Good morning everyone and welcome to the 2016 Second 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 turn the call over to Dr. Ernest Bates, Chairman and Chief Executive Officer, Craig Tagawa, Chief Operating and Financial Officer and Alexis Wallace, Controller of American Shared Hospital Services. Please go ahead.

Thank you, Eric and thank you all for joining us for AMS’s 2016 second quarter and first half 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 of 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, 2015, is Form 10-Q for the three months ended March 31, 2016 and the definitive Proxy Statement for the Annual Meeting of Shareholders held on June 21, 2016. The company assumes no obligation to update the information contained in this conference call. I’m pleased to report that our first proton therapy center, the Marjorie and Leonard William center for proton therapy at U.S. Health Cancer Center, Orlando Health in Florida, hit the ground running since it began treating patients in April. The MEVION S250 system we supplied the center perform 442 fractions during the quarter. This was well ahead of our expectations, we generated revenue of 446,000 also more than we expected. There is a great dealer room for growth at this center. As I said on our last conference call, we expect the system to contribute even more significantly to revenue in this year second half as the center moves further up to learning curve and volume increases. The expansion of our proton therapy business remains our number one priority. We are currently in discussions with several other hospitals seeking to partner with AMS to develop proton centers of their own. Volume in our Gamma Knife business was down marginally for this year’s first six months compared to the same period of 2015, excluding volume lost due to the expiration of a customer contract at the end of last year’s first quarter. We attribute the slight decrease to normal variations in the flow of new cancer patients at several of our sites this year compared to last. Nevertheless, gross margins in our Gamma Knife business remain robust, and we continue to work diligently to improve profitability and utilization of the 17 Gamma Knife systems AMS currently has placed at hospitals around the country. Now I will turn the call over to Alexis Wallace to go over the financial results in detail. Alexis?

Thank you, Craig. For the three months ended June 30, 2016 medical services revenue increased 2.8% to $4,518,000 compared to medical services revenue of $4,394,000 for the second quarter of 2015. As Craig mentioned, revenue from the company’s initial proton therapy system in Orlando, which began 20 patients in April with 446,000. Revenue for the company’s Gamma Knife operations $3,162,000 for the second quarter of 2016, compared to $4,281,000 for the second quarter of 2015 reflecting a 6.9% decrease in treatment volume versus prior year. Net income attributable to the company for the second quarter of 2016 was $93,000, or $0.02 per share. This compares to a net loss attributable to the company for the second quarter of 2015 of $1,970,000, or $0.36 per share, which included the loss attributable to an impairment charge of $2,114,000 related to the company’s strategic equity investment in Mevion Medical Systems. Adjusted net income attributable to the company for the second quarter of 2015, after excluding the loss attributable to the impairment charge, was $144,000, or $0.03 per share. Medical services gross margin for the second quarter of 2016 was essentially unchanged at 40.7% of revenue, compared to medical services gross margin of 41% of revenue for the second quarter of 2015. Operating income decreased to 443,000 for the second quarter of 2016 compared to operating income of 470,000 for the same period a year earlier, primarily the result of higher interest and depreciation associated with the proton system in Florida. Pre-tax income, net of income attributable to non-controlling interest was 186,000 for the second quarter of 2016. This compares to adjusted pre-tax income, net of income attributable to non-controlling interest and the loss attributable to the Mevion impairment charge of 250,000 for the second quarter of 2015. Selling and administrative expenses for the second quarter of 2016 decreased slightly to 963,000, compared to selling and administrative expenses of 979,000 for the second quarter of 2015. Adjusted EBITDA, a non-GAAP financial measure, was 2,328,000 for the second quarter of 2016, compared to 2,246,000 for the second quarter of 2015. Please refer to the financial statements included with this press release for a reconciliation of GAAP to this non-GAAP financial measure. For the six months ended June 30, 2016, medical services revenue increased 2.9% to 8,756,000 compared to medical services revenue of 8,511,000 for the first six months of 2015. Gamma Knife treatment volume decreased 3.4% for the first six months of 2016 compared to the same period of 2015. Excluding treatments at a customer site whose contract expired at the end of the first quarter of 2015, Gamma Knife volume was down 0.8% for this year's first half compared to the first half of 2015. Net income attributable to the Company for the first six months of 2016 was 144,000, or $0.03 per share. This compares to a net loss attributable to the Company for the first six months of 2015 of 1,842,000, or $0.34 per share. Excluding the loss on early extinguishment of debt of 108,000 during the first half of 2016, net of estimated taxes, adjusted net income attributable to the Company for the first half of 2016 was 208,000, or $0.04 per share. This compares to adjusted net income attributable to the Company for the first half of 2015, excluding the loss attributable to the impairment charge, of 272,000, or $0.05 per share. Adjusted EBITDA was 4,457,000 for the first six months of 2016, compared to 4,365,000 for the first six months of 2015. On the balance sheet at June 30, 2016, cash, cash equivalents and restricted cash was 1,814,000 compared to 2,259,000 at December 31, 2015. Shareholders' equity at June 30, 2016 was 25,690,000, or $4.79 per outstanding share. This compares to shareholders' equity at December 31, 2015 of 25,180,000, or $4.69 per outstanding share. Craig.

Thank you Alexis. Erik, we are ready for the first question.

Thank you. We will now begin the question-and-answer session [Operator Instruction] And our first question comes from Robert. Robert your line is now open.

Congratulation on pushing the company ahead. [indiscernible] it looks like we have our good future ahead of us. And the only question I have, I know we have a interest in Mevion, it is a private company so we never get reports on it. so I would like to know and actually you should know or somebody there doctor. How is Mevion doing on its own? I know you can’t give me dollar figures, but can you give me a general outlook on the company itself on Mevion?

Yes, this is Dr. Bates. I can tell you that Mevion is doing well. They have roughly six machines out there now that are operating and each of those machines are doing better than 15 patients a day, which is pretty good.

And our next question comes from [Anthony Markezi] (Ph). Anthony, your line is now open.

A couple of questions relating to the proton being - the number of fractions that were done, could you just give us a sense of what percentage of capacity are there. In other words, how much more it can maybe doing and what is as far as you can tell or has been told to you that you can tell us publicly what is the planned rate of ramp that's my first question.

Well they are continuing to ramp up and I think you will see significant growth in the third quarter, but it won't yet be at capacity. So I think they are making the progress that we expect them to make. I think if you look at it's not capacity, but what you can do in a fairly long day would be in third quarters about 2,200 fractions or there are about.

Per day.

Per - in a quarter.

I'm sorry in a quarter. Okay, all right fine. And you guys have been talking for the last two or three quarters about the potential opportunity to fund more proton beams. Are you any closer now that you will be - just give us a sense of - obviously it looks as though from my standpoint that each of these centers has the potential to add $0.30 to $0.35 of share in earnings. And I'm not asking a comment on that's just my own estimate. But that being the case obviously the more centers you can finance the better off you would be. Can you give us a sense of how close you are? Is this something that still - are you our first base, third base just if you can give us any sense of where you are that would be helpful?

Well I think what rapidly people that want to finance this equipment, they are waiting to see what was going to happen to that in Orlando. And they have seen the results and they are pleased so we are in discussion with at least four institutions that have some interest in financing these units going forward.

Is it the financing or is it the number, or is it the hospitals that want it and that has to do their own evaluation.

I would say some of the transactions we are working on are a little more complex than others, so financings is a little more difficult, but I think these are large projects for hospitals both in terms of undertaking a new clinical service as well as the finances. So I think these take a lot longer to do than a Gamma Knife project. But I think we are making very good progress. And I just want to clarify one thing, I did misspeak in terms of the number of fractions, it’s about 1500 in a quarter would be in a fairly good run rate.

Do you guys feel as though by the end of - I’m sorry go ahead.

Go ahead.

No, no. Go ahead. You finish your thoughts.

No. I was just going to say that we are in discussions with two hospitals in the Bay area that’s in California. Two in Southern California, two in the Midwest and one on the East Coast. These are not hospitals that we have to convince of the clinical advantage - theoretical advantage. They believe in proton.

Okay. Now the question is financing them now.

That’s correct.

Okay. Thank you very much.

[Operator Instructions]. And our next question comes from [Lenny Dunn] (Ph). Lenny, your line is now open.

Very encouraging quarter, this is kind of a transitional one and from what you are saying, the next quarter should be substantially better, but you are not starting from zero with the protons. And the force should be even stronger even thought, it does has a holiday season in it. Is that accurate assessment?

Yes. We expect the ramp up to continue, the holidays probably will impact us a little bit in the fourth quarter. But are very encouraged about the rate of the ramp up and the type of procedures that they are going. So I think everything going very well.

Okay. And then on the Gamma Knife which is not a bad business. Do you expect some progress, because you indicated in your release that it just the way these things happen and sometime you have less procedures than you do expect. So should we expect a little bit more in the current quarter?

Well, it’s hard to predict. I think one of the things that did affect us, about a third of our facilities participated in the every two year symposium that [indiscernible] puts on. And that occurred towards the end of May and that took about a week out for about a third of our facility. So that probably impacted us to some extent. But we still believe the Gamma Knife business is a very good business and we will continue to try and add to it.

Okay. Do you have anything in works, I’m not asking you to be specific, but should we anticipate being able to replace one or two Gamma Knife yet this year?

Yes. That’s our goal to do something before at the end of the year. And hopefully, we will have something, went out shortly.

And my basic arithmetic tells me that now that you have gotten the procedures in Orlando up to the even the level that which certainly don’t exceed that you now can be profitable because the first so many have to cover the interest once you get pass that a lot more close to the bottom line. That’s also a accurate?

That’s accurate.

So percentage of profit will go up substantially.

Yes correct.

It sounds good, I'm really looking forward to the future. We waited a long time for this.

Thank you for your patients.

And we have a follow up question from [Anthony Markezi] (Ph). Anthony, your line is now open.

Well you guys are trading in a half of book and if you look at the EBITDA for the quarter its 2.3 million, if you annualize that you are trading at less than two times cash flow, which seems to be fairly undervalued. Any plans for expanding IR activities now that we have all been waiting for the Gamma Knife, it looks like it's [indiscernible] Gamma Knife, proton beam, it looks like it's very successful and getting even more successful, any plans to spread the [indiscernible].

Yes, I think we are doing one more road show in September and then I think another one in the fourth quarter of this year.

We will be doing one in your city New York, I think in the fourth.

That’s great, because as I said before, I’m tuning my own horn, because I own the stock. But it's just [indiscernible] priced and I’m not sure what it’s going to take, but it just seems as though you are in the right space and like I said the company is substantially undervalue by any objective measures. So I think the more people find out about it the better off we would be.

Thank you, thank you for your support.

And we have a question from [Richard Greulich] (Ph). Richard your line is now open.

Thank you, I apologies for my hoarse inside a sore throat and I’m trying speak as loudly as I can. The interest expense for the proton business in the quarter was about 150,000, which would be the increment from Q1 to Q2?

I don’t think we break them out by the technologies. We look at it as all one segment. So we don’t break that information out.

Okay, but the increment from Q1 to Q2 was about 150,000 and you did mention that part of the reason for the operating income was increased in interest expense associate with the proton business.

Correct.

Let me ask another question regarding that. Do you know how much and how much of the quarter was the interest expense associated with the proton business included in the P&L?

We don’t break that out. It's all one segment, so we do not break it out.

When did the operation start - starting operation during the quarter?

April.

Is that in the first or later part of April or just…

In the beginning, the announcement we made.

Now, was there also addition in depreciation associated with that business included in the P&L in the second quarter?

Yes.

Okay. I was surprise the gross margin held up as well as it did quarter-to-quarter, I would assume particularly with the Gamma Knife business being down and I would assume that the gross margin for the proton business given it was in the start up phase would have been less than the average. Is there a particular reason for the good gross margin?

No I think the we have been trying to control or Gamma's expenses going forward and I think some of the procedures and policies that we put in places have reduced the cost structure to some extent in the Gamma Knife business. And also you need to look at that each quarter as the debt portfolio matures, the interest expense component actually goes down every quarter. so clearly it is offset to some extent by these issue in the proton projects.

If I remember right, you were going to be installing one GK Model 4C in Peru this year, did that occur?

It has not occurred yet.

Is that still on track?

Yes, we are looking to install it at the later part of this year.

Okay. I'm trying to understand when the proton business is operating, does it operate during the weekend days as well or just Monday to Friday?

At this time Monday to Friday.

It that anticipated that a Saturday would be included down the road or is that a norm for the business.

It maybe, but it's not anticipated at this point. It's anticipated to go Monday to Friday at this point.

Okay, I think the original goal from the hospitals point of view down in Orlando, at top end doing close to about 30 a day, is that still sort of what they are talking about.

I think as I recall some of their - what they said is 26 or somewhere in there, but clearly the system can do what you are suggesting.

The rat of system that is doing that now or maybe at.

Okay, so the average of 2015 for six existing systems kind of way out the early ones plus the more mature ones I guess.

Yes.

Last question so the non controlled interest income of 260,000 in the quarter would imply that the GK business Gamma Knife business was profitable to a tune of about a [1.3 million] (Ph) just as a percentage of it. So that would imply that there was about $100,000 operating loss in the non- Gamma Knife business. Now does that include corporate overhead that is associated with the non-controlling interest?

Yes, the non-controlling interest is made up as you correctly stated the 19% ownership in our partner, but we also have a partnerships with two other facility that impact that number. But the Gamma Knife business is very profitable, but the Gamma Knife business the way it's run does not include all of the corporate overhead that’s directly related to American Shared. It just has those expenses that are needed to run the Gamma Knife business.

When I kind of do that rough calculation, I understand it from the outside looking in. So it could be quite rough. But I came to the conclusion that the non-Gamma Knife in the first quarter lost over $1 million and now in the second quarter lost maybe just 800,000 to 900,000 let’s say using the same methodology. So I was just trying to figure out what would be reason for that improvement?

I don’t know if that's the right calculation, I haven’t looked at it to be honest with you. so I would rather not comment of the cuff and give you a wrong answer.

But it seemed like there was some improvement.

Correct.

I guess that surprise me, because again you are including the proton business, which I’m assuming in the beginning would have the detracted from that improvement but maybe I’m wrong.

No, the proton project tell its [indiscernible] in the second quarter.

Okay. Sounds good. All right, thank you very much.

We have no additional questions at this time. Mr. Tagawa, would you like to make your closing remarks?

Dr. Bates, would you like to make any closing remarks?

The only thing I want to say, we are very excited about what has happened in Orlando. We see a bright future for protons. I do not see a cure for a cancer that doesn’t include protons, so we are very excited about it.

And just in closing I would like to thank you everyone for joining us this afternoon and we look forward to speaking with you in August on our third quarter 2016 results conference call.

Thank you, ladies and gentlemen. 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 43147466 followed by the pound sign or the # key. The webcast of this call will also be available at www.ashs.com and streetevents.com. This concludes today’s teleconference. Thank you for participating. You may now disconnect.