##### Table of Contents



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 June 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 July 30, 2004, there are outstanding 4,025,173 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. Changes in 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 and Reports on Form 8-K.SIGNATURESExhibit IndexEXHIBIT 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
    
    June 30, 2004
    
    December 31, 2003Current assets:Cash and cash equivalents
    
    $
    9,344,000
    
    
    $
    10,312,000Restricted cash
    
    
    50,000
    
    
    
    50,000Accounts receivable, net of allowance for
for doubtful accounts of $170,000 in
2004 and $120,000 in 2003
    
    
    2,554,000
    
    
    
    2,467,000Prepaid expenses and other assets
    
    
    572,000
    
    
    
    473,000Total current assets
    
    
    12,520,000
    
    
    
    13,302,000Property and equipment:Medical equipment and facilities
    
    
    46,885,000
    
    
    
    46,072,000Office equipment
    
    
    485,000
    
    
    
    430,000Deposits and construction in progress
    
    
    1,872,000
    
    
    
    1,463,00049,242,000
    
    
    
    47,965,000Accumulated depreciation and
amortization
    
    
    (17,523,000
    )
    
    
    (15,137,000
    )Net property & equipment
    
    
    31,719,000
    
    
    
    32,828,000Other assets
    
    
    160,000
    
    
    
    174,000Total assets
    
    $
    44,399,000
    
    
    $
    46,304,000
 LIABILITIES AND
    
    (unaudited)
    
    (audited)SHAREHOLDERS EQUITY
    
    June 30, 2004
    
    December 31, 2003Current liabilities:Accounts payable
    
    $
    220,000
    
    
    $
    371,000Accrued interest
    
    
    35,000
    
    
    
    145,000Employee compensation and benefits
    
    
    235,000
    
    
    
    126,000Other accrued liabilities
    
    
    755,000
    
    
    
    539,000Income taxes payable
    
    
    50,000
    
    
    
    50,000Current portion of long-term debt
    
    
    6,764,000
    
    
    
    6,803,000Total current liabilities
    
    
    8,059,000
    
    
    
    8,034,000Long-term debt, less current portion
    
    
    17,106,000
    
    
    
    20,114,000Deferred income taxes
    
    
    1,221,000
    
    
    
    1,096,000Minority interest
    
    
    2,114,000
    
    
    
    1,731,000Shareholders equity:Common stock, without par value:authorized shares - 10,000,000; issued
& outstanding shares, 4,025,173 in 2004
and 3,918,203 in 2003
    
    
    9,210,000
    
    
    
    9,198,000Additional paid-in capital
    
    
    3,589,000
    
    
    
    3,461,000Retained earnings
    
    
    3,100,000
    
    
    
    2,670,000Total shareholders equity
    
    
    15,899,000
    
    
    
    15,329,000Total liabilities and shareholders equity
    
    $
    44,399,000
    
    
    $
    46,304,000
 See accompanying notes 2
    Table of Contents  AMERICAN SHARED HOSPITAL SERVICES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) Three Months ended June 30,
    
    Six Months ended June 30,2004
    
    2003
    
    2004
    
    2003Revenue:Medical services
    
    $
    4,114,000
    

    $
    4,105,000
    
    
    $
    8,343,000
    
    
    $
    7,774,000Costs and expenses:Costs of operations:Maintenance and supplies
    
    
    219,000
    

    
    166,000
    
    
    
    422,000
    
    
    
    311,000Depreciation and amortization
    
    
    1,178,000
    

    
    1,036,000
    
    
    
    2,356,000
    
    
    
    1,976,000Other
    
    
    599,000
    

    
    681,000
    
    
    
    1,252,000
    
    
    
    1,131,0001,996,000
    

    
    1,883,000
    
    
    
    4,030,000
    
    
    
    3,418,000Selling and administrative
    
    
    762,000
    

    
    839,000
    
    
    
    1,528,000
    
    
    
    1,665,000Interest
    
    
    562,000
    

    
    671,000
    
    
    
    1,174,000
    
    
    
    1,252,000Total costs and expenses
    
    
    3,320,000
    

    
    3,393,000
    
    
    
    6,732,000
    
    
    
    6,335,000794,000
    

    
    712,000
    
    
    
    1,611,000
    
    
    
    1,439,000Interest and other income
    
    
    20,000
    

    
    28,000
    
    
    
    43,000
    
    
    
    72,000Minority interest
    
    
    (246,000
    )

    
    (237,000
    )
    
    
    (497,000
    )
    
    
    (475,000
    )Income before income taxes
    
    
    568,000
    

    
    503,000
    
    
    
    1,157,000
    
    
    
    1,036,000Income tax expense
    
    
    179,000
    

    
    169,000
    
    
    
    398,000
    
    
    
    366,000Net income
    
    $
    389,000
    

    $
    334,000
    
    
    $
    759,000
    
    
    $
    670,000Net income per share:Earnings per common share  basic
    
    $
    0.10
    

    $
    0.09
    
    
    $
    0.19
    
    
    $
    0.18Earnings per common share  assuming
dilution
    
    $
    0.08
    

    $
    0.07
    
    
    $
    0.15
    
    
    $
    0.13
 See accompanying notes 3
    Table of Contents  AMERICAN SHARED HOSPITAL SERVICES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) Six Months ended June 30,2004
    
    2003Operating activities:Net income
    
    $
    759,000
    
    
    $
    670,000Adjustments to reconcile net cash provided by operating activities:Depreciation and amortization
    
    
    2,399,000
    
    
    
    2,020,000Deferred income taxes
    
    
    297,000
    
    
    
    366,000Minority interest in consolidated subsidiaries
    
    
    497,000
    
    
    
    475,000Changes in operating assets and liabilities:Receivables
    
    
    (87,000
    )
    
    
    (221,000
    )Prepaid expenses and other assets
    
    
    (99,000
    )
    
    
    216,000Accounts payable and accrued liabilities
    
    
    50,000
    
    
    
    132,000Net cash from operating activities
    
    
    3,816,000
    
    
    
    3,658,000Investing activities:Purchase of property and equipment
    
    
    (1,276,000
    )
    
    
    (4,001,000
    )Net cash from investing activities
    
    
    (1,276,000
    )
    
    
    (4,001,000
    )Financing activities:Payment of dividends
    
    
    (314,000
    )
    
    
    (454,000
    )Payment received for exercise of stock options
    
    
    12,000
    
    
    
    24,000Distribution to minority owners
    
    
    (114,000
    )
    
    
    (360,000
    )Payment for repurchase of stock
    
    
    (45,000
    )
    
    
    0Financing on purchase of property and equipment
    
    
    775,000
    
    
    
    4,913,000Principal payments on long-term debt and capitalized leases
    
    
    (3,822,000
    )
    
    
    (2,672,000
    )Net cash from financing activities
    
    
    (3,508,000
    )
    
    
    1,451,000Net change in cash and cash equivalents
    
    
    (968,000
    )
    
    
    1,108,000Cash and cash equivalents at beginning of period
    
    
    10,312,000
    
    
    
    9,924,000Cash and cash equivalents at end of period
    
    $
    9,344,000
    
    
    $
    11,032,000Supplemental cash flow disclosure:Cash paid during the period for:Interest paid
    
    $
    1,284,000
    
    
    $
    1,263,000Income taxes paid
    
    $
    101,000
    
    
    $
    39,000
 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 June 30, 2004 and the results
of its operations for the three and six month periods ended June 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 seventeen medical centers as of June 30, 2004 in Arkansas,
California, Connecticut, Florida, Illinois, Maryland, Massachusetts,
Mississippi, Nevada, New Jersey, New Mexico, New York, 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 and six months ended June 30, 2004 basic earnings per share was
computed using 3,958,000 and 3,941,000 common shares, respectively, and diluted
earnings per share was computed using 5,062,000 and 5,083,000 common shares and
equivalents, respectively. For the three and six months ended June 30, 2003
basic earnings per share was computed using 3,822,000 and 3,805,000 common
shares, respectively, and diluted earnings per share was computed using
5,064,000 and 5,067,000 common shares and equivalents, respectively. Note 3. Stock-based Compensation 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 5
    Table of Contents  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 June 30
    
    Six Months Ended June 302004
    
    2003
    
    2004
    
    2003Net income, as reported
    
    $
    389,000
    
    
    $
    334,000
    
    
    $
    759,000
    
    
    $
    670,000Deduct: 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
    
    $
    389,000
    
    
    $
    333,000
    
    
    $
    759,000
    
    
    $
    669,000Earnings per share:Basic-as reported
    
    $
    0.10
    
    
    $
    0.09
    
    
    $
    0.19
    
    
    $
    0.18Basic-pro forma
    
    $
    0.10
    
    
    $
    0.09
    
    
    $
    0.19
    
    
    $
    0.18Diluted-as reported
    
    $
    0.08
    
    
    $
    0.07
    
    
    $
    0.15
    
    
    $
    0.13Diluted-pro forma
    
    $
    0.08
    
    
    $
    0.07
    
    
    $
    0.15
    
    
    $
    0.13
 
 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 and the risks of developing
its IMRT and The Operating Room for the 21st Century® programs. 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
three months ended March 31, 2004 and the definitive Proxy Statement for the
Annual Meeting of Shareholders held on June 17, 2004. Medical services revenue increased $9,000 and $569,000 to $4,114,000 and
$8,343,000 for the three month and six month periods ended June 30, 2004, from
$4,105,000 and $7,774,000 for the three and six month periods ended June 30,
2003, respectively. The increase for the three month period ended June 30,
2004 was due to revenue from two Gamma Knife centers that began operating
during second and third quarters 2003, which was offset by a 20% decrease in
revenue at Gamma Knife centers in operation more than one year. The revenue
increase for the six month period was due to the inclusion of three additional
Gamma Knife units that began operation during 2003, and was partially offset by
a 15% revenue decrease at Gamma Knife centers in operation for longer than one
year. The Company had 17 Gamma Knife units in operation at June 30, 2004
compared to 16 at June 30, 2003. Thirteen of the Companys customers are under
fee-per-use contracts, and four customers are under revenue sharing 6
    Table of Contents  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 decreased by 9% to 513 and increased
by 2% to 1,076 for the three and six month periods ended June 30, 2004 from 561
and 1051 for the three and six month periods ended June 30, 2003, respectively.
Increases in procedures due to three new Gamma Knife units that began
operation during 2003 were offset by decreases in procedures performed at Gamma
Knife units in operation more than one year of 19% and 12%
for the three and six month periods ended June 30, 2004, respectively. Staffing
issues at one Gamma Knife center and the bi-annual Leksell Gamma Knife Users
meeting that occurred during May 2004 contributed to the drop in both revenue
and the number of procedures performed during second quarter 2004, compared to
the same quarter in the prior year. Total costs of operations increased $113,000 and $612,000 to $1,996,000
and $4,030,000 for the three and six month periods ended June 30, 2004, from
$1,883,000 and $3,418,000 for the three and six month periods ended June 30,
2003, respectively. Maintenance and supplies increased by $53,000 and $111,000
for the three and six month periods ended June 30, 2004 compared to the same
periods in the prior year, primarily due to an increase in the number of Gamma
Knife units covered under maintenance contract. There were 14 Gamma Knife
units covered under maintenance contract as of June 30, 2004 compared to 13 as
of June 30, 2003. Depreciation and amortization increased by $142,000 and
$380,000 for the three and six month periods ended June 30, 2004 compared to
the same periods in the prior year due to the inclusion of one new Gamma Knife
unit that started during first quarter 2003, one new Gamma Knife unit that
started during second quarter 2003, and one new Gamma Knife units that started
during third quarter 2003. Other operating costs decreased $82,000 and
increased $121,000 for the three and six month periods ended June 30, 2004
compared to the same periods in the prior year. For the three month period the
decrease is primarily due to training costs in second quarter 2003 for the
Companys two new Gamma Knife centers and a reduction in operating expenses due
to fewer procedures performed at the Companys retail units. For the six month
period, the increase is primarily due to an increase in marketing costs and
property taxes, partially offset by a reduction in training costs. Selling and administrative costs decreased by $77,000 and $137,000 to
$762,000 and $1,528,000 for the three and six month periods ended June 30, 2004
from $839,000 and $1,665,000 for the three and six month periods ended June 30,
2003, respectively. The decrease for the quarter was primarily due to a
write-off in second quarter 2003 of approximately $58,000 for previously
deferred costs relating to the future placement of a Gamma Knife unit in
Brazil, which was reallocated to another location. For the year the decrease
was due to lower payroll costs, a reduction in contributions and the write-off
in second quarter 2003 of Brazil development costs, and were partially offset
by an increase in business development costs. Interest expense decreased by $109,000 and $78,000 to $562,000 and
$1,174,000 for the three and six month periods ended June 30, 2004 from
$671,000 and $1,252,000 for the three and six month periods ended June 30,
2003, respectively. These decreases are primarily due to lower interest
expense on the debt relating to the more mature Gamma Knife units, partially 7
    Table of Contents  offset by additional interest expense on the financing of the three new Gamma
Knife units that began operation during first, second and third quarters 2003.
The mature units have lower interest expense because interest expense decreases
as the outstanding principal balance of each loan is reduced. Interest and other income decreased by $8,000 and $29,000 to $20,000 and
$43,000 for the three and six month periods ended June 30, 2004 from $28,000
and $72,000 for the three and six month periods ended June 30, 2003,
respectively, primarily due to lower invested cash
balances. For the six 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 $9,000 and $22,000 to $246,000 and $497,000
for the three and six month periods ended June 30, 2004 from $237,000 and
$475,000 for the three and six month periods ended June 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 increased by $10,000 and $32,000 to $179,000 and
$398,000 for the three and six month periods ended June 30, 2004 compared to
$169,000 and $366,000 for the three and six month periods ended June 30, 2003,
respectively. The increase was due to increased profitability and a reduction
in the effective income tax rate in 2004 compared to 2003. The Company
recorded a 40% income tax provision in the three and six month periods ended
June 30, in both 2004 and 2003. The effective income tax rate in second
quarter 2004 was reduced to approximately 32% due to an income tax benefit of
$49,000 that was recorded for the exercise of 75,000 previously expensed
options. In second quarter 2003, the effective income tax rate was reduced to
34% due to an income tax benefit of $32,000 that was recorded for the exercise
of 50,000 previously expensed options. For the six month period ended June 30,
2004, the effective income tax rate was reduced to 34% 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 $65,000 (100,000 shares) compared to
$48,000 (75,000 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 $389,000 ($0.08 per diluted share) and
$759,000 ($0.15 per diluted share) for the three and six month periods ended
June 30, 2004 compared to net income of $334,000 ($0.07 per diluted share) and
$670,000 ($0.13 per diluted share) in the same period in the prior year. The
increase for both the three and six month periods was primarily due to the
addition of three new Gamma Knife units that began operation during 2003, lower
selling and administrative costs and lower interest expense. Liquidity and Capital Resources The Company had cash and cash equivalents of $9,344,000 at June 30, 2004
compared to $10,312,000 at December 31, 2003. The Companys cash position
decreased by $968,000 primarily due to the payment of dividends of $314,000,
net capital expenditures of 8
    Table of Contents  approximately $501,000 and the payment prior to
month end of a large vendor invoice of approximately $555,000 that had
historically been paid after the end of the month. During first and second quarters 2004 the Company paid quarterly dividends
of $157,000 per quarter. In June 2004, the Company declared a quarterly
dividend of $0.425 per share to shareholders of record on July 2, 2004, which
resulted in a reduction in retained earnings of $171,000 in second quarter
2004. The dividends are payable to shareholders of record on July 16, 2004. The Company as of
June 30, 2004 had shareholders equity of $15,899,000,
working capital of $4,461,000 and total assets of approximately $44,399,000. The Company has scheduled interest and principal payments under its debt
obligations of approximately $8,636,000 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 never required a parent
company guarantee, but one alternative financing lender has required a parent
guarantee on leasehold improvements. 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 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 9
    Table of Contents  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. Changes in Securities and Use of Proceeds. None. 
 Item 3. Defaults Upon Senior Securities. None. 
 Item 4. Submission of Matters to a Vote of
Securities Holders.
The Companys Annual Meeting of Shareholders (Meeting)
was held on June 17, 2004. There were present in person
or by proxy at said Meeting shareholders voting 3,640,995
shares that represented 95.3% of the 3,818,203 shares
outstanding and entitled to vote at the Meeting, which
represented a quorum. At the meeting, the shareholders:  1)
    
    Voted on the Election of Directors as follows: Nominee
    
    For
    
    AbstainedErnest A. Bates, M.D.
    
    
    3,686,006
    
    
    
    106,159Ernest R. Bates
    
    
    3,668,756
    
    
    
    123,409Olin C. Robison
    
    
    3,768,496
    
    
    
    23,669John F. Ruffle
    
    
    3,769,496
    
    
    
    22,669Stanley S. Trotman, Jr.
    
    
    3,769,496
    
    
    
    22,669
 Dr. Bates, Mr. Bates, Mr. Robison, Mr. Ruffle and Mr. Trotman
were elected to the Board of Directors.  2)
    
    Voted on amending the 1995 and 2001 Stock Option
Plans to allow the Companys Chairman and Chief Executive
Officer to participate. There were 1,109,913 for, 437,049
votes against and 515,788 votes abstained. The amendments to the 1995 and 2001 Stock Option Plans were
approved.  3)
    
    Voted on the ratification of Moss Adams, LLP as
the Companys independent accountants for the year ending
December 31, 2004. There were 3,751,393 votes for, 21,500
votes against and 19,271 votes abstained. Moss Adams, LLP was ratified as the Companys independent
accountants for the year ending December 31, 2004. 10
    Table of Contents  Item 5. Other Information. None. 
 Item 6. Exhibits and Reports on Form 8-K.  (a)
    
    Exhibits
The following exhibits are filed herewith: Exhibit Number
    
    Description31.1
    
    Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    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.
  (b)
    
    Reports on Form 8-K
None. 11
    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:              August 13, 2004
    /s/ Ernest A. BatesErnest A. Bates, M.D.Chairman of the Board and
Chief Executive OfficerDate:              August 13, 2004
    /s/ Craig K. TagawaCraig K. TagawaSenior Vice President
Chief Operating and Financial Officer 12
    Table of Contents  Exhibit Index Exhibit Number
    
    Description31.1
    
    Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    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.
 13