Ernest A. Bates - Chairman and CEO Craig K. Tagawa – COO & CFO Alexis Wallace – Assistant Controller Brad Roberts – Information Technology Manager Ernest R. Bates – VP, Sales and Business Development

Tony Polluck – Maxim Group Lenny Dunn – Freedom Investors Tony Kamin – Eastwood Partners

Good afternoon, everyone. And welcome to the 2013 Third Quarter Financial Results Conference Call for American Shared Hospital Services. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) I would now like to turn the call over to Dr. Ernest Bates, Chairman and Chief Executive Officer; Craig Tagawa, Chief Operating and Financial Officer; Ernest R. Bates, Vice President, Sales and Business Development and Alexis Wallace and Brad Roberts; Assistant Controllers of American Shared Hospital Services. Mr. Tagawa, you may begin. Craig K. Tagawa: Thank you, Yolanda. And thank you all for joining us for AMS' third quarter financial results conference call and webcast. Please note that various remarks that we may make on this conference call about future expectations, plans and prospects for the company constitute forward-looking statements for the purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may vary materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K for the year ended December 31, 2012, a quarterly reports on Form 10-Q for the quarter ended March 31, 2013 and June 30, 2013, and the definitive proxy statement for the Annual Meeting of Shareholders held on June 11, 2013. The company assumes no obligation to update the information contained in this conference call. We are pleased with our third quarter performance. Revenue increased despite the reduction in Medicare reimbursement for Gamma Knife services that went into effect on April 1, as mandated by the American Taxpayer Relief Act of 2012. This is a noteworthy accomplishment for AMS that was driven by higher patient volume at a number of our established sites, as well as the addition of two Gamma Knife Perfexion units to our portfolio during the past year. A favorable mix of procedures by location also had a positive impact on our results. Also noteworthy is reduction in selling and administrative expenses for this year’s third quarter compared to last year. The program we announced in late April to reduce future cash outlays by approximately $1 million annually is taking affect. We expect to realize additional savings once all steps are fully implemented. As I said on our last call we believe we’ve positioned AMS to deal effectively with reduced Medicare reimbursement for the balance of 2013. We expect reimbursement for Gamma Knife services to increase beginning in January what we do not know yet is how much reimbursement will increase. The Centers for Medicare and Medicaid Services recently posted a revision of the previously proposed rule for Medicare's hospital outpatient prospective payment system for calendar year 2014. Within this proposed rule, CMS proposes updates for the delivery codes used for stereotactic radiosurgery or SRS, including Gamma Knife services. In this revision, CMS proposes to reimburse hospitals for a complete course of treatment comprised of a single session of SRS at $5,615 in 2014 that would a 70% increase over the current rate. This payment level would apply to single session treatment for all forms of Gamma Knife, robotic linear accelerator SRS or non-robotic LINAC SRS. By comparison, effective April 1, 2013, the Gamma Knife was reimbursed by CMS at $3,300 and during the period January 1, 2013 to March 31, 2013 at $7,910. This CMS proposed reimbursement rate was subject to comments from interested parties, and could change. Final CMS reimbursement rates to be issued soon. In AMS’s proton therapy business, construction of MD Anderson Orlando's dedicated proton center is moving forward. AMS will supply MEVION S250 Proton Therapy System for this $25 million facility. FDA approval of the MEVION S250 was received last year. Delivery of the MEVION synchrocyclotron to MD Anderson Orlando is still scheduled for the second quarter of 2014, and the facility is expected to begin treating patients in the first half of 2015. We see the MD Anderson Cancer Center Orlando as the model for additional proton centers, we are developing. On its part MEVION is making steady progress in the commercial development of the MEVION S250. In September MEVION announced the transition from acceptance testing to the clinical commissioning phase of its MEVION S250 installed at the S. Lee Kling Center for Proton Therapy at the Siteman Cancer Center at Barnes-Jewish Hospital and Washington University School of Medicine in St. Louis, the initial site for the system. This is the final clinical preparation for the initiation of patient treatments which we expect to begin soon. Now, I’m going to turn the call over to Brad Roberts to go over the results in detail. Brad?

Thanks Craig. For the three months ended September 30, 2013 medical services revenue increased 3.8% to $4,396,000 this compares to medical services revenue for the third quarter of 2012 of $4,236,000. The net loss for the third quarter of 2013 of $134,000, or $0.03 per diluted share included a pretax loss from foreign currency transactions of $306,000 due to the weakening of the Turkish Lira against the U.S. Dollar. For this foreign currency transaction loss pre-tax income for the third quarter of 2013 was $40,000, net of losses attributable to non-controlling interests. In comparison for the third quarter of 2012, pretax income net of losses attributable to non-controlling interest was $37,000 and net income was $9,000 or zero cents per diluted share. Operating income for the third quarter of 2013 decreased to $162,000, compared to operating income for the third quarter of 2012 of $210,000. The number of procedures performed on Gamma Knife Perfexion systems supplied by AMS increased 18% for the third quarter and 23% for the first nine months of 2013 compared to the same periods of 2012. The total number of procedures performed in AMS' Gamma Knife business, including Gamma Knife and Gamma Knife Perfexion procedures, increased 21% for the third quarter and 23% for the first nine months of 2013 compared to the same periods of 2012. Medical services gross margin for the third quarter of 2013 was 36%, compared to medical services gross margin of 40% for the third quarter of 2012. This decrease primarily reflects the lower reimbursement rates on procedure performed under Medicare during the quarter. Selling and administrative expenses for the third quarter of 2013 decreased 7.6% to $887,000 compared to $960,000 for the third quarter of 2012. This decrease reflect the cost cut implemented in rent, travel and reduced payroll expense. For the nine months ended September 30, 2013, medical services revenue increased 5.6% to $13,647,000 compared to medical services revenue of $12,923,000 for the first nine months of 2012. The net loss for the first nine months of 2013 of $230,000, or $0.05 per diluted share included a pre-tax loss from foreign currency transactions of $840,000. The foreign currency transaction loss pre-tax income for the first nine months of 2013 was $246,000, net of losses attributable to non-controlling interests. For the first nine months of 2012 pre-tax income net of losses attributable to non-controlling interests was $85,000 and net income was $33,000 or $0.01 per diluted share. Cash flow, as measured by earnings before interest, taxes, depreciation and amortization or EBITDA was $2,025,000 for the third quarter and $5,993,000 for the first nine months of 2013, compared to $2,275,000 for the third quarter and $6,076,000 for the first nine months of 2012. On the balance sheet, at September 30, 2013, cash, cash equivalents and certificates of deposit were $10,955,000 compared to $10,564,000 at December 31, 2012. Shareholders' equity at September 30, 2013 was $24,444,000, or $5.03 per outstanding share. This compares to shareholders' equity at December 31, 2012 of $24,830,000 or $5.39 per share. Craig? Craig K. Tagawa: Thank you, Brad. Yolanda we are ready for the first question.

(Operator Instructions) We have a question from Lenny Dunn, please state your question. He has been removed. We now have a question from Tony Polluck, please state your question. Tony Polluck – Maxim Group: Hi, I was wondering if you could give us an idea, you say that the first patient treatment should happen later this year, what do they expect ramp up to eventually and how quickly are they going to be able to ramp up, so we can have an idea what Orlando, how quickly they will get up to? Craig K. Tagawa: To be honest with you I do not know because what Barnes’ plans are in terms of ramping up or how many patients they are going to, but we’re not really privy that, so unfortunately I can't answer that for you other than knowing that they intend from what we understand to do a patient later this year before year end. Tony Polluck – Maxim Group: Are there are centers that are being built right now? Craig K. Tagawa: Yes, I think there are currently an additional five systems that are in various stages of construction.

In the quarterly newsletter Dr. Bates moving on they came out last week they mentioned insulations at Robert Wood Johnson and New Brunswick, New Jersey, Oklahoma University, Oklahoma City, West Coast Oncology Jacksonville Florida. MD Anderson Center Orlando, our unit in University Hospitals Health System, Cleveland. Tony Polluck – Maxim Group: Okay.

Those are the ones that are being installed at this point and they will be treating their first patient. We have been told as recently as last week the first patient will be treated on December 9. Tony Polluck – Maxim Group: Okay. Thank you. Craig K. Tagawa: You are welcome.

We have a question from [Tony Marcozzi] please take your question.

Oh hi. Good afternoon guys. Should we anticipate in the fourth quarter -- when we -- I guess will the fourth quarter have more cuts relative to G&A you mentioned that and you are looking to save about a million dollars a year, can you just give us some color as to when you expect those to be fully implemented? Craig K. Tagawa: I think the cuts that we mentioned are a lot of them are cash flow cuts as opposed to expenses of what we’ve been doing in terms of restructuring some of our debt obligations and what not. We did implement expense cuts as well as we mentioned in terms of salary reductions as well as subletting a part of the building that we recognized -- we are recognizing that over the term of a lease, but the total amount of cuts that were mentioned in the release in April included not just P&L cuts, but also cash flow cuts which we thought were important for the company going forward.

I see. Okay. Thank you very much. Craig K. Tagawa: You are welcome.

Lenny Dunn your line is now open, please state your question. Lenny Dunn – Freedom Investors: Sure, I have a couple of questions. I hope you can hear me this time because I started last time and the Turkish Lira has been -- is heard as the last few quarter but of late it’s actually been going back up again though obviously it’s got a long way to go. Do you have some feel for how the current quarter is, are you going to have still have some currency translation losses or do you think that maybe if it stays where it is that will be okay? Craig K. Tagawa: Yes, it’s hard to tell until we get to the end of December and which obviously don’t have the crystal ball as to where the currency is going but the Lira has of late weakened again, so we just have to see each measurement date where it ends up, so unfortunately I can't predict for you where we are going to be so if we are going to have more currency losses where it gains in the fourth quarter. Lenny Dunn – Freedom Investors: I note that the number of procedures has gone up substantially which is very good and we would expect this started to see some decent earnings actually at these levels, are they continuing to rise or this is level off now or can you give some idea next quarter that one starting in January should the pickup for more Gamma Knife Perfexion procedures? Craig K. Tagawa: We continue to work on our organic growth, it’s important, so it should continue to promote what the profession does best which metastatic brain tumor which are as we previously mentioned the greatest indication for the types of diseases that the Gamma Knife can treat another way of surgery devices can treat. We have also had increases as Brad has mentioned from the new units that have gone in the last – over the last year but I think we are continuing to strive to increase volumes that’s our goal from organic growth. So we hope to continue that trend.

As generally agreed now as the Gamma Knife particularly the Perfexion is considered the treatment for metastatic disease and that’s a very common disease. We are seeing that usage go up radically and I think that will continue to go up. Lenny Dunn – Freedom Investors: That’s good. Now the Barnes-Jewish Hospital which I understand is not one of our units but obviously it's very important to demonstrate that this is a viable treatment. Now initially we were supposed to be in the quarter. We just finished and then they put it off into what I thought would be mid November but apparently now you are saying that your expectation is they will do it December 9th and again this is completely out of your control. But do you think that it is reasonably firm or you don’t know? Craig K. Tagawa: Well, probably as firm as it’s been in the past. But I think the light is at the – they’re seeing the light at the end of the tunnel, I am reasonably certain that they will treat that first we put at the end of the year. Lenny Dunn – Freedom Investors: Yes, obviously the value of your MEVION stock could be a fairly large number assuming that this all works itself out. So I am sure a lot of people not just myself are anxious to see them at least get their first patient behind them. Okay and with the increased number of procedures with extremely likely though obviously until CMS actually gives the number you can't project but with extremely likely it will – you are going to get a much better reimbursement. It really sounds like we could have some real earnings of starting in January. Am I out of line in expecting that? Craig K. Tagawa: It’s a function of peer mix that in some cases for our retail customers who really haven’t been impacted to any great extend obviously in our fee per use customers. So again that’s going to depend on the peer mix and how they all go up. I think it's going to be favorable it's nothing else even if they go up to the $5,600 rate from the current $3,300. Lenny Dunn – Freedom Investors: Okay. They may do better but you never know until they in their wisdom give you the ruling. Now under normal circumstances, you have the ruling by the end of this month but are you getting indications that they may stretch out the ruling until December? Craig K. Tagawa: The ruling usually comes out in early November but with the government shutdown that delayed the announcement. I think we are hopeful that it's going to come out by the end of November but that again is out of our control as to when they do the final announcement. Lenny Dunn – Freedom Investors: Okay. I thought you might have some insight into it. But obviously it's in their ballpark so to speak. Okay. Well, thanks, it looks promising and again looking forward to getting their first patient behind us and also getting some concrete numbers from CMS. Okay. Well that’s all I have. But thank you very much. Craig K. Tagawa: Thank you Lenny.

Tony Kamin your line is now open. Please state your question. Tony Kamin – Eastwood Partners: Hi guys! Craig K. Tagawa: Hello! Tony Kamin – Eastwood Partners: It's been since a long many years that we have been waiting for the MEVION machine to actually for – we are waiting for approval and particularly these last several months, when we have been waiting just to get that patient treated I realize that for a lot of people that they may have kind of lost the thread why this is so important. So I wonder Dr. Bates if you could comment on your sense of what the just how many institutions are perhaps are watching and what the pent up demand might be here for MEVION proton solution once they start treating? Ernest A. Bates: So we are seeing where our potential services increase weekly. We are probably in negotiations with over 10 hospitals or more about putting in MEVION unit. I think it's clear at this point that those large rooms, three and four systems do not make economic sense. If you look at what has happened in the last two or three years, no machines has really done more than 900 patients a year. And so many of the large room machines if they were single rooms, it would be quite profitable. They are not. In the direction that this seems to be it’s going is the MEVION single room system. We there encouraged everyday from some hospitals that were taking up putting in larger rooms are no longer considering that. So, the interest is large. We’ve also finding that interest in institutions to finance these once the MEVION machine is treating patient. So I’m encouraged by what’s happening and I think clearly of the proton business is going to explode in the next six months. A small room system. Tony Kamin – Eastwood Partners: So, would it realize caveat with all the delays we had so far, but it’s your feeling that in 2014 will be the real inflection where the sort of vast investment of years and time and money that AMS was put into proton that 2014 will be the year when it really starts to appreciate the other side of the benefits through all that. Ernest A. Bates: Yes, we spent a day with the MEVION sales staff recently. They have a backlog of over 17 machines and there seem even new orders or potential orders coming every week and they expect that backlog to increase dramatically in the next few months. Tony Kamin – Eastwood Partners: Great. Thank you.

Craig, there are no further questions at this time, would you like to make your closing remarks. Craig K. Tagawa: Well, I’d just like to thank everybody for joining us this afternoon and we look forward to speaking with you on our fourth quarter results conference call in the next several months.

This call will be available in digital replay immediately following today's conference. To access the system, dial 888-843-7419 and enter the passcode 36067135, followed by the pound sign. The webcast of this call will be available at www.ashs.com and www.earnings.com. This concludes today's teleconference. Thank you for participating. You may now disconnect.