American Shared Hospital Services(AMS) - 2020 Q4 - Annual Report

Financial Performance - The Company reported total revenue of $11.67 million for the year ended December 31, 2020, representing 65.4% of total revenue from Gamma Knife services[21] - The Gamma Knife business accounted for 65.4% of total revenue in 2020, slightly down from 65.8% in 2019[21] - One customer accounted for approximately 35% of the Company's total revenue in 2020, down from 30% in 2019[31] Impairment and Assets - The Company recognized an impairment loss of $8.26 million on assets, including six Gamma Knife units and related costs, for the year ended December 31, 2020[18] - The Company has $2.25 million in deposits for two MEVION S250i PBRT systems, which were determined to be impaired, resulting in a total impairment of $3.86 million related to the proton therapy business[26] Product and Market Expansion - The Company continues to expand its product offerings to include advanced linear accelerators with MRI and PET imaging technologies, targeting a more receptive market segment[23] - The Company operates thirteen Gamma Knife units in the U.S. and two in South America, with plans for further expansion in the radiation therapy market[17] - The Company has established subsidiaries in Peru and Ecuador to provide Gamma Knife services, enhancing its international presence[12] Pricing and Reimbursement - The average Medicare reimbursement rate for Gamma Knife procedures was $9,600 in 2021, unchanged from 2020[46] - The RO APM, effective January 1, 2022, will change the payment methodology for radiation services, impacting approximately 30% of radiation oncology patients[43] - PBRT patients with Medicare as their primary insurer comprise an estimated 45% to 50% of total radiation therapy patients treated[42] - The Company’s Gamma Knife contracts typically range from $6,000 to $9,300 per procedure, with no minimum volume guarantees required from customers[30] Financing and Contracts - The Company’s financing for Gamma Knife units is predominantly fully amortized over an 84-month period, collateralized by equipment and customer contracts[35] - The Company does not have customer contracts for its second and third PBRT units, indicating a need for market expansion[38] - The Company’s ability to secure additional customers is dependent on effective competition against manufacturers selling directly to potential customers[40] Employment and Compliance - The Company employed a total of 21 full-time employees as of December 31, 2020, with 10 in the United States, 5 in Peru, and 6 in Ecuador[59] - The Company believes it is in compliance with various federal and state regulations, including the federal anti-kickback statute and the Federal False Claims Act[51][54] - The Company is subject to legislative changes affecting Medicare payments, including a 2% reduction to providers that has been in effect since April 2013 and will continue through 2027 unless further Congressional action is taken[50] - The Company believes that the evolving interpretations of the federal anti-kickback statute may impact its operations, although it currently believes it is compliant[51] Insurance and Regulatory Matters - The Company maintains a comprehensive insurance program covering the value of its property and equipment, which it believes is reasonable[57] - The Company’s Gamma Knife units contain Cobalt 60 radioactive sources, and the medical centers are responsible for obtaining necessary licenses from regulatory agencies[56] - The Company’s operations may be affected by Certificate of Need (CON) requirements in various jurisdictions, which can be time-consuming and costly[55] - The Company’s Gamma Knife centers in Peru and Ecuador are operated by independent contractors, and the Company maintains adequate insurance coverage for these operations[58] Executive Team - The Company’s executive team includes Raymond C. Stachowiak as CEO, Craig K. Tagawa as President and CFO, and Ernest R. Bates as Senior VP[60][61][62]