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SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549
 ________________________ FORM 10-Q (Mark One) þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2004 or o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from _______________ to _______________. Commission file number 1-8789
________________________ American Shared Hospital Services (Exact name of registrant as specified in its charter)
 California
    
    94-2918118(State or other jurisdiction of
Incorporation or organization)
    
    (IRS Employer
Identification No.)
 Four Embarcadero Center, Suite 3700, San Francisco, California
    
    94111(Address of Principal Executive Offices)
    
    (Zip Code)
 Registrants telephone number, including area code: (415) 788-5300 Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes
þ No o Indicate by check mark whether the registrant is an accelerated filer (as
defined in Securities Exchange Act Rule 12b-2). Yes o No þ As of October 29, 2004, there are outstanding 4,755,173 shares of the
Registrants common stock.




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 4.   Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal Proceedings.Item 2.   Unrestricted Sales of Equity Securities and Use of Proceeds.Item 3. Defaults Upon Senior Securities.Item 4. Submission of Matters to a Vote of Securities Holders.Item 5. Other Information.Item 6. Exhibits.SIGNATURESEXHIBIT 10.45EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1    Table of Contents  
 PART I  FINANCIAL INFORMATION 
 ITEM 1. FINANCIAL STATEMENTS AMERICAN SHARED HOSPITAL SERVICES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
    
    (audited)ASSETS
    
    9/30/2004
    
    12/31/2003Current assets:Cash and cash equivalents
    
    $
    9,512,000
    
    
    $
    10,312,000Restricted cash
    
    
    50,000
    
    
    
    50,000Accounts receivable, net of allowance for
for doubtful accounts of $170,000 in
2004 and $170,000 in 2003
    
    
    3,081,000
    
    
    
    2,467,000Prepaid expenses and other assets
    
    
    463,000
    
    
    
    473,000Total current assets
    
    
    13,106,000
    
    
    
    13,302,000Property and equipment:Medical equipment and facilities
    
    
    49,221,000
    
    
    
    46,072,000Office equipment
    
    
    492,000
    
    
    
    430,000Deposits and construction in progress
    
    
    1,907,000
    
    
    
    1,463,00051,620,000
    
    
    
    47,965,000Accumulated depreciation and
amortization
    
    
    (18,737,000
    )
    
    
    (15,137,000
    )Net property & equipment
    
    
    32,883,000
    
    
    
    32,828,000Other assets
    
    
    169,000
    
    
    
    174,000Total assets
    
    $
    46,158,000
    
    
    $
    46,304,000
 LIABILITIES AND
    
    (unaudited)
    
    (audited)SHAREHOLDERS' EQUITY
    
    9/30/2004
    
    12/31/2003Current liabilities:Accounts payable
    
    $
    170,000
    
    
    $
    371,000Accrued interest
    
    
    4,000
    
    
    
    145,000Employee compensation and benefits
    
    
    228,000
    
    
    
    126,000Other accrued liabilities
    
    
    927,000
    
    
    
    539,000Income taxes payable
    
    
    50,000
    
    
    
    50,000Current portion of long-term debt
    
    
    6,775,000
    
    
    
    6,803,000Total current liabilities
    
    
    8,154,000
    
    
    
    8,034,000Long-term debt, less current portion
    
    
    18,298,000
    
    
    
    20,114,000Deferred income taxes
    
    
    189,000
    
    
    
    1,096,000Minority interest
    
    
    2,191,000
    
    
    
    1,731,000Shareholders equity:Common stock, without par value:authorized shares - 10,000,000; issued
& outstanding shares, 4,755,173 in 2004
and 3,918,203 in 2003
    
    
    9,218,000
    
    
    
    9,198,000Additional paid-in capital
    
    
    4,381,000
    
    
    
    3,461,000Retained earnings
    
    
    3,727,000
    
    
    
    2,670,000Total shareholders equity
    
    
    17,326,000
    
    
    
    15,329,000Total liabilities and shareholders equity
    
    $
    46,158,000
    
    
    $
    46,304,000
 See accompanying notes 2




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AMERICAN SHARED HOSPITAL SERVICES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) Three Months ended Sept. 30,
    
    Nine Months ended Sept. 30,2004
    
    2003
    
    2004
    
    2003Revenue:Medical services
    
    $
    4,136,000
    
    
    $
    4,011,000
    
    
    $
    12,479,000
    
    
    $
    11,785,000Costs and expenses:Costs of operations:Maintenance and supplies
    
    
    203,000
    
    
    
    222,000
    
    
    
    625,000
    
    
    
    533,000Depreciation and amortization
    
    
    1,199,000
    
    
    
    1,085,000
    
    
    
    3,555,000
    
    
    
    3,061,000Other
    
    
    504,000
    
    
    
    588,000
    
    
    
    1,756,000
    
    
    
    1,719,000Total costs of operations
    
    
    1,906,000
    
    
    
    1,895,000
    
    
    
    5,936,000
    
    
    
    5,313,000Selling and administrative
    
    
    817,000
    
    
    
    702,000
    
    
    
    2,345,000
    
    
    
    2,367,000Interest
    
    
    553,000
    
    
    
    656,000
    
    
    
    1,727,000
    
    
    
    1,908,000Total costs and expenses
    
    
    3,276,000
    
    
    
    3,253,000
    
    
    
    10,008,000
    
    
    
    9,588,000Operating income
    
    
    860,000
    
    
    
    758,000
    
    
    
    2,471,000
    
    
    
    2,197,000Interest and other income
    
    
    21,000
    
    
    
    27,000
    
    
    
    64,000
    
    
    
    99,000Minority interest
    
    
    (267,000
    )
    
    
    (224,000
    )
    
    
    (764,000
    )
    
    
    (699,000
    )Income before income taxes
    
    
    614,000
    
    
    
    561,000
    
    
    
    1,771,000
    
    
    
    1,597,000Income tax (benefit) expense
    
    
    (226,000
    )
    
    
    192,000
    
    
    
    172,000
    
    
    
    558,000Net income
    
    $
    840,000
    
    
    $
    369,000
    
    
    $
    1,599,000
    
    
    $
    1,039,000Net income per share:Earnings per common share  basic
    
    $
    0.18
    
    
    $
    0.10
    
    
    $
    0.38
    
    
    $
    0.27Earnings per common share  assuming
dilution
    
    $
    0.16
    
    
    $
    0.07
    
    
    $
    0.31
    
    
    $
    0.20
 See accompanying notes 3




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AMERICAN SHARED HOSPITAL SERVICES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) Nine Months ended Sept. 30,2004
    
    2003Operating activities:Net income
    
    $
    1,599,000
    
    
    $
    1,039,000Adjustments to reconcile net cash provided by operating activities:Depreciation and amortization
    
    
    3,621,000
    
    
    
    3,130,000Deferred income taxes
    
    
    58,000
    
    
    
    559,000Minority interest in consolidated subsidiaries
    
    
    764,000
    
    
    
    699,000Changes in operating assets and liabilities:Receivables
    
    
    (614,000
    )
    
    
    (297,000
    )Prepaid expenses and other assets
    
    
    (6,000
    )
    
    
    423,000Accounts payable and accrued liabilities
    
    
    91,000
    
    
    
    88,000Net cash from operating activities
    
    
    5,513,000
    
    
    
    5,641,000Investing activities:Purchase of property and equipment
    
    
    (3,655,000
    )
    
    
    (4,510,000
    )Net cash from investing activities
    
    
    (3,655,000
    )
    
    
    (4,510,000
    )Financing activities:Payment of dividends
    
    
    (485,000
    )
    
    
    (454,000
    )Payment received for exercise of stock options
    
    
    20,000
    
    
    
    25,000Distribution to minority owners
    
    
    (304,000
    )
    
    
    (455,000
    )Payment for repurchase of stock
    
    
    (45,000
    )
    
    
    (14,000
    )Financing on purchase of property and equipment
    
    
    3,790,000
    
    
    
    4,913,000Principal payments on long-term debt and capitalized leases
    
    
    (5,634,000
    )
    
    
    (4,188,000
    )Net cash from financing activities
    
    
    (2,658,000
    )
    
    
    (173,000
    )Net change in cash and cash equivalents
    
    
    (800,000
    )
    
    
    958,000Cash and cash equivalents at beginning of period
    
    
    10,312,000
    
    
    
    9,924,000Cash and cash equivalents at end of period
    
    $
    9,512,000
    
    
    $
    10,882,000Supplemental cash flow disclosure:Cash paid during the period for:Interest paid
    
    $
    1,868,000
    
    
    $
    1,938,000Income taxes paid
    
    $
    120,000
    
    
    $
    81,000
 See accompanying notes 4




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AMERICAN SHARED HOSPITAL SERVICES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) Note 1.   Basis of Presentation In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly American Shared Hospital
Services consolidated financial position as of September 30, 2004 and the
results of its operations for the three and nine month periods ended September
30, 2004 and 2003, which results are not necessarily indicative of results on
an annualized basis. Consolidated balance sheet amounts as of December 31,
2003 have been derived from audited financial statements. These unaudited consolidated financial statements should be read in
conjunction with the audited financial statements for the year ended December
31, 2003 included in the Companys 10-K and 10-KA filed with the Securities and
Exchange Commission. These financial statements include the accounts of American Shared
Hospital Services (the Company) and its wholly-owned subsidiaries: OR21,
Inc. (OR21); MedLeader.com, Inc. (MedLeader); American Shared Radiosurgery
Services (ASRS); and ASRS majority-owned subsidiary, GK Financing, LLC (GK
Financing). The Company through its majority-owned subsidiary, GK Financing, provided
Gamma Knife units to eighteen medical centers as of September 30, 2004 in
Arkansas, California, Connecticut, Florida, Illinois, Maryland, Massachusetts,
Mississippi, Nevada, New Jersey, New Mexico, New York, Ohio, Pennsylvania,
Texas and Wisconsin. All significant intercompany accounts and transactions have been
eliminated in consolidation. Note 2.   Per Share Amounts Per share information has been computed based on the weighted average
number of common shares and dilutive common share equivalents outstanding. For
the three and nine months ended September 30, 2004 basic earnings per share was
computed using 4,755,000 and 4,214,000 common shares, respectively, and diluted
earnings per share was computed using 5,119,000 and 5,097,000 common shares and
equivalents, respectively. For the three and nine months ended September 30,
2003 basic earnings per share was computed using 3,871,000 and 3,827,000 common
shares, respectively, and diluted earnings per share was computed using
5,081,000 and 5,072,000 common shares and equivalents, respectively. The
increase in common shares used in the basic earnings per share calculation
during 2004 is the result of stock options exercised, primarily in third
quarter 2004. This is explained in more detail in Item 2, Managements
Discussion and Analysis of Financial Condition and Results of Operations. Note 3.   Stock-based Compensation 5




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The Company has two stock-based employee compensation plans, the 1995 and
2001 Stock Option Plans. The Company accounts for those plans using the
intrinsic value method prescribed by APB Opinion No. 25, Accounting for Stock
Issued to Employees, and related Interpretations. No stock-based employee
compensation cost is reflected in net income, as all options granted under
those plans had an exercise price greater than or equal to the market value of
the underlying common stock on the date of grant. The following table
illustrates the effect on net income and earnings per share if the Company had
applied the fair value recognition provisions of FASB Statement No. 123,
Accounting for Stock-Based Compensation, to stock-based employee compensation.
For pro forma purposes, the estimated fair value of the Companys options is
amortized over the options vesting period. Three months ended Sept. 30
    
    Nine Months Ended Sept. 302004
    
    2003
    
    2004
    
    2003Net income, as reported
    
    $
    840,000
    
    
    $
    369,000
    
    
    $
    1,599,000
    
    
    $
    1,039,000Deduct: Total stock-based employee compensation expense
determined under fair value based method for all
awards, net of related tax effects
    
    $
    0
    
    
    
    ($1,000
    )
    
    $
    0
    
    
    
    ($1,000
    )Pro forma net income
    
    $
    840,000
    
    
    $
    368,000
    
    
    $
    1,599,000
    
    
    $
    1,038,000Earnings per share:Basic-as reported
    
    $
    0.18
    
    
    $
    0.10
    
    
    $
    0.38
    
    
    $
    0.27Basic-pro forma
    
    $
    0.18
    
    
    $
    0.10
    
    
    $
    0.38
    
    
    $
    0.27Diluted-as reported
    
    $
    0.16
    
    
    $
    0.07
    
    
    $
    0.31
    
    
    $
    0.20Diluted-pro forma
    
    $
    0.16
    
    
    $
    0.07
    
    
    $
    0.31
    
    
    $
    0.20
 
 Item 2.   Managements Discussion and Analysis of Financial Condition and
Results of Operations This quarterly report to the Securities and Exchange Commission 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 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 and 10-KA for the year ended
December 31, 2003, the Quarterly Report on Form 10-Q for the periods ended
March 31, 2004 and June 30, 2004 and the definitive Proxy Statement for the
Annual Meeting of Shareholders held on June 17, 2004. Medical services revenue increased $125,000 and $694,000 to $4,136,000 and
$12,479,000 for the three month and nine month periods ended September 30,
2004, from $4,011,000 and $11,785,000 for the three and nine month periods
ended September 30, 2003, respectively. The increase in revenue for the three
month period ended September 30, 2004 was due to the addition of one new Gamma
Knife unit that began operating during third quarter 2004, and one Gamma Knife
center that began operating during late third quarter 2003, which was offset
during third quarter 2004 by a 10% decrease in revenue at Gamma Knife centers
in operation more than one year. The revenue increase for the nine month
period was due to the inclusion of one new Gamma Knife unit that began
operating during 2004 and three Gamma 6




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Knife units that began operation during
2003, and was partially offset by a 13% revenue decrease
at Gamma Knife centers in operation for longer than one year. The
Company had 18 Gamma Knife units in operation at September 30, 2004 compared to
17 at September 30, 2003. Fourteen of the Companys customers are under
fee-per-use contracts, and four customers are under revenue sharing agreements
(retail). For retail units the Company receives all or a percentage of the
reimbursement (exclusive of physician fees) received by the customer, and is
responsible for all or a percentage of the operating expenses of the Gamma
Knife. The number of Gamma Knife procedures increased by 8% to 552 and by 4% to
1,628 for the three and nine month periods ended September 30, 2004 from 510
and 1561 for the three and nine month periods ended September 30, 2003,
respectively. The addition of one new Gamma Knife unit in 2004 and increases
in procedures from three new Gamma Knife units that began operation during 2003
were offset during third quarter 2004 by decreases in procedures performed at
Gamma Knife units in operation more than one year of 4% and 9% for the three
and nine month periods ended September 30, 2004, respectively. The Company
believes that the decrease in procedures performed at Gamma Knife units in
operation more than one year is primarily due to personnel staffing issues at
certain Gamma Knife sites and normal fluctuations in disease incidence and
related factors. Total costs of operations increased $11,000 and $623,000 to $1,906,000 and
$5,936,000 for the three and nine month periods ended September 30, 2004, from
$1,895,000 and $5,313,000 for the three and nine month periods ended September
30, 2003, respectively. Maintenance and supplies decreased by $19,000 and
increased by $92,000 for the three and nine month periods ended September 30,
2004 compared to the same periods in the prior year. The decrease for the
three month period is primarily due to credits associated with the renewal of
maintenance contracts on certain Gamma Knife units. The increase for the nine
month period is primarily due to an increase in the number of Gamma Knife
contracts covered under maintenance contract. There were 16 Gamma Knife units
covered under maintenance contract as of September 30, 2004 compared to 14 as
of September 30, 2003. Depreciation and amortization increased by $114,000 and
$494,000 for the three and nine month periods ended September 30, 2004 compared
to the same periods in the prior year due to the inclusion of one new Gamma
Knife unit that started operating during third quarter 2004 and three new Gamma
Knife units that started operating during 2003. Other operating costs
decreased $84,000 and increased $37,000 for the three and nine month periods
ended September 30, 2004 compared to the same periods in the prior year. For
the three month period the decrease is due to a reduction in operating expenses
in connection with the Companys retail Gamma Knife units, primarily due to a
reduced number of retail procedures performed. For the nine month period, the
increase is primarily due to an increase in marketing related costs and
property taxes, partially offset by a reduction in operating expenses related
to the Companys retail units. Selling and administrative costs increased by $115,000 and decreased by
$22,000 to $817,000 and $2,345,000 for the three and nine month periods ended
September 30, 2004 from $702,000 and $2,367,000 for the three and nine month
periods ended September 30, 2003, respectively. The increase for the quarter
was primarily due to increased payroll related costs and business development
costs partially due to the addition of a Director of Sales during 2004. In
addition, approximately $46,000 in employer paid payroll taxes were expensed
during third 7




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quarter 2004 due to income earned by the Companys Chairman and
Chief Executive Officer
upon his exercise of 730,000 options to purchase Company stock. For the
year the decrease was primarily due to the write-off in second quarter 2003 of
Brazil development costs and a reduction in contributions during 2004, and was
partially offset by an increase in business development costs. Interest expense decreased by $103,000 and $181,000 to $553,000 and
$1,727,000 for the three and nine month periods ended September 30, 2004 from
$656,000 and $1,908,000 for the three and nine month periods ended September
30, 2003, respectively. These decreases are primarily due to lower interest
expense on the debt relating to the more mature Gamma Knife units, partially
offset by additional interest expense on the financing of one new Gamma Knife
unit that began operation during third quarter 2004 and three new Gamma Knife
units that began operation during 2003. The mature units have lower interest
expense because interest expense decreases as the outstanding principal balance
of each loan is reduced. In addition, the financing on the more recent Gamma
Knife units is at lower interest rates than the older loans. Interest and other income decreased by $6,000 and $35,000 to $21,000 and
$64,000 for the three and nine month periods ended September 30, 2004 from
$27,000 and $99,000 for the three and nine month periods ended September 30,
2003, respectively, primarily due to lower invested cash balances. For the
nine month period, the reduction is also due to interest income of
approximately $17,000 in first quarter 2003 relating to a state sales/use tax
refund. Minority interest increased by $43,000 and $65,000 to $267,000 and
$764,000 for the three and nine month periods ended September 30, 2004 from
$224,000 and $699,000 for the three and nine month periods ended September 30,
2003, respectively, due to increased profitability of GK Financing. Minority
interest represents the 19% interest of GK Financing owned by a third party. Income tax expense decreased by $418,000 and $386,000 to a benefit of
$226,000 and an expense of $172,000 for the three and nine month periods ended
September 30, 2004 compared to expense of $192,000 and $558,000 for the three
and nine month periods ended September 30, 2003, respectively. The Company
recorded a 40% income tax provision in the three and nine month periods ended
September 30, in both 2004 and 2003, and the provision for both the three and
nine month periods increased due to greater profitability. The decrease for
the three month period was due to an income tax benefit of $472,000 that was
recorded for the exercise of 730,000 previously expensed options, which offset
the income tax provision. In third quarter 2003, the effective income tax rate
was reduced to 34% due to an income tax benefit of $33,000 that was recorded
for the exercise of 50,000 previously expensed options. For the nine month
period ended September 30, 2004, the effective income tax rate was reduced to
10% compared to 35% for the same period in the prior year. This is due to an
income tax benefit on the exercise of previously expensed options of $537,000
(830,000 shares) compared to $81,000 (125,000 shares) in the prior year. These
income tax benefits are the result of compensation expense that was recognized
when the options were granted in 1995. The Company had net income of $840,000 ($0.16 per diluted share) and
$1,599,000 ($0.31 per diluted share) for the three and nine month periods ended
September 30, 2004 8




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compared to net income of $369,000 ($0.07 per diluted share)
and $1,039,000 ($0.20 per diluted
share) in the same period in the prior year. The increase for both the
three and nine month periods was primarily due to an income tax benefit as a
result of the exercise of stock options, the addition of one new Gamma Knife
unit that began operation during 2004 and three new Gamma Knife units that
began operation during 2003, and lower interest expense. Liquidity and Capital Resources The Company had cash and cash equivalents of $9,512,000 at September 30,
2004 compared to $10,312,000 at December 31, 2003. The Companys cash position
decreased by $800,000 primarily due to the payment of dividends of $485,000 and
an increase in accounts receivable of $614,000. During the first three quarters of 2004 the Company paid quarterly
dividends totaling $485,000. In September 2004, the Company declared a
quarterly dividend of $0.045 per share to shareholders of record on October 1,
2004, which resulted in a reduction in retained earnings of $214,000 in third
quarter 2004. The dividends were paid to shareholders of record on October 15,
2004. The Company as of September 30, 2004 had shareholders equity of
$17,326,000, working capital of $4,952,000 and total assets of $46,158,000. The Company has scheduled interest and principal payments under its debt
obligations of approximately $8,670,000 during the next 12 months. The Company
believes that its cash flow from operations and cash resources are adequate to
meet its scheduled debt obligations during the next 12 months. The Companys primary lender for its Gamma Knife projects, DVI Financial
Services Inc. (DVI), filed for Chapter 11 bankruptcy protection in August
2003. This will not materially affect the financing that has been committed to
existing projects. The Company has secured alternative financing for its
pending projects and continues to seek other financing options for future
projects. Financing has been secured at lower interest rates than had
historically been obtained from DVI, however certain debt covenants are more
restrictive than required by DVI. In addition, DVI did not require a parent
company guarantee, but one alternative financing lender has required a parent
guarantee on leasehold improvements only. Through June 30, 2004 the Company invested its cash in an institutionally
priced money market fund pending use in the Companys operations. During July
2004 the Company converted its invested cash primarily to short to
intermediate-term fixed income securities. The objective of the fixed income
investments is to maximize current income while preserving principal value. 
 Item 4.   Controls and Procedures (a)   Evaluation of disclosure controls and procedures.Our Chief Executive
Officer and our Chief Financial Officer, after evaluating the effectiveness of
the Companys 9




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disclosure controls and procedures (as defined in the
Securities Exchange Act of 1934
(Exchange Act) Exchange Rules 13a-15(e) and 15d-15(e)) as of the end of
the period covered by this quarterly report, have concluded that our disclosure
controls and procedures are effective based on their evaluation of these
controls and procedures required by paragraph (b) of Exchange Act Rules 13a-15
or 15d-15. (b)   Changes in internal control over financial reporting.   There were no
changes in our internal control over financial reporting identified in
connection with the evaluation required by paragraph (d) of Exchange Act Rules
13a-15 or 15d-15 that occurred during our last fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting. 
 PART II  OTHER INFORMATION 
 Item 1.   Legal Proceedings. None. 
 Item 2.   Unrestricted Sales of Equity Securities and Use of Proceeds. None. 
 Item 3.   Defaults Upon Senior Securities. None. 
 Item 4.   Submission of Matters to a Vote of Securities Holders. None. 
 Item 5.  Other Information. None. 
 Item 6.   Exhibits. The following exhibits are filed herewith: Exhibit Number
    
    Description10.45
    
    Lease Agreement for a Gamma Knife
Unit dated as of May 28, 2003 between GK Financing, LLC
and Lehigh Valley Hospital. (Confidential material
appearing in this document has been omitted and filed
separately with the Securities and Exchange Commission
in accordance with Rule 24b-2, promulgated under the
Securities and Exchange Act of 1934, as amended.
Omitted information has been replaced with asterisks.)31.1
    
    Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
 10




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Exhibit Number
    
    Description31.2
    
    Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 11




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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized. AMERICAN SHARED HOSPITAL SERVICES
Registrant Date: November 12, 2004
    /s/ Ernest A. BatesErnest A. Bates, M.D.Chairman of the Board and
Chief Executive OfficerDate: November 12, 2004
    /s/ Craig K. TagawaCraig K. TagawaSenior Vice President
Chief Operating and Financial Officer 12