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What changed in AMERICAN SHARED HOSPITAL SERVICES's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of AMERICAN SHARED HOSPITAL SERVICES's 2023 and 2024 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 2024 report.

+302 added−231 removedSource: 10-K (2025-04-04) vs 10-K (2024-04-01)

Top changes in AMERICAN SHARED HOSPITAL SERVICES's 2024 10-K

302 paragraphs added · 231 removed · 165 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

51 edited+36 added−26 removed72 unchanged
Biggest changeOperating 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.
Biggest changeThe Company owns 50% of “The Operating Room for the 21st Century”SM, OR21, LLC (“OR21”). The remaining 50% of OR21 is owned by an architectural design company. OR21 is not operational at this time . The Company was incorporated in the State of California in 1983 and its predecessor, Ernest A. Bates, M.D., Ltd.
Proton Beam Radiation Therapy Operations ( “ PBRT ” ) PBRT is an alternative to traditional external beam, photon-based radiation delivered by linear accelerators. PBRT, first clinically introduced in the 1950s, has physics advantages compared to photon-based systems which allow PBRT to deliver higher radiation doses to the tumor with less radiation to healthy tissue.
Proton Beam Radiation Therapy Operations PBRT is an advanced alternative to traditional external beam, photon-based radiation delivered by linear accelerators. PBRT, first clinically introduced in the 1950s, has physics advantages compared to photon-based systems which allow PBRT to deliver higher radiation doses to the tumor with less radiation to healthy tissue.
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 models 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.
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 Company has purchased one MEVION S250.
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., Sumitomo Heavy Industries, Ltd., ProTom International, Inc. and Mitsubishi Electric Corp. The Company has purchased one MEVION S250.
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 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 and Mexican LINAC center are free-standing facilities operated by GKPeru, GKCE, and Puebla, respectively. The treating physicians and clinical staff at these facilities are independent contractors.
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.
Elekta is the manufacturer of the Leksell Gamma Knife® (the “Gamma Knife”), which is a radiosurgery-treatment device that uses precise beams of gamma radiation to non-invasively 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.
The Company’s stand-alone clinic in in Puebla, Mexico is in the process of obtaining its user license through the Comisión Nacional de Seguridad Nuclear y Salvaguardias (CNSNS). 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’s stand-alone clinic in in Puebla, Mexico was responsible for obtaining its user license through the Comisión Nacional de Seguridad Nuclear y Salvaguardias (CNSNS). 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.
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.
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 Methodist Hospital Merrillville, Indiana 10 2019 Revenue Sharing The Company’s typical fee per use leasing agreement is for a ten-year term.
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.
The average Medicare reimbursement delivery rate trends from 2023 to 2025 are outlined below: Average Medicare Reimbursement Delivery Rate Trends - Gamma Knife 2023 2024 2025 $7,691 $7,420 $7,645 The average Medicare reimbursement delivery rate trends for PBRT from 2023 to 2025 are outlined below. Patients typically undergo 25-40 delivery sessions.
The customer generally is obligated to pay site and installation costs and the costs of operating the Gamma Knife. The customer can either renew the agreement or terminate the agreement at the end of the contractual term. If the customer chooses to terminate the agreement, then GKF removes the equipment from the medical center for possible placement at another site.
The customer generally is obligated to pay site costs and the costs of operating the Gamma Knife. The customer can either renew the agreement or terminate the agreement at the end of the contractual term. If the customer chooses to terminate the agreement, then GKF removes the equipment from the medical center.
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.
Average Medicare Reimbursement Delivery Rate Trends - PBRT 2023 2024 2025 Simple without Compensation $ 572 $ 561 $ 578 Simple with Compensation, Intermediate, or Complex $ 1,323 $ 1,362 $ 1,276 We are unable to predict the effect of future government health care funding policy changes on operations.
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 following is a listing of the Company’s current medical equipment leases: 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 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.
(“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”).
(“GC Holdings”), pursuant to which GenesisCare agreed to sell to the Company its entire 60% equity interest in each of Southern New England Regional Cancer Center, LLC (“SNERCC”) and Roger Williams Radiation Therapy, LLC (“RWRT”), (collectively, the “RI Companies”) and to assign certain payor contacts to the Company for a purchase price of $2,850,000 (such transaction, the “RI Acquisition”).
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.
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 2024 $ 9,716 34.3 % 2023 $ 10,992 51.5 % The Company conducts its Gamma Knife business through its 81% indirect interest in GKF.
Stachowiak was appointed the Executive Chairman of the Board of the Company on March 7, 2023. Mr. Stachowiak previously served as Chief Executive Officer of the Company from October 1, 2020 to March 7, 2023 and as Interim President and Chief Executive Officer effective as of May 4, 2020 through September 30, 2020. Mr. Stachowiak joined the Board in 2009.
Stachowiak also previously served as Chief Executive Officer from October 1, 2020 to March 7, 2023 and as Interim President and Chief Executive Officer effective as of May 4, 2020 through September 30, 2020. Mr. Stachowiak originally joined the Board in 2009. Mr.
Mr. Stachowiak previously served as President and Chief Executive Officer of Shared Imaging, a preferred independent provider of CT, MRI and PET/CT equipment and services, from its inception in December 1991 until his retirement in March 2013. In 2008, Mr.
Stachowiak previously served as President and Chief Executive Officer of Shared Imaging, a preferred independent provider of CT, MRI and PET/CT equipment and services, from its inception in December 1991 until his retirement in March 2013. In 2008, Mr. Stachowiak sold 50% of his interest in Shared Imaging to Lubar Equity Fund and remains a 50% owner of Shared Imaging.
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 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, 2024, the Company had a workforce of 43 people on a full-time basis and one part-time in the United States, 15 people on a full-time basis in Lima, Peru, four people on a full-time basis in Guayaquil, Ec uador, and 19 people on a full-time basis in Puebla, Mexico.
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 currently provides Gamma Knife services through its 81% indirect interest in GK Financing, LLC, a California limited liability company (“GKF”) to eight medical centers in eight states in the United States, and owns and operates two Gamma Knife units at stand-alone facilities in Lima, Peru and Guayaquil, Ecuador.
The Company believes that the current development of one and two treatment room PBRT systems at lower capital costs and the level of reimbursement for PBRT from the Centers for Medicare & Medicaid Services (“CMS”) will help make this technology available to a larger segment of the market.
The Company believes that the current development of single treatment room PBRT systems at lower capital costs and the level of reimbursement for PBRT from the Centers for Medicare & Medicaid Services (“CMS”) will help make this technology available to a larger segment of the market. The Company currently has a PBRT system located in Orlando, Florida.
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.
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.
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 and Guadalupe hold 85% and 15% ownership interests, respectively, in Puebla. 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.
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.
PBRT currently treats but is not limited to prostate, brain, spine, head and neck, lung, breast, gastrointestinal tract and pediatric tumors. Introduction of PBRT in the United States, until recently, has been limited due to the high capital costs of these projects.
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 Company’s Gamma Knife units performed 1,084 procedures in 2024 for a cumulative total of approximately 48,490 procedures from commencement through December 31, 2024.
Tagawa 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.
Tagawa served in various positions with the Company. Mr. Tagawa currently serves as Chief Financial Officer and Secretary of the Ernest A. Bates Foundation. Mr. Tagawa also serves on the Board of Directors of Shared Imaging. He received his undergraduate degree from the University of California at Berkeley and his M.B.A. from Cornell University. R.
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%. The maturity date for the first and second tranche of the DFC Loan is December 15, 2027.
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%.
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.
Currently, all of the Company’s eight Gamma Knife units in the United States are Gamma Knife Perfexion units and one of these Perfexion units has the Icon upgrade. Four of the Company’s eight Gamma Knife units were upgraded to an Esprit in October 2023, January 2024, September 2024 and January 2025, respectively.
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.
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.
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 Company’s typical revenue sharing leasing 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.
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.
At December 31, 2023, two customers each individually accounted for 30% and 31% of total accounts receivable, respectively. MARKETING The Company markets turn-key business solutions to cancer treatment centers, health systems, and cancer networks worldwide.
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 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 66 Executive Chairman of the Board Gary Delanois 72 Chief Executive Officer Craig K. Tagawa 71 President Raymond S. Frech 53 Chief Financial Officer Raymond C.
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.
In addition, on April 9, 2024, Bristol was granted a CoN to provide radiation therapy services in Bristol, Rhode Island. 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.
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.
GKF’s operating agreement requires that it have a cash reserve of at least $50,000 before cash distributions are made to its members.
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.
Two customers individually accounted for approximately 35% and 27% of the Company’s total revenue in 2024, and one customer accounted for 48% of the Company’s total revenue in 2023, respectively. At December 31, 2024, one location accounted for 32% of total accounts receivable.
Stachowiak sold 50% of his interest in Shared Imaging to Lubar Equity Fund and remains a 50% owner of Shared Imaging. Mr. Stachowiak is the sole owner of RCS Investments, Inc., and owner-manager of Stachowiak Equity Fund, both of which are private equity funds. Mr. Stachowiak received a B.S. in Business and an M.B.A. from Indiana University.
Mr. Stachowiak is the sole owner of RCS Investments, Inc., and owner-manager of Stachowiak Equity Fund, both of which are private equity funds. Mr. Stachowiak received a B.S. in Business and an M.B.A. from Indiana University. He is a Certified Public Accountant (inactive), Certified Internal Auditor (inactive) and holds a Certification in Production and Inventory Management.
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”).
The Company’s acquisition of GKCE and the Gamma Knife Esprit in Ecuador is financed by the United States International Development Finance Corporation (“DFC”). 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 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).
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). The Company has begun the process to upgrade the unit in Peru with an Esprit and expects to complete this project around April 2025.
The DFC Loan also contains customary covenants and representations which the Company’s wholly-owned subsidiary, HoldCo, was not in compliance with as of December 31, 2023. On March 28, 2024, the Company obtained a waiver from DFC for the covenant noncompliance as of December 31, 2023.
The maturity date for the first and second tranche of the DFC Loan is December 15, 2027. The DFC Loan also contains customary covenants and representations which the Company’s wholly-owned subsidiary, HoldCo, was not in compliance with as of December 31, 2023.
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 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 (“RI PBRT”), ASHS-Bristol Radiation Therapy, LLC (“Bristol”), OR21, Inc. and MedLeader.com, Inc. (“MedLeader”). 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”).
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 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 first tranche of the DFC Loan was funded in June 2020 in the amount of $1,425,000. 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.
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 either through medical equipment leasing or direct patient services.
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. Gamma Knife Operations Gamma Knife stereotactic radiosurgery, a non-invasive procedure, is an alternative to conventional brain surgery and/or radiation therapy.
(“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.
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. (“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.
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.
For medical equipment leasing, the Company typically provides the equipment, as well as planning, installation, reimbursement and marketing support services.
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.
The Company anticipates the facility being built and treating its first patient in approximately 18 to 24 months. MedLeader was formed to provide continuing medical education online and through videos for doctors, nurses and other health care practitioners. MedLeader is not operational at this time and is not expected to generate significant revenue within the next two years.
(“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”).
GKF has established the wholly-owned subsidiaries Instituto de Gamma Knife del Pacifico S.A.C. (“GKPeru”) and HoldCo GKC S.A (“HoldCo”) for the purpose of providing direct patient 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”).
(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.
Delanois is also a Certified Public Accountant (inactive) and a member of the American Institute of CPAs and the Florida Institute of Public Accountants. 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.
ITEM 1. BUSINESS GENERAL American Shared Hospital Services (“ASHS” and, together with its subsidiaries, the “Company”) provides stereotactic radiosurgery equipment and advanced radiation therapy and related equipment.
ITEM 1. BUSINESS GENERAL American Shared Hospital Services (“ASHS” and, together with its subsidiaries, the “Company”) 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.
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.
A 40% minority ownership in LBE is owned by radiation oncologists. 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.
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.
The Gamma Knife treats selected malignant and benign brain tumors, arteriovenous malformations, and functional disorders including trigeminal neuralgia (facial pain). The Company, currently, has eight 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.
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.
(“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. 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 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.
(d/b/a American Shared Hospital Services), a California limited partnership, was formed in June 1980.
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.
On May 7, 2024, the Company acquired a 60% interest in the RI Companies. The RI Companies operate three, existing, stand-alone radiation therapy cancer centers in Woonsocket, Warwick and Providence, Rhode Island. In July 2024, the Company began treating patients at its stand-alone radiation therapy facility in Puebla, Mexico.
Removed
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.
Added
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 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
The Company’s facilities in Rhode Island, Peru, Ecuador, and Mexico 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
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.
Added
As described below, in May 2024, the Company acquired a 60% interest in three, existing linear accelerator (“LINAC”) facilities in Rhode Island, and, in July 2024, the Company began operating a stand-alone LINAC facility in Puebla, Mexico.
Removed
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).
Added
The RI Companies operate three radiation therapy cancer centers in Rhode Island. The parties closed the RI Acquisition on May 7, 2024. Accordingly, activity from May 7, 2024 forward is included under direct patient services in the consolidated financial statements. See Note 12 - Rhode Island Acquisition to the consolidated financial statements for further information.
Removed
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.
Added
Puebla was formed on December 15, 2022 and began treating patients in July 2024. Operating costs incurred for the twelve-month period ended December 31, 2024 by Puebla, are included in the consolidated statement of operations. On June 28, 2024, ASHS-Mexico, S.A.P.I. de C.V. signed a Joint Venture Agreement with Hospital San Javier, S.A. de C.V.
Removed
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.
Added
(“HSJ”) to establish Newco to provide radiosurgery services to public- and private-paying patients in Guadalajara, Mexico. The Company and HSJ will hold 70% and 30% ownership interests, respectively, in Newco.
Removed
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
Under the agreement, the Company is responsible for upgrading HSJ’s existing Gamma Knife Perfexion system to a Gamma Knife Esprit and paying 50% of all site modification costs required to install the Esprit. The Company does not expect that Newco will begin treating patients until mid to late 2025.
Removed
The Company pays for the equipment and the medical center generally pays for site and installation costs.
Added
On December 10, 2024, RI PBRT was granted a Certificate of Need (a “CoN”) to acquire the technology necessary to construct and operate a freestanding proton beam radiation treatment (“PBRT”) system in Johnston, Rhode Island. The Company anticipates the facility being built and treating its first patient in approximately 36 months.
Removed
The Company works closely with major global Original Equipment Manufacturers (“OEM’s”) that provide leading edge clinical treatment systems and software that treat cancer using radiation therapy and radiosurgery.
Added
On April 9, 2024, Bristol was granted a CoN to provide radiation therapy services in Bristol, Rhode Island. On February 6, 2025, Bristol closed on the acquisition of certain parcels of real property located on Gooding Avenue, Bristol, Rhode Island for a purchase price of $1,185,000. The Company expects to construct a linear accelerator facility on this real property.
Removed
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.
Added
The Company went public in 1984 and its common stock is currently listed on the NYSE: American Stock Exchange under the symbol “AMS” . 4 Table of Contents OPERATIONS Radiation Therapy Services The Company is continuing its efforts to expand radiation therapy services both domestically and internationally.
Removed
The Company is product agnostic and works with all major OEMs to provide financial solutions to the end users for the products and services they desire. The Company has enhanced and expanded its sales and marketing team and efforts to better provide sales and customer service to the healthcare community.
Added
Additionally, on December 10, 2024, RI PBRT was granted a CoN in Rhode Island to acquire the technology necessary to construct and operate a freestanding PBRT system.
Removed
The Company’s CEO manages directly the day to day operations as well as all sales, marketing, and customer service teams to ensure close contact with the Company’s customer installed base and management of the sales pipeline.
Added
From inception to December 31, 2024, GKF has distributed $50,815,000 to the Company and $11,920,000 to Elekta. 5 Table of Contents CUSTOMERS The Company’s current business is the provisioning of stereotactic radiosurgery services and radiation therapy services either through medical equipment leasing or direct patient services to cancer patients.
Removed
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.
Added
Under a leasing arrangement, the Company pays for the equipment and the medical center generally pays for site and installation costs. The Company also owns and operates two single-unit Gamma Knife facilities in Peru and Ecuador, where it provides radiosurgery services directly to the patient.
Removed
By not acquiring the equipment supplied by the Company, the cancer care/medical center is able to allocate the funds otherwise required to purchase and/or finance the equipment to other projects within their facility. ▪The Company does not have minimum volume requirements, so the cancer care/medical center avoids the risk of equipment under-utilization.
Added
The Company also added four direct patient radiation therapy treatment centers during 2024, which it owns and manages. The Company acquired a 60% interest in three of these facilities through the RI Acquisition in May 2024 and started treating patients in Puebla, Mexico in July 2024.
Removed
The cancer care/medical center pays the Company only for each procedure performed on a patient. 6 Table of Contents ▪For contracts under revenue sharing arrangements, the Company assumes all or a portion of the risk of reimbursement rate changes.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

27 edited+41 added−12 removed55 unchanged
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.
Biggest changeReported average daily trading volume in our common stock for the three-month period ended December 31, 2024 was approximately 21,000 shares. It is not likely that a further increase in an active trading market in the Company’s common stock will develop in the future.
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”).
As of December 31, 2023 and 2024, 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”).
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.
A failure by the Company to successfully integrate the businesses, operations, and contractual obligations of the RI 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.
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.
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 outstanding under the DFC Loan, which could have a material adverse effect on the Company’s financial condition.
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.
The Company may fail to successfully integrate the interests acquired in the RI Acquisition with its legacy 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.
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.
Such risks include but are not limited to the following: ● the potential difficulty of assimilating the businesses and operations of the RI 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 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 Companies’ operation of their three radiation oncology centers; ● the added costs and burdens that the Company has and will incur in connection with obtaining and then maintaining the governmental and regulatory approvals that were necessary to effect the RI Acquisition and to stay regulatorily compliant under Rhode Island law on an on-going basis; ● 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 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 Companies and taking control from GenesisCare; and ● the risk of financial loss due to the existing debts and liabilities of the RI Companies and the potential need for the Company to expend substantial capital to stabilize the businesses of the RI Companies due to any instability created by the GenesisCare bankruptcy, with no guarantee of return on investment.
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.
The Company conducted due diligence when evaluating the RI Acquisition prior to executing the IPA and during the interim period between signing the IPA and closing the RI Acquisition.
Additionally, the Company is obligated to remove the equipment at the end of the lease term. In the event the customer does not purchase the equipment from the Company or the Company is not able to trade in the equipment, the Company is required to remove the equipment and record an ARO.
Additionally, the Company is obligated to remove the equipment at the end of the lease term. In the event the customer does not purchase the equipment from the Company or the Company is not able to trade in the equipment, the Company is required to remove the equipment and record an Asset Retirement Obligation (“ARO”).
As a result, we plan to adapt our business model to place other types of stereotactic radiosurgery and advanced radiation therapy equipment in addition to Gamma Knife units and PBRT systems.
As a result, we plan to adapt our business model to place other types of stereotactic radiosurgery and advanced radiation therapy equipment, including through the completion of the RI Acquisition, in addition to Gamma Knife units and PBRT systems.
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.
On January 25, 2024, the Company and Fifth Third entered into the First Amendment which added an additional $2,700,000 term loan, and, on December 18, 2024 the Company entered into the Second Amendment which added another $7,000,000 term loan. In June 2020, the Company’s wholly-owned subsidiary, HoldCo, entered into the DFC Loan in connection with the acquisition of GKCE.
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
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 Our officers, directors and principal shareholders collectively own a substantial portion of our common stock.
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 .
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 2024, two customers individually accounted for approximately 35% and 27% of the Company’s revenue .
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.
The first tranche of the DFC Loan was funded in June 2020 in the amount of $1,425,000. 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 $20,182,000 as of December 31, 2024.
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.
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.
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.
Despite the thoroughness of the Company’s review, diligence may not have revealed all material issues that could affect the Company’s interests in the RI Companies acquired in the RI Acquisition. In addition, factors outside of the Company’s control could later arise.
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.
Acquiring a majority interest in the RI 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 Companies operate in Rhode Island has involved and likely will continue to involve several risks that could undermine the success and expected benefits of the RI Acquisition.
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.
The Company’s failure to identify material issues specific to the business and operations of the RI Companies and the liabilities and obligations the Company assumed from the assignment of the payor contracts, during the Company’s due diligence process, could negatively impact the Company’s financial condition 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.
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 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.
The Company ’ s cash flow could become insufficient to service its debt due to financial, business, and other factors. 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.
International operations make the Company vulnerable to risks associated with doing business in foreign countries that can affect its business, financial condition, results of operations and cash flows. The Company installed a Gamma Knife unit in Lima, Peru in 2017 and acquired a Gamma Knife unit operation in Guayaquil, Ecuador in 2020.
International operations make the Company vulnerable to risks associated with doing business in foreign countries that can affect its business, financial condition, results of operations and cash flows.
The integration of any acquisitions, including the Company’s planned RI Acquisition, requires significant time and resources.
The integration of any acquisitions, including the RI Acquisition, completed during the 2024 fiscal year, requires significant time and resources.
RISK FACTORS In addition to the other information in this report, the following factors could affect our future business, results of operations, cash flows or financial position, and could cause future results to differ materially from those expressed in any of the forward-looking statements contained in this report. 11 Table of Contents Company, Industry and Economic Risk If the Company is not successful at diversifying its business model, its revenues and profitability may decline.
ITEM 1A. RISK FACTORS In addition to the other information in this report, the following factors could affect our future business, results of operations, cash flows or financial position, and could cause future results to differ materially from those expressed in any of the forward-looking statements contained in this report.
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.
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. 14 Table of Contents Flaws in the Company ’ s due-diligence assessment in connection with the equity interests and payor contracts acquired in the RI Acquisition could have a significant negative effect on the Company ’ s financial condition and results of operations.
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. Currently, four of the Company’s eight Gamma Knife units in the United States are Esprits and all of the Company’s eight Gamma Knife units are Perfexion models, one of which has the Icon upgrade.
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.
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 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 Company installed a Gamma Knife unit in Lima, Peru in 2017, acquired a Gamma Knife unit operation in Guayaquil, Ecuador in 2020, and installed a LINAC in Puebla, Mexico which began treating patients in July 2024. International operations can be subject to exchange rate volatility, which could have an adverse effect on our financial results and cash flows.
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.
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 failure to remediate its material weakness in its internal control over financial reporting could adversely affect its ability to report its financial condition and results of operations in a timely and accurate manner, and may adversely affect investor confidence, our reputation, and our business operations and financial condition.
Removed
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.
Added
The risks and uncertainties described below are not the only ones we face.
Removed
The Company expects to be compliant with all of its debt covenants by the end of the fiscal quarter ended March 31, 2024.
Added
Additional risks not currently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business operations. 11 Table of Contents Company, Industry and Economic Risk If the Company is not successful at diversifying its business model, its revenues and profitability may decline.
Removed
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
Moreover, under certain of our credit arrangements we have granted the lender a security interest in Company assets as security for our obligations. 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
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
On March 3, 2025 the Company received an additional DFC waiver for certain covenants as of December 31, 2024 and through December 31, 2025.
Removed
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 ’ s failure to file certain financial statements in connection with the RI Acquisition pursuant to Rules 8-04 and 8-05 of Regulation S-X and Item 9.01 of Form 8-K will limit the Company ’ s ability to raise capital.
Removed
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
On May 7, 2024, the Company filed a Current Report on Form 8-K to report the completion of the Company’s acquisition of 60% of the equity interests in each of the RI Companies from GenesisCare.
Removed
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
Based on information available to the Company, the Company believes that the acquisition would qualify as a “significant” acquisition under Rule 1-02(w) of Regulation S-X and as a result, under Rules 8-04 and 8-05 of Regulation S-X, the Company would be required to provide (i) audited financial statements for the RI Companies as of and for the period ended June 30, 2023 and unaudited interim financial statements to the extent applicable (the “8-04 financial information”), and (ii) pro forma historical financial information combined to reflect the RI Companies’ financial information for the most recent fiscal year and interim period (the “8-05 financial information” and, together with the 8-04 financial information, the “S-X financial information”).
Removed
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.
Added
The Company purchased its interest in the RI Companies as part of the sale of certain of GenesisCare’s assets in its bankruptcy proceedings which were initiated in early June 2023.
Removed
The magnitude of the continued impact of COVID-19 on our business and operations are largely dependent on external factors and future developments that are beyond our control, such as the extent and duration of any COVID-19 resurgence, the spread of new variants, the occurrence of other severe health events or similar unprecedented outbreaks, the response to any such resurgence, new variant, or outbreak by government and regulatory agencies, such as the potential reinstatement of “shelter-in-place” lockdown orders, the efficacy and implementation of vaccinations and boosters to counter the virus, the availability of Gamma Knife and PBRT treatments, patients’ assessment of the risks of prioritizing rather than delaying such treatments in the event of any COVID-19 resurgence, new variant, or outbreak, the worsening of current economic conditions, and the severity of ongoing supply-chain disruptions.
Added
Due to the lack of reliable financial information for the RI Companies following the protracted bankruptcy proceedings, the Company is not able to obtain financial information sufficient to be able to provide the S-X financial information. The Company, therefore, is not in compliance with Rules 8-04 and 8-05 of Regulation S-X.
Removed
If there are regressions in our global progress to combat the COVID-19 pandemic or if any similar global public-health events develop, the scope and nature of the impact on our business, results of operations, financial condition, liquidity and cash flows would be uncertain and potentially materially adverse.
Added
Unless the Company files the S-X financial information, the Securities and Exchange Commission will not declare effective registration statements or post-effective amendments filed by the Company until twelve months following the date on which the Company has filed a periodic report with the Securities and Exchange Commission that meets the requirements of Regulation S-X, and affiliates will be not be permitted to make sales of securities pursuant to Rule 144 pursuant to the Securities Act of 1933, as amended.
Removed
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.
Added
The Company is subject to various SEC reporting and other regulatory requirements. Effective internal controls over financial reporting are necessary for the Company to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud and material errors in transactions and to fairly present financial statements.
Removed
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.
Added
Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations.
Added
As of December 31, 2024, the Company’s principal executive officer and principal financial officer carried out an evaluation of the effectiveness of the Company’s “disclosure controls and procedures” (as defined in the Rules 13a-15(e) and 15d-15(e)) of the Exchange Act) and concluded that the disclosure controls and procedures were not effective due to a material weakness in the Company’s internal control over financial reporting.
Added
The Company has limited accounting and finance personnel and expanded its operations in 2024, which impacted the Company’s ability to maintain an effective control environment. While the Company has processes to identify and appropriately apply applicable accounting requirements, the Company plans to continue to enhance its systems, processes, and human capital resources with respect to its accounting and finance functions.
Added
The elements of the Company’s remediation plan can only be accomplished over time with the addition of experienced accounting and finance employees and, where necessary, external consultants, and with the implementation of enhanced accounting systems and financial close processes.
Added
The Company has commenced remediation of the above discussed material weakness as it has expanded its accounting staff and personnel since late in fiscal 2024. The Company will continue to evaluate its accounting and finance staffing needs as well as make planned enhancements to its systems and improvements to its financial reporting processes.
Added
However, there can be no assurance that the Company will be successful in remediating the material weakness in its internal control over financial reporting.
Added
If the Company is unable to successfully complete its remediation efforts or favorably assess the effectiveness of its internal control over financial reporting, the Company’s operating results, financial position, stock price, and ability to accurately report its financial results and timely file its SEC reports could be adversely affected.
Added
Additionally, any failure to maintain effective controls could limit the Company’s ability to prevent or detect a misstatement of our accounts or disclosures that could result in material misstatements of the Company’s annual or interim financial statements.
Added
In such a case, the Company may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to the listing requirements of the NYSE American.
Added
In addition, the Company could be subject to sanctions or investigations by the SEC, the NYSE American, or other regulatory authorities as well as shareholder litigation which would require additional financial and management resources.
Added
Failures in internal controls may also negatively affect investor and customer confidence in Company management or result in adverse publicity and concerns from investors and customers, any of which could have a negative effect on the price of the Company’s common stock, subject the Company to regulatory investigations, potential penalties, or stockholder litigation, and have a material adverse impact on the Company’s business and financial condition.
Added
The Company’s equipment in Ecuador was upgraded to a Perfexion with Icon in November 2023. The Company is in the process of upgrading the equipment in Peru from a Model 4(C) to the Esprit and expects to complete this upgrade during the second quarter of 2025.
Added
Macroeconomic conditions could have a material adverse effect on our business, results of operations, and financial condition.
Added
Unfavorable macroeconomic conditions, including low productivity growth, declining business investment, inflationary pressures, fluctuating interests rates, concerns regarding the imposition of tariffs (including retaliatory tariffs in response to tariffs imposed by the United States), concerns regarding the level of U.S. debt, shifts in monetary and fiscal policy, strained international trade relations, and heightened geopolitical pressures, could negatively impact our business, results of operations, and financial condition.
Added
Economic downturns may cause hospitals and medical centers to reduce spending on capital-intensive medical equipment, delay lease renewals for the radiation therapy devices, and decrease overall investment in new treatment technologies.
Added
Trade policies like tariffs and retaliatory measures, as well as geopolitical tensions in the U.S. and global markets, may cause disruptions to medical equipment supply chains, increase the cost of acquiring advanced radiation therapy technology, and delay the delivery of essential components of our Gamma Knife and LINAC systems.
Added
Economic and inflationary pressure on patients and health care providers, along with prolonged uncertainty in the macroeconomic environment, could result in changes in hospital procurement decisions, reduced demand for elective procedures, and constrained budgets for medical technology investments.
Added
These conditions may also weaken investor confidence in the health care sector, reduce access to capital for expansion projects, reduce access to capital for expansion projects, and increase regulatory scrutiny over health care spending and reimbursement policies, all of which could have a material adverse effect on our business, financial condition, and results of operations.
Added
We are subject to risks associated with foreign operations, including political, economic, and regulatory uncertainties. We operate Gamma Knife and LINAC facilities in Peru, Ecuador, and Mexico. These operations expose us to various risks, including changes in foreign regulations, economic instability, and shifts in health care reimbursement policies.
Added
If any of these countries implement stricter health care-related requirements, impose price controls, or experience significant currency fluctuations, our international revenue profitability may be negatively impacted. The potential impairment of our Gamma Knife portfolio and its salvage value could adversely impact our financial condition and results of operations.
Added
As of December 31, 2024, we determined that our Gamma Knife portfolio had no remaining salvage value, and certain sites experienced equipment impairment or are expected to expire in the second quarter of 2025. Additionally, two sites that recently recognized their salvage value as part of the Esprit upgrade were subsequently impaired.
Added
Accordingly, we concluded that there was no salvage value remaining and the Company recognized equipment impairment as of December 31, 2024. The impairment of equipment and change in estimate of salvage value could have a material adverse effect on our financial condition and results of operations.
Added
If additional impairments occur in the future, we may be required to recognize further losses on the write-down of impaired assets and incur additional removal costs for expired Gamma Knife units, which could negatively impact our reported earnings.
Added
Additionally, the continued aging of our equipment portfolio may necessitate increased capital expenditures to replace or upgrade systems, which could increase our financial burden. Stock 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.
Added
Collectively, our officers and directors beneficially own approximately 23.2% of our outstanding common stock, with Raymond Stachowiak, the Executive Chairman of the Board, beneficially owning approximately 22.8% o f our common stock.
Added
As a result, investors may face challenges in affecting matters involving our Company, including: ● the composition of our Board of Directors and, through it, any determination with respect to our business direction and policies, including the appointment and removal of officers; ● any determinations with respect to mergers or other business combinations; ● our acquisition or disposition of assets; and ● our corporate financing activities.
Added
Our officers, directors, and principal shareholders may act in concert to significantly influence these and other matters requiring shareholder approval. Furthermore, this concentration of voting power could have the effect of delaying, deterring, or preventing a change of control or other business combination that might otherwise be beneficial to our shareholders.
Added
This significant concentration of share ownership may also adversely affect the trading price for our common stock because investors may perceive disadvantages in owning stock in a company in which a small number of shareholders hold a significant ownership interest. We do not anticipate paying dividends on our common stock.
Added
We do not expect to pay or declare dividends in the foreseeable future. The declaration of dividends is subject to the discretion of our board of directors and will depend on various factors, including our operating results, financial condition, future prospects, covenants in documents governing our debt obligations and any other factors deemed relevant by our board of directors.
Added
You should not rely on an investment in our company if you require dividend income from your investment in our company. The success of your investment will likely depend entirely upon any future appreciation of the market price of our common stock, which is uncertain and unpredictable. There is no guarantee that our common stock will appreciate in value.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe 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.
Biggest changeThe 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 lease in Peru is currently on a month-to-month basis.
ITEM 2. PROPERTIES The Company’s corporate offices are located at 601 Montgomery Street, Suite 1112, San Francisco, California, where it leases approximately 900 square feet for $4,500 per month with a lease expiration date in November 2024.
ITEM 2. PROPERTIES The Company’s corporate offices were located at 601 Montgomery Street, Suite 1112, San Francisco, California, where it leased approximately 900 square feet for $4,500 per month with a lease expiration date in November 2024.
Removed
The 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.
Added
In November 2024, the Company closed this office and signed two sublease agreements for small, office spaces in San Francisco, California and Downers Grove, Illinois. The sublease in San Francisco is for 80 square feet for $1,395 per month located at 601 Montgomery Street, Suite 850.
Added
The sublease in Downers Grove was signed in February 2025 and is for two offices and three cubicle spaces for $2,300 per month located at 3041 Woodcreek Drive. On February 6, 2025, Bristol closed on the acquisition of certain parcels of real property located on Gooding Avenue, Bristol Rhode Island. The purchase price for the property was $1,185,000.
Added
The transaction was effected pursuant to the terms of a Real Estate Purchase and Sale Agreement dated November 21, 2023 by and between the Company and the sellers identified therein, with the Company having assigned its rights under that agreement to Bristol effective February 5, 2025.
Added
At closing the parties entered into other agreements related to the transaction, including with respect to the grant of certain easements and restrictive covenants imposed on the sellers. On May 7, 2024, the Company completed the RI Acquisition and acquired 60% of the equity interests of the RI Companies.
Added
The RI Companies operate three single-unit radiation therapy facilities, and each location operates pursuant to a lease. The facility in Woonsocket, RI has a ground lease with a sublease for 1,950 square feet of the clinic space, which is leased back to the lessor. The Woonsocket ground lease has an annual prepayment of approximately $44,000 located at 115 Cass Avenue.
Added
The facility in Warwick, RI has a lease for 15,019 square feet for $32,790 per month located at 450 Toll Gate Road. The facility in Providence, RI also has a ground lease, which was contributed by one of the minority partners, located at 825 Chalkstone Avenue.
Added
The Company’s stand-alone radiation therapy facility in Puebla, Mexico also has a lease for approximately 536 square meters for $1,800 per month with a lease expiration in July 3034. See Note 6 - Leases and Note 13 - Subsequent Event to the consolidated financial statements for additional information.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEquity 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.
Biggest changeEquity Compensation Plans During 2024, 290,000 restricted stock units were granted, of which, 290,000 restricted stock units shares were granted for executive compensation. There were no options granted during 2024. Additional information regarding our equity compensation plans is incorporated herein by reference from the 2025 Proxy Statement.
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.
In 2024 and 2023, 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, 2024, there were approximately 72,000 shares remaining under the repurchase authorizations.
There were no dividends declared or paid during 2023 and 2022.
There were no dividends declared or paid during 2024 and 2023.
At 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.
At December 31, 2024, the Company had 6,420,000 issued and outstanding common shares, 42,000 common shares reserved for options, 206,000 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, 2024.
Added
See Note 8 - Stock-Based Compensation Expense to the consolidated financial statements for additional information.

Item 7. Management's Discussion & Analysis

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

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Biggest changeAs of December 31, 2023, the Company was subject to customary covenants under the Credit Agreement which included, among other covenants and obligations, a minimum fixed charge coverage ratio of 1.25 to 1.0 and a total funded debt to EBITDA ratio of 3.0 to 1.0 (tested on a trailing twelve-month basis at the end of each fiscal quarter), along with an annual clean-up covenant that requires the Company to cause the outstanding principal balance under the Revolving Loan to be less than $3,500,000 for at least 30 consecutive days during each calendar year (the “Credit Agreement Covenants”).
Biggest changeThe Credit Agreement contains customary covenants and representations, including without limitation, a minimum fixed charge coverage ratio of 1.25 and maximum funded debt to EBITDA ratio of 3.0 to 1.0 (tested on a trailing twelve-month basis at the end of each fiscal quarter), the Company maintain at least $5,000,000 of unrestricted cash, reporting obligations, limitations on dispositions, changes in ownership, mergers and acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and capital expenditures.
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.
Rental Revenue from Medical Equipment Leasing (“Leasing”) The Company recognizes revenues under ASC 842 when services have been rendered and collectability is reasonably assured, on either a fee per use or revenue sharing basis. The terms of the contracts do not contain any guaranteed minimum payments.
The Company believes that its borrowing capacity under its Revolving Line and its access to capital resources are sufficient to continue funding its present operations, to meet its commitments on its existing debt, and to meet its operating capital and funding requirements for the next 12 months from the date of this Annual Report.
The Company believes that its revenue from operations, together with borrowing capacity under the Revolving Line and its access to capital resources are sufficient to continue funding its present operations, to meet its commitments on its existing debt, and to meet its operating capital and funding requirements for the next 12 months from the date of this Annual Report.
In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”) which requires entities, on an annual basis, to disclose: specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, the amount of income taxes paid, net of refunds, disaggregated by jurisdiction, income or loss from continuing operations before income tax, income tax expense from continuing operations disaggregated between foreign and domestic, and income tax expense from continuing operations disaggregated by federal, state and foreign.
Accounting pronouncements issued and not yet adopted - In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”) which requires entities, on an annual basis, to disclose: specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, the amount of income taxes paid, net of refunds, disaggregated by jurisdiction, income or loss from continuing operations before income tax, income tax expense from continuing operations disaggregated between foreign and domestic, and income tax expense from continuing operations disaggregated by federal, state and foreign.
The Company delivers radiation therapy through medical equipment leasing (“leasing”) and direct patient services (“retail”). The Company leased ten Gamma Knife systems and one PBRT system as of December 31, 2023. The leasing business operates by fee-per-use contracts or revenue sharing, where the Company shares in the revenue and operating costs of the equipment.
The Company delivers radiation therapy through medical equipment leasing (“leasing”) and direct patient services (“retail”). The Company leased nine Gamma Knife systems and one PBRT system as of December 31, 2024. The leasing business operates by fee-per-use contracts or revenue sharing, where the Company shares in the revenue and operating costs of the equipment.
The 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.
The Gamma Knife, PBRT, LINAC and related 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.
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.
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.
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.
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 (as defined above, the “Revolving Line”).
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.
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 $11,275,000 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 $13,109,000.
Furthermore, The lenders under the Credit Agreement and the DFC Loan could also exercise their rights to take possession of, and to dispose of, the collateral securing the credit facilities and loans and could take any additional remedies upon default as set forth in each such agreement. The Company’s combined long-term debt, net, totaled $13,125,000 as of December 31, 2023.
Furthermore, The lenders under the Credit Agreement and the DFC Loan could also exercise their rights to take possession of, and to dispose of, the collateral securing the credit facilities and loans and could take any additional remedies upon default as set forth in each such agreement. The Company’s combined long-term debt, net, totaled $20,182,000 as of December 31, 2024.
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.
See Note 5 - Long Term Debt to the consolidated financial statements for additional information. Commitments As of December 31, 2024, the Company had commitments to purchase and install Gamma Knife and LINAC equipment totaling $13,053,000. There are no significant cash requirements, pending financing, for these commitments in the next 12 months.
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.
A summary of the Company’s medical equipment leases and direct patient service sites is set forth in the table below: Number of Sites 12/31/2024 12/31/2023 Revenue Sharing 5 5 Fee Per Use 4 5 Medical Equipment Leasing ("Leasing") - Gamma Knife 9 10 Leasing - Proton Bream Radiation Therapy 1 1 Leasing - Total 10 11 Direct Patient Services ("Retail") - Gamma Knife 2 2 Direct Patient Services ("Retail") - LINAC 4 — Direct Patient Services ("Retail") - Total 6 2 The Company had two contracts expire in the second and third quarters of 2023, respectively, and one in November 2024.
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.
SELLING AND ADMINISTRATIVE EXPENSE Increase (In thousands) 2024 (Decrease) 2023 Selling and administrative expense $ 7,407 5.5 % $ 7,022 Percentage of total revenue 26.1 % 32.9 % The Company’s selling and administrative costs increased $385,000 in 2024 compared to 2023.
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.
The Company’s lease contracts typically have a ten-year term and are classified as either fee per use or revenue sharing. Fee per use revenues are recognized at the time the procedures are performed, based on each hospital’s contracted rate and the number of procedures performed.
The First Amendment also replaces the LIBOR-based rates in the Credit Agreement with SOFR-based rates. Pursuant to the First Amendment, advances under the Credit Agreement bear interest at a floating rate per annum equal to SOFR plus 3.00%, subject to a SOFR floor of 0.00%.
Pursuant to the First Amendment, advances under the Credit Agreement bear interest at a floating rate per annum equal to SOFR plus 3.00%, subject to a SOFR floor of 0.00%.
The 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.
These facilities constitute the direct patient services segment, which we also refer to as the Company’s retail segment, where a contract exists between the Company's facilities and the individual treated at the facility.
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.
Based on the valuation techniques used and the sensitivity of the consolidated financial statement amounts, and the methods, assumptions and estimates underlying those amounts, management has identified estimated useful lives of property and equipment and its salvage values, impairment of property and equipment, business combinations, and revenue recognition for revenue sharing customers, and as such the aforementioned could be most subject to revision as new information becomes available.
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.
DSO fluctuates depending on timing of customer payments received and the mix of fee per use versus revenue sharing and retail customers. The revenue sharing and retail sites generally have longer collection periods than fee per use sites. The Company added four retail sites during 2024, driving the increase in DSO.
On January 25, 2024, the, the Company entered into a First Amendment to Credit Agreement with Fifth Third which amended the Credit Agreement to add the Supplemental Term Loan, a new term loan in the aggregate principal amount of $2,700,000.
On January 25, 2024 (the “First Amendment Effective Date”), the Company and Fifth Third 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”).
The Company is currently evaluating ASU 2023-09 to determine the impact it may have on its consolidated financial statements. 2023 Results For each of the years ended December 31, 2023 and 2022, 84% and 16% of the Company’s revenue was derived from the leasing segment versus the retail segment, respectively.
The Company is currently evaluating ASU 2024-03 to determine the impact it may have on its consolidated financial statements. 2024 Results For each of the years ended December 31, 2024 and 2023, 56% and 83% of the Company’s revenue was derived from the leasing segment, respectively, and 44% and 17% from the Company’s retail segment, respectively.
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 .
Payor mix is a significant variable in the Company’s estimate for revenue sharing revenues. Fluctuations in payor mix that may result in a 5% to 10% change in the estimate could increase or decrease revenues as of December 31, 2024, by approximately $113,000 to $226,000.
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 Company recognized net revenues of $155,000 and $200,000 on the sale of equipment for the years ended December 31, 2024 and 2023. 20 Table of Contents Salvage Value on Equipment The Company determines salvage value based on the estimated fair value of the equipment at the end of its useful life.
ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating ASU 2023-07 to determine the impact it may have on its consolidated financial statements.
ASU 2023-09 is effective for annual periods beginning after December 31, 2024. The Company is currently evaluating ASU 2023-09 to determine the impact it may have on its consolidated financial statements.
The increase in 2023 was due to increased staffing in the sales, finance and customer retention areas and approximately $919,000 in fees associated with new business opportunities, including the Company’s pending RI Acquisition.
The increase in 2024 was due to increased staffing in the sales, finance and customer retention areas and approximately $560,000 in fees associated with new business opportunities, including those resulting from the RI Acquisition.
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 Company did not draw on the Revolving Line as of December 31, 2024.
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.
The Company’s trade accounts receivable increased by $7,267,000 to $11,610,000 at December 31, 2024 from $4,343,000 at December 31, 2023. The number of days revenue (sales) outstanding (“DSO”) in accounts receivable as of December 31, 2024 was 150 days compared to 74 days at December 31, 2023.
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 .
Maintenance and supplies and other direct operating costs, related party, as a percentage of total revenue were 10.7% and 13.5% in 2024 and 2023 , respectively. Maintenance and supplies and other direct operating costs, related party increased by $138,000 in 2024 compared to 2023 .
Net income attributable to non-controlling interests represents the pre-tax income earned by the 19% non-controlling interest in GKF, and the pre-tax income or losses of the non-controlling interests in various subsidiaries controlled by GKF. The decrease or increase in net income attributable to non-controlling interests reflects the relative profitability of GKF.
Net income or loss attributable to non-controlling interests represents the pre-tax income earned by the 19% non-controlling interest in GKF, and the pre-tax income or losses of the non-controlling interests in various subsidiaries controlled by GKF, and the 40% non-controlling interests in the RI facilities and their pre-tax income or losses.
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.
Gamma Knife Revenue Increase 2024 (Decrease) 2023 Revenue from Gamma Knife (in thousands) $ 9,716 (11.6 )% $ 10,992 Number of Gamma Knife procedures 1,084 (9.3 )% 1,195 Average revenue per procedure $ 8,963 (2.6 )% $ 9,198 Gamma Knife revenue for 2024 was $9,716,000 compared to $10,992,000 in 2023.
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 for its operations in Puebla, Mexico and other related transaction costs.
The proceeds of the Supplemental Term Loan were advanced in a single borrowing on January 25, 2024, and were used for capital expenditures related to the Company’s operations in Puebla, Mexico and other related transaction costs. The Supplemental Term Loan will mature on January 25, 2030 (the “Maturity Date”).
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.
Proton Therapy Revenue Increase 2024 (Decrease) 2023 Revenue from PBRT (in thousands) $ 9,952 (1.8 )% $ 10,133 Number of PBRT fractions 5,139 (4.3 )% 5,369 Average revenue per fraction $ 1,937 2.6 % $ 1,887 PBRT revenue for 2024 was $9,952,000 compared to $10,133,000 in 2023.
The Credit Agreement includes three loan facilities: (1) a $9,500,000 term loan (the “Term Loan”), which was used to refinance the domestic Gamma Knife debt and finance leases and the associated closing costs; (2) a $5,500,000 delayed draw term loan (the “DDTL”), which was used to refinance the Company’s PBRT finance leases and associated closing costs and to provide additional working capital for the Company; and (3) a $7,000,000 revolving line of credit (the “Revolving Line”), which is available for the Company’s future projects and general corporate purposes.
The second loan facility is a $5,500,000 delayed draw term loan (the “DDTL”) which was used to refinance the Company’s PBRT finance leases and associated closing costs, as well as to provide additional working capital. The third loan facility provides for a $7,000,000 revolving line of credit (the “Revolving Line”) available for future projects and general corporate purposes.
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. The Supplemental Term Loan is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries.
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.
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.
INCOME TAX EXPENSE Increase (In thousands) 2024 (Decrease) 2023 Income tax (benefit) expense $ (295 ) (168.4 )% $ 431 Percentage of total revenue (1.0 )% 2.0 % Percentage of income, after net income attributable to non-controlling interests, and before income taxes and bargain purchase gain 15.5 % 41.4 % Income tax expense decreased $726,000 in 2024 compared to 2023.
The Company was in compliance with the Credit Agreement Covenants as of December 31, 2023. The Company’s acquisition of GKCE and the Gamma Knife Esprit in Ecuador is financed with DFC. The loan entered into with DFC in June 2020 was obtained through the Company's wholly-owned subsidiary, HoldCo, and is guaranteed by GKF.
The Loan Parties are in compliance with the Credit Agreement covenants as of December 31, 2024. The loan entered into with DFC in connection with the acquisition of GKCE in June 2020 ( the “DFC Loan”) was obtained through the Company’s wholly-owned subsidiary, HoldCo, and is guaranteed by GKF. The DFC Loan is secured by a lien on GKCE’s assets.
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 approximate CMS reimbursement rates for delivery of PBRT for a simple treatment without compensation for 2025 is $578 ($561 in 2024 ) and $1,276 ($1,362 in 2024 ) for simple with compensation, intermediate and complex treatments, respectively.
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.
NET INCOME ATTRIBUTABLE TO AMERICAN SHARED HOSPITAL SERVICES (In thousands, Increase except per share amounts) 2024 (Decrease) 2023 Net income attributable to ASHS $ 2,186 258.4 % $ 610 Net income per share attributable to ASHS, diluted $ 0.33 241.8 % $ 0.10 Net income attributable to American Shared Hospital Services increased $1,576,000 in 2024 compared to 2023.
On March 28, 2024 the Company received a waiver and amendment from DFC for certain covenants as of December 31, 2023 and through December 31, 2024 and amended other covenants and definitions permanently. The Company expects to be in compliance with all debt covenants pursuant to the DFC Loan as amended and waived at March 31, 2024.
On March 28, 2024 the Company received a waiver and amendment from DFC for certain covenants as of December 31, 2023 and through December 31, 2024 and amended other covenants and definitions permanently. On March 3, 2025 the Company received an additional waiver from DFC for certain covenants as of December 31, 2024 and through December 31, 2025.
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.
The increase for the year ended December 31, 2024 was due to an increase in borrowings, including the Supplemental Term Loan received in January 2024, and the second tranche of the DFC loan received in November 2023. 22 Table of Contents (LOSS) ON WRITE DOWN OF IMPAIRED ASSETS AND ASSOCIATED REMOVAL COSTS Increase (In thousands) 2024 (Decrease) 2023 Loss on write down of impaired assets $ 3,084 228.1 % $ 940 Percentage of total revenue 10.9 % 4.4 % As of December 31, 2024 and 2023, the Company recognized a loss on the write down of impaired assets of $3,084,000 and $940,000, respectively.
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.
A summary of the Company’s procedure volumes for fiscal years 2024 and 2023 are set forth in the table below. 18 Table of Contents Volume Increase Increase Gamma Knife 12/31/2024 12/31/2023 (Decrease) (Decrease) Leasing - Gamma Knife 624 824 (200 ) (24.3 )% Retail - Gamma Knife 460 371 89 24.0 % Gamma Knife - Total 1,084 1,195 (111 ) (9.3 )% PBRT Procedures (medical equipment leasing) 5,139 5,369 (230 ) (4.3 )% LINAC Procedures (direct patient services) 14,662 — 14,662 * The decrease in Gamma Knife volume during 2024 in the leasing segment was primarily due to the expiration of two contracts in the second and third quarters of 2023 and a third contract that expired in November 2024 , respectively.
The Company determines salvage value based on the estimated fair value of the equipment at the end of its useful life. There is no active resale market of Gamma Knife or PBRT equipment, but the Company believes its salvage value estimates were a reasonable assessment of the economic value of the equipment when the contract ends.
There is no active resale market of Gamma Knife or PBRT equipment, but the Company believes its salvage value estimates are a reasonable assessment of the economic value of the equipment when the contract ends. There is no salvage value assigned to the two Gamma Knife units in Peru or Ecuador.
The DFC Loan contains customary covenants among other covenants and obligations, requirements that the Company maintain certain financial ratios related to liquidity and cash flow as well as depository requirements.
The Company capitalized debt issuance costs of $0 and $9,000 as of December 31, 2024 and 2023, respectively, related to maintenance and administrative fees on the DFC Loan. The DFC Loan contains customary covenants among other covenants and obligations, requirements that the Company maintain certain financial ratios related to liquidity and cash flow as well as depository requirements.
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.
GKCE’s patient population is primarily covered by a government payor and payments are paid between six and nine months, following issuance of invoice. The Company did not capitalize any incremental costs related to the fulfillment of its customer contracts. On May 7, 2024, the Company acquired 60% of the interests of the RI Companies.
The 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.
The following summarizes related party activity for the years ended December 31, 2024 and 2023: December 31, 2024 2023 Equipment purchases and de-install costs $ 5,268,000 $ 6,918,000 Costs incurred to maintain equipment 678,000 851,000 Total related party transactions $ 5,946,000 $ 7,769,000 The Company had related party commitments to purchase and install four Esprit upgrades, two LINACs, and service the related equipment.
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.
Other direct operating costs as a percentage of total revenue were 35.5% and 18.9% in 2024 and 2023 , respectively. Other direct operating costs increased by $6,040,000 in 2024 compared to 2023 .
The 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%.
The first tranche of the DFC Loan was funded in June 2020. During the fourth quarter of 2023, the second tranche of the DFC loan was funded to finance the equipment upgrade in Ecuador. 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%.
During the year ended December 31, 2023, the Company recorded an asset removal obligation (“ARO”) for one of the customer contracts that expired during 2023. An ARO for the second contract that expired during 2023 was recorded and impaired in a prior period.
An ARO for the second contract that expired during 2023 was recorded and impaired in a prior period.
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.
Some of the Company’s revenue sharing arrangements also have a cost sharing component and net profit share for the operating costs of the center. The Company records an estimate of operating costs which are reviewed on a regular basis and adjusted as necessary to more accurately reflect the actual operating costs and profit.
Accounts receivable under ASC 606 at January 1, 2022 and December 31, 2022 was $668,000 and $1,119,000. For the years ended December 31, 2023 and 2022, the Company recognized retail revenues of approximately $3,553,000 and $3,091,000 under ASC 606, respectively. Equipment Sales During the year-ended December 31, 2023, the Company completed a sale of equipment to a new customer.
Accounts receivable under ASC 606 at December 31, 2024 and January 1, 2024 were $11,229,000 and $1,626,000. Accounts receivable under ASC 606 at December 31, 2023 and January 1, 2023 were $1,626,000 and $1,119,000. For the years ended December 31, 2024 and 2023, the Company recognized retail revenues of approximately $12,556,000 and $3,553,000 under ASC 606, respectively.
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.
This decrease was due to changes in reimbursement at the Company’s revenue share sites, which can fluctuate depending on payor mix and volume of procedures by site. 21 Table of Contents COSTS OF REVENUE Increase (In thousands) 2024 (Decrease) 2023 Total costs of revenue $ 19,155 59.9 % $ 11,981 Percentage of total revenue 67.6 % 56.2 % The Company’s costs of revenue, consisting of maintenance and supplies, depreciation and amortization, and other operating expenses (such as insurance, property taxes, sales taxes, marketing costs and operating costs from the Company’s revenue sharing and international sites) increased by $7,174,000 in 2024 compared to 2023.
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.
Currently there are state income tax payments required for most states in which the Company operates. 23 Table of Contents NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS Increase (In thousands) 2024 (Decrease) 2023 Net loss attributable to non-controlling interests $ (654 ) 89.6 % $ (345 ) Percentage of total revenue (2.3 )% (1.6 )% Net loss attributable to non-controlling interests increased $309,000 in 2024 compared to 2023.
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.
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. 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.
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.
The Company leases nine Gamma Knife systems and one PBRT system as of December 31, 2024, where a contract exists between the hospital and the Company.
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.
The Company has not assigned salvage value to its PBRT equipment. As of December 31, 2023, the Company had seven domestic Gamma Knife units with salvage value ranging from $140,000 to $300,000. As of December 31, 2024, the Company reduced its estimate of salvage value for the remaining five Gamma Knife units to $0.
Because the revenue estimates are reviewed on a quarterly basis, any adjustments required for past revenue estimates would result in an increase or reduction in revenue during the current quarterly period. Payor mix is a significant variable in the Company’s estimate for revenue sharing revenues.
Revenue sharing arrangements amounted to approximately 47 % and 70 % of total revenue for the years ended December 31, 2024 and 2023, respectively. Because the revenue estimates are reviewed on a quarterly basis, any adjustments required for past revenue estimates would result in an increase or reduction in revenue during the current quarterly period.
The increase in Gamma Knife volumes from retail sites was due to improved marketing and physician outreach at the Company’s international locations, partially offset by downtime due to upgrade the Gamma Knife equipment in Ecuador to the Icon. Revenue per procedure increased by $805 in 2023 compared to 2022.
The increase in Gamma Knife volumes from retail sites was due to improved marketing and physician outreach at the Company’s international locations. In addition, the Company’s Gamma Knife unit in Ecuador was upgraded to the Esprit and received a Cobalt-60 reload in November 2023, providing for faster procedure time. Revenue per procedure decreased by $235 in 2024 compared to 2023.
INTEREST EXPENSE Increase (In thousands) 2023 (Decrease) 2022 Interest expense $ 1,112 38.0 % $ 806 Percentage of total revenue 5.2 % 4.1 % The Company’s interest expense increased $306,000 in 2023 compared to 2022. The debt under the Credit Agreement carries a floating interest rate of LIBOR plus 3%.
INTEREST EXPENSE Increase (In thousands) 2024 (Decrease) 2023 Interest expense $ 1,499 34.8 % $ 1,112 Percentage of total revenue 5.3 % 5.2 % The Company’s interest expense increased $387,000 in 2024 compared to 2023.
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.
Cash Flows Cash Flows Provided by Operating Activities Operating activities provided $167,000 of cash in 2024, which was driven by net income of $1,532,000, non-cash charges for depreciation and amortization of $6,174,000, a loss on the write down of impaired assets of $3,084,000, gain on sale of equipment of $155,000, stock-based compensation expense of $373,000, accretion of deferred issuance costs of $95,000, changes in related party liabilities of $324,000, and changes in payables and other accrued liabilities of $2,227,000.
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.
The number of Gamma Knife procedures performed in 2024 decreased by 111 compared to 2023 primarily due to the expiration of two contracts in the second and third quarters of 2023, and a third contract that expired in November 2024.
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.
The Company had cash and cash equivalents, including restricted cash, of $11,275,000 at December 31, 2024 compared to $13,808,000 at December 31, 2023, a decrease of $2,533,000. The Company’s expected primary cash needs on both a short and long-term basis are for capital expenditures, business expansion, working capital, and other general corporate purposes.
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 operating costs and estimated net operating profit are recorded as other direct operating costs in the consolidated statements of income. For the years ended, December 31, 2024 and 2023, the Company recognized leasing revenue of approximately $15,629,000 and $17,772,000 under ASC 842, respectively, of which approximately $9,952,000 and $10,133,000 were for PBRT services, respectively.
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
Total related party commitments were $18,581,000 as of December 31, 2024. Related party liabilities on the consolidated balance sheets consist of the following as of December 31, 2024 and 2023: December 31, 2024 2023 Accounts payable, asset retirement obligations and other accrued liabilities $ 2,270,000 $ 2,361,000
The increase in Gamma Knife procedures for existing customer sites was driven by a 12% increase in the Company’s retail segment, partially offset by a 4% decrease in the Company’s Gamma Knife leasing segment in 2023 compared to 2022, respectively.
Excluding the three Gamma Knife contracts that expired during 2023 and 2024, Gamma Knife procedures for existing sites were consistent with the prior year. Gamma Knife procedures for existing customer sites, retail segment, increased by 24%, offset by a 15% decrease in the Company’s Gamma Knife leasing segment in 2024 compared to 2023, respectively.
The 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 .
The increase in 2024 compared to 2023was primarily due to maintenance at the Company’s radiation therapy facilities in Rhode Island, that were acquired during 2024, offset by lower maintenance expense for the Company’s Gamma Knife portfolio . Depreciation and amortization costs as a percentage of total revenue were 21.4% and 23.8% in 2024 and 2023 .
The decrease in 2023 compared to 2022 was due to lower pre-tax income for GKF stand-alone operations.
The decrease or increase in net income attributable to non-controlling interests reflects the relative profitability of GKF and the RI Companies. The increase in net loss attributable to non-controlling interests in 2024 compared to 2023 was due to higher pre-tax loss for GKF stand-alone operations.
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.
The number of PBRT fractions performed in 2024 was 5,139 compared to 5,369 in 2023. Revenue per fraction in 2024 was $1,937 compared to $1,887 in 2023. The Company’s PBRT unit in Orlando, Florida, was impacted by several hurricanes during 2024, which resulted in lower procedure volume.
The Revolving Loan, the Term Loan, and the DDTL will mature on April 9, 2026 unless accelerated due to the occurrence of certain events specified in the Credit Agreement. The Revolving Line is charged an unused line fee of 0.25% per annum. The Term Loan and DDTL have interest and principal payments due quarterly.
The Company capitalized debt issuance costs of $164,000 as of December 31, 2024 related to issuance of the Supplemental Term Loan and Second Supplemental Term Loan. The Revolving Line is charged an unused line fee of 0.25% per annum. The Term Loan and DDTL have interest and principal payments due quarterly.
ASU 2023-09 is effective for annual periods beginning after December 31, 2024.
ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted.
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 $6,176,000 increase in net working capital was primarily due to an increase in trade, tax, and other receivables, primarily attributable to the RI Companies. 24 Table of Contents Long-Term Debt On April 9, 2021, the Company along with certain of its domestic subsidiaries (collectively, the “Loan Parties”) entered into a five year $22,000,000 credit agreement with Fifth Third Bank, N.A.
The 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.
The Company also owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador, one single-unit radiation therapy facility in Puebla, Mexico, and following the RI Acquisition on May 7, 2024, the Company also owns a 60% interest in and operates three single-unit radiation therapy facilities in Rhode Island, collectively, the retail segment.
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.
The decrease in income tax expense in 2024 was primarily due to losses incurred by the Company’s leasing segment, driven by equipment impairment, and lower Gamma Knife volumes during 2024. The Company anticipates that it will continue to record income tax expense if it operates profitably in the future.
INTEREST 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.
See Note 12 - RI Acquisition to the consolidated financial statements for further discussion on bargain purchase. INTEREST AND OTHER INCOME Increase (In thousands) 2024 (Decrease) 2023 Interest and other income (loss) $ 248 (41.2 )% $ 422 Percentage of total revenue 0.9 % 2.0 % Interest and other income decreased $174,000 in 2024 compared to 2023.
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.
The increase in Gamma Knife volume during 2024 in the retail segment was due to improved marketing and physician outreach at the Company’s international locations. In addition, the Company’s Gamma Knife unit in Ecuador was upgraded to the Esprit and received a Cobalt-60 reload in November 2023, providing for faster procedure time.
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.
See Note 3 - Property and Equipment to the consolidated financial statements for further discussion on salvage value. Impairment of Long-lived Assets The Company assesses the recoverability of its long-lived assets when events or changes in circumstances indicate their carrying value may not be recoverable.
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.
In February 2025, the Company and one of its customer mutually agreed to terminate their lease agreement prior to the contract term, and the Company expects a fourth contract to expire in the second quarter of 2025. The Company has one customer contract that was upgraded to the Esprit in January 2025.
The Company amended its Credit Agreement to include financing for the LINAC equipment in in January 2024. Cash Flows Provided by (Used in) Financing Activities Financing activities provided $1,910,000 of cash during 2023, which was driven by long-term debt financing from the second tranche of the DFC Loan of $1,750,000 and net borrowings on the Revolving Line of $2,500,000.
These increases were offset by net payments on the Revolving Line of $2,500,000, payments on long-term debt of $2,734,000, debt issuance costs of $164,000, and distributions of noncontrolling interests of $95,000. The Company amended its Credit Agreement to include financing for capital expenditures made during 2024 and for the RI Acquisition.
Excluding the two Gamma Knife contracts that expired, Gamma Knife procedures for existing sites increased 1% in 2023 compared to the prior year.
Gamma Knife revenue for 2024 decreased $1,276,000 compared to 2023 due to the expiration of two contracts in the second and third quarters of 2023, and a third contract that expired in November 2024.
The Supplemental Term Loan will mature on January 25, 2030, unless accelerated due to the occurrence of certain events specified in the Credit Agreement. Interest on the Supplemental Term Loan is payable monthly during the initial twelve month period following the First Amendment Effective Date.
Interest on the Second Supplemental Term Loan is payable monthly during the initial twelve month period following the Second 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 Second Supplemental Term Loan over a period of seven years.
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.
The Supplemental Term Loan is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. The First Amendment also replaces the LIBOR-based rates in the Credit Agreement with SOFR-based rates.
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.
Working Capital The Company had working capital at December 31, 2024 of $15,853,000 compared to working capital of $9,677,000 at December 31, 2023.

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