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 September 30, 2010

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 November 19, 2010: 12,821,928 shares of common stock.

Table of Contents

		Page
PART I. – FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	2

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS	23

ITEM 4.	CONTROLS AND PROCEDURES	23

PART II - OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS.	24

ITEM 1A.	RISK FACTORS.	24

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	24

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	24

ITEM 4.	REMOVED AND RESERVED	24

ITEM 5.	OTHER INFORMATION.	24

ITEM 6.	EXHIBITS.	24

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 SEPTEMBER 30, 2010

(UNAUDITED)

CONTENTS

	PAGE
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2010 (UNAUDITED) AND DECEMBER 31, 2009	3

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 (UNAUDITED)	4

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 (UNAUDITED)	5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 (UNAUDITED)	6

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	8

AMERICAN SURGICAL HOLDINGS, INC. AND SUBSIDIARIES (formerly ASAH Corp.) CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2010 AND DECEMBER 31, 2009

	September 30,			December 31, 2009
	2010
	(unaudited)

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	3,983,931		$	2,705,488
Accounts receivable, net		3,595,500			3,855,401
Advances to employees		29,440			31,453
Prepaid federal income tax		-			302,024
Prepaid expenses and other current assets		192,185			28,263
TOTAL CURRENT ASSETS		7,801,056			6,922,629

PROPERTY AND EQUIPMENT, NET		42,966			54,103
HOSPITAL CONTRACT COSTS & NON-COMPETE, NET		-			13,667
TOTAL ASSETS	$	7,844,022		$	6,990,399

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	248,574		$	116,386
Accrued/deferred income tax		261,198			94,506
Accrued salaries, bonuses and payroll taxes		1,120,391			1,180,957

TOTAL CURRENT LIABILITIES		1,630,163			1,391,849

STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value, 10,000,000 shares
authorized, none issued and outstanding		-			-
Common stock, $0.001 par value, 100,000,000 shares
authorized, 12,808,866 and 11,632,161 shares issued
and outstanding, respectively		12,809			11,632
Additional paid-in capital		3,228,142			3,601,927
Deferred compensation		(6,250	)		(43,750	)
Retained earnings		2,979,158			2,028,741
TOTAL STOCKHOLDERS' EQUITY		6,213,859			5,598,550
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	7,844,022		$	6,990,399
See accompanying notes to condensed consolidated financial statements.

AMERICAN SURGICAL HOLDINGS, INC. AND SUBSIDIARIES

(formerly ASAH Corp.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,

(UNAUDITED)

	Three months ended						Nine months ended
	2010			2009			2010			2009

Revenues
Service fees, net	$	6,566,038		$	6,501,234		$	17,793,718		$	16,008,716
Contract fees		300,602			223,524			918,190			694,134

Total net revenues		6,866,640			6,724,758			18,711,908			16,702,850

Cost of revenues		2,923,009			2,198,857			7,810,583			6,115,198

GROSS PROFIT		3,943,631			4,525,901			10,901,325			10,587,652

OPERATING EXPENSES

General and administration		417,068			257,893			1,001,039			807,780
Legal and professional fees		282,711			38,526			1,088,499			159,805
Director fees		300,308			62,390			781,668			190,206
Salaries		1,181,269			1,131,495			4,982,637			3,524,609
Rent		27,153			23,699			81,459			68,981
TOTAL OPERATING EXPENSES		2, 208,509			1,514,003			7,935,302			4,751,381

NET INCOME FROM OPERATIONS		1,735,122			3,011,898			2,966,023			5,836,271

Other income (expense)
Interest expense		-			-			-			(280,583	)
Interest income		3,601			3,306			9,099			5,357

OTHER INCOME (EXPENSE)		3,601			3,306			9,099			(275,226	)

INCOME FROM OPERATIONS		1,738,723			3,015,204			2,975,122			5,561,045

Provision for income taxes		(619,571	)		(1,052,734	)		(1,008,715	)		( 2,014,280	)

NET INCOME	$	1,119,152		$	1,962,470		$	1,966,407		$	3,546,765

Net income per share – basic	$	0.09		$	0.23		$	0.16		$	0.42
Net income per share – diluted	$	0.08		$	0.17		$	0.14		$	0.41

Weighted average number of shares outstanding
during the period - basic		12,698,684			8,537, 261			12,177,880			8,507,841
Weighted average number of shares outstanding during the period –diluted		14,503,932			11,275,979			14,079,000			8,938,964

See accompanying notes to condensed consolidated financial statements

AMERICAN SURGICAL HOLDINGS, INC. (formerly ASAH Corp.) CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 (UNAUDITED)
									Additional									Total
	Preferred Stock				Common Stock				Paid-in			Deferred			Retained			Stockholders'
	Shares		Amount		Shares		Amount		Capital			Compensation			Earnings			Equity
Balances, December 31, 2009		-	$	-		11,632,161	$	11,632	$	3,601,927		$	(43,750	)	$	2,028,741		$	5,598,550

Deferred compensation		-		-		-		-		-			37,500			-			37,500
Options issued to officers		-		-		-		-		71,982			-			-			71,982
Options issued to employees		-		-		-		-		5,142			-			-			5,142
Options issued to directors		-		-		-		-		6,918			-			-			6,918
Stock issued upon exercise of options						854,388		854		67,496			-			-			68,350
Stock issued upon exercise of warrants		-		-		322,317		323		37,177			-			-			37,500
Cancellation and repurchase of options		-		-		-		-		(562,500	)		-			-			(562,500	)
Cash dividends ($0.08 per share)																(1,015,990	)		(1,015,990	)
Net income		-		-		-		-		-			-			1,966,407			1,966,407

Balances, September 30, 2010		-	$	-		12,808,866	$	12,809	$	3,228,142		$	(6,250	)	$	2,979,158		$	6,213,859

See accompanying notes to condensed consolidated financial statements.

AMERICAN SURGICAL HOLDINGS, INC. AND SUBSIDIARIES (formerly ASAH Corp.) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 (UNAUDITED)

	September 30,			September 30,
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,966,407		$	3,546,765
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		32,927			61,054
Provision for uncollectible accounts		-			(19,000	)
Amortization of discount of convertible notes payable		-			131,493
Deferred compensation		37,500			37,500
Options issued for services		5,142			10,471
Options issued to officers		71,982			162,880
Options issued to directors		6,918			17,024
Changes in operating assets and liabilities:
(Increase) Decrease in accounts receivable, net		259,901			(47,758	)
(Increase) Decrease in advances to employees		2,013			(22,315	)
(Increase) Decrease in prepaid expenses		(163,922	)		(25,703	)
(Increase) Decrease in FIT receivable		302,024			-
Increase (Decrease) in accounts payable and accrued expenses		132,188			(57,568	)
Increase (Decrease) in accrued salaries		(60,566	)		737,741
Increase (Decrease) in accrued taxes		166,692			214,280
Net cash provided by operating activities		2,759,206			4,746,863

CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) Decrease in restricted cash		-			373,653
Purchase of hospital contracts & non-compete		-			(50,000	)
Purchase of property and equipment		(8,123	)		-
Net cash (used in) provided by investing activities		(8,123	)		323,653

CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of options		(562,500	)		-
Repayment of note payable from related party		-			(150,000	)
Issuance of common stock upon exercise of warrants and options		105,850			90,633
Repayment of convertible notes payable		-			(2,715,000	)
Cash dividends ($0.08 per share)		(1,015,990	)		-
Net cash used in financing activities		(1,472,640	)		(2,774,367	)

NET INCREASE IN CASH		1,278,443		2,296,149
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD		2,705,488		431,731

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	3,983,931	$	2,727,880

See accompanying notes to condensed consolidated financial statements

AMERICAN SURGICAL HOLDINGS, INC. AND SUBSIDIARIES (formerly ASAH Corp.) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE (UNAUDITED)
	September 30,		September 30,
	2010		2009
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Cash paid for income taxes	$	540,000	$	1,800,000
Cash paid for interest expense		-	$	226,053

SUPPLEMENTAL NON-CASH DISCLOSURE
Stock issued in acquisition		-	$	20,000

See accompanying 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 and nine months ended September 30, 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 result 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 108 surgical assistants, of which 91 are full or part time employees and 17 are independent contractors. We also have 30 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 September 30, 2010 and December 31, 2009, the Company had approximately $3,666,549 and $2,269,511, respectively, in excess of FDIC insurance limits.

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 basis 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 have 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 value of $84,042 for stock options earned for the nine months ended September 30, 2010.

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 common 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 estimated 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 were 1,816,112 and warrants were 340,215 on September 30, 2010, of which 30,000 common stock options and 7,715 warrants were excluded from the computation of diluted earnings per share on September 30, 2010 since their effect remains anti-dilutive. Excluded from the Company’s September 30, 2009 computation of diluted earnings per share due to their anti-dilutive effect were 1,463,356 common stock options and 3,060,000 warrants.

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 amounts recovered. 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 (“RVU'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 paid to the Company “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. The net revenue is recorded at the time the services were rendered.

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 its historical collection experience.

Completing the paperwork for each case and preparing it for billing takes approximately ten business days after a procedure is performed. 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 its 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 records an estimate for expected charge-backs as they are received from insurance companies.

The Company also earns 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 its accounts receivable, its 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 the net revenue 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 and the appropriate collection percentage, the Company determined that an allowance was necessary at September 30, 2010 in the amount of $260,000 compared to an allowance of $260,000 at December 31, 2009. The $260,000 at September 30, 2010 and $260,000 at December 31, 2009 were for estimated 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 September 30, 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 their individual estimated useful lives. In March 2009, the Company acquired assets, primarily hospital contracts, of a small surgical assistant services provider and required the owner to enter into an employment and non-compete agreement. The acquired hospital contracts are amortized over the life of the contracts and the non-compete agreement is amortized over the one year life of the agreement. As of September 30, 2010, the Company had recognized $13,667 of amortization expense related to the intangible assets. The intangible assets were fully amortized as of June 30, 2010.

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.

In January 2010, the FASB issued guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. The guidance requires new disclosures on the transfers of assets and liabilities between Level 1 (quoted prices in active market for identical assets or liabilities) and Level 2 (significant other observable inputs) of the fair value measurement hierarchy, including the reasons and the timing of the transfers. Additionally, the guidance requires a roll forward of activities on purchases, sales, issuance, and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). The guidance became effective for the Company with the reporting period beginning January 1, 2010, except for the disclosure on the roll forward activities for Level 3 fair value measurements, which will become effective for the Company with the reporting period beginning July 1, 2011. Other than requiring additional disclosures, adoption of this new guidance did not have a material impact on the Company’s financial statements.

In February 2010, the FASB issued ASU No. 2010-9, which amends the Subsequent Events Topic of the Accounting Standards Codification to eliminate the requirement for public companies to disclose the date through which subsequent events have been evaluated. The Company will continue to evaluate subsequent events through the date of the issuance of the financial statements; however, consistent with the guidance, this date will no longer be disclosed. ASU 2010-09 does not have any impact on the Company’s results of operations, financial condition or liquidity.

NOTE 2 – EQUITY

Dividends

On July 27, 2010, our Board of Directors declared a special dividend of $0.08 per share for each share of our common stock, par value $0.001 per share that was issued and outstanding on August 12, 2010. The dividend was paid on August 30, 2010 in the amount of $1,015,990. We have not yet determined whether we will pay additional dividends in the future.

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:

	2009
Expected Life	1 to 3 years
Interest Rate	4.14%
Dividend Yield	$0
Volatility	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 had not paid and did not anticipate paying dividends at the time when the options and warrants were granted. 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 $84,042 and $190,375 for common stock options earned during the nine months ended September 30, 2010 and September 30, 2009, respectively.

The following tables summarize all stock option grants as of December 31, 2009, the cancellations as of September 30, 2010 and the related changes during these periods are presented below.

	Number of Options			Weighted Average Exercise Price
Balance at December 31, 2009		3,295,500		$	0.54
Cancelled and repurchased		(625,000	)	$	2.36
Exercised		(854,388	)	$	0.08

Balance at September 30, 2010		1,816,112		$	0.13
Options exercisable on September 30, 2010		135,479		$	0.75
Weighted average fair value of options granted during 2010				$	-

Of the total options granted, 135,479 are fully vested, exercisable and non-forfeitable as of September 30, 2010.

September 30, 2010 Options Outstanding								Options Exercisable
Range of Exercise Price		Number Outstanding at September 30, 2010		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable at September 30, 2010		Weighted Average Exercise Price
$	0.08		1,786,112		1.31	$	0.08		105,479	$	0.08

$	3.10		30,000		1.25	$	3.10		30,000	$	3.10

December 31, 2009 Options Outstanding								Options Exercisable
Range of Exercise Price		Number Outstanding at December 31, 2009		Weighted Average Remaining Contractual Life (Years)		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 in the first nine months of 2010. Changes to the warrants are given below:

	Number of Warrants			Weighted Average Exercise Price
Balance at December 31, 2009		727,715		$	0.44
Exercised		(387,500	)	$	0.50
Balance at September 30, 2010		340,215		$	0.54
Warrants exercisable on September 30, 2010		340,215		$	0.54
Weighted average fair value of Warrants granted during 2010				$	-

Of the total warrants granted, 340,215 are fully vested, exercisable and non-forfeitable.

September 30, 2010 Warrants Outstanding									Warrants Exercisable
	Range of Exercise Prices		Number Outstanding at September 30, 2010		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable at September 30, 2010		Weighted Average Exercise Price
	$	0.10-0.75		332,500		1.81	$	0.51		332,500	$	0.43
	$	2.00		7,715		1.81	$	2.00		7,715	$	2.00

December 31, 2009 Warrants Outstanding									Warrants Exercisable
	Range of Exercise Prices		Number Outstanding at December 31, 2009		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable at December 31, 2009		Weighted Average Exercise Price
	$	0.10-0.75		720,000		2.56	$	0.43		720,000	$	0.43
	$	2.00		7,715		2.56	$	2.00		7,715	$	2.00

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

On August 17, 2010, the Compensation Committee established performance targets for bonuses related to the Company's performance in September and October 2010. If the Company's senior management team achieved these targets, they were to receive bonuses in the aggregate amount of $250,000 in the latter part of November 2010. The Compensation Committee subsequently reviewed the approved bonuses, and while targets were met, determined that the bonuses will not be paid and the members of our senior management have waived all of their rights to receive any such bonuses. The Compensation Committee may establish additional performance goals in the future.

NOTE 5 – SUBSEQUENT EVENTS

On October 1, 2010, the Company received an exercise notice for the exercise of 25,000 warrants to purchase on a cashless basis. The Company issued 13,062 shares of common stock in connection with the exercise.

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 nine months ended September 30, 2010.

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 of 1933, as amended. 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 revenues 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 revenues:

· Insurance - workers' compensation, malpractice, medical and dental;

· Licenses and permits;

· Professional contract services;

· Postage and delivery;

· 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 amounts recovered. 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 (“RVU'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 paid to us “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. The net revenue is recorded at the time the services were rendered.

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 after the procedure is performed. 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 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 materially affect on our consolidated results of operations, financial position or liquidity for the periods presented in this annual report.

Recent Accounting Pronouncements

In October 2009, the Financial Accounting Standards Board ("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.

In January 2010, the FASB issued guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. The guidance requires new disclosures on the transfers of assets and liabilities between Level 1 (quoted prices in active market for identical assets or liabilities) and Level 2 (significant other observable inputs) of the fair value measurement hierarchy, including the reasons and the timing of the transfers. Additionally, the guidance requires a roll forward of activities on purchases, sales, issuance, and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). The guidance became effective for us with the reporting period beginning January 1, 2010, except for the disclosure on the roll forward activities for Level 3 fair value measurements, which will become effective for us with the reporting period beginning July 1, 2011. Other than requiring additional disclosures, adoption of this new guidance did not have a material impact on our financial statements.

In February 2010, the FASB issued ASU No. 2010-9, which amends the Subsequent Events Topic of the Accounting Standards Codification (ASC) to eliminate the requirement for public companies to disclose the date through which subsequent events have been evaluated. We will continue to evaluate subsequent events through the date of the issuance of the financial statements; however, consistent with the guidance, this date will no longer be disclosed. ASU 2010-09 does not have any impact on our results of operations, financial condition or liquidity.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2009

Operating Results

The table below provides a brief recap of operating results for the three months and nine months ended September 30, 2010 and 2009 expressed as a percentage of Net Revenue.

	FOR THE THREE MONTHS ENDED SEPTEMBER 30,				FOR THE NINE MONTHS ENDED SEPTEMBER 30,
	2010		2009		2010		2009

Revenues, net	100	%	100	%	100	%	100	%
Cost of Revenues	(43	%)	(33	%)	(42	%)	(37	%)

Gross Profit	57	%	67	%	58	%	63	%

Operating Expenses	(32	%)	(22	%)	(42	%)	(28	%)

Net Income from Operations	25	%	45	%	16	%	35	%

Other (Expense) Income	-		-		-		(2	%)

Income from Operations	25	%	45	%	16	%	33	%

Provision for Income Taxes	(9	%)	(16	%)	(5	%)	(12	%)

Net Income	16	%	29	%	11	%	21	%

Revenue: We generated revenue of $6,866,640 for the three months ended September 30, 2010 as compared to $6,724,758 for the three months ended September 30, 2009. The increase in revenue for the three months ended September 30, 2010 as compared to the same period in 2009 was $141,882, or 2.1%. The increase in revenue is due primarily to a 2.6% increase in the number of cases performed by our surgical assistants during the third quarter of 2010 compared to the comparable quarter of 2009. These new cases originated in part due to our provision of services at additional facilities in Georgia and Tennessee during the third quarter of 2010 as compared to the same quarter of 2009. Revenue during the three months ended September 30, 2010, included $247,877 related to services performed in prior periods as compared to $668,077 in the comparable period of 2009. Revenue during the three months ended September 30, 2010, excluding revenue from services performed in prior periods, increased by $562,082 or 8.5% as compared to the comparable period in 2009. Because our revenue recognition policy requires us to make certain estimates with respect to our revenue, we anticipate that our future revenues will continue to be impacted by revenue from services performed in prior periods, which should be considered in comparing our results. Revenue from services performed in prior periods is likely to continue to decline in the future because we have moved our billing services in-house, which has resulted in more timely and efficient processing of services and claims.

Cost of Revenues: Cost of revenues increased to $ 2,923,009 for the three months ended September 30, 2010 from $2,198,857 for the three months ended September 30, 2009, which represented an increase of $724,152 or 33%. The increase is primarily due to increases in salaries to our surgical assistants, bonuses and payment for overtime services. In addition to salaries, bonuses and other costs related to providing surgical assistant services, cost of revenues includes start-up costs associated with the provision of services to new facilities.

Gross Profit: Gross profit was $3,943,631 for the three months ended September 30, 2010 from $4,525,901 for the three months ended September 30, 2009, which represented a decrease of $582,270. The 13% decrease in gross profit resulted from the increase in cost of revenues. As a percentage of revenue, gross profit margins were 57% for the three months ended September 30, 2010, as compared to 67% for the three months ended September 30, 2009, which represents a decrease of 10%. The decrease in gross profit margin resulted primarily from the increase in revenue offset by a greater increase in the cost of revenues.

Operating Expenses: Operating expenses, which are comprised of general and administrative expense, legal and professional fees, director fees, salaries and rent, increased to $2,208,509 for the three months ended September 30, 2010, from $1,514,003 for the comparable period in 2009, which represented an increase of $694,506, or 46%. During the three months ended September 30, 2010, general and administrative expenses increased by $159,175, or 62%, as compared to the comparable period in 2009. The increase in general and administrative expense is due to an increase in travel expense of $42,549 and $108,600 for professional contract services.

Legal and professional fees and director fees increased to $282,711 and $300,308, respectively for the three months ended September 30, 2010, from $38,526 and $62,390, respectively, for the comparable period in 2009, which represented an increase of $244,185, or 634%, and $237,918, or 381%, respectively. 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, which activity increased during 2010. In addition, legal and professional fees also increased as a result of the retention of a law firm to assist the Mergers and Acquisitions Committee 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 September 30, 2010 increased to $1,181,269 from $1,131,495 for the comparable period in 2009, representing an increase of $49,774, or 4%. The increase resulted primarily due to an increase in bonuses, which rose from $527,164 in the quarter ended September 30, 2009 to $667,010 in the quarter ended September 30, 2010. This increase in bonuses was partially offset by a decrease in salaries of approximately $81,000. In August 2010, our Compensation Committee approved performance-based bonuses in the aggregate amount of $250,000 to select members of our senior management based on their potential achievement of certain collection targets for the period between September and October 2010. Although the performance targets have been achieved, the potential recipients of the bonuses have waived all of their rights to receive any such bonuses at this time. The Compensation Committee may establish additional performance goals in the future.

Rent increased by $3,454 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.

Interest Expense: The Company did not have any interest expense in the third quarter of 2010 or in the same quarter of 2009.

Income Tax Expense: We recorded a provision for income tax for the three months ended September 30, 2010 in the amount of $619,571 as compared to a provision for income tax of $1,052,734 for the three months ended September 30, 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 September 30, 2010 was $1,119,152 which represented a decrease of $843,318 or 43%, compared to net income of $1,962,470 for the three months ended September 30, 2009. This decrease was primarily the result of the increase in our cost of revenues, legal and professional fees, director fees and salaries, which were partially offset by the increase in our revenue.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2009

Revenue: We generated revenue of $18,711,908 for the nine months ended September 30, as compared to $16,702,850 for the nine months ended September 30, 2009. The increase in revenue for the nine months ended September 30, 2010 as compared to the same period in 2009 was $2,009,058, or 12%. The increase in revenue is due primarily to a 16% increase in cases performed by our surgical assistants during the first nine months of 2010 compared to the comparable period in 2009. Those new cases originated in part due to our provision of services at additional facilities in Georgia, Virginia, Tennessee, and Texas. Revenue during the nine months ended September 30, 2010 included $247,877 related to services performed in prior periods as compared to $2,295,273 included in the comparable period in 2009. Revenue during the nine months ended September 30, 2010, excluding revenue from services performed in prior periods increased by $4,056,454, or 22% as compared to the comparable period in 2009. Because our revenue recognition policy requires us to make certain estimates with respect to our revenue, we anticipate that our future will continue to be impacted by revenue from services performed in prior periods, which should be considered in comparing our results. Revenue from services performed in prior periods is likely to continue to decline in the future because we have moved our billing services in-house, which has resulted in more timely and efficient processing of services and claims.

Cost of Revenues: Our cost of revenues increased to $7,810,583 for the nine months ended September 30, 2010 from $6,115,198 for the comparable period in 2009, which represented an increase of $1,695,385 or 28%. The increase is primarily due to increases in salaries to our surgical assistants, bonuses and payment for overtime services. In addition to salaries, bonuses and other costs related to providing surgical assistant services, cost of revenues includes start-up costs associated with the provision of services to new facilities.

Gross Profit: Our gross profit was $10,901,325 for the nine months ended September 30, 2010 as compared to $10,587,652 for the nine months ended September 30, 2009, which represented an increase of $313,673 or 3%. This is the result of an increase in net revenue equal to 12% which was partially offset by an increase in cost of revenues increase of 28% for the nine months of 2010 as compared to the same nine months in 2009.

During the nine months ended September 30, 2010, general and administrative expenses increased by $193,259 or 24% as compared to the comparable period in 2009. This increase resulted primarily from a $74,565 increase in franchise tax, $70,972 increase in travel expense and a $32,194 increase in medical insurance expense.

Legal and professional fees and director fees increased by $928,694 and $591,462, 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, which activity increased during 2010. In addition, legal and professional fees also increased as a result of the retention of law firm to assist the Mergers and Acquisitions Committee and 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 nine months ended September 30, 2010 increased to $4,982,637 from $3,524,609 for the comparable period in 2009, representing an increase of $1,458,028 or 41%. During 2008, we implemented cost cutting measures, which included a reduction in the salaries paid to management. In addition, our convertible notes were outstanding in 2009, which prohibited us from increasing the compensation and/or benefits payable to certain of our management and key personnel. 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. Additionally, we employed 10 additional administrative employees in the past twelve months. Lastly, during the nine months of 2010 we paid performance bonuses in the amount of $2,815,172 as compared to bonuses of $1,381,114 during the comparable period in 2009. In August 2010, our Compensation Committee approved performance-based bonuses in the aggregate amount of $250,000, to select members of our senior management based on their potential achievement of certain performance targets for the period between September and October 2010. Although the performance targets have been achieved, the potential recipients of the bonuses have waived their rights to receive such bonuses at this time. The Compensation Committee may establish performance goals in the future.

Rent increased by $12,478 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.

Interest Expense: Interest expense for the nine months ended September 30, 2010 was $0 compared to $280,583 for the nine months ended September 30, 2009. The decrease in 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 nine months ended September 30, 2010 in the amount of $1,008,715 as compared to a provision for income tax of $2,014,280 for the nine months ended September 30, 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 and a timing difference due to a change in accounting methods for tax purposes.

Net Income: Our net income for the nine months ended September 30, 2010 was $1,966,407 which represented a decrease of $1,580,358, or 45%, compared to net income of $3,546,765 for the nine months ended September 30, 2009. This decrease was primarily the result of the increase in our cost of revenues, legal and professional fees and salaries, which was partially offset by the increase in our revenue.

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 September 30, 2010, we had $3,983,931 in cash and cash equivalents on hand compared to $2,705,488 on hand at December 31, 2009. Our working capital at September 30, 2010 was $6, 179, 893 compared to $5,530,780 at December 31, 2009. We had a working capital ratio (current assets/current liabilities) as of September 30, 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.

On July 27, 2010, our Board of Directors declared a special dividend of $0.08 per share for each share of our common stock, par value $0.001 per share that was issued and outstanding on August 12, 2010. The dividend was paid on August 30, 2010 in the aggregate amount of $1,015,990. We have not yet determined whether we will pay additional dividends in the future.

Although we do anticipate some capital needs in the future to expand our information technology systems 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 $2,759,206 for the nine months ended September 30, 2010 as compared to net cash provided by operating activities of $4,746,863 during the comparable period in 2009. The $2,759,206 in cash provided by operating activities for the nine months ended September 30, 2010 is primarily a result of $1,966,407 in net income, an increase of $163,922 in prepaid expenses, a decrease in accounts receivable of $259,901 due to better collection efforts, a decrease in federal income tax receivable of $302,024, and an increase of $132,188 in accounts payable and accrued expenses due to an increase in legal fees Net cash provided by operating activities for the nine months ended September 30, 2009 is primarily a result of $3,546,765 in net income, an increase in accrued salaries of $737,741 due to the month end accrual of 15 days more than the 2009 accrual in 2009, and a $214,280 increase in accrued taxes.

Investing Activities: Net cash used in investing activities was $8,123 for the nine months ended September 30, 2010 as compared to net cash provided by investing activities of $323,653 for the comparable period in 2009. During the nine months ended September 30, 2010, we paid $8,123 for an upgrade of the billing software. During the nine months ended September 30, 2009, net cash provided by investing activities was primarily a result of a decrease of $373,653 in restricted cash, which restriction was removed upon payment of our 2007 convertible notes, and the payment of $50,000 for the purchase of hospital contracts and a non-compete agreement.

Financing Activities: Net cash used in financing activities for the nine months ended September 30, 2010 was $1,472,640 as compared to net cash used in financing activities of $2,774,367 in the comparable period in 2009. During the nine months ended September 30, 2010, we received $105,850 as a result of option and warrant exercises, which was offset by the use of $562,500 for 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 and the use of $1,015,990 for the payment of dividends. During the nine months ended September 30, 2009, we received $90,633 in connection with the exercise of options and warrants, which was offset by the use of $2,715,000 to repay our convertible notes issued in 2007 and $150,000 to repay a note to a related party.

We anticipate continuing to generate positive operating cash flow which, combined with available cash resources, should be sufficient to meet our planned working capital needs, capital expenditures and operating expenses. However, there can be no assurance that we will not require additional capital.

Exercise of Warrants and Options

During the nine months ended September 30, 2010, warrant holders exercised 387,500 warrants to purchase 322,317 shares of our common stock. We realized cash proceeds of $37,500 from the exercise of 50,000 warrants and the remaining 337,500 warrants were exercised using the cashless method.

During the nine months ended September 30, 2010, option holders exercised stock options to purchase 854,388 shares of our common stock for total proceeds to us of $68,350.

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 RISK

Not required for smaller reporting companies

ITEM 4T. CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting during the quarter ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We have pending actions against several insurance carriers to recover underpayments of amounts due by these carriers that were below their respective contractual commitments to us. We have joined a class action lawsuit with respect to one of the actions. We have settled some of these actions and continue to pursue the remaining actions.

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. REMOVED AND RESERVED

None

ITEM 5. OTHER INFORMATION.

None

ITEM 6. EXHIBITS.

(a) Exhibits

Exhibit No.		Description
31.1		Certifications of Chief Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002

31.2		Certifications of Chief financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1		Certifications of Chief Executive Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002

32.2		Certifications of Chief financial Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002

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: November 19, 2010	By:	/s/ Zak W. Elgamal
		Zak W. Elgamal,
		Chairman and Chief Executive Officer and Principal Executive Officer

Date: November 19, 2010	By:	/s/ James A. Longaker
		James A. Longaker,
		Chief Financial Officer and Principal Accounting Officer

AMERICAN SURGICAL HOLDINGS INC 10-Q