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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026 or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________.

Commission file number 001-08789

American Shared Hospital Services

(Exact name of registrant as specified in its charter)

California	94-2918118
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

601 Montgomery Street	Suite 850	San Francisco,	California	94111-2619
(Address of principal executive offices)				(Zip code)

(415) 788-5300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
American Shared Hospital Services Common Stock, No Par Value	AMS	NYSE AMERICAN

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐	Accelerated Filer ☐	Non-Accelerated Filer ☒	Smaller reporting company ☒
Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 11, 2026, there were outstanding 6,625,000 shares of the registrant’s common stock.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

AMERICAN SHARED HOSPITAL SERVICES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

ASSETS	*March 31, 2026*		*December 31, 2025*
Current assets:
Cash and cash equivalents	$	4,973,000	$	3,462,000
Restricted cash		250,000		250,000
Accounts receivable, net of allowance for credit losses of $980,000 and $980,000 at March 31, 2026 and December 31, 2025, respectively		10,566,000		10,521,000
Tax receivables		569,000		978,000
Other receivables		467,000		1,021,000
VAT credits		617,000		702,000
Prepaid expenses and other current assets		830,000		786,000

Total current assets		18,272,000		17,720,000

Property and equipment, net		29,869,000		31,122,000
Land		1,305,000		1,305,000
Goodwill		1,265,000		1,265,000
Intangible asset		78,000		78,000
Right of use assets, net		3,610,000		3,648,000
Other assets		326,000		341,000

Total assets	$	54,725,000	$	55,479,000

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,081,000	$	607,000
Employee compensation and benefits		1,259,000		1,504,000
Other accrued liabilities		1,923,000		1,752,000
Related party liabilities		1,256,000		937,000
Asset retirement obligations, related party (includes $250,000 and $250,000 non-related party at March 31, 2026 and December 31, 2025, respectively)		1,200,000		1,200,000
Current portion of lease liabilities		156,000		150,000
Current portion of long-term debt, net		16,843,000		17,294,000

Total current liabilities		23,718,000		23,444,000

Long-term lease liabilities, less current portion		4,187,000		4,229,000
Deferred income taxes		115,000		115,000

Total liabilities		28,020,000		27,788,000

Commitments (see Note 8)

Shareholders' equity:
Common stock, no par value (10,000,000 authorized shares; Issued and outstanding shares - 6,600,000 at March 31, 2026 and 6,575,000 at December 31, 2025)		10,763,000		10,763,000
Additional paid-in capital		9,110,000		9,009,000
Retained earnings		3,650,000		4,262,000
Total equity-American Shared Hospital Services		23,523,000		24,034,000
Non-controlling interests in subsidiaries		3,182,000		3,657,000
Total shareholders' equity		26,705,000		27,691,000

Total liabilities and shareholders' equity	$	54,725,000	$	55,479,000

See accompanying notes

AMERICAN SHARED HOSPITAL SERVICES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	*Three Months Ended March 31,*
	*2026*			*2025*

Revenues:
Rental revenue from medical equipment leasing	$	3,020,000		$	2,991,000
Direct patient services revenue		4,064,000			3,121,000
		7,084,000			6,112,000
Costs of revenue:
Maintenance and supplies		813,000			610,000
Depreciation and amortization		1,289,000			1,445,000
Other direct operating costs		3,446,000			2,864,000
Other direct operating costs, related party		248,000			251,000
		5,796,000			5,170,000

Gross margin		1,288,000			942,000

Selling and administrative expense		1,910,000			1,808,000
Interest expense		302,000			433,000

Operating loss		(924,000	)		(1,299,000	)

Interest and other income, net		54,000			64,000
Loss before income taxes		(870,000	)		(1,235,000	)
Income tax expense (benefit)		92,000			(323,000	)
Net loss		(962,000	)		(912,000	)
Less: net loss attributable to non-controlling interests		350,000			287,000
Net loss attributable to American Shared Hospital Services	$	(612,000	)	$	(625,000	)

Net loss per share:
Loss per common share - basic	$	(0.09	)	$	(0.10	)
Loss per common share - diluted	$	(0.09	)	$	(0.10	)

Weighted average common shares for basic loss per share		6,725,000			6,572,000
Weighted average common shares for diluted loss per share		6,725,000			6,572,000

See accompanying notes

AMERICAN SHARED HOSPITAL SERVICES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

	FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2026 AND 2025
	*Common Shares*		*Common Stock*		*Additional Paid-in Capital*		*Retained Earnings*			*Sub-Total ASHS*			*Non-controlling Interests in Subsidiaries*			*Total*

Balances at January 1, 2025		6,420,000	$	10,763,000	$	8,605,000	$	5,815,000		$	25,183,000		$	4,844,000		$	30,027,000
Stock-based compensation expense		-		-		89,000		-			89,000			-			89,000
Vested restricted stock awards		30,000		-		-		-			-			-			-
Capital contributions from non-controlling interests		-		-		-		-			-			8,000			8,000
Net loss		-		-		-		(625,000	)		(625,000	)		(287,000	)		(912,000	)
Balances at March 31, 2025		6,450,000	$	10,763,000	$	8,694,000	$	5,190,000		$	24,647,000		$	4,565,000		$	29,212,000

Balances at January 1, 2026		6,575,000	$	10,763,000	$	9,009,000	$	4,262,000		$	24,034,000		$	3,657,000		$	27,691,000
Stock-based compensation expense		-		-		101,000		-			101,000			-			101,000
Vested restricted stock awards		25,000		-		-		-			-			-			-
Cash distributions to non-controlling interests		-		-		-		-			-			(125,000	)		(125,000	)
Net loss		-		-		-		(612,000	)		(612,000	)		(350,000	)		(962,000	)
Balances at March 31, 2026		6,600,000	$	10,763,000	$	9,110,000	$	3,650,000		$	23,523,000		$	3,182,000		$	26,705,000

See accompanying notes

AMERICAN SHARED HOSPITAL SERVICES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	*Three Months Ended March 31,*
	*2026*			*2025*
Operating activities:
Net loss	$	(962,000	)	$	(912,000	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation, amortization, and other		1,294,000			1,449,000
Accretion of debt issuance costs		21,000			24,000
Non cash lease expense		133,000			157,000
Accretion of unfavorable lease position		(5,000	)		(26,000	)
Stock-based compensation expense		101,000			89,000
Changes in operating assets and liabilities:
Receivables		1,003,000			2,127,000
Prepaid expenses and other assets		(29,000	)		576,000
Accounts payable and accrued liabilities		400,000			(883,000	)
Related party liabilities		319,000			59,000
Lease liabilities		(126,000	)		(157,000	)
Net cash provided by operating activities		2,149,000			2,503,000

Investing activities:
Payment for purchases of property and equipment		(41,000	)		(4,015,000	)
Net cash used in investing activities		(41,000	)		(4,015,000	)

Financing activities:
Principal payments on long-term debt		(472,000	)		(280,000	)
Advances on line of credit		-			2,000,000
Capital contribution non-controlling interests		-			8,000
Distributions to non-controlling interests		(125,000	)		-
Net cash (used in) provided by financing activities		(597,000	)		1,728,000
Net change in cash, cash equivalents, and restricted cash		1,511,000			216,000
Cash, cash equivalents, and restricted cash at beginning of period		3,712,000			11,275,000
Cash, cash equivalents, and restricted cash at end of period	$	5,223,000		$	11,491,000

Supplemental cash flow disclosure
Cash paid during the period for:
Interest	$	257,000		$	409,000
Income tax (refunds)	$	(316,000	)	$	129,000

Schedule of non-cash investing and financing activities
Equipment included in accounts payable and accrued liabilities	$	400,000		$	2,160,000

Detail of cash, cash equivalents and restricted cash at end of period
Cash and cash equivalents	$	4,973,000		$	11,241,000
Restricted cash		250,000			250,000
Cash, cash equivalents, and restricted cash at end of period	$	5,223,000		$	11,491,000

See accompanying notes

AMERICAN SHARED HOSPITAL SERVICES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

In the opinion of the management of American Shared Hospital Services (“ASHS”), the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary for the fair presentation of ASHS consolidated financial position as of March 31, 2026, the results of its operations for the three-month periods ended March 31, 2026 and 2025, and the cash flows for the three-month periods ended March 31, 2026 and 2025. The results of operations for the three-month periods ended March 31, 2026 are not necessarily indicative of results on an annualized basis. Consolidated balance sheet amounts as of December 31, 2025 have been derived from the audited consolidated financial statements.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2025 included in the ASHS Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 31, 2026.

These condensed consolidated financial statements include the accounts of ASHS and its subsidiaries (the “Company”) including as follows: ASHS wholly owns the subsidiaries American Shared Radiosurgery Services (“ASRS”), PBRT Orlando, LLC (“Orlando”), ASHS-Mexico, S.A. de C.V. (“ASHS-Mexico”), ASHS-Rhode Island Proton Beam Radiation Therapy, LLC (“RI-PBRT”), ASHS-Bristol Radiation Therapy, LLC (“Bristol”), and MedLeader.com, Inc. (“MedLeader”); ASHS is the majority owner of Southern New England Regional Cancer Center, LLC (“SNERCC”), Roger Williams Radiation Therapy, LLC (“RWRT”) and Long Beach Equipment, LLC (“LBE”); ASRS is the majority-owner of GK Financing, LLC (“GKF”), which wholly owns the subsidiaries Instituto de Gamma Knife del Pacifico S.A.C. (“GKPeru”) and HoldCo GKC S.A. (“HoldCo”). HoldCo wholly owns the subsidiary Gamma Knife Center Ecuador S.A. (“GKCE”). ASHS-Mexico is the majority owner of AB Radiocirugia y Radioterapia de Puebla, S.A.P.I. de C.V. of Puebla (“Puebla”) and Instituto Gamma Knife San Javier Mexico S.A.P.I. de C.V. (“San Javier”) . GKF is the majority owner of the subsidiaries Albuquerque GK Equipment, LLC (“AGKE”) and Jacksonville GK Equipment, LLC (“JGKE”).

The Company (through ASRS) and Elekta AB (“Elekta”), the manufacturer of the Gamma Knife (through its wholly-owned United States subsidiary, GKV Investments, Inc.), entered into an operating agreement and formed GKF. As of March 31, 2026, GKF provides Gamma Knife units to seven medical centers in the United States in the states of Illinois, Indiana, Mississippi, New Mexico, New York, Oregon, and Texas. GKF also owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador. The Company through its wholly-owned subsidiary, Orlando, provided proton beam radiation therapy (“PBRT”) and related equipment to a medical center in Florida.

On June 28, 2024, ASHS-Mexico, signed a Joint Venture Agreement with Hospital San Javier, S.A. de C.V. (“HSJ”) to establish San Javier to treat public- and private-paying cancer patients and provide radiosurgery services in Guadalajara, Mexico. The Company and HSJ will hold 70% and 30% ownership interests, respectively, in San Javier. 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 San Javier will begin treating patients until late 2026 or 2027.

On February 6, 2025, the Company’s subsidiary, Bristol, closed on the acquisition of certain parcels of real property located on Gooding Avenue, Bristol, Rhode Island. The purchase price for the property was $1,185,000. The transaction was effected pursuant to the terms of a Real Estate Purchase and Sale Agreement dated November 21, 2024 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.

The Company formed the subsidiaries Puebla, GKPeru, ASHS-Mexico, and acquired GKCE for the purposes of expanding its business internationally; Orlando and LBE to provide PBRT equipment and services in Orlando, Florida and Long Beach, California, respectively; and AGKE and JGKE to provide Gamma Knife equipment and services in Albuquerque, New Mexico and Jacksonville, Florida, respectively. LBE 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 healthcare workers. MedLeader is not operational at this time.

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

Accounting pronouncements issued and adopted - In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company adopted ASU 2023-09 for the year-ended December 31, 2025, prospectively, and enhanced its disclosure requirements, accordingly.

In July 2025, the FASB issued ASU 2025-05 Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”) which provides (1) all entities with a practical expedient and (2) entities other than public business entities, with an accounting policy election when estimating credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company adopted ASU 2025-05 for the period-ended March 31, 2026 and concluded it did not have a material impact to its condensed consolidated financial statements.

Accounting pronouncements issued and not yet adopted - In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ASU 2024-03”) which requires entities to 1. disclose amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities, 2. include certain amounts that are already required to be disclosed under current Generally Accepted Accounting Principles in the same disclosures as other disaggregation requirements, 3. disclose a qualitative description of the amounts remaining in relevant expense captions that are not necessarily disaggregated quantitatively, and 4. disclose the total amount of selling expenses, in annual reporting periods, including an entity’s definition of selling expense. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating ASU 2024-03 to determine the impact it may have on its consolidated financial statements.

Revenue recognition - The Company recognizes revenues under Accounting Standards Codification (“ASC”) 842 Leases (“ASC 842”) and ASC 606 Revenue from Contracts with Customers (“ASC 606”).

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’s lease contracts typically have a ten-year term and are classified as either fee per use or revenue sharing. Fee per use revenues are recognized at the time the procedures are performed, based on each hospital’s contracted rate and the number of procedures performed. Under revenue sharing arrangements, the Company receives a contracted percentage of the reimbursement received by the hospital. The amount the Company expects to receive is recorded as revenue and estimated based on historical experience. Revenue estimates are reviewed periodically and adjusted as necessary. Some of the Company’s revenue sharing arrangements also have a cost sharing component. The Company records an estimate of operating costs which are reviewed on a regular basis and adjusted as necessary to more accurately reflect the actual operating costs. The operating costs are recorded as other direct operating costs in the condensed consolidated statements of operations. For the three-month period ended March 31, 2026, the Company recognized leasing revenue of approximately $3,020,000 compared to $2,991,000 for the same period in the prior year. For the three-month period ended March 31, 2026, $1,956,000 of the ASC 842 revenues were for PBRT services compared to $1,642,000, for the same period in the prior year.

Direct patient services income – The Company has stand-alone facilities in Lima, Peru, Guayaquil, Ecuador, and Puebla, Mexico where contracts exist between the Company’s facilities and the individual patients treated at the facility. Under ASC 606, the Company acts as the principal in these transactions and provides, at a point in time, a single performance obligation, in the form of a Gamma Knife or radiation therapy treatment. Revenue related to these treatments is recognized on a gross basis at the time when the patient receives treatment. There is no variable consideration present in the Company’s performance obligation and the transaction price is agreed upon per the stated contractual rate. GKPeru’s payment terms are typically prepaid for self-pay patients and insurance provider payments are paid net 30 days. GKCE’s patient population is primarily covered by a government payor and payments are paid between three and six months following issuance of an invoice. The facility in Puebla currently has a contract with one local hospital to cover its eligible patient base and is also treating self-pay patients. Puebla’s payment terms are typically prepaid for self-pay patients and net 30 days for the hospital patients. The Company did not capitalize any incremental costs related to the fulfillment of its customer contracts.

The Company holds a 60% equity interest in each of SNERCC and RWRT (collectively, the “RI Companies”) and was assigned certain payor contracts for a purchase price of $2,850,000, in May 2024 (such transaction, the “RI Acquisition”). The RI Companies operate three, existing, stand-alone radiation therapy cancer centers in Woonsocket, Warwick and Providence, Rhode Island, where contracts exist between the Company’s facilities and the individual patients treated at the facility. Under ASC 606, the Company acts as the principal in these transactions and provides, at a point in time, a single performance obligation, in the form of radiation therapy treatment. Revenue related to radiation therapy is recognized at the expected amount to be received, based on insurance contracts and payor mix, when the patient receives treatment. There is no variable consideration present in the Company’s performance obligation and the transaction price is agreed upon per the stated contractual rate. Payment terms at these facilities are typically prepaid for self-pay patients and insurance providers are paid net 30 to 60 days. The Company did not capitalize any incremental costs related to the fulfillment of its customer contracts. The Company also concluded the three facilities are part of its direct patient services segment, see further discussion below.

Accounts receivable balances under ASC 606 at March 31, 2026 and January 1, 2026 were $8,484,000 and $8,138,000, respectively. Accounts receivable balances under ASC 606 at March 31, 2025 and January 1, 2025 were $6,120,000 and $6,073,000, respectively. For the three-month period ended March 31, 2026, the Company recognized direct patient services revenues of approximately $4,064,000 compared to $3,121,000 for the same period in the prior year.

Liquidity - On April 9, 2021, ASHS, Orlando, GKF (together with ASHS and Orlando, the “Borrowers”), and ASRS (together with the Borrowers, collectively, the “Loan Parties”) entered into a five-year $22,000,000 credit agreement (the “Credit Agreement”) with Fifth Third Bank, N.A. (“Fifth Third”). The loan entered into with United States International Development Finance Corporation (“DFC”) in connection with the acquisition of GKCE in June 2020 (the “DFC Loan”; together with the Credit Agreement, the “Credit Agreements”) was obtained through the Company’s wholly-owned subsidiary, HoldCo and is guaranteed by GKF. On December 10, 2025, the Loan Parties received a notice from Fifth Third asserting that a specified Event of Default (as defined in the Credit Agreement) occurred under the Credit Agreement due to the Borrower's failure to maintain minimum unrestricted domestic cash of at least an aggregate of $5,000,000 (the “Minimum Cash Covenant”) as of September 30, 2025. As of December 31, 2025, the Company was not in compliance with the minimum fixed-charge coverage ratio, the maximum funded debt-to-EBITDA ratio, and the Minimum Cash Covenant required by the Credit Agreement, and the Company notified Fifth Third of such defaults.

ASHS has also determined that the Borrowers’ defaults under the Credit Agreement could be deemed to have resulted in an Event of Default (as defined in the DFC Loan) under the DFC Loan. However, as of the date of this Quarterly Report, DFC has not delivered any notice asserting that such an Event of Default has occurred or sought to exercise any remedies it may have under the DFC Loan.

The Credit Agreement matured on April 9, 2026 and is secured by a lien on substantially all of the assets of the Loan Parties and is guaranteed by ASHS, Orlando and ASRS. The Loan Parties did not satisfy all outstanding obligations under the Credit Agreement on the maturity date. ASHS is currently in discussions with Fifth Third regarding a potential amendment and extension of the maturity date of the Credit Agreement. However, there can be no assurance that Fifth Third will agree to such an extension or, if obtained, as to the terms or duration of any such extension. If ASHS is unable to obtain an extension of the maturity date of the Credit Agreement, and Fifth Third were to demand payment in Full in lump-sum, the Company will not have sufficient cash on hand to repay all outstanding obligations due under the Credit Agreement at maturity. See Note 3 - “Long Term Debt” for additional information.

As of March 31, 2026, HoldCo was not in compliance with the cash-to-debt covenant under the DFC Loan. The Company notified DFC of this non-compliance and is in discussions for an extended waiver or amendment to the DFC Loan, but there can be no assurances regarding the outcome of such discussions. Furthermore, ASHS has determined that HoldCo’s non-compliance with the DFC Loan could be deemed to have resulted in an Event of Default (as defined in the Credit Agreement) of the Credit Agreement with Fifth Third. However, as of the date of this Quarterly Report, Fifth Third has not delivered any notice to the Loan Parties asserting that such an Event of Default has occurred or sought to exercise any remedies it may have under the Credit Agreement.

The Company reassessed its ability to continue as a going concern in light of the Events of Default discussed above. As long as the Company remains in default under the Credit Agreements, Fifth Third and DFC could accelerate all payment obligations under the Credit Agreements. If Fifth Third or DFC were to accelerate all payment obligations under the Credit Agreements as a result of the defaults thereunder, the Company would not have sufficient cash on hand to satisfy such accelerated payment obligations. As a result, these conditions raise substantial doubt about the Company’s ability to continue as a going concern. To date, the Company has not negotiated a definitive extension and, if the Company is ultimately unable to do so, the Company’s liquidity will be adversely impacted and the Company’s ability to satisfy all of its commitments over the next twelve months in accordance with their current terms would be jeopardized. As a result of these conditions, in connection with management’s assessment of going-concern considerations in accordance with ASC 205-40 Presentation of Financial Statements - Going Concern, management has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s condensed consolidated balance sheet as of March 31, 2026, does not contain any adjustments that might result from the uncertainty regarding the Company’s ability to continue as a going concern.

Business segment information - Based on the guidance provided in accordance with ASC 280 Segment Reporting (“ASC 280”), the Company analyzed its subsidiaries which are all in the business of providing radiosurgery and radiation therapy services, either through leasing to healthcare providers or directly to patients, and concluded there are two reportable segments, leasing and direct patient services. As of March 31, 2026, the Company provided Gamma Knife and PBRT equipment to eight hospitals in the United States, which constitutes the leasing segment. As of March 31, 2026, the Company 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 the Company also owns a majority interest in and operates, three single-unit radiation therapy facilities in Rhode Island, which collectively constitute the direct patient services segment.

An operating segment is defined by ASC 280 as a component of an entity that engages in business activities in which it may recognize revenues and incur expenses, that has operating results that are regularly reviewed by the Company’s Chief Operating Decision Maker (“CODM”), and for which its discrete financial information is available. The Company determined two reportable segments existed due to similarities in economics of business operations and how the Company recognizes revenue for the patient treatment. The operating results of the two reportable segments are reviewed by the Company’s Executive Chairman of the Board, who is also the CODM.

For the three-month periods ended March 31, 2026 and 2025, the Company’s PBRT operations represented a majority of the revenue and net income of the leasing segment, which reported an overall net loss for the period. The revenues, depreciation, amortization, and other expense, interest expense, interest income, income tax expense (benefit), net (loss) income attributable to American Shared Hospital Services, and total assets for the Company’s two reportable segments as of March 31, 2026 and 2025 consist of the following:

	*Three Months Ended March 31,*
	*2026*		*2025*
Revenues
Leasing	$	3,020,000	$	2,991,000
Direct patient services		4,064,000		3,121,000
Total	$	7,084,000	$	6,112,000

	*2026*		*2025*
Depreciation, amortization, and other expense
Leasing	$	859,000	$	899,000
Direct patient services		435,000		550,000
Total	$	1,294,000	$	1,449,000

	*2026*		*2025*
Interest expense
Leasing	$	285,000	$	398,000
Direct patient services		17,000		35,000
Total	$	302,000	$	433,000

	*2026*		*2025*
Interest income
Leasing	$	33,000	$	58,000
Direct patient services		20,000		16,000
Total	$	53,000	$	74,000

	*2026*			*2025*
Income tax expense (benefit)
Leasing	$	(40,000	)	$	(257,000	)
Direct patient services		132,000			(66,000	)
Total	$	92,000		$	(323,000	)

	*2026*			*2025*

Net loss attributable to American Shared Hospital Services
Leasing	$	(156,000	)	$	(303,000	)
Direct patient services		(456,000	)		(322,000	)
Total	$	(612,000	)	$	(625,000	)

	*March 31,*		*December 31,*
	*2026*		*2025*
Total assets
Leasing	$	23,821,000	$	24,334,000
Direct patient services		30,904,000		31,145,000
Total	$	54,725,000	$	55,479,000

	*2026*		*2025*
Leasing revenue
Domestic	$	3,020,000	$	2,991,000
Total	$	3,020,000	$	2,991,000

	*2026*		*2025*
Direct patient service revenue
International	$	1,912,000	$	1,181,000
Domestic		2,152,000		1,940,000
Total	$	4,064,000	$	3,121,000

Reclassification - Certain comparative balances as of December 31, 2025 have been reclassified to make them consistent with the current year presentation.

Note 2. Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation for Gamma Knife equipment, LINAC units and other equipment is determined using the straight-line method over the estimated useful lives of the assets, which for medical and office equipment is generally between three and ten years, and after accounting for salvage value on the equipment where applicable.

Depreciation for PBRT equipment is determined using the modified units of production method, which is a function of both time and usage of the equipment. This depreciation method allocates costs considering the projected volume of usage through the useful life of the PBRT unit, which has been estimated at 20 years. The estimated useful life of the PBRT unit is consistent with the estimated economic life of 20 years.

The following table summarizes property and equipment as of March 31, 2026 and December 31, 2025:

	*March 31,*			*December 31,*
	*2026*			*2025*

Medical equipment and facilities	$	70,259,000		$	70,172,000
Office equipment		643,000			638,000
Construction in progress		205,000			255,000
		71,107,000			71,065,000
Accumulated depreciation		(41,238,000	)		(39,943,000	)
Net property and equipment	$	29,869,000		$	31,122,000

Net property and equipment held outside of the United States	$	7,887,000		$	8,082,000

Depreciation expense recorded in costs of revenue and selling and administrative expense in the condensed consolidated statements of operations for the three-month periods ended March 31, 2026 and 2025 is as follows:

	*Three Months Ended March 31,*
	*2026*		*2025*

Depreciation expense	$	1,294,000	$	1,449,000

Note 3. Long-Term Debt Financing

On April 9, 2021, the Borrowers, and the Loan Parties entered into a five year $22,000,000 Credit Agreement with Fifth Third. The Credit Agreement includes three loan facilities. The first loan facility is a $9,500,000 term loan (the “Term Loan”) which was used to refinance the domestic Gamma Knife debt and finance leases, and associated closing costs. The second loan facility of $5,500,000 is a delayed draw term loan (the “DDTL”) which was used to refinance the Company’s PBRT finance leases and associated closing costs, as well as to provide additional working capital. The third loan facility provides for a $7,000,000 revolving line of credit (the “Revolving Line”) available for future projects and general corporate purposes. The facilities have a five-year maturity, which matured on April 9, 2026, and carry a floating interest rate based on the Secured Overnight Financing Rate (“SOFR”) plus 3.0% (6.86% as of March 31, 2026) and are secured by a lien on substantially all of the assets of the Loan Parties and guaranteed by ASHS, Orlando and ASRS. There was an aggregate of $7,075,000 due on April 9, 2026 for the Term Loan and DDTL.

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

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

The long-term debt on the condensed consolidated balance sheets related to the Term Loan, DDTL, Revolving Line, Supplemental Term Loan and Second Supplemental Term Loan was $15,895,000 and $16,197,000 as of March 31, 2026 and December 31, 2025, respectively. The Company did not capitalize any debt issuance costs as of March 31, 2026 and December 31, 2025, related to the issuance of the Supplemental Term Loan and Second Supplemental Term Loan.

The Credit Agreement contains customary covenants and representations, including without limitation, a minimum fixed charge coverage ratio of 1.25 and maximum funded debt to EBITDA ratio of 3.0 to 1.0 (tested on a trailing twelve-month basis at the end of each fiscal quarter), an obligation that the Company maintain $5,000,000 of unrestricted cash, reporting obligations, limitations on dispositions, changes in ownership, mergers and acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and capital expenditures.

On September 30, 2025, the Company received a limited waiver from Fifth Third with respect to its failure to be in compliance with the maximum funded debt to EBITDA ratio covenant in the Credit Agreement as of June 30, 2025 and with respect to the delivery of items following the closing of the Second Amendment.

As previously disclosed, (i) on December 10, 2025, the Loan Parties received notice from Fifth Third asserting that an Event of Default had occurred under the Credit Agreement due to the Borrowers’ failure to comply with the Minimum Cash Covenant as of September 30, 2025, and (ii) as of December 31, 2025, the Company was not in compliance with the minimum fixed-charge coverage ratio, the maximum funded debt-to-EBITDA ratio, and the Minimum Cash Covenant required by the Credit Agreement and notified Fifth Third of such non-compliance (all such defaults in clauses (i) and (ii), collectively, the “Financial Covenant Defaults”). The Financial Covenant Defaults under the Credit Agreement remain uncured as of March 31, 2026, and, as a result, the Loan Parties are not in compliance with the Credit Agreement as of such date.

Due to the Financial Covenant Defaults described above, Fifth Third may exercise any of its rights, powers, privileges, and remedies under the Credit Agreement, the other Loan Documents, and applicable law, including but not limited to the right to accelerate the Borrowers’ payment obligations under the Credit Agreement.

In December 2025, as a result of the Financial Covenant Defaults, Fifth Third notified the Company that, among other things, it had suspended the Revolving Loan Commitment with respect to additional Revolving Loan Advances. To date, Fifth Third has not accelerated the obligations of the Loan Parties under the Credit Agreement or other Loan Documents

The Loan Parties did not satisfy all outstanding obligations under the Credit Agreement when it matured on April 9, 2026. Due to the Financial Covenant Defaults described above, the Loan Parties are not in compliance with the Credit Agreement as of March 31, 2026. To date, Fifth Third has not accelerated the obligations of the Loan Parties under the Credit Agreement or other Loan Documents. ASHS is currently in discussions with Fifth Third regarding an amendment to extend the maturity date of the Credit Agreement. However, there can be no assurances regarding the outcome of such discussions.

The loan entered into with DFC in connection with the acquisition of GKCE in June 2020 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. 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%. 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 Company did not capitalize any debt issuance costs as of March 31, 2026 and December 31, 2025, related to the maintenance and administrative fees on the DFC Loan. The long-term debt on the condensed consolidated balance sheets related to the DFC Loan was $985,000 and $1,149,000 as of March 31, 2026 and December 31, 2025, respectively.

The DFC Loan contains customary covenants including without limitation, requirements that HoldCo maintain certain financial ratios related to liquidity and cash flow as well as depository requirements. On March 28, 2024, HoldCo 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. HoldCo was not in compliance with the cash to debt covenant at March 31, 2026.

As a result of the Loan Parties’ Financial Covenant Defaults under the Credit Agreement with Fifth Third discussed above, ASHS has determined that the non-compliance with the Credit Agreement could be deemed to have resulted in an Event of Default (as defined in the DFC Loan) under the DFC Loan. However, as of the date of this Quarterly Report, DFC has not delivered any notice to HoldCo or ASHS asserting the occurrence of an Event of Default resulting from the Financial Covenant Defaults or sought to exercise any remedies it may have under the DFC Loan.

Additionally, HoldCo was not in compliance with the cash-to-debt covenant under the DFC Loan as of March 31, 2026. The Company notified DFC of this non-compliance and is in discussions for an extended waiver or amendment to the DFC Loan. However, there can be no assurances regarding the outcome of such discussions.

Furthermore, ASHS has determined that HoldCo’s non-compliance with the DFC Loan could be deemed to have resulted in an Event of Default (as defined in the Credit Agreement) under the Credit Agreement with Fifth Third. However, as of the date of this Quarterly Report, Fifth Third has not delivered any notice to the Loan Parties asserting that such an Event of Default has occurred or sought to exercise any remedies it may have under the Credit Agreement as a result thereof.

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

As long as the Company remains in default under the Credit Agreements, Fifth Third and DFC could accelerate all payment obligations under the Credit Agreements. If Fifth Third or DFC were to accelerate all payment obligations under the Credit Agreements as a result of the defaults thereunder, the Company would not have sufficient cash on hand to satisfy such accelerated payment obligations. As a result, these conditions raise substantial doubt about the Company’s ability to continue as a going concern.

In November and December 2024, GKCE obtained two loans with banks locally in Ecuador (the “GKCE Loans”). The GKCE Loans carry interest rates of 12.60% and 12.78% and are payable in twelve and thirty-six equal monthly installments of principal and interest, respectively. The Company did not capitalize any debt issuance costs related to the GKCE Loans. Total long-term debt on the condensed consolidated balance sheets related to the GKCE Loans was $47,000 and $53,000 as of March 31, 2026 and December 31, 2025, respectively.

The accretion of debt issuance costs for the three-month period ended March 31, 2026 was $21,000 compared to $24,000 for the same period in the prior year. As of March 31, 2026 and December 31, 2025, the unamortized deferred issuance costs on the condensed consolidated balance sheet was $84,000 and $105,000, respectively.

As of March 31, 2026, long-term debt on the condensed consolidated balance sheets was $16,843,000. The following are contractual maturities of long-term debt as of March 31, 2026, excluding deferred issuance costs of $84,000:

Year ending December 31,	*Principal*
2026 (excluding the three-months ended March 31, 2026)	$	8,827,000
2027		2,058,000
2028		1,540,000
2029		4,457,000
2030		45,000
	$	16,927,000

Note 4. Other Accrued Liabilities

Other accrued liabilities consist of the following as of March 31, 2026 and December 31, 2025:

	*March 31,*		*December 31,*
	*2026*		*2025*
Professional services	$	317,000		141,000
Operating costs		986,000		1,026,000
Other		620,000		585,000
Total other accrued liabilities	$	1,923,000	$	1,752,000

Note 5. Leases

The Company determines if a contract is a lease at inception. Under ASC 842, the Company is a lessor of equipment to various customers. Leases that commenced prior to the ASC 842 adoption date were classified as operating leases under historical guidance. As the Company has elected the package of practical expedients allowing it to not reassess lease classification, these leases are classified as operating leases under ASC 842 as well, as applicable. All of the Company’s lessor arrangements entered into or modified after ASC 842 adoption are also classified as operating leases. Some of these lease terms have an option to extend the lease after the initial term, but do not contain the option to terminate early or purchase the asset at the end of the term. The Company has elected not to recognize right-of-use (“ROU”) assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset.

The Company’s Gamma Knife and PBRT contracts with health systems are classified as operating leases under ASC 842. The related equipment is included in medical equipment and facilities on the Company’s condensed consolidated balance sheets. As all income from the Company’s lessor arrangements is solely based on procedure volume, all income is considered variable payments not dependent on an index or a rate. As such, the Company does not measure future operating lease receivables.

On March 13, 2026, the Company and Orlando Health, Inc. (“Orlando Health”) entered into Amendment Two to Proton Beam Radiation Therapy Lease Agreement (the “Amendment”). The Amendment extends the term of the Proton Beam Radiation Therapy Lease Agreement dated October 18, 2006 between the Company and Orlando Health, as amended by Amendment One to Proton Beam Radiation Therapy Lease Agreement dated effective as of August 12, 2012 (the “Lease”) for an additional seven years commencing April 6, 2026 through April 5, 2033 (the “Extended Term”), and sets the lease payment terms during the Extended Term based on a technical component collection percentage with that percentage decreasing during certain of the twelve month periods of the Extended Term. The Amendment amends certain other terms of the Lease and sets forth certain agreements between the parties with respect to the leased equipment, including (i) an option granted to Orlando Health whereby it may elect to purchase the leased equipment at the end of the lease term, including setting the purchase price and the period in which Orlando Health may exercise its option, (ii) matters related to the Company’s obligation to remove, at its expense, the leased equipment from Orlando Health at the end of the Extended Term in the event Orlando Health does not exercise its purchase option, and certain financial understandings of the parties related to that obligation, and (iii) maintenance and insurance coverage obligations of the parties.

The Company has two sublease agreements for small, corporate office spaces in San Francisco, California and Downers Grove, Illinois. The sublease in San Francisco is for 80 square feet for $1,003 per month located at 601 Montgomery Street, Suite 850. 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. Total ROU assets and lease liabilities for the Downers Grove sublease were $26,000. The sublease for Downers Grove expired in January 2026 and was not renewed.

The RI Companies operate three single-unit radiation therapy facilities. The Company assessed the existing lease agreements under ASC 842 and concluded two of the three facilities contained operating leases. The facility in Woonsocket, RI has a ground lease with a sublease for 1,950 square feet of the clinic space, which is leased back to the lessor. The facility in Warwick, RI has a lease for 10,236 square feet for $32,790 per month. The facility in Providence, RI also has a ground lease, which was contributed by one of the minority partners.

On January 1, 2025, the Company entered into the Amended and Restated Lease Agreement (the “Amended Lease”) for the facility lease in Warwick, Rhode Island. The Amended Lease includes a lease extension to December 31, 2039 and modified the monthly lease payment to $26,443. The Company assessed the Amended Lease under ASC 842 and concluded it was a lease modification. On January 1, 2025, the effective date of the Amended Lease, the Company recorded additional ROU asset and lease liability in the amount of $1,922,000.

The Company owns and operates a stand-alone Gamma Knife facility in Lima, Peru where it leased approximately 1,600 square feet for approximately $8,850 per month through June 2025. In May 2024, the Company executed a new lease agreement for approximately 7,704 square feet for $9,000 per month. The Company renovated this space during the first half of 2025 to accommodate its Gamma Knife Esprit and administrative offices and moved into the leased space in June 2025. The current lease expires in May 2034. Total ROU asset and lease liability for the Peru lease was $771,000.

The Company also owns and operates a stand-alone Gamma Knife facility in Guayaquil, Ecuador where it owns 864 square feet of condominium space in an office building and approximately 10,135 of related land and parking spaces. The Company’s stand-alone radiation therapy facility in Puebla, Mexico also has a lease for approximately 536 square meters for $1,800 per month with a lease expiration in July 2034. The lease in Puebla is with a related party. Total ROU assets and lease liabilities for the Puebla lease were $149,000.

Sublease income for the three-month period ended March 31, 2026 was $15,000 compared to $15,000 for the same period in the prior year.

The Company’s lessee operating leases are accounted for as ROU assets, current portion of lease liabilities, and lease liabilities on the condensed consolidated balance sheets. Operating lease ROU assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The Company’s operating lease contracts do not provide an implicit rate for calculating the present value of future lease payments. The Company determined its incremental borrowing rate to be approximately 8% by using available market rates and expected lease terms. The operating lease ROU assets and liabilities include any lease payments made and there were no lease incentives or initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company’s lessee operating lease agreements are for administrative office space and related equipment and for its direct patient service facilities in Lima, Peru, Puebla, Mexico and two stand-alone facilities in Rhode Island in which the Company acquired an interest in the RI Acquisition. These leases have remaining lease terms of approximately 8 to 15 years, some of which include options to renew or extend the lease. As of March 31, 2026, operating ROU assets, net of unfavorable leasehold interests, were $3,610,000, and lease liabilities were $4,343,000.

The following table summarizes the maturities of the Company's lessee operating lease liabilities as of March 31, 2026:

Year ending December 31,	*Operating Leases*

2026 (excluding the three-months ended March 31, 2026)	$	375,000
2027		510,000
2028		520,000
2029		536,000
2029		550,000
Thereafter		4,713,000

Total lease payments		7,204,000
Less imputed interest		(2,861,000	)
Total	$	4,343,000

	*Three Months Ended March 31,*
	*2026*			*2025*
Lease cost
Operating lease cost	$	133,000		$	157,000
Sublease income		(15,000	)		(15,000	)
Total lease cost	$	118,000		$	142,000

Other information
Cash paid for amounts included in the measurement of lease liabilities - Operating leases	$	126,000		$	655,000
Weighted-average remaining lease term - Operating leases in years		12.83			14.70
Weighted-average discount rate - Operating leases		8.19	%		8.25	%

Note 6. Per Share Amounts

Per share information has been computed based on the weighted average number of common shares and dilutive common share equivalents outstanding. The Company calculates diluted shares using the treasury stock method. Because the Company reported a loss for the three-month periods ended March 31, 2026 and 2025, the potentially dilutive effects of approximately 2,000 of the Company’s stock options and 211,000 of the Company’s unvested restricted stock awards, and 38,000 of the Company’s stock options and 173,000 of the Company’s unvested restricted stock awards were not considered for the reporting periods, respectively. The weighted average common shares outstanding for basic earnings per share for the three-month periods ended March 31, 2026 and 2025 included approximately 123,000 and 123,000, respectively, of the Company's restricted stock awards that are fully vested but are deferred for issuance.

The following table sets forth the computation of basic and diluted earnings per share for the three-month periods ended March 31, 2026 and 2025:

	*Three Months Ended March 31,*
	*2026*			*2025*
Net loss attributable to American Shared Hospital Services	$	(612,000	)	$	(625,000	)

Weighted average common shares for basic loss per share		6,725,000			6,572,000
Weighted average common shares for diluted loss per share		6,725,000			6,572,000

Basic loss per share	$	(0.09	)	$	(0.10	)
Diluted loss per share	$	(0.09	)	$	(0.10	)

Note 7. Income Taxes

The Company generally calculates its effective income tax rate at the end of an interim period using an estimate of the annualized effective income tax rate expected to be applicable for the full fiscal year. However, when a reliable estimate of the annualized effective income tax rate cannot be made, the Company computes its provision for income taxes using the actual effective income tax rate for the results of operations reported within the year-to-date periods. The Company’s effective income tax rate is highly influenced by relative income or losses reported and from the results of international operations. A small change in estimated annual pretax income can produce a significant variance in the annualized effective income tax rate given the expected amount of these items. As a result, the Company has computed its provision for income taxes for the three-month periods ended March 31, 2026 and 2025 by applying the actual effective tax rates to income or reported within the condensed consolidated financial statements through those periods. The provision for income taxes for the three-month period ended March 31, 2026, included a non-recurring adjustment for unrecognized tax benefits related to foreign taxes of $31,000. For the three-month period ended March 31, 2025, the Company recorded a $71,000 adjustment for unrecognized tax benefits related to foreign taxes.

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (“OBBBA”) into law, which is considered the enactment date under U.S. GAAP. This legislation introduces several provisions affecting businesses, including the permanent extension of certain expiring elements of the Tax Cuts and Jobs Act, modifications to the international tax framework, and favorable tax treatment for certain other business provisions. Key corporate tax provisions include existing 21% corporate income tax rate made permanent, the restoration of 100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to Section 163(j) interest limitations, updates to Global Intangible Low Tax Income (GILTI) and Foreign- Derived Intangible Income (FDII) rules, amendments to energy credits, and expanded Section 162(m) aggregation requirements. The OBBBA contains multiple effective dates, with some provisions applicable beginning in 2026. The legislation does not impact the Company’s prior years’ financial statements.

Note 8. Commitments

As of March 31, 2026, the Company had commitments to purchase and install two Esprit and two LINAC systems. The Esprit upgrades and one LINAC installation are anticipated to occur in late 2026 or later at existing customer sites. The remaining LINAC is reserved for a future customer site. Total Gamma Knife and LINAC commitments as of March 31, 2026 were $7,884,000. There are no deposits on the condensed consolidated balance sheets related to these commitments as of March 31, 2026 and December 31, 2025, nor are there any penalties if the Company decides to not execute on these commitments. Although the Company’s current intent is to finance substantially all of these commitments, 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 $5,223,000.

As of March 31, 2026, the Company had commitments to service and maintain its Gamma Knife, LINAC, and PBRT equipment. The service commitments are carried out via contracts with Mevion, Elekta, Solutech, and Mobius Imaging, LLC. The Company’s commitment to purchase one LINAC system also includes a 5-year agreement to service the equipment. Total service commitments as of March 31, 2026 were $5,705,000. The service contracts are paid monthly, as service is performed. The Company believes that cash flow from cash on hand and operations will be sufficient to cover these payments.

Note 9. Related Party Transactions and Balances

The Company’s Gamma Knife business is operated through its GKF subsidiary in which the Company holds an indirect 81% interest. The remaining 19% of GKF is owned by a wholly owned U.S. subsidiary of Elekta, which is the manufacturer of the Gamma Knife. Since the Company purchases its Gamma Knife units from Elekta, there are significant related party transactions with Elekta, such as equipment purchases, commitments to purchase and service equipment, and costs to maintain the equipment.

The following table summarizes related party activity for the three-month periods ended March 31, 2026 and 2025:

	*Three Months Ended March 31,*
	*2026*		*2025*
Equipment purchases and de-install costs	$	10,000	$	1,307,000
Costs incurred to maintain equipment		248,000		251,000
Total related party transactions	$	258,000	$	1,558,000

The Company also had commitments to purchase and install two Esprit units, and two LINACs, and to service the related equipment totaling $10,464,000 as of March 31, 2026.

Related party liabilities on the condensed consolidated balance sheets consist of the following as of March 31, 2026 and December 31, 2025:

	*March 31,*		*December 31,*
	*2026*		*2025*
Accounts payable, asset retirement obligation and other accrued liabilities	$	2,206,000	$	1,887,000

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This quarterly report to the SEC may be deemed to contain certain forward-looking statements. The Private Securities Litigation Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words like we “believe”, “anticipate”, “target”, “expect”, “pro forma”, “estimate”, “intend”, “will”, “is designed to”, “plan” and words of similar meaning. Forward-looking statements describe our future plans, objectives, expectations or goals. Such statements address future events and conditions and include, but are not limited to, such things as capital expenditures, earnings, liquidity and capital resources, financing of our business, government programs and regulations, legislation affecting the health care industry, the expansion of our proton beam radiation therapy business, accounting matters, compliance with debt covenants, completed and potential acquisitions, competition, customer concentration, contractual obligations, timing of payments, technology and interest rates. These forward-looking statements involve known and unknown risks that may cause our actual results in future periods to differ materially from those expressed in any forward-looking statement. Factors that could cause or contribute to such differences include, but are not limited to, such things as our level of debt, the limited market for our capital-intensive services, the impact of lowered federal reimbursement rates, the impact of U.S. health care reform legislation, competition and alternatives to our services, technological advances and the risk of equipment obsolescence, our significant investment in the proton beam radiation therapy business, restrictions in our debt agreements that limit our flexibility to operate our business, our ability to repay our indebtedness, breaches in security of our information technology, and the small and relatively illiquid market for our stock. These lists are not all-inclusive because it is not possible to predict all factors. Further information on potential factors that could affect the financial condition, results of operations and future plans of American Shared Hospital Services is included in the filings of the Company with the SEC, including the Annual Report on Form 10-K for the year ended December 31, 2025. Any forward-looking statement speaks only as of the date such statement was made, and we are not obligated to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made, except as required by applicable laws or regulations.

Overview

American Shared Hospital Services is a leading provider of turn-key technology solutions for stereotactic radiosurgery and advanced radiation therapy equipment and services. The main drivers of the Company’s revenue are numbers of sites, procedure volume, and reimbursement. The Company delivers radiation therapy through medical equipment leasing and direct patient services, its two reportable segments. The medical equipment leasing segment, which we also refer to as the Company’s leasing segment, operates by fee-per-use contracts or revenue sharing contracts where the Company shares in the revenue and operating costs of the equipment. The Company leases seven Gamma Knife systems and one PBRT system as of March 31, 2026, where a contract exists between the hospital and the Company.

The Company acquired 60% of the equity interests of the RI Companies, which operate three single-unit radiation therapy facilities in Rhode Island. The Company, through GKF, owns and operates two single-unit Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador. The Company also owns and operates a single-unit radiation therapy center in Puebla, Mexico. The Company’s facilities in Rhode Island, Peru, Ecuador, and Mexico are considered direct patient services, where a contract exists between the Company’s facilities and the individual treated at the facility.

Based on the guidance provided in accordance with ASC 280 Segment Reporting, the Company determined it has two reportable segments, leasing and direct patient services. See Note 1 - Basis of Presentation to the condensed consolidated financial statements for additional information. The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations reflects activity for both segments and specifically addresses a segment when appropriate to the discussion.

Reimbursement

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

Application of Critical Accounting Policies and Estimates

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

The most significant accounting policies followed by the Company are presented in Note 2 to the consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2025. These policies along with the disclosures presented in the other condensed consolidated financial statement notes and, in this discussion, and analysis, provide information on how significant assets and liabilities are valued in the condensed consolidated financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of financial statement amounts, and the methods, assumptions and estimates underlying those amounts, management has identified revenue recognition for revenue sharing arrangements, and the carrying value of property and equipment and useful lives, and as such the aforementioned could be most subject to revision as new information becomes available. The following are our critical accounting policies in which management’s estimates, assumptions and judgments most directly and materially affect the condensed consolidated financial statements:

Revenue Recognition

The Company recognizes revenues under ASC 842 and ASC 606. The Company had seven domestic Gamma Knife units, two international Gamma Knife units, three domestic LINAC units, one international LINAC unit, and one PBRT system in operation in the United States as of March 31, 2026, and ten domestic Gamma Knife units, two international Gamma Knife units, three domestic LINAC units, and one PBRT system in operation in the United States as of March 31, 2025. Five of the Company’s seven domestic Gamma Knife customers are under fee-per-use contracts, and two customers are under revenue sharing arrangements. The seven domestic Gamma Knife contracts operate under the Company’s leasing segment. The Company’s PBRT system at Orlando Health is considered a revenue share contract operating under the leasing segment. On March 13, 2026, the Company and Orlando Health, Inc. entered into an amendment to their PBRT lease agreement to, among other things, extend the term through April 5, 2033. The Company’s interest in three single-unit radiation therapy facilities, acquired in Rhode Island in May 2024, and the Company’s single-unit LINAC facility in Puebla, Mexico operate under the Company’s direct patient services segment. The Company, through GKF, also owns and operates two single-unit, international Gamma Knife facilities in Lima, Peru and Guayaquil, Ecuador. These two units economically operate under the Company’s direct patient services segment.

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’s lease contracts typically have a ten-year term and are classified as either fee-per-use or revenue sharing. Fee-per-use revenues are recognized at the time the procedures are performed, based on each hospital’s contracted rate and the number of procedures performed. Under revenue sharing arrangements, the Company receives a contracted percentage of the reimbursement received by the hospital. The amount the Company expects to receive is recorded as revenue and estimated based on historical experience. Revenue estimates are reviewed periodically and adjusted as necessary. Some of the Company’s revenue sharing arrangements also have a cost sharing component. The Company records an estimate of operating costs which are reviewed on a regular basis and adjusted as necessary to more accurately reflect the actual operating costs. The operating costs are recorded as other direct operating costs in the condensed consolidated statements of operations. For the three-month period ended March 31, 2026, the Company recognized leasing revenue of approximately $3,020,000 compared to $2,991,000 for the same period in the prior year. For the three-month period ended March 31, 2026, $1,956,000 of the ASC 842 revenues were for PBRT services compared to $1,642,000, for the same period in the prior year.

Direct patient services income – The Company has stand-alone facilities in Lima, Peru, Guayaquil, Ecuador, and Puebla, Mexico where contracts exist between the Company’s facilities and the individual patients treated at the facility. Under ASC 606, the Company acts as the principal in these transactions and provides, at a point in time, a single performance obligation, in the form of a Gamma Knife or radiation therapy treatment. Revenue related to these treatments is recognized on a gross basis at the time when the patient receives treatment. There is no variable consideration present in the Company’s performance obligation and the transaction price is agreed upon per the stated contractual rate. GKPeru’s payment terms are typically prepaid for self-pay patients and insurance provider payments are paid net 30 days. GKCE’s patient population is primarily covered by a government payor and payments are paid between three and six months following issuance of an invoice. The facility in Puebla currently has a contract with one local hospital to cover its eligible patient base and is also treating self-pay patients. Puebla’s payment terms are typically prepaid for self-pay patients and net 30 days for the hospital patients. 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 RI Companies operate three, existing, stand-alone radiation therapy cancer centers in Woonsocket, Warwick and Providence, Rhode Island, where contracts exist between the Company’s facilities and the individual patients treated at the facility. Under ASC 606, the Company acts as the principal in these transactions and provides, at a point in time, a single performance obligation, in the form of radiation therapy treatment. Revenue related to radiation therapy is recognized at the expected amount to be received, based on insurance contracts and payor mix, when the patient receives treatment. There is no variable consideration present in the Company’s performance obligation and the transaction price is agreed upon per the stated contractual rate. Payment terms at these facilities are typically prepaid for self-pay patients and insurance providers are paid net 30 to 60 days. The Company did not capitalize any incremental costs related to the fulfillment of its customer contracts. The Company also concluded the three radiation therapy facilities are part of its direct patient services segment, see further discussion at Note 1 - Basis of Presentation to the condensed consolidated financial statements.

Accounts receivable balances under ASC 606 at March 31, 2026 and January 1, 2026 were $8,484,000 and $8,138,000, respectively. Accounts receivable balances under ASC 606 at March 31, 2025 and January 1, 2025 were $6,120,000 and $6,073,000, respectively. For the three-month periods ended March 31, 2026, the Company recognized direct patient services revenues of approximately $4,064,000 compared to $3,121,000 for the same period in the prior year.

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

Accounting Pronouncements Issued and Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and interim reporting periods beginning after December 15, 2025. The Company adopted ASU 2023-09 for the year-ended December 31, 2025, prospectively, and enhanced its disclosure requirements, accordingly.

In July 2025, the FASB issued ASU 2025-05 Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”) which provides (1) all entities with a practical expedient and (2) entities other than public business entities, with an accounting policy election when estimating credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company adopted ASU 2025-05 for the period-ended March 31, 2026 and concluded it did not have a material impact to its condensed consolidated financial statements.

Accounting Pronouncements Issued and Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ASU 2024-03”) which requires entities to 1. disclose amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities, 2. include certain amounts that are already required to be disclosed under current Generally Accepted Accounting Principles in the same disclosures as other disaggregation requirements, 3. disclose a qualitative description of the amounts remaining in relevant expense captions that are not necessarily disaggregated quantitatively, and 4. disclose the total amount of selling expenses, in annual reporting periods, an entity’s definition of selling expense. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating ASU 2024-03 to determine the impact it may have on its consolidated financial statements.

First Quarter 2026 Results

Revenues increased by $972,000 to $7,084,000 for the three-month period ended March 31, 2026 compared to $6,112,000 for the same period in the prior year. Revenues from the Company’s leasing segment increased by $29,000 to $3,020,000 for the three-month period ended March 31, 2026 compared to $2,991,000 for the same period in the prior year. The increase in leasing revenue was due to a higher number of Gamma Knife and PBRT procedures compared to the same period in the prior year. Revenues from the Company’s direct patient services segment increased by $943,000 to $4,064,000 for the three-month period ended March 31, 2026 compared to $3,121,000 for the same period in the prior year. The increase in direct patient services revenue was due to a higher number of procedures at the RI facilities and the Company’s radiation therapy facility in Puebla.

Radiation therapy revenues generated from the three stand-alone facilities acquired through the RI Acquisition and the radiation therapy facility in Puebla were $2,920,000 for the three-month period ended March 31, 2026, compared to $2,374,000 for the same period in the prior year. Radiation therapy procedures for the three stand-alone facilities acquired through the RI Acquisition and the radiation therapy facility in Puebla were 6,311 for the three-month period ended March 31, 2026, compared to 6,726 for the same period in the prior year.

Revenues generated from the Company’s PBRT system increased by $314,000 to $1,956,000 for the three-month period ended March 31, 2026, compared to $1,642,000 for the same period in the prior year, respectively. The increase for the three-month period ended March 31, 2026, was driven by higher procedure volumes.

The number of PBRT fractions increased by 172 to 1,003 for the three-month period ended March 31, 2026 compared to 831 for the same period in the prior year. The increase in PBRT volumes for the three-month period ended March 31, 2026 was due to what the Company believes are normal, cyclical fluctuations.

Gamma Knife revenue increased by $112,000 to $2,208,000 for the three-month period ended March 31, 2026 compared to $2,096,000 for the same period in the prior year. The increase for the three-month period ended March 31, 2026 was due to increased procedure volume from the direct patient services segment, offset by lower procedure volume from the leasing segment.

The number of Gamma Knife procedures increased by 21 to 229 for the three-month period ended March 31, 2026 compared to 208 for the same period in the prior year. Gamma Knife procedures from the Company’s leasing segment decreased 10.1% for the three-month period ended March 31, 2026 due to the expiration of one customer contract in April 2025. Gamma Knife procedures from the Company’s direct patient services segment, which are the two international Gamma Knife locations, increased 44% for the three-month period ended March 31, 2026, compared to the same period in the prior year. The Company completed the equipment upgrade in Peru to a Gamma Knife Esprit in June 2025. Following the upgrade, there was an increase in volume driven by shorter treatment times. The Company’s facility in Ecuador also experienced a 49% increase in volumes for the three-month period ended March 31, 2026 compared to same period in the prior year. The patient populations in Peru and Ecuador are primarily insured by local government therefore volumes can be impacted by local legislation changes or social and economic factors. Both facilities were impacted by local factors during the first quarter of 2025.

Total costs of revenue increased by $626,000 to $5,796,000 for the three-month period ended March 31, 2026 compared to $5,170,000 for the same period in the prior year.

Maintenance and supplies and other direct operating costs, related party, increased by $200,000 to $1,061,000 for the three-month period ended March 31, 2026 compared to $861,000 for the same period in the prior year. The increase in maintenance and supplies and other direct operating costs, related party, for the three-month period ended March 31, 2026, was due to maintenance for the LINAC in Puebla, Mexico that was previously under warranty, maintenance for the LINAC equipment in Rhode Island, and the PBRT maintenance contract, which increases on an annual basis.

Depreciation and amortization decreased by $156,000 to $1,289,000 for the three-month period ended March 31, 2026 compared to $1,445,000 for the same period in the prior year. The decrease in depreciation and amortization for the three-month period ended March 31, 2026 was due to the expiration of one Gamma Knife customer contract in April 2025, depreciation on the Gamma Knife equipment in Peru that was replaced during the second quarter of 2025, and assets in Rhode Island that became fully depreciated.

Other direct operating costs increased by $582,000 to $3,446,000 for the three-month period ended March 31, 2026 compared to $2,864,000 for the same period in the prior year. The increase in other direct operating costs for the three-month period ended March 31, 2026 was primarily due to operating costs at the RI facilities, which are part of the Company’s direct patient services segment and have higher operating costs compared to facilities in the Company’s leasing segment.

Selling and administrative expense increased by $102,000 to $1,910,000 for the three-month period ended March 31, 2026 compared to $1,808,000 for the same period in the prior year. The increase in selling and administrative expense for the three-month period ended March 31, 2026 was primarily due to audit, tax and consulting fees, offset by lower legal fees.

Interest expense decreased by $131,000 to $302,000 for the three-month period ended March 31, 2026 compared to $433,000 for the same period in the prior year. The decrease in interest expense for the three-month period ended March 31, 2026 was due to a lower average principal balance on the Company’s debt compared to the same period in the prior year.

Interest and other income, net, decreased by $10,000 to $54,000 for the three-month period ended March 31, 2026 compared to $64,000 for the same period in the prior year. The decrease for the three-month period ended March 31, 2026 was due to lower interest income received on the Company’s cash, driven primarily by lower average cash balances compared to the same period in the prior year.

Income tax expense increased by $415,000 to an expense of $92,000 for the three-month period ended March 31, 2026 compared to an income tax benefit of $323,000 for the same period in the prior year. Income tax expense for the three-month period ended March 31, 2026, included a non-recurring adjustment for unrecognized tax benefits related to foreign taxes of $31,000, which offset income tax expense for the same period, compared to $71,000 for the three-month period ended March 31, 2025. Excluding this adjustment, income tax expense for the three-month period ended March 31, 2026 increased $375,000. The increase in income tax expense for the three-month period ended March 31, 2026 was due to profits generated at the Company’s direct patient services segment in foreign jurisdictions. The Company’s direct patient services segment conducts operations in the United States and certain foreign jurisdictions.

Net loss attributable to non-controlling interests increased by $63,000 to a loss of $350,000 for the three-month period ended March 31, 2026 compared to $287,000 for the same period in the prior year. Net income or loss attributable to non-controlling interests represents net income or loss earned by the 40% non-controlling interest in the Rhode Island facilities, the 19% non-controlling interest in GKF, and net income or loss of the non-controlling interests in various subsidiaries controlled by GKF. The change in net income or loss attributable to non-controlling interests reflects the relative profitability of the three Rhode Island facilities and GKF and its subsidiaries.

Net loss attributable to American Shared Hospital Services decreased by $13,000 to a net loss of $612,000, or $0.09 per diluted share for the three-month period ended March 31, 2026 compared to a net loss of $625,000, or $0.10 per diluted share for the same period in the prior year. Net loss for the three-month period ended March 31, 2026 decreased primarily due to increased revenues compared to the same period in the prior year. The Company incurred a net loss for three-month period ended March 31, 2026, due to losses incurred by the direct patient services segments, driven by higher operating costs for these facilities.

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. The Company had cash, cash equivalents and restricted cash of $5,223,000 at March 31, 2026 compared to $3,712,000 at December 31, 2025. The Company’s cash position increased by $1,511,000 during the first three months of 2026 driven by cash provided by operating activities of $2,149,000. This increase was offset by payment for the purchase of property and equipment of $41,000, payments on long-term debt of $472,000, and distributions to non-controlling interests of $125,000. The Company’s expected primary cash needs on both a short and long-term basis are for capital expenditures, business expansion, working capital, and other general corporate purposes. The Company has scheduled interest and principal payments under its debt obligations of approximately $10,407,000 during the next 12 months. Of this amount, there was an aggregate of $7,605,000 due on April 9, 2026 for the Term Loan and DDTL. For a further discussion of these obligations, see “Long-Term Debt” below.

Working Capital

The Company had a working capital deficit at March 31, 2026 of $5,446,000 compared to a working capital deficit of $5,724,000 at December 31, 2025. The $278,000 decrease in working capital deficit was primarily due to increasing cash and a decrease in the current portion of long-term debt, net, offset in part by an increase in accounts payable and related party payables. If the Company is unable to negotiate an extension to the Credit Agreement, the Company’s liquidity will be adversely impacted and the Company’s ability to satisfy all of its commitments over the next twelve months in accordance with their current terms would be jeopardized. See additional discussion in the “Long-Term Debt” and “Commitments” sections below. The Company, in the past, has secured financing for its Gamma Knife and radiation therapy units. The Company has secured financing for its projects from several lenders and anticipates that it will be able to secure financing on future projects from these or other lending sources, but there can be no assurance that financing will continue to be available on acceptable terms. Furthermore, if the Company’s payment obligations under the Credit Agreements become accelerated due to the events of default under such agreements, the Company would not have sufficient cash on hand, cash flow from operations, and other cash resources to satisfy such accelerated payment obligations, which raises substantial doubt about the Company’s ability to continue as a going concern. See additional discussion in the “Long-Term Debt” and “Going-Concern Consideration” sections below.

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 (the “Credit Agreement”) with Fifth Third Bank, N.A. (“Fifth Third”). The Credit Agreement includes three loan facilities. The first loan facility is a $9,500,000 term loan (the “Term Loan”) which was used to refinance the domestic Gamma Knife debt and finance leases, and associated closing costs. The second loan facility of $5,500,000 is a delayed draw term loan (the “DDTL”) which was used to refinance the Company’s PBRT finance leases and associated closing costs, as well as to provide additional working capital. The third loan facility provides for a $7,000,000 revolving line of credit (the “Revolving Line”) available for future projects and general corporate purposes. The facilities have a five-year maturity, which matured on April 9, 2026, and carry a floating interest rate based on the Secured Overnight Financing Rate (“SOFR”) plus 3.0% (6.86% as of March 31, 2026) and are secured by a lien on substantially all of the assets of the Loan Parties and guaranteed by ASHS, Orlando and ASRS. There was $7,075,000 due on April 9, 2026 for the Term Loan and DDTL.

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

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

The long-term debt on the condensed consolidated balance sheets related to the Term Loan, DDTL, Revolving Line, Supplemental Term Loan and Second Supplemental Term Loan was $15,895,000 and $16,197,000 as of March 31, 2026 and December 31, 2025, respectively. The Company did not capitalize any debt issuance as of March 31, 2026 and December 31, 2025, related to the issuance of the Supplemental Term Loan and Second Supplemental Term Loan.

The Credit Agreement contains customary covenants and representations, including without limitation, a minimum fixed charge coverage ratio of 1.25 and maximum funded debt to EBITDA ratio of 3.0 to 1.0 (tested on a trailing twelve-month basis at the end of each fiscal quarter), an obligation that the Company maintain $5,000,000 of unrestricted cash, reporting obligations, limitations on dispositions, changes in ownership, mergers and acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and capital expenditures.

On September 30, 2025, the Company received a limited waiver from Fifth Third with respect to its failure to be in compliance with the maximum funded debt to EBITDA ratio covenant in the Credit Agreement as of June 30, 2025 and with respect to the delivery of items following the closing of the Second Amendment.

As previously disclosed, (i) on December 10, 2025, the Loan Parties received notice from Fifth Third asserting that an Event of Default had occurred under the Credit Agreement due to the Borrowers’ failure to comply with the Minimum Cash Covenant as of September 30, 2025, and (ii) as of December 31, 2025, the Company was not in compliance with the minimum fixed-charge coverage ratio, the maximum funded debt-to-EBITDA ratio, and the Minimum Cash Covenant required by the Credit Agreement and notified Fifth Third of such non-compliance (all such defaults in clauses (i) and (ii), collectively, the “Financial Covenant Defaults”). The Financial Covenant Defaults under the Credit Agreement remain uncured as of March 31, 2026, and, as a result, the Loan Parties are not in compliance with the Credit Agreement as of such date.

Due to the Financial Covenant Defaults described above, Fifth Third may exercise any of its rights, powers, privileges, and remedies under the Credit Agreement, the other Loan Documents, and applicable law, including the right to accelerate the Borrowers’ payment obligations under the Credit Agreement. In December 2025, as a result of the Financial Covenant Defaults, Fifth Third notified the Company that, among other things, it had suspended the Revolving Loan Commitment with respect to additional Revolving Loan Advances. To date, Fifth Third has not accelerated the obligations of the Loan Parties under the Credit Agreement or other Loan Documents.

As noted above, the Credit Agreement matured on April 9, 2026 and is secured by a lien on substantially all of the assets of the Loan Parties and is guaranteed by ASHS. The Loan Parties did not satisfy all outstanding obligations under the Credit Agreement on the maturity date. ASHS is currently in discussions with Fifth Third regarding a waiver and an amendment to extend the maturity date of the Credit Agreement. However, there can be no assurances regarding the outcome of such discussions.

The loan entered into with United States International Development Finance Corporation (“DFC”) in connection with the acquisition of GKCE in June 2020 (the “DFC Loan”) was obtained through the Company’s wholly-owned subsidiary, HoldCo and is guaranteed by GKF. The DFC Loan is secured by a lien on GKCE’s assets. 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%. 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 long-term debt on the condensed consolidated balance sheets related to the DFC Loan was $985,000 and $1,149,000 as of March 31, 2026 and December 31, 2025, respectively.

The DFC Loan contains customary covenants including without limitation, requirements that HoldCo maintain certain financial ratios related to liquidity and cash flow as well as depository requirements. On March 28, 2024, HoldCo 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. HoldCo was not in compliance with the cash to debt covenant at March 31, 2026. The Company notified DFC of this non-compliance and is in discussions for an extended waiver or amendment to the DFC Loan. However, there can be no assurances regarding the outcome of such discussions.

As a result of the Loan Parties’ Financial Covenant Defaults under the Credit Agreement with Fifth Third discussed above, ASHS determined that the non-compliance with the Credit Agreement could be deemed to have resulted in an Event of Default (as defined in the DFC Loan) under the DFC Loan. However, as of the date of this Quarterly Report, DFC has not delivered any notice to HoldCo or ASHS asserting the occurrence of an Event of Default resulting from the Financial Covenant Defaults or sought to exercise any remedies it may have under the DFC Loan as a result thereof.

Furthermore, ASHS has determined that HoldCo’s non-compliance with the DFC Loan could be deemed to have resulted in an Event of Default (as defined in the Credit Agreement) under the Credit Agreement with Fifth Third. However, as of the date of this Quarterly Report, Fifth Third has not delivered any notice to the Loan Parties asserting that such an Event of Default has occurred or sought to exercise any remedies it may have under the Credit Agreement as a result thereof.

As long as the Company remains in default under the Credit Agreements, Fifth Third and DFC could accelerate all payment obligations under the Credit Agreements. If Fifth Third or DFC were to accelerate all payment obligations under the Credit Agreements as a result of the defaults thereunder, the Company would not have sufficient cash on hand to satisfy such accelerated payment obligations. As a result, these conditions raise substantial doubt about the Company’s ability to continue as a going concern.

In November and December 2024, GKCE obtained two loans with banks locally in Ecuador (the “GKCE Loans”). The GKCE Loans carry interest rates of 12.60% and 12.78% and are payable in twelve and thirty-six equal monthly installments of principal and interest, respectively. The Company did not capitalize any debt issuance costs related to the GKCE Loans. Total long-term debt on the condensed consolidated balance sheets related to the GKCE Loans was $47,000 and $53,000 as of March 31, 2026 and December 31, 2025, respectively.

As of March 31, 2026, long-term debt on the condensed consolidated balance sheets was $16,843,000. See Note 3 - Long Term Debt to the condensed consolidated financial statements for additional information.

Commitments

As of March 31, 2026, the Company had commitments to purchase and install two Esprit and two LINAC systems. The Esprit upgrades and one LINAC installation are anticipated to occur in the second half of 2026 or later at existing customer sites. The remaining LINAC is reserved for a future customer site. Total Gamma Knife and LINAC commitments as of March 31, 2026 were $7,884,000. There are no deposits on the condensed consolidated balance sheets related to these commitments as of March 31, 2026, nor are there any penalties if the Company decides to not execute these commitments. The Company’s current intent is to finance substantially all of these commitments. There can be no assurance that financing will be available for the Company’s initiatives or future projects, or at terms that are acceptable to the Company. However, the Company currently has cash on hand of $5,223,000 and is actively engaged with financing resources to fund these projects.

As of March 31, 2026, the Company had commitments to service and maintain its Gamma Knife, LINAC, and PBRT equipment. The service commitments are carried out via contracts with Mevion, Elekta, Solutech and Mobius Imaging, LLC. The Company’s commitment to purchase one LINAC system also includes a 5-year agreement to service the equipment, respectively. Total service commitments as of March 31, 2026 were $5,705,000. The Gamma Knife and certain other service contracts are paid monthly, as service is performed. The Company believes that cash flow from cash on hand and operations will be sufficient to cover these payments.

Related Party Transactions

The Company’s Gamma Knife business is operated through its 81% indirect interest in its GKF subsidiary. The remaining 19% of GKF is owned by a wholly owned U.S. subsidiary of Elekta, which is the manufacturer of the Gamma Knife. Since the Company purchases its Gamma Knife units from Elekta, there are significant related party transactions with Elekta, such as equipment purchases, commitments to purchase and service equipment, and costs to maintain the equipment.

The following table summarizes related party activity for the three-month periods ended March 31, 2026 and 2025:

	Three Months Ended March 31,
	2026		2025
Equipment purchases and de-install costs	$	10,000	$	1,307,000
Costs incurred to maintain equipment		248,000		251,000
Total related party transactions	$	258,000	$	1,558,000

The Company also had commitments to purchase and install two Esprit units and two LINACs, and service the related equipment totaling $10,464,000 as of March 31, 2026.

Related party liabilities on the condensed consolidated balance sheets consist of the following as of March 31, 2026 and December 31, 2025

	March 31,		December 31,
	2026		2025
Accounts payable, asset retirement obligation and other accrued liabilities	$	2,206,000	$	1,887,000

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company does not hold or issue derivative instruments for trading purposes and is not a party to any instruments with leverage or prepayment features. The Company does not have affiliation with partnerships, trusts or other entities whose purpose is to facilitate off-balance sheet financial transactions or similar arrangements, and therefore has no exposure to the financing, liquidity, market or credit risks associated with such entities. At March 31, 2026, the Company had no significant long-term, market-sensitive investments.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934. These controls and procedures are designed to ensure that material information relating to the Company and its subsidiaries is communicated to the principal executive officer and our principal financial officer. Based on that evaluation, our principal executive officer and our principal financial officer concluded that, as of March 31, 2026, our disclosure controls and procedures were not effective due to the material weakness in our internal controls over financial reporting described in our Annual Report on Form 10-K for the year ended December 31, 2025, with respect to the Company having an insufficient number of personnel and resources with experience to create a proper control environment.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The Company’s remediation plan related to the material weakness in our internal controls identified are to hire sufficient personnel with accounting and financial reporting experience to augment its current staff and to improve the timeliness of our overall effectiveness of the Company’s closing and financial reporting processes, including as described in this paragraph. As previously disclosed, on December 19, 2024, the Company appointed a new Chief Financial Officer who also serves as the Company’s principal financial officer and principal accounting officer and has extensive experience and expertise in billing and collections for radiation therapy facilities. During 2024, the Company outsourced its billing cycle for its Rhode Island facilities. In May 2025, the Company hired a Director of Revenue Cycle Management and effective June 1, 2025 began preparing to process the Rhode Island revenue cycle internally. Two additional staff members were hired during 2025 to support this process internally as well. While this process is still relatively new and continuing to be implemented, the Company expects this change to provide more control and efficiency to this process overall. Also, the Company hired an Accounting Manager on a full-time basis in late March 2025 in addition to using third party accounting consulting services as needed on an ongoing basis. The Company will continue to assess the need for additional resources, especially in the finance and accounting areas, as the Company’s business continues to grow and expand.

The primary element of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. As management continues to evaluate and work to improve our internal control over financial reporting, management may determine it is necessary to take additional measures to address the material weakness.

Except for the continued implementation of the remediation plan described above, there were no other changes in our internal control over financial reporting during the three-month period ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors

There were no material changes during the period covered in this report to the risk factors previously disclosed in Part 1, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

As described in Item 2 of Part I of this Quarterly Report under the subheading “Long-Term Debt”, ASHS and certain of its subsidiaries are not in compliance with certain covenants under the Credit Agreements as of March 31, 2026. Additionally, the Loan Parties did not satisfy all outstanding obligations under the Credit Agreement with Fifth Third when it matured on April 9, 2026. To date, neither Fifth Third nor DFC have accelerated the obligations under the Credit Agreements. ASHS is currently in discussions with Fifth Third regarding an amendment to extend the maturity date of the Credit Agreement. However, there can be no assurances regarding the outcome of such discussions.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

During the three-month period ended March 31, 2026, none of the Company’s directors or officers adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408(a) of Regulation S-K

Item 6. Exhibit Index

			Incorporated by reference herein
Exhibit Number		Description	Form	Exhibit	Date of Filing
10.1	ǂ	Amendment Two to Proton Beam Radiation Therapy Lease Agreement effective as of March 13, 2026, by and between American Shared Hospital Services and Orlando Health, Inc.	8-K 001-08789	10.1	March 19, 2026
31.1	*	Certification of Principal Executive Officer pursuant to Rule 13a-14a/15d-14a, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	*	Certification of Principal Financial Officer pursuant to Rule 13a-14a/15d-14a, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	**	Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	*	Inline XBRL Instance Document
101.SCH	*	Inline XBRL Taxonomy Extension Schema Document
101.CAL	*	Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF	*	Inline XBRL Taxonomy Definition Linkbase Document
101.LAB	*	Inline XBRL Taxonomy Label Linkbase Document
101.PRE	*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	*	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline Instance XBRL contained in Exhibit 101

	*	Filed herewith.
	**	Furnished herewith.
	ǂ	Certain portions of this exhibit have been omitted because they are not material, would be competitively harmful if publicly disclosed, and are of the type that the registrant treats as private or confidential.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AMERICAN SHARED HOSPITAL SERVICES

Registrant

Date:	May 14, 2026	/s/ Raymond C. Stachowiak
		Raymond C. Stachowiak
		Executive Chairman of the Board (principal executive officer)

Date:	May 14, 2026	/s/ Raymond S. Frech
		Raymond S. Frech
		Chief Financial Officer (principal financial and principal accounting officer)

AMERICAN SHARED HOSPITAL SERVICES 10-Q