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  4. [8-K] AMERICAN SHARED HOSPITAL SERVICES Reports Material Event

American Shared (NYSE: AMS) reports loan defaults and higher default interest

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

American Shared Hospital Services reported that its lender, Fifth Third Bank, has issued a notice declaring multiple Events of Default under the company’s Credit Agreement. The defaults include failing to maintain unrestricted cash and equivalents of at least $5,000,000 as of September 30, 2025, breaching financial covenants as of December 31, 2025, missing a required compliance certificate for the quarter ended March 31, 2026, and not repaying term loan obligations due April 9, 2026. As a result, interest on advances has increased to the Default Rate, which adds 2% per year to the existing applicable margin. The lender has reserved all rights, including accelerating all obligations and enforcing on collateral, and the company states it would not have enough cash on hand to satisfy accelerated payments, though acceleration has not yet occurred.

Positive

  • None.

Negative

  • Multiple Events of Default under Credit Agreement: The company admits covenant breaches and missed payments, formally placing its main credit facility in default status with Fifth Third Bank.
  • Higher interest expense via Default Rate: Interest on advances now accrues at the Default Rate, adding 2% per annum to the applicable margin and increasing financing costs.
  • Stated inability to repay on acceleration: The company discloses it would not have sufficient cash on hand to satisfy fully accelerated obligations if the lender exercises that right, highlighting liquidity strain.

Insights

Loan defaults trigger higher interest and raise liquidity risk.

American Shared Hospital Services has received a notice of multiple Events of Default under its Credit Agreement, including covenant breaches and failure to repay term loans due on April 9, 2026. This shifts the loan into a default status from the lender’s perspective.

The notice activates a Default Rate that adds 2% per annum to the existing margin on advances, increasing borrowing costs. The lender has also reserved broad rights to accelerate all obligations and act on collateral, which can materially affect capital structure if exercised.

The company explicitly states it would not have sufficient cash on hand to meet fully accelerated obligations. While the lender has not yet accelerated the debt, future company disclosures will clarify whether a forbearance, amendment, or enforcement path is pursued.

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation Financial
An event triggered acceleration or increase of an existing financial obligation, such as a debt covenant breach.
Minimum Cash Covenant $5,000,000 unrestricted cash and Cash Equivalents Required as of September 30, 2025 under Credit Agreement
Default Rate increase 2% per annum added to Applicable Margin Applies to advances after earliest Event of Default
Compliance Certificate deadline 45 days after quarter end Missed for quarter ended March 31, 2026
Term loan due date April 9, 2026 Term Loan and Delayed Draw Term Loan obligations not paid in full
Events of Default financial
"the Loan Parties received notice from Lender ... asserting that Events of Default had occurred"
Events of default are specific breaches or failures listed in a loan, bond, or credit agreement that give lenders the right to act, such as demanding immediate repayment, raising interest rates, or taking secured assets. They matter to investors because triggering one is like setting off a financial alarm: it raises the chance of foreclosure, restructuring, or bankruptcy and can sharply reduce the value of a company’s stock or bonds and increase borrowing costs.
Minimum Cash Covenant financial
"failure to maintain unrestricted cash and Cash Equivalents of at least $5,000,000 (the “Minimum Cash Covenant”)"
A minimum cash covenant is a loan agreement clause that requires a company to keep at least a specified amount of cash or liquid assets on hand, like a bank requiring you to maintain a minimum balance. It matters to investors because it limits how management can spend or return cash, reduces the risk of surprise default by ensuring a short-term safety buffer, and can signal lender concern about the company’s liquidity.
Default Rate financial
"increase interest on Advances to the Default Rate effective from and after the earliest to occur"
Default rate is the percentage of loans, bonds, or borrowers that fail to make required payments or otherwise break their payment promise over a given time. Investors watch it because rising defaults signal higher credit risk, lower expected returns, and potential losses across a portfolio—much like a landlord losing rent from a growing share of tenants, which reduces income and can lower property value.
Fixed Charge Coverage Ratio financial
"failure to comply with the Fixed Charge Coverage Ratio, Total Funded Debt Ratio, and the Minimum Cash Covenant"
A fixed charge coverage ratio measures how well a company's operating income can cover its fixed, recurring obligations like interest payments and lease costs. Think of it as a safety margin — the higher the number, the more comfortably a business can pay steady bills from its normal earnings, which matters to investors because it signals financial stability, lower default risk, and greater ability to withstand revenue dips.
Total Funded Debt Ratio financial
"failure to comply with the Fixed Charge Coverage Ratio, Total Funded Debt Ratio, and the Minimum Cash Covenant"
Collateral financial
"to repossess, liquidate, or take any other action with respect to any or all Collateral"
Collateral is an asset a borrower pledges to a lender as security for a loan; if the borrower fails to repay, the lender can take the asset to recover losses. For investors, collateral matters because it reduces lender risk, influences interest rates and loan terms, and determines who gets paid first if a company faces financial trouble—think of it like a pawned item that gives the lender extra protection.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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FAQ

What triggered the Events of Default for AMS under its Credit Agreement?
American Shared Hospital Services disclosed several Events of Default, including failing to maintain $5,000,000 in unrestricted cash as of September 30, 2025, breaching financial covenants at December 31, 2025, missing a required compliance certificate, and not repaying term loan obligations due April 9, 2026.

How does the Default Rate affect AMS’s borrowing costs?
The lender applied a Default Rate that adds 2% per year to the existing applicable margin on advances. This means all outstanding advances now bear higher interest, increasing ongoing financing costs while the Events of Default continue and until any resolution is reached.

Has AMS’s lender accelerated the loans under the Credit Agreement?
As of the report date, the company states the lender has not accelerated obligations under the Credit Agreement. However, the notice expressly reserves the lender’s right to accelerate all amounts due and to exercise additional remedies if it chooses.

Can American Shared Hospital Services repay its debt if acceleration occurs?
The company states it would not have sufficient cash on hand to satisfy all obligations if the lender accelerates payment under the Credit Agreement. This disclosure highlights a significant liquidity concern should acceleration and enforcement actions occur.

Which financial covenants did AMS fail to meet?
The filing cites noncompliance with the Minimum Cash Covenant of $5,000,000 as of September 30, 2025, and with the Fixed Charge Coverage Ratio, Total Funded Debt Ratio, and Minimum Cash Covenant as of December 31, 2025, triggering Events of Default.

What additional rights did the lender reserve against AMS?
The lender reserved all rights under the Credit Agreement and other loan documents, including the right to accelerate all obligations, demand immediate payment, and repossess or liquidate collateral securing the loans if it decides to proceed with enforcement.
false 0000744825 0000744825 2026-05-29 2026-05-29
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): May 29, 2026
 
AMERICAN SHARED HOSPITAL SERVICES
(Exact Name of Registrant as Specified in Its Charter)
 
California
1-08789
94-2918118
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
   
601 Montgomery Street, Suite 850
San Francisco, California
94111
(Address of Principal Executive Offices)
(Zip Code)
 
Registrant’s telephone number, including area code: (415) 788-5300
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
 
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 
 
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of Each Class
  
Trading Symbol
  
Name of Each Exchange on Which Registered
American Shared Hospital Services Common Stock, No Par Value
  
AMS
  
NYSE AMERICAN
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
 
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.          
☐
 
 
 
 
Item 2.04   Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
 
American Shared Hospital Services (the “Company”) is a party to that certain Credit Agreement, dated as of April 9, 2021 (as amended from time to time, the “Credit Agreement”), between Fifth Third Bank, National Association (the “Lender”), on the one hand, and the Company, PBRT Orlando, LLC (“PBRT”), GK Financing, LLC (“GKF,” together with the Company and PBRT, the “Borrowers”), and American Shared Radiosurgery Services (together with the Borrowers, the “Loan Parties”), on the other hand. Capitalized terms that are used but not defined in this Current Report on Form 8-K (this “Form 8-K”) have the meanings given to them in the Credit Agreement.
 
On May 29, 2026, the Loan Parties received notice from Lender (the “Notice”) asserting that Events of Default had occurred under the Credit Agreement (i) due to the Borrowers’ failure to maintain unrestricted cash and Cash Equivalents of at least $5,000,000 (the “Minimum Cash Covenant”) as of September 30, 2025, (ii) the Borrowers’ failure to comply with the Fixed Charge Coverage Ratio, Total Funded Debt Ratio, and the Minimum Cash Covenant as of December 31, 2025, (iii) the Borrowers’ failure to deliver a Compliance Certificate for the quarter ended March 31, 2026 within forty-five days after the end of such fiscal quarter and (iv) the Borrowers’ failure to pay in full the Term Loan Obligations and the Delayed Draw Term Loan Obligations on April 9, 2026 (such defaults in clauses (i) through (vi), collectively, the “Specified Events of Default”). The Notice further stated that as a result of the occurrence and continuation of the Specified Events of Default, the Lender has elected to exercise its right under the Credit Agreement to increase interest on Advances to the Default Rate effective from and after the earliest to occur of the Specified Events of Default. The Default Rate adds two percent per annum to the existing Applicable Margin in effect for Advances.
 
In addition to confirming that the Lender has not waived the Specified Event of Default or any other Event of Default, the Notice reserves all of the Lender’s other rights, powers, privileges, and remedies under the Credit Agreement, the other Loan Documents, applicable law, and otherwise with respect to any Event of Default, including Lender’s right to accelerate the Borrowers’ payment obligations in respect of all Advances and other Obligations owing under the Credit Agreement and to repossess, liquidate, or take any other action with respect to any or all Collateral. If Lender were to accelerate all payment obligations under the Credit Agreement, the Company would not have sufficient cash on hand to satisfy such accelerated payment obligations. As of the date of this Form 8-K, the Lender has not accelerated the obligations of the Loan Parties under the Credit Agreement or other Loan Documents.
 
 
 
 
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 hereunto duly authorized.
 
 
  AMERICAN SHARED HOSPITAL SERVICES
(Registrant)
Dated: June 4, 2026
By:
/s/ Raymond C. Stachowiak
Raymond C. Stachowiak
Executive Chairman of the Board
 
 

Source: View Original Filing on SEC EDGAR

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