AMERICAN SHARED HOSPITAL SERVICES REPORTS 2012 THIRD QUARTER RESULTS San Francisco, CA -- November 7 , 2012 -- AMERICAN SHARED HOSPITAL SERVICES (NYSE AMEX:AMS) , a leading provider of turnkey technology solutions for ad

AMERICAN SHARED HOSPITAL SERVICES

REPORTS 2012 THIRD QUARTER RESULTS

San Francisco, CA -- November 7,

2012 -- AMERICAN SHARED HOSPITAL SERVICES (NYSE AMEX:AMS), a leading provider of turnkey technology solutions for advanced

radiosurgical and radiation therapy services, today announced financial results for the third quarter and first nine months of

Third Quarter Results

Medical services revenue for the three

months ended September 30, 2012 increased 1.7% to $4,236,000. This compares to medical services revenue for the third quarter of

2011 of $4,164,000. Total revenue for the third quarter of 2011 of $9,148,000 included revenue from equipment sales of $4,984,000.

Net income for the third quarter of 2012 was $9,000, or $0.00 per diluted share. This compares to net income of $220,000, or $0.05

per diluted share, for the third quarter of 2011.

In March 2011, AMS announced a contract

to upgrade a Gamma Knife to PerfexionTM specifications at Lehigh Valley Hospital in Allentown, Pennsylvania.

As part of this upgrade, AMS agreed to the early termination of the existing 10-year lease on the Gamma Knife system it supplied

to Lehigh in 2004, and Lehigh agreed to purchase the Perfexion system. Pre-tax income from this transaction of $844,000 was recognized

in the third quarter of 2011.

The number of procedures performed on Gamma

Knife Perfexion systems supplied by AMS increased 16.2% for the third quarter and 8.0% for the first nine months of 2012 compared

to the same periods of 2011. The total number of procedures performed in AMS' Gamma Knife business, including Gamma Knife and Gamma

Knife Perfexion, increased 5.2% for this year's third quarter and 8.9% for the first nine months compared to the same periods of

2011. The Perfexion system AMS supplied to Florence Nightingale Hospital Group in Istanbul through its EWRS Turkey subsidiary that

began treating patients in May contributed to this growth. Revenue increased more slowly than procedure volume primarily due to

variations in the mix of procedures by site. Revenue comparisons were also constrained by the termination late in the third quarter

of 2011 of the lease on the Gamma Knife system AMS supplied to Lehigh Valley Hospital, and the expiration in the second quarter

of 2012 of a customer contract at another site.

Medical services gross margin for this

year's third quarter increased to 40.0%, compared to medical services gross margin of 38.8% for the third quarter of 2011.

Selling and administrative expenses for

the third quarter of 2012 decreased to $960,000 compared to $1,038,000 for the third quarter of 2011. Operating income for this

year's third quarter was $210,000. This compares to operating income for the third quarter of 2011 of $813,000, which included

income from the Lehigh transaction mentioned above.

Cash flow, as measured by earnings before

interest, taxes, depreciation and amortization (EBITDA), was $2,112,000 for the third quarter and $6,239,000 for the first nine

months of 2012, compared to $2,691,000 for the third quarter and $6,772,000 for the first nine months of 2011.

Balance Sheet Highlights

At September 30, 2012, cash, cash equivalents

and certificates of deposit were $9,716,000 compared to $11,580,000 at December 31, 2011. Shareholders' equity September 30, 2012

was $25,221,000, or $5.48 per outstanding share. This compares to shareholders' equity at December 31, 2011 of $25,171,000, or

$5.46 per outstanding share.

For the nine months ended September 30,

2012, medical services revenue increased to $12,923,000 compared to medical services revenue of $12,737,000 for the first nine

months of 2011. Total revenue for the first nine months of 2011 of $17,721,000 included revenue from equipment sales of $4,984,000.

Net income for the first nine months of 2012 was $33,000, or $0.01 per diluted share, compared to net income for the first nine

months of 2011 of $262,000, or $0.06 per diluted share, which included income from the Lehigh transaction mentioned above.

Chairman and Chief Executive Officer Ernest

A. Bates, M.D., said, "We grew our Gamma Knife business modestly in the third quarter, as the upgrade of many of our existing

sites to Perfexion specifications and the expansion of our client base and international footprint over the past couple of years

more than offset the impact of the sale of the Lehigh site and the expiration of a customer contract at another site this year,

as well as the headwinds created by the slow economic recovery and its effect on the health care industry overall.

"With the steady maturation of our

existing Perfexion sites, the installation of a Perfexion at a new site, Sacred Heart Health System in Pensacola, Florida, in the

first quarter of 2013, the installation of our fourteenth Perfexion system at Northern Westchester Hospital (NWH) in Mt. Kisco,

New York scheduled for the second quarter of 2013, and the addition of the Gamma Knife we have contracted to provide to Hospital

Central FAP in Lima, Peru early next year, we believe that growth in our Gamma Knife business may accelerate. We will continue

our vigorous efforts to bring advanced radiosurgery and radiation therapy devices to additional partner hospitals in this country

and around the world."

Dr. Bates continued, "In a major breakthrough

in our proton therapy business, just last month AMS received a firm financing commitment for the MEVION S250TM Proton

Therapy System AMS will supply for the $25 million proton therapy center now under construction at MD Anderson Cancer Center Orlando.

This debt financing is similar to the structure we have used for many years to finance our Gamma Knife projects, minimizing dilution

for AMS shareholders. MD Anderson Orlando's new facility, the first proton center in Central Florida, is expected to begin treating

patients in early 2014.

"Following the announcement in June

of FDA 510(k) clearance for the MEVION S250, our receipt of a firm financing commitment for the proton device we will supply to

the new center in Orlando is the next important step in AMS' long-term strategy to develop proton projects as rapidly as possible,

even as we continue growing our Gamma Knife business. The MD Anderson Cancer Center Orlando center will be the model for additional

proton centers we are developing. With our first proton center now under construction, we expect AMS' proton therapy business to

accelerate. We are pleased to play a critical role in making this exciting cancer therapy available at an affordable price."

AMS owns approximately 1% of Mevion Medical

Systems, developer of the MEVION S250, and in addition to Orlando is developing proton therapy centers in Boston and Long Beach,

California which are expected to employ the Mevion device. "We believe our equity investment in Mevion will turn out to be

a valuable asset for AMS and our shareholders," Dr. Bates said. AMS is also developing a two room proton therapy center in

Dr. Bates added that the Company is currently

evaluating options to relocate its corporate headquarters and refinance certain of its equipment debt under its continuing program

to reduce operating costs.

Earnings Conference Call

has scheduled a conference call at 12:00 p.m. PDT (3:00 p.m. EDT) today. To participate in the live call, dial (800) 588-4973 at

least 5 minutes prior to the scheduled start time. A simultaneous WebCast of the call may be accessed through the Company's website,

www.ashs.com, or through CCBN, www.earnings.com

(individual investors) or www.streetevents.com (institutional

investors). A replay will be available for 30 days at these same internet addresses, or by calling (888) 843-7419, pass code 3370

American Shared Hospital Services provides

turnkey technology solutions for advanced radiosurgical and radiation therapy services. AMS is the world leader in providing Gamma

Knife radiosurgery equipment, a non-invasive treatment for malignant and benign brain tumors, vascular malformations and trigeminal

neuralgia (facial pain). The Company also offers the latest IGRT and IMRT systems, as well as its proprietary Operating Room for

the 21st CenturySM concept. AMS owns a preferred stock investment in Mevion Medical Systems, Inc., developer of the

compact MEVION S250 Proton Therapy System.

Safe Harbor Statement

This press release may be deemed to

contain certain forward-looking statements with respect to the financial condition, results of operations and future plans of American

Shared Hospital Services, which involve risks and uncertainties including, but not limited to, the risks of the Gamma Knife and

radiation therapy businesses, the risks of developing The Operating Room for the 21st Century program, and the risks of investing

in a development-stage company, Mevion Medical Systems, Inc., without a proven product. Further information on potential factors

that could affect the financial condition, results of operations and future plans of American Shared Hospital Services is included

in the filings of the Company with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for

the year ended December 31, 2011, the Quarterly Report on form 10-Q for the quarter ended March 31, 2012, the Quarterly Reports

on Form 10-Q and 10-Q/A for the quarter ended June 30, 2012, and the definitive Proxy Statement for the Annual Meeting of Shareholders

held on June 7, 2012.

AMERICAN SHARED HOSPITAL SERVICES