UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-Q




(Mark
One)




x            Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.




For
the quarterly period ended March 31, 2010


or




o            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 000-50354




AMERICAN SURGICAL HOLDINGS,
INC.


(Exact
name of registrant as specified in its charter)




Delaware
            
            98-0403551(State
      or other jurisdiction of
            
            (I.R.S.
      Employer Identification No.)incorporation
      or organization)10039
      Bissonnet, Suite #250
              Houston,
      Texas
            
            77036-7852(Address
      of principal executive offices)
            
            (Zip
      Code)





(713)
779-9800


(Registrants
telephone number, including area code)




Indicate
by check mark whether the issuer (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 issuer was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes x
  No o




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted 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 and post such files).


Yes  ̈ No x




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company filer.
 See definition of "large accelerated filer," "accelerated filer" and
"small reporting company" in Rule 12b-2 of the Exchange Act (Check
one):




Large
accelerated filer o
     Accelerated filer o
     Non-accelerated filer o
     Smaller reporting company x




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.) Yes o   No x




State the
number of shares outstanding of each of the issuer's classes of common equity,
as of April 14, 2010: 11,846,118 shares of common stock.












Table of Contents




PagePART
      I. – FINANCIAL INFORMATIONITEM
      1. FINANCIAL STATEMENTS
              1ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF OPERATIONS
              14ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISKS
              19ITEM
      4. CONTROLS AND PROCEDURES
              20PART
      II - OTHER INFORMATIONITEM
      1. LEGAL PROCEEDINGS.
              21ITEM
      1A. RISK FACTORS.
              21ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
    PROCEEDS
              21ITEM
      3. DEFAULTS UPON SENIOR SECURITIES.
              21ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
              21ITEM
      5. OTHER INFORMATION.
              21ITEM
      6. EXHIBITS.
              21

















PART
I. – FINANCIAL INFORMATION




ITEM
1. FINANCIAL STATEMENTS




AMERICAN
SURGICAL HOLDINGS, INC. AND SUBSIDIARIES


(F/K/A
ASAH Corp.)


CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS


AS
OF MARCH 31, 2010


(UNAUDITED)




CONTENTS




PAGECONDENSED
      CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2010 (UNAUDITED) AND DECEMBER
      31, 2009
            2CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31,
      2010 AND 2009 (UNAUDITED)
            3CONDENSED
      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE
      MONTHS ENDED MARCH 31, 2010 (UNAUDITED)
            4CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31,
      2010 AND 2009 (UNAUDITED)
            5NOTES TO THE
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
            7









1









AMERICAN SURGICAL HOLDINGS, INC.
      AND SUBSIDIARIES
                (formerly
      ASAH Corp.)
                CONDENSED
      CONSOLIDATED BALANCE SHEETS
                AS
      OF MARCH 31, 2010 AND DECEMBER 31, 2009March
      31,
              
              
              December
      31,
                20092010(unaudited)ASSETSCURRENT
      ASSETSCash
      and cash equivalents
              
              $
              2,954,032
              
              
              $
              2,705,488Accounts
      receivable, net
              
              
              3,748,927
              
              
              
              3,855,401Advances
      to employees
              
              
              65,500
              
              
              
              31,453Prepaid
      federal income tax
              
              
              12,485
              
              
              
              302,024Prepaid
      expenses and other current assets
              
              
              84,758
              
              
              
              28,263TOTAL
      CURRENT ASSETS
              
              
              6,865,702
              
              
              
              6,922,629PROPERTY
      AND EQUIPMENT, NET
              
              
              47,757
              
              
              
              54,103HOSPITAL
      CONTRACT COSTS & NON-COMPETE, NET
              
              
              3,000
              
              
              
              13,667TOTAL
      ASSETS
              
              $
              6,916,459
              
              
              $
              6,990,399LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
              
              $
              187,563
              
              
              $
              116,386Accrued/deferred
      income tax
              
              
              111,286
              
              
              
              94,506Accrued
      salaries, bonuses & payroll taxes
              
              
              1,084,251
              
              
              
              1,180,957TOTAL
      CURRENT LIABILITIES
              
              
              1,383,100
              
              
              
              1,391,849STOCKHOLDERS'
      EQUITYPreferred
      stock, $0.001 par value, 10,000,000 sharesauthorized,
      none issued and outstanding
              
              
              -
              
              
              
              -Common
      stock, $0.001 par value, 100,000,000 sharesauthorized,
      11,846,118 and 11,632,161 shares issuedand
      outstanding
              
              
              11,846
              
              
              
              11,632Additional
      paid-in capital
              
              
              3,107,967
              
              
              
              3,601,927Deferred
      compensation
              
              
              (31,250
              )
              
              
              (43,750
              )Retained
      earnings
              
              
              2,444,796
              
              
              
              2,028,741TOTAL
      STOCKHOLDERS' EQUITY
              
              
              5,533,359
              
              
              
              5,598,550TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              6,916,459
              
              
              $
              6,990,399
  See
      accompanying notes to condensed consolidated financial
      statements.




2




AMERICAN SURGICAL HOLDINGS, INC.
      AND SUBSIDIARIES(formerly
      ASAH Corp.)CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONSFOR
      THE THREE MONTHS ENDED(UNAUDITED)March
      31,
              
              
              March
      31,2010
              
              
              2009RevenuesService fees,
      net
              
              $
              5,129,376
              
              
              $
              3,848,281Contract
      fees
              
              
              309,114
              
              
              
              191,116Total net
      revenues
              
              
              5,438,490
              
              
              
              4,039,397Cost
      of revenues
              
              
              2,446,231
              
              
              
              1,997,109GROSS
      PROFIT
              
              
              2,992,259
              
              
              
              2,042,288OPERATING
      EXPENSESGeneral and
      administrative
              
              
              281,697
              
              
              
              270,762Legal and
      professional fees
              
              
              310,683
              
              
              
              79,780Director
      fees
              
              
              185,052
              
              
              
              54,426Salaries
              
              
              1,469,001
              
              
              
              633,032Rent
              
              
              27,153
              
              
              
              22,341TOTAL
      OPERATING EXPENSES
              
              
              2,273,586
              
              
              
              1,060,341NET
      INCOME FROM OPERATIONS
              
              
              718,673
              
              
              
              981,947Other
      income (expense)Interest
      expense
              
              
              -
              
              
              
              (174,165
              )Interest
      income
              
              
              3,702
              
              
              
              1,077TOTAL
      OTHER INCOME (EXPENSE)
              
              
              3,702
              
              
              
              (173,088
              )INCOME
      FROM OPERATIONS before provision for income taxes
              
              
              722,375
              
              
              
              808,859Provision
      for income taxes
              
              
              (306,320
              )
              
              
              (317,177
              )NET
      INCOME
              
              $
              416,055
              
              
              $
              491,682Net
      income per share basic
              
              $
              0.04
              
              
              $
              0.06Net
      income per share diluted
              
              $
              0.03
              
              
              $
              0.05Weighted
      average number of sharesOutstanding during
      the period - basic
              
              
              11,812,009
              
              
              
              8,459,928Outstanding during
      the period - diluted
              
              
              14,669,291
              
              
              
              9,982,153See
      accompanying notes to condensed consolidated financial
      statements.






3






AMERICAN SURGICAL HOLDINGS,
      INC.
              (formerly
      ASAH Corp.)
              CONDENSED
      CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
              FOR
      THE THREE MONTHS ENDED MARCH 31, 2010
              (UNAUDITED)Additional
            
            
            
            
            
            
            
            
            TotalPreferred
      Stock
            
            
            Common
      Stock
            
            
            Paid-in
            
            
            Deferred
            
            
            Retained
            
            
            Stockholders'Shares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Capital
            
            
            Compensation
            
            
            Earnings
            
            
            EquityBalances,
      December 31, 2009
            
            
            -
            
            
            
            -
            
            
            
            11,632,161
            
            
            $
            11,632
            
            
            $
            3,601,927
            
            
            $
            (43,750
            )
            
            $
            2,028,741
            
            
            $
            5,598,550Deferred
      compensation
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            12,500
            
            
            
            -
            
            
            
            12,500Options
      issued to officers
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            26,738
            
            
            
            -
            
            
            
            -
            
            
            
            26,738Options
      issued to employees
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,714
            
            
            
            -
            
            
            
            -
            
            
            
            1,714Options
      issued to directors
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            2,802
            
            
            
            -
            
            
            
            -
            
            
            
            2,802Stock
      issued for exercise of warrants
            
            
            -
            
            
            
            -
            
            
            
            213,957
            
            
            
            214
            
            
            
            37,286
            
            
            
            -
            
            
            
            -
            
            
            
            37,500Cancellation
      and repurchase of options
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (562,500
            )
            
            
            -
            
            
            
            -
            
            
            
            (562,500
            )Net
      income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            416,055
            
            
            
            416,055Balances,
      March 31, 2010
            
            
            -
            
            
            
            -
            
            
            
            11,846,118
            
            
            $
            11,846
            
            
            $
            3,107,967
            
            
            $
            (31,250
            )
            
            $
            2,444,796
            
            
            $
            5,533,359See
      accompanying notes to condensed consolidated financial
      statements.




4







AMERICAN SURGICAL HOLDINGS, INC.
      AND SUBSIDIARIES
              (formerly
      ASAH Corp.)
              CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR
      THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
              (UNAUDITED)MARCH
      31,
            
            
            MARCH
      31,2010
            
            
            2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income
            
            $
            416,055
            
            
            $
            491,682Adjustments
      to reconcile net income to net cashprovided
      by operating activities:Depreciation
      and amortization
            
            
            17,012
            
            
            
            12,240Provision for uncollectible accounts
            
            
            -
            
            
            
            (19,000
            )Amortization of discount of convertible notes payable
            
            
            -
            
            
            
            63,142Deferred
      compensation
            
            
            12,500
            
            
            
            12,500Options
      issued for services
            
            
            1,714
            
            
            
            2,929Options
      issued to officers
            
            
            26,738
            
            
            
            50,986Options
      issued to directors
            
            
            2,802
            
            
            
            5,744Changes
      in operating assets and liabilities:(Increase) Decrease in accounts receivable, net
            
            
            106,474
            
            
            
            1,021,083(Increase) Decrease in advances to employees
            
            
            (34,047
            )
            
            
            (3,309
            )(Increase) Decrease in prepaid expenses
            
            
            (56,495
            )
            
            
            (31,862
            )(Increase) Decrease in FIT receivable
            
            
            289,539
            
            
            
            -Increase (Decrease) in accounts payable and accrued
    expenses
            
            
            71,178
            
            
            
            97,268Increase (Decrease) in accrued salaries
            
            
            (96,706
            )
            
            
            147,271Increase (Decrease) in accrued taxes
            
            
            16,780
            
            
            
            317,177Net
      cash provided  by operating activities
            
            
            773,544
            
            
            
            2,167,851CASH
      FLOWS FROM INVESTING ACTIVITIES:(Increase) Decrease in restricted cash
            
            
            -
            
            
            
            305,973Purchase of hospital contracts & non-compete
            
            
            -
            
            
            
            (50,000
            )Net
      cash provided by investing activities
            
            
            -
            
            
            
            255,973CASH
      FLOWS FROM FINANCING ACTIVITIES:Repurchase of options
            
            
            (562,500
            )
            
            
            -Repayment of note payable from related party
            
            
            -
            
            
            
            (150,000
            )Issuance of common stock for exercise of warrants
            
            
            37,500
            
            
            
            -Repayment of convertible notes payable
            
            
            -
            
            
            
            (1,357,500
            )Net
      cash used in financing activities
            
            
            (525,000
            )
            
            
            (1,507,500
            )NET
      INCREASE (DECREASE) IN CASH
            
            
            248,544
            
            
            
            916,324CASH
      AND CASH EQUIVALENTS AT BEGINNINGOF
      PERIOD
            
            
            2,705,488
            
            
            
            431,731CASH
      AND CASH EQUIVALENTS AT END OF PERIOD
            
            $
            2,954,032
            
            
            $
            1,348,055






5







AMERICAN
      SURGICAL HOLDINGS, INC. AND SUBSIDIARIES
              (formerly
      ASAH Corp.)
              CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR
      THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
              (UNAUDITED)MARCH
      31,
            
            
            MARCH
      31,2010
            
            
            2009NON-CASH
      INVESTING AND FINANCING ACTIVITIES:Cash
      paid for income taxes
            
            
            -
            
            
            
            -Cash
      paid for interest expense
            
            
            -
            
            
            $
            120,489SUPLEMENTAL
      NON-CASH DISCLOSUREStock
      issued in acquisition
            
            
            -
            
            
            $
            20,000See
      accompanying notes to condensed consolidated financial
      statements.




6




AMERICAN
      SURGICAL HOLDINGS, INC. AND SUBSIDIARIES(formerly
      ASAH Corp.)NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS




NOTE 1 - BASIS OF
PRESENTATION




The
accompanying consolidated, condensed unaudited financial statements are
presented in accordance with generally accepted accounting principles ("GAAP")
for interim financial information and the instructions to Form 10-Q under the
rules and regulations of the Securities and Exchange Commission (the "SEC").
Accordingly, they do not include all of the information and footnotes required
by GAAP for complete financial statements. In the opinion of management, all
adjustments (consisting only of normal occurring accruals) considered necessary
in order to make the financial statements not misleading have been included. The
financial statements are presented on the accrual basis.  Intercompany
transactions and balances have been eliminated.




These
financial statements should be read in conjunction with the Company’s audited
financial statements and the accompanying notes included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2009, filed with the SEC.
The results of operations for the three months ended March 31, 2010 are not
necessarily indicative of the results to be expected for any subsequent quarter
or for the entire fiscal year.




Organization




Through
our wholly owned subsidiary, American Surgical Assistants, Inc. (“ASA”), we
provide professional surgical assistant services to patients, surgeons, and
healthcare institutions. Our high quality services results in cost savings for
patients, insurance carriers, hospitals, surgeons, and healthcare institutions
without compromising the quality of patient care. We are certified by The Joint
Commission (formerly Joint Commission on Accreditation of Healthcare
Organizations (JCAHO)).




Surgical
assistants are highly skilled, fully trained professionals credentialed through
an extensive process similar to that utilized to evaluate
physicians.  These assistants are an integral part of the surgical
team and they provide their services to surgeons and their patients. These
services include, but are not limited to: identifying anatomical landmarks,
securing blood vessels, recognizing pathological situations and providing and
securing adequate, safe and proper assistance in exposure of the operative
field, closing the surgical wound, and applying casts and dressings. They also
perform other duties within the scope of their professional license as
instructed or delegated by the operating surgeon. ASA surgical assistants are
trained in general surgery, obstetrics, and gynecology, orthopedic surgery,
plastic surgery, urology, cardiovascular surgery, neurosurgery and other
surgical disciplines. ASA’s recruiting strategies are designed to attract and
retain surgical assistant professionals from both domestic and international
sources.




We market
our services to hospitals, surgeons and healthcare facilities. Presently, we
provide service in Texas, Oklahoma, Virginia, Tennessee and Georgia. We plan to
extend our services to other healthcare facilities in other states.




Our
business model is designed to accommodate various modalities to suit our
licensed and/or certified professionals to work either as full-time salaried
employees, hourly employees or independent contractors. Currently, we have a
total of 96 surgical assistants, of which 81 are full or part time employees and
15 are independent contractors. We also have 23 full-time administrative and
billing employees.




Cash
and cash equivalents




The
Company considers all highly liquid investments with an original maturity at
acquisition of three months or less to be cash equivalents.  These
accounts may from time to time exceed federally insured limits. The Company has
not experienced any losses on such accounts.  At March 31, 2010 and
December 31, 2009, the Company had approximately $2,750,868and
$2,269,511,  respectively, in excess of FDIC insurance
limits.







7


AMERICAN
      SURGICAL HOLDINGS, INC. AND SUBSIDIARIES(formerly
      ASAH Corp.)NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS


Convertible
Notes




The
Company issued convertible notes in 2007.  The conversion feature of
the notes became effective only if the Company commenced a Qualified Offering.
The notes were paid off in March and June 2009; the conversion feature is no
longer applicable.




Use
of Estimates




The
preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.




Significant
estimates include revenue recognition, the allowance for doubtful accounts and
share-based compensation. These estimates have the potential to have a
significant impact on our financial statements, either because of the
significance of the financial statement item to which they relate, or because
they require judgment and estimation due to the uncertainty involved in
measuring, at a specific point in time, events which are continuous in
nature.




Income
Taxes




The
Company records deferred taxes in accordance with the Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 740,
Accounting for Income
Taxes.  The statement requires recognition of deferred tax
assets and liabilities for temporary differences between the tax bases of assets
and liabilities and the amounts at which they are carried in the financial
statements, based upon the enacted tax rates in effect for the year in which the
differences are expected to reverse. A valuation allowance is established when
necessary to reduce deferred tax assets to the amount expected to be
realized.




Stock-Based
Compensation




The
Company accounts for its stock-based compensation under the provisions of FASB
ASC No. 718,Accounting for
Stock Based Compensation. Under FASB ASC No. 718, the Company is
permitted to record expenses for stock options and other employee compensation
plans based on their fair value at the date of grant. Any such compensation cost
is charged to expense on a straight-line basis over the periods the options
vest. If the options had cashless exercise provisions, the Company utilizes
variable accounting.




Common
stock, stock options and common stock warrants issued to other than employees or
directors are recorded on the basis of their fair value, as required by FASB ASC
No. 718, which is measured as of the date required by FASB ASC No. 505,Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services.  In accordance with FASB ASC No.
505, the stock options or common stock warrants are valued using the
Black-Scholes model on the basis of the market price of the underlying common
stock on the valuation date, which for options and warrants related to contracts
that have substantial disincentives to non-performance is the date of the
contract, and for all other contracts is the vesting date. Expense related to
the options and warrants is recognized on a straight-line basis over the shorter
of the period over which services are to be received or the vesting period.
Where expense must be recognized prior to a valuation date, the expense is
computed under the Black-Scholes model on the basis of the market price of the
underlying common stock at the end of the period, and any subsequent changes in
the market price of the underlying common stock up through the valuation date is
reflected in the expense recorded in the subsequent period in which that change
occurs.




The
Company recognized a fair market value of $31,254for stock
options earned for the three months ended March 31, 2010.




8




AMERICAN
      SURGICAL HOLDINGS, INC. AND SUBSIDIARIES(formerly
      ASAH Corp.)NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS




Basic
and Diluted Net Income (Loss) Per Share




Basic and
diluted net income (loss) per common share is computed based upon the weighted
average common shares outstanding as defined by FASB ASC No. 260, Earnings Per
Share.  Basic EPS is computed by dividing net income (loss)
available to common shareholders (numerator) by the weighted average number of
shares outstanding (denominator) during the period. Diluted EPS gives effect to
all dilutive potential common shares outstanding during the period using the
treasury stock method and convertible preferred stock using the if-converted
method. In computing diluted EPS, the average stock price for the period is used
in determining the number of shares assumed to be purchased from the exercise of
stock options or warrants. Diluted EPS excludes all dilutive potential shares if
their effect is anti dilutive. The Company’s outstanding stock options were2,670,500and
warrants were 465,215on March
31, 2010. 30,000
options and 7,715warrants were
excluded from the computation of diluted earnings per share on March 31, 2010
since their effect remains anti-dilutive.  The Company’s outstanding
stock options and warrants were 5,133,000 and 3,258,000, respectively at March
31, 2009.  1,283,000 options and 1,900,500 warrants were excluded from
the March 31, 2009 computation of diluted earnings per share since their effect
remains anti-dilutive.




Reclassification




Certain
amounts from prior periods have been reclassified to conform to the current
period presentation.




Revenue
Recognition




The
Company recognizes revenue over the period the service is performed in
accordance with FASB ASC No. 605, Revenue Recognition in Financial
Statements.  In general, ASC No. 605 requires that four basic
criteria must be met before revenue can be recognized: (i) persuasive evidence
of an arrangement exists, (ii) delivery has occurred or services rendered, (iii)
the fee is fixed and determinable, and (iv) collectability is reasonably
assured.




Established
billing rates are not the same as actual pricing.  They generally do
not reflect what the Company is ultimately paid and therefore are not reported
in our financial statements.  The Company is typically paid amounts
based on established charges per procedure with guidance from the annually
updated Current Procedural Terminology (“CPT”) guidelines (a code set maintained
by the American Medical Association through the CPT Editorial Panel), that
designates relative value units (“R.V.U.'s”) and a suggested range of charges
for each surgical procedure which is then assigned a CPT code.  This
fee is discounted to reflect the percentage “using a modifier” recognized by
each insurance carrier for surgical assistant services, less deductible, co-pay,
and contractual adjustments which are deducted from the calculated surgical
assistant fee and the remainder amount is issued to us.




The
Company reports revenues derived from providing licensed and/or certified
surgical assistants to assist physicians in surgical procedures, and in
emergency surgery (“Service Fees, net”). Additional revenues are derived from
contracts with hospitals for 24/7 Surgical Assistant On-Call services (“Contract
Fees”).




“Service
Fees, net” includes revenues generated from services performed by surgical
assistants on the date the services are performed based on established billing
rates less allowances for contractual adjustments and uncollectible amounts.
These contractual adjustments vary by insurance company and self-pay patients.
The Company computes these contractual adjustments and collection allowances
based on our historical collection experience.




Completing
the paperwork for each case and preparing it for billing takes approximately ten
business days. The majority of claims are then filed electronically except for
those remaining insurance carriers requiring paper filing. An initial response
is usually received within four weeks from electronic filing and up to six weeks
from paper filing. Responses may be a payment, a denial, or a request for
additional information.




Historical
collection rates are estimated using the most current prior 12 month historical
payment and collection percentages. The Company generally receives 99% of our
collections within 12 months from the date of service. Amounts greater than
one-year past due are written off as a bad debt. The Company accounts for
charge-backs as they occur and record an estimate for known charge-backs as they
are received from insurance companies.






9




AMERICAN
      SURGICAL HOLDINGS, INC. AND SUBSIDIARIES(formerly
      ASAH Corp.)NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS




The
Company also earns revenue (“Contract Fees”) derived from contracts with
hospitals for providing surgical assistant twenty-four hour per day On-Call
coverage. Contract Fees are invoiced monthly throughout the respective contract
period as services are provided and revenue is recognized monthly as the fees
are earned.




Allowance
for Doubtful Accounts




The
Company generally provides for an allowance against accounts receivable for an
amount that could become uncollectible whereby such receivables are reduced to
their estimated net realizable value. The Company estimates this allowance based
on the aging of our accounts receivable, our historical collection experience
and other relevant factors. There are various factors that can impact the
collection trends, such as changes in the number of uninsured patients, the
increased burden of co-payment to be made by patients with insurance and
business practices related to collection efforts. These factors continuously
change and can have an impact on collection trends and our estimation
process.




The
Company evaluates the collectability of its receivables at least quarterly,
using various factors including the financial condition and payment history on
patient accounts, an overall review of collections experience on accounts and
other economic factors or events expected to affect the Company’s future
collections experience.




As part
of the evaluation discussed above concerning Service Fees Revenue and the
appropriate Collection Percentage, the Company determined that an allowance was
necessary at March 31, 2010 in the amount of $260,000 compared to a reserve of
$260,000 at December 31, 2009.  The $260,000 in 2010 and $260,000 in
2009were for
chargebacks.




Long-Lived Assets




Long-lived
assets and certain identifiable assets related to those assets are periodically
reviewed for impairment whenever circumstances and situations change such that
there is an indication that the carrying amounts may not be
recoverable.  If the non-discounted future cash flows of the
enterprise are less than their carrying amount, their carrying amounts are
reduced to fair value and an impairment loss is recognized.   As of
March 31, 2010, the Company did not record any impairment of its long-lived
assets.




Identifiable
Intangible Assets




Intangible
assets are stated at cost net of accumulated amortization and
impairment.  Intangible assets other than goodwill, are amortized over
estimated useful lives.  Hospital contracts are amortized
over the life of the agreements, which is 6 months to 14
months.  The non-compete agreement is amortized over the life of the
agreement of one year.   As of March 31, 2010, the Company has
recognized $10,667of amortization expense related to the intangible assets.




Recent
Accounting Pronouncements




In
October 2009, the FASB issued an Accounting Standard Update (“ASU”) No. 2009-13,
which addresses the accounting for multiple-deliverable arrangements to enable
vendors to account for products or services separately rather than as a combined
unit and modifies the manner in which the transaction consideration is allocated
across the separately identified deliverables. The ASU significantly expands the
disclosure requirements for multiple-deliverable revenue arrangements. The ASU
will be effective for the first annual reporting period beginning on or after
June 15, 2010, and may be applied retrospectively for all periods presented or
prospectively to arrangements entered into or materially modified after the
adoption date. Early adoption is permitted, provided that the guidance is
retroactively applied to the beginning of the year of adoption. The Company does
not expect the adoption of ASU No. 2009-13 to have any effect on its financial
statements upon its required adoption on January 1, 2011.






10


AMERICAN
      SURGICAL HOLDINGS, INC. AND SUBSIDIARIES(formerly
      ASAH Corp.)NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS




NOTE 2 –
EQUITY




Stock
Options and Warrants




The fair
market value of the stock options and warrants at the date of grant was
estimated using the Black-Scholes option-pricing model with the following
assumptions:




2009Expected
      Life
            
            1
      to 3 yearsInterest
      Rate
            
            4.14%Dividend
      Yield
            
            $0Volatility
            
            259%Forfeiture
      Rate
            
            0





The
Company has not issued any new options or warrants in 2010.




Expected
life represents the period of time that options are expected to be outstanding
and is based on the Company’s historical experience or the simplified method, as
permitted by FASB ASC No. 718 where appropriate. The risk-free interest rate is
based on U.S. Treasury interest rates at the time of the grant whose term is
consistent with the expected life of the stock options.




Expected
dividend yield was considered to be $0 in the option pricing formula since the
Company does not pay dividends and has no current plans to do so in the future.
Expected volatility is based on the Company’s historical experience. The
forfeiture rate was considered to be none insofar as the historical experience
of the Company is very limited.  As required by ASC No. 718, the
Company will adjust the estimated forfeiture rate based upon actual
experience.




The
Company recognized an expense of $31,254for stock
options and $59,659 for stock options earned during the three months ended March
31, 2010 and the year ended 2009, respectively.




The
following tables summarize all stock option grants as of December 31, 2009, the
cancellations as of March 31, 2010 and the related changes during these periods
are presented below.




Number
      of Options
            
            
            Weighted
      Average Exercise PriceBalance
      at December 31, 2009
            
            
            3,295,500
            
            
            
            0.54Cancelled
      and repurchased
            
            
            (625,000
            )
            
            
            2.36Balance
      at March 31, 2010
            
            
            2,670,500
            
            
            
            0.11Options
      exercisable on March 31, 2010
            
            
            346,438
            
            
            
            0.34Weighted
      average fair value of options granted during 2010
            
            
            
            
            
            
            0.00





Of the
total options granted, 346,438 are fully vested, exercisable and
non-forfeitable.






11




AMERICAN
      SURGICAL HOLDINGS, INC. AND SUBSIDIARIES(formerly
      ASAH Corp.)NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS




March
      31, 2010 Options Outstanding
            
            
            Options
      ExercisableRange
      of Exercise Price
            
            
            Number
      Outstanding at March 31, 2010
            
            
            Weighted
      Average Remaining Contractual Life
            
            
            Weighted
      Average Exercise Price
            
            
            Number
      Exercisable at March 31, 2010
            
            
            Weighted
      Average Exercise Price$
            3.10
            
            
            
            30,000
            
            
            
            1.76
            
            
            $
            3.10
            
            
            
            30,000
            
            
            $
            3.10$
            0.08
            
            
            
            2,640,500
            
            
            
            1.81
            
            
            $
            0.08
            
            
            
            316,438
            
            
            $
            0.08




December
      31, 2009 Options Outstanding
              
              
              Options
      ExercisableRange
      of Exercise Price
              
              
              Number
      Outstanding at December 31, 2009
              
              
              Weighted
      Average Remaining Contractual Life
              
              
              Weighted
      Average Exercise Price
              
              
              Number
      Exercisable at December 31, 2009
              
              
              Weighted
      Average Exercise Price$
              0.08
              
              
              
              2,640,500
              
              
              
              2.06
              
              
              $
              0.08
              
              
              
              -
              
              
              
              -$
              2.00-2.20
              
              
              
              125,000
              
              
              
              0.26
              
              
              $
              2.13
              
              
              
              119,384
              
              
              $
              2.12$
              2.21-3.10
              
              
              
              530,000
              
              
              
              0.12
              
              
              $
              2.46
              
              
              
              529,543
              
              
              $
              2.46




Warrants




The
Company did not issue any warrants in 2009 or the first quarter of
2010.  Changes to the warrants are given below:




Number
      of Warrants
            
            
            Weighted
      Average Exercise PriceBalance
      at December 31, 2009
            
            
            727,715
            
            
            $
            0.44Exercised
            
            
            (262,500
            )Balance
      at March 31, 2010
            
            
            465,215Warrants
      exercisable on March 31, 2010
            
            
            465,215
            
            
            $
            0.50Weighted
      average fair value of Warrants granted during 2010
            
            
            
            
            
            $
            -





Of the
total warrants granted, 465,215 are fully vested, exercisable and
non-forfeitable.




March
      31, 2010 Warrants Outstanding
                
                
                Warrants
      ExercisableRange
      of Exercise Price
                
                
                Number
      Outstanding at March 31, 2010
                
                
                Weighted
      Average Remaining Contractual Life
                
                
                Weighted
      Average Exercise Price
                
                
                Number
      Exercisable at March 31, 2010
                
                
                Weighted
      Average Exercise Price$
                0.10-0.75
                
                
                
                457,500
                
                
                
                0.31
                
                
                $
                0.50
                
                
                
                475,500
                
                
                $
                0.50$
                2.00
                
                
                
                7,715
                
                
                
                0.27
                
                
                $
                2.00
                
                
                
                7,715
                
                
                $
                2.00
  December
      31, 2009 Warrants Outstanding
                
                
                Warrants
      ExercisableRange
      of Exercise Price
                
                
                Number
      Outstanding at December 31, 2009
                
                
                Weighted
      Average Remaining Contractual Life
                
                
                Weighted
      Average Exercise Price
                
                
                Number
      Exercisable at December 31, 2009
                
                
                Weighted
      Average Exercise Price$
                0.10-0.75
                
                
                
                720,000
                
                
                
                0.56
                
                
                $
                0.43
                
                
                
                720,000
                
                
                $
                0.43$
                2.00
                
                
                
                7,715
                
                
                
                0.56
                
                
                $
                2.00
                
                
                
                7,715
                
                
                $
                2.00






12


AMERICAN
      SURGICAL HOLDINGS, INC. AND SUBSIDIARIES(formerly
      ASAH Corp.)NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS




NOTE 3 – RELATED PARTY
TRANSACTION




On
January 21, 2010, the independent members of the Board of Directors upon the
recommendation of the Compensation Committee approved and awarded payments of
$562,500 to the Company’s officers and directors in exchange for, among other
things, the cancellation of options to purchase 625,000 shares of the Company's
common stock.




NOTE 4 –
COMMITMENTS





The
Company's Compensation Committee has approved performance-based bonuses to
select members of  our senior management based on the achievement of
certain collection targets for the period between January 1, 2010 and April 30,
2010.  If the performance targets are achieved, two members of our
senior management team would each receive a bonus of $250,000.  Based
on the Company's collections to date, it is likely that the performance targets
will be achieved and that  the bonuses will be paid.





NOTE 5 – SUBSEQUENT
EVENTS





None.






13




ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS




FORWARD-LOOKING
STATEMENTS




This
report contains certain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange
Act of 1934, as amended, which are based on management’s exercise of business
judgment as well as assumptions made by and information currently available to,
management. When used in this report, the words" may," "will", "anticipate,"
"believe," "estimate," "expect," "intend" and words of similar import, are
intended to identify any forward-looking statements.  You should not
place undue reliance on these forward-looking statements.  These
statements reflect our current view of future events and are subject to certain
risks and uncertainties as described in this report on Form 10-Q as well as
other periodic reports, filed with the Securities and Exchange Commission, and
as noted below. Should one or more of these risks or uncertainties materialize,
or should underlying assumptions prove incorrect, our actual results could
differ materially from those anticipated in these forward-looking
statements.  We undertake no obligation, and do not intend, to update,
revise or otherwise publicly release any revisions to these forward-looking
statements to reflect events or circumstances after the date hereof, or to
reflect the occurrence of any unanticipated events. Although we believe that our
expectations are based on reasonable assumptions, we can give no assurance that
our expectations will materialize.




GENERAL




The
following Management’s Discussion and Analysis of Financial Condition and
Results of Operations highlights the principal factors that have affected our
financial condition and results of operations as well as
our  liquidity and capital resources for the quarter ended March 31,
2010, with their explanatory notes included as part of this Form
10-Q.




We were
incorporated in the State of Delaware under the name Renfrew, Inc. on July 22,
2003 as a blank check company as defined under Rule 419 of the Securities
Act.  On August 2, 2005, we filed Articles of Amendment with the State
of Delaware changing our name to ASAH Corp.  On January 9, 2007, we
filed Articles of Amendment with the State of Delaware changing our name to
American Surgical Holdings, Inc.




Pursuant
to a Stock Purchase Agreement and Share Exchange between us and American
Surgical Assistants, Inc. ("ASA") dated October 10, 2005, we acquired all of the
shares of ASA, from Zak Elgamal, our Chief Executive Officer, and Jaime
Olmo-Rivas, one of our executive officers. As a result of and in consideration
for the issuance of 1,714,286 shares of our common stock to Mr. Elgamal and
1,714,286 shares of our common stock to Mr. Olmo-Rivas, for an aggregate
amount of 3,428,572 shares of our common stock, ASA became our wholly owned
subsidiary.




Our staff
and associates are credentialed and provide services to surgeons and patients at
numerous hospitals and surgery centers in Texas, Oklahoma, Georgia and
Virginia.  We commenced operations in Tennessee in
2010.  The majority of our revenue comes in the form of Service Fees
paid by third party insurers on behalf of their clients (the
patients).  A small percentage of our revenue is generated from
payments by the patients for deductibles and co-pays not covered by the insurers
and payments from patients who are self-insured.  We generate
additional revenue in the form of fees earned under contracts for “On-Call
Coverage” from hospitals and other healthcare facilities.  Our
agreements with these healthcare facilities usually include an exclusivity
arrangement whereby ASA is the only entity entitled to provide surgical
assistants within the client facility except under very limited and clearly
defined circumstances.




Our cost
of revenue includes those costs and expenditures that are incurred directly by
or associated with the surgical assistants’ performance of their
duties.  The following items are included in the cost of
revenue:




·  Insurance
- worker’s compensation, malpractice, medical and dental;




·  Licenses
and permits;




·  Professional
contract services;




·  Postage
and delivery;




14






·  Salaries
and wages;




·  Payroll taxes;
and




·  Telephone
and communications.




Critical
Accounting Policies




Revenue
Recognition




We
recognize revenue over the period the service is performed in accordance with
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) No. 605, Revenue
Recognition in Financial Statements.  In general, ASC No. 605
requires that four basic criteria must be met before revenue can be recognized:
(i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or
services rendered, (iii) the fee is fixed and determinable, and (iv)
collectability is reasonably assured.




Established
billing rates are not the same as actual pricing.  They generally do
not reflect what we are ultimately paid and therefore are not reported in our
financial statements.  We are typically paid amounts based on
established charges per procedure with guidance from the annually updated
Current Procedural Terminology (“CPT”) guidelines (a code set maintained by the
American Medical
Association through the CPT Editorial Panel), that designates relative
value units (“R.V.U.'s”) and a suggested range of charges for each surgical
procedure which is then assigned a CPT code.  This fee is discounted
to reflect the percentage “using a modifier” recognized by each insurance
carrier for surgical assistant services, less deductible, co-pay, and
contractual adjustments which are deducted from the calculated surgical
assistant fee and the remainder amount is issued to us.




We report
revenues derived from providing licensed and/or certified surgical assistants to
assist physicians in surgical procedures, and in emergency surgery (“Service
Fees, net”). Additional revenues are derived from contracts with hospitals for
24/7 Surgical Assistant On-Call services (“Contract Fees”).




“Service
Fees, net” includes revenues generated from services performed by surgical
assistants on the date the services are performed based on established billing
rates less allowances for contractual adjustments and uncollectible
amounts.  These contractual adjustments vary by insurance company and
self-pay patients.  We compute these contractual adjustments and
collection allowances based on our historical collection
experience.




Completing
the paperwork for each case and preparing it for billing takes approximately ten
business days.  The majority of claims are then filed electronically
except for those remaining insurance carriers requiring paper
filing.  An initial response is usually received within four weeks
from electronic filing and up to six weeks from paper
filing.  Responses may be a payment, a denial, or a request for
additional information.




Historical
collection rates are estimated using the most current prior 12 month historical
payment and collection percentages.  We generally receive 99% of our
collections within 12 months from the date of service.  Amounts
greater than one-year past due are written off as a bad debt.  We
account for charge-backs as they occur and record an estimate for known
charge-backs as they are received from insurance companies.




We also
earn revenue (“Contract Fees”) derived from contracts with hospitals for
providing surgical assistant twenty-four hour per day On-Call
coverage.  Contract Fees are invoiced monthly throughout the
respective contract period as services are provided and revenue is recognized
monthly as the fees are earned.




Other
Policies




Our other
significant accounting policies are summarized in Note 1 of our Condensed
Consolidated Financial Statements, included elsewhere in this report. Policies
determined to be significant are those policies that have the greatest impact on
our financial statements and require management to use a greater degree of
judgment and estimates. Actual results may differ from those
estimates.  Our management believes that given current facts and
circumstances, it is unlikely that applying any other reasonable judgments or
estimate methodologies would cause effect on our consolidated results of
operations, financial position or liquidity for the periods presented in this
annual report.






15






Recent
Accounting Pronouncements




In
October 2009, the FASB issued an Accounting Standard Update (“ASU”) No. 2009-13,
which addresses the accounting for multiple-deliverable arrangements to enable
vendors to account for products or services separately rather than as a combined
unit and modifies the manner in which the transaction consideration is allocated
across the separately identified deliverables. The ASU significantly expands the
disclosure requirements for multiple-deliverable revenue arrangements. The ASU
will be effective for the first annual reporting period beginning on or after
June 15, 2010, and may be applied retrospectively for all periods presented or
prospectively to arrangements entered into or materially modified after the
adoption date. Early adoption is permitted, provided that the guidance is
retroactively applied to the beginning of the year of adoption. We do not expect
the adoption of ASU No. 2009-13 to have any effect on our financial statements
upon its required adoption on January 1, 2011.




RESULTS
OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2010 COMPARED TO THE THREE
MONTHS ENDED MARCH 31, 2009




Operating
Results




The table
below provides a brief recap of operating results for the three months ended
March 31, 2010 and 2009 expressed as a percentage of revenue.




For
      the quarters endedMarch
      31,2010
            
            
            2009Revenues,
      net
            
            
            100.0
            %
            
            
            100.0
            %Cost
      of Revenues
            
            
            (44.9
            %)
            
            
            (49.4
            %)Gross
      Profit
            
            
            55.1
            %
            
            
            50.6
            %Operating
      Expenses
            
            
            (41.8
            %)
            
            
            (26.3
            %)Net
      Income from Operations
            
            
            13.3
            %
            
            
            24.3
            %Other
      (Expense) Income
            
            
            0.0
            %
            
            
            (4.3
            %)Income
      from Operations
            
            
            13.3
            %
            
            
            20
            %Provision
      for Income Taxes
            
            
            (5.6
            %)
            
            
            (7.8
            %)Net
      Income
            
            
            7.7
            %
            
            
            12.2
            %







Revenue:Revenues increased by $1,399,093, or
35%,to $5,438,490
for the three months ended March 31, 2010 from$4,039,397 for the three
months ended March 31, 2009.  The increase in revenue is due primarily
to a 25% increase in the number of cases performed by our surgical assistants
during the first quarter of 2010 compared to the comparable quarter in
2009.  These new cases originated in part due to our provision of
services at seven additional facilities in Georgia, Tennessee, Virginia and
Texas during the first quarter of 2010.  In addition, our surgical
assistants performed additional services at our existing
facilities.




Cost of
Revenue:  Cost of revenue increased to $2,446,231 for the three
months ended March 31, 2010 from $1,997,109 for the three months ended March 31,
2009, an increase of $449,122, or 22%.  The increase is primarily due
to the increase in the number of surgical assistants from 73 to 96 to cover our
additional business.






16




Gross Profit:Gross profit
increased to $2,992,259 for the three months ended March 31, 2010 from
$2,042,288 for the three months ended March 31, 2009, an increase of
$949,971.  The 47% increase in gross profit resulted primarily from
the increase in revenues and our ability to reduce the cost of revenue as a
percentage of revenue.   As a percentage of revenue, gross profit
margins were 55.0% for the three months ended March 31, 2010, as compared to
50.6% for the three months ended March 31, 2009, an increase of 4.4%. The
increase in gross profit margin resulted primarily from the increase in revenues
offset by a moderate increase in the cost of revenue.




Operating
Expenses:Operating expenses, which are comprised of general
and administrative expense, legal and professional fees, directors fees,
salaries and rent, increased to $2,273,586 for the three months ended March 31,
2010, which was up from $1,060,341 for the comparable period in
2009.  During the three months ended March 31, 2010, general and
administrative expenses increased by $10,935, or 4%, as compared to the
comparable period in 2009.  General and administrative expenses
increased primarily as a result of increases in travel due to the expansion of
our business in additional states.




Legal and
professional fees and director fees increased by $230,903 and $130,626,
respectively, as compared to the comparable period in 2009.  The
increase in legal and professional fees and director fees resulted from the
creation of the Mergers and Acquisitions Committee of the Board of Directors in
the third quarter of 2009 and the evaluation by such committee of potential
transactions.  In addition, legal and professional fees also increased
as a result of the retention of a law firm to expand the review of all our SEC
filings and other regulatory filings, including state filings which were
required as a result of the expansion of our business into additional
states.




Salaries
for the three months ended March 31, 2010 increased to $1,469,001 from
$633,032 for the comparable period in 2009, representing an increase of
$835,969, or 132%.  During 2008, we implemented cost cutting measures,
which included a reduction in the salaries paid to management.  In
addition, the terms of our convertible notes, which  were outstanding in
2009, required the approval of all our independent directors in order to
increase the compensation and/or benefits payable to certain of our management
and key personnel.  Our independent directors determined not to increase
such compensation or benefits until the convertible notes were paid in
full.  The convertible notes were repaid in the first and second
quarters of 2009. Thereafter, salaries were reinstated to their original levels
during the second quarter of 2009. In addition, during the first quarter of
2010, the salaries of our Chief Executive Officer and Chief Operating Officer
were increased by 5% as required by the terms of their respective employment
agreements. During
the first quarter of 2010, we also paid performance bonuses of $742,500 to
senior management.  No such bonuses were paid during the comparable
quarter of 2009 due to the restrictions imposed by our convertible notes and the
decision of our independent directors.




Rent
increased by $4,812 as compared to the comparable period in
2009.  Rent increased as a result of the annual increases in rent
required under the terms of our lease agreement and the departure of our
sub-tenant.




Our
Compensation Committee has approved performance-based bonuses to select members
of  our senior management based on the achievement of certain
collection targets for the period between January 1, 2010 and April 30,
2010.  If the performance targets are achieved, two members of our
senior management team would each receive a bonus of $250,000.  Based
on our collections to date, it is likely that the performance targets will be
achieved and that  the bonuses will be paid.




Interest Expense:Interest
expense for the three months ended March 31, 2010 was $0 compared to $174,165
for the three months ended March 31, 2009.  The decreasein interest expense
resulted primarily from the repayment of the convertible notes in March and June
2009 and a note to a related party in March 2009.




Income Tax Expense:We
recorded a provision for income tax for the three months ended March 31, 2010 in
the amount of $306,320 as compared to a provision for income tax of $317,177 for
the three months ended March 31, 2009.  The decrease in income tax due
in 2010 as compared to the income tax due in 2009 is primarily a result of the
decrease in net income.




Net Income:Our net income for the
three months ended March 31, 2010 was $416,055, which represented a decrease of
$75,627, or 15%, compared to net income of $491,682 for the three months ended
March 31, 2009.  This decrease was primarily the result of the
increase in our legal and professional fees, director fees and salaries, which
was partially offset by the increase in our revenue.






17




LIQUIDITY
AND CAPITAL RESOURCES




To date,
we have relied primarily upon cash flow from operations, the net proceeds of our
convertible note offering completed during 2007 and a promissory note from a
related party to finance our operations.  Our primary use of cash from
operations has been the repayment of our convertible notes, as more fully
described below, and payment of our operating expenses.




As a
result of various changes implemented in 2008 and our dramatic increase in
revenue in 2009, we improved our cash flow dramatically in 2009 and we believe
that our cash flow will continue to remain stable or improve in 2010. As of
March 31, 2010, we had $ 2,954,032 in cash and cash equivalents on hand compared
to $2,705,488 on hand at December 31, 2009.  Our working capital at
March 31, 2010 was $5,482,602 compared to $5,530,780 at December 31,
2009.  We had a working capital ratio (current assets/current
liabilities) as of March 31, 2010 and December 31, 2009 of 5:1.  We
believe that our cash flows from operations will be sufficient to meet our
working capital needs.




Although
we do anticipate some capital needs in the future to expand our information
technology in response to our growth, we have not yet established a budget or
timeline for such capital improvements.  If such capital needs occur
in the coming year and are not significant, they will likely be funded from our
cash flow from operations.  If such capital needs are significant, we
would likely seek additional financing to meet them.




Operating Activities: Net cash
provided by operating activities was $773,544 for the three months ended March
31, 2010 as compared to net cash provided by operating activities of $2,167,851
during the comparable period in 2009.  The primary reasons for the
decrease in the cash provided by operating activities were the decrease of
$75,627 in net income, the decrease of $914,609 in accounts receivable as
compared to the comparable period in 2009, which resulted from continual
improvements in our collections, the decrease of $243,977 in accrued salaries as
compared to the comparable period in 2009, and the decrease in accrued taxes of
$300,397 as compared to the comparable period in 2009, which were partially
offset by the decrease in a federal income tax (FIT) receivable of $289,539 as
compared to the comparable period in 2009, which resulted from the overpayment
of federal income tax.




Investing
Activities:  Net cash provided by investing activities was $0
for the three months ended March 31, 2010 as compared to net cash used in
investing activities of $255,973 for the comparable period in
2009.  During the period ended March 31, 2010, we had no investing
activities as compared to a decrease in restricted cash offset by the purchase
of hospital contracts and non-competes during the comparable period in
2009.




Financing Activities: Net cash
used in financing activities for the three months ended March 31, 2010 was
$525,000 as compared to net cash used in financing activities of $1,507,500 in
the comparable period in 2009.  During the three months ended March
31, 2010, we received $37,500 as a result of option and warrants exercises which
was offset by the use of $562,500 in payments to our officers and directors, in
exchange for, among other things the cancellation of options to purchase 625,000
shares of our common stock as compared to the use of $150,000 and $1,357,500 to
repay a note payable to a related party and to repay the convertible notes we
issued in 2007, respectively.




Convertible
Notes




In May
2007, we commenced an offering of a minimum of 12 Units and a maximum of 35
Units pursuant to a private placement memorandum at a price of $100,000 per
Unit.  Each Unit consisted of (i) a one year 15% interest bearing
unsecured promissory note (“Note”) in the principal amount of $100,000 and (ii)
a warrant to purchase 100,000 shares of our common stock at an exercise price of
$2.00 per share (the "Warrants”).  We also agreed to register the
shares of common stock underlying the warrants under certain
circumstances.




The Notes
were secured by our accounts receivable and an assignment of any proceeds
received by us from judgments against or settlements with insurance carriers
with respect to certain past due claims.




The Notes
were convertible into our common stock if we commenced a “Qualified Offering”
prior to the maturity date of the Notes. In lieu of repayment of principal and
interest on the Notes, the Holders of the Notes could acquire our securities in
the amount of such principal and interest at a purchase price equal to 85% of
the price per security sold in the Qualified Offering. For purposes of the
Notes, a Qualified Offering was the completion of an offering or offerings of
our securities, including any offering of debt or equity securities, or
securities convertible into debt or equity securities, in an amount not less
than $3.0 million.






18




Dawson
James Securities, Inc. (“Dawson”) was hired as the exclusive placement agent for
the offering.  For its services, Dawson earned a cash commission equal
to 10% and a non-accountable expense allowance equal to 3% of the gross proceeds
of each Unit sold.  In addition, for each Unit sold Dawson earned
warrants to purchase 20,000 shares of our common stock at an exercise price of
$2.00 per share.




In June
2007, we accepted subscriptions for the minimum number of Units and executed
Notes in the principal amount of $1,230,000 and issued warrants to purchase
1,230,000 shares of common stock to the note holders.  We received net
proceeds of $1,070,100 after payment of commissions to Dawson.  In
July 2007, we accepted subscriptions for an additional 14.85 Units and executed
Notes in the principal amount of $1,485,000 and issued warrants to purchase
1,485,000 shares of common stock to the note holders. We received net proceeds
of $1,291,950 after payment of commissions to Dawson. The value of the warrants
issued as part of the Units was recorded as a discount on the Notes and was
charged to interest expense and accreted to the balance of the Notes over the
life of the Notes.  In connection with the offering, we issued
warrants to purchase 543,000 shares of our common stock to
Dawson.  The value of the warrants issued to Dawson as part of the
compensation for the offering and the cash commission paid to Dawson was
recorded as deferred financing costs and amortized to interest expense over the
life of the Notes.




In July
2008, the terms of the Notes were renegotiated with half due in March 2009 and
the due date of the remaining balance automatically extended to December 2009
upon payment of the amount of principal due on March 31, 2009.  The
warrants were re-priced with one half re-priced at an exercise price of $0.10
per share and one half re-priced with an exercise price of $0.75 per
share.  The warrants held by Dawson were not re-priced.  The
fair value of the options was reset and a portion was charged to interest
expense in 2008 and the remainder amortized in 2009.




We paid
the Notes on a timely basis from cash generated from operations.  One
half of the Notes were paid off in March 2009 and the other half in June
2009.  In November 2009, we received a request to register the shares
of common stock underlying the warrants.  In response, we filed a
registration statement with the SEC on a timely basis as required by the
agreement with the warrant holders.




Note from a Related
Party




The note
payable due to a related party of $150,000 was signed on June 12, 2008 and
extended on September 12, 2008 to a new maturity date of June 15,
2009.  The note accrued interest at a rate of 15%
annually.  During 2009, we recorded $4,685 of interest
expense.  All accrued interest on this note as of December 31, 2008
was paid in January 2009 and the principal and accrued interest from January 1,
2009 was paid in full during March 2009.




Exercise of Warrants and
Options




During
the quarter ended March 31, 2010, warrant holders exercised warrants to purchase
75,000 shares of our common stock and 187,500 shares of our common stock at
exercise prices of $0.10 per share and $0.75 per share, respectively,
representing an aggregate of $37,500 in proceeds to us.  This amount
reflects only the warrants that were exercised for cash, as many of the warrants
were exercised on a cashless basis.




No
options were exercised during the quarter ended March 31, 2010.




Off-Balance
Sheet Arrangements




We are
not a party to any “off-balance sheet arrangements,” as defined by applicable
GAAP and SEC rules.




ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS




We
conduct our business in United States Dollars. Our market risk is limited to the
United States domestic, economic and regulatory factors.






19






ITEM
4. CONTROLS AND PROCEDURES




Evaluation of Disclosure
Controls.  Our Chief Executive Officer and our Chief Financial
and Accounting Officer evaluated the effectiveness of our disclosure controls
and procedures as of the end of our first fiscal quarter of 2010 pursuant to
Rule 13a-15(b) of the Securities Exchange Act of 1934.  Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by us in
the reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, as appropriate to allow timely decisions
regarding required disclosure.  Based on their evaluation, the Chief
Executive Officer and Chief Financial and Accounting Officer concluded that our
disclosure controls and procedures were effective as of March 31,
2010.




It should
be noted that any system of controls, however well designed and operated, can
provide only reasonable, and not absolute, assurance that the objectives of the
system are met. In addition, the design of any control system is based in part
upon certain assumptions about the likelihood of future events. Because of these
and other inherent limitations of control systems, there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions.




Changes in Internal Control
Over Financial Reporting.  There have been no changes in our
internal control over financial reporting that occurred during the last fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.






20






PART
II - OTHER INFORMATION




ITEM
1. LEGAL PROCEEDINGS.




Currently
we are not aware of any litigation pending or threatened by or against the
Company.




ITEM
1A. RISK FACTORS.




Not
applicable.




ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS




None.




ITEM
3. DEFAULTS UPON SENIOR SECURITIES.




None




ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.




On
February 26, 2010, stockholders owing 8,217,423 shares of our common stock
outstanding executed written consents authorizing the following amendments to
our certificate of incorporation:




·  An
amendment to reflect the 1-for-1.75 reverse stock split of our issued and
outstanding shares of common stock approved by our board of directors and a
majority of our stockholders on December 19, 2006 and effected as of January 23,
2007.




·  An
amendment to reflect the 1-for-2 stock split of our issued and outstanding
shares of common stock approved by our board of directors and a majority of our
stockholders on March 23, 2007 and effected as of April 26, 2007.




ITEM
5. OTHER INFORMATION.




None




ITEM
6. EXHIBITS.




(a)           Exhibits




Exhibit
      No.
            
            Description31.1
            
            Certifications
      of Chief Executive Officer pursuant to Section 302 of Sarbanes Oxley Act
      of 200231.2
            
            Certifications
      of Chief Financial Officer pursuant to Section 302 of Sarbanes Oxley Act
      of 200232.1
            
            Certifications
      of Chief Executive Officer pursuant to Section 906 of Sarbanes Oxley Act
      of 200232.2
            
            Certifications
      of Chief Financial Officer pursuant to Section 906 of Sarbanes Oxley Act
      of 2002





21





SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.




AMERICAN
      SURGICAL HOLDINGS, INC.Date:
      April 30, 2010
              By:
              /s/ Zak
      W. ElgamalZak
      W. Elgamal,Chairman
      and Chief Executive Officer and
                Principal
      Executive Officer


Date:
      April 30, 2010
              By:
              /s/ James
      A. LongakerJames
      A. Longaker,Chief
      Financial Officer and
                Principal
      Accounting Officer











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