What changed in AMERICAN SHARED HOSPITAL SERVICES's 2023 10-K compared to 2022?

Across the narrative sections we track, AMERICAN SHARED HOSPITAL SERVICES (AMS) added 276 paragraphs, removed 206, and edited 155 between the 2022 and 2023 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+117/−94), Item 1A. Risk Factors (+76/−42), Item 1. Business (+77/−64).

Did AMERICAN SHARED HOSPITAL SERVICES add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 76 new/edited paragraphs and 42 removed paragraphs versus the 2022 10-K.

What changed in AMERICAN SHARED HOSPITAL SERVICES's MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 117 new/edited paragraphs and 94 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Where does this AMS 10-K diff come from?

The source filings are AMERICAN SHARED HOSPITAL SERVICES's official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in AMERICAN SHARED HOSPITAL SERVICES's 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of AMERICAN SHARED HOSPITAL SERVICES's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+276 added−206 removedSource: 10-K (2024-04-01) vs 10-K (2023-03-31)

Top changes in AMERICAN SHARED HOSPITAL SERVICES's 2023 10-K

276 paragraphs added · 206 removed · 155 edited across 5 sections

Item 7. Management's Discussion & Analysis+117 / −94 · 65 edited
Item 1A. Risk Factors+76 / −42 · 29 edited
Item 1. Business+77 / −64 · 55 edited
Item 5. Market for Registrant's Common Equity+4 / −4 · 4 edited
Item 2. Properties+2 / −2 · 2 edited

Item 1. Business

Business — how the company describes what it does

55 edited+22 added−9 removed72 unchanged

2022 filing

2023 filing

Biggest changeHe is also the Chief Executive Officer and policy committee member of GKF. From September 1988 through January 1992, Mr. Tagawa served in various positions with the Company. Mr. Tagawa currently serves as Chief Financial Officer and Secretary of the Ernest A. Bates Foundation.

Biggest changeTagawa served in various positions with the Company. Mr. Tagawa currently serves as Chief Financial Officer and Secretary of the Ernest A. Bates Foundation. He received his undergraduate degree from the University of California at Berkeley and his M.B.A. from Cornell University. Robert Hiatt has served as the Chief Financial Officer of the Company since April 17, 2023. Mr.

The policy committee may act only with the unanimous approval of both of its members. The policy committee selects a manager to handle GKF’s daily operations. Craig K. Tagawa, Chief Executive Officer of GKF and President and Chief Financial Officer of ASHS, serves as GKF’s manager. GKF’s profits and/or losses and any cash distributions are allocated based on membership interests.

The policy committee may act only with the unanimous approval of both of its members. The policy committee selects a manager to handle GKF’s daily operations. Craig K. Tagawa, Chief Executive Officer of GKF and President of ASHS, serves as GKF’s manager. GKF’s profits and/or losses and any cash distributions are allocated based on membership interests.

Advanced Radiation Therapy Equipment and Services The Company is continuing its efforts to contract new radiation therapy customers both domestically and internationally. The Company has increased its product offerings from standard linear accelerators to more advanced linear accelerators that incorporate Magnetic Resonance Imaging (“MRI”) and potentially Positron Emission Tomography (“PET”) imaging technologies.

Advanced Radiation Therapy Equipment and Services The Company is continuing its efforts to contract new radiation therapy customers both domestically and internationally. The Company has increased its product offerings from standard linear accelerators to more advanced linear accelerators (“LINAC”) that incorporate Magnetic Resonance Imaging (“MRI”) and potentially Positron Emission Tomography (“PET”) imaging technologies.

The remaining 49% in each of these two companies is owned by radiation oncologists. The Company is also the sole owner of PBRT Orlando, LLC (“Orlando”) and the majority owner of Long Beach Equipment, LLC (“LBE”) which were formed to provide proton beam radiation therapy services in Orlando, Florida and Long Beach, California.

On April 9, 2021, the Company and certain of its domestic subsidiaries entered into a five year $22,000,000 credit agreement with Fifth Third Bank, N.A. (the “Credit Agreement”), which refinanced its existing domestic Gamma Knife portfolio. The lease financing previously obtained by Orlando was also refinanced as long-term debt by the Credit Agreement.

FINANCING On April 9, 2021, the Company and certain of its domestic subsidiaries entered into a five year $22,000,000 credit agreement (the “Credit Agreement”) with Fifth Third Bank, N.A. (“Fifth Third”), which refinanced its existing domestic Gamma Knife portfolio. The lease financing previously obtained by Orlando was also refinanced as long-term debt by the Credit Agreement.

Because the Company is not a health care provider, we were not directly affected by the law, but we could be indirectly affected principally as follows: • The repeal of the Affordable Care Act's individual mandate requirement pursuant to the Tax Cuts and Jobs Act of 2017 could results in a decrease in the number of insured patients seeking Gamma Knife or radiation therapy treatment. • The Company’s retail contracts are subject to reimbursement rate changes for radiosurgery or radiation therapy services by the government or other third-party payors.

Because the Company is not a health care provider, we were not directly affected by the law, but we could be indirectly affected principally as follows: • The repeal of the Affordable Care Act’s individual mandate requirement pursuant to the Tax Cuts and Jobs Act of 2017 could results in a decrease in the number of insured patients seeking Gamma Knife or radiation therapy treatment. • The Company’s revenue sharing contracts are subject to reimbursement rate changes for radiosurgery or radiation therapy services by the government or other third-party payors.

GKF’s operating agreement requires that it have a cash reserve of at least $50,000 before cash distributions are made to its members. From inception to December 31, 2022, GKF has distributed $50,410,000 to the Company and $11,825,000 to Elekta.

GKF’s operating agreement requires that it have a cash reserve of at least $50,000 before cash distributions are made to its members. From inception to December 31, 2023, GKF has distributed $50,410,000 to the Company and $11,825,000 to Elekta.

The fixed fee per use reimbursement amount that the Company receives from the customer is based on the Company’s cost to provide the service and the anticipated volume of the customer. The Gamma Knife contracts signed by the Company typically call for a fee ranging from $4,500 to $9,000 p er procedure.

The major products the Company is able to provide creative financial and turnkey services for are; MR Guided Radiation Therapy Linacs, Advanced Linear Accelerators, Proton Beam Therapy systems, Brachytherapy systems, and through our GK Financing partnership with Elekta, the Leksell Gamma Knife product and services.

The major products the Company is able to provide creative financial and turn-key services for are; MR Guided Radiation Therapy Linacs, Advanced Linear Accelerators, Proton Beam Therapy systems, Brachytherapy systems, and through our GK Financing partnership with Elekta, the Leksell Gamma Knife product and services.

The following is a listing of the Company’s sites as of March 1, 2023: Original Term of Year Contract Customers (Gamma Knife except as noted) Contract (in years) Began Basis of Payment Southwest Texas Methodist Hospital San Antonio, Texas 10 1998 Fee per use Kettering Medical Center Kettering, Ohio 10 1999 Revenue sharing Central Mississippi Medical Center Jackson, Mississippi 10 2001 Fee per use OSF Saint Francis Medical Center Peoria, Illinois 10 2001 Fee per use Albuquerque Regional Medical Center Albuquerque, New Mexico 10 2003 Fee per use Northern Westchester Hospital Mt.

The following is a listing of the Company’s medical equipment leases as of March 1, 2024: Original Term of Year Contract Customers (Gamma Knife except as noted) Contract (in years) Began Basis of Payment Southwest Texas Methodist Hospital San Antonio, Texas 10 1998 Fee per use Kettering Medical Center Kettering, Ohio 10 1999 Revenue sharing Central Mississippi Medical Center Jackson, Mississippi 10 2001 Fee per use OSF Saint Francis Medical Center Peoria, Illinois 10 2001 Fee per use Albuquerque Regional Medical Center Albuquerque, New Mexico 10 2003 Fee per use Northern Westchester Hospital Mt.

The Supreme Court of the United States ruled on appeal that the plaintiffs lacked standing to challenge the individual mandate and its severability from the Affordable Care Act. Notably, the Supreme Court’s ruling addressed standing and did not discuss the constitutionality of the individual mandate or its severability.

On June 17, 2021, the Supreme Court of the United States ruled on appeal that the plaintiffs lacked standing to challenge the individual mandate and its severability from the Affordable Care Act. Notably, the Supreme Court’s ruling addressed standing and did not discuss the constitutionality of the individual mandate or its severability.

PBRT currently treats prostate, brain, spine, head and neck, lung, breast, gastrointestinal tract and pediatric tumors. Approximately 280,000 p atients have been treated with protons worldwide. Introduction of PBRT in the United States, until recently, has been limited due to the high capital costs of these projects.

PBRT currently treats prostate, brain, spine, head and neck, lung, breast, gastrointestinal tract and pediatric tumors. Approximately 280,000 pati ents have been treated with protons worldwide. Introduction of PBRT in the United States, until recently, has been limited due to the high capital costs of these projects.

(“GKPeru”) and HoldCo GKC S.A (“HoldCo”) for the purpose of providing similar Gamma Knife services in Peru and Ecuador, respectively. HoldCo owns approximately 99.3% of the total outstanding shares of Gamma Knife Center Ecuador S.A. (“GKCE”). GKF also owns a 51% interest in Albuquerque GK Equipment, LLC (“AGKE”) and Jacksonville GK Equipment, LLC (“JGKE”).

(“GKPeru”) and HoldCo GKC S.A (“HoldCo”) for the purpose of providing similar Gamma Knife services in Peru and Ecuador, respectively. HoldCo owns approximately 99.3% of the total outstanding shares of Gamma Knife Center Ecuador S.A. (“GKCE”). ASRS is the majority-owner of GKF. GKF also owns a 51% interest in Albuquerque GK Equipment, LLC (“AGKE”) and Jacksonville GK Equipment, LLC (“JGKE”).

The cancer care/medical center and its physicians are not under any obligation to utilize technologically obsolete cancer treatment equipment. ▪The Company provides planning, installation, operating and marketing assistance and support to its customers as well as providing turnkey solutions if room modifications, new vault, or even a new cancer care facility is needed by working with creditable and reputable construction companies.

The cancer care/medical center and its physicians are not under any obligation to utilize technologically obsolete cancer treatment equipment. ▪The Company provides planning, installation, operating and marketing assistance and support to its customers as well as providing turn-key solutions if room modifications, new vault, or even a new cancer care facility is needed by working with credible and reputable construction companies.

The major advantages to a health care provider in contracting with the Company for its financial and turnkey services include: ▪The cancer care center/medical center avoids the high cost of owning the equipment.

The major advantages to a health care provider in contracting with the Company for its financial and turn-key services include: ▪The cancer care center/medical center avoids the high cost of owning the equipment.

The Company maintains general and professional liability insurance consistent with the operations of these facilities and believes its present coverage is adequate for its business. 10 Table of Contents HUMAN CAPITAL RESOURCES At December 31, 2022, the Company had a workforce of ten people on a full-time basis and one person on a temporary basis in the United States, thirteen people on a full-time basis in Lima, Peru, a nd five people on a full-time basis in Guayaquil, Ec uador.

The Company maintains general and professional liability insurance consistent with the operations of these facilities and believes its present coverage is adequate for its business. 10 Table of Contents HUMAN CAPITAL RESOURCES At December 31, 2023, the Company had a workforce of thirteen people on a full-time basis in the United States, thirteen people on a full-time basis in Lima, Peru, a nd five people on a full-time basis in Guayaquil, Ec uador.

The Company provides Gamma Knife units to twelve medical centers in eleven states in the United States and two Gamma Knife units at stand-alone facilities in Lima, Peru and Guayaquil, Ecuador as of March 1, 2023. The Company provides Gamma Knife services through its 81% indirect interest in GK Financing, LLC, a California limited liability company (“GKF”).

The Company provides Gamma Knife units to ten medical centers in ten states in the United States and two Gamma Knife units at stand-alone facilities in Lima, Peru and Guayaquil, Ecuador as of March 1, 2024. The Company provides Gamma Knife services through its 81% indirect interest in GK Financing, LLC, a California limited liability company (“GKF”).

The Company, as of March 1, 2023, had twelve operating Gamma Knife units located in the United States and two in South America in Lima, Peru and Guayaquil, Ecuador, respectively. The Company’s first Gamma Knife commenced operation in September 1991.

The Company, as of March 1, 2024, had ten operating Gamma Knife units located in the United States and two in South America in Lima, Peru and Guayaquil, Ecuador, respectively. The Company’s first Gamma Knife commenced operation in September 1991.

There are currently no competing proton therapy facilities near the Company’s site. There are several competing manufacturers of PBRT systems, including Mevion, IBA Particle Therapy Inc., Hitachi Ltd., ProNova Solutions, LLC, Sumitomo Heavy Industries, Ltd., ProTom International, Inc. and Mitsubishi Electric Corp.

The average Medicare reimbursement delivery rate trends from 2021 to 2023 are outlined below: Average Medicare Reimbursement Delivery Rate Trends - Gamma Knife 2021 2022 2023 $7,773 $7,943 $7,691 The average Medicare reimbursement delivery rate trends for PBRT from 2021 to 2023 are outlined below. Patients typically undergo 25-40 delivery sessions.

The average Medicare reimbursement delivery rate trends from 2022 to 2024 are outlined below: Average Medicare Reimbursement Delivery Rate Trends - Gamma Knife 2022 2023 2024 $7,943 $7,691 $7,420 The average Medicare reimbursement delivery rate trends for PBRT from 2022 to 2024 are outlined below. Patients typically undergo 25-40 delivery sessions.

Average Medicare Reimbursement Delivery Rate Trends - PBRT 2021 2022 2023 Simple without Compensation $ 543 $ 554 $ 572 Simple with Compensation, Intermediate, or Complex $ 1,298 $ 1,321 $ 1,323 We are unable to predict the effect of future government health care funding policy changes on operations.

Average Medicare Reimbursement Delivery Rate Trends - PBRT 2022 2023 2024 Simple without Compensation $ 554 $ 572 $ 561 Simple with Compensation, Intermediate, or Complex $ 1,321 $ 1,323 $ 1,362 We are unable to predict the effect of future government health care funding policy changes on operations.

Vincent’s Medical Center Jacksonville, Florida 10 2011 Revenue Sharing Sacred Heart Medical Center Pensacola, Florida 10 2013 Revenue Sharing PeaceHealth Sacred Heart Medical Center at RiverBend Eugene, Oregon 10 2014 Revenue Sharing Orlando Health Cancer Institute Orlando, Florida (PBRT) 10 2016 Revenue Sharing Bryan Medical Center Lincoln, Nebraska 10 2017 Revenue Sharing Methodist Hospital Merrillville, Indiana 10 2019 Revenue Sharing The Company’s typical fee per use agreement is for a ten-year term.

Kisco, New York 10 2005 Fee per use Sacred Heart Medical Center Pensacola, Florida 10 2013 Revenue Sharing PeaceHealth Sacred Heart Medical Center at RiverBend Eugene, Oregon 10 2014 Revenue Sharing Orlando Health Cancer Institute Orlando, Florida (PBRT) 10 2016 Revenue Sharing Bryan Medical Center Lincoln, Nebraska 10 2017 Revenue Sharing Methodist Hospital Merrillville, Indiana 10 2019 Revenue Sharing The Company’s typical fee per use agreement is for a ten-year term.

At December 31, 2022, four customers each individually accounted for 12%, 14%, 16% and 22% of total accounts receivable, respectively. At December 31, 2021, two customers each individually accounted for 10% and 31% of total accounts receivable, respectively. MARKETING The Company markets financial and turnkey solutions to cancer treatment centers, hospitals, and large cancer networks worldwide.

At December 31, 2022, four customers each individually accounted for 12%, 14%, 16% and 22% of total accounts receivable, respectively. MARKETING The Company markets financial and turn-key solutions to cancer treatment centers, hospitals, and large cancer networks worldwide.

Additional information on our operations can be found in “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Note 1 - Business And Basis of Presentation” of the consolidated financial statements. 5 Table of Contents CUSTOMERS The Company’s current business is the outsourcing of stereotactic radiosurgery services and radiation therapy services.

(Mexico), as well as Executive Vice President of Elekta North and Latin America Regions and a Member of the Elekta AB Global Executive Management team from June 2017 to February 2020. Craig K. Tagawa serves as the President and Chief Financial Officer. Mr. Tagawa was also the Chief Operating Officer from February 1999 through September 2022. Mr.

(Mexico), as well as Executive Vice President of Elekta North and Latin America Regions and a Member of the Elekta AB Global Executive Management team from June 2017 to February 2020. Craig K. Tagawa has served as the President of the Company since October 1, 2020. Mr. Tagawa was also Chief Operating Officer from February 1999 through September 2022. Mr.

Revenue from Gamma Knife services for the Company during each of the last two years ended December 31, and the percentage of total revenue of the Company represented by the Gamma Knife for each of the last two years, are set forth below: Year Ended Total Gamma Knife Gamma Knife % of December 31, Revenue (in thousands) Total Revenue 2022 $ 10,794 54.7 % 2021 $ 11,629 66.0 % The Company conducts its Gamma Knife business through its 81% indirect interest in GKF.

Revenue from Gamma Knife services for the Company during each of the last two years ended December 31, and the percentage of total revenue of the Company represented by the Gamma Knife for each of the last two years, are set forth below: Year Ended Total Gamma Knife Gamma Knife % of December 31, Revenue (in thousands) Total Revenue 2023 $ 10,992 51.5 % 2022 $ 10,794 54.7 % The Company conducts its Gamma Knife business through its 81% indirect interest in GKF.

See additional discussion under “Item 1A Risk Factors.” On August 29, 2022, CMS published a final rule that delayed the start date of the RO APM to a date to be determined through future rulemaking and amended the definition of “model performance period” to provide that the start and end dates of the five-year model performance period will be established by CMS through future rulemaking.

On August 29, 2022, CMS published a final rule that delayed the start date of the RO APM to a date to be determined through future rulemaking and amended the definition of “model performance period” to provide that the start and end dates of the five-year model performance period will be established by CMS through future rulemaking.

The executive officers were appointed by the Board of Directors and serve at the discretion of the Board of Directors. Name: Age: Position: Raymond C. Stachowiak 64 Executive Chairman of the Board Peter Gaccione 64 Chief Executive Officer Craig K. Tagawa 69 President and Chief Financial Officer Raymond C.

The executive officers were appointed by the Board of Directors and serve at the discretion of the Board of Directors. Name: Age: Position: Raymond C. Stachowiak 65 Executive Chairman of the Board Peter Gaccione 65 Chief Executive Officer Craig K. Tagawa 70 President Robert Hiatt 58 Chief Financial Officer Raymond C.

The Company currently does not have customer contracts for its second and third PBRT units. The Company believes the business model it has developed for use in its stereotactic radiosurgery equipment and advanced radiation therapy placements can be tailored for the PBRT market segment. The Company is targeting large, hospital-based cancer programs.

The Company believes the business model it has developed for use in its stereotactic radiosurgery equipment and advanced radiation therapy placements can be tailored for the PBRT market segment. The Company is targeting large, hospital-based cancer programs.

Under the RO APM, hospital based and free-standing radiation therapy providers would have been required to participate in the model based on whether the radiation therapy provider is located within a randomly selected core-based statistical area. CMS projects that providers treating approximately 30% of radiation oncology patients would have been selected to participate in the RO APM.

The Gamma Knife Perfexion unit, which was introduced by Elekta in 2006, treats patients with 192 single doses of gamma rays that are focused with great precision on small and medium sized, well circumscribed and critically located structures in the brain.

Typically, Gamma Knife patients resume their pre-surgical activities one or two days after treatment. The Gamma Knife Perfexion unit, which was introduced by Elekta in 2006, treats patients with 192 single doses of gamma rays that are focused with great precision on small and medium sized, well circumscribed and critically located structures in the brain.

On April 27, 2022 , the Company signed a Joint Venture Agreement (the “Agreement”) with the principal owners of Guadalupe Amor Y Bien (“Guadalupe”) to establish AB Radiocirugia Y Radioterapia de Puebla, S.A.P.I. de C.V. of Puebla (“Puebla”) to treat public- and private-paying cancer patients. The Company and Guadalupe will hold 85% and 15% ownership interests, respectively, in Puebla.

(“Guadalupe”) to establish AB Radiocirugia Y Radioterapia de Puebla, S.A.P.I. de C.V. of Puebla (“Puebla”) to treat public- and private-paying cancer patients. The Company and Guadalupe will hold 85% and 15% ownership interests, respectively, in Puebla.

The Company’s Gamma Knife units performed 1,286 procedures in 2022 for a cumulative total of approximately 46,200 procedures from commencement through December 31, 2022.

The Company’s Gamma Knife units performed 1,195 procedures in 2023 for a cumulative total of approximately 47,400 procedures from commencement through December 31, 2023.

The remaining 19% interest is indirectly owned by Elekta through its wholly-owned subsidiary, GKF Investments. GKF, formed in October 1995, is managed by its policy committee. The policy committee is composed of one representative from the Company, Craig Tagawa, ASHS’s President and Chief Financial Officer, and one representative from Elekta. The policy committee sets the operating policy for GKF.

The remaining 19% interest is indirectly owned by Elekta through its wholly-owned subsidiary, GKF Investments. GKF, formed in October 1995, is managed by its policy committee. The policy committee is composed of one representative from the Company, Raymond Stachowiak , ASHS’ Executive Chairman of the Board, and one representative from Elekta. The policy committee sets the operating policy for GKF.

The Company believes that these more advanced technologies, with a higher capital cost component, may be potentially a more receptive market segment for its business model.

The Company believes that these more advanced technologies, with a higher capital cost component, may be potentially a more receptive market segment for its business model. The Company’s site in Puebla, Mexico will treat patients with a LINAC machine.

The Credit Agreement includes a $7,000,000 revolving line of credit that the Company has not drawn on as of December 31, 2022. The Credit Agreement is 48% amortized over a 58-month period with a balloon payment upon maturity and is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries.

The Credit Agreement is 48% amortized over a 58-month period with a balloon payment upon maturity and is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries.

Tagawa assumed the title of President on October 1, 2020. Mr. Taga wa has served as Chief Financial Officer from January 1992 through October 1995 and May 1996 to the present. Previously a Vice President in such capacity, Mr. Tagawa became a Senior Vice President on February 28, 1993.

Taga wa also served as Chief Financial Officer from January 1992 through October 1995 and from May 1996 to April 2023. Previously a Vice President in such capacity, Mr. Tagawa became a Senior Vice President on February 28, 1993. He is also the Chief Executive Officer and manager of GKF. From September 1988 through January 1992, Mr.

It can be an adjunct to conventional brain surgery, radiation therapy, or chemotherapy. Compared to conventional surgery, Gamma Knife radiosurgery usually is an out-patient procedure with lower risk of complications and can be provided at a lower cost. Typically, Gamma Knife patients resume their pre-surgical activities one or two days after treatment.

OPERATIONS Gamma Knife Operations Gamma Knife stereotactic radiosurgery, a non-invasive procedure, is an alternative to conventional brain surgery and/or radiation therapy. It can be an adjunct to conventional brain surgery, radiation therapy, or chemotherapy. Compared to conventional surgery, Gamma Knife radiosurgery usually is an out-patient procedure with lower risk of complications and can be provided at a lower cost.

The Company’s typical revenue sharing agreements (“retail”) are for a period of ten years. Instead of receiving a fixed fee, the Company receives all or a percentage of the reimbursement (exclusive of physician fees) received by the customer.

The Company’s typical revenue sharing agreements are for a period of ten years. Instead of receiving a fixed fee, the Company receives all or a percentage of the reimbursement (exclusive of physician fees) received by the customer. The Company is at risk for any reimbursement rate changes for radiosurgery or radiation therapy services by the government or other third-party payors.

The remaining 19% of GKF is owned by GKV Investments, Inc. (“GKV Investments”), a wholly-owned U.S. subsidiary of Elekta AG, a Swedish company (“Elekta”). Elekta is the manufacturer of the Leksell Gamma Knife® (the “Gamma Knife”). GKF is a non-exclusive provider of alternative financing services for Leksell Gamma Knife units.

The remaining 19% of GKF is owned by GKV Investments, Inc. (“GKV Investments”), a wholly-owned U.S. subsidiary of Elekta AG, a Swedish company (“Elekta”).

The Company expects to replace the unit in Ecuador with an Icon in mid-2023. 4 Table of Contents The Gamma Knife treats selected malignant and benign brain tumors, arteriovenous malformations, and functional disorders including trigeminal neuralgia (facial pain). As of December 31, 2022 , there were 118 Gamma Knife sites in the United States and 360 units in operation worldwide.

The Company expects to replace the unit in Peru with an Esprit in late 2024. 4 Table of Contents The Gamma Knife treats selected malignant and benign brain tumors, arteriovenous malformations, and functional disorders including trigeminal neuralgia (facial pain).

Under the Agreement, the Company will be responsible for providing a linear accelerator upgrade to an Elekta Versa HD, and Guadalupe will be accountable for all site modification costs. The Company formed ASHS-Mexico, S.A. de C.V. on October 3, 2022 to establish Puebla in order to provide radiation therapy and radiosurgery services locally in Mexico.

Under the Agreement, the Company is responsible for providing a linear accelerator, an Elekta Versa HD, and Guadalupe is accountable for all site modification costs. The Company formed ASHS-Mexico on October 3, 2022 to establish Puebla. Puebla was formed on December 15, 2022 and the Company expects Puebla to begin treating patients in June 2024.

The Company believes it is in substantial compliance with the various rules and regulations that affect its businesses. INSURANCE AND INDEMNIFICATION The Company’s contracts with equipment vendors generally do not contain indemnification provisions. The Company maintains a comprehensive insurance program covering the value of its property and equipment, subject to deductibles, which the Company believes are reasonable.

The Company maintains a comprehensive insurance program covering the value of its property and equipment, subject to deductibles, which the Company believes are reasonable. The Company’s customer contracts generally contain mutual indemnification provisions. The Company maintains general and professional liability insurance in the United States.

The Company’s Peruvian and Ecuadorian Gamma Knife centers are free-standing facilities operated by GKPeru and GKCE, respectively. The treating physicians and clinical staff at these facilities are independent contractors.

The Company is not involved in the practice of medicine and therefore believes its present insurance coverage and indemnification agreements are adequate for its business. The Company’s Peruvian and Ecuadorian Gamma Knife centers are free-standing facilities operated by GKPeru and GKCE, respectively. The treating physicians and clinical staff at these facilities are independent contractors.

The Company’s Gamma Knife center in Ecuador was responsible for obtaining possession and user’s licenses for the Cobalt-60 sources from the Subsecretaría de Control y Aplicaciones Nucleares (SCAN). Standard linear accelerator equipment utilized to treat patients is regulated by the FDA. The licensing is obtained by the individual medical center operating the equipment.

The Company’s Gamma Knife center in Peru was responsible for obtaining possession and user’s licenses for the Cobalt-60 sources from the Peruvian Regulatory Agencies. The Company’s Gamma Knife center in Ecuador was responsible for obtaining possession and user’s licenses for the Cobalt-60 sources from the Subsecretaría de Control y Aplicaciones Nucleares (SCAN).

The Company’s Gamma Knife unit in Ecuador is financed with United States Development Finance Corporation (“DFC”) . See Note 5 - Long Term Debt to the consolidated financial statements for additional information. COMPETITION Conventional neurosurgery, radiation therapy and other radiosurgery devices are the primary competitors of Gamma Knife radiosurgery.

See Note 5 - Long Term Debt to the consolidated financial statements and Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Long-Term Debt for additional information. COMPETITION Conventional neurosurgery, radiation therapy and other radiosurgery devices are the primary competitors of Gamma Knife radiosurgery.

A 40% minority ownership in LBE is owned by radiation oncologists. LBE is not expected to generate revenue within the next two years.

A 40% minority ownership in LBE is owned by radiation oncologists. LBE is not expected to generate revenue within the next two years. MedLeader was formed to provide continuing medical education online and through videos for doctors, nurses and other health care practitioners.

On September 18, 2020, CMS issued the final rule that would have implemented a new mandatory payment model for radiation oncology services: the Radiation Oncology Alternative Payment Method (“RO APM”). The RO APM, which was to be in effect for a five year period, has been delayed indefinitely.

On September 29, 2020, CMS published a final rule that would have implemented a new mandatory payment model for radiation oncology services delivered to certain Medicare beneficiaries: the Radiation Oncology Alternative Payment Method (“RO APM”).

As of March 1, 2023, all of the Company’s twelve Gamma Knife units in the United States are Gamma Knife Perfexion units and two of these Perfexion units have the Icon upgrade. The Company’s Gamma Knife units in Peru and Ecuador are Model 4(C)s.

As of March 1, 2024, eight of the Company’s ten Gamma Knife units in the United States are Gamma Knife Perfexion units and two of these Perfexion units have the Icon upgrade. Two of the Company’s ten Gamma Knife units were upgraded to an Esprit in October 2023 and January 2024, respectively.

Puebla was formed on December 15, 2022. The Company continues to develop its design and business model for “The Operating Room for the 21st Century”SM through its 50% owned OR21, LLC (“OR21”). The remaining 50% of OR21 is owned by an architectural design company. OR21 is not expected to generate significant revenue within the next two years.

Operating costs incurred for the twelve-month period ended December 31, 2023 by Puebla, are included in the consolidated statement of operations. The Company continues to develop its design and business model for “The Operating Room for the 21st Century”SM through its 50% owned OR21, LLC (“OR21”). The remaining 50% of OR21 is owned by an architectural design company.

The Company was incorporated in the State of California in 1983 and its predecessor, Ernest A. Bates, M.D., Ltd. (d/b/a American Shared Hospital Services), a California limited partnership, was formed in June 1980. OPERATIONS Gamma Knife Operations Gamma Knife stereotactic radiosurgery, a non-invasive procedure, is an alternative to conventional brain surgery and/or radiation therapy.

The Company anticipates that the closing conditions will be met in April 2024. The Company was incorporated in the State of California in 1983 and its predecessor, Ernest A. Bates, M.D., Ltd. (d/b/a American Shared Hospital Services), a California limited partnership, was formed in June 1980.

The Company wholly-owns the subsidiaries American Shared Radiosurgery Services (“ASRS”), OR21, Inc. and MedLeader.com, Inc. (“MedLeader”). ASRS is the majority-owner of GKF. MedLeader is not expected to generate significant revenue within the next two years. GKF has established the wholly-owned subsidiaries Instituto de Gamma Knife del Pacifico S.A.C.

The Company wholly-owns the subsidiaries American Shared Radiosurgery Services (“ASRS”), ASHS-Mexico, S.A. de C.V. (“ASHS-Mexico”), ASHS-Rhode Island Proton Beam Radiation Therapy, LLC, ASHS-Bristol Radiation Therapy, LLC, OR21, Inc. and MedLeader.com, Inc. (“MedLeader”). GKF has established the wholly-owned subsidiaries Instituto de Gamma Knife del Pacifico S.A.C.

The medical centers that house the Company's Gamma Knife units are responsible for obtaining possession and user's licenses for the Cobalt 60 source from the Nuclear Regulatory Commission. The Company’s Gamma Knife center in Peru was responsible for obtaining possession and user’s licenses for the Cobalt-60 sources from the Peruvian Regulatory Agencies.

The medical centers that house the Company’s Gamma Knife units are responsible for obtaining possession and user ’ s licenses for the Cobalt 60 source from the Nuclear Regulatory Commission. Standard linear accelerator equipment utilized to treat patients is regulated by the FDA. The licensing is obtained by the individual medical center operating the equipment.

He received his undergraduate degree from the University of California at Berkeley and his M.B.A. from Cornell University. AVAILABLE INFORMATION Our Internet address is www.ashs.com .

Hiatt received his Bachelor’s of Science in Accountancy from Miami University. AVAILABLE INFORMATION Our Internet address is www.ashs.com .

The Company is at risk for any reimbursement rate changes for radiosurgery or radiation therapy services by the government or other third-party payors. There are no minimum volume guarantees required of the customer. One customer accounted for approximately 45% and 34% of the Company’s total revenue in 2022 and 2021, respectively.

There are no minimum volume guarantees required of the customer. One customer accounted for approximately 48% and 45% of the Company’s total revenue in 2023 and 2022, respectively. At December 31, 2023, two customers each individually accounted for 30% and 31% of total accounts receivable, respectively.

Removed

Based on 2021 case mix data, an estimated percentage breakdown of Gamma Knife procedures performed in the U.S. by indications treated is as follows: malignant (63%) and benign (22%) brain tumors, vascular disorders (4%), and functional disorders (11%).

Added

Elekta is the manufacturer of the Leksell Gamma Knife® (the “Gamma Knife”), which is a radiotherapy-treatment device that uses precise beams of gamma radiation to noninvasively target and remove lesions or tumors in the brain and treat various neurological disorders. GKF is a non-exclusive provider of alternative financing services for Leksell Gamma Knife units.

Removed

However, the introduction of the Radiation Oncology Alternative Payment Model (“RO APM”) and the inclusion of PBRT in this model may potentially limit the adoption of PBRT by medical centers.

Added

MedLeader is not operational at this time and is not expected to generate significant revenue within the next two years. On April 27, 2022 , the Company signed a Joint Venture Agreement (the “Agreement”) with the principal owners of Radioterapia Guadalupe Amor y Bien S.A. de C.V.

Removed

The Company typically provides the equipment, as well as planning, installation, reimbursement and marketing support services. The majority of the Company’s customers pay the Company on a revenue sharing basis. The market for these services primarily consists of large and medium sized medical centers.

Added

OR21 is not expected to generate significant revenue within the next two years. 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.

Removed

Kisco, New York 10 2005 Fee per use USC University Hospital Los Angeles, California 10 2008 Fee per use St.

Added

(“GC Holdings”), pursuant to which GenesisCare agreed to sell to the Company its entire equity interest in each of Southern New England Regional Cancer Center, LLC and Roger Williams Radiation Therapy, LLC, (collectively, the “RI Target Companies”) together with the assignment of certain payor contacts for a purchase price of $2,850,000 (such transaction, the “RI Acquisition”).

Removed

FINANCING The Company’s Gamma Knife business is operated through GKF. Prior to April 2021, GKF generally financed its U.S. Gamma Knife units, upgrades and additions with loans or finance leases from various finance companies for typically 100% of the cost of each Gamma Knife, plus any sales tax, customs, and duties.

Added

The equity interests to be acquired by the Company under the IPA equates to a 60% interest in each RI Target Company. The RI Target Companies operate three functional radiation therapy cancer centers in Rhode Island.

Removed

The Company has purchased one MEVION S250 and has made deposits towards the purchase of two additional MEVION S250i systems.

Added

The RI Acquisition is contingent upon certain closing conditions, including GenesisCare and the Company entering into a consent agreement with the Rhode Island Department of Health and approval of all equity holders and managers of each RI Target Company.

Removed

The remaining providers not included in the RO APM would have continued to receive reimbursement based on a fee-for-service methodology. The RO APM would have included but would not have been limited to PBRT and Gamma Knife services. Three of the Company's Gamma Knife centers were expected to be included in the RO APM.

Added

On March 1, 2024, the Company, GenesisCare and GC Holding entered into a First Amendment to the Investment Agreement pursuant to which the parties agreed to extend the date on which a party could terminate the IPA if the closing conditions had not been met from March 10, 2024 to April 30, 2024.

Removed

It was not anticipated that inclusion in the RO APM would have a significant impact on the Company's Gamma Knife revenues. The Company's PBRT center was not selected for inclusion in the RO APM. Medicare reimbursement in 2023 for the most commonly used PBRT delivery codes increased by approximately 3.2% and 0.2% and decreased by approximately 3.2% for Gamma Knife.

Added

The Company’s Gamma Knife unit in Ecuador was upgraded in November 2023 to a Perfexion with Icon. The Company’s Gamma Knife unit in Peru is Model 4(C).

Removed

The Company’s customer contracts generally contain mutual indemnification provisions. The Company maintains general and professional liability insurance in the United States. The Company is not involved in the practice of medicine and therefore believes its present insurance coverage and indemnification agreements are adequate for its business.

Added

For medical equipment leasing, the Company typically provides the equipment, as well as planning, installation, reimbursement and marketing support services. The Company also owns and operates two single-unit facilities where it provides radiation therapy services directly to the patient.

Added

The Company has a third direct patient service facility in Puebla, Mexico, that the Company expects will begin treating patients in June 2024. The market for these services primarily consists of large and medium sized medical centers.

Added

The Credit Agreement includes a $7,000,000 revolving line of credit (the “Revolving Line”) available for future projects and general corporate purposes. The Company borrowed $2,500,000 on the Revolving Line as of December 31, 2023, which was paid off in January 2024.

Added

On January 25, 2024 (the “First Amendment Effective Date”), the Company entered into a First Amendment to the 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”).

Added

The proceeds of the Supplemental Term Loan were advanced in a single borrowing on January 25, 2024, and were used to finance capital expenditures that the Company paid cash for during 2023 towards its operations in Puebla, Mexico and other related transaction costs. The Supplemental Term Loan will mature on January 25, 2030 (the “Maturity Date’).

Added

Interest on the Supplemental Term Loan is payable monthly during the initial twelve-month period following the First Amendment Effective Date. Following such twelve-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.

Added

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 Company’s acquisition of GKCE and the Gamma Knife Esprit in Ecuador is financed by the United States International Development Finance Corporation (“DFC”).

Added

The loan entered into with DFC in connection with the acquisition of GKCE in June 2020 (the “DFC Loan”) is secured by a lien on GKCE’s assets. The first tranche of the DFC Loan was funded in June 2020.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

29 edited+47 added−13 removed18 unchanged

2022 filing

2023 filing

Biggest changeIf we are unable to obtain additional customers or are unable to finance the two additional systems, the Company will lose its deposits . Stock Ownership Risk The Trading Volume of Our Common Stock is Low Although our common stock is listed on the NYSE American, our common stock has historically experienced low trading volume.

Biggest changeStock Ownership Risk The trading volume of the Company ’ s common stock is low Although the Company’s common stock is listed on the NYSE American, the Company’s common stock has historically experienced low trading volume. Reported average daily trading volume in our common stock for the three-month period ended December 31, 2023 was approximately 10,000 shares.

The Company has begun and continued operation at only seven new Gamma Knife sites in the United States since 2011. Due to the substantial costs of acquiring a Gamma Knife unit, we must identify medical centers that possess neurosurgery and radiation oncology departments capable of performing a large number of Gamma Knife procedures.

The Company has begun and continued operation at only five new Gamma Knife sites in the United States since 2011. Due to the substantial costs of acquiring a Gamma Knife unit, we must identify medical centers that possess neurosurgery and radiation oncology departments capable of performing a large number of Gamma Knife procedures.

On April 9, 2021, the Company and certain of its domestic subsidiaries entered into a five year $22,000,000 credit agreement with Fifth Third Bank, N.A., which refinanced its existing domestic Gamma Knife portfolio. The lease financing previously obtained by Orlando was also refinanced as long-term debt by the Credit Agreement.

On April 9, 2021, the Company and certain of its domestic subsidiaries entered into a five year $22,000,000 credit agreement with Fifth Third, which refinanced its existing domestic Gamma Knife portfolio. The lease financing previously obtained by Orlando was also refinanced as long-term debt by the Credit Agreement.

In recognition of the Gamma Knife's limited growth opportunity, the Company has expanded its product mix to include LINACs, MRI LINACs, PET LINACs and is continuing to market PBRT units, but there can be no assurance that the Company will be successful in placing these products with customers.

In recognition of the Gamma Knife's limited growth opportunity, the Company has expanded its product mix to include LINACs, MR LINACs, PET LINACs and is continuing to market PBRT units, but there can be no assurance that the Company will be successful in placing these products with customers.

The Company's retail revenue is subject to payor mix variability which could negatively impact the Company's revenue and financial results. The Company’s average reimbursement rate for its retail and international customers is dependent on the percentage mix of government associated payors and commercial managed care payors.

The Company's revenue sharing is subject to payor mix variability which could negatively impact the Company's revenue and financial results. The Company’s average reimbursement rate for its revenue sharing and retail customers is dependent on the percentage mix of government associated payors and commercial managed care payors.

A limited number of customers have historically accounted for a substantial portion of the Company’s total revenue, and the Company expects such customer concentration to continue for the foreseeable future. For example, in 2022, one customer in total accounted for approximately 45% of the Company’s revenue .

A limited number of customers have historically accounted for a substantial portion of the Company’s total revenue, and the Company expects such customer concentration to continue for the foreseeable future. For example, in 2023, one customer in total accounted for approximately 48% of the Company’s revenue .

The Company has a high level of debt and may incur additional debt to finance its operations and if the Company is unable to secure additional credit in the future its operations and profits will be negatively impacted. The Company’s business is capital intensive.

The Company has incurred debt and may incur additional debt to finance its operations and if the Company is unable to secure additional credit in the future its operations and profits will be negatively impacted. The Company’s business is capital intensive.

The Company’s business model differs from its competitors, but there can be no assurances that the Company will not lose placements to its competitors. In addition, the Company may continue to lose future sales to customers purchasing equipment directly from manufacturers.

The Company also has several competitors in the financing of proton therapy projects. The Company’s business model differs from its competitors, but there can be no assurances that the Company will not lose placements to its competitors. In addition, the Company may continue to lose future sales to customers purchasing equipment directly from manufacturers.

The failure to acquire or use new technology and products could have a material adverse effect on our business and results of operations.

The Company’s equipment in Peru is a Model 4(C). The failure to acquire or use new technology and products could have a material adverse effect on our business and results of operations.

Limited trading volume subjects our common stock to greater price volatility and may make it difficult for you to sell your shares in a quantity or at a price that is attractive to you.

Limited trading volume subjects the Company’s common stock to greater price volatility and may make it difficult for shareholders to sell their shares in a quantity or at a price that is attractive. 15 Table of Contents

Each Gamma Knife, PBRT or advanced LINEAR accelerator device requires a substantial capital investment. In some cases, we contribute additional funds for capital costs and/or annual operating and equipment related costs such as marketing, maintenance, insurance and property taxes.

In some cases, we contribute additional funds for capital costs and/or annual operating and equipment related costs such as marketing, maintenance, insurance and property taxes.

In addition, international operations can be subject to legal and regulatory uncertainty and political and economic instability, which could result in problems asserting property or contractual rights, potential tariffs, increased compliance costs, increased regulatory scrutiny, potential adverse tax consequences, the inability to repatriate funds to the United States, and the Company’s inability to operate in those locations. 13 Table of Contents New technology and products could result in making the Company's equipment obsolete which could have a material adverse impact on its business and results of operations.

In addition, international operations can be subject to legal and regulatory uncertainty and political and economic instability, which could result in problems asserting property or contractual rights, potential tariffs, increased compliance costs, increased regulatory scrutiny, foreign customers with longer payment cycles than customers in the United States, potential adverse tax consequences, the inability to repatriate funds to the United States, and the Company’s inability to operate in those locations.

Depending on the Company’s financing requirements and market conditions, the Company may seek to finance its operations by incurring additional long-term debt in the future. The Company’s current level of debt may adversely affect the Company’s ability to secure additional credit in the future, and as a result may affect operations and profitability.

The Company’s current level of debt may adversely affect the Company’s ability to secure additional credit in the future, and as a result may affect operations and profitability.

International operations can be subject to exchange rate volatility, which could have an adverse effect on our financial results and cash flows.

The Company’s third international site in Puebla, Mexico is expected to begin treating patients in June 2024. International operations can be subject to exchange rate volatility, which could have an adverse effect on our financial results and cash flows.

The Credit Agreement is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries and the DFC Loan is secured by a lien on GKCE’s assets. The Credit Agreement includes a line of credit of $7,000,000 that it has not drawn on as of December 31, 2022.

The Credit Agreement is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries and the DFC Loan is secured by a lien on GKCE’s assets. The Credit Agreement includes a $7,000,000 Revolving Line available for future projects and general corporate purposes.

The Company’s relationship with Elekta, the manufacturer of the Leksell Gamma Knife unit, is non-exclusive, and in the past the Company has lost sales to customers that chose to purchase a Gamma Knife unit directly from Elekta. The Company also has several competitors in the financing of proton therapy projects.

The Company estimates that there are two other companies that actively provide alternative, non-conventional Gamma Knife financing to potential customers. The Company’s relationship with Elekta, the manufacturer of the Leksell Gamma Knife unit, is non-exclusive, and the Company has lost sales to customers that chose to purchase a Gamma Knife unit directly from Elekta.

The Perfexion is upgradeable to the Icon platforms which has enhanced imaging capabilities allowing for treatment without a head frame and the treatment of larger tumors. In 2022, Elekta introduced an upgrade to the Icon, called the Esprit. Existing model 4(C)s of the Gamma Knife are not upgradeable to the Perfexion model.

In 2022, Elekta introduced an upgrade to the Icon, called the Esprit. Existing model 4(C)s of the Gamma Knife are not upgradeable to the Perfexion model.

If a default on debt occurs in the future, the Company’s creditors would have the ability to accelerate the defaulted loan, to seize the Company’s assets with respect to which default has occurred, and to apply any collateral they may have at the time to cure the default. 12 Table of Contents The Company ’ s debt agreements contain restrictions that limit its flexibility in operating its business, and the Company may be required to repay the outstanding indebtedness in an event of default, which would have an adverse effect on our business.

The loss of a significant customer or a significant decline in the business from the Company’s largest customers could have a material adverse effect on the Company’s business and results of operations. The Company occupies many of its facilities under long-term leases and the Company may not be able to renew its leases at the end of their terms.

In 2006, Elekta introduced a new model of the Gamma Knife, the Perfexion, which the Company has implemented at all of its domestic sites. The Perfexion can perform procedures faster than previous Gamma Knife models and it involves less health care personnel intervention. In 2015, Elekta introduced the Leksell Gamma Knife Icon ™.

The Perfexion can perform procedures faster than previous Gamma Knife models and it involves less health care personnel intervention. In 2015, Elekta introduced the Leksell Gamma Knife Icon ™. The Perfexion is upgradeable to the Icon platforms which has enhanced imaging capabilities allowing for treatment without a head frame and the treatment of larger tumors.

Therefore, a shift in payor mix to a higher level of government payors will reduce the Company’s average reimbursement rate per treatment. 12 Table of Contents The Company ’ s capital investment at each site is substantial and the Company may not be able to fully recover its costs or capital investment which could have a material negative impact on its revenues and financial results.

The Company ’ s capital investment at each site is substantial and the Company may not be able to fully recover its costs or capital investment which could have a material negative impact on its revenues and financial results. Each Gamma Knife, PBRT or advanced LINEAR accelerator device requires a substantial capital investment.

Reported average daily trading volume in our common stock for the three-month period ended December 31, 2022 was approximately 12,000 shares. There is no reason to think that a further increase in an active trading market in our common stock will develop in the future.

There is no reason to think that a further increase in an active trading market in the Company’s common stock will develop in the future.

As of December 31, 2022, there were 118 operating Gamma Knife units in the United States, of which twelve units were owned by the Company. There can be no assurance that we will be successful in placing additional units at any sites in the future.

There can be no assurance that we will be successful in placing additional units at any sites in the future.

As of March 1, 2023, all the Company’s Gamma Knife units in the United States are Perfexion models and two of these Perfexion units have the Icon upgrade. The Company's two South American sites utilize the Model 4(C).

As of March 1, 2024, two of the Company’s ten Gamma Knife units in the United States are Esprits and eight of the Company’s ten Gamma Knife units are Perfexion models, two of which have the Icon upgrade. The Company’s equipment in Ecuador was upgraded to a Perfexion with Icon in November 2023.

Commercial and managed care payors tend to reimburse at a higher level than government payors.

Commercial and managed care payors tend to reimburse at a higher level than government payors. Therefore, a shift in payor mix to a higher level of government payors will reduce the Company’s average reimbursement rate per treatment.

There is constant change and innovation in the market for highly sophisticated medical equipment. New and improved medical equipment can be introduced that could make the Gamma Knife technology obsolete and that would make it uneconomical to operate.

New and improved medical equipment can be introduced that could make the Gamma Knife technology obsolete and that would make it uneconomical to operate. In 2006, Elekta introduced a new model of the Gamma Knife, the Perfexion, which the Company has implemented at all of its domestic sites.

The market for the Company ’ s services is competitive and i f the Company is not able to compete its business and results of operations could be negatively impacted. The Company estimates that there are two other companies that actively provide alternative, non-conventional Gamma Knife financing to potential customers.

The failure to be able to obtain leased space when required or the costs of relocation could have a material adverse effect on our business and results of operations. The market for the Company ’ s services is competitive and i f the Company is not able to compete its business and results of operations could be negatively impacted.

If a start date for the RO APM is proposed, CMS will provide at least six months’ notice in advance of the proposed start date, and the proposed start date will be subject to public comment. The impact of the COVID-19 pandemic and associated economic disruptions may continue to adversely affect the Company ’ s business operations and financial condition.

The impact of a pandemic, epidemic, or outbreak of an infection disease, such as COVID-19 and associated economic disruptions, has and may in the future adversely affect the Company ’ s business operations and financial condition.

In June 2020, the Company entered into the DFC Loan in connection with the acquisition of GKCE. The Company’s combined long-term debt, net, totaled $13,467,000 as of December 31, 2022.

In October 2023, the second tranche of the DFC Loan was funded in the amount of $1,750,000 to finance its equipment upgrade in Ecuador. The Company’s combined long-term debt, net, totaled $13,125,000 as of December 31, 2023.

Removed

Introduction of the RO APM reimbursement model could negatively impact the Company's revenue and financial results. On September 18, 2020, CMS issued the final rule that would have implemented a new mandatory payment model for radiation oncology services: the Radiation Oncology Alternative Payment Method (“RO APM”).

Added

On January 25, 2024, the Company and Fifth Third entered into the First Amendment which added an additional $2,700,000 term loan. In June 2020, the Company’s wholly-owned subsidiary, HoldCo, entered into the DFC Loan in connection with the acquisition of GKCE. The first tranche of the DFC Loan was funded in June 2020.

Removed

The RO APM, which was to be in effect for a five year period, has been delayed indefinitely. If the RO APM had not been delayed, it would have significantly altered CMS’ payment methodology from a fee for service paradigm to a set reimbursement by cancer type methodology for radiation services provided within a 90 day episode of care.

Added

The Company borrowed $2,500,000 on the Revolving Line as of December 31, 2023, which was paid off in January 2024. Depending on the Company’s financing requirements and market conditions, the Company may seek to finance its operations by incurring additional long-term debt in the future.

Removed

Added

The Credit Agreement and the DFC Loan contain various covenants that limit the Company’s ability to engage in specified types of transactions.

Removed

Added

These covenants subject the Company to various restrictions that limit the Company from, among other activities, creating any unpermitted liens to exist on its assets, incurring additional indebtedness, causing a sale of all or substantially all of its assets, effecting a merger, paying dividends or other distributions on capital stock, redeeming shares of capital stock, engaging in transactions with affiliates, or undertaking lease obligations above certain thresholds In addition, the Company is obligated to comply with certain financial-reporting requirements, financial ratios, and liquidity and leverage thresholds under certain covenants in its Credit Agreement and DFC Loan.

Removed

Added

The Company’s ability to meet those financial ratios and tests can be affected by events beyond our control, including prevailing economic, financial market and industry conditions and the Company cannot give assurance that it will be able to satisfy such ratios and tests when required.

Removed

Added

A breach of any of these covenants could result in a default under the Credit Agreement and the DFC Loan. Upon the occurrence of an event of default, the lenders could elect to declare the amount outstanding under the Credit Agreement or DFC Loan immediately due and payable.

Removed

At this time, it is not clear if the RO APM will be implemented and, if it is implemented, the timing for implementation and in what form it will be implemented.

Added

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. The Company’s business, financial condition, and results of operations could be materially adversely affected as a result of any of those events.

Removed

Our operations and those of our suppliers and customers were negatively impacted by the COVID-19 pandemic. While the progressive lifting of COVID-related restrictions led to a rebound in procedure volumes for our Gamma Knife business and our PBRT business, the secondary and tertiary effects of the COVID-19 pandemic could continue to present challenges for our business and industry.

Added

The Company may seek to enter into an extension of the credit and loan agreements or to enter into a new facility or loan agreement with another lender.

Removed

Such effects may include lingering disruptions in the global supply chain, delays in the manufacturing, delivery, and repair of the equipment we provide, increases in the prices for purchased services and capital acquisition, potential volatility or timing in the demand for Gamma Knife and PBRT treatments, slow recovery in workforce participation, constraints on access to capital, general economic volatility, and pandemic-related inflationary pricing.

Added

However, the Company may not be able to extend the term or obtain other debt financing on terms that are favorable to the Company, if at all, and the Company could be subject to additional restrictions on its business operations.

Removed

We refer you to “Management’s Discussion and Analysis of Financial Position and Results of Operations” for a more detailed discussions of the potential impact of the COVID-19 pandemic and associated economic disruptions, and the actual operational and financial impacts that we have experienced to date.

Added

If the Company is unable to obtain adequate financing or financing on satisfactory terms when required, the Company’s ability to support its business growth and to respond to business challenges could be significantly impaired, and its business may be harmed.

Removed

The Company has invested in a Proton Beam business and is obligated to fund two additional proton beams systems; there is no assurance that the Company will be able to fund these additional proton systems and if the Company is unable to do so the may be a negative impact on the Company ’ s business and results of operations .

Added

As of December 31, 2023, HoldCo was not in compliance with all of its debt covenants then in effect pursuant to the DFC Loan. However, on March 28, 2024, the Company obtained a waiver for the covenant non-compliance as of December 31, 2023 (the “DFC Waiver”).

Removed

We have committed a substantial amount of our financial resources to next-generation proton beam technology. The first MEVION S250 system began treating patients in December 2013. The Company’s first MEVION S250 system began treating patients in April 2016. The Company has committed to purchase two additional MEVION S250i systems and has already made deposits of $2,250,000 towards this commitment.

Added

The Company expects to be compliant with all of its debt covenants by the end of the fiscal quarter ended March 31, 2024.

Removed

As of December 31, 2020, the Company determined these deposits were impaired and wrote their value down to $ 0. See Note 3 - Property and Equipment to the consolidated financial statements for further discussion. There can be no assurance that we will be able to obtain additional customers or be able to finance the two additional systems.

Added

However, if a waiver from DFC is required in the future for potential non-compliance, DFC may be unwilling to provide a waiver and could, as a result, among other remedies, accelerate the repayment of the debt obligations oustanding under the DFC Loan, which could have a material adverse effect on the Company’s financial condition.

Added

The Company may fail to successfully integrate the interests to be acquired in the RI Acquisition with its existing business in a timely manner, which could have a material adverse effect on the Company ’ s business, financial condition, results of operations, or cash flows, or the Company may fail to realize all of the expected benefits of the RI Acquisition, which could negatively impact the Company ’ s future results of operations.

Added

The integration of any acquisitions, including the Company’s planned RI Acquisition, requires significant time and resources.

Added

A failure by the Company to successfully integrate the businesses, operations, and contractual obligations of the RI Target Companies with the Company’s existing business in a timely manner could have a material adverse effect on the Company’s business, financial condition, cash flows, or results of operations.

Added

Acquiring majority interests in the RI Target Companies, assuming obligations under the commercial payor contracts set forth in the IPA, and integrating the businesses of the three turn-key radiation therapy cancer centers that the RI Target Companies operate in Rhode Island involves several risks that could undermine the success and expected benefits of the RI Acquisition.

Added

Such risks include but are not limited to the following: ● the potential difficulty of assimilating the businesses and operations of the RI Target Companies with our existing business and operations; ● the added costs that could be incurred from coordinating the integration of personnel from diverse business backgrounds and consolidating the corporate and administrative functions of the Company and the RI Target Companies; ● the potential disruption to our existing operations that could result from the Company expanding into another state and expending time and resources to oversee the RI Target Companies’ operation of their three radiation oncology centers; ● the added costs and burdens that the Company will incur in connection with obtaining the governmental and regulatory approvals that are necessary to effect the RI Acquisition and to stay regulatorily compliant under Rhode Island law if the RI Acquisition is effected; ● the diversion of the resources of the Company and the attention of the Company’s management from the Company’s existing operations and business ventures to the operations of the RI Target Companies, which could hinder the performance of the Company and its subsidiaries; ● the potential management differences that could result from the Company gaining majority interests in the RI Target Companies and taking control from GenesisCare; and ● the risk of financial loss due to the existing debts and liabilities of the RI Target Companies and the potential need for the Company to expend substantial capital to stabilize the businesses of the RI Target Companies due to any instability created by the GenesisCare bankruptcy, with no guarantee of return on investment.

Added

If the Company is not successful in addressing these risks effectively, the Company’s business and operations could be impaired. 13 Table of Contents The Company ’ s cash flow could become insufficient to service its debt due to financial, business, and other factors.

Added

The Company’s ability to make scheduled payments of the principal and interest on its indebtedness depends on the Company’s financial condition and operating performance, which is subject to economic and competitive conditions and to certain financial, business, and other factors.

Added

There can be no assurance that the Company will maintain a level of cash flow from operating activities sufficient to permit it to pay the principal of and any interest on its indebtedness.

Added

If the Company’s cash flow and capital resources are insufficient to fund its debt obligations, the Company may be forced to delay investments and capital expenditures, to seek additional capital, or to restructure or refinance its indebtedness.

Added

There can be no guarantee that those alternative measures will be available, either at all or on terms that are favorable to the Company, or that they will be successful even if available in allowing the Company to meet its debt-service obligations.

Added

In the absence of such operating results and resources, the Company could experience liquidity issues, which could force the Company to take alternative measures to satisfy its debt obligations, such as selling assets, restructuring debt, or obtaining additional equity capital on potentially onerous or highly dilutive terms.

Added

The Credit Agreement and DFC Loan restrict the Company’s ability to dispose of assets and to use the proceeds from such dispositions, so the Company may be restricted from taking certain measures, such as conducting an asset sale, to meet its debt-service obligations.

Added

The ability to refinance indebtedness would also depend on the general state of capital markets and on the Company’s financial condition, neither of which can be predicted at this time.

Added

The Company leases many of the facilities where it holds its equipment. At the end of the lease term for a facility, the Company may be unable to renew the lease without substantial additional costs, if at all. If we are unable to renew our facility leases, we may be required to relocate or close a facility.

Added

Additionally, due to the nature of its radiation equipment, there can be a long lead time to prepare space for holding its equipment and substantial cost involved in moving the equipment should the Company need to change locations.

Added

There can be no assurance that the Company ’ s pending RI Acquisition will close as anticipated, as the closing of the transactions provided for in the IPA are subject to various judicial, regulatory, and contractual contingencies over which the Company has little to no control The closing of the pending RI Acquisition is contingent upon certain closing conditions, including GenesisCare and the Company entering into a consent agreement with the Rhode Island Department of Health and approval of all equity holders and managers of each RI Target Company.

Added

There can be no assurance that the Company and GenesisCare will receive the necessary approvals and consents to effect the RI Acquisition or that such approvals and consents will be delivered.

Added

Furthermore, if all of the closing conditions to the RI Acquisition are not met by April 30, 2024, both the Company and GenesisCare have the right to terminate the IPA without completing the RI Acquisition.

Added

The Company cannot assure that the pending RI Acquisition will close on our anticipated timeline or at all, or without material adjustment. 14 Table of Contents Flaws in the Company ’ s ongoing due-diligence assessment in connection with the equity interests and payor contracts to be acquired in the RI Acquisition could have a significant negative effect on the Company ’ s financial condition and results of operations.

Added

The Company conducted due diligence when evaluating the RI Acquisition prior to executing the IPA and continues to complete due diligence during the interim period between signing the IPA and closing the RI Acquisition.

Added

The process of completing due diligence is expensive and time consuming due to the operations, accounting, finance, and legal professionals who must be involved in the due-diligence process and the fact that such efforts do not always lead to a consummated transaction.

Added

The time and costs of the due-diligence process were amplified with respect to the Company’s evaluation of the potential costs and benefits of the RI Acquisition due to the distressed state and bankruptcy of GenesisCare.

Added

Despite the thoroughness of the Company’s review, diligence may not reveal all material issues that could affect the Company’s interests in the RI Target Companies if the RI Acquisition is consummated. In addition, factors outside of the Company’s control could later arise.

Added

The Company’s failure to identify material issues specific to the business and operations of the RI Target Companies and the liabilities and obligations the Company is assuming upon the assignment of the payor contracts during the Company’s ongoing due-diligence process could negatively impact the Company’s financial condition and results of operations after the closing of the RI Acquisition.

Added

New technology and products could result in making the Company's equipment obsolete which could have a material adverse impact on its business and results of operations. There is constant change and innovation in the market for highly sophisticated medical equipment.

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Item 2. Properties

Properties — owned and leased real estate

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2022 filing

2023 filing

Biggest changeThe Company subleased its prior corporate offices located at Two Embarcadero Center, Suite 410, San Francisco, California, where it leases approximately 3,253 square feet for $22,011 per month with a lease expiration date in August 2023. The monthly lease expense is offset by sublease income of $16,195. The sublease term is consistent with the existing lease term.

Biggest changeThe Company subleased its prior corporate offices located at Two Embarcadero Center, Suite 410, San Francisco, California, where it leased approximately 3,253 square feet for $22,011 per month. This lease expired in August 2023. The monthly lease expense was offset by sublease income of $16,195. The sublease term was consistent with the existing lease term.

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 with a lease expiration date in January 2024.

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 on a month-to-month basis.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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2022 filing

2023 filing

Biggest changeAt December 31, 2022, the Company had 6,184,000 issued and outstanding common shares, 95,000 common shares reserved for options, 6,000 unvested restricted stock units, an d 123,000 v ested, but not issued restricted stock units. The Company estimates that there were approximately 1,100 b eneficial holders of its Common Shares at December 31, 2022.

Biggest changeAt December 31, 2023, the Company had 6,300,000 issued and outstanding common shares, 146,000 common shares reserved for options, 33,000 unvested restricted stock units, an d 123,000 v ested, but not issued restricted stock units. The Company estimates that there were approximately 1,100 b eneficial holders of its Common Shares at December 31, 2023.

In 2022 and 2021, there were no shares repurchased by the Company. A total of approximately 928,000 shares have been repurchased in the open market pursuant to these authorizations at a cost of approximately $1,957,000. As of December 31, 2022, there were approximately 72,000 shares remaining under the repurchase authorizations.

In 2023 and 2022, there were no shares repurchased by the Company. A total of approximately 928,000 shares have been repurchased in the open market pursuant to these authorizations at a cost of approximately $1,957,000. As of December 31, 2023, there were approximately 72,000 shares remaining under the repurchase authorizations.

Equity Compensation Plans During 2022, 11,000 restricted stock units, 120,000 shares for executive compensation, and 50,000 options were granted. Additional information regarding our equity compensation plans is incorporated herein by reference from the 2023 Proxy Statement. Also, see Note 8 - Stock-Based Compensation Expense to the consolidated financial statements for additional information.

Equity Compensation Plans During 2023, 26,000 restricted stock units, 120,000 shares for executive compensation, and 70,000 options were granted. Additional information regarding our equity compensation plans is incorporated herein by reference from the 2024 Proxy Statement. Also, see Note 8 - Stock-Based Compensation Expense to the consolidated financial statements for additional information.

There were no dividends declared or paid during 2022 and 2021.

There were no dividends declared or paid during 2023 and 2022.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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2022 filing

2023 filing

Biggest changeThe increase in 2022 was due to higher sales and related fees associated with new business opportunities. INTEREST EXPENSE Increase (In thousands) 2022 (Decrease) 2021 Interest expense $ 806 9.1 % $ 739 Percentage of total revenue 4.1 % 4.2 % The Company's interest expense increased $67,000 in 2022 compared to 2021.

Biggest changeINTEREST AND OTHER INCOME Increase (In thousands) 2023 (Decrease) 2022 Interest and other income (loss) $ 422 385.1 % $ 87 Percentage of total revenue 2.0 % 0.4 % Interest and other income increased $422,000 in 2023 compared to 2022. The increases are primarily due to increases in the interest paid on the Company’s cash in 2023 compared to 2022.

Long-Term Debt On April 9, 2021, the Company and certain of its domestic subsidiaries entered into a five year $22,000,000 credit agreement with Fifth Third Bank, N.A., which refinanced its existing domestic Gamma Knife portfolio. The lease financing previously obtained by Orlando was also refinanced as long-term debt by the Credit Agreement.

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 .

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 retail revenues.

The decrease in 2022 compared to 2021 was due to lower pre-tax income for GKF stand-alone operations.

The decrease in 2023 compared to 2022 was due to lower pre-tax income for GKF stand-alone operations.

There is no salvage value assigned to the two Gamma Knife units in Peru or Ecuador because these are Model 4(C) units. The Company has not assigned salvage value to its PBRT equipment. As of April 1, 2021, the Company reduced its estimate for salvage value for nine of its domestic Gamma Knife Perfexion units.

There is no salvage value assigned to the two Gamma Knife units in Peru or Ecuador. The Company has not assigned salvage value to its PBRT equipment. As of April 1, 2021, the Company reduced its estimate for salvage value for nine of its domestic Gamma Knife Perfexion units.

The Term Loan and DDTL have interest and principal payments due quarterly. Principal amortization on an annual basis for the Term Loan and DDTL equates to 48% of the original principal loan commitments in years one through five and an end of term payment of the remaining principal balance.

Principal amortization on an annual basis for the Term Loan and DDTL equates to 48% of the original principal loan commitments in years one through five and an end of term payment of the remaining principal balance.

The increase for the year ended December 31, 2022 was due to an increase in LIBOR compared to the same period of the prior year. 19 Table of Contents (LOSS) ON WRITE DOWN OF IMPAIRED ASSETS AND ASSOCIATED REMOVAL COSTS Increase (In thousands) 2022 (Decrease) 2021 Loss on write down of impaired assets $ — * $ 105 Percentage of total revenue 0.0 % 0.6 % As of December 31, 2022 and 2021, the Company recognized a loss on the write down of impaired assets of $0 and $105,000, respectively.

The increase for the year ended December 31, 2023 was due to an increase in LIBOR compared to the same period of the prior year. 22 Table of Contents (LOSS) ON WRITE DOWN OF IMPAIRED ASSETS AND ASSOCIATED REMOVAL COSTS Increase (In thousands) 2023 (Decrease) 2022 Loss on write down of impaired assets $ 940 * $ — Percentage of total revenue 4.4 % 0.0 % As of December 31, 2023 and 2022, the Company recognized a loss on the write down of impaired assets of $940,000 and $0, respectively.

Reimbursement CMS established a 2023 delivery code reimbursement rate of approximately $7,691 ($7,943 in 2022 ) for a Medicare Gamma Knife treatment. The approximate CMS reimbursement rates for delivery of PBRT for a simple treatment without compensation for 2023 is $572 ($554 in 2022 ) and $1,323 ($1,321 in 2022 ) for simple with compensation, intermediate and complex treatments, respectively.

Reimbursement CMS established a 2024 delivery code reimbursement rate of approximately $7,420 ($7,691 in 2023 ) for a Medicare Gamma Knife treatment. The approximate CMS reimbursement rates for delivery of PBRT for a simple treatment without compensation for 2024 is $561 ($572 in 2023 ) and $1,362 ($1,323 in 2023 ) for simple with compensation, intermediate and complex treatments, respectively.

The increase in income tax expense in 2022 was due to higher earnings during 2022, return-to-provision adjustments arising from foreign tax returns filed during 2022, as well as permanent domestic tax differences. The Company anticipates that it will continue to record income tax expense if it operates profitably in the future.

The decrease in income tax expense in 2023 was due to lower earnings during 2023, and return-to-provision adjustments arising from foreign tax returns filed during 2022, as well as permanent domestic tax differences recorded in the prior year. The Company anticipates that it will continue to record income tax expense if it operates profitably in the future.

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 revenue recognition and costs of sales for turn-key and revenue sharing arrangements, and the carrying value of fixed assets and useful lives, and as such the aforementioned could be most subject to revision as new information becomes available.

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 revenue recognition and costs of sales for revenue sharing customers, and the salvage value of equipment, and as such the aforementioned could be most subject to revision as new information becomes available.

The Company has secured financing for its projects from several lenders and anticipates that it will be able to secure financing on future projects from these or other lending sources, but there can be no assurance that financing will continue to be available on acceptable terms. Long-Term Debt Prior to April 2021, GKF generally financed its U.S.

COSTS OF REVENUE Increase (In thousands) 2022 (Decrease) 2021 Total costs of revenue $ 11,364 4.2 % $ 10,902 Percentage of total revenue 57.6 % 61.8 % 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 retail sites) increased by $462,000 in 2022 compared to 2021.

COSTS OF REVENUE Increase (In thousands) 2023 (Decrease) 2022 Total costs of revenue $ 11,981 5.4 % $ 11,364 Percentage of total revenue 56.2 % 57.6 % 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 $617,000 in 2023 compared to 2022.

Maintenance and supplies and other direct operating costs, related party as a percentage of total revenue were 15.1% and 14.1% in 2022 and 2021 , respectively. Maintenance and supplies and other direct operating costs, related party increased by $482,000 in 2022 compared to 2021 .

Maintenance and supplies and other direct operating costs, related party, as a percentage of total revenue were 13.5% and 15.1% in 2023 and 2022 , respectively. Maintenance and supplies and other direct operating costs, related party decreased by $89,000 in 2023 compared to 2022 .

Revenue per procedure increased by $295 in 2022 compared to 2021. This increase was due to higher reimbursement at the Company’s retail sites, driven by several large reimbursements from commercial payors at a few of the customer sites.

This increase was due to higher reimbursement at the Company’s retail sites, driven by several large reimbursements from commercial payors at a few of the customer sites.

The Company’s PBRT system at Orlando Health is also considered a retail arrangement. Rental Income from Medical Services 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.

Rental Revenue from Medical Equipment Leasing (“Leasing”) The Company recognizes leasing revenue 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 has net operating loss carryforwards for state income tax purposes. 20 Table of Contents NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS Increase (In thousands) 2022 (Decrease) 2021 Net income attributable to non-controlling interests $ 227 (53.1 )% $ 484 Percentage of total revenue 1.1 % 2.7 % Net income attributable to non-controlling interests decreased $257,000 in 2022 compared to 2021.

The Company has net operating loss carryforwards for state income tax purposes. 23 Table of Contents NET (LOSS) INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS Increase (In thousands) 2023 (Decrease) 2022 Net (loss) income attributable to non-controlling interests $ (345 ) (252.0 )% $ 227 Percentage of total revenue (1.6 )% 1.1 % Net income attributable to non-controlling interests decreased $572,000 in 2023 compared to 2022.

Revenues from the Company’s domestic segment increased $1,936,000 in 2022 compared to 2021 due to an increase in PBRT volumes and PBRT and Gamma Knife average reimbursement, offset by lower Gamma Knife volumes. Revenues from the Company’s international segment increased by $182,000 in 2022 compared to 2021 due to an increase in volume and average reimbursement.

Revenues from the Company’s leasing segment increased $1,117,000 in 2023 compared to 2022 due to an increase in PBRT volumes and PBRT average reimbursement, offset slightly by lower Gamma Knife revenues. Revenues from the Company’s retail segment increased by $462,000 in 2023 compared to 2022 primarily due to an increase in volume.

Gamma Knife Revenue Increase 2022 (Decrease) 2021 Revenue from Gamma Knife (in thousands) $ 10,794 (7.2 )% $ 11,629 Number of Gamma Knife procedures 1,286 (10.4 )% 1,436 Average revenue per procedure $ 8,393 3.6 % $ 8,098 Gamma Knife revenue for 2022 was $10,794,000 compared to $11,629,000 in 2021.

Gamma Knife Revenue Increase 2023 (Decrease) 2022 Revenue from Gamma Knife (in thousands) $ 10,992 1.8 % $ 10,794 Number of Gamma Knife procedures 1,195 (7.1 )% 1,286 Average revenue per procedure $ 9,198 9.6 % $ 8,393 Gamma Knife revenue for 2023 was $10,992,000 compared to $10,794,000 in 2022.

The Company borrowed $2,500,000 under the Revolving Line as of December 31, 2023, which the Company repaid in January 2024. The Credit Agreement is 48% amortized over a 58-month period with a balloon payment upon maturity and is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview American Shared Hospital Services is a leading provider of turnkey technology solutions for stereotactic radiosurgery and advanced radiation therapy equipment and services.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview 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.

Proton Therapy Revenue Increase 2022 (Decrease) 2021 Revenue from PBRT (in thousands) $ 8,952 47.8 % $ 6,058 Number of PBRT fractions 5,296 19.7 % 4,426 Average revenue per fraction $ 1,690 23.5 % $ 1,369 18 Table of Contents PBRT revenue for 2022 was $8,952,000 compared to $6,058,000 in 2021.

Proton Therapy Revenue Increase 2023 (Decrease) 2022 Revenue from PBRT (in thousands) $ 10,133 13.2 % $ 8,952 Number of PBRT fractions 5,369 1.4 % 5,296 Average revenue per fraction $ 1,887 11.7 % $ 1,690 21 Table of Contents PBRT revenue for 2023 was $10,133,000 compared to $8,952,000 in 2022.

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.

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.

INCOME TAX EXPENSE Increase (In thousands) 2022 (Decrease) 2021 Income tax expense $ 963 258.0 % $ 269 Percentage of total revenue 4.9 % 1.5 % Percentage of income, after net income attributable to non-controlling interests, and before income taxes 42.0 % 58.1 % Income tax expense increased $694,000 in 2022 compared to 2021.

INCOME TAX EXPENSE Increase (In thousands) 2023 (Decrease) 2022 Income tax expense $ 431 (55.2 )% $ 963 Percentage of total revenue 2.0 % 4.9 % Percentage of income, after net income attributable to non-controlling interests, and before income taxes 41.4 % 42.0 % Income tax expense decreased $532,000 in 2023 compared to 2022.

Gamma Knife revenue for 2022 decreased $835,000 compared to 2021 due to a decrease in procedures, offset by an increase in average reimbursement. The number of Gamma Knife procedures performed in 2022 decreased 150 compared to 2021 primarily due to the expiration of two contracts in the first and fourth quarters of 2021.

Gamma Knife revenue for 2023 increased $198,000 compared to 2022 due to an increase in average reimbursement, offset by lower procedure volume. The number of Gamma Knife procedures performed in 2023 decreased by 91 compared to 2022 primarily due to the expiration of two contracts in the second and third quarters of 2023.

As of December 31, 2022 and 2021, the Company recognized revenues of approximately $16,655,000 and $14,719,000 under ASC 842, respectively, of which approximately $8,952,000 and $6,058,000 were for PBRT services, respectively. Revenue from retail arrangements amounted to approximately 67% and 60% of total revenue for the years ended December 31, 2022 and 2021, respectively.

For the years ended, December 31, 2023 and 2022, the Company recognized leasing revenue of approximately $17,772,000 and $16,655,000 under ASC 842, respectively, of which approximately $10,133,000 and $8,952,000 were for PBRT services, respectively. Revenue sharing arrangements amounted to approximately 70 % and 67% of total revenue for the years ended December 31, 2023 and 2022, respectively.

The Company’s contracts are typically for a ten-year term and are classified as either fee per use or retail. Retail arrangements are further classified as either turn-key or revenue sharing. Revenues from fee per use contracts is determined by each hospital’s contracted rate.

The Company’s lease contracts are typically for a ten-year term and are classified as either fee per use or revenue sharing. Revenue from fee per use contracts is determined by each hospital’s lease agreement with the Company. Revenues are recognized at the time the procedures are performed, based on each hospital’s contracted rate and the number of procedures performed.

NET INCOME ATTRIBUTABLE TO AMERICAN SHARED HOSPITAL SERVICES (In thousands, Increase except per share amounts) 2022 (Decrease) 2021 Net income attributable to ASHS $ 1,328 584.5 % $ 194 Net income per share attributable to ASHS, diluted $ 0.21 600.0 % $ 0.03 Net income attributable to American Shared Hospital Services increased $1,134,000 in 2022 compared to 2021.

NET INCOME ATTRIBUTABLE TO AMERICAN SHARED HOSPITAL SERVICES (In thousands, Increase except per share amounts) 2023 (Decrease) 2022 Net income attributable to ASHS $ 610 (54.1 )% $ 1,328 Net income per share attributable to ASHS, diluted $ 0.10 (52.4 )% $ 0.21 Net income attributable to American Shared Hospital Services decreased $718,000 in 2023 compared to 2022.

The Company records an estimate of net operating profit based on estimated revenues, less estimated operating costs. The operating costs and estimated net operating profit are recorded as other direct operating costs in the consolidated statement of operations.

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 statement of operations.

The following summarizes related party activity for the years ended December 31, 2022 and 2021: December 31, 2022 2021 Equipment purchases and de-install costs $ 1,844,000 $ 1,906,000 Costs incurred to maintain equipment 1,094,000 759,000 Total related party transactions $ 2,938,000 $ 2,665,000 The Company also had related party commitments to purchase one Icon, install four Icon upgrades, purchase two Gamma Plan workstations, purchase two LINACs, and service the related equipment of $17,407,000 as of December 31, 2022.

The following summarizes related party activity for the years ended December 31, 2023 and 2022: December 31, 2023 2022 Equipment purchases and de-install costs $ 6,918,000 $ 1,844,000 Costs incurred to maintain equipment 851,000 1,094,000 Total related party transactions $ 7,769,000 $ 2,938,000 The Company also had related party commitments to install three Esprit upgrades, one Cobalt-60 reload, purchase one MR LINAC, purchase one Gamma Plan workstation, and service the related equipment.

For example, if the Company determined the salvage value of the existing seven domestic Gamma Knife units should be $0, there could be an annual increase to depreciation expense of approximately $514,000. 2022 Results For the year ended December 31, 2022, 55% of the Company’s revenue was derived from its Gamma Knife business and 45% was derived from the PBRT system.

For the year ended December 31, 2021, 66% of the Company’s revenue was derived from its Gamma Knife business and 34% was derived from the PBRT system.

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. For the year ended December 31, 2022, 55% of the Company’s revenue was derived from its Gamma Knife business and 45% was derived from its PBRT business.

The increase in 2022 was primarily due to increased operating costs at the Company’s international sites. SELLING AND ADMINISTRATIVE EXPENSE Increase (In thousands) 2022 (Decrease) 2021 Selling and administrative expense $ 5,145 13.6 % $ 4,531 Percentage of total revenue 26.1 % 25.7 % The Company’s selling and administrative costs increased $614,000 in 2022 compared to 2021.

SELLING AND ADMINISTRATIVE EXPENSE Increase (In thousands) 2023 (Decrease) 2022 Selling and administrative expense $ 7,022 36.5 % $ 5,145 Percentage of total revenue 32.9 % 26.1 % The Company’s selling and administrative costs increased $1,877,000 in 2023 compared to 2022.

This change in estimate will also impact future periods. See Note 3 - Property and Equipment to the consolidated financial statements for further discussion on salvage value. As of December 31, 2022, the Company has seven domestic Gamma Knife units with salvage value ranging from $140,000 to $300,000.

As of December 31, 2023, the Company had seven domestic Gamma Knife units with salvage value ranging from $140,000 to $300,000. A further change in estimate for salvage value could have an impact on future earnings of the Company.

See Note 5 - Long Term Debt to the consolidated financial statements for additional information. Commitments As of December 31, 2022, the Company had commitments to purchase two MEVION S250i PBRT systems for $34,000,000, and commitments to purchase and install Gamma Knife and LINAC equipment totaling $13,243,000.

See Note 5 - Long Term Debt to the consolidated financial statements for additional information. Commitments As of December 31, 2023, the Company had commitments to purchase and install Gamma Knife and LINAC equipment totaling $15,925,000. There are no significant cash requirements, pending financing, for these commitments in the next 12 months.

GKCE's patient population is primarily covered by a government payor and payments are paid approximately 30 to 60 days upon invoice. The Company did not capitalize any incremental costs related to the fulfillment of its customer contracts. Accounts receivable earned by GKPeru were not significant for the years ended December 31, 2022 and 2021.

GKCE’s patient population is primarily covered by a government payor and payments are paid between three and six months, following issuance of invoice. The Company did not capitalize any incremental costs related to the fulfillment of its customer contracts. Accounts receivable under ASC 606 at December 31, 2023 was $1,626,000.

Revenue estimates are reviewed periodically and adjusted as necessary. Under turn-key arrangements, the Company receives payment from the hospital at an agreed upon percentage share of the hospital’s reimbursement from third party payors, and the Company is responsible for paying all the operating costs of the equipment.

The Company receives payment from the hospital at an agreed upon percentage share of the hospital’s reimbursement from third party payors, and the Company is responsible for paying operating costs of the equipment determined primarily based on historical treatment protocols and cost schedules with the hospital.

See additional discussion below related to commitments. See Note 5 - Long-Term Debt Financing to the consolidated financial statements for more information. The Company, in the past, has secured financing for its Gamma Knife and radiation therapy units.

On January 25, 2024, the Company amended the Credit Agreement to include financing for the LINAC equipment in Puebla totaling $2,700,000. See Note 5 - Long-Term Debt to the consolidated financial statements for more information. 24 Table of Contents The Company, in the past, has secured financing for its Gamma Knife and radiation therapy units.

The Company’s Gamma Knife unit in Ecuador is financed with DFC. The DFC Loan is secured by a lien on GKCE’s assets. The amount outstanding under the DFC Loan is payable in 29 quarterly installments with a fixed interest rate of 3.67%.

The amount outstanding under the first tranche of the DFC Loan is payable in 29 quarterly installments with a fixed interest rate of 3.67% . The amount outstanding under the second tranche of the DFC Loan is payable in 16 quarterly installments with a fixed interest rate of 7.49%.

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 of December 31, 2022, the Company has not drawn on its line of credit.

LIQUIDITY AND CAPITAL RESOURCES 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.

See Note 10 - Commitments and Contingencies to the consolidated financial statements for further discussion on commitments. 22 Table of Contents Related Party Transactions The Company’s Gamma Knife business is operated through its 81% indirect interest in its GKF subsidiary.

The Company’s commitments to purchase a second and third PBRT unit expired in January 2024. 25 Table of Contents Related Party Transactions The Company’s Gamma Knife business is operated through its 81% indirect interest in its GKF subsidiary.

A summary of the Company’s procedure volumes for fiscal years 2022 and 2021 are set forth in the table below. 15 Table of Contents Volume Increase Increase Gamma Knife 12/31/2022 12/31/2021 (Decrease) (Decrease) Total Procedures 1,286 1,436 (150 ) (10.4 )% Same Centers Procedures 1,286 1,360 (74 ) (5.4 )% PBRT Procedures 5,296 4,426 870 19.7 % The decrease in Gamma Knife volume during 2022 was primarily due to the expiration of two contracts in the first and fourth quarters of 2021.

A summary of the Company’s procedure volumes for fiscal years 2023 and 2022 are set forth in the table below. 18 Table of Contents Volume Increase Increase Gamma Knife 12/31/2023 12/31/2022 (Decrease) (Decrease) Medical Equipment Leasing - Gamma Knife 824 954 (130 ) (13.6 )% Direct Patient Services ("retail") - Gamma Knife 371 332 39 11.7 % Gamma Knife - Total 1,195 1,286 (91 ) (7.1 )% PBRT Procedures (medical equipment leasing) 5,369 5,296 73 1.4 % The decrease in Gamma Knife volume, under medical equipment lease, during 2023 was primarily due to the expiration of two contracts in the second and third quarters of 2023 , respectively.

Excluding the two Gamma Knife contracts that expired, Gamma Knife procedures for existing sites decreased 5% in 2022 compared to the prior year. The decrease in Gamma Knife procedures for existing customer sites was due to normal, cyclical fluctuations. The number of international Gamma Knife procedures increased 2% in 2022 compared to 2021.

Excluding the two Gamma Knife contracts that expired, Gamma Knife procedures for existing sites increased 1% in 2023 compared to the prior year.

To mitigate its cost increases, the Company has in many cases aggregated its purchase of services and capital goods to minimize these price increases. APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES 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.

The Company anticipates that the closing conditions will be met in April 2024. 19 Table of Contents APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES 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.

Related party liabilities on the consolidated balance sheets consist of the following as of December 31, 2022 and 2021: December 31, 2022 2021 Accounts payable and other accrued liabilities $ 497,000 $ 1,992,000

The Company also has two commitments to de-install Gamma Knife units at existing customer sites. Total related party commitments were $18,968,000 as of December 31, 2023. Related party liabilities on the consolidated balance sheets consist of the following as of December 31, 2023 and 2022: December 31, 2023 2022 Accounts payable and other accrued liabilities $ 1,961,000 $ 497,000

The Company had cash and cash equivalents, including restricted cash, of $12,453,000 at December 31, 2022 compared to $8,263,000 at December 31, 2021, an increase of $4,190,000. 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’s expected primary cash needs on both a short and long-term basis are for capital expenditures, business expansion (including the payment of the purchase price in connection with the RI acquisition), working capital, and other general corporate purposes.

As of October 1, 2022, the Company further reduced its estimate for salvage value for one of its domestic Gamma Knife Perfexion units. The net effect of the change in estimate made October 1, 2022, for the year ended December 31, 2022, was a decrease in net income of approximately $17,000 or $0.00 per diluted share.

The net effect of the change in estimate made January 1, 2023, for the year ended December 31, 2023, was a decrease in net income of approximately $207,000 or $0.03 per diluted share. This change in estimate also impacts future periods.

On September 29, 2020, CMS published a final rule that would have implemented a new mandatory payment model for radiation oncology services delivered to certain Medicare beneficiaries: the RO APM.

The Company believes that cash flow from operations, cash on hand and its line of credit will be sufficient to cover these payments.

The Gamma Knife and certain other service contracts are paid monthly, as service is performed. The Company believes that cash flow from operations, cash on hand and its line of credit will be sufficient to cover these payments. See Note 10 - Commitments and Contingencies to the consolidated financial statements for further discussion on commitments.

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, 2022, by approximately $114,000 to $227,000. 17 Table of Contents Patient Income The Company has stand-alone facilities in Lima, Peru and Guayaquil, Ecuador, where a contract exists between the Company’s facilities and the individual patient treated at the facility.

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, 2023, by approximately $113,000 to $226,000 .

The number of PBRT fractions performed in 2022 was 5,296 compared to 4,426 in 2021. Revenue per fraction in 2022 was $1,690 compared to $1,369 in 2021. The increase in PBRT volume was due to lower volumes in the prior year driven by the continued impact from the COVID-19 pandemic and down-time for repair of system components.

The number of PBRT fractions performed in 2023 was 5,369 compared to 5,296 in 2022. Revenue per fraction in 2023 was $1,887 compared to $1,690 in 2022. The increase in PBRT volume was due to the higher utilization of the equipment by the customer.

There are no significant cash requirements, pending financing, for these commitments in the next 12 months. There can be no assurance that financing will be available for the Company’s current or future projects, or at terms that are acceptable to the Company.

There can be no assurance that financing will be available for the Company’s current or future projects, or at terms that are acceptable to the Company. However, the Company currently has cash on hand of $13,808,000 and a line of credit of $7,000,000 to fund these projects. The Company also had commitments to service these various equipment commitments totaling $14,805,000.

TOTAL REVENUE Increase (in thousands) 2022 (Decrease) 2021 Total revenue $ 19,746 12.0 % $ 17,628 Total revenue in 2022 increased 12.0% compared to 2021 primarily due an increase in PBRT revenues, offset by a decrease in domestic Gamma Knife revenue. Domestic Gamma Knife volumes were down compared to the prior year, offset by an increase in average reimbursement.

TOTAL REVENUE Increase (in thousands) 2023 (Decrease) 2022 Total revenue $ 21,325 8.0 % $ 19,746 Total revenue in 2023 increased 8.0% compared to 2022 primarily due to an increase in PBRT revenues and equipment sales during the current year.

Operating activities pr ovided $7,235,000 of cash in 2022, which was driven by net income of $1,555,000, non-cash charges for depreciation and amortization of $4,783,000, stock-based compensation expense of $399,000, amortization of deferred issuance costs of $84,000, deferred income taxes of $344,000, income taxes payable of $159,000 changes in payables and other accrued liabilities of $608,000, and changes in receivables of $696,000.

Cash Flows Cash Flows Provided by Operating Activities Operating activities pr ovided $5,718,000 of cash in 2023, which was driven by net income of $265,000, non-cash charges for depreciation and amortization of $5,165,000, a loss on the write down of impaired assets of $940,000, stock-based compensation expense of $389,000, accretion of deferred issuance costs of $46,000, income taxes payable of $974,000, and changes in prepaids and other assets of $21,000.

Six of the Company’s twelve domestic Gamma Knife customers are under fee-per-use contracts, and six customers are under retail arrangements. The Company, through GKF, also owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador. These units economically function similar to the Company’s turn-key retail arrangements.

The Company, through GKF, also owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador, which provide radiation therapy services directly to the patient, or, retail.

Depreciation and amortization costs as a percentage of total revenue were 23.9% and 27.5% in 2022 and 2021 . Depreciation and amortization costs decreased $130,000 in 2022 compared to 2021 .

The decrease in 2023 compared to 2022was primarily due to maintenance for one of the Company’s Gamma Knife contracts that expired in June 2023 . Depreciation and amortization costs as a percentage of total revenue were 23.8% and 23.9% in 2023 and 2022 . Depreciation and amortization costs increased $347,000 in 2023 compared to 2022 .

GKCE’s accounts receivable were $862,000 and $435,000 for the years ended December 31, 2022 and 2021. As of December 31, 2022 and 2021, the Company recognized revenues of approximately $3,091,000 and $2,909,000 under ASC 606, respectively. Salvage Value on Equipment Salvage value is based on the estimated fair value of the equipment at the end of its useful life.

The Company recognized net revenue of $200,000 on the sale of equipment for the year-ended December 31, 2023. 20 Table of Contents Salvage Value on Equipment Salvage value is based on the estimated fair value of the equipment at the end of its useful life.

The decrease in 2022 compared to 2021was due to the expiration of one contract in each of the first and fourth quarters of 2021, offset by the Company’s change in estimate for salvage value. As of April 1, 2021, the Company reduced its estimate for salvage value for nine of its Gamma Knife units.

The increase in 2023 compared to 2022was due to a change in estimate for useful life for one of the Company’s Gamma Knife units. As of January 1, 2023, the Company reduced its estimated useful life for one of its retail Gamma Knife units.

Salvage value is based on the estimated fair value of the equipment at the end of its useful life. This change in estimate also impacts future periods. Other direct operating costs as a percentage of total revenue were 18.6% and 20.2% in 2022 and 2021 , respectively. Other direct operating costs increased by $110,000 in 2022 compared to 2021 .

Other direct operating costs as a percentage of total revenue were 18.9% and 18.6% in 2023 and 2022 , respectively. Other direct operating costs increased by $359,000 in 2023 compared to 2022 . The increase in 2023 was primarily due to increased volume and therefore increased operating costs from the retail segment.

The number of days revenue (sales) outstanding (“DSO”) in accounts receivable as of December 31, 2022 was 70 days compared to 87 days at December 31, 2021. DSO can and does fluctuate depending on timing of customer payments received and the mix of fee per use versus retail customers.

The Company’s trade accounts receivable increased by $542,000 to $4,343,000 at December 31, 2023 from $3,801,000 at December 31, 2022. The number of days revenue (sales) outstanding (“DSO”) in accounts receivable as of December 31, 2023 was 74 days compared to 70 days at December 31, 2022.

As of October 1, 2022, the Company further reduced its estimate for salvage value for one of its domestic Gamma Knife Perfexion units. See Note 3 - Property and Equipment to the consolidated financial statements for further discussion on salvage value.

Financing activities used $2,657,000 of cash during 2022, which was driven by payments on long-term debt of $2,032,000, distributions to non-controlling interests of $573,000, debt issuance costs of $9,000 and payments on short-term financing of insurance premiums of $48,000.

These increases were offset by payments on long-term debt of $2,129,000, debt issuance costs of $9,000 and payments on short-term financing of insurance premiums of $202,000. Working Capital The Company had working capital at December 31, 2023 of $9,677,000 compared to working capital of $13,548,000 at December 31, 2022.

Retail sites generally have longer collection periods than fee per use sites. Investing activities used $388,000 of cash in 2022, due to payments made towards the purchase of property and equipment.

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’s domestic Gamma Knife business operates by fee-per-use contracts or retail contracts where the Company shares in the revenue and operating costs of the equipment. The Company, through GKF, also owns and operates single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador. These units economically function similar to the Company’s turn-key retail arrangements.

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.

Removed

The Company’s PBRT system at Orlando Health, is also considered a retail arrangement. The main drivers of the Company’s revenue are numbers of sites, procedure volume and reimbursement. A summary of the sites is set forth in the table below.

Added

The Company leases ten Gamma Knife systems and one PBRT system as of December 31, 2023, where a contract exists between the hospital and the Company. The Company, through GKF, also owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador.

Removed

Number of Sites 12/31/2022 12/31/2021 Retail/Turn-key 6 7 Fee Per Use 6 6 Domestic Gamma Knife 12 13 International Gamma Knife 2 2 Total Gamma Knife 14 15 PBRT 1 1 The Company removed one Gamma Knife unit in January 2022, whose contract expired in the fourth quarter of 2021.

Added

The Company’s facilities in Peru and Ecuador are considered direct patient services, 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.

Removed

Another Gamma Knife contract expired in the second quarter of 2022 is currently leased on a month-to-month basis and the Company is in negotiations with this site to renew the lease. The next customer contract expirations are in the first and fourth quarters of 2023. The Company is in active negotiations with both of these sites as well.

Added

A summary of the Company’s medical equipment leases and direct patient service sites is set forth in the table below: Number of Sites 12/31/2023 12/31/2022 Revenue Sharing 5 6 Fee Per Use 5 6 Medical Equipment Leasing - Gamma Knife 10 12 Medical Equipment Leasing - Proton Bream Radiation Therapy 1 1 Medical Equipment Leasing - Total 11 13 Direct Patient Services ("Retail") - Gamma Knife 2 2 The Company had two contracts expire in the second and third quarters of 2023, respectively.

Removed

Same center procedures decreased 5% compared to 2021 due to temporary staffing shortages at several of the Company’s domestic customers and normal, cyclical fluctuations . The increase in PBRT volume was due to lower volumes during 2021 driven by the continued impact from the COVID-19 pandemic and down-time for repair of system components.

Added

The Company had a third contract up for renewal in 2023. This lease was extended and the equipment was upgraded to an Esprit during the fourth quarter. The Company has one customer contract that will expire in November 2024.

Removed

The remaining providers not included in the RO APM would have continued to receive reimbursement based on a fee-for-service methodology. The RO APM would have included, but would not have been limited to, PBRT and Gamma Knife services. Three of the Company's Gamma Knife centers were expected to be included in the RO APM.

Added

Same center procedures decreased 4% compared to 2022 due to downtime for the upgrade of two Gamma Knife systems to the Esprit during the third and fourth quarters of 2023 .

Removed

Added

The increase in Gamma Knife volume, under direct patient services, during 2023 was due to improved marketing and physician outreach at the Company’s international locations, offset by downtime to upgrade the Gamma Knife equipment in Ecuador to the Icon. The increase in PBRT volume was due to normal, cyclical fluctuations.

Removed

Impact of the COVID-19 Pandemic In 2021, following the dissemination of the vaccine for the COVID-19 virus in the United States, there was a scale back of the safety measures put into place throughout 2020. Some of the Company’s customers still experienced some delays and restrictions in providing service, but not to the same degree that occurred during 2020.

Added

Pending 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 RI Target Companies together with the assignment of certain payor contacts for a purchase price of $2,850,000.

Removed

Procedure volumes for the Company’s domestic Gamma Knife business for the year ended December 31, 2021, began to rebound to pre-pandemic levels. The Company’s PBRT business was impacted by COVID-19, and other factors, during 2021 as treatment volumes continued to lag from pre-pandemic levels.

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Top changes in AMERICAN SHARED HOSPITAL SERVICES's 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Other AMS 10-K year-over-year comparisons