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

AMERICAN SHARED HOSPITAL SERVICES

REPORTS SECOND QUARTER RESULTS

San Francisco, CA -- August 14,

2014 -- AMERICAN SHARED HOSPITAL SERVICES (NYSE MKT:AMS), a leading provider of turnkey technology solutions for advanced

radiosurgical and radiation therapy services, today announced financial results for the second quarter and first half of 2014.

Second Quarter Results

For the three months ended June 30, 2014,

medical services revenue decreased to $3,379,000 compared to $4,583,000 for the second quarter of 2013. In addition to lower procedure

volume at many of AMS' Gamma Knife sites and the sale of its Turkey operations effective May 31, 2014, the decrease in revenue

was exacerbated by one site being down for the entire quarter due to personnel issues that have now been resolved, and two sites

which generated significant procedure volumes in second quarter 2013 having an unusually slow second quarter this year. Both sites

have bounced back to their usual treatment levels in July. Gamma Knife revenues in July improved 18% and 33% compared to average

monthly revenues for the first and second quarter of 2014, respectively, and improved 5% compared to July 2013 revenues, net of

The net loss for the second quarter of

2014 was $927,000, or $0.20 per share, which included a pre-tax loss on the sale of the Turkish subsidiary of $572,000, a pre-tax

gain from foreign currency transactions of $146,000 due to the strengthening of the Turkish Lira against the U.S. Dollar, and an

income tax charge of $165,000, which offset an income tax benefit of $131,000 from the Company's operating loss. Although

this sale resulted in a book loss, it generated approximately $540,000 in cash for the Company. This compares to a net loss for

the second quarter of 2013 of $122,000, or $0.03 per share, which included a pre-tax loss from foreign currency transactions of

The number of procedures performed on Gamma

Knife PerfexionTM systems supplied by AMS decreased 25% for the second quarter and 12% for the first six months

of 2014 compared to the same periods of 2013. The total number of procedures performed in AMS' Gamma Knife business, including

Gamma Knife and Gamma Knife Perfexion procedures, decreased 28% for the second quarter and 17% for the first six months of 2014

compared to the same periods of 2013.

Medical services gross margin for the second

quarter of 2014 was 25.0%, compared to medical services gross margin of 41.3% for the second quarter of 2013. In addition to the

impact of lower revenue, the decrease in gross margin reflected higher depreciation and maintenance costs associated with the opening

of a new Perfexion site in the second quarter of 2013, as well as the upgrade to Perfexion specifications of a Gamma Knife at another

site and two cobalt reloads which occurred in the fourth quarter of 2013. Because an upgrade or cobalt reload increases the book

value of the unit, depreciation expense also increases.

Selling and administrative expenses for

the second quarter of 2014 decreased 18.7% to $937,000 compared to $1,153,000 for the second quarter of 2013.

For the six months ended June 30, 2014,

medical services revenue decreased to $7,443,000, compared to medical services revenue of $9,251,000 for the first six months of

The net loss for the first six months of

2014 of $1,023,000, or $0.22 per share, included a pre-tax loss from the sale of the Turkish subsidiary of $572,000, a pre-tax

gain from foreign currency transactions of $161,000, and an income tax charge of $165,000, which offset an income tax benefit of

$161,000. In comparison, the net loss for the first six months of 2013 of $97,000, or $0.02 per share, included a pre-tax loss

from foreign currency transactions of $534,000.

Balance Sheet Highlights

At June 30, 2014, cash, cash equivalents

and certificates of deposit were $9,944,000 compared to $10,909,000 at December 31, 2013. Shareholders' equity at June 30, 2014

was $25,021,000, or $4.76 per outstanding share. This compares to shareholders' equity at December 31, 2013 of $24,055,000, or

$5.22 per outstanding share.

Proceeds of approximately $5.2 million

from the sale of the Company's Gamma Knife business in Turkey were used to reduce outstanding debt, including approximately $1.7

million of short-term debt. Proceeds of approximately $1.6 million from the private placement of common stock completed on June

13, 2014 were used primarily to strengthen the Company's balance sheet in anticipation of its proton therapy initiatives.

Chairman and Chief Executive Officer Ernest

A. Bates, M.D., said, "We were disappointed by the slow pace of Gamma Knife procedures in this year's second quarter at many

of our sites. We are working diligently to resolve this issue and restore normal procedure volume. A variety of non-recurring factors

also affected us in the first half, including scheduled downtime at a number of our centers for maintenance and upgrades that have

now been completed, personnel issues at one center that have now been resolved, and of course the extreme weather experienced by

much of the nation last winter and early spring. As previously noted, July 2014 Gamma Knife revenues have increased significantly,

net of volume in Turkey, an encouraging sign for the future.

"During the second quarter we closed

the sale of our Gamma Knife and radiation therapy business in Turkey. While we viewed our Turkey operations as a good long term

investment, the continued volatility of the Turkish Lira against the U.S. Dollar (which resulted in cumulative foreign currency

transaction losses of $908,000) and the opportunity to generate approximately $540,000 in cash for our domestic operations were

compelling reasons to consummate the sale.

"We also completed a private placement

of common stock to several AMS Directors in the second quarter, which raised approximately $1.6 million. We used the proceeds of

this transaction mainly to improve the strength of our balance sheet in anticipation of our proton therapy initiatives."

"We also are encouraged by the continued

growth of our domestic Perfexion portfolio. We recently signed a contract to supply a Perfexion system to PeaceHealth Sacred Heart

Medical Center at RiverBend, Springfield, Oregon. This new Perfexion system, the fourteenth in AMS' portfolio, is expected to begin

treating patients in the fourth quarter of 2014. This installation will also mark our 28th new Gamma Knife site.

"Another reason for optimism are the

proposed Medicare hospital outpatient prospective payment rates for calendar year 2015 recently posted by the Centers for Medicare

and Medicaid Services (CMS). Effective January 1, 2015, the proposed comprehensive reimbursement rate for both Gamma Knife and

LINAC one session cranial radiosurgery of approximately $9,768 will be inclusive of the delivery and ancillary codes but exclusive

of co-insurance payments or other adjustments. The average current CMS reimbursement rate for delivery and ancillary codes (exclusive

of co-insurance and other adjustments) is approximately $5,600. While these reimbursement rates are not final and could change,

we are pleased that CMS has proposed an increase for this life-saving therapy.

"The cost reduction program we announced

in April 2013 has helped mitigate the impact of lower revenue on our financial results. General and administrative expenses decreased

18.7% for this year's second quarter and 22.2% for the first half versus the same periods a year ago. We are on track to reduce

cash outlays by approximately $1,000,000 annually compared to our cash outlays in 2013."

Turning to the Company's proton therapy

business, Dr. Bates said that construction of the dedicated proton center at the University of Florida Health Cancer Center at

Orlando Health is moving forward. AMS will supply a MEVION S250TM Proton Therapy System for this facility. Delivery

of the MEVION synchrocyclotron to the UF Health Cancer Center is expected this fall, and the facility is expected to begin treating

patients in first quarter 2016. Dr. Bates said that the UF Health Cancer Center at Orlando Health is the model for additional proton

centers AMS is developing.

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) 351-9852 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 3787 3970.

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 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