American Shared Hospital Services – ‘POS AM’ on 4/4/97

As of:  Friday, 4/4/97   ·   Accession #:  950149-97-723   ·   File #:  33-63721

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Post-Effective Amendment
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: POS AM      Post-Effective Amendment No. 1                        21    123K 
 2: EX-23.1     Consent of Ernst & Young LLP                           1      5K 

POS AM   —   Post-Effective Amendment No. 1
Document Table of Contents

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 4, 1997 
                                                       REGISTRATION NO. 33-63721
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

POST-EFFECTIVE AMENDMENT NO. 1 ON 

FORM S-3
TO REGISTRATION STATEMENT ON

FORM S-1
UNDER 
THE SECURITIES ACT OF 1933
------------------------

AMERICAN SHARED HOSPITAL SERVICES 
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                                                                [Download Table]
                                                                            
            CALIFORNIA                                      94-2918118      
   (STATE OR OTHER JURISDICTION                          (I.R.S. EMPLOYER   
OF INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NUMBER)

FOUR EMBARCADERO CENTER, SUITE 3620 
SAN FRANCISCO, CALIFORNIA 94111-4155
(415) 788-5300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF 
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) 
------------------------

ERNEST A. BATES, M.D. 
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER 
AMERICAN SHARED HOSPITAL SERVICES 
FOUR EMBARCADERO CENTER, SUITE 3620 
SAN FRANCISCO, CALIFORNIA 94111-4155
(415) 788-5300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE) 
------------------------

WITH A COPY TO: 
DANIEL G. KELLY, JR., ESQ.
SIDLEY & AUSTIN 
875 THIRD AVENUE
NEW YORK, NEW YORK 10022

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.

If the only securities being registered on this form are being offered  
pursuant to dividend or interest reinvestment plans, please check the following 
box. [ ]                                                                        

   If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of  
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]                                

If this form is filed to register additional securities for an offering 
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier        
effective registration statement for the same offering. [ ]                     

   If this form is a post-effective amendment filed pursuant to Section 462(c)
under the Securities Act, check the following box and list the Securities Act   
registration statement number of the earlier effective registration statement   
for the same offering. [ ]                                                      

   If delivery of this prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]                                             
------------------------

CALCULATION OF REGISTRATION FEE 

                                                        [Enlarge/Download Table]
                                                                                                                  
==================================================================================================================
                                                                            PROPOSED MAXIMUM                      
       TITLE OF EACH CLASS                              PROPOSED MAXIMUM        AGGREGATE           AMOUNT OF     
       OF SECURITIES TO BE            AMOUNT TO BE       OFFERING PRICE         OFFERING          REGISTRATION    
            REGISTERED                 REGISTERED        PER UNIT(1)(2)        PRICE(1)(2)          FEE(2)(3)     
------------------------------------------------------------------------------------------------------------------
Common Shares No Par Value........  1,290,853 shares          $1.56           $2,013,750.68          $694.39      
------------------------------------------------------------------------------------------------------------------
Warrants to purchase Common                                                                                       
  Shares..........................  441,147 Warrants           --                  --                  --         
------------------------------------------------------------------------------------------------------------------
Common Shares Underlying                                                                                          
  Warrants........................   441,147 shares            --                  --                $237.31      
------------------------------------------------------------------------------------------------------------------
Total Registration Fee............                                               $931.70                          
==================================================================================================================

(1) Estimated solely for the purpose of calculating the registration fee        
    pursuant to Rule 457(c) under the Securities Act of 1933, as amended, on the
 basis of average high and low prices of the Common Shares on the American
    Stock Exchange on October 20, 1995. The maximum offering price of the Common
Shares is deemed to be the aggregate of their market value.             

(2) Pursuant to Rule 457(g) under the Securities Act of 1933, as amended, no    
    separate registration fee is being paid in respect of the Warrants because a
 full registration fee is being paid for the Common Shares underlying such
 Warrants. All of securities registered hereunder are carried forward from
the Registration Statement on Form S-1 (File No. 33-63721) to which this
Post-Effective Amendment No. 1 and the enclosed Prospectus relate.      

(3) The full amount of the registration fee was paid on the date of the original
filing of the Registration Statement (October 26, 1995). Accordingly, no
  additional fee is being paid at this time. The shares registered hereunder
 are carried forward from the Registration Statement on Form S-1 (File No.
33-63721). No new shares are being registered hereby.                   

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION       
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF  
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME    
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), 
MAY DETERMINE.                                                                  
================================================================================

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AMERICAN SHARED HOSPITAL SERVICES 

------------------------

CROSS REFERENCE SHEET 

PURSUANT TO ITEM 501(B) OF REGULATION S-K 

                                                        [Enlarge/Download Table]

             FORM S-3 ITEM NUMBER AND CAPTION            LOCATION IN REGISTRATION STATEMENT OR PROSPECTUS 
    ---------------------------------------------------  -------------------------------------------------
                                                                                                          
 1. Forepart of Registration Statement and Outside       Facing Page; Cross-Reference Sheet; Outside Front
    Front Cover Page of Prospectus.....................  Cover Page of Prospectus                         
 2. Inside Front and Outside Back Cover Pages of         Inside Front Cover Page and Outside Back Cover   
    Prospectus.........................................  Page of Prospectus; Available Information        
 3. Summary Information, Risk Factors and Ratio of                                                        
    Earnings to Fixed Charges..........................  Risk Factors                                     
 4. Use of Proceeds....................................  Use of Proceeds                                  
 5. Determination of Offering Price....................  Determination of Offering Price                  
 6. Dilution...........................................  *                                                
 7. Selling Security Holders...........................  Selling Securityholders                          
 8. Plan of Distribution...............................  Plan of Distribution                             
 9. Description of Securities to be Registered.........  Description of Securities                        
10. Interests of Named Experts and Counsel.............  Legal Matters; Experts                           
11. Material Changes...................................  The Company; Financial Restructuring;            
                                                         Capitalization                                   
12. Incorporation of Certain Information by                                                               
    Reference..........................................  Available Information                            
13. Disclosure of Commission Position on                                                                  
    Indemnification for Securities Act Liabilities.....  Indemnification of Directors and Officers        

---------------                                                                 

* Not applicable.                                                               

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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A 
     REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
  SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
    MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
     BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
  THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
    SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
   UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.                                                    

PROSPECTUS                                                                      

1,632,300 COMMON SHARES 
(INCLUDING 314,000 COMMON SHARES ISSUABLE 
UPON THE EXERCISE OF WARRANTS)
AND 
WARRANTS TO PURCHASE 314,000 COMMON SHARES

AMERICAN SHARED HOSPITAL SERVICES 

The common shares, no par value ("Common Shares"), of American Shared 
Hospital Services, a California corporation ("ASHS" and together with its       
subsidiaries, the "Company"), warrants to purchase Common Shares ("Warrants")   
and the Common Shares issuable upon exercise of such Warrants (collectively, the
"Securities") covered by this Prospectus may be sold from time to time by the   
securityholders specified in this Prospectus or their successors in interest    
(the "Selling Securityholders"). See "Selling Securityholders."                 

  On May 17, 1995, the Company repurchased $17,694,000 principal amount of
its senior subordinated notes from certain of the Selling Securityholders for   
consideration comprised of cash, 819,000 Common Shares and 216,000 Warrants.    
Pursuant to the terms of the Note Purchase Agreement dated as of May 12, 1995,  
upon the occurrence of certain subsequent events the Company issued to such     
Selling Securityholders an additional 374,000 Common Shares and 98,000 Warrants.
The repurchase of the senior subordinated notes was part of an overall financial
restructuring in which the Company also restructured most of its medical        
equipment leases and issued its primary equipment lessor 225,000 Warrants. The  
Common Shares and Warrants issued in these transactions, and the Common Shares  
underlying such Warrants, are the Securities to which this Prospectus relates.  
Such Securities were registered by the Company under the Securities Act of 1933,
as amended (the "Act"), pursuant to the terms of a Registration Rights Agreement
dated as of May 17, 1995 among the Company and the Selling Securityholders (the 
"Registration Rights Agreement").                                               

  The Common Shares are listed on the American Stock Exchange ("the AMEX")
under the trading symbol "AMS." The Common Shares are also listed on the Pacific
Exchange (the "PCX"). Each such exchange has commenced a review procedure to    
determine whether the Common Shares will remain listed. See "Risk               
Factors -- Possible Delisting of Common Shares and Loss of Active Trading       
Market." On April 1, 1997, the last reported sale price of the Common Shares on 
the AMEX was $1.375 per share.                                                  

The Company will not receive any of the proceeds from the sale of the 
Securities being offered by the Selling Securityholders. The Selling            
Securityholders may, from time to time, sell the Common Shares at market prices 
prevailing on the AMEX or the PCX, respectively, at the time of sale or sell the
Common Shares and Warrants under certain other terms. See "Plan of              
Distribution."                                                                  

------------------------
THE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. SEE "RISK 
FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED IN
CONNECTION WITH AN INVESTMENT IN THE SECURITIES OFFERED HEREBY. 

------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE 
CONTRARY IS A CRIMINAL OFFENSE. 

THE DATE OF THE PROSPECTUS IS APRIL   , 1997

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AVAILABLE INFORMATION 

    The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance        
therewith files periodic reports, proxy statements and other information with   
the Securities and Exchange Commission (the "Commission"). Such reports, proxy  
statements and other information filed by the Company with the Commission can be
inspected and copied at the public reference facilities maintained by the       
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,   
D.C. 20549, and at the Commission's Regional Offices at 7 World Trade Center,   
New York, New York 10007 and Northwestern Atrium Center, 500 Madison Street,    
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be        
obtained upon written request addressed to the Commission, Public Reference     
Section, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.   
20549, and its public reference facilities in New York, New York and Chicago,   
Illinois, at prescribed rates. The Commission maintains a site on the World Wide
Web at http://www.sec.gov that contains reports, proxy and information          
statements and other information regarding registrants that file electronically 
with the Commission. The Company's Common Shares are listed on the American     
Stock Exchange and the Pacific Exchange, and such reports, proxy statements, and
other information concerning the Company can also be inspected at the offices of
the American Stock Exchange, 86 Trinity Place, New York, New York 10006 and at  
the offices of the Pacific Exchange, 301 Pine Street, San Francisco, California 
94104. Statements contained in this Prospectus as to the contents of any        
agreement or other document are not necessarily complete, and in each instance  
reference is made to the copy of such agreement or document filed as an exhibit 
to the Registration Statement, each such statement being qualified in all       
respects by such reference.                                                     

    Additional information regarding the Company and the Common Shares offered
hereby is contained in the Registration Statement on Form S-1, as amended, and  
the exhibits (the "Registration Statement") filed with the Commission under the 
Act. This Prospectus does not contain all the information set forth in the      
Registration Statement, certain parts of which are omitted in accordance with   
the rules and regulations of the Commission. For further information, reference 
is made to the Registration Statement which may be inspected without charge at, 
and copies thereof may be obtained at prescribed rates from, the Commission at  
Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.     

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

   The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated herein by reference:                       

          (1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 (the "1996 10-K"); and                              

       (2) The description of the Company's Common Shares contained in the
 Company's Registration Statement on Form 8-A (Registration No. 1-8789),
which was declared effective by the Commission on October 23, 1984.   

    All documents filed by the Company pursuant to Sections 13(a), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus shall be deemed to
be incorporated by reference in this Prospectus and to be part hereof from the  
date of filing of such documents.                                               

   Any statement contained herein or in a document incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein 
or in any subsequently filed document which is deemed to be incorporated by     
reference herein modifies or supersedes such prior statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or         
superseded, to constitute a part of this Prospectus.                            

The Company will provide without charge to each person, including any 
beneficial owner, to whom a copy of this Prospectus is delivered, upon oral or  
written request, a copy of any or all of the documents incorporated herein by   
reference (other than exhibits to such documents, unless such exhibits are      
specifically incorporated by reference in such documents). Written or telephone 
inquiries should be directed to American Shared Hospital Services, Four         
Embarcadero Center, Suite 3620, San Francisco, California 94111, Attention:     
Richard Magary (telephone: (415) 788-5300).                                     

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RISK FACTORS

The following specific factors should be considered carefully by      
prospective investors in evaluating the Company, its business and an investment 
in the Common Shares.                                                           

DEFAULTS, POTENTIAL BANKRUPTCY AND RESTRUCTURING                                

    As a result of a serious cash shortage during the second half of 1992, the
Company failed to make the required semi-annual interest payments under its     
14 3/4% Subordinated Notes due 1996 (the "14 3/4% Notes") and Senior            
Subordinated Exchangeable Reset Notes due 1996 (the "16 1/2% Notes" and         
collectively with the 14 3/4% Notes, the "Subordinated Notes") that were due    
beginning on October 15, 1992. In addition, the Company suspended lease payments
on a significant portion of its equipment leases beginning on December 1, 1992. 
The non-payment of interest and the suspension of lease payments caused defaults
under the Company's Subordinated Notes and equipment leases and gave the holders
of such obligations as well as the lender under the Company's senior secured    
working capital facility the right to declare all amounts immediately due and   
payable and to reclaim substantially all of the Company's diagnostic imaging    
equipment and other assets. The Company stated that if any of such creditors or 
lessors had exercised their rights, the Company would have been forced to seek a
liquidation under Chapter 7 or a reorganization under Chapter 11 of the United  
States Bankruptcy Code.                                                         

    Following lengthy negotiations, the Company restructured its debt and most
of its lease obligations (the "Restructuring"). The Restructuring had the effect
of curing all defaults under the Subordinated Notes and the equipment leases.   
The remaining Subordinated Notes have since matured and been paid in full. The  
Company nevertheless remains highly leveraged and has substantial fixed payment 
obligations. If defaults occur in the future, the Company's creditors and       
lessors would have the ability to accelerate the Company's obligations and seize
substantially all of its medical imaging equipment and other assets. There can  
be no assurance that the Company will be able to avoid such defaults in the     
future.                                                                         

RECENT LOSSES; FINANCIAL CONDITION OF THE COMPANY                               

   The Company has reported significant operating losses in each of the last
three fiscal years. The net loss of the Company (before extraordinary items) was
$5,537,000, $12,459,000 and $353,000 for the years ended December 31, 1994, 1995
and 1996, respectively. The Company had a net capital deficiency of $10,470,000 
at March 15, 1997. Unless the Company is able to increase its revenues and/or   
increase its operating margins through a reduction in its cost of operations, it
will be unable to achieve profitability. There can be no assurance that the     
Company will be profitable in the future.                                       

HIGH DEBT LEVEL                                                                 

Even after the Restructuring, the Company remains highly leveraged. At
March 15, 1997, the Company had approximately $13,797,000 of long-term debt and 
approximately $21,501,000 of obligations under capital leases. Scheduled        
payments of principal and interest under debt obligations and capital leases are
approximately $16,504,000 during 1997. In addition, scheduled payments under    
operating leases and related maintenance and service agreements are             
approximately $3,326,000 during 1997. The Company must increase its revenues and
reduce its cost structure and debt payment schedules 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 as they become due in 1997. Further,  
the high debt level may adversely affect the Company's ability to offer         
technologically advanced equipment in the future to customers, which may        
adversely affect the Company's ability to secure or retain profitable contracts.

CONSOLIDATION OF MEDICAL DIAGNOSTIC IMAGING INDUSTRY                            

 The medical diagnostic imaging business, both mobile and fixed, is in a
period of consolidation as a result of the growth of managed care and other     
competitive forces. Smaller companies, such as the Company, must either grow    
through acquisitions or become part of larger enterprises in order to compete   
successfully and achieve acceptable returns for their shareholders. The Company 
is pursuing the proposed merger with U.S.                                       

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Diagnostic Inc. ("USD") in response to the industry trend toward consolidation  
and because the transaction would enable the Company's shareholders to obtain a 
fair price and liquidity for their investment. See "Recent Developments." In    
light of the continuing delay in negotiations with USD, however, the Company can
provide no assurance that the proposed merger will be consummated or that the   
Company will be able to successfully respond to these changes in the industry.  

LIMITED ACCESS TO CAPITAL AND FINANCING                                         

    The Company is severely limited by covenants in its credit agreements from
incurring additional indebtedness without the consent of its lenders. In        
addition, the Company has pledged substantially all of its liquid assets and    
substantially all of its tangible personal property and real property to secure 
its existing debt. As a result, the Company has very little financial           
flexibility to address unforeseen cash needs, to fund future growth or to       
finance necessary equipment purchases and upgrades.                             

POTENTIAL INABILITY TO REPAY MATURING INDEBTEDNESS                              

    A substantial portion of the Company's funded debt will mature in the near
future. During 1997, approximately $9,315,000 plus the then outstanding balance 
(currently approximately $3,705,000 at March 15, 1997) of the Company's         
revolving credit facility will become due. The Company does not expect to have  
sufficient cash resources to pay all of these obligations at maturity.          
Accordingly, the Company will be required to seek new financing to meet its     
maturing obligations. There can be no assurance that such financing will be     
available or that the terms of any such financing will be acceptable to the     
Company.                                                                        

TREND OF DECREASING REVENUES                                                    

  The Company's revenues have decreased substantially during the last five
fiscal years. For the five years ended December 31, 1992, 1993, 1994, 1995 and  
1996, revenues were $48,834,000, $39,485,000, $38,545,000, $34,077,000, and     
$36,989,000, respectively. This trend of decrease in revenues is a result of the
sale by the Company of various revenueproducing assets, reduced demand for      
certain of the Company's imaging services and severe competition which have led 
to reduced pricing for the Company's services. This trend resulted in           
significant operating losses and, during the period from late 1992 until May    
1995, the Company failed to meet certain of its fixed obligations. The Company  
must increase its revenues or decrease its expenses in order to remain viable.  
There can be no assurance that the Company will be able to increase its revenues
or decrease its expenses sufficiently to cover its fixed obligations.           

POSSIBLE DELISTING OF COMMON STOCK AND LOSS OF ACTIVE TRADING MARKET            

   The Common Stock is currently traded on the American Stock Exchange ("the
AMEX") and the Pacific Exchange (the "PCX"). The announcement by the Company of 
the terms of a restructuring in early April 1994 was followed by a significant  
decline in the market price of the Common Stock. The Company's losses and net   
capital deficiency have caused the Company to no longer satisfy the minimum     
criteria with respect to net income and net worth for continued listing         
published by the AMEX. The per share trading price of the Common Stock is also  
below the minimum criteria for continued listing on such exchange. The closing  
per share price was $1.375 on April 1, 1997. The Company has been advised that  
its net capital deficiency is inconsistent with the criteria applied by the PCX 
for continued listing on such exchange. The AMEX and the PCX are currently      
reviewing the Company's financial condition following the restructuring in order
to determine whether the Common Stock will continue to be listed on such        
exchanges. Accordingly, no assurances can be given that a holder of Common      
Shares will be able to sell Common Shares in the future on a national or        
regional securities exchange, or that there will be an active trading market for
the Common Shares or as to the price at which the Common Shares might trade.    

INABILITY OF COMPANY TO PAY DIVIDENDS                                           

     The Company is prohibited by its credit agreements from paying dividends on
the Common Shares and does not anticipate being in a position to pay dividends  
for the foreseeable future.                                                     

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INABILITY OF NON-AFFILIATES TO SELL COMMON STOCK                                

  At April 1, 1997 there were 4,769,384 shares of Common Stock outstanding
and an additional 2,196,916 shares of Common Stock issuable under immediately   
exercisable warrants and options. Approximately 1,616,883 of these shares and an
additional 1,995,480 shares underlying immediately exercisable options or       
warrants that are owned by "affiliates" would normally be subject to limitations
on resale; however, all of such shares, options and warrants are currently      
eligible for sale pursuant to effective registration statements. The trading    
market for the Common Stock is thin. The average weekly trading volume of the   
Common Stock on the AMEX since April 1, 1996 is approximately 17,600 shares.    
Accordingly, non-"affiliate" holders may find it extremely difficult to sell    
their Common Shares, and the price thereof may be depressed for an indefinite   
period by the number of "affiliate" shares available for resale pursuant to     
effective registration statements.                                              

CONTROL BY MAJOR SHAREHOLDERS; POTENTIAL CONFLICT OF SHAREHOLDER INTERESTS      

As of April 1, 1997, Ernest A. Bates, M.D., the Company's Chairman and
Chief Executive Officer, owned (directly or through immediately exercisable     
options) 2,342,642 shares of Common Shares, which represents approximately 33.6%
of the Company's outstanding Common Shares and Common Shares exercisable        
pursuant to immediately exercisable options and warrants. In addition, as a     
result of securities issued to them pursuant to the Restructuring, certain      
Selling Securityholders own directly or through immediately exercisable warrants
1,632,300 shares of Common Stock, representing approximately 23.4% of the       
outstanding Common Shares and Common Shares exercisable pursuant to immediately 
exercisable options and warrants. Dr. Bates and certain of the Selling          
Securityholders acting together will have the power to determine the outcome of 
a shareholder vote with respect to any fundamental corporate transaction,       
including mergers and the sale of all or substantially all of the Company's     
assets. This could have the effect of blocking transactions that a majority of  
the other shareholders would otherwise find attractive, or conversely,          
permitting Dr. Bates and the Selling Securityholders to adopt transactions that 
a majority of the other shareholders vote to reject. Accordingly, owners of     
Common Shares other than Dr. Bates and the Selling Securityholders should       
recognize that their interests may conflict and, as a result of the size of     
their shareholdings, Dr. Bates and such Selling Securityholders will be able    
effectively to determine the course of action to be taken by the Company.       

DEPENDENCE ON KEY PERSONNEL                                                     

     The Company's operations and business are dependent to a significant extent
upon the continued active participation of its founder, Chairman of the Board   
and Chief Executive Officer, Ernest A. Bates, M.D. In the past, Dr. Bates has   
personally guaranteed various financial obligations of the Company, which has   
enabled the Company to obtain credit. Certain of the Company's lenders have also
sought to insure the continued involvement of Dr. Bates by requiring his        
personal guarantee of a significant amount of the Company's debt. Should Dr.    
Bates become unavailable to the Company for any reason, it could have a material
adverse effect on the Company's business, results of operations, financial      
condition and prospects.                                                        

INABILITY OF COMPANY TO ACQUIRE ADVANCED TECHNOLOGY                             

Diagnostic imaging technology is subject to continuous development and
change. New technological breakthroughs may require the Company to acquire new  
or technologically improved products to service its customers. There can be no  
assurance that the Company's financial resources will enable it to make the     
investment necessary to acquire such products. The failure to acquire or use new
technology and products could have a material adverse effect on the Company's   
business and results of operations.                                             

EXPANSION OF REIMBURSEMENT PROGRAMS                                             

    Customers to which the Company provides services generally receive payment
for patient care from governmental and private insurer reimbursement programs.  
As a result, a significant adverse change in such reimbursement policies might  
have a material adverse effect on the Company's business and results of         
operations. As a result of federal costcontainment legislation currently in     
effect, hospital in-patients covered by federally funded reimbursement programs 
are classified into diagnostic related groups ("DRG") in accor-                 

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dance with the patient's diagnosis, necessary medical procedures and other      
factors. Patient reimbursement is limited to a predetermined amount for each    
DRG. Because the reimbursement payment is predetermined, it does not necessarily
cover the cost of all medical services actually provided. Currently the DRG     
system is not applicable to out-patient services, and consequently many health  
care providers have an incentive to treat patients on an out-patient basis. If  
the DRG program is at some future date expanded to include out-patient          
reimbursement, such change could have a material adverse effect on the Company's
business and results of operations.                                             

RISK OF ADVERSE HEALTHCARE REFORM LEGISLATION                                   

   In addition to extensive existing government healthcare regulation, there
are numerous initiatives at the federal and state levels for comprehensive      
reforms affecting the payment for and availability of healthcare services,      
including a number of proposals that would significantly limit reimbursement    
under Medicare and Medicaid. It is not clear at this time what proposals, if    
any, will be adopted or, if adopted, what effect such proposals would have on   
the Company's business. Aspects of certain of these healthcare proposals, such  
as cutbacks in the Medicare and Medicaid programs, containment of healthcare    
costs on an interim basis by means that could include a short-term freeze on    
prices charged by healthcare providers, and permitting greater state flexibility
in the administration of Medicaid, could adversely affect the Company. There can
be no assurance that any currently proposed or future healthcare legislation or 
other changes in the administration or interpretation of governmental healthcare
programs will not have an adverse effect on the Company.                        

BURDEN AND COST OF GOVERNMENT REGULATION                                        

    Many aspects of the medical industry in the United States are subject to a
high degree of governmental regulation. Generally, failure to comply with any   
such regulations may result in denial of the right to conduct business and      
significant fines. For example, legislation in various jurisdictions requires   
that health facilities obtain a Certificate of Need ("CON") prior to making     
expenditures in excess of specified amounts. The CON procedure can be expensive 
and time consuming, and consequently a health care facility may elect to use the
Company's services rather than purchase equipment subject to CON requirements.  
CON requirements vary from state to state as they apply to the operations of    
both the Company and its customers. In some jurisdictions the Company is        
required to comply with CON procedures before operating its services and in     
other jurisdictions customers must comply with CON procedures before using the  
Company's services. An increase in the complexity or substantive requirements of
such federal, state and local laws and regulations could adversely affect the   
Company's business.                                                             

COMPETITION                                                                     

 The Company faces severe competition from other providers of diagnostic
imaging services, some of which have greater financial resources than the       
Company, and from equipment manufacturers, hospitals, imaging centers and       
physician groups owning in-house diagnostic units. Significant competitive      
factors in the diagnostic services market include equipment price and           
availability, performance quality, ability to upgrade equipment performance and 
software, service and reliability. The Company's financial problems have        
adversely affected its ability to obtain and retain certain profitable customer 
contracts, and its high debt burden may adversely affect its ability to offer   
technologically advanced equipment in the future. There can be no assurance that
the Company will be able to retain its competitive position in the medical      
imaging industry.                                                               

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THE COMPANY 

  The Company provides shared diagnostic imaging services and radiosurgery
services to approximately 209 hospitals, medical centers and medical offices    
located in 23 states. The four principal diagnostic imaging services provided by
the Company are Magnetic Resonance Imaging (MRI), Computed Axial Tomography     
Scanning (CT), Ultrasound and Nuclear Medicine. Radiosurgery services are       
performed by the Company through a subsidiary which provides Gamma Knife Units  
to two major university medical centers. The Company also provides Cardiac      
Catheterization Laboratory, Respiratory Therapy and Insurance Services.         

ASHS's address is Four Embarcadero Center, Suite 3620, San Francisco, 
California 94111 and its telephone number is (415) 788-5300.                    

RECENT DEVELOPMENTS 

  On December 11, 1996, the Company and US Diagnostic Inc. ("USD") entered
into a letter of intent pursuant to which USD would acquire the Company for     
$2.25 per share in cash. On January 29, 1997, the Company and USD agreed to     
revised terms. Under the revised terms, USD proposed to acquire the outstanding 
securities of the Company for USD common shares at the rate of $2.40 per share  
of the Company in a transaction that would be accounted for under pooling       
instead of under the purchase method of accounting. Subsequently, on February   
11, 1997, USD and the Company announced that there would be a delay in the      
consummation of their proposed merger. Both companies stated, in addition, that 
they had not yet entered into a definitive merger agreement and that the terms  
of the merger had not yet been submitted to their respective board of directors.
In light of the continuing delay in negotiations, the Company can provide no    
assurance that the proposed merger will be consummated.                         

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CAPITALIZATION

The following table sets forth the capitalization of the Company at   
December 31, 1996:                                                              

                                                        [Enlarge/Download Table]

                                                                                 DECEMBER 31, 
                                                                                     1996     
                                                                                 ------------ 
                                                                                              
Current portion of long-term debt............................................... $  6,816,000 
Current portion of obligations under capital leases.............................    6,366,000 
  Total current obligations.....................................................   13,182,000 
Long-term debt, less current portion............................................    7,690,000 
Obligations under capital leases less current portion...........................   16,245,000 
  Total long-term obligations...................................................   23,935,000 
          Total Obligations.....................................................   37,117,000 
Stockholder's equity (Net Capital Deficiency):                                                
  Common stock, without par value:                                                            
     authorized shares -- 10,000,000, 4,769,384 shares issued and                             
      outstanding(1)............................................................   11,089,000 
  Common stock options issued to officer........................................    2,414,000 
  Additional paid-in capital....................................................      930,000 
  Accumulated deficit...........................................................  (24,908,000)
          Total stockholders' equity (Net Capital Deficiency)...................  (10,475,000)
                                                                                 ------------ 
          TOTAL CAPITALIZATION.................................................. $ 26,642,000 
                                                                                 ============ 

---------------                                                                 

(1) Does not include (i) 330,000 Common Shares reserved for issuance upon       
    exercise of options granted under the Company's 1995 Stock Option Plan, (ii)
151,600 Common Shares reserved for issuance for options remaining       
    exercisable under the Company's 1984 Stock Option Plan, (iii) 314,000 Common
Shares underlying unexercised Warrants, or (iv) 1,495,000 Common Shares 
underlying an unexercised option issued to Ernest A. Bates, M.D.        

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USE OF PROCEEDS 

The Company will not receive any of the proceeds from the sale of the 
Securities. All of the proceeds will be received by the Selling Securityholders.
See "Selling Securityholders." Upon exercise of any of the Warrants, the Company
will receive proceeds equal to the aggregate exercise price, unless the holder  
of the Warrant elects to pay the exercise price by directing the Company to     
withhold Common Shares in an amount equal to the exercise price divided by the  
market price of the Common Shares on date of exercise. See "Description of      
Securities -- Warrants." The aggregate exercise price of the unexercised        
Warrants is approximately $235,000. Any portion of such exercise price received 
in cash will be added to the Company's working capital and used for general     
corporate purposes.                                                             

DETERMINATION OF OFFERING PRICE 

The offering price of the Securities will be determined by the Selling
Securityholders in transactions entered into by them regarding the Securities.  
See "Plan of Distribution."                                                     

SELLING SECURITYHOLDERS 

On May 17, 1995, in connection with the Notes Repurchase, the Company 
issued 819,000 Common Shares and immediately exercisable Warrants (the          
"Noteholder Warrants") to purchase 216,000 Common Shares to certain holders of  
Subordinated Notes. An additional 374,000 Common Shares and 98,000 Noteholder   
Warrants were issued to such holders as of October 6, 1995. The Noteholder      
Warrants will expire on May 17, 2002 and have an initial exercise price of $0.75
per Common Share.                                                               

   In connection with the restructuring of its equipment leases, on December
30, 1994, the Company issued to GE Medical immediately exercisable Warrants to  
acquire 97,853 Common Shares at an initial exercise price of $0.01 per share. On
May 17, 1995, the Company issued additional Warrants to GE Medical to acquire   
127,147 Common Shares at an initial exercise price of $0.01 per share. All of   
the Warrants held by GE Medical have been exercised.                            

This Prospectus relates to the offer and sale by the Selling          
Securityholders of the 1,632,300 Common Shares and/or Warrants, and the 314,000 
Common Shares underlying such Warrants. The Prospectus is part of a registration
statement filed under the Act pursuant to the terms of the Registration Rights  
Agreement. In the Registration Rights Agreement, the Company has agreed to keep 
the registration statement effective for up to 36 months or until all of the    
Securities have been sold, if earlier. The Registration Rights Agreement        
provides that certain rights of the parties thereto are assignable in connection
with a sale of Common Shares.                                                   

  The Securities offered by this Prospectus are offered for the account of
the Selling Securityholders. The following table sets forth, as of April 1,     
1997, the names of the Selling Securityholders offering the Securities, the     
number and percentage of Common Shares owned by such Selling Securityholders,   
the number of                                                                   

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Warrants owned by such Selling Securityholders and the number of Common Shares, 
including Common Shares subject to Warrants, offered for sale.                  

                                                        [Enlarge/Download Table]

                                                                      PERCENTAGE OF            
                                                                         COMMON                
                                                  COMMON                 SHARES        COMMON  
                                                  SHARES    WARRANTS  BENEFICIALLY     SHARES  
                     NAME                         OWNED      OWNED        OWNED       OFFERED  
----------------------------------------------- ----------  --------  -------------  ----------
                                                                                               
SunAmerica Life Insurance Company..............    219,659    57,814        5.8%        277,473
Anchor National Life Insurance Company.........    222,453    84,766        6.3%        307,219
SunAmerica Inc.................................    101,382    26,684        2.7%        128,066
Lion Advisors, L.P. (1)........................    304,044    80,051        7.9%        384,095
AIF II, L.P. (2)...............................    135,174    35,578        3.6%        170,752
General Electric Company acting through GE                                                     
  Medical Systems..............................    225,000        --        4.7%        225,000
Grace Brothers, Ltd............................    105,385    27,737        2.8%        133,122
Upchurch Living Trust U/A/D 12/14/90...........      5,203     1,370          *           6,573
                                                  --------   -------                  ---------
Total..........................................  1,318,300   314,000       32.1%      1,632,300
                                                  ========   =======                  =========

---------------                                                                 

* less than one percent                                                         

(1) Represents shares held for the benefit of an investment account under       
    management over which Lion Advisors, L.P. holds investment and voting power.

(2) The general partner of AIF II, L.P. is Lion Advisors, L.P. ("Lion") whose   
 general partner is Apollo Capital Management, Inc. Messrs. Leon Black and
John Hannan, the directors of Apollo Capital Management, Inc. disclaim  
beneficial ownership of all such shares. AIF II, L.P. is an affiliate of
Lion.                                                                   

    Because the Selling Securityholders may sell all or a part of their Common
Shares and Warrants, no estimate can be given as to the number of Common Shares 
or Warrants to be held by any Selling Securityholders upon termination of the   
offering. The Common Shares owned by the Selling Securityholders represent      
approximately 27.6% of the issued and outstanding Common Shares and the Common  
Shares underlying the Warrants represent approximately 6.2% of the issued and   
outstanding Common Shares plus those Common Shares underlying the Warrants.     

PLAN OF DISTRIBUTION

    The Selling Securityholders may sell the Securities (i) in an underwritten
offering or offerings, (ii) through brokers and dealers, (iii) "at the market"  
to or through a market maker or into an existing trading market, on an exchange 
or otherwise, for such shares, (iv) in other ways not involving market makers or
established trading markets, including direct sales to purchasers and (v) to the
extent not prohibited by applicable securities law, in ways other than pursuant 
to the distribution plan presented in the Prospectus. Pursuant to the terms of  
the Registration Rights Agreement, the Company has agreed to maintain the       
effectiveness of the registration statement for a period of 36 months or until  
all Securities have been sold, if earlier.                                      

    The distribution of Securities may be effected from time to time in one or
more underwritten transactions at a fixed price or prices, which may be changed,
or at market prices prevailing at the time of sale, at prices related to such   
prevailing market prices or at negotiated prices. Any such underwritten offering
may be on a "best efforts" or a "firm commitment" basis.                        

   In connection with any such underwritten offering, underwriters or agents
may receive compensation from the Selling Securityholders for whom they may act 
as agents in the form of discounts, concessions or commissions. Underwriters may
sell Securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters      
and/or commissions from the purchasers for whom they may act as agents.         

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At any time a particular offer of Securities made, if required, a     
Prospectus Supplement will be distributed that will set forth the names of the  
Selling Securityholder(s) offering such Common Shares, the aggregate amount of  
such Securities being offered and the terms of the offering, including the name 
or names of any underwriters, dealers or agents, any discounts, commissions and 
other items constituting compensation from the Selling Securityholders and any  
discounts, commissions or concessions allowed or reallowed or paid to dealers.  
Such Prospectus Supplement and, if necessary, a post-effective amendment to the 
Registration Statement of which this Prospectus is a part, will be filed with   
the Commission to reflect the disclosure of additional information with respect 
to the distribution of such Securities.                                         

  The Selling Securityholders and any underwriters, dealers or agents that
participate in the distribution of Securities may be deemed to be underwriters, 
and any profit on the sale of Securities by the Selling Securityholders and any 
discounts, commissions or concessions received by any such underwriters, dealers
or agents might be deemed to be underwriting discounts and commissions under the
Securities Act.                                                                 

   Under an agreement that may be entered into by the Company, underwriters,
dealers, and agents who participate in the distribution of Securities may be    
entitled to indemnification by the Company against certain liabilities,         
including liabilities under the Securities Act, or to contribution with respect 
to payments which such underwriters, dealers or agents may be required to make  
in respect thereof.                                                             

The sale of the Securities by the Selling Securityholders may also be 
effected from time to time by Selling Securities directly to purchasers or to or
through certain broker-dealers. In connection with any such sale, any such      
broker-dealer may act as agent for the Selling Securityholders or may purchase  
from the Selling Securityholders all or a portion of the Securities as principal
and thereafter may resell any Securities so purchased. Sales by any such        
broker-dealer, acting as agent or as principal, may be made pursuant to any of  
the methods described below. Such sales may be made on the AMEX or The PCX or   
other exchanges on which the Common Shares are then traded, in the              
over-the-counter market, in negotiated transactions or otherwise at prices and  
at terms then prevailing or at prices related to the thencurrent market prices  
or at prices otherwise negotiated.                                              

The Securities may also be sold in one or more of the following       
transactions: (a) block transactions (which may involve crosses) in which a     
broker-dealer may sell all or a portion of such Securities as agent but may     
position and resell all or a portion of the block as principal to facilitate the
transaction; (b) purchases by any such broker-dealer as principal and resale by 
such broker-dealer for its own account pursuant to this Prospectus which is part
of the Registration Statement; (c) a special offering, an exchange distribution 
or a secondary distribution in accordance with applicable stock exchange rules; 
(d) ordinary brokerage transactions and transactions in which any such          
broker-dealer solicits purchasers; and (e) otherwise than pursuant to this      
Prospectus. In effecting sales, broker-dealers engaged by the Selling           
Securityholders may arrange for other broker-dealers to participate.            
Broker-dealers will receive commissions or other compensation from the Selling  
Securityholders in amounts to be negotiated immediately prior to the sale that  
will not exceed those customary in the types of transaction involved.           
Broker-dealers may also receive compensation from purchasers of the shares which
is not expected to exceed that customary in the types of transactions involved. 

    No director, officer or agent of the Company is expected to be involved in
soliciting offers to purchase the Securities offered hereby, and no such person 
will be compensated by the Company for the sale of any of such Securities.      
Certain officers of the Company may assist such representatives of the Selling  
Securityholders in such efforts but will not be compensated therefor.           

    The Company will pay all of the expenses incident to the offering and sale
of the Securities, other than commissions, discounts and fees of underwriters,  
dealers or agents.                                                              

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DESCRIPTION OF SECURITIES 

COMMON SHARES                                                                   

   The authorized capital stock of the Company consists of 10,000,000 Common
Shares, no par value. At April 1, 1997, 4,769,384 shares were issued and        
outstanding and were held of record by approximately 400 persons. The Common    
Shares of the Company are listed on the American Stock Exchange and the Pacific 
Exchange under the symbol "AMS."                                                

    Each Common Share has the same rights, privileges and preferences as every
other share and will share equally in the Company's net assets upon liquidation 
or dissolution. The Common Shares have no conversion or redemption rights or    
sinking fund provisions. All Common Shares outstanding are, and all Common      
Shares issued upon exercise of outstanding warrants and options will be, validly
issued, fully paid and non-assessable. The Common Shares have no preemptive     
rights. Shareholders are entitled to one vote for each share owned on all       
matters submitted to the shareholders and have the right, subject to certain    
conditions, to elect to cumulate their votes in the election of directors.      
Shareholders are entitled to receive such dividends as may be declared by the   
Board of Directors out of funds legally available therefor. The Company did not 
pay dividends in 1994, 1995 or 1996 and does not intend to pay dividends in the 
near future. The Company is a party to various financing agreements that        
prohibit the declaration of dividends on the Common Shares. See "Risk Factors --
Inability of Company to Pay Dividends."                                         

  The transfer agent and registrar for the Common Shares is American Stock
Transfer & Trust Company, New York, New York.                                   

WARRANTS                                                                        

   The Noteholder Warrants entitle the registered holders thereof to acquire
up to 314,000 Common Shares at an initial exercise price of $0.75 per share up  
to and including May 17, 2002. The Noteholder Warrants were issued in           
certificated form. The Noteholder Warrants may be exercised by surrendering the 
warrant certificate evidencing such warrants, a written election to exercise the
Noteholder Warrant specifying the number of Common Shares to be purchased and   
the payment of the exercise price. Payment of the exercise price may be made at 
the holder's option (a) in cash, (b) by certified or official bank check payable
to order of the Company, or (c) by the Company withholding that number of shares
of Common Shares with a value as of the date of exercise equal to the aggregate 
exercise price. Upon surrender of the warrant certificate and the purchase      
price, the Company will deliver or cause to be delivered stock certificates     
representing the number of Common Shares designated to be exercised, less the   
number of Common Shares withheld by the Company as payment therefor, if         
applicable. If less than all of the Noteholder Warrants evidenced by a warrant  
certificate are to be exercised, a new warrant certificate will be issued for   
the remaining number of Noteholder Warrants. No fractional Common Shares will be
issued upon exercise of the Noteholder Warrants. The Company shall pay to the   
holder of the Noteholder Warrant an amount in cash equal to the same fraction of
the current value per share on the date of the exercise.                        

     The number of Common Shares purchasable upon the exercise of the Noteholder
Warrants and the exercise price are subject to adjustment in certain events (and
subject to certain limitations set forth in the warrant certificate) including: 
(i) the payment of a dividend on its Common Shares in additional shares of      
Common Shares, (ii) the payment of a dividend or other distribution on its      
Common Shares or other issuance to all holders of its Common Shares of rights or
warrants entitling them to subscribe for Common Shares at a price per share less
than the current market price on the record date of such dividend, distribution 
or issuance, (iii) subdivisions, combinations and reclassifications of the      
Common Shares, (iv) subject to an election to receive such dividend or          
distribution, the distribution to all holders of Common Shares of evidences of  
indebtedness, shares of capital stock, cash or assets (including securities, but
excluding any dividend or distribution referred to in clauses (i) or (ii) above 
for which an adjustment is made), and (v) the issuance or sale of shares of     
Common Shares by the Company for consideration per share less than the current  
market price.                                                                   

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   No adjustment in the number of Common Shares purchasable and the exercise
price will be required unless such adjustment would require an increase or      
decrease of at least 1% in the exercise price; provided, however, that any      
adjustment that is not made will be carried forward and taken into account in   
any subsequent adjustment.                                                      

  In case of certain consolidations, mergers or capital reorganizations or
reclassifications of the Company, each holder of a Noteholder Warrant shall be  
entitled to receive, in lieu of the Common Shares of the Company, the kind and  
amount of securities, cash or other property to which such holder would have    
been entitled upon such consummation if such holder had exercised the Noteholder
Warrant in full immediately prior thereto.                                      

 The holders of the Noteholder Warrants have no right to vote on matters
submitted to the shareholders of the Company. Except as set forth in the warrant
certificate with respect to the right to elect to receive certain distributions,
the holders of the Noteholder Warrants have no right to receive dividends. The  
holders of the Noteholder Warrants are not entitled to share in the net assets  
of the Company in the event of liquidation, dissolution or the winding up of the
Company's affairs.                                                              

LEGAL MATTERS 

 Certain legal matters with respect to the validity of the Common Shares
offered hereby have been passed upon for the Company by Sidley & Austin, Los    
Angeles, California.                                                            

EXPERTS 

The consolidated financial statements and schedule of American Shared 
Hospital Services at December 31, 1996 and 1995 and for each of the three years 
in the period ended December 31, 1996 appearing in the Company's Annual Report  
on Form 10-K for the year ended December 31, 1996 have been audited by Ernst &  
Young LLP, independent auditors, as set forth in their report thereon included  
therein and incorporated herein by reference, which report contains an          
explanatory paragraph with respect to the substantial doubt surrounding the     
Company's ability to continue as a going concern mentioned in Note 1 to the     
consolidated financial statements. Such consolidated financial statements and   
schedule are incorporated herein by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.          

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======================================================                          

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY      
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR     
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH     
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE COMMON SHARES OFFERED   
HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT 
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT      
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE         
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE       
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF
THIS PROSPECTUS.                                                                

------------------------

TABLE OF CONTENTS 

                                                                [Download Table]

                                        PAGE
                                        ----
                                            
Available Information.................    2 
Incorporation of Certain Documents by       
  Reference...........................    2 
Risk Factors..........................    3 
The Company...........................    7 
Recent Developments...................    7 
Capitalization........................    8 
Use of Proceeds.......................    9 
Determination Of Offering Price.......    9 
Selling Securityholders...............    9 
Plan of Distribution..................   10 
Description of Securities.............   12 
Legal Matters.........................   13 
Experts...............................   13 

======================================================                          
======================================================                          

AMERICAN SHARED 
HOSPITAL SERVICES 
1,632,300 COMMON SHARES 
(INCLUDING 314,000 COMMON SHARES
ISSUABLE UPON THE EXERCISE OF WARRANTS) 

AND 

WARRANTS TO PURCHASE
314,000 COMMON SHARES 
------------------------------
PROSPECTUS
------------------------------
            , 1997

======================================================                          

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PART II 

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION                            

The following table sets forth an itemized statement of all fees and  
expenses in connection with the distribution of the securities registered       
pursuant to this Registration Statement, all of which fees and expenses have    
been or will be paid by the Registrant:                                         

                                                                [Download Table]
                                                                             
Securities and Exchange Commission registration fee.............  $    931.70
American Stock Exchange Fee.....................................  $ 17,500.00
Pacific Stock Exchange Fee......................................  $  1,000.00
Printing........................................................  $ 30,000.00
Accountants' fees and expenses..................................  $ 90,000.00
Legal fees and expenses.........................................  $ 35,000.00
Miscellaneous...................................................  $  2,000.00
                                                                  -----------
          Total.................................................  $176,431.70
                                                                  ===========

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS                              

   Section 204(10) of the California General Corporation Law ("GCL") permits
the inclusion in the articles of incorporation of a California corporation of a 
provision eliminating or limiting the personal liability of a director for      
monetary damages in an action brought by or in the right of the corporation for 
breach of a director's duties to the corporation and its shareholders. The      
foregoing provision is subject to certain qualifications set forth in the GCL   
including, without limitation, that such provision may not limit or eliminate   
liability of directors for (i) intentional misconduct, (ii) transactions from   
which a director derived an improper personal benefit, (iii) reckless disregard 
of the director's duties, and (iv) an unexcused pattern of inattention. The     
Company's Articles of Incorporation, as amended, contains an article eliminating
the liability of the directors for monetary damages to the fullest extent       
permissible under California law.                                               

    Section 317 of the GCL permits the indemnification of officers, directors,
employees and agents of California corporations. Article Fifth, Section 2, of   
the Company's Articles of Incorporation, as amended, provides that the          
Registrant is authorized to provide indemnification to its agents in excess of  
the indemnification otherwise permitted by Section 317 of the GCL.              

    Article IX, Section 7, of the Bylaws of the Company contains the following
indemnification provision:                                                      

Section 7. Indemnification of Corporate Agents; Purchase of Liability 
Insurance. (a) The Corporation shall, to the maximum extent permitted by the    
General Corporation Law of the state of California, and as the same may from    
time to time be amended, indemnify each of its agents against expenses,         
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with any proceeding to which such person was or is a party or is  
threatened to be made a party arising by reason of the fact that such person is 
or was an agent of the Corporation. For purposes of this Section 7, an "agent"  
of the Corporation includes any person who is or was a director, officer,       
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another foreign or     
domestic corporation, partnership, joint venture, trust or other enterprise, or 
was a director, officer, employee or agent of a foreign or domestic corporation 
which was a predecessor corporation of the Corporation or of another enterprise 
at the request of the such predecessor corporation; "proceeding" means any      
threatened, pending or completed action or proceeding, whether civil, criminal, 
administrative or investigative, and includes an action or proceeding by or in  
the right of the Corporation to procure a judgment in its favor; and "expenses" 
includes attorneys' fees and any expenses of establishing a right to            
indemnification under this subdivision (a).                                     

   (b) The Corporation shall, if and to the extent the Board of Directors so
determines by resolution, purchase and maintain insurance in an amount and on   
behalf of such agents of the Corporation as the Board may specify in such       
resolution against any liability asserted against or incurred by the agent in   
such capacity or                                                                

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arising out of the agent's status as such whether or not the Corporation would  
have the capacity to indemnify the agent against such liability under the       
provisions of this Section 7.                                                   

Each of the directors of the Corporation has entered into an          
Indemnification Agreement with the Company pursuant to which the Company is,    
subject to the limitations in the following sentence, obligated to indemnify the
directors to the fullest extent provided by law, notwithstanding such           
indemnification not specifically being provided in the Company's Articles,      
Bylaws or by statute. The Company is not obligated under the Indemnification    
Agreement to indemnify directors for the following: acts or omission or         
transactions from which a director may not be relieved from liability under     
Section 204 of the California General Corporation Law, a proceeding or action   
instituted by an appropriate bank regulatory agency, claims initiated by such   
director except with respect to proceedings to enforce a right of               
indemnification unless the Board has approved the initiation or bringing of such
suit, a proceeding instituted by a director to enforce the Indemnification      
Agreement which is found by a court of competent jurisdiction to be not in good 
faith or frivolous, insured claims or claims under Section 16(b) of the         
Securities Exchange Act of 1934.                                                

  For the undertaking with respect to indemnification, see Item 17 herein.

ITEM 16. EXHIBITS                                                               

The following exhibits are filed herewith:                            

                                                                [Download Table]

EXHIBIT                                                                            
NUMBER                                  DESCRIPTION                                
------   --------------------------------------------------------------------------
                                                                                   
 4.1*    Form of Common Stock Purchase Warrant held by Selling Securityholders of  
         American Shared Hospital Services.                                        
 4.2*    Registration Rights Agreement dated as of May 17, 1995 by and among       
         American Shared Hospital Services, the Holders referred to in the Note    
         Purchase Agreement, dated as of May 12, 1995 and General Electric Company,
         acting through GE Medical Systems.                                        
 4.3*    Agreement and Proxy dated as of May 12, 1995 by Ernest A. Bates, M.D.     
         Accepted and Agreed to by Anchor National Life Insurance Company, Sun Life
         Insurance Company of America, SunAmerica Inc., AIF II, L.P., Lion         
         Advisors, L.P., Grace Brothers, Ltd., and Upchurch Living Trust U/A/D     
         12/14/90.                                                                 
 5*      Opinion of Sidley & Austin regarding legality of certain securities being 
         registered.                                                               
23.1     Consent of Ernst & Young LLP.                                             
23.2*    Consent of Sidley & Austin (contained in their opinion filed as Exhibit 5 
         to this Registration Statement).                                          
24*      Power of Attorney, incorporated by reference to the signature page (II-4) 
         to the Registration Statement on Form S-1.                                

---------------                                                                 

* Previously filed on October 26, 1995 as part of this Registration Statement   
(File No. 33-63721).                                                            

ITEM 17. UNDERTAKINGS                                                           

a. The undersigned registrant hereby undertakes that, for purposes of 
determining any liability under the Securities Act of 1933, each filing of the  
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange   
Act that is incorporated by reference in the registration statement shall be    
deemed to be a new registration statement relating to the securities offered    
therein, and the offering of such securities at that time shall be deemed to be 
the initial bona fide offering thereof.                                         

    b. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the      
Company pursuant to the foregoing provisions, or otherwise, the registrant has  
been advised that in the opinion of the Commission such indemnification is      
against public policy as expressed in the Securities Act and is, therefore,     
unenforceable. In the event that a claim for indemnifica-                       

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tion against such liabilities (other than the payment by registrant of expenses 
incurred or paid by a director, officer or controlling person of the registrant 
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being 
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate     
jurisdiction the question whether such indemnification by it is against public  
policy as expressed in the Securities Act and will be governed by the final     
adjudication of such issue.                                                     

c. The undersigned registrant hereby further undertakes that:         

      (1) For purposes of determining any liability under the Securities
   Act, the information omitted from the form of Prospectus filed as part of
   this Registration Statement in reliance upon Rule 430A and contained in a
  form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
   (4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.      

         (2) For the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new   
    registration statement relating to the securities offered therein, and the
    offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.                                           

     (3) To file, during any period in which offers or sales are being
    made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not 
   previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement.                    

          (4) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the     
termination of the offering.                                          

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SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the    
requirements for filing on Form S-3 and has duly caused this Post-Effective     
Amendment No. 1 on Form S-3 to the Registration Statement on Form S-1 to be     
signed on its behalf by the undersigned, thereunto duly authorized in the City  
of San Francisco, state of California on this 3rd day of April, 1997.           

                                     AMERICAN SHARED HOSPITAL SERVICES

                                    By:    /s/ ERNEST A. BATES, M.D.

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

Pursuant to the requirements of the Securities Act of 1933, this      
Post-Effective Amendment No. 1 to the Registration Statement has been signed by 
the following persons in the capacities and on the date indicated.              

                                                        [Enlarge/Download Table]

                   SIGNATURE                                 TITLE                   DATE      
-----------------------------------------------  -----------------------------  ---------------
                                                                                               

           /s/ ERNEST A. BATES, M.D.               Chairman of the Board and     April 3, 1997 
-----------------------------------------------     Chief Executive Officer                    
             Ernest A. Bates, M.D.                                                             

             /s/ WILLIE R. BARNES                   Director and Secretary       April 3, 1997 
-----------------------------------------------                                                
               Willie R. Barnes                                                                

               /s/ MATTHEW HILLS                           Director              April 3, 1997 
-----------------------------------------------                                                
                 Matthew Hills                                                                 

              /s/ JOHN F. RUFFLE                           Director              April 3, 1997 
-----------------------------------------------                                                
                John F. Ruffle                                                                 

          /s/ STANLEY S. TROTMAN, JR.                      Director              April 3, 1997 
-----------------------------------------------                                                
            Stanley S. Trotman, Jr.                                                            

          /s/ AUGUSTUS A. WHITE, M.D.                      Director              April 3, 1997 
-----------------------------------------------                                                
            Augustus A. White, M.D.                                                            

          /s/ CHARLES B. WILSON M.D.                       Director              April 3, 1997 
-----------------------------------------------                                                
            Charles B. Wilson M.D.                                                             

              /s/ CRAIG K. TAGAWA                   Chief Financial Officer      April 3, 1997 
-----------------------------------------------      (Principal Accounting                     
                Craig K. Tagawa                            Officer)                            

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INDEX TO EXHIBITS 

                                                        [Enlarge/Download Table]

EXHIBIT                                                                       SEQUENTIAL 
NUMBER                           EXHIBIT DESCRIPTION                          PAGE NUMBER
------   -------------------------------------------------------------------  -----------
                                                                                         
 4.1  *  Form of Common Stock Purchase Warrant held by Selling Noteholders               
         of American Shared Hospital Services...............................     *       
 4.2  *  Registration Rights Agreement dated as of May 17, 1995 by and among             
         American Shared Hospital Services, the Holders referred to in the               
         Note Purchase Agreement, dated as of May 12, 1995 and General                   
         Electric Company, acting through GE Medical Systems................     *       
 4.3  *  Agreement and Proxy dated as of May 12, 1995 by Ernest A. Bates,                
         M.D. Accepted and Agreed to by Anchor National Life Insurance                   
         Company, Sun Life Insurance Company of America, SunAmerica Inc.,                
         AIF II, L.P., Lion Advisors, L.P., Grace Brothers, Ltd., and                    
         Upchurch Living Trust U/A/D 12/14/90...............................     *       
 5    *  Opinion of Sidley & Austin regarding legality of certain securities             
         being registered...................................................     *       
23.1     Consent of Ernst & Young LLP.......................................     *       
23.2  *  Consent of Sidley & Austin, incorporated by reference to Exhibit 5              
         to this Registration Statement.....................................     *       
24    *  Power of Attorney..................................................     *       

---------------                                                                 

* Previously filed.                                                             

Dates Referenced Herein   and   Documents Incorporated by Reference

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		3/15/97		5		6
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		1/29/97		9
		12/31/96		4		15			10-K405
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		4/1/96		7					10-K
		12/31/95		5		15			10-K
		10/26/95		1		18			S-1
		10/20/95		1
		10/6/95		11					DEF 14A
		5/17/95		3		21
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		12/31/94		5		6
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		12/31/93		6
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