American Shared Hospital Services to Develop Proton Beam Radiation Therapy Facility in San Francisco Bay Area

AMERICAN SHARED HOSPITAL SERVICES (AMEX:AMS), a leading provider of turnkey technology solutions for advanced radiosurgical and radiation therapy services, announced today that it is developing a proton beam radiation therapy (PBRT) facility in the San Francisco Bay Area. AMS has entered into a non-binding agreement with VARIAN MEDICAL SYSTEMS (NYSE:VAR) under which Varian will supply proton therapy equipment for the planned three-room treatment facility. AMS currently is evaluating several potential sites, and is forming a consortium of hospital partners for what should be the first PBRT center in Northern California.

"Widely regarded as the optimal radiation treatment for a wide variety of cancers, proton beam radiation therapy is the most significant advance in radiation oncology in a generation. AMS is proud to take the lead in making this advanced therapy available to cancer patients in the Bay Area," said Ernest A. Bates, M.D., Chairman and CEO of American Shared Hospital Services. "Subject to financing and FDA clearance, we and our partners hope to begin treating patients at our PBRT facility in San Francisco by 2011."

AMS has previously announced contracts to place PBRT devices at Tufts Medical Center in Boston, Orlando Regional Healthcare (with professional services to be provided exclusively by M.D. Anderson Cancer Center Orlando), and Long Beach Memorial Medical Center (in partnership with A.M. Nisar Syed & Associates, a leading radiation oncology group). "We are negotiating contracts to place additional PBRT systems in medical centers throughout the country," Dr. Bates said.

About AMS

American Shared Hospital Services provides turnkey technology solutions for advanced radiosurgical and radiation therapy services. AMS is the world leader in providing Gamma Knife radiosurgery equipment, a non-invasive treatment for malignant and benign brain tumors, vascular malformations and trigeminal neuralgia (facial pain). The Company also offers the latest IGRT and IMRT systems, as well as its proprietary Operating Room for the 21st Century® concept. Through its preferred stock investment in Still River Systems, AMS also plans to complement these services with the Monarch 250^TM proton beam radiation therapy (PBRT) system, which has not yet been approved by the FDA.

Safe Harbor Statement

This press release 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 and radiation therapy businesses, the risks of developing The Operating Room for the 21st Century program, and the risks of investing in a development-stage company, Still River Systems, Inc., without a proven product. 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 for the year ended December 31, 2007, the Quarterly Report on Form 10-Q for the quarters ended March 31, 2008, June 30, 2008 and September 30, 2008, and the definitive Proxy Statement for the Annual Meeting of Shareholders held on June 20, 2008.