AMERICAN SHARED HOSPITAL SERVICES (Form: 10-Q, Received: 05/13/2021 14:07:55)

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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, 2021 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.)

Two Embarcadero Center,

Suite 410

San Francisco,

California

94111

(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

NYSEAMER

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 3, 2021, there were outstanding 5,801,000 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, 2021		December 31, 2020
Current assets:
Cash and cash equivalents	$	4,895,000	$	3,961,000
Restricted cash	118,000		364,000
Accounts receivable, net of allowance for doubtful accounts of $100,000 at March 31, 2021 and $100,000 at December 31, 2020	4,792,000		4,303,000

Other receivables	280,000		272,000
Prepaid expenses and other current assets	1,364,000		1,950,000

Total current assets	11,449,000		10,850,000

Property and equipment:
Medical equipment and facilities	70,718,000		75,657,000
Office equipment	394,000		330,000
Construction in progress	1,178,000		170,000
	72,290,000		76,157,000
Accumulated depreciation and amortization	(41,944,000)		(45,739,000)
Net property and equipment	30,346,000		30,418,000

Land	19,000		19,000
Goodwill	1,265,000		1,265,000
Right of use assets	812,000		886,000
Intangible asset	78,000		78,000
Other assets	78,000		137,000

Total assets	$	44,047,000	$	43,653,000

LIABILITIES AND SHAREHOLDERS' EQUITY	March 31, 2021		December 31, 2020
Current liabilities:
Accounts payable	$	885,000	$	683,000
Employee compensation and benefits	432,000		405,000
Other accrued liabilities	2,712,000		1,574,000
Asset retirement obligations	1,214,000		1,270,000
Income taxes payable	399,000		373,000
Working capital payment due	197,000		197,000
Short term financing	355,000		471,000
Current portion of lease liabilities	310,000		305,000
Current portion of long-term debt	782,000		1,157,000
Current portion of finance leases	—		5,945,000

Total current liabilities	7,286,000		12,380,000

Long-term lease liabilities, less current portion	502,000		581,000
Long-term debt, less current portion	11,820,000		3,440,000
Long-term finance leases, less current portion	—		2,974,000
Deferred revenue, less current portion	193,000		210,000

Deferred income taxes	402,000		418,000

Shareholders' equity:
Common stock, no par value (10,000,000 authorized; 5,801,000 and 5,791,000 shares issued and outstanding at March 31, 2021 and at December 31, 2020, respectively)	10,753,000		10,753,000

Additional paid-in capital	7,131,000		7,024,000
Retained earnings	1,526,000		1,497,000
Total equity-American Shared Hospital Services	19,410,000		19,274,000
Non-controlling interests in subsidiaries	4,434,000		4,376,000
Total shareholders' equity	23,844,000		23,650,000

Total liabilities and shareholders' equity	$	44,047,000	$	43,653,000

See accompanying notes

AMERICAN SHARED HOSPITAL SERVICES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months ended March 31,
	2021		2020

Revenues	$	4,364,000	$	4,568,000

Costs of revenue:

Maintenance and supplies	672,000		633,000

Depreciation and amortization	1,198,000		1,647,000

Other direct operating costs	1,060,000		894,000

	2,930,000		3,174,000

Gross margin	1,434,000		1,394,000

Selling and administrative expense	1,084,000		1,211,000

Interest expense	260,000		282,000

Operating income (loss)	90,000		(99,000)



Interest and other income	3,000		3,000

Income (loss) before income taxes	93,000		(96,000)

Income tax expense (benefit)	6,000		(28,000)

Net income (loss)	87,000		(68,000)
Less: Net (income) attributable to non-controlling interest	(58,000)		(67,000)

Net income (loss) attributable to American Shared Hospital Services	$	29,000	$	(135,000)

Net income (loss) per share:

Earnings (loss) per common share - basic	$	0.00	$	(0.02)

Earnings (loss) per common share - diluted	$	0.00	$	(0.02)

See accompanying notes

AMERICAN SHARED HOSPITAL SERVICES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

(Unaudited)



	FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2021 AND 2020
	Common Shares	Common Stock		Additional Paid-in Capital		Retained Earnings		Sub-Total ASHS		Non-controlling Interests in Subsidiaries		Total

Balances at January 1, 2020	5,817,000	$	10,753,000	$	6,725,000	$	8,555,000	$	26,033,000	$	5,778,000	$	31,811,000

Stock-based compensation expense	—	—		56,000		—		56,000		—		56,000

Restricted common shares returned to the plan	(129,000)	—		—		—		—		—		—

Cash distributions to non-controlling interests	—	—		—		—		—		(326,000)		(326,000)

Net (loss) income	—	—		—		(135,000)		(135,000)		67,000		(68,000)

Balances at March 31, 2020	5,688,000	$	10,753,000	$	6,781,000	$	8,420,000	$	25,954,000	$	5,519,000	$	31,473,000
























Balances at January 1, 2021	5,791,000	$	10,753,000	$	7,024,000	$	1,497,000	$	19,274,000	$	4,376,000	$	23,650,000

Stock-based compensation expense	10,000	—		107,000		—		107,000		—		107,000





Net income	—	—		—		29,000		29,000		58,000		87,000

Balances at March 31, 2021	5,801,000	$	10,753,000	$	7,131,000	$	1,526,000	$	19,410,000	$	4,434,000	$	23,844,000

See accompanying notes

AMERICAN SHARED HOSPITAL SERVICES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months ended March 31,
	2021		2020
Operating activities:
Net income (loss)	$	87,000	$	(68,000)

Adjustments to reconcile net income (loss) to net cash from operating activities

Depreciation and amortization	1,231,000		1,676,000

Non cash lease expense	74,000		67,000

Deferred income taxes	(16,000)		(28,000)

Stock-based compensation expense	107,000		56,000



Interest expense associated with lease liabilities	12,000		17,000

Changes in operating assets and liabilities:

Receivables	(497,000)		848,000

Prepaid expenses and other assets	551,000		557,000

Accounts payable, accrued liabilities and deferred revenue	1,294,000		383,000

Income taxes payable (receivable)	26,000		(35,000)

Lease liabilities	(86,000)		(84,000)



Net cash provided by operating activities	2,783,000		3,389,000

Investing activities:
Payment for purchase of property and equipment	(1,065,000)		(195,000)





Net cash used in investing activities	(1,065,000)		(195,000)

Financing activities:
Principal payments on long-term debt	(276,000)		(554,000)

Principal payments on finance leases	(638,000)		(912,000)

Principal payments on short-term financing	(116,000)		(158,000)

Distributions to non-controlling interests	—		(326,000)







Net cash used in financing activities	(1,030,000)		(1,950,000)

Net change in cash, cash equivalents, and restricted cash	688,000		1,244,000

Cash, cash equivalents, and restricted cash at beginning of period	4,325,000		1,779,000

Cash, cash equivalents, and restricted cash at end of period	$	5,013,000	$	3,023,000

Supplemental cash flow disclosure:
Cash paid during the period for:

Interest	$	260,000	$	282,000

Income taxes (refunded) paid	$	(4,000)	$	34,000

Schedule of non-cash investing and financing activities
Lease reassessment right of use assets and lease liabilities	$	—	$	67,000



Interest capitalized to property and equipment	$	—	$	32,000



Acquisition of equipment with long-term debt financing	$	—	$	1,184,000

See accompanying notes

AMERICAN SHARED HOSPITAL SERVICES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary for the fair presentation of American Shared Hospital Services’ consolidated financial position as of March 31, 2021, the results of its operations for the three-month periods ended March 31, 2021 and 2020, and the cash flows for the three-month periods ended March 31, 2021 and 2020. The results of operations for the three-months ended March 31, 2021 are not necessarily indicative of results on an annualized basis. Consolidated balance sheet amounts as of December 31, 2020 have been derived from 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, 2020 included in American Shared Hospital Services’ Annual Report on Form 10-K filed with the Securities and Exchange Commission.

These condensed consolidated financial statements include the accounts of American Shared Hospital Services and its subsidiaries (the “Company”) as follows: the Company wholly-owns the subsidiaries American Shared Radiosurgery Services (“ASRS”), PBRT Orlando, LLC (“Orlando”), OR21, Inc., and MedLeader.com, Inc. (“MedLeader”); the Company is the majority owner of Long Beach Equipment, LLC (“LBE”); ASRS is the majority-owner of GK Financing, LLC (“GKF”) which wholly-owns the subsidiary Instituto de Gamma Knife del Pacifico S.A.C. (“GKPeru”) and HoldCo GKC S.A. (“HoldCo”). GKF is the majority owner of the subsidiaries Albuquerque GK Equipment, LLC (“AGKE”) and Jacksonville GK Equipment, LLC (“JGKE”). GKF acquired Gamma Knife Center Ecuador S.A. (“GKCE”) through HoldCo in June 2020.

The Company (through ASRS) and Elekta AB, 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, 2021, GKF provides Gamma Knife units to thirteen medical centers in the United States in the states of Arkansas, California, Florida, Illinois, Indiana, Mississippi, Nebraska, New Mexico, New York, Ohio, Oregon, and Texas. GKF also owns and operates 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 customer in the United States.

The Company formed the subsidiaries GKPeru 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.

On June 12, 2020, GKF purchased approximately 98% of the total outstanding shares of GKCE, from GKCE’s majority shareholders (the “Acquisition”). As of March 31, 2021, the Company had acquired approximately 99.3% of the total outstanding shares of GKCE. The base purchase price for the Acquisition, including acquisition of the minority shares was approximately $2,000,000. This purchase price was paid with $575,000 in cash and a $1,425,000 loan from the United States International Development Finance Corporation (“DFC”). The purchase price is subject to certain post-closing adjustments, including adjustment for GKCE's working capital and excess cash. The DFC loan is denominated in U.S. dollars, which is also the currency of Ecuador. See “Note 9. GKCE Acquisition” for further discussion.

The Company continues to develop its design and business model for The Operating Room for the 21st CenturySM through its 50% owned OR21, LLC (“OR21 LLC”). The remaining 50% is owned by an architectural design company. OR21 LLC is not expected to generate significant revenue for at least the next two years.

MedLeader was formed to provide continuing medical education online and through videos for doctors, nurses, and other healthcare workers. This subsidiary is not operational at this time.

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

The COVID-19 pandemic, the resulting recession in the United States and its follow-on effects have impacted and will likely continue to impact business activity across industries, including the Company’s. During 2020, due to factors related to the COVID-19 pandemic such as delays in service at medical facilities and restrictions imposed by government agencies, and the Company’s customers in response to the spread of COVID-19, the Company experienced some delays in delivering certain Gamma Knife procedures and PBRT treatments. Similarly, the Company’s ability to conduct commercial efforts with its customers have been and are likely to continue to be disrupted as customers have turned their focus to dealing with the impact of the COVID-19 pandemic on their operations and have restricted access to their sites in efforts to contain the spread of the virus. The global nature of the pandemic has resulted in authorities implementing numerous measures designed to contain the virus, including travel bans and restrictions, border closures, quarantines, shelter-in-place orders, business limitations and shutdowns. The impact of the COVID-19 pandemic on the global economy and capital markets is significant, and on June 8, 2020 the National Bureau of Economic Research announced that the United States was in an economic recession. An extended economic recession in the United States or elsewhere could have a material adverse effect on the Company’s ability to conduct its business and to access financing, as well as on the Company’s results of operation, financial condition, liquidity and cash flows. The prioritization of COVID-19 treatment and containment has resulted in delays in decisions by the Company’s customers and their patients, obstacles to the Company’s ability to market and deliver its services, declines in treatment volumes and adverse impacts to revenues for both Gamma Knife procedures and PBRT treatments. As a result of the pandemic and related governmental actions, Gamma Knife procedures and PBRT treatments, which currently make up all of the Company’s revenue, may be impacted differently at each of the Company’s various locations and may take longer to recover than other areas of the economy, which may have a material impact on the Company's business. The Company’s Gamma Knife operations in Latin America have experienced a decline in procedures due to the COVID-19 pandemic. Our Gamma Knife and PBRT operations in the United States have also experienced negative impacts from the COVID-19 pandemic. As the COVID-19 pandemic continues to develop, additional impacts may arise that we are not aware of currently.

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 leasing radiosurgery and radiation therapy equipment to healthcare providers, and concluded there are two reportable segments, domestic and foreign. The Company provides Gamma Knife and PBRT equipment to fourteen hospitals in the United States and owns and operates two single-unit facilities in Lima, Peru and Guayaquil, Ecuador as of March 31, 2021. The Company determined two reportable segments existed due to similarities in economics of business operations and geographic location. The operating results of the two reportable segments are reviewed by the Company’s CEO and President, Chief Operating and Financial Officer, who are also deemed the Company’s Chief Operating Decision Makers (“CODMs”). As of March 31, 2020, the Company had one reportable segment. Following the Company's acquisition of GKCE in June 2020, the Company concluded it had two reportable segments.

The revenues and profit or loss, allocations for the Company's two reportable segments as of March 31, 2021 consists of the following:


	March 31,
	2021
Revenues
Domestic	$	3,699,000
Foreign	665,000
Total	$	4,364,000

Profit or (loss)
Domestic	$	73,000
Foreign	(44,000)
Total	$	29,000

Accounting Pronouncements Issued and Adopted

In December 2019, the FASB issued ASU 2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) which removes specific exceptions to the general principles in Topic 740 and eliminates the need for an organization to analyze whether the following apply in a given period: exception to the incremental approach for intraperiod tax allocation; exceptions to accounting for basis differences when there are ownership changes in foreign investments; exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. The new guidance is effective for fiscal years and interim periods beginning after December 15, 2020. The Company adopted ASU 2019-12 on January 1, 2021. There was no significant impact on its condensed consolidated financial statements and related disclosures.

Note 2. Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation for Gamma Knife 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 3 – 10 years, and after accounting for salvage value on the equipment where indicated. Salvage value is based on the estimated fair value of the equipment at the end of its useful life.

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, 2021 and December 31, 2020:


	March 31,		December 31,
	2021		2020

Medical equipment and facilities	$	70,718,000	$	75,657,000
Office equipment	394,000		330,000
Construction in progress	1,178,000		170,000


	72,290,000		76,157,000
Accumulated depreciation	(41,944,000)		(45,739,000)

Net property and equipment	$	30,346,000	$	30,418,000

As of March 31, 2021, approximately $3,064,000 of the net property and equipment balance is outside of the United States.

Note 3. Long-Term Debt Financing

Long-term debt consisted of five notes with three financing companies collateralized by the Gamma Knife units, the individual customer contracts, and related accounts receivable at March 31, 2021. The Company’s loan with DFC for the Acquisition was obtained through the Company’s wholly-owned subsidiary, HoldCo and is guaranteed by GKF. As of March 31, 2021, long-term debt on the Condensed Consolidated Balance Sheets, before the refinancing, was $4,321,000.

On April 9, 2021, the Company refinanced its existing debt and finance lease obligations, with the exception of its loan with DFC. A total of $8,281,000 of the Company’s finance leases were refinanced by long-term debt. Total long-term debt following this transaction was $12,602,000. The classification on the Condensed Consolidated Balance Sheets as of March 31, 2021 reflect the terms of the refinancing. See further details on the refinancing under Note 10 - Subsequent Event.

Note 4. Finance Leases

Finance lease obligations, before the refinancing, of $8,281,000 consisted of six leases with two financing companies, collateralized by Gamma Knife units and PBRT equipment, the individual customer contracts, and related accounts receivable at March 31, 2021.

On April 9, 2021, the Company's finance lease obligations were refinanced by long-term debt. The classification on the Condensed Consolidated Balance Sheets as of March 31, 2021 reflect the terms of the refinancing. See further details on the refinancing under Note 10 - Subsequent Event.

Note 5. Leases

The Company determines if a contract is a lease at inception. Under ASC 842 Leases (“ASC 842”), the Company is a lessor of equipment to various customers. Leases that commenced prior to 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. All of the Company’s lessor arrangements entered into 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’s Gamma Knife and PBRT contracts with hospitals 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.

The Company’s lessee operating leases are accounted for as right-of-use (“ROU”) assets, other current 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 in the range of approximately 4.0% and 6.0%, by using available market rates and expected lease terms. The operating lease ROU assets and liabilities also include any lease payments made and excludes lease incentives and 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 the agreement to lease clinic space for its stand-alone facility in Lima, Peru. These leases have remaining lease terms between 2 and 3 years, some of which include options to renew or extend the lease. As of March 31, 2021, operating ROU assets and liabilities were $812,000.

The following table summarizes maturities of lessee operating lease liabilities as of March 31, 2021:


Year ending December 31,	Operating Leases

2021 (excluding the three-months ended March 31, 2021)	$	261,000
2022	353,000
2023	248,000
2024	8,000



Total lease payments	870,000
Less imputed interest	(58,000)
Total	$	812,000

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 computation for the three-month periods ended March 31, 2021 and 2020 excluded approximately 370,000 and 430,000, respectively, of the Company's stock options because the exercise price of the options was higher than the average market price during those periods.

On March 31, 2020, the Company’s Award Agreements (as defined below) expired and the unvested performance share awards were returned to the Company’s stock incentive plan - see Note 7 for further discussion. Based on the guidance provided in accordance with ASC 260 Earnings Per Share (“ASC 260”), the weighted average common shares for basic earnings per share, for the three-month period ended March 31, 2020, excluded the weighted average impact of the unvested performance share awards. These awards were legally outstanding but not deemed participating securities and therefore were excluded from the calculation of basic earnings per share. The unvested shares were also excluded from the denominator for diluted earnings per share because they were considered contingent shares not deemed probable as of March 31, 2020.

The following table sets forth the computation of basic and diluted earnings per share for the three-month periods ended March 31, 2021 and 2020:


	Three Months ended March 31,
	2021		2020
Net income (loss) attributable to American Shared Hospital Services	$	29,000	$	(135,000)

Weighted average common shares for basic earnings per share	6,254,000		6,126,000
Diluted effect of stock options and restricted stock awards	68,000		27,000
Weighted average common shares for diluted earnings per share	6,322,000		6,153,000

Basic earnings (loss) per share	$	0.00	$	(0.02)
Diluted earnings (loss) per share	$	0.00	$	(0.02)

Note 7. Stock-based Compensation

In June 2010, the Company’s shareholders approved an amendment and restatement of the Company’s stock incentive plan, renaming it the Incentive Compensation Plan (the “Plan”), and among other things, increasing the number of shares of the Company’s common stock reserved for issuance under the Plan to 1,630,000. The Plan provides that the shares reserved under the Plan are available for issuance to officers of the Company, other key employees, non-employee directors, and advisors. No further grants or share issuances will be made under the previous plans. On June 21, 2019, the Company’s shareholders approved an amendment and restatement of the Plan in order to extend the term of the Plan by two years to February 22, 2022.

Stock-based compensation expense associated with the Company’s stock options to employees is calculated using the Black-Scholes valuation model. The Company’s stock awards have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value estimates. The estimated fair value of the Company’s option grants is estimated using assumptions for expected life, volatility, dividend yield, and risk-free interest rate which are specific to each award. The estimated fair value of the Company’s options is expensed over the period during which an employee is required to provide service in exchange for the award (requisite service period), usually the vesting period. Accordingly, stock-based compensation cost before income tax effect for the Company’s options and restricted stock awards in the amount of $107,000 and $56,000 is reflected in net income (loss) for the three-month periods ended March 31, 2021 and 2020, respectively. At March 31, 2021, there was approximately $10,000 of unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. This cost is expected to be recognized over a period of approximately three years.

On January 4, 2017, the Company entered into a Performance Share Award Agreement with three executive officers of the Company (the “Award Agreements”) for 161,766 restricted stock awards which vest upon the achievement of certain performance metrics. The Award Agreements expired on March 31, 2020. Based on the guidance in ASC 718 Stock Compensation (“ASC 718”), the Company concluded these were performance-based awards with vesting criteria tied to performance metrics. As of December 31, 2019, the Company achieved one of those certain performance metrics under the Award Agreements and recognized stock compensation expense of approximately $108,000 related to these awards. The unrecognized stock-based compensation expense for these awards was approximately $434,000 and the unvested awards of approximately 129,000 shares were returned to the Plan as of March 31, 2020.

The following table summarizes stock option activity for the three-month periods ended March 31, 2021 and 2020:


	Stock Options	Grant Date Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in Years)	Intrinsic Value
Outstanding at January 1, 2020	450,000	$	2.78	2.44	$	27,000



Outstanding at March 31, 2020	450,000	$	2.78	2.20	$	—
Exercisable at March 31, 2020	425,000	$	2.79	2.00	$	—

Outstanding at January 1, 2021	417,000	$	2.79	1.61	$	2,000



Outstanding at March 31, 2021	417,000	$	2.79	1.36	$	19,000
Exercisable at March 31, 2021	407,000	$	2.80	1.27	$	—

Note 8. 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 the amount of the nondeductible stock-based compensation associated with grants of its common stock options and from the results of foreign operations. A small change in estimated annual pretax income (loss) 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, 2021 and 2020 by applying the actual effective tax rates to income or (loss) reported within the condensed consolidated financial statements through those periods.

Note 9. GKCE Acquisition

On June 18, 2019, the Company entered into a Stock Purchase Agreement (the “Agreement”) to acquire Gamma Knife Center Ecuador S.A. (“GKCE”) from GKCE’s selling majority shareholders. GKCE is a well-established Gamma Knife operation founded in 2009 as a private clinic to introduce advanced stereotactic radiosurgery into Ecuador and continues to operate the only Gamma Knife unit in the country. The Company acquired GKCE for the continued expansion of its business internationally.

The Acquisition has been accounted for according to ASC 805 Business Combinations (“ASC 805”) using the acquisition method of accounting. Under the acquisition method of accounting, all assets acquired, including goodwill and other intangible assets, should be stated at fair value at the time of acquisition. The allocation of purchase price consideration is preliminary, pending the completion of the fair value of certain tangible, intangible assets, and residual goodwill. During the measurement period, which can be no more than one year from June 12, 2020 (the “Closing Date”), the Company expects to continue to obtain information to assist in determining the final fair value of assets acquired. The assets acquired were recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. Thus, the provisional measurements of fair value discussed below are subject to change.

As of March 31, 2021, accounting for the Closing Date accounts receivable balances, allowance on the uncollected accounts receivable balances, and related liabilities, was not complete. The accounting for these amounts will be complete following the twelve-month period after the Closing Date, per the terms of the Agreement. The Company expects to finalize the valuation as soon as practicable, but no later than one year from the Closing Date. While the Company believes its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired, and the resulting amount of goodwill.

After the Closing Date, the Company received additional information regarding the amounts recorded as accounts receivable as of June 12, 2020. After reviewing the information obtained, the Company booked an additional $27,000 of accounts receivable as of December 31, 2020. As a result, related liabilities were increased by $13,000 and the contingent consideration increased by $14,000. There was no impact to goodwill or net loss as of December 31, 2020.

Note 10. Subsequent Event

On April 9, 2021 the Company entered into a five year $22.0 million credit agreement with Fifth Third Bank, N.A. (the “Credit Agreement”). The Credit Agreement includes three loan facilities. The first facility is a $9.5 million term loan of which $6.8 million was used to refinance the domestic Gamma Knife debt and finance leases, and associated closing costs, $1.6 million was used to finance two Gamma Knife reloads in the first quarter of 2021, with the remaining $1.1 million available for future projects. The second loan facility of $5.5 million was used to refinance the Company's PBRT finance leases, as well as to provide additional working capital. The third loan facility provides for a $7.0 million revolving line of credit available for future projects and general corporate purposes. The facilities carry a floating interest of LIBOR plus 3.0% and are collateralized by a blanket lien on substantially all of the Company's assets.

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), reporting obligations, limitations on dispositions, changes in ownership, mergers and acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and capital expenditures

As of March 31, 2021, the Company's short-term debt and finance lease obligations were $6,669,000. Following the completion of the Credit Agreement, these short-term obligations were refinanced and reduced to $782,000.

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

This quarterly report to the Securities and Exchange Commission may be deemed to contain certain forward-looking statements with respect to the financial condition, results of operations and future plans of American Shared Hospital Services (including statements regarding the expected continued treatment growth of the Company's MEVION S250 system, the expansion of the Company’s PBRT business, the timing and expansion of treatments by new Gamma Knife systems, the Company's expansion into new markets and the Company's acquisitions and potential market segments for its services, which involve risks and uncertainties including, but not limited to, the risks of economic and market conditions, the risks of variability of financial results between quarters, the risks of the Gamma Knife and radiation therapy businesses, the risks of developing The Operating Room for the 21st Century program, the risks of changes to CMS reimbursement rates or reimbursement methodology, the risks of the timing, financing, and operations of the Company’s PBRT business, the risks of the COVID-19 pandemic and its effect on the Company’s business operations and financial condition, the risk of expanding within or into new markets, and the risk that the integration or continued operation of acquired businesses could adversely affect financial results and the risk that current and future acquisitions may negatively affect the Company's financial position. 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 Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the definitive Proxy Statement for the Annual Meeting of Shareholders to be held on June 25, 2021.

The Company recognizes revenues under ASC 842 and ASC 606 Revenue from Contracts with Customers (“ASC 606”). The Company had thirteen Gamma Knife units and one PBRT system, and fifteen Gamma Knife units, one PBRT system and one IGRT machine in operation in the United States as of March 31, 2021 and 2020, respectively. Three of the Company’s customer contracts are through subsidiaries where GKF or its subsidiary is the majority owner and managing partner. Six of the Company’s fifteen current Gamma Knife customers are under fee-per-use contracts, and seven customers are under retail arrangements. 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 function similarly to the Company’s turn-key retail arrangements. The Company’s PBRT system at Orlando Health – UF Health Cancer Center (“Orlando Health”) is also considered a retail arrangement. The Company’s contract for IGRT equipment and related equipment services expired in April 2020 and the Company agreed to sell the equipment to its existing customer for $150,000, which is equal to the equipment's salvage value.

Rental income from medical services – The Company recognizes revenues under ASC 842 when services have been rendered and collectability is reasonably assured, on either a fee per use or revenue sharing basis. The terms of the contracts do not contain any guaranteed minimum payments. The Company’s contracts are typically for a ten-year term and are classified as either fee per use or retail. Retail arrangements are further classified as either turn-key or revenue sharing. Revenues from fee per use contracts is determined by each hospital’s contracted rate. 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. Under turn-key arrangements, the Company receives payment from the hospital at an agreed upon percentage share of the hospital’s reimbursement from third party payors, and the Company is responsible for paying all the operating costs of the equipment. Operating costs are determined primarily based on historical treatment protocols and cost schedules with the hospital. 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. For turn-key sites, the Company also shares a percentage of net operating profit. The Company records an estimate of net operating profit based on estimated revenues, less estimated operating costs. The operating costs and estimated net operating profit are recorded as other direct operating costs in the condensed consolidated statement of operations. For the three-month periods ended March 31, 2021 and 2020, the Company recognized revenues of approximately $3,699,000 and $4,339,000, respectively, under ASC 842.

Patient income – The Company has stand-alone facilities in Lima, Peru and Guayaquil, Ecuador, where a contract exists between the Company’s facilities and the individual patient treated at the facility. Under ASC 606, the Company acts as the principal in this transaction and provides, at a point in time, a single performance obligation, in the form of a Gamma Knife treatment. Revenue related to a Gamma Knife treatment 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 approximately 30 to 60 days upon invoice. The Company did not capitalize any incremental costs related to the fulfillment of its customer contracts. Accounts receivable earned by GKPeru were not significant for the three-month periods ended March 31, 2021 and 2020. GKCE’s accounts receivable were $478,000 for the three-month period ended March 31, 2021. For the three-month periods ended March 31, 2021 and 2020, the Company recognized revenues of approximately $665,000 and $229,000, respectively, under ASC 606.

The Centers for Medicare and Medicaid (“CMS”) have established a 2021 total reimbursement rate of approximately $9,600 ($9,600 in 2020) for a Medicare Gamma Knife treatment. The approximate CMS reimbursement rates for delivery of PBRT for a simple treatment without compensation for 2021 is $543 ($539 in 2020) and $1,298 ($1,246 in 2020) for simple with compensation, intermediate and complex treatments, respectively.

On September 18, 2020, CMS issued the final rule that would implement a new mandatory payment model for radiation oncology services: the RO APM. The RO APM is scheduled to commence January 1, 2022 and will be in effect for a five (5) year period. The RO APM significantly alters CMS' payment methodology from a fee for service paradigm to a set reimbursement by cancer type methodology for radiation services provided within a 90 day episode of care. Under the RO APM, hospital based and free-standing radiation therapy providers are mandatorily required to participate in the model based on whether the radiation therapy provider is located within a randomly selected Core Based Statistical Area (“CBSA”). CMS projects that providers treating approximately 30% of radiation oncology patients have been selected to participate in the RO APM. The remaining providers not included in the RO APM will continue to receive reimbursement based on a fee-for-service methodology. The RO APM includes but is not limited to PBRT and Gamma Knife services. Four (4) of the Company's Gamma Knife centers are scheduled to be included in the RO APM. It is not anticipated that inclusion in the RO APM will have a significant impact on the Company's Gamma Knife revenues. The Company's PBRT center was not selected for inclusion in the RO APM. For centers not included in the RO APM proposed model, Medicare reimbursement in 2021 for the most commonly used PBRT delivery codes increases by approximately 4.1% and decreases by approximately 1.7% for Gamma Knife.

The impact of the COVID-19 pandemic for the three-month periods ended March 31, 2021 and 2020 has varied by location based on the stage of containment and actions by government agencies. The impact on treatments and costs in the three-month periods ended March 31, 2021 and 2020 did not appear material for the Gamma Knife. The COVID-19 pandemic appears to have had a greater impact on PBRT fractions for the three-month period ended March 31, 2021.

Revenues decreased by $204,000 to $4,364,000 for the three-month period ended March 31, 2021 compared to $4,568,000 for the same period in the prior year.

Revenues generated from the Company’s PBRT system decreased by $145,000 to $1,531,000 for the three-month period ended March 31, 2021 compared to $1,676,000 for the same period in the prior year. The decrease in PBRT revenues for the three-month period ended March 31, 2021 was due to lower fractions primarily due to the continued impact of the COVID-19 pandemic, offset by a higher average reimbursement for the period.

The number of PBRT fractions decreased by 445 to 1,231 for the three-month period ended March 31, 2021 compared to 1,676 for the same period in the prior year. The decrease in PBRT volume for the three-month period ended March 31, 2021 was primarily due to the continued impact from the COVID-19 pandemic. The Company's PBRT system also experienced some down-time for maintenance during the three-month period ended March 31, 2021.

Gamma Knife revenues were $2,892,000 for the three-month periods ended March 31, 2021 and 2020. For the three-month period ended March 31, 2021, Gamma Knife procedures decreased, but this decrease was offset by an increase in average reimbursement. The increase in average reimbursement was partially driven by the Company’s contract that expired in the fourth quarter of 2020, which was reimbursed at a lower rate, and an increase in the average rate at the Company’s retail sites.

The number of Gamma Knife procedures decreased by 21 to 355 for the three-month period ended March 31, 2021 compared to 376 for the same period in the prior year. The decrease in Gamma Knife procedures for the three-month period ended March 31, 2021 was primarily due to the expiration of a contract in the fourth quarter of 2020 and in the first quarter of 2021. This decrease was offset by the Company’s acquisition of GKCE in the second quarter of 2020.

The Company’s contract for IGRT equipment and related equipment services expired in April 2020. As of March 31, 2021, the Company reviewed its estimate of related revenues and accounts receivable and determined the amount should be $0 and wrote off the balance of $59,000.

Total costs of revenue decreased by $244,000 to $2,930,000 for the three-month period ended March 31, 2021 compared to $3,174,000 for the same period in the prior year.

Maintenance and supplies increased by $39,000 to $672,000 for the three-month period ended March 31, 2021 compared to $633,000 for the same period in the prior year. The increase in maintenance and supplies for the three-month period ended March 31, 2021 was due to a maintenance contract for one of the Company's Gamma Knife Icon upgrades which commenced in the fourth quarter of 2020.

Depreciation and amortization decreased by $449,000 to $1,198,000 for the three-month period ended March 31, 2021 compared to $1,647,000 for the same period in the prior year. The decrease in depreciation and amortization for the three-month period ended March 31, 2021 was primarily due to the expiration of a contract in the fourth quarter of 2020 and in the first quarter of 2021. In addition, the Company determined some of its Gamma Knife equipment was impaired as of December, 31, 2020 and the related equipment values were written off for the year-ended, therefore, there was no depreciation expense incurred on this equipment for the three-month period ended March 31, 2021.

Other direct operating costs increased by $166,000 to $1,060,000 for the three-month period ended March 31, 2021 compared to $894,000 for the same period in the prior year. The increase in other direct operating costs for the three-month period ended March 31, 2021 was driven by the operating costs of GKCE which was acquired in June 2020.

Selling and administrative costs decreased by $127,000 to $1,084,000 for the three-month period ended March 31, 2021 compared to $1,211,000 for the same period in the prior year. The decrease for the three-month period ended March 31, 2021, was due to lower legal and other fees.

Interest expense decreased by $22,000 to $260,000 for the three-month period ended March 31, 2021 compared to $282,000 for the same period in the prior year. The decrease for the three-month period ended March 31, 2021 was due to a lower average principal base on the Company’s debt and leases compared to the same periods in the prior year, respectively, effectively reducing interest expense.

Interest and other income was $3,000 for the three-month period ended March 31, 2021 compared to $3,000 for the same period in the prior year. Interest and other income is comprised of interest expense and interest earned.

Income tax expense increased by $34,000 to $6,000 for the three-month period ended March 31, 2021 compared to an income tax benefit of $28,000 for the same period in the prior year. The increase in income tax expense for the three-month period ended March 31, 2021 was due to higher taxable income attributable to GKF and the acquisition of GKCE.

Net income attributable to non-controlling interest decreased by $9,000 to $58,000 for the three-month period ended March 31, 2021 compared to $67,000 for the same period in the prior year. Net income attributable to non-controlling interests represents net income earned by the 19% non-controlling interest in GKF, and net income of the non-controlling interests in various subsidiaries controlled by GKF. The decrease or increase in net income attributable to non-controlling interests reflects the relative profitability of GKF.

Net income increased by $164,000 to $29,000, or $0.00 per diluted share for the three-month period ended March 31, 2021 compared to a net loss of $135,000, or $0.02 per diluted share for the same period in the prior year. The increase in net income for the three-month period ended March 31, 2021 was due to a decrease in depreciation expense and selling and administrative costs.

Liquidity and Capital Resources

The Company had cash, cash equivalents and restricted cash of $5,013,000 at March 31, 2021 compared to $4,325,000 at December 31, 2020. The Company’s cash position increased by $688,000 primarily due to cash from operating activities of $2,783,000. This increase was offset by payment for the purchase of property and equipment of $1,065,000, payments on long-term debt and finance leases of $914,000 and payments on short-term financing of $116,000.

The Company has scheduled interest and principal payments under its debt obligations of approximately $1,209,000 during the next 12 months. The Company believes that its cash on hand, cash flow from operations, and other cash resources are adequate to meet its scheduled debt obligations and working capital requirements during the next 12 months. See additional discussion below related to commitments.

The Company as of March 31, 2021 had shareholders’ equity of $23,844,000, working capital of $4,163,000 and total assets of $44,047,000.

Commitments

On December 20, 2018, the Company signed Second Amendments to two System Build Agreements for the Company’s second and third Mevion PBRT units. The Company and Mevion have agreed to upgrade the second and third PBRT units for which the Company has purchase commitments. The Company is actively seeking sites for these units but, to date, has not entered into agreements with any party for either placement of a PBRT unit or the related financing. The Company projects that it will be required to commence delivery of the second and third PBRT units no later than 2023. In the event the Company is unable to enter into customer agreements within the requisite time frame or receive an extension from Mevion, the Company could forfeit its deposits. As of March 31, 2021, the Company had commitments, after deposits, to purchase two MEVION S250i PBRT systems for $34,000,000.

As of March 31, 2021, the Company had commitments to perform one Cobalt-60 reload and install four Leksell Gamma Knife Icon Systems (“Icon”) at existing customer sites, and purchase two Linear Accelerator (“LINAC”) systems, one to be placed at an existing customer site and one at a new customer site. The Company also has a commitment to upgrade the Gamma Knife unit at it's stand-alone facility in Ecuador to a Perfexion. The Cobalt-60 reload, Icon upgrades, and LINAC purchases are scheduled to occur between 2022 and 2023. The Company expects to upgrade the equipment in Ecuador in the third quarter of 2021. The Company has a commitment from DFC to finance this upgrade. Total Gamma Knife and LINAC commitments as of March 31, 2021 were $10,860,000. It is the Company’s intent to finance these commitments. There are no significant cash requirements, pending financing, for these commitments in the next 12 months. There can be no assurance that financing will be available for the Company’s current or future projects, or at terms that are acceptable to the Company.

On July 21, 2017, the Company entered into a Maintenance and Support Agreement (the “Mevion Service Agreement”) with Mevion, which provides for maintenance and support of the Company’s PBRT unit at Orlando Health. The Mevion Service Agreement began September 5, 2017, was amended in 2018, and renews annually over a five year period. The agreement requires an annual prepayment of $1,572,000 for the current contractual period. This payment portion was recorded as a prepaid contract and will be amortized over the one-year service period.

As of March 31, 2021, the Company had commitments to service and maintain its Gamma Knife and PBRT equipment. The service commitments are carried out via contracts with Mevion, Elekta and Mobius Imaging, LLC. In addition, in April 2019, the Company signed agreements to service the Icon upgrades which will be installed at various dates between 2021 and 2022. The Company’s commitments to purchase two LINAC systems also include a 9-year and 5-year agreement to service the equipment, respectively. Total service commitments as of March 31, 2021 were $10,272,000. 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.

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, 2021, 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 chief executive officer and our president and chief operating and 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 chief executive officer and the chief financial officer. Based on that evaluation, our chief executive officer and our chief financial officer concluded that, as of March 31, 2021, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to the chief executive officer and the chief financial officer, and recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

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 Act 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.

There were no changes in our internal control over financial reporting during the three-months ended March 31, 2021 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, 2020.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibit Index

Incorporated by reference herein

Exhibit Number

Description

Form

Exhibit

Date

10.1

Amendment Two to Equipment Lease Agreement (Reload) dated as of October 7, 2020 between GK Financing, LLC and Northern Westchester Hospital Association.

10.2

Amendment One to Leksell Gamma Knife Perfexion Purchased Services Agreement dated as of March 27, 2014 between GKF Financing, LLC and PeaceHealth Sacred Heart Medical Center at Riverbend.

10.3

Credit Agreement dated as of April 9, 2021 among American Shared Hospital Services, PBRT Orlando, LLC and GK Financing, LLC as the initial co-Borrowers, and American Shared Radiosurgery Services as the initial additional Loan Party and Fifth Third Bank, National Association, as Lender.

8-K
001-08789

10.1

4/15/2021

31.1

Certification of Chief 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 Chief 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 Chief Executive Officer and Chief 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

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Calculation Linkbase Document

101.DEF

XBRL Taxonomy Definition Linkbase Document

101.LAB

XBRL Taxonomy Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline Instance XBRL

Filed herewith.

Furnished herewith.

Portions of this exhibit (indicated therein by asterisks) have been omitted for confidential treatment.

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 13, 2021	/s/ Raymond C. Stachowiak
		Raymond C. Stachowiak
		Chief Executive Officer

Date:	May 13, 2021	/s/ Craig K. Tagawa
		Craig K. Tagawa
		President, Chief Operating and Financial Officer

Exhibit 10.1

[*****] Text Omitted for Confidential Treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

AMENDMENT TWO TO EQUIPMENT LEASE AGREEMENT
(RELOAD)

This AMENDMENT TWO TO EQUIPMENT LEASE AGREEMENT (RELOAD) (“Amendment Two”) is dated effective as of October 7, 2020 (the “Effective Date”), and is entered into by and between (i) GK FINANCING, LLC, a California limited liability company (“GKF”), whose address is Two Embarcadero Center, Suite 410, San Francisco, CA 94111, and (ii) NORTHERN WESTCHESTER HOSPITAL ASSOCIATION, a New York not for profit corporation (“Hospital”) (formerly referred to as “Northern Westchester Hospital Center”), whose address is 400 East Main Street, Mount Kisco, NY 10549.

Recitals:

WHEREAS, GKF and Hospital entered into (i) that certain Equipment Lease Agreement dated March 21, 2003 (the “Original Lease”), pursuant to which GKF agreed to lease to Hospital a Leksell Stereotactic Gamma Knife unit, Model C with Automatic Positioning System (the “Model C”), as amended by (ii) that certain Amendment To Equipment Lease Agreement (Perfexion Upgrade) dated effective June 8, 2012 (“Amendment One”), pursuant to which the Model C was upgraded and replaced with a Leksell Gamma Knife Perfexion unit (the “Perfexion”), which was installed at the existing Site (the Original Lease, as amended by Amendment One, is referred to herein as the “Lease”).

WHEREAS, GKF and Hospital desire to further amend the Lease on the terms set forth herein to provide for the reload of the Perfexion that is currently being leased by GKF to Hospital pursuant to the Lease.

Agreement:

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Defined Terms. Unless otherwise defined herein, the capitalized terms used herein shall have the same meanings set forth in the Lease.

2.Cobalt-60 Reload.

a.Scheduling and Process for the Reload. Subject to the terms and conditions set forth herein, GKF shall reload the existing Perfexion with new Cobalt-60 that meets the manufacturer’s radioactivity level specifications (the “Reload”). GKF shall use its commercially reasonable best efforts to perform the Reload in the first or second quarter of 2021, or such other time as mutually agreed to in writing by Hospital and GKF, subject to availability of the Cobalt-60 from the equipment manufacturer, issuance of all regulatory approvals, permits and/or waivers in a timely manner, and completion of construction, if any, of the Site.

[*****] Text Omitted for Confidential Treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

The parties acknowledge that Hospital may not be able to perform Procedures for approximately three weeks during the Reload. Until such time as the Perfexion is no longer able to perform Procedures due to the Reload, Hospital shall continue to perform Procedures using the Perfexion.

Notwithstanding anything to the contrary contained in this Amendment Two, GKF makes no representation or warranty to Hospital concerning the Reload, and GKF shall have no obligation or liability to pay any damages to Hospital resulting from the Hospital’s inability to perform Procedures during the time required for the Reload, including, without limitation, any lost revenues or profits during the period of time that the Equipment is unavailable to perform Procedures during the Reload.

b.Site Preparation and Rigging. GKF, at its sole cost and expense, shall be solely responsible for the preparation of the Site and the rigging and installation required for the Reload.

c.Hospital Personnel and Services. Upon request and as required by GKF, Hospital, at Hospital’s cost and expense, shall provide GKF with Hospital personnel (including Hospital’s physicists) and services, including security, in connection with Reload, among other things, to oversee, supervise and assist with compliance with local, state and federal regulatory requirements and with nuclear regulatory compliance issues and the calibration of the Perfexion. Hospital shall not be entitled to reimbursement for its personnel costs, internal costs or overhead in connection with the Reload. Notwithstanding anything to the contrary set forth herein, the Reload shall be performed by GKF only after all necessary and appropriate Site modifications (if any), licenses, permits, approvals, waivers, consents and authorizations, and the proper handling of the Cobalt-60 (collectively, the “Permits”), have been obtained by Hospital at Hospital’s sole cost and expense. Subject to Sections 2.a and 2.b above and this Section 2.c, the actual costs of the Reload paid or payable to third parties shall be the responsibility of GKF.

d.Lender Documentation. Upon request by GKF and at GKF’s reasonable expense, Hospital shall execute and deliver a commercially reasonable form of subordination, attornment and non-disturbance or other documentation if such a document is reasonably requested by the third party financing company which holds a security interest in the Perfexion.

e.Acceptance Tests. Upon receipt of Elekta’s report on the results of the Acceptance Tests (as defined in the Leksell Gamma Knife End User Agreement (“LGK Agreement”)), Hospital shall have five (5) business days to review and validate the results of the Acceptance Tests to confirm that the Perfexion meets the manufacturer’s specifications and documentation. If Hospital fails to respond within such five (5) business day period, Hospital shall be granted a one-time five (5) business day extension to validate and confirm the results of the Acceptance Tests. If Hospital fails to respond within such review period, as extended, Hospital shall be deemed to have validated and confirmed the results of the Acceptance Tests.

[*****] Text Omitted for Confidential Treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

3.No Ownership Interests. Notwithstanding anything to the contrary set forth in the Lease or this Amendment Two, GKF shall retain all ownership rights and title to the Perfexion, and Hospital shall have no ownership interest therein.

4.Extension of Lease Term. In consideration of GKF’s agreement to perform the Reload, the Term is hereby extended to the date that is sixty-six (66) months following the First Perfexion Procedure Date After the Reload.

5.Lease Payments.

a.It is understood and agreed that Section 8.1 of the Lease (Per Procedure Payments) shall remain in full force and effect with respect to all Procedures performed prior to the Reload, and that all rent or lease payments pertaining to Procedures performed prior to the Reload shall continue to be calculated in accordance with Section 8.1 of the Lease (as in effect immediately prior to the Effective Date) and shall be paid by Hospital to, and retained solely by, GKF. However, effective from and after the date the first Procedure is performed at the Site using the Perfexion following completion of the Reload (the “First Post-Reload Procedure Date”), Section 8.1 of the Lease shall be deleted in its entirety and replaced with the following;

"8.l Per Procedure Payments. As rent for the lease of the Equipment to Hospital pursuant to this Agreement, Hospital shall pay to GKF the applicable per procedure payments set forth in Exhibit "A" attached to this Amendment Two (the “Lease Payment”) for each and every "Procedure" that is completed by Hospital, its representatives, affiliates, joint ventures and/or partnerships, on an inpatient or outpatient basis, or “under arrangement” (as used in the Medicare billing context), and irrespective of whether the Procedure is performed using the Equipment or using any other equipment or devices in lieu of, or as an alternative to, the Equipment, and includes, without limitation, any and all related treatment planning and delivery, imaging and other ancillary services. As used herein, the term “Procedure” means any treatment using external, single conformal radiation, commonly called stereotactic radiosurgery, that may include one or more isocenters during the patient treatment session, delivered to any site(s) superior to the foramen magnum.

[*****] Text Omitted for Confidential Treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

“If no Procedures are performed by Hospital or any other person utilizing the Equipment or any other equipment devices, Hospital shall not owe any Lease Payment to GKF. In the event a Procedure is not completed due to a technical problem with the Equipment, the Hospital will not be charged a Lease Payment for such Procedure. GKF shall submit an invoice to Hospital on the fifteenth (15th) and last day of each calendar month (or portion thereof) for the actual number of Procedures performed during the first and second half of the calendar month, respectively. The Hospital shall pay invoices received within thirty (30) days after submission by GKF to Hospital. All or any portion of an invoice which is not paid in full within forty five (45) days after submission shall bear interest at the rate of the lesser of one percent (1.0%) per month (or the maximum monthly interest rate permitted to be charged by law between an unrelated, commercial borrower and lender, if less) until the unpaid rent invoice together with all accrued interest thereon is paid in full. If GKF shall at any time accept a Lease Payment from Hospital after it shall become due, such acceptance shall not constitute or be construed as a waiver of any or all of GKF’s rights under this Agreement, including the rights of GKF set forth in Section 20 of the Agreement.

“Within ten (10) days after Hospital’s receipt of written request by GKF, GKF shall have the right to audit all applicable books and records during normal business hours to verify the number of Procedures performed by Hospital or its agents, representatives, affiliates, joint ventures and/or partnerships utilizing the Equipment and/or any other equipment or devices, and Hospital shall provide GKF (or cause GKF to be provided) with access to such books and records; provided that any patient names or identifiers shall not be disclosed. GKF shall not have access to nor shall it directly or indirectly access any “Patient Health Information” as such terms are defined by HIPAA. GKF agrees that it shall execute such documents and agreements as may be reasonably required by Hospital to assure compliance with HIPAA.”

b.Exhibit "A" attached to Amendment One (which had replaced Exhibit 8 of the Original Lease) is hereby deleted in its entirety and replaced with Exhibit "A" attached to this Amendment Two.

[*****] Text Omitted for Confidential Treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

c.Arm’s Length Negotiations. The parties acknowledge that the compensation payable by Hospital for the Reload as set forth in this Amendment Two has been negotiated by the parties at arm’s length based upon reasonable and jointly derived assumptions regarding the capacity for clinical services available from the Perfexion, Hospital’s capabilities in providing high quality radiation oncology services, market dynamics, GKF’s risk in providing the Reload and the provision to GKF of a reasonable rate of return on its investment in support of the Reload. Based thereon, the Parties believe that the Lease Payments represent fair market value for the use of the Perfexion, the Reload, maintenance and service, personal property taxes, cost of insurance coverage for the Perfexion, educational support, and any other additional services and costs to be provided or paid for by GKF pursuant to this Amendment Two. Hospital undertakes no obligation to perform any minimum number of procedures on the Perfexion, and the use of the Perfexion for the performance of procedures is wholly based upon the independent judgment of physicians who order such procedures to meet the medical needs of their patients.

6.Educational Support. Hospital’s obligations with respect to community and physician education regarding the Perfexion shall continue in the same manner and with the same amounts as set forth in Section 7 of the Lease; provided that community education activities may be expanded to the general public (in addition to physicians).

7.Charity/Excluded Procedures.

a.As a means to permit Hospital to perform care for persons who are not covered by insurance programs and who do not have the means to pay for such procedures based upon Hospital’s adopted standards of indigency, commencing from and after the First Post-Reload Procedure Date, GKF shall waive the per procedure Lease Payment for not more than [*****] Perfexion procedure to be performed for an indigent person meeting such standards of indigency (a “Charity Procedure”) for each fifty (50) paid Perfexion procedures (without counting any Charity Procedures) performed from and after the First Post-Reload Procedure Date for which a per procedure Lease Payment is made to GKF. For purposes of counting the number of Perfexion procedures to determine the number of Charity Procedures allowed, there shall be no retroactive counting of procedures performed prior to the First Post-Reload Procedure Date. Hospital shall be solely responsible (and GKF shall not in any manner be or become responsible) for determining (i) whether any person described herein requires a Perfexion procedure, (ii) who shall receive a Charity Procedure hereunder if more than one (1) person qualifies for a Charity Procedure, and (iii) whether any person meets the standards of indigency. Hospital shall provide reasonable written documentation evidencing satisfaction of the conditions set forth herein to GKF at or prior to the expected time of treatment.

b.As a means of accommodating differing medical judgment and medical preference for alternative treatment modalities, for each annual period commencing from and after the First Post-Reload Procedure Date, GKF shall waive the per procedure Lease Payment for not more than two (2) procedures that are performed using equipment or devices other than the Perfexion (each, an “Excluded Procedure”).

[*****] Text Omitted for Confidential Treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

c.If at any time or from time-to-time any of the foregoing limits pertaining to Charity Procedures and/or Excluded Procedures is exceeded by Hospital, then, GKF shall be entitled to receive payment for each Procedure in excess of such limits in an amount equal to the applicable Lease Payment set forth in Exhibit "A" attached to this Amendment Two.

8.Supplier and Owner of Perfexion. The parties hereto agree that, notwithstanding anything to the contrary set forth herein, the Lease as amended by this Amendment Two, is and shall be treated and interpreted as a "finance lease," as such term is defined in Article 2A of the Uniform Commercial Code, that GKF shall be treated as a finance lessor who is entitled to the benefits and releases from liability accorded to a finance lessor under Article 2A of the Uniform Commercial Code. In furtherance of the foregoing, Hospital acknowledges that, before signing this Amendment Two, GKF has informed Hospital in writing (a) that Elekta is the entity supplying the Perfexion and Reload, (b) that Hospital is entitled (under Section 2A of the Uniform Commercial Code) to the promises and warranties, including those of any third party, provided to GKF by Elekta which is the entity supplying the goods in connection with or as part of the contract by which GKF acquired the Perfexion or the right to possession and use of the Perfexion, and (c) that Hospital may communicate with Elekta and receive an accurate and complete statement of those promises and warranties, including any disclaimers and limitations

of them or of remedies. Hospital also acknowledges that Hospital has selected Elekta to supply the Perfexion and has directed GKF to acquire the Perfexion or the right to possession and use of the Perfexion from Elekta.

9.Miscellaneous. This Amendment Two (a) shall be governed by and construed under the laws of the State of New York, without reference to its principles of conflicts of law; and (b) may be executed in separate counterparts, each of which when so executed and delivered shall be an original, but all of which counterparts shall together constitute the same instrument. The captions and paragraph headings used herein are for convenience only and shall not be used in construing or interpreting this Amendment Two. This Amendment Two constitutes the full and complete agreement and understanding between the parties hereto concerning the subject matter hereof and shall supersede any and all prior written and oral agreements with regard to such subject matter.

[*****] Text Omitted for Confidential Treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

10.Full Force and Effect; Except as amended by this Amendment Two, all of the terms and provisions of the Lease shall remain unchanged and in full force and effect and, together with this Amendment Two, represent the entire agreement of the parties with respect to the Perfexion and its use by Hospital. Unless the context requires otherwise, all references in the Lease to (i) the “Agreement” shall be deemed to mean the Lease as amended by this Amendment Two; (ii) the “Equipment” shall be deemed to mean the Perfexion; (iii) the “LGK Agreement” shall be deemed to refer to the Perfexion; and (iv) the “Term” shall be deemed to refer to the Term, as extended pursuant to this Amendment Two. To the extent any of the terms of the Lease conflict with the terms of this Amendment Two, the terms and provisions of this Amendment Two shall prevail and control. Where not different or not in conflict with the terms and provisions of this Amendment Two, all applicable terms and provisions set forth in the Lease are incorporated within this Amendment Two as is if set forth herein and shall apply with equal force and effect to the Perfexion. Notwithstanding anything to the contrary set forth herein, no term or condition of this Amendment Two shall be effective to the extent it causes Hospital to breach the LGK Agreement or otherwise violate or infringe upon the rights of Elekta. Nothing set forth in this Amendment Two shall relieve either party from any or all of its obligations under the Lease, including, without limitation, the obligation to pay rent or lease payments and service, insurance and property tax expenses at all times.

IN WITNESS WHEREOF, the parties have executed this Amendment Two effective as of the Effective Date.


GKF: GK FINANCING, LLC By: / s / Craig K. Tagawa____ Craig K. Tagawa Chief Executive Officer Date: 10 / 7 / 2020___________			Hospital: NORTHERN WESTCHESTER HOSPITAL ASSOCIATION By: / s / Phyllis Mc Creedy__ Date: 10 / 7 / 2020________

[*****] Text Omitted for Confidential Treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

Exhibit “A”

PER PROCEDURE PAYMENTS


Annual Paid Procedures Performed			Per Procedure Payment
1-50			[*****] per Procedure
51-100			[*****] per Procedure
101+			[*****] per Procedure

Notwithstanding anything to the contrary set forth herein, for purposes of determining the Per Procedure Payments, (a) only those Procedures performed on or after the First Post-Reload Procedure Date shall be counted; (b) the number of annual Procedures performed on the Perfexion or using any other equipment or devices shall be reset to zero (0) at the commencement of each anniversary of the First Post-Reload Procedure Date; (c) Charity Procedures and Excluded Procedures shall not be counted towards the annual Procedures performed; and (d) there shall be no retroactive adjustment of the Per Procedure Payments irrespective of whether the number of Procedures performed reaches a lower Per Procedure Payment level. For example, if during an annual measuring period, the number of annual counted Procedures totals 100, then, the Per Procedure Payments for the first 50 Procedures would remain at [*****] per Procedure while the Per Procedure Payments for the next 50 procedures (i.e., for Procedures 51 through 100) would be [*****] per Procedure. There are no minimum volume requirements.

Exhibit 10.2

AMENDMENT ONE TO LEKSELL GAMMA KNIFE PERFEXION

PURCHASED SERVICES AGREEMENT

This AMENDMENT ONE TO LEKSELL GAMMA KNIFE PERFEXION PURCHASED SERVICES AGREEMENT (this “Amendment”) is made and entered into as of the date of the last party to sign below, by and between GK FINANCING, LLC, a California limited liability company (“GKF”), and PEACEHEALTH, a Washington non-profit corporation, doing business through its operating division PEACEHEALTH SACRED HEART MEDICAL CENTER AT RIVERBEND (“Medical Center”), with reference to the following recitals:

Recitals:

WHEREAS, pursuant to section 13.2 of that certain Leksell Gamma Knife Perfexion Purchased Services Agreement dated March 27, 2014, by and between GKF and Medical Center (the “Agreement”), the parties desire to reload the Cobalt-60 source and upgrade the Equipment’s software on the terms set forth herein.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

Agreement:

1.Defined Terms. Unless otherwise defined herein, the capitalized terms used herein shall have the same meanings set forth in the Agreement.

2.Cobalt-60 Reload and Software Upgrade.

a.Scheduling and Process for the Reload and Software Upgrade. Subject to the terms and conditions set forth herein, GKF shall (i) reload the Equipment with new Cobalt-60 that meets the manufacturer’s radioactivity level specifications (the “Reload”), and (ii) upgrade the Equipment’s software to include the Lightening and Remote Planning platforms ("Software Upgrade"). GKF and Medical Center shall share equally in the costs of the Reload and Software Upgrade. GKF shall use its commercially reasonable efforts to perform the Reload and Software Upgrade in the First/Second quarter of 2021, or such other time as mutually agreed to in writing by Medical Center and GKF, subject to availability of Cobalt-60 from the equipment manufacturer, and issuance of all regulatory approvals, permits and/or waivers in a timely manner. The parties acknowledge that Medical Center may not be able to perform Procedures using the Equipment for approximately three (3) weeks during the Reload and Software Upgrade. GKF makes no representation or warranty to Medical Center concerning the Reload and Software Upgrade, and GKF shall have no obligation or liability to pay any damages to Medical Center resulting therefrom, including, without limitation, any lost revenues or profits during the period of time that the Equipment is unavailable to perform Procedures during the Reload and Software Upgrade. Notwithstanding the foregoing, GKF shall use its commercially reasonable efforts to ensure that all benefits under the manufacturer’s or software developer’s warranty shall run to the Medical Center.

b.Medical Center Personnel and Services. Upon request and as reasonably required by GKF, Medical Center, at Medical Center’s cost and expense, shall provide GKF with Medical Center personnel (including Medical Center’s physicists) and services in connection with the Reload, among other things, to oversee, supervise and assist with construction and compliance with local, state and federal regulatory requirements and with nuclear regulatory compliance issues and the calibration of the Equipment. Medical Center shall not be entitled to reimbursement for its personnel costs, internal costs or overhead in connection with the Reload. Notwithstanding anything to the contrary herein, both GKF and Medical Center will each be responsible for fifty percent (50%) of any costs incurred in providing security in connection with the Reload. Also notwithstanding anything to the contrary set forth herein, the Reload shall be performed by GKF only after all necessary and appropriate licenses, permits, approvals, waivers, consents and authorizations, and the proper handling of the Cobalt-60 (collectively, the “Permits”), have been obtained by Medical Center.

c.Lender Documentation. GKF, in its sole discretion, may finance its portion of the Reload and Software Upgrade costs in which event, the terms and provisions set forth in Section 14 of the Agreement (Financing of Equipment by GKF) shall apply to the Equipment, Reload and Software Upgrade. In furtherance of the foregoing, and upon request by GKF, Medical Center shall execute and deliver a commercially reasonable form of subordination, attornment and non-disturbance or other documentation if such a document is reasonably requested by the third party financing company which holds a security interest in the Equipment.

d.Acceptance Tests. Upon receipt of Elekta’s report on the results of the Acceptance Tests (as defined in the LGK Agreement), Medical Center shall have seven (7) business days to review and validate the results of the Acceptance Tests to confirm that the Equipment meets the manufacturer’s specifications and documentation. If Medical Center fails to respond within such seven (7) business day period, Medical Center may request in writing a one-time seven (7) business days extension from GKF. If Medical Center fails to respond within such seven (7) business day period (as may be so extended), Medical Center shall be deemed to have validated and confirmed the results of the Acceptance Tests.

3.Extension of Term of the Agreement. The Term of the Agreement is hereby further extended for a period of three (3) years to December 15 2027, plus an additional period of time equal to the period of time that the Equipment is unavailable to perform procedures due to the Reload and Software Upgrade, not to exceed three weeks. All references in the Agreement to the “Term” or “Initial Term” shall be deemed to refer to the Term, as extended hereby. Any subsequent reload of the Cobalt-60 source prior to the expiration of the Term as extended hereby shall be on such terms as mutually agreed upon in writing between GKF and Medical Center.

4.Miscellaneous. This Amendment may be executed in separate counterparts, each of which when so executed and delivered shall be an original, but all of which counterparts shall together constitute the same instrument. The captions and paragraph headings used herein are for convenience only and shall not be used in construing or interpreting this Amendment. This Amendment constitutes the full and complete agreement and understanding between the parties hereto concerning the subject matter hereof and shall supersede any and all prior written and oral agreements with regard to such subject matter.

5.Full Force and Effect. Except as amended by this Amendment, all of the terms and provisions of the Agreement shall remain in full force and effect. In the event of any conflict or inconsistency between the terms and provisions of this Amendment and that of the Agreement, the terms and provisions of this Amendment shall prevail and control.

IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the date of the last party to sign below.


“GKF”: GK FINANCING, LLC By: __/ S / Craig K. Tagawa______ Title: CEO______________________ Date: ___1/20/21__________________			“Medical Center”: PEACEHEALTH, a Washington non-profit corporation, doing business through its operating division PEACEHEALTH SACRED HEART MEDICAL CENTER AT RIVERBEND By: __/ S / Darrin Montalvo _______ Title: Executive V.P., Chief Financial and Growth Officer_________________ Date: ____1/18/21__________________

Exhibit 31.1

CERTIFICATION

I, Raymond C. Stachowiak, as chief executive officer of American Shared Hospital Services, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Shared Hospital Services;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


May 13, 2021

/s/ Raymond C. Stachowiak
Raymond C. Stachowiak

Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, Craig K. Tagawa., as president, chief operating and financial officer of American Shared Hospital Services, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Shared Hospital Services;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


May 13, 2021

/s/ Craig K. Tagawa
Craig K. Tagawa

President, Chief Operating and Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The certification set forth below is being submitted in connection with the Quarterly Report on Form 10-Q of American Shared Hospital Services for the quarterly period ended March 31, 2021 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Ray Stachowiak, the Chief Executive Officer and Craig K. Tagawa, the President, Chief Operating a Financial Officer of American Shared Hospital Services, each certifies that, to the best of his knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of American Shared Hospital Services.

May 13, 2021


			/s/ Raymond C. Stachowiak
			Raymond C. Stachowiak
			Chief Executive Officer

			/s/ Craig K. Tagawa
			Craig K. Tagawa
			President, Chief Operating and Financial Officer