AMERICAN SHARED HOSPITAL SERVICES REPORTS HIGHER FIRST QUARTER REVENUE AND NET INCOME San Francisco, CA

AMERICAN SHARED HOSPITAL SERVICES REPORTS

HIGHER FIRST QUARTER REVENUE AND NET

San Francisco, CA - May 15,

2017 -- AMERICAN SHARED HOSPITAL SERVICES (NYSE MKT:AMS) (the "Company", "AMS"), a leading provider

of turnkey technology solutions for advanced radiosurgical and radiation therapy services, today announced financial results for

the first quarter of 2017.

First Quarter Results

For the three months ended March 31, 2017,

medical services revenue increased 16.0% to $4,914,000 compared to medical services revenue of $4,238,000 for the first quarter

First 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 was $1,155,000.

Revenue for the Company's Gamma Knife operations

decreased to $3,619,000 for the first quarter of 2017 compared to $4,125,000 for the first quarter of 2016, primarily because two

sites were offline during this year's first quarter for Cobalt-60 reload.

Net income attributable to the Company

for the first quarter of 2017 increased to $293,000, or $0.05 per share. This compares to net income attributable to the Company

for the first quarter of 2016 of $51,000, or $0.01 per share.

Medical services gross margin for the first

quarter of 2017 increased to 47.7% of revenue, compared to medical services gross margin of 40.9% of revenue for the first quarter

of 2016, primarily reflecting the increase in revenue from proton therapy.

Operating income increased 51.1% to $754,000

for the first quarter of 2017 compared to operating income of $499,000 for the same period a year earlier. Income before

income taxes increased 91.4% to $758,000 for the first quarter of 2017 compared to $396,000 for the first quarter of 2016. Non-GAAP

pre-tax income, net of income attributable to non-controlling interest, was $509,000 for the first quarter of 2017. This

compares to non-GAAP pre-tax income, net of income attributable to non-controlling interest, of $115,000 for the first quarter

Selling and administrative expenses for

the first quarter of 2017 increased to $1,139,000, compared to selling and administrative expenses of $949,000 for the first quarter

of 2016. Interest expense increased to $453,000 for the first quarter of 2017, compared to interest expense of $285,000 for the

first quarter of 2016, primarily reflecting the addition of the proton center in Orlando.

Adjusted EBITDA, a non-GAAP financial measure,

was $2,616,000 for the first quarter of 2017, compared to $2,129,000

for the first quarter of 2016. Please refer to the financial statements included with this press release for a reconciliation of

GAAP to this non-GAAP financial measure.

Balance Sheet Highlights

At March 31, 2017, cash and cash equivalents

was $2,403,000, compared to $2,871,000 at December 31, 2016. Shareholders' equity at March 31, 2017 was $27,774,000, or $4.87 per

outstanding share. This compares to shareholders' equity at December 31, 2016 of $27,173,000, or $4.97 per outstanding share.

Chairman and Chief Executive Officer Ernest

A. Bates, M.D. said, "Patient treatments that began in April 2016 at our proton center at UF Health Cancer Center-Orlando

Health continue to drive improved financial performance for AMS. Treatment volume at this center increased to 1,220 fractions in

the first quarter, compared to 1,019 fractions performed in last year's fourth quarter, 869 fractions performed in the third quarter

and 442 fractions performed in the second quarter. The reliability and throughput of the MEVION S250 proton system we supplied

Orlando Health is meeting or exceeding our expectations, and we believe there is room for further growth in treatment volume.

"The decrease in revenue in our Gamma

Knife business in this year's first quarter was the anticipated consequence of routine Cobalt-60 reload at two of our centers.

As previously announced, we will lose one of our sites due to the expiration of its contract term in this year's second quarter;

however, we expect the Gamma Knife Perfexion system we recently contracted to supply to Bryan Medical Center in

Lincoln, Nebraska to begin treating patients in this year's second half. We also expect patient treatments to begin in this year's

third quarter on a Gamma Knife located at the Air Force Hospital in Lima, Peru.

"We are focused on taking advantage

of the attractive growth opportunities available to us in both our proton and Gamma Knife businesses. Building on the success we

have achieved to date, we are confident that AMS will deliver further growth in the years ahead."

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 4493 2897. 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 14 days at these same internet addresses, or by dialing 888-843-7419 and entering 4493 2897# 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, and the latest IGRT and IMRT systems. 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 continued growth in treatment volume of the MEVION S250 system,

the expansion of the Company's proton therapy business, the growth of the Company, and the timing of treatments by new Gamma Knife

systems) which involve risks and uncertainties including, but not limited to, the risks of variability of financial results between

quarters, 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, 2016, and

the definitive Proxy Statement for the Annual Meeting of Shareholders to be held on June 27, 2017.

Non-GAAP Financial Measure

None of Adjusted EBITDA and non-GAAP pre-tax

income, 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 loss on early extinguishment of debt. We believe that both management and investors benefit from referring

to these non-GAAP financial measures in assessing our performance.

AMERICAN SHARED HOSPITAL SERVICES

Selected Financial Data

AMERICAN SHARED HOSPITAL SERVICES

Selected Financial Data

AMERICAN SHARED HOSPITAL SERVICES

Selected Financial Data