AMERICAN SHARED HOSPITAL SERVICES Leases Disclosure
NOTE 6 - LEASES
The Company determines if a contract is a lease at inception. Under ASC 842, the Company is a lessor of equipment to various customers. Leases that commenced prior to 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, amended or extended after ASC 842 adoption are also classified as operating leases. Some of these lease terms have an option to extend the lease after the initial term, but do not contain the option to terminate early or purchase the asset at the end of the term. The Company has elected not to recognize right-of-use (“ROU”) assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset.
The Company’s Gamma Knife and PBRT contracts with hospitals are classified as operating leases under ASC 842. The related equipment is included in medical equipment and facilities on the Company’s consolidated balance sheets (see further discussion at Note 2). As all income from the Company’s lessor arrangements is solely based on procedure volume, all income is considered variable payments not dependent on an index or a rate. As such, the Company does not measure future operating lease receivables.
On May 7, 2024, the Company completed the RI Acquisition and acquired 60% of the equity interests of the RI Companies. The RI Companies operate three single-unit radiation therapy facilities. The Company assessed the existing lease agreements under ASC 842 and concluded two of the three facilities contained operating leases. The Company included these leases in its presentation of the consolidated financial statements for years ended December 31, 2025 and 2024. The Company’s operating lease in Woonsocket contains a sublease for a 1,950 square feet of the clinic space, which is leased back to the lessor. The Company did not make any lease payments during the year-ended December 31, 2024 related to the RI Companies and its leases. Sublease income for the twelve months ended December 31, 2025 and 2024 was $61,000 and $40,000, respectively.
The Company’s lessee operating leases are accounted for as ROU assets, current portion of lease liabilities, and lease liabilities on the condensed consolidated balance sheets. Operating lease ROU assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The Company’s operating lease contracts do not provide an implicit rate for calculating the present value of lease payments. The Company determined its incremental borrowing rate to be approximately 8% by using available market rates and expected lease terms. The operating lease ROU assets and liabilities include any lease payments made and there were no lease incentives or initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company’s lessee operating lease agreements are for administrative office space and related equipment and two of its recently acquired stand-alone facilities in Rhode Island. These leases have remaining lease terms of approximately 8 to 15 years, some of which include options to renew or extend the lease. As of December 31, 2025, operating ROU assets, net of unfavorable leasehold interests were $3,648,000, and lease liabilities were $4,379,000.
The following table summarizes maturities of lessee operating lease liabilities as of December 31, 2025:
| Year ending December 31, | Operating Leases | |||
| 2026 | $ | 501,000 | ||
| 2027 | 510,000 | |||
| 2028 | 520,000 | |||
| 2029 | 536,000 | |||
| 2030 | 550,000 | |||
| Thereafter | 4,711,000 | |||
| Total lease payments | 7,328,000 | |||
| Less imputed interest | (2,949,000 | ) | ||
| Total | $ | 4,379,000 | ||
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Lease cost | ||||||||
| Operating lease cost | $ | 654,000 | $ | 467,000 | ||||
| Sublease income | (61,000 | ) | (40,000 | ) | ||||
| Total lease cost | $ | 593,000 | $ | 427,000 | ||||
| Other information | ||||||||
| Cash paid for amounts included in the measurement of lease liabilities - Operating leases | $ | 781,000 | $ | 467,000 | ||||
| Weighted-average remaining lease term - Operating leases in years | 13.07 | 7.64 | ||||||
| Weighted-average discount rate - Operating leases | 8.19 | % | 8.02 | % | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Apr 4, 2025 | |
| 2023 | Apr 1, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2019 | Apr 3, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.