AMERICAN SHARED HOSPITAL SERVICES REPORTS 2016 SECOND QUARTER RESULTS San Francisco, CA

AMERICAN SHARED HOSPITAL SERVICES

REPORTS 2016 SECOND QUARTER RESULTS

San Francisco, CA - August

10, 2016 -- AMERICAN SHARED HOSPITAL SERVICES (NYSE MKT:AMS) (the "Company"), a leading provider of turnkey technology

solutions for advanced radiosurgical and radiation therapy services, today announced financial results for the second quarter of

Second Quarter Results

For the three months ended June 30, 2016,

medical services revenue increased 2.8% to $4,518,000 compared to medical services revenue of $4,394,000 for the second quarter

Revenue for the Company's initial proton

therapy system installed at The Marjorie and Leonard Williams Center for Proton Therapy at UF Health Cancer Center-Orlando Health

in Florida, which began treating patients in April, was $446,000.

Revenue for the Company's Gamma Knife operations

decreased to $3,962,000 for the second quarter of 2016 compared to $4,281,000 for the second quarter of 2015, reflecting a 6.9%

decrease in treatment volume versus prior year.

Net income attributable to the Company

for the second quarter of 2016 was $93,000, or $0.02 per share. This compares to a net loss attributable to the Company for the

second quarter of 2015 of $1,970,000, or $0.36 per share, which included the loss attributable to an impairment charge of $2,114,000

related to the Company's strategic equity investment in Mevion Medical Systems. Adjusted net income attributable to the Company

for the second quarter of 2015, after excluding the loss attributable to the impairment charge, was $144,000, or $0.03 per share.

Medical services gross margin for the second

quarter of 2016 was essentially unchanged at 40.7% of revenue, compared to medical services gross margin of 41.0% of revenue for

the second quarter of 2015.

Operating income decreased to $443,000

for the second quarter of 2016 compared to operating income of $478,000 for the same period a year earlier, primarily the result

of higher interest expense associated with the proton system in Florida. Adjusted pre-tax income, net of income attributable

to non-controlling interest, was $186,000 for the second quarter of 2016. This compares to adjusted pre-tax income, net of

income attributable to non-controlling interest and the loss attributable to the impairment charge related to the Company's

equity investment in Mevion, of $250,000 for the second quarter of 2015.

Selling and administrative expenses for

the second quarter of 2016 decreased slightly to $963,000, compared to selling and administrative expenses of $979,000 for the

second quarter of 2015.

Adjusted EBITDA, a non-GAAP financial measure,

was $2,328,000 for the second quarter of 2016, compared to $2,246,000

for the second quarter of 2015. Please refer to the financial statements included with this press release for a reconciliation

of GAAP to this non-GAAP financial measure.

For the six months ended June 30, 2016,

medical services revenue increased 2.9% to $8,756,000 compared to medical services revenue of $8,511,000 for the first six months

Gamma Knife treatment volume decreased

3.4% for the first six months of 2016 compared to the same period of 2015. Excluding treatments at a customer site whose contract

expired at the end of the first quarter of 2015, Gamma Knife volume was down 0.8% for this year's first half compared to the first

Net income attributable to the Company

for the first six months of 2016 was $144,000, or $0.03 per share. This compares to a net loss attributable to the Company for

the first six months of 2015 of $1,842,000, or $0.34 per share. Excluding the loss on early extinguishment of debt of $108,000

during the first half of 2016, net of estimated taxes, adjusted net income attributable to the Company for the first half of 2016

was $208,000, or $0.04 per share. This compares to adjusted net income attributable to the Company for the first half of 2015,

excluding the loss attributable to the impairment charge, of $272,000, or $0.05 per share.

Adjusted EBITDA was $4,457,000 for the

first six months of 2016, compared to $4,365,000 for the first six months of 2015.

Balance Sheet Highlights

At June 30, 2016, cash, cash equivalents

and restricted cash was $1,814,000 compared to $2,259,000 at December 31, 2015. Shareholders' equity at June 30, 2016 was $25,690,000,

or $4.79 per outstanding share. This compares to shareholders' equity at December 31, 2015 of $25,180,000, or $4.69 per outstanding

Chairman and Chief Executive Officer Ernest

A. Bates, M.D., said, "Treatment volume at our first proton therapy center, at UF Health Cancer Center-Orlando Health, ramped

up much faster than we anticipated when the system began treating patients in April. The MEVION S250 system we supplied the Orlando

center performed 442 fractions during the quarter, reliably and with outstanding patient throughput. We expect this system to contribute

more significantly to revenue in this year's second half as the center moves further up the learning curve and volume increases.

We plan to expand our proton therapy business, and are currently in discussions with several other hospitals seeking to partner

with AMS to develop proton centers of their own.

"Volume in our Gamma Knife business

was down marginally for this year's first six months compared to the same period of 2015, excluding volume lost due to the expiration

of a customer contract at the end of last year's first quarter. We attribute this slight decrease to normal variation in the flow

of new cancer patients at several of our sites this year compared to last. Nevertheless, gross margins in our Gamma Knife business

remain robust, and we continue to work diligently to improve profitability and utilization of the 17 Gamma Knife systems AMS currently

has placed at hospitals around the country."

Earnings Conference Call

American Shared 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, and mention confirmation number 4314 7466. A simultaneous WebCast of the call may be accessed through

the Company's website, www.ashs.com, or www.streetevents.com (institutional investors). A replay will be available

for 30 days at these same internet addresses, or by dialing 888-843-7419 and entering 4314 7466# when prompted.

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 proton therapy, the latest IGRT and IMRT systems, as well as its proprietary Operating

Room for the 21st CenturySM concept. AMS owns a common 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 (including statements regarding the expected contribution to revenue from the MEVION S250 system, the

expansion of the Company's proton therapy business, and efforts to improve profitability and utilization) 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, the risks of investing in Mevion Medical Systems, Inc., and the risks of the timing,

financing, and operations of the Company's proton therapy business. 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, 2015, its Form 10-Q for the quarter ended March 31, 2016, and the definitive Proxy Statement for the Annual Meeting

of Shareholders held on June 21, 2016.

Non-GAAP Financial Measures

None of adjusted EBITDA, adjusted pre-tax

income and adjusted net income attributable to the Company, the non-GAAP measures presented in this press release and supplementary

information, is a measure of performance under the accounting principles generally accepted in the United States ("GAAP").

These non-GAAP financial measures should not be considered as substitute for, and investors should also consider, income (loss)

before income taxes, income from operations, net income attributable to the Company, earnings (loss) per share and other measures

of performance as defined by GAAP as indicators of the Company's performance or profitability. We use these non-GAAP financial

measures as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide

meaningful supplemental information regarding our performance by excluding certain expenses and charges that may not be indicative

of the operating results of our recurring core business, such as the impairment charge related to the Company's equity investment

in Mevion and the loss on early extinguishment of debt. We believe that both management and investors benefit from referring to