This HT has 40 FM and 12 AM channels from the factory.
On the AM you could receive on all 40 channels but only transmit on 12 channels.
With a simple modification it becomes a full 40 channel AM / FM HT.
Everything revolves around the Sanyo LC7132 PLL chip.
In the schematic we see on pin 14 a connection with a transistor with the text AM Channel inhibit.
We therefore have to block that circuit.
Very simple. remove that Q9 transistor which blocks transmitting!