AMS Credit Agreement Events of Default Triggered; Lender Increases Interest Rate
American Shared Hospital Services and its co-borrowers received notice on May 29, 2026 from Fifth Third Bank of multiple events of default under their April 9, 2021 Credit Agreement, including failure to maintain a $5,000,000 minimum cash covenant as of September 30, 2025, non-compliance with debt ratios as of December 31, 2025, failure to deliver a compliance certificate for Q1 2026, and failure to pay term loan obligations on April 9, 2026. The lender has increased the interest rate on advances by two percent per annum (the Default Rate) and reserves the right to accelerate all payment obligations; the company stated it lacks sufficient cash to satisfy accelerated obligations if the lender exercises that right.
Key facts
- Credit Agreement dated April 9, 2021 between Fifth Third Bank and American Shared Hospital Services, PBRT Orlando LLC, GKFinancing LLC, and American Shared Radiosurgery Services
- Notice of default received May 29, 2026
- Minimum Cash Covenant: $5,000,000, failed as of September 30, 2025
- Fixed Charge Coverage Ratio and Total Funded Debt Ratio covenant violations as of December 31, 2025
- Compliance Certificate for quarter ended March 31, 2026 not delivered within 45-day requirement
- Term Loan Obligations and Delayed Draw Term Loan Obligations payment due April 9, 2026 not paid in full
- Default Rate: adds 2% per annum to Applicable Margin on Advances
- As of Form 8-K filing date, lender has not yet accelerated obligations
Why it matters
The company faces material liquidity pressure and potential forced liquidation of collateral if the lender exercises its right to accelerate payment obligations, which management acknowledges the company cannot satisfy with available cash.
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Derived from 8-K filed June 4, 2026. Not investment advice. View the source filing on SEC.gov →