AMERICAN SHARED HOSPITAL SERVICES 8-K

What Happened

• On Dec 27, 2025 the Audit Committee, after discussions with management and Baker Tilly US, LLP, concluded the unaudited balance sheet in the Q3 2025 Form 10‑Q (filed Nov 14, 2025) should no longer be relied upon as to the classification of indebtedness. The company determined it misclassified $8,631,000 of debt that should have been reported as current liabilities rather than long‑term. The company plans to restate the Q3 2025 financial statements and amend the Q3 2025 Quarterly Report as soon as practical.

Key Details

• Misclassification amount: $8,631,000 reclassified from long‑term to current liabilities.
• Breakdown: $7,947,000 under the Fifth Third Credit Agreement and $653,000 under the DFC Credit Agreement.
• Trigger: On Dec 10, 2025 the company received notice from Fifth Third alleging an Event of Default for failing to maintain at least $5,000,000 in unrestricted domestic cash/Cash Equivalents for the quarter ended Sept 30, 2025 (not a payment default); company may also be out of compliance under the DFC loan.
• Impact on other items: No effect on cash and cash equivalents, total assets, income statement, cash flows, shareholders’ equity, or reported non‑GAAP measures; lenders have not accelerated obligations as of the 8‑K filing.

Why It Matters

• Restating the Q3 2025 balance sheet and moving $8.631M of debt to current liabilities reduces reported working capital and highlights potential covenant and liquidity issues. Although the filing says cash balances and operating results were unchanged, the reclassification and alleged covenant breach could affect the company’s short‑term liquidity, lender relationships, and investor confidence. The company is negotiating with Fifth Third for a waiver and amendment, but there is no assurance of outcome; investors should watch for the amended 10‑Q and further updates on waiver/repayment terms and going‑concern disclosures.