An impairment loss is charged to the consolidated statement of operations in the period in which management determines such impairment. As of December 31, 2025 and 2024, the Company recognized a loss on the write down of impaired assets of $0 and $3,084,000, respectively. Fluctuations in the Company’s projections of cash flows may result in a 5% to 10% change in the impairment write-down by approximately $87,000 to $174,000, as of December 31, 2024.

Previous wording

Accounting pronouncements issued and not yet adopted - In December 2023, the FASB issued ASU 2023-09Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”) 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. ASU 2023-09 is effective for annual periods beginning after December 31, 2024. The Company is currently evaluating ASU 2023-09 to determine the impact it may have on its consolidated financial statements.

Current wording

Accounting pronouncements issued and adopted - In December 2023, the FASB issued ASU 2023-09Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”) 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. ASU 2023-09 is effective for annual periods beginning after December 31, 2024. The Company adopted ASU 2023-09 for the year ended December 31, 2025 and enhanced its disclosure requirements, accordingly. See Note 7 - Income Taxes for further discussion.

Previous wording

In November 2024, the FASB issued ASU 2024-03Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ASU 2024-03”) which requires entities to (1) 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 are not necessarily disaggregated quantitatively, and (4) disclose the total amount of selling expenses, in annual reporting periods, an entity’s definition of selling expense. ASU 2024-03 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 ASU 2024-03 to determine the impact it may have on its consolidated financial statements.

Current wording

Accounting pronouncements issued and not yet adopted - In November 2024, the FASB issued ASU 2024-03Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ASU 2024-03”) which requires entities to 1. 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 are not necessarily disaggregated quantitatively, and 4. disclose the total amount of selling expenses, in annual reporting periods, an entity’s definition of selling expense. ASU 2024-03 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 ASU 2024-03 to determine the impact it may have on its consolidated financial statements.

Previous wording

For each of the years ended December 31, 2024 and 2023, 56% and 83% of the Company’s revenue was derived from the leasing segment, respectively, and 44% and 17% from the Company’s retail segment, respectively. For the year ended December 31, 2024, 35% of the Company’s revenue was derived from its PBRT business, 34% was derived from its Gamma Knife business, 30% was derived from its LINAC business, and 1% was derived from equipment sales. For the year ended December 31, 2023, 51% of the Company’s revenue was derived from its Gamma Knife business, 48% was derived from its PBRT business and 1% was derived from equipment sales.

Current wording

For each of the years ended December 31, 2025 and 2024, 45% and 56% of the Company’s revenue was derived from the leasing segment, respectively, and 55% and 44% from the Company’s direct patient service segment, respectively. For the year ended December 31, 2025, 41% of the Company’s revenue was derived from its LINAC business, 33% was derived from its Gamma Knife business, and 26% was derived from its PBRT business. For the year ended December 31, 2024, 35% was derived from its PBRT business, 34% of the Company’s revenue was derived from its Gamma Knife business, 30% was derived from its LINAC business, and 1% was derived from equipment sales.

Previous wording

Total revenue in 2024 increased 32.9% compared to 2023 primarilydue to revenue generated from the Company’s single-unit radiation therapy facility in Puebla, Mexico, which began treating patients in July 2024, and revenue generated by the three single-unit radiation therapy facilities owned by the RI Companies, which the Company acquired a 60% interest in on May 7, 2024. Revenues from the Company’s leasing segment decreased $1,988,000 in 2024 compared to 2023 due to a decrease in PBRT volumes and due to the expiration of two contracts in the second and third quarters of 2023, and a third contract that expired in November 2024. Revenues from the Company’s retail segment increased by $9,003,000 in 2024 compared to 2023 due to higher volumes at the Company’s international Gamma Knife facilities, the Company’s single-unit facility in Puebla, Mexico and the three, recently acquired, radiation therapy facilities in Rhode Island.

Current wording

Total revenue in 2025 increased 0.9% compared to 2024 primarilydue to revenue generated from the Company’s single-unit radiation therapy facility in Puebla, Mexico, which began treating patients in July 2024, and revenue generated by the three single-unit radiation therapy facilities owned by the RI Companies, which the Company acquired a 60% interest in on May 7, 2024. Revenues from the Company’s leasing segment decreased $3,076,000 in 2025 compared to 2024 due to a decrease in PBRT volumes and due to the expiration of three Gamma Knife contracts in the fourth quarter of 2024, first quarter of 2025, and second quarter of 2025. Revenues from the Company’s direct patient service segment increased by $2,973,000 in 2025 compared to 2024 due to the Company’s single-unit facility in Puebla, Mexico and the three, recently acquired, radiation therapy facilities in Rhode Island.

Previous wording

The Company acquired the RI Companies on May 7, 2024 and included the financial results from their operations from May 7, 2024, the Closing Date of the transaction, through December 31, 2024. The Company’s stand-alone radiation therapy facility in Puebla, Mexico also began treating patients in July 2024. Radiation therapy revenues generated from the three stand-alone facilities acquired through the RI Acquisition and the radiation therapy facility in Puebla were $8,517,000 for the year ended December 31, 2024. Radiation therapy procedures for the three stand-alone facilities acquired through the RI Acquisition and the radiation therapy facility in Puebla were 14,507 for the year ended December 31, 2024.

Current wording

The Company acquired the RI Companies on May 7, 2024 and included the financial results from their operations from May 7, 2024, the closing date of the transaction, through December 31, 2024. The Company’s stand-alone radiation therapy facility in Puebla, Mexico also began treating patients in July 2024. These facilities were consolidated with the Company’s operations or otherwise operated for the twelve-month period ended December, 31, 2025, versus operating under the Company for a partial period in the prior year, driving the increase in radiation therapy revenue and LINAC sessions.

Previous wording

PBRT revenue for 2024 was $9,952,000 compared to $10,133,000 in 2023. The number of PBRT fractions performed in 2024 was 5,139 compared to 5,369 in 2023. Revenue per fraction in 2024 was $1,937 compared to $1,887 in 2023. The Company’s PBRT unit in Orlando, Florida, was impacted by several hurricanes during 2024, which resulted in lower procedure volume. The average reimbursement increased due to a shift in payor mix from Medicare to commercial or other payors, which are reimbursed at a higher amount.

Current wording

PBRT revenue for 2025 was $7,369,000 compared to $9,952,000 in 2024. The number of PBRT fractions performed in 2025 was 4,056 compared to 5,139 in 2024. Revenue per fraction in 2025 was $1,817 compared to $1,937 in 2024. Lower volumes during 2025 drove lower revenues. We believe the lower procedure volume during 2025 was due to normal, cyclical fluctuations.

Previous wording

Gamma Knife revenue for 2024 was $9,716,000 compared to $10,992,000 in 2023. Gamma Knife revenue for 2024 decreased $1,276,000 compared to 2023 due to the expiration of two contracts in the second and third quarters of 2023, and a third contract that expired in November 2024.

Current wording

Gamma Knife revenue for 2025 was $9,185,000 compared to $9,716,000 in 2024. Gamma Knife revenue for 2025 decreased $531,000 compared to 2024 due to the expiration of a total of three contracts in the fourth quarter of 2024, first quarter of 2025, and second quarter of 2025, respectively.

Previous wording

The number of Gamma Knife procedures performed in 2024 decreased by 111 compared to 2023 primarily due to the expiration of two contracts in the second and third quarters of 2023, and a third contract that expired in November 2024. Excluding the three Gamma Knife contracts that expired during 2023 and 2024, Gamma Knife procedures for existing sites were consistent with the prior year. Gamma Knife procedures for existing customer sites, retail segment, increased by 24%, offset by a 15% decrease in the Company’s Gamma Knife leasing segment in 2024 compared to 2023, respectively. The increase in Gamma Knife volumes from retail sites wasdue to improved marketing and physician outreach at the Company’s international locations. In addition, the Company’s Gamma Knife unit in Ecuador was upgraded to the Esprit and received a Cobalt-60 reload in November 2023, providing for faster procedure time.

Current wording

The number of Gamma Knife procedures performed in 2025 decreased by 147 compared to 2024 primarily due to the expiration of a total of three contracts in the fourth quarter of 2024, first quarter of 2025, and second quarter of 2025, respectively. Excluding the three Gamma Knife contracts that expired during 2024 and 2025, Gamma Knife procedures for existing sites increased 2% compared to the prior year. Overall, Gamma Knife procedures for existing customer sites, direct patient service segment, decreased by 6%, offset by an 11% increase in the Company’s Gamma Knife leasing segment in 2025 compared to 2024, respectively. The decrease in Gamma Knife volumes from direct patient service sites wasdue to downtime to upgrade the Gamma Knife in Peru from a Model 4(C) to the Esprit, and to relocate the facility location as part of the upgrade.

Previous wording

Revenue per procedure decreased by $235 in 2024 compared to 2023. This decrease was due to changes in reimbursement at the Company’s revenue share sites, which can fluctuate depending on payor mix and volume of procedures by site.

Current wording

Revenue per procedure increased by $840 in 2025 compared to 2024. This increase was due to changes in reimbursement at the Company’s revenue share sites, which can fluctuate depending on payor mix and volume of procedures by site.

Previous wording

The Company’s costs of revenue, consisting of maintenance and supplies, depreciation and amortization, and other operating expenses (such as insurance, property taxes, sales taxes, marketing costs and operating costs from the Company’s revenue sharing and international sites) increased by $7,174,000 in 2024 compared to 2023.

Current wording

The Company’s costs of revenue, consisting of maintenance and supplies, depreciation and amortization, and other operating expenses (such as insurance, property taxes, sales taxes, marketing costs and operating costs from the Company’s revenue sharing and international sites) increased by $3,863,000 in 2025 compared to 2024.

Previous wording

Maintenance and supplies and other direct operating costs, related party, as a percentage of total revenue were 10.7% and 13.5% in 2024 and 2023, respectively. Maintenance and supplies and other direct operating costs, related party increased by $138,000 in 2024 compared to 2023. The increase in 2024 compared to 2023was primarily due to maintenance at the Company’s radiation therapy facilities in Rhode Island, that were acquired during 2024, offset by lower maintenance expense for the Company’s Gamma Knife portfolio.

Current wording

Maintenance and supplies and other direct operating costs, related party, as a percentage of total revenue were 13.4% and 10.7% in 2025 and 2024, respectively. Maintenance and supplies and other direct operating costs, related party increased by $740,000 in 2025 compared to 2024. The increase in 2025 compared to 2024 was primarily due to maintenance at the Company’s radiation therapy facilities in Rhode Island, that were acquired during 2024, and maintenance for the Company’s LINAC equipment in Puebla, Mexico which was under warranty through May 2025.

Previous wording

Depreciation and amortization costs as a percentage of total revenue were 21.4% and 23.8% in 2024 and 2023. Depreciation and amortization costs increased $996,000 in 2024 compared to 2023. The increase in 2024 compared to 2023was due to five upgrades performed between 2023 and 2024 where the Company upgraded an existing Gamma Knife to the Esprit, installed a new Esprit, or replaced the Cobalt-60 in the related machines, and the RI Acquisition where the Company acquired three, existing, single-unit radiation therapy facilities.

Current wording

Depreciation and amortization costs as a percentage of total revenue were 20.3% and 21.4% in 2025 and 2024. Depreciation and amortization costs decreased by $376,000 in 2025 compared to 2024. The decrease in 2025 compared to 2024 wasdue to theexpiration of three contracts in the fourth quarter of 2024, first quarter of 2025, and second quarter of 2025, respectively, offset by higher depreciation expense driven by an upgrade at one of the Company’s existing locations, the RI Acquisition where the Company acquired three, existing, single-unit radiation therapy facilities, and the Company’s radiation therapy in Puebla, Mexico which began treating patients July 2024.

Previous wording

Other direct operating costs as a percentage of total revenue were 35.5% and 18.9% in 2024 and 2023, respectively. Other direct operating costs increased by $6,040,000 in 2024 compared to 2023. The increase in 2024 was primarilydue to the Company’s single-unit radiation therapy facility in Puebla, Mexico, which began treating patients in July 2024, and the three single-unit radiation therapy facilities the Company acquired in Rhode Island on May 7, 2024. These facilities are part of the Company’s retail segment where the Company owns and operates the facilities, therefore, there are higher operating costs associated with them.

Current wording

Other direct operating costs as a percentage of total revenue were 48.3% and 35.5% in 2025 and 2024, respectively. Other direct operating costs increased by $3,499,000 in 2025 compared to 2024. The increase in 2025 was due to the Company’s single-unit radiation therapy facility in Puebla, Mexico, which began treating patients in July 2024, and the three single-unit radiation therapy facilities the Company acquired in Rhode Island on May 7, 2024. These facilities are part of the Company’s direct patient service segment where the Company owns and operates the facilities, therefore, there are higher operating costs associated with them.

Previous wording

The Company’s selling and administrative costs increased $385,000 in 2024 compared to 2023. The increase in 2024 was due to increased staffing in the sales, finance and customer retention areas and approximately$560,000 in fees associated with new business opportunities, including those resulting from the RI Acquisition.

Current wording

The Company’s selling and administrative costs decreased by $329,000 in 2025 compared to 2024. The decrease in 2025 was due to fees associated with new business opportunities, including those resulting from the RI Acquisition, incurred in the prior year only, offset by increased staffing in the sales, finance and customer retention areas that continued into 2025.

Previous wording

The Company’s interest expense increased $387,000 in 2024 compared to 2023. The increase for the year ended December 31, 2024 was due to an increase in borrowings, including the Supplemental Term Loan received in January 2024, and the second tranche of the DFC loan received in November 2023.

Current wording

The Company’s interest expense increased $75,000 in 2025 compared to 2024. The increase for the year ended December 31, 2025 was due to an increase in borrowings, primarily the Second Supplemental Term Loan received in December 2024.

Previous wording

As of December 31, 2024 and 2023, the Company recognized a loss on the write down of impaired assets of $3,084,000 and $940,000, respectively. During the year ended December 31, 2024, the Company recognized impairment on six of its domestic Gamma Knife units. The Company also increased and impaired its ARO liability for one of the impaired units where the Company does not plan to renew the contract in early 2025 and will remove this unit at its contract term. The sixsites that were impaired and ARO for one of the impaired units were recorded as write down of impaired assets for the December 31, 2024.

Current wording

As of December 31, 2025 and 2024, the Company recognized a loss on the write down of impaired assets of $0 and $3,084,000, respectively. During the year ended December 31, 2024, the Company recognized impairment on six of its domestic Gamma Knife units. The Company also increased and impaired its ARO liability for one of the impaired units where the Company does not plan to renew the contract in early 2026 and will remove this unit at its contract term. The sixsites that were impaired and ARO for one of the impaired units were recorded as write down of impaired assets as of December 31, 2024. The Company also reviewed its long-lived assets during the fourth quarter of 2025 and concluded no events or circumstances existed that indicated additional impairment existed at December 31, 2025.

Previous wording

The Company recorded a $3,794,000 net bargain purchase gain related to the RI Acquisition that closed on May 7, 2024. The Company acquired 60% of the equity interests of the RI Companies, which operate three radiation therapy facilities, for $2,850,000. The assets acquired exceeded the total purchase price by the bargain purchase amount and the Company recorded this difference as a gain for the year ended December 31, 2024. See Note 12 - RI Acquisition to the consolidated financial statements for further discussion on bargain purchase.

Current wording

For the year ended December 31, 2024, the Company recorded a $3,794,000 net bargain purchase gain related to the RI Acquisition that closed on May 7, 2024. The Company acquired 60% of the equity interests of the RI Companies, which operate three radiation therapy facilities, for $2,850,000. The assets acquired exceeded the total purchase price by the bargain purchase amount and the Company recorded this difference as a gain for the year ended December 31, 2024. See Note 12 - RI Acquisition to the consolidated financial statements for further discussion on bargain purchase.

Previous wording

Income tax expense decreased $726,000 in 2024 compared to 2023. The decrease in income tax expense in 2024 was primarily due to losses incurred by the Company’s leasing segment, driven by equipment impairment, and lower Gamma Knife volumes during 2024.

Current wording

Income tax benefit increased $198,000 in 2025 compared to 2024. The increase in the income tax benefit in 2025 was primarily due to losses incurred by both the Company’s leasing and direct patient services segments, driven by lower PBRT and Gamma Knife procedure volumes during 2025.

Previous wording

The Company anticipates that it will continue to record income tax expense if it operates profitably in the future. Currently there are state income tax payments required for most states in which the Company operates.

Current wording

The Company anticipates that it will record income tax expense if it operates profitably in the future. Currently there are state income tax payments required for most states in which the Company operates.

Previous wording

Net loss attributable to non-controlling interests increased $309,000 in 2024 compared to 2023. Net income or loss attributable to non-controlling interests represents the pre-tax income earned by the 19% non-controlling interest in GKF, and the pre-tax income or losses of the non-controlling interests in various subsidiaries controlled by GKF, and the 40% non-controlling interests in the RI facilities and their pre-tax income or losses. The decrease or increase in net income attributable to non-controlling interests reflects the relative profitability of GKF and the RI Companies. The increase in net loss attributable to non-controlling interests in 2024 compared to 2023 was due to higher pre-tax loss for GKF stand-alone operations.

Current wording

Net loss attributable to non-controlling interests increased $520,000 in 2025 compared to 2024. Net income or loss attributable to non-controlling interests represents the pre-tax income earned by the 19% non-controlling interest in GKF, and the pre-tax income or losses of the non-controlling interests in various subsidiaries controlled by GKF, the 40% non-controlling interests in the RI facilities and their pre-tax income or losses, and the 15% non-controlling interest in the Company’s joint venture in Puebla, Mexico and its net income or loss. The decrease or increase in net income or loss attributable to non-controlling interests reflects the relative profitability of GKF, the RI Companies, and Puebla. The increase in net loss attributable to non-controlling interests in 2025 compared to 2024 was due to higher pre-tax loss for GKF stand-alone operations and the RI facilities.

Previous wording

NET INCOME ATTRIBUTABLE TO AMERICAN SHARED HOSPITAL SERVICES

Current wording

NET (LOSS) INCOME ATTRIBUTABLE TO AMERICAN SHARED HOSPITAL SERVICES

Previous wording

Net income attributable to American Shared Hospital Services increased $1,576,000 in 2024 compared to 2023. Net income for the Company’s retail segment increased $5,474,000 in 2024 compared to 2023. The increase in 2024 compared to 2023 was primarily due to the bargain purchase gain from the RI Acquisition and profitability of the three stand-alone facilities acquired, in which the Company acquired an interest. Net income for the Company’s leasing segment decreased $3,898,000 in 2024 compared to 2023. The decrease in 2024 compared to 2023 was primarily due to the impairment recognized on the Gamma Knife portfolio and related removal costs, along with operating losses at the domestic Gamma Knife leasing segment level.

Current wording

The Company incurred a net loss attributable to American Shared Hospital Services of $1,553,000 in 2025 compared to net income of $2,186,000 in 2024. The Company’s direct patient segment incurred a net loss of $1,167,000 in 2025 compared to net income of $5,566,000 in 2024. Net income in 2024 was primarily due to the bargain purchase gain from the RI Acquisition and profitability of the three stand-alone facilities acquired, in which the Company acquired an interest. The Company’s direct patient segment incurred a net loss in 2025, primarily due to physician turnover at the RI facilities, which impacted volumes during the year. Also, the Company experienced equipment downtime in Peru to upgrade its equipment in July 2025. Net loss for the Company’s leasing segment decreased $2,994,000 in 2025 to a loss of $386,000 compared to a loss of $3,380,000 in 2024. The decrease in 2025 compared to 2024 was primarily due to the impairment recognized in the prior year on the Gamma Knife portfolio and related removal costs, along with operating losses at the domestic Gamma Knife leasing segment level.

Previous wording

The Company’s primary liquidity needs are to fund capital expenditures as well as support working capital requirements. In general, the Company’s principal sources of liquidity are cash and cash equivalents on hand and a $7,000,000 revolving line of credit (as defined above, the “Revolving Line”). The Company had cash and cash equivalents, including restricted cash, of $11,275,000 at December 31, 2024 compared to $13,808,000 at December 31, 2023, a decrease of $2,533,000. The Company’s expected primary cash needs on both a short and long-term basis are for capital expenditures, business expansion, working capital, and other general corporate purposes. The Company believes that its revenue from operations, together with borrowing capacity under the Revolving Line and its access to capital resources are sufficient to continue funding its present operations, to meet its commitments on its existing debt, and to meet its operating capital and funding requirements for the next 12 months from the date of this Annual Report.

Current wording

The Company’s primary liquidity needs are to fund capital expenditures as well as support working capital requirements. In general, the Company’s principal sources of liquidity are cash and cash equivalents on hand. The Company had cash and cash equivalents, including restricted cash, of $3,712,000 at December 31, 2025 compared to $11,275,000 at December 31, 2024, a decrease of $7,563,000. The Company’s expected primary cash needs on both a short and long-term basis are for capital expenditures, business expansion, working capital, and other general corporate purposes.

Previous wording

Operating activities provided $167,000 of cash in 2024, which was driven by net income of $1,532,000, non-cash charges for depreciation and amortization of $6,174,000, a loss on the write down of impaired assets of $3,084,000, gain on sale of equipment of $155,000, stock-based compensation expense of $373,000, accretion of deferred issuance costs of $95,000, changes in related party liabilities of $324,000, and changes in payables and other accrued liabilities of $2,227,000. These increases were offset by the gain on bargain purchase of $3,794,000, deferred income taxes of $359,000, accretion of unfavorable lease position of $65,000, changes in receivables of $6,939,000, changes in prepaids and other assets of $513,000, changes in ARO of $588,000, and income taxes payable of $1,229,000.

Current wording

Operating activities provided $3,098,000 of cash in 2025, which was driven by non-cash charges for depreciation and amortization of $5,714,000, stock-based compensation expense of $404,000, accretion of deferred issuance costs of $126,000, net changes in lease liabilities of $285,000, changes in related party liabilities of $207,000, and changes in prepaids and other assets of $1,677,000. These increases were offset by a net loss of $2,727,000, accretion of unfavorable lease position of $26,000, changes in receivables of $559,000, and changes in accounts payable and accrued liabilities of $955,000.

Previous wording

The Company’s trade accounts receivable increased by $7,267,000 to $11,610,000 at December 31, 2024 from $4,343,000 at December 31, 2023. The number of days revenue (sales) outstanding (“DSO”) in accounts receivable as of December 31, 2024 was 150 days compared to 74 days at December 31, 2023. DSO fluctuates depending on timing of customer payments received and the mix of fee per use versus revenue sharing and retail customers. The revenue sharing and retail sites generally have longer collection periods than fee per use sites. The Company added four retail sites during 2024, driving the increase in DSO.

Current wording

The Company’s trade accounts receivable decreased by $1,089,000 to $10,521,000 at December 31, 2025 from $11,610,000 at December 31, 2024. The number of days revenue (sales) outstanding (“DSO”) in accounts receivable as of December 31, 2025 was 137 days compared to 150 days at December 31, 2024. DSO fluctuates depending on timing of customer payments received and the mix of fee per use versus revenue sharing or direct patient service customers. The revenue sharing and direct patient service sites generally have longer collection periods than fee per use sites. The Company added four direct patient service sites during 2024, driving the increase in DSO.

Previous wording

Investing activities used $7,105,000 of cash in 2024, primarily due to payments made towards the purchase of property and equipment of $7,938,000, offset by cash received in excess of cash paid for the RI Acquisition of $538,000, and proceeds from equipment sales of $140,000. During 2024, the Company completed two Esprit upgrades at existing customer sites, began installation at a third site, and completed a Cobalt-60 reload and software upgrade at a fourth site.

Current wording

Investing activities used $7,634,000 of cash in 2025, due to payments made towards the purchase of property and equipment. During 2025, the Company completed two Esprit upgrades at existing customer sites.

Previous wording

On April 9, 2021, the Company along with certain of its domestic subsidiaries (collectively, the “Loan Parties”) entered into a five year $22,000,000 credit agreement with Fifth Third Bank, N.A. (“the Credit Agreement”). The Credit Agreement includes three loan facilities. The first 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. The second loan facility is a $5,500,000 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. The third loan facility provides for a $7,000,000 revolving line of credit (the “Revolving Line”) available for future projects and general corporate purposes. The facilities have a five-year maturity, 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.

Current wording

On April 9, 2021, ASHS, Orlando, GKF (collectively, the Borrowers), and ASRS (together with the Borrowers, collectively, the Loan Parties) entered into a five-year $22,000,000 Credit Agreement with Fifth Third Bank, N.A. Unless otherwise stated, capitalized terms that are used in this “Long-Term Debt” section but not defined here or elsewhere in this Annual Report have the meanings given to them in the Credit Agreement, as amended. The Credit Agreement includes three loan Facilities. The first loan facility is a $9,500,000 Term Loan, which was used to refinance the domestic Gamma Knife debt and finance leases and for associated closing costs. The second loan facility is a $5,500,000 DDTL, which was used to refinance the Company’s PBRT finance leases and associated closing costs, as well as to provide additional working capital. The third loan facility provides a $7,000,000 Revolving Line of credit available for future projects and general corporate purposes. The Facilities have a five-year maturity, which mature on April 9, 2026, carry a floating interest of SOFR plus 3.0% (6.99% as of December 31, 2025), and are secured by a lien on substantially all of the assets of the Loan Parties and are guaranteed by ASHS. ASHS is currently in discussions with Fifth Third regarding a potential extension of the maturity of the Facilities. However, there can be no assurance that Fifth Third will agree to such an extension or, if obtained, as to the terms or duration of any such extension. If ASHS is unable to obtain an extension of the maturity of the Facilities, the Company will not have sufficient cash on hand to repay the Facilities at maturity.