<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 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 September 30, 1995
                                       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 0-12849

                        AMERICAN SHARED HOSPITAL SERVICES
             (Exact name of registrant as specified in its charter)


         CALIFORNIA                                      94-2918118         
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

FOUR EMBARCADERO CENTER, SUITE 3620, 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  X  No  
                                              ---    ---


         As of November 10, 1995 there are outstanding 4,244,401 shares of the
Registrant's common stock.


                                      -1-

<PAGE>   2

                        AMERICAN SHARED HOSPITAL SERVICES

                         PART I - FINANCIAL INFORMATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                    (unaudited)        (audited)
           ASSETS                                  Sept. 30, 1995    Dec. 31, 1994
           ------                                  --------------    -------------
<S>                                                  <C>              <C>        
Current assets:
   Cash and cash equivalents                         $   593,000      $ 1,225,000
   Receivables, less allowance for
      uncollectible accounts of
      $1,324,000 ($1,424,000 in
      1994):
           Trade accounts receivable                   5,748,000        6,183,000
           Other receivables                             349,000          537,000
           Note receivable from officer                   55,000           54,000
                                                     -----------      -----------
                                                       6,152,000        6,774,000
   Inventories                                            98,000          146,000
   Prepaid expenses and other current assets             543,000          758,000
                                                     -----------      -----------

TOTAL CURRENT ASSETS                                   7,386,000        8,903,000

Note receivable from officer, less current portion       207,000          248,000

Property and equipment:
   Land buildings and improvements                     2,168,000        2,351,000
   Medical, transportation & office equipment          7,285,000        9,670,000
   Capitalized lease equipment                        25,523,000       38,271,000
                                                     -----------      -----------
                                                      34,976,000       50,292,000
   Accumulated depreciation  & amortization          (12,513,000)     (18,165,000)
                                                     -----------      -----------
Net property and equipment                            22,463,000       32,127,000


Intangible assets, less accumulated
   amortization                                        1,356,000        2,118,000

Other assets                                             452,000          943,000
                                                     -----------      -----------

TOTAL ASSETS                                         $31,864,000      $44,339,000
                                                     ===========      ===========
</TABLE>

<TABLE>
<CAPTION>
LIABILITIES AND
STOCKHOLDERS' EQUITY                                (unaudited)        (audited)
(NET CAPITAL DEFICIENCY)                           Sept. 30, 1995    Dec. 31,1994
------------------------                           --------------    ------------
<S>                                                  <C>              <C>        
Current liabilities:
   Accounts payable                                  $ 4,685,000      $ 4,450,000
   Accrued  interest                                     145,000        8,497,000
   Employee compensation                                 953,000        1,210,000
   Other accrued liabilities                           1,234,000        1,317,000
   Current portion of long-term debt                   1,614,000          196,000
   Current portion of obligations
      under capital leases                             6,947,000        8,135,000
   Senior subordinated notes                                   0       18,467,000
                                                     -----------      -----------

TOTAL CURRENT LIABILITIES                             15,578,000       42,272,000

Long-term debt, less current portion                   8,789,000        2,539,000
   Obligations under capital leases
    less current portion                              15,828,000       21,705,000
Deferred income taxes                                    164,000          164,000
Senior subordinated notes                               773,0000                0
Stockholders' equity (Net Capital
   Deficiency):
   Common stock, without par value:
      authorized shares - 10,000,000
      issued & outstanding shares,
      3,870,000 in 1995 & 2,867,000
      in 1994                                         10,141,000        8,795,000
Additional paid-in capital                               849,000          763,000
Accumulated deficit                                  (20,258,000)     (31,899,000)
                                                     -----------      -----------
Total stockholders' equity
   (Net Capital Deficiency)                           (9,268,000)     (22,341,000)
                                                     -----------      -----------

 TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY (NET CAPITAL DEFICIENCY)                   $31,864,000      $44,339,000
                                                     ===========      ===========
</TABLE>


                             See Accompanying Notes

                                       -2-
<PAGE>   3

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                     Three months ended September 30,         Nine months ended September 30,
                                                         1995                1994                1995                1994
                                                         ----                ----                ----                ----

<S>                                                   <C>                 <C>                 <C>                 <C>        
REVENUES:
  Medical services                                    $8,377,000         $ 9,258,000          $25,517,000         $28,709,000

COSTS AND EXPENSES:
  Costs of operations:

      Medical services payroll                         1,739,000           2,493,000            5,212,000           7,708,000

      Maintenance and supplies                         1,679,000           2,069,000            5,091,000           5,590,000

      Depreciation and amortization                    2,032,000           1,962,000            6,655,000           5,927,000

      Equipment rental                                   814,000           1,305,000            2,022,000           3,620,000

      Other                                              833,000           1,168,000            2,738,000           3,390,000

      Write-down of assets                                     0                   0            4,425,000                   0
                                                      ----------         -----------          -----------         -----------

                                                       7,097,000           8,997,000           26,143,000          26,235,000

  Selling and administrative                           1,313,000           1,381,000            4,271,000           4,406,000

  Interest                                               959,000           1,469,000            4,233,000           4,551,000
                                                      ----------         -----------          -----------         -----------

TOTAL COSTS AND EXPENSES                               9,369,000          11,847,000           34,647,000          35,192,000
                                                      ----------         -----------          -----------         -----------

Equity in earnings of partnerships                        12,000              24,000               36,000              61,000

Gain on sale of assets & equipment                       262,000              29,000              216,000             174,000

Interest and other income                                 32,000             112,000              141,000             157,000
                                                      ----------         -----------          -----------         -----------

Loss before income taxes &
  extraordinary item                                    (684,000)         (2,424,000)          (8,737,000)         (6,091,000)

Income tax provision                                           0               1,000                    0              19,000
                                                      ----------         -----------          -----------         -----------

Loss before extraordinary item                          (684,000)         (2,425,000)          (8,737,000)         (6,110,000)
                                                      ----------         -----------          -----------         -----------
Extraordinary item - gain on early
  extinguishment of debt                                       0             362,000           20,378,000             362,000
                                                      ----------         -----------          -----------         -----------

Net income (loss)                                     $ (684,000)        $(2,063,000)         $11,641,000         $ 5,748,000
                                                      ==========         ===========          ===========         ===========

Income (loss) per share:

      Loss before extraordinary item                      $(0.16)             $(0.85)              $(2.43)             $(2.13)

      Extraordinary Item                                   $0.00               $0.13                $5.68               $0.13
                                                          ------              ------               ------              ------
Net income (loss) per share                               $(0.16)             $(0.72)              $ 3.25              $(2.00)
                                                          ======              ======               ======              ======

Common shares and equivalents used in
  computing per share amounts                          4,217,000           2,867,000            3,586,000           2,867,000
</TABLE>


                             See Accompanying Notes

                                       -3-

<PAGE>   4

                        AMERICAN SHARED HOSPITAL SERVICES

                 Condensed Consolidated Statement of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                 Nine months ended September 30,
                                                                     1995             1994
                                                                     ----             ----

<S>                                                               <C>             <C>         
OPERATING ACTIVITIES:
Net Income (loss)                                                $ 11,641,000     $(5,748,000)

Adjustment to reconcile net income (loss) to net 
  cash provided by operating activities:
      Extraordinary gain                                          (20,378,000)       (362,000)
      Write-down of assets                                          4,425,000               0
      Depreciation and amortization                                 7,060,000       6,459,000
      Gain on sale of assets                                         (216,000)       (174,000)
      Equity in (earnings) of partnerships                            (36,000)        (61,000)
      Compensation from stock grants                                  265,000               0
  Changes in operating assets and liabilities:
      Decrease (increase)  in receivables                             622,000        (471,000)
      Decrease  (increase) in inventory                                48,000          (2,000)
      Decrease in prepaid expenses                                    165,000          34,000
      Increase in account payable &
        and accrued liabilities                                       397,000       4,109,000
                                                                 ------------     -----------

Net cash provided by operating activities                           3,993,000       3,784,000

INVESTING ACTIVITIES
Proceeds from sale and disposition of equipment                       108,000         708,000
Payment for purchase of property and equipment                       (158,000)       (970,000)
Other                                                                (128,000)        514,000
                                                                 ------------     -----------

Net cash (used in) provided by investing activities                  (178,000)        252,000

FINANCING ACTIVITIES:
Payment for repurchase of bonds                                    (3,893,000)        (64,000)
Proceeds from loan agreement                                        7,000,000               0
Principal payments on long-term debt and
  obligations under capital leases                                 (7,667,000)     (4,333,000)
Other                                                                 113,000               0
                                                                 ------------     -----------
Net cash used in financing activities                              (4,447,000)     (4,397,000)

Net decrease in cash and cash equivalents                            (632,000)       (361,000)
Cash and cash equivalents at beginning of period                    1,225,000         957,000
                                                                 ------------     -----------
Cash and cash equivalents at end of period                       $    593,000     $   596,000
                                                                 ============     ===========

SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest paid                                                    $  3,731,000     $ 1,555,000
                                                                 ============     ===========
Income taxes paid                                                $     55,000     $    20,000
                                                                 ============     ===========
</TABLE>


                             See accompanying notes

                                       -4-
<PAGE>   5

                        AMERICAN SHARED HOSPITAL SERVICES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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' (the "Company") consolidated financial position as of
    September 30, 1995 and the results of its operations for the nine months
    ended September 30, 1995 and 1994, which results are not necessarily
    indicative of results on an annual basis. Consolidated balance sheet amounts
    as of December 31, 1994 have been derived from audited financial statements.
    These financial statements include the accounts of the Company and its
    wholly owned subsidiaries, CuraCare, Inc., MMRI, Inc., European Shared
    Medical Services Limited, American Shared Radiosurgery Services, African
    American Church Health and Economic Services, Inc. and ACHES Insurance
    Services, Inc. All significant intercompany accounts and transactions have
    been eliminated.


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

    Medical Services Revenues of $8,377,000 and $25,517,000 for the three and
    nine months ended September 30, 1995 represent a 10%


                                       -5-
<PAGE>   6

    and 11% decline for the three and nine month periods, compared to Medical
    Services Revenues of $9,258,000 and $28,709,000 for the three and nine
    months ended September 30, 1994.

    Revenues from Magnetic Resonance Imaging (MRI) for the three and nine month
    periods ended September 30, 1995 increased $620,000 and $1,963,000 compared
    to the same periods in the prior year. The increase was due primarily to the
    commencement of new customer contracts and increased utilization from
    contracts commenced in prior periods. The Company had a net increase of
    approximately 31 new customer contracts as of September 30, 1995 compared to
    September 30, 1994.


    Computed Tomography (CT) revenues declined $73,000 and $468,000, for the
    three and nine month periods ended September 30, 1995, respectively,
    compared to the same periods in the prior year due to the operation of two
    fewer scanners and lower revenue generation from mobile routes. Nuclear
    Medicine and Ultrasound revenues decreased $330,000 and $946,000 for the
    three and nine month periods ended September 30, 1995, respectively,
    compared to the same periods in the prior year as a result of the December
    31, 1994 sale of two Ultrasound Department contracts as a part of its
    Respiratory Therapy Department contract sale and the continued reduction in
    mobile Ultrasound revenues.


                                       -6-
<PAGE>   7


    Respiratory Therapy Services revenues decreased $1,114,000 and $3,757,000
    for the three and nine month periods ended September 30, 1995, respectively,
    compared to the same periods in the prior year due to the sale on December
    31, 1994 of eight Respiratory Therapy contracts, the Respiratory Registry
    and the termination of three contracts in the first nine months of 1995.
    During the remainder of 1995 an additional two contracts will terminate.

    Gamma Knife Revenues increased $16,000 for the three and nine month periods
    ended September 30, 1995, compared to the same periods in the prior year.

    On October 16, 1995 the Company and Elekta AB of Sweden through its U.S.
    subsidiary, GK Investments, Inc. formed a new venture, GK Financing, LLC,
    (GKF). GKF will provide financing for projects using the Gamma Knife
    radiosurgery unit, which is sold by Elekta Instruments, Inc., a U.S.
    subsidiary of the manufacturer, Elekta AB.

    Pursuant to GKF's operating agreement dated October 17, 1995, the Company
    will contribute its ownership of two existing Gamma Knife units (including
    one unit which will be acquired pursuant to an option agreement with the
    Company's Chairman and CEO) in return for the Company's 81% ownership
    interest in GK Financing, LLC. Elekta will contribute approximately $727,000
    in cash for its 19% interest and has made an initial loan commitment to GKF.


                                       -7-
<PAGE>   8

    On October 31, 1995 GK Financing, LLC purchased four Gamma Knife units
    valued at a total of approximately $12,000,000.

    Total Costs of Operations decreased $1,900,000 and $92,000 for the three and
    nine month periods ended September 30, 1995, respectively, compared to the
    same periods in the prior year. Medical Services payroll, the largest
    routine component of Total Costs of Operations, decreased $754,000 and
    $2,496,000 for the three and nine month periods ended September 30, 1995,
    respectively, compared to the same periods in the prior year. The decrease
    is primarily attributable to the Company's sale of its Respiratory Therapy
    Department and related contracts during the fourth quarter of 1994.
    Maintenance and supplies decreased $390,000 and $499,000 for the three and
    nine month periods ended September 30, 1995, respectively, compared to the
    same periods in the prior year. The decrease is primarily attributable to
    pricing reductions on MRI maintenance contracts and a decrease in supply
    usage associated with the sale and termination of Respiratory Therapy
    contracts. Depreciation and amortization increased $70,000 and $728,000 for
    the three and nine month periods ended September 30, 1995, respectively,
    compared to the same periods in the prior year. The increase is primarily
    attributable to the Company's lease restructuring with its primary equipment
    lessor which was effective January 1, 1994 but recorded cumulatively in the
    fourth quarter of 1994. Equipment leases previously accounted for as rentals
    were accounted for

                                       -8-
<PAGE>   9

    as capitalized leases (increased depreciation and interest expense) due to
    the lease restructuring. The increase was mitigated by the write-down of
    assets which was recorded in the second quarter of 1995. Equipment rental
    decreased $491,000 and $1,598,000 for the three and nine month periods ended
    September 30, 1995, respectively, compared to the same periods in the prior
    year as a result of the Company's aforementioned lease restructuring with
    its primary equipment lessor. Other operating costs decreased $335,000 and
    $652,000 for the three and nine month periods ended September 30, 1995,
    respectively, compared to the same periods in the prior year primarily due
    to a reduction in regional office costs, property related costs, and bad
    debt recoveries .

    In connection with the adoption of the Statement of Financial Accounting
    Standards No. 121 (FAS 121), during the second quarter of 1995, management
    reviewed the recoverability of the carrying value of long-lived assets,
    primarily fixed assets, goodwill and deferred costs based on the life of the
    assets.

    The Company initiated its review of potential loss impairment due to the
    continuing changes in the health care environment which have put downward
    pressure on customer and equipment pricing. These changes have resulted in
    recent operating results and future forecasted operating results for certain
    assets which were less than previously planned.


                                      -9-

<PAGE>   10


    This situation led to the conclusion that there was a potential impairment
    in the recorded value of fixed assets, goodwill and deferred costs.
    Management's estimate of future undiscounted cash flows over the useful life
    of certain assets was determined to be less than their recorded values,
    indicating impairment of these assets under provisions of FAS 121.

    An impairment loss of $4,425,000 was recorded in the second quarter of 1995
    based on the differences between the fair value determined by third parties
    and the recorded values of certain assets. The impairment loss is comprised
    of write-downs of equipment of $3,650,000 (primarily MRI, CT and nuclear
    medicine); goodwill of $600,000; and deferred assets of $175,000.


    Selling and Administrative costs decreased $68,000 and $135,000 for the
    three and nine month periods ended September 30, 1995, respectively,
    compared to the same periods in the prior year. The nine month period ended
    September 30, 1995 results would have reflected a larger decrease except for
    a second quarter, 1995 charge of $265,000 to salary and wage expense for the
    184,000 shares of common stock issued to the Company's Chairman and CEO,
    Ernest A. Bates, M.D., for his continued services to the Company and his
    personal guarantee of $6,500,000 of indebtedness of the Company (see
    Liquidity and Capital Resources").


                                      -10-

<PAGE>   11


    Interest expense decreased $510,000 and $318,000 for the three and nine
    month periods ended September 30, 1995, respectively, compared to the same
    periods in the prior year. The decrease for the three and nine month periods
    ended September 30, 1995 compared to the same periods in the prior year is
    primarily due to the Company's repurchase of its Senior Subordinated Notes
    on May 17, 1995, as described below. The decrease in interest expense from
    the Senior Subordinated Notes was partially offset by the Company's
    aforementioned lease restructuring with its primary equipment lessor.

    The Company had losses before extraordinary item of $684,000 and $8,737,000
    for the three and nine month periods ended September 30, 1995, respectively,
    compared to losses of $2,425,000 and $6,110,000 for the same periods in the
    prior year. Included in the Company's 1995 nine month loss was a charge of
    $4,425,000 due to adoption of FAS 121. The Company had a net loss of
    $684,000 and net income of $11,641,000 for the three and nine month periods
    ended September 30, 1995, respectively, compared to net losses of $2,063,000
    and $5,748,000 for the same periods in the prior year.

    The Company's 1995 nine month net income results included an extraordinary
    gain of $20,378,000 on its Senior Subordinated Note restructuring recorded
    on May 17, 1995. The gain resulted from the repurchase of $17,694,000 of
    face amount plus $8,854,000 of


                                      -11-

<PAGE>   12



    accrued and unpaid interest of the Company's 14-3/4% and 16-1/2% Senior
    Subordinated Notes net of cash, common stock and warrants issued and
    transaction related costs of $3,893,000, $1,250,000 and $1,027,000
    respectively.

    In addition, during September 1994, the Company recognized an extraordinary
    gain on the early extinguishment of indebtedness of $362,000. The
    extraordinary gain resulted from the repurchase of $321,000 face amount plus
    $115,000 of accrued and unpaid interest of the Company's 14-3/4% Senior
    Subordinated Notes net of income tax and deferred financing costs of $10,000
    for $64,000 in cash.

LIQUIDITY AND CAPITAL RESOURCES

    The Company had cash and cash equivalents of $593,000 at September 30, 1995
    compared to $1,225,000 at December 31, 1994. The Company's cash position
    decreased in 1995 as a result of its operating losses.


    On May 17, 1995, the Company repurchased for cash and securities
    approximately 96% of its outstanding 16-1/2% Senior Subordinated
    Exchangeable Reset Notes due 1996 and 14-3/4% Senior Subordinated Notes due
    1996 (collectively, the "Subordinated Notes"). This repurchase, together
    with the December 1994 lease restructuring


                                      -12-

<PAGE>   13

    described below and the availability of up to $8,000,000 of new debt
    financing, concluded an overall restructuring of the Company's obligations.

    In 1992, the Company determined that it would not generate sufficient
    revenues or achieve sufficient expense reductions to meet in full its
    scheduled debt and lease obligations. Accordingly, the Company suspended
    interest payments under the Subordinated Notes beginning with the October
    15, 1992 semi-annual interest payment and suspended lease payments on a
    significant portion of its equipment leases from December 1, 1992. As a
    result, the Company was in default under substantially all of its debt and
    lease obligations and the holders had the right to accelerate such
    obligations. The Company stated that any such acceleration would cause it to
    seek a liquidation in bankruptcy.

    The Company engaged in prolonged restructuring negotiations with its
    creditors following the actions referred to in the immediately preceding
    paragraph. As a result of these negotiations, the following resolutions were
    achieved:

    1. Secured Credit Facility. The Company's revolving credit facility was
    repaid in full and terminated on February 28, 1995 with a portion of the
    proceeds of the sale of eight respiratory therapy contracts. The revolving
    credit facility was replaced


                                      -13-

<PAGE>   14

    in May 1995 in connection with the repurchase of the Subordinated Notes (see
    below).

    2. Equipment Leases. On December 31, 1994, the Company entered into a lease
    restructuring with its primary equipment lessor. Under the lease
    restructuring, the leases covering substantially all of the Company's
    medical equipment were modified to extend the lease terms and to reduce
    scheduled lease payments. During 1994, the Company made monthly aggregate
    payments based on the estimated restructured lease payments. In addition,
    certain accrued and unpaid lease and service payments were converted into a
    $2,000,000 secured 86 month note (the "Lessor's Note"). The Lessor's Note
    bears interest at an annual rate of 4%, payable in arrears, and will mature
    in February, 2002. Monthly payments of interest only are due through
    November, 1995. Thereafter the principal balance of the Lessor's Note will
    amortize in 75 equal monthly installments until maturity. The Lessor's Note
    is secured by a lien on the Accounts Receivable of CuraCare, Inc. and
    American Shared-CuraCare. The Lessor's Note is also secured by a lien on two
    CT units and one Ultrasound unit.


    3. Subordinated Notes. On May 5, 1995, in lieu of a previously negotiated
    restructuring that would have resulted in the exchange of 96% of the Senior
    Subordinated Notes for 89.4% of the Company's common stock, the Company
    agreed to repurchase such


                                      -14-

<PAGE>   15

    Subordinated Notes (including accrued, unpaid interest) for a combination of
    cash and equity equal to approximately 25% of the Company's fully diluted
    outstanding shares. On May 17, 1995 the Company completed its repurchase of
    approximately 96% of its Subordinated Notes from the four Noteholders. The
    four Noteholders received approximately $3,900,000 in cash, plus a total of
    819,000 shares of common stock (equal to approximately 20% of the Company's
    then fully diluted outstanding common shares), and warrants for an
    additional 216,000 shares of common stock (equal to approximately 5% of the
    then fully diluted common shares). The warrants are immediately exercisable
    for $0.75 per share.

    The restructuring results in annual interest savings from the Subordinated
    Notes of approximately $2,890,000. In addition, under the terms of the
    Subordinated Notes, the Subordinated Notes would have matured in October
    1996. After the restructuring there still remain outstanding approximately
    $773,000 of Subordinated Notes with required annual interest payments of
    $125,000. The Company paid accrued and unpaid interest through April 15,
    1995 of approximately $460,000 to holders of unexchanged Subordinated Notes
    on the May 17, 1995 closing date. Subsequently, the Company made when due
    its October 15, 1995 interest payment on the unexchanged Subordinated Notes.

    The repurchase of the Subordinated Notes was completed with the


                                      -15-

<PAGE>   16

    proceeds of three new credit facilities made available to the Company. One
    credit facility is a 48 month level amortizing loan of $2,500,000 at an
    interest rate of 15%. This term loan is secured by various unencumbered
    equipment, the Company's Modesto, California real property and accounts
    receivable. The proceeds were used to repurchase Subordinated Notes,
    refinance certain equipment and provide working capital. The second credit
    facility is a two year, $4,000,000 interest only revolving credit facility
    at Bank of America prime lending rate plus five percent (5%). The revolving
    credit facility, secured by the Company's Accounts Receivable had a
    $3,286,000 loan balance as of September 30, 1995. The proceeds were used to
    repurchase Subordinated Notes. The Company had additional borrowing capacity
    of $209,000 under its revolving credit facility, based on its eligible
    Accounts Receivable valuation at September 30, 1995. The third credit
    facility is an 18 month level amortizing loan of $1,500,000 at an interest
    rate of 10.5%. The proceeds were utilized to refinance certain equipment and
    provide additional working capital. The payments on the loan were
    restructured in September, 1995 from $90,431 per month to $40,203 per month
    effective September 17, 1995, and to extend the loan term to September 17,
    1998.

    At the Company's Annual Shareholders meeting held on October 6, 1995, the
    Company's shareholders approved the issuance of an option for an additional
    1,495,000 common shares to Dr. Bates as


                                      -16-

<PAGE>   17

    further consideration for his continued service to the Company and his
    personal guarantee of $6,500,000 of the Company's new credit facilities. As
    a result of this issuance, Dr. Bates holds approximately 40% of the
    Company's fully diluted outstanding shares and the four Selling Noteholders
    received 374,000 additional common shares and warrants for an additional
    98,000 common shares to maintain their respective fully diluted ownership of
    the common shares. Existing shareholders own approximately 28% of the common
    shares on a fully diluted basis.

    The various restructuring transactions described above cured all of the
    Company's outstanding defaults. The Company nevertheless remains highly
    leveraged and has significant cash payment requirements under its equipment
    leases and credit facilities. Scheduled cash equipment lease payments during
    the next 12 months are $9,444,000 and scheduled interest and principal
    payments under the Company's other loan obligations during such period are
    approximately $2,854,000. The Company's cash flow during the first nine
    months of 1995 was not sufficient to make these payments, in addition to the
    Company's normal, recurring operating expenses. Accordingly, the Company
    during the next 12 months must increase its revenues and reduce its cost
    structure in order to meet its obligations as they become due. There can be
    no assurance that the Company will be able to meet its scheduled obligations
    during the next 12 months.


                                      -17-

<PAGE>   18

                           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.

    The Company's Annual Meeting of Shareholders was held on October 6, 1995. At
    the meeting, the following matters were voted upon by the Shareholders with
    the results set forth below:


                                      -18-

<PAGE>   19

<TABLE>
<CAPTION>

1.  Election of
    Directors:
                                                In Favor         Withheld

<S>                                            <C>               <C>                <C>               <C>
      Bates                                    3,504,504           65,020
      Barnes                                   3,502,504           67,020
      Brown                                    3,502,204           67,320
      Ruffle                                   3,504,504           65,020
      White                                    3,504,504           65,020
      Wilson                                   3,504,504           65,020

                                                 Number of Shares Voting                               Broker
                                                  For            Against            Abstaining        Non-Votes
                                                  ---            -------            ----------        ---------

2   Company's 1995 Stock Option Plan           2,649,868          157,118              55,212           707,326
                                               

3.  Grant of a non-qualified option
    to purchase 1,495,000 common
    shares to the Company's Chairman
    and Chief Executive Officer                1,519,781          223,136           1,196,612(1)        629,995
</TABLE>

(1) includes 1,191,000 shares held by Dr. Bates which were not entitled to vote
    on this proposal.


    Item 6.   Exhibits and Reports on Form 8-K.

    None.


                                      -19-

<PAGE>   20

                                   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 14, 1995                   /s/  Ernest A. Bates, M.D.
                                                   -----------------------------
                                                   Ernest A. Bates, M.D.
                                                   Chairman of the Board and
                                                   Chief Executive Officer


Date:          November 14, 1995                   /s/  James A. Gordin
                                                   -----------------------------
                                                   James A. Gordin
                                                   Vice President - Acting Chief
                                                   Financial Officer


                                      -20-


<PAGE>   21

EXHIBIT INDEX 

Exhibit No.                                 Description 


27                         Financial Data Schedule.