##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549



---



FORM 10-Q

(Mark One)



|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|--- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2002 or



|[   ] | 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
(State or other jurisdiction of
Incorporation or organization)                               |  | 94-2918118
(IRS Employer
Identification No.)
|                                                                                                       
|Four Embarcadero Center, Suite 3700, San Francisco, California
(Address of Principal Executive Offices) |  | 94111
(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 [X] No [   ]

As of May 4, 2002, there are outstanding 3,768,203 shares of the Registrants
common stock.





---

TABLE OF CONTENTS



|                               |                                                                                               |                                                      |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                               |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                               |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF INCOME         
|                               |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                               |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|PART II  OTHER INFORMATION   
|                               | Item 1. Legal Proceedings.                                                                   
|                               | Item 2. Changes in Securities.                                                               
|                               | Item 3. Defaults upon Senior Securities.                                                     
|                               | Item 4. Submission of Matters to a Vote of Securities Holders.                               
|                               | Item 5. Other Information.                                                                   
|                               | Item 6. Exhibits and Reports on Form 8-K.                                                    
|SIGNATURES                    



---



##### Table of Contents






PART I  FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS

AMERICAN SHARED HOSPITAL SERVICES




CONDENSED CONSOLIDATED BALANCE SHEETS


|                                           |                                                                                                    |                                                                                                      |            |               |           |               |            |            |           | 
|------------------------------------------ | -------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ---------- | ------------- | --------- | ------------- | ---------- | ---------- | --------- | 
|                                           |                                                                                                    |                                                                                                      |            | Mar. 31, 2002 |           | Dec. 31, 2001
|                                           |                                                                                                    |                                                                                                      |            |               |           |              
|                                           |                                                                                                    |                                                                                                      |            | (unaudited)   |           | (audited)    
|ASSETS                                     |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|                                          
|Current assets:                            |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|                                           | Cash and cash equivalents                                                                          |                                                                                                      | $          | 11,041,000    |           |               | $          | 11,580,000 |          
|                                           | Restricted cash                                                                                    |                                                                                                      |            | 50,000        |           |               |            | 50,000     |          
|                                           | Accounts receivable, net of allowance for
doubtful accounts of $70,000 in 2002
and $70,000 in 2001 |                                                                                                      |            | 2,724,000     |           |               |            | 2,369,000  |          
|                                           | Prepaid expenses and other assets                                                                  |                                                                                                      |            | 718,000       |           |               |            | 789,000    |          
|                                           |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|Total current assets                       |                                                                                                    |                                                                                                      | 14,533,000 |               |           |               | 14,788,000 |           
|Property and equipment:                    |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|                                           | Medical equipment and facilities                                                                   |                                                                                                      |            | 32,277,000    |           |               |            | 31,278,000 |          
|                                           | Office equipment                                                                                   |                                                                                                      |            | 236,000       |           |               |            | 234,000    |          
|                                           | Deposits and construction in progress                                                              |                                                                                                      |            | 2,970,000     |           |               |            | 3,202,000  |          
|                                           |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|                                           |                                                                                                    |                                                                                                      | 35,483,000 |               |           |               | 34,714,000 |           
|                                           | Accumulated depreciation and
amortization                                                          |                                                                                                      |            | (8,171,000    | )         |               |            | (7,360,000 | )        
|                                           |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|Net property & equipment                   |                                                                                                    |                                                                                                      | 27,312,000 |               |           |               | 27,354,000 |           
|Other assets                               |                                                                                                    |                                                                                                      | 354,000    |               |           |               | 243,000    |           
|                                           |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|Total
assets                               |                                                                                                    | $                                                                                                    | 42,199,000 |               |           | $             | 42,385,000 |           
|                                           |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|                                          
|LIABILITIES AND SHAREHOLDERS EQUITY       |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|                                          
|Current liabilities:                       |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|                                           | Accounts payable                                                                                   |                                                                                                      | $          | 205,000       |           |               | $          | 412,000    |          
|                                           | Accrued interest                                                                                   |                                                                                                      |            | 182,000       |           |               |            | 176,000    |          
|                                           | Employee compensation and benefits                                                                 |                                                                                                      |            | 205,000       |           |               |            | 215,000    |          
|                                           | Other accrued liabilities                                                                          |                                                                                                      |            | 657,000       |           |               |            | 329,000    |          
|                                           | Current portion of long-term debt                                                                  |                                                                                                      |            | 4,545,000     |           |               |            | 4,305,000  |          
|                                           |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|Total current liabilities                  |                                                                                                    |                                                                                                      | 5,794,000  |               |           |               | 5,437,000  |           
|Long-term debt, less current portion       |                                                                                                    |                                                                                                      | 21,079,000 |               |           |               | 21,615,000 |           
|Deferred income taxes                      |                                                                                                    |                                                                                                      | 553,000    |               |           |               | 383,000    |           
|Minority interest                          |                                                                                                    |                                                                                                      | 1,135,000  |               |           |               | 1,165,000  |           
|Shareholders equity:                      |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|                                           | Common stock, without par value:                                                                   |                                                                                                      |            |               |           |               |            |            |          
|                                           |                                                                                                    | authorized shares - 10,000,000; issued
& outstanding shares, 3,608,000 in 2002
and 3,525,000 in 2001 |            |               | 9,147,000 |               |            |            | 9,240,000 | 
|                                           | Additional paid-in capital                                                                         |                                                                                                      |            | 3,218,000     |           |               |            | 3,154,000  |          
|                                           | Retained earnings                                                                                  |                                                                                                      |            | 1,273,000     |           |               |            | 1,391,000  |          
|                                           |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|Total shareholders equity                 |                                                                                                    |                                                                                                      | 13,638,000 |               |           |               | 13,785,000 |           
|                                           |                                                                                                    |                                                                                                      |            |               |           |               |            |           
|Total liabilities and shareholders equity |                                                                                                    | $                                                                                                    | 42,199,000 |               |           | $             | 42,385,000 |           
|                                           |                                                                                                    |                                                                                                      |            |               |           |               |            |           

See accompanying notes

2



---



##### Table of Contents



AMERICAN SHARED HOSPITAL SERVICES




CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)


|                           |                                               |                               |           |                              |         |      |           |           |         | 
|-------------------------- | --------------------------------------------- | ----------------------------- | --------- | ---------------------------- | ------- | ---- | --------- | --------- | ------- | 
|                           |                                               |                               |           | Three Months ended March 31,
|                           |                                               |                               |           |                             
|                           |                                               |                               |           | 2002                         |         | 2001
|                           |                                               |                               |           |                              |         |     
|Revenues:                  |                                               |                               |           |                              |         |      |           |          
|                          
|                           | Medical services                              |                               | $         | 3,245,000                    |         |      | $         | 2,860,000 |        
|                          
|Costs and expenses:        |                                               |                               |           |                              |         |      |           |          
|                          
|                           | Costs of operations:                          |                               |           |                              |         |      |           |           |        
|                           |                                               | Maintenance and supplies      |           |                              | 79,000  |      |           |           | 80,000  | 
|                           |                                               | Depreciation and amortization |           |                              | 802,000 |      |           |           | 644,000 | 
|                           |                                               | Other                         |           |                              | 354,000 |      |           |           | 295,000 | 
|                           |                                               |                               |           |                              |         |      |           |          
|                           |                                               |                               | 1,235,000 |                              |         |      | 1,019,000 |          
|                           | Selling and administrative                    |                               |           | 798,000                      |         |      |           | 809,000   |        
|                           | Interest                                      |                               |           | 624,000                      |         |      |           | 586,000   |        
|                           |                                               |                               |           |                              |         |      |           |          
|Total costs and expenses   |                                               |                               | 2,657,000 |                              |         |      | 2,414,000 |          
|                           |                                               |                               |           |                              |         |      |           |          
|                           |                                               |                               | 588,000   |                              |         |      | 446,000   |          
|Interest and other income  |                                               |                               | 54,000    |                              |         |      | 166,000   |          
|Minority interest          |                                               |                               | (217,000  | )                            |         |      | (195,000  | )        
|                           |                                               |                               |           |                              |         |      |           |          
|Income before income taxes |                                               |                               | 425,000   |                              |         |      | 417,000   |          
|Income tax expense         |                                               |                               | 105,000   |                              |         |      | 0         |          
|                           |                                               |                               |           |                              |         |      |           |          
|Net income                 |                                               | $                             | 320,000   |                              |         | $    | 417,000   |          
|                           |                                               |                               |           |                              |         |      |           |          
|Net income per share:      |                                               |                               |           |                              |         |      |           |          
|                           | Earnings per common share  basic             |                               | $         | 0.09                         |         |      | $         | 0.12      |        
|                           |                                               |                               |           |                              |         |      |           |          
|                           | Earnings per common share  assuming dilution |                               | $         | 0.06                         |         |      | $         | 0.08      |        
|                           |                                               |                               |           |                              |         |      |           |          

See accompanying notes

3



---



##### Table of Contents



AMERICAN SHARED HOSPITAL SERVICES




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)


|                                                                    |                                                             |                                                        |         |                              |          |      |           |            |         |  
|------------------------------------------------------------------- | ----------------------------------------------------------- | ------------------------------------------------------ | ------- | ---------------------------- | -------- | ---- | --------- | ---------- | ------- | -
|                                                                    |                                                             |                                                        |         | Three Months ended March 31,
|                                                                    |                                                             |                                                        |         |                             
|                                                                    |                                                             |                                                        |         | 2002                         |          | 2001
|                                                                    |                                                             |                                                        |         |                              |          |     
|Operating activities:                                               |                                                             |                                                        |         |                              |          |      |           |           
|Net income                                                          |                                                             | $                                                      | 320,000 |                              |          | $    | 417,000   |           
|Adjustments to reconcile net cash provided by operating activities: |                                                             |                                                        |         |                              |          |      |           |           
|                                                                    | Depreciation and amortization                               |                                                        |         | 820,000                      |          |      |           | 662,000    |        
|                                                                    | Deferred income taxes                                       |                                                        |         | 105,000                      |          |      |           | 0          |        
|                                                                    | Changes in operating assets and liabilities:                |                                                        |         |                              |          |      |           |            |        
|                                                                    |                                                             | (Increase) decrease in accounts receivable             |         |                              | (355,000 | )    |           |            | 124,000 |  
|                                                                    |                                                             | Decrease in prepaid expenses and other assets          |         |                              | 79,000   |      |           |            | 32,000  |  
|                                                                    |                                                             | (Decrease) in accounts payable and accrued liabilities |         |                              | (321,000 | )    |           |            | (35,000 | )
|                                                                    |                                                             |                                                        |         |                              |          |      |           |           
|Net cash from operating activities                                  |                                                             |                                                        | 648,000 |                              |          |      | 1,200,000 |           
|Investing activities:                                               |                                                             |                                                        |         |                              |          |      |           |           
|                                                                    | Purchase of property and equipment (net of financing)       |                                                        |         | (28,000                      | )        |      |           | (70,000    | )      
|                                                                    | (Decrease) in minority interest                             |                                                        |         | (30,000                      | )        |      |           | (71,000    | )      
|                                                                    |                                                             |                                                        |         |                              |          |      |           |           
|                                                                    | Net cash from investing activities                          |                                                        |         | (58,000                      | )        |      |           | (141,000   | )      
|Financing activities:                                               |                                                             |                                                        |         |                              |          |      |           |           
|                                                                    | Payment of dividends                                        |                                                        |         | 0                            |          |      |           | (361,000   | )      
|                                                                    | Payment received for exercise of options                    |                                                        |         | 42,000                       |          |      |           | 15,000     |        
|                                                                    | Payment for repurchase of stock                             |                                                        |         | (135,000                     | )        |      |           | (265,000   | )      
|                                                                    | Principal payments on long-term debt and capitalized leases |                                                        |         | (1,036,000                   | )        |      |           | (655,000   | )      
|                                                                    |                                                             |                                                        |         |                              |          |      |           |           
|                                                                    | Net cash from financing activities                          |                                                        |         | (1,129,000                   | )        |      |           | (1,266,000 | )      
|                                                                    |                                                             |                                                        |         |                              |          |      |           |           
|                                                                    | Net (decrease) in cash and cash equivalents                 |                                                        |         | (539,000                     | )        |      |           | (207,000   | )      
|                                                                    | Cash and cash equivalents at beginning of period            |                                                        |         | 11,580,000                   |          |      |           | 12,421,000 |        
|                                                                    |                                                             |                                                        |         |                              |          |      |           |           
|                                                                    | Cash and cash equivalents at end of period                  |                                                        | $       | 11,041,000                   |          |      | $         | 12,214,000 |        
|                                                                    |                                                             |                                                        |         |                              |          |      |           |           
|Supplemental cash flow disclosure:                                  |                                                             |                                                        |         |                              |          |      |           |           
|                                                                    | Cash paid during the period for:                            |                                                        |         |                              |          |      |           |            |        
|                                                                    |                                                             | Interest                                               |         | $                            | 619,000  |      |           | $          | 592,000 |  
|                                                                    |                                                             |                                                        |         |                              |          |      |           |           
|                                                                    |                                                             | Income taxes                                           |         | $                            | 48,000   |      |           | $          | 15,000  |  
|                                                                    |                                                             |                                                        |         |                              |          |      |           |           

See accompanying notes

4



---



##### Table of Contents



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 March 31, 2002 and the results
of its operations for the three month periods ended March 31, 2002 and 2001,
which results are not necessarily indicative of results on an annualized basis.
Consolidated balance sheet amounts as of December 31, 2001 have been derived
from audited financial statements.

These financial statements include the accounts of American Shared
Hospital Services (the Company) and its wholly-owned subsidiaries: MMRI,
Inc.; American Shared Radiosurgery Services; OR21, Inc. (OR21);
MedLeader.com, Inc. (MedLeader); and the Companys majority-owned subsidiary,
GK Financing, LLC (GK Financing).

The Company through its majority-owned subsidiary, GK Financing, provided
Gamma Knife units to twelve medical centers as of March 31, 2002 in Arkansas,
California, Connecticut, Illinois, Massachusetts, Mississippi, Nevada, New
Jersey, Ohio, 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 months ended March 31, 2002 basic earnings per share was computed
using 3,554,000 common shares and diluted earnings per share was computed using
5,012,000 common shares and equivalents. For the three months ended March 31,
2001 basic earnings per share was computed using 3,612,000 common shares and
diluted earnings per share was computed using 5,175,000 common shares and
equivalents.

Note 3. Recent Accounting Pronouncements

In June 2001, the Financial Standards Accounting Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 141, Business
Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS
No. 141 addresses financial accounting and reporting for business combinations
and supersedes APB Opinion No. 16, Business Combinations and SFAS No. 38,
Accounting for Preacquisition Contingencies of Purchased Enterprises. SFAS
No. 141 is effective for transactions initiated after June 30, 2001. SFAS No.
142 addresses financial accounting and reporting for acquired goodwill and
other intangible assets and supersedes APB Opinion No. 17, Intangible Assets.
It addresses how intangible assets

5



---



##### Table of Contents



that are acquired individually or with a group of other assets (but not those
acquired in a business combination) should be accounted for in financial
statements upon their acquisition. SFAS No. 142 also addresses how goodwill
and other intangible assets should be accounted for after they have been
initially recognized in the financial statements. The Company does not expect
the adoption of these statements to have a material effect on its consolidated
results of operations or financial position.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations. This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. It applies to legal
obligations associated with the retirement of long-lived assets that result
from the acquisition, construction, development and (or) the normal operation
of a long-lived asset, except for certain obligations of lessees. The Company
is required to adopt the provisions of SFAS No. 143 no later than the beginning
of fiscal year 2003, with early adoption permitted. The Company does not
expect the adoption of this statement to have a material effect on its
consolidated results of operations or financial position.

In August 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
While SFAS No. 144 supersedes FASB Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, it
retains many of the fundamental provisions of that Statement. SFAS No. 144
becomes effective for fiscal years beginning after December 15, 2001, with
early applications encouraged. The Company does not expect the adoption of
this statement to have a material effect on its consolidated results of
operations or financial position.




Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations

Medical services revenues increased $385,000 to $3,245,000 for the three
month period ended March 31, 2002 from $2,860,000 for the three month period
ended March 31, 2001. The increase reflects the addition of two new Gamma
Knife units and increased utilization at Gamma Knife centers in operation for
longer than one year of 2%. The Company had twelve Gamma Knife units in
operation at March 31, 2002 compared to ten at March 31, 2001. Ten of the
Companys customers are under fee-per-use contracts, and two 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 65 in first quarter 2002
to 410 from 345 in the same quarter in the prior year. This increase was
primarily the result of two new Gamma Knife units in operation.

Total costs of operations increased $216,000 to $1,235,000 for the three
month period ended March 31, 2002 from $1,019,000 for the three month period
ended March 31, 2001. Maintenance and supplies remained constant at $79,000
for three month period ended March 31,

6



---



##### Table of Contents



2001 compared to $80,000 for the same period in the prior year. There
were ten Gamma Knife units covered under contract maintenance as of March 31,
2002 compared to eight as of March 31, 2001. The increase in contract
maintenance expense because of these additional units was offset by a
maintenance expense credit of $19,000. Depreciation and amortization increased
by $158,000 for the three month period ended March 31, 2002 compared to the
same period in the prior year due to the increase of two additional Gamma Knife
units and the upgrade of one unit to a Model C. Other operating costs
increased $59,000 for the three month period ended March 31, 2002 compared to
the same period in the prior year primarily due to an increase in marketing and
insurance costs.

Selling and administrative costs decreased by $11,000 to $798,000 for the
three month period ended March 31, 2002 from $809,000 for the three month
period ended March 31, 2001. This decrease is primarily due to a $100,000
reduction in development costs for the Companys two startup businesses, OR21
and MedLeader during the period ended March 31, 2002 compared to the same
quarter last year. This reduction is due to the Companys decision to defer
development of the MedLeader subsidiary for the present time. The reduction
was offset by increases in sales and business development costs, rent expense,
legal fees and accounting fees.

Interest expense increased by $38,000 to $624,000 for the three month
period ended March 31, 2002 from $586,000 for the three month period ended
March 31, 2001 due to the addition of two Gamma Knife units and the upgrade on
one existing unit, all of which were financed with long-term debt. The newer
Gamma Knife units have higher interest expense than more mature units because
interest expense decreases as the outstanding balance of each loan is reduced.

Interest and other income decreased by $112,000 to $54,000 for the three
month period ended March 31, 2002 from $166,000 for the three month period
ended March 31, 2001 primarily due to lower interest rates available on
invested cash balances.

Minority interest increased by $22,000 to $217,000 for the three month
period ended March 31, 2002 from $195,000 for the three month period ended
March 31, 2001 due to increased profitability of GK Financing. Minority
interest represents the 19% interest of GK Financing owned by a third party.

The Company recorded $105,000 in income tax expense in the first quarter
2002 compared to no income tax expense in first quarter 2001 due to net
operating loss carryforwards available for tax purposes. The Company began
recording a 40% income tax provision in second quarter 2001. The 40% income
tax rate for first quarter 2002 was reduced to an effective income tax rate of
approximately 25% due to a tax benefit that was recorded for the exercise of
100,000 options. This income tax reduction of $65,000 is the result of
compensation expense that was recognized when the options were granted in 1995.

The Company had net income of $320,000 ($0.09 per basic share) for the
three month period ended March 31, 2002 compared to net income of $417,000
($0.12 per basic share) in the same period in the prior year. This decrease is
primarily due to $105,000 of income tax expense in first quarter 2002 compared
to no income tax expense in the same quarter 2001, and a

7



---



##### Table of Contents



reduction in interest and other income of $112,000. These reductions to
net income were partially offset by a 13% increase in revenue as a result of
two additional Gamma Knife units and a reduction of $100,000 in costs
associated with MedLeader and OR21.

Liquidity and Capital Resources

The Company had cash and cash equivalents of $11,041,000 at March 31, 2002
compared to $11,580,000 at December 31, 2001. The Companys cash position
decreased by $539,000 because of an increase in accounts receivable of $355,000
primarily due to increased revenue, and a reduction in accounts payable of
$207,000. In addition the Company made a deposit of $100,000 on a new Gamma
Knife unit.

The Company as of March 31, 2002 had shareholders equity of $13,638,000,
working capital of $8,739,000 and total assets of approximately $42,199,000.

The Company has scheduled interest and principal payments under its debt
obligations of approximately $6,860,000 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 is investing its cash in an institutionally priced money
market fund pending use in the Companys operations. The investment objective
of the money market fund is to maintain a stable net asset value, in order to
maximize yield while preserving principal value.

8



---



##### Table of Contents






PART II  OTHER INFORMATION




Item 1. Legal Proceedings.

None.




Item 2. Changes in Securities.

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 and Reports on Form 8-K.

None.

9



---



##### Table of Contents






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: May 13, 2002 |  | /s/ Ernest A. Bates                                                        
|                   |  |                                                                            
|                   |  | Ernest A. Bates, M.D.
Chairman of the Board and
Chief Executive Officer    
|                  
|Date: May 13, 2002 |  | /s/ Craig K. Tagawa                                                        
|                   |  |                                                                            
|                   |  | Craig K. Tagawa
Senior Vice President
Chief Operating and Financial Officer

10