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<SEC-DOCUMENT>0000950149-04-001334.txt : 20040729
<SEC-HEADER>0000950149-04-001334.hdr.sgml : 20040729
<ACCEPTANCE-DATETIME>20040729122830
ACCESSION NUMBER:		0000950149-04-001334
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20040729
ITEM INFORMATION:		Financial statements and exhibits
ITEM INFORMATION:		Regulation FD Disclosure
FILED AS OF DATE:		20040729

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMERICAN SHARED HOSPITAL SERVICES
		CENTRAL INDEX KEY:			0000744825
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MEDICAL LABORATORIES [8071]
		IRS NUMBER:				942918118
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08789
		FILM NUMBER:		04938127

	BUSINESS ADDRESS:	
		STREET 1:		FOUR EMBARCADERO CENTER
		STREET 2:		SUITE 3700
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94111-4107
		BUSINESS PHONE:		415-788-5300

	MAIL ADDRESS:	
		STREET 1:		FOUR EMBARCADERO CENTER
		STREET 2:		SUITE 3700
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94111-4107
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>f00633e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>e8vk</TITLE>
</HEAD>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center"><FONT size="4"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B></FONT>

<DIV align="center"><FONT size="3"><B>Washington, DC 20549</B>
</FONT></DIV>

<P align="center"><FONT size="5"><B>FORM 8-K</B></FONT>

<P align="center"><FONT size="4"><B>CURRENT REPORT</B></FONT>

<DIV align="center"><FONT size="3"><B>Pursuant to Section&nbsp;13 OR 15(d) of the Securities Exchange Act of 1934</B>
</FONT></DIV>


<P align="center"><FONT size="2">Date of Report (Date of earliest
reported) <B>July&nbsp;29, 2004</B>
</FONT>

<P align="center"><FONT size="6"><B>AMERICAN SHARED HOSPITAL SERVICES</B></FONT>

<DIV align="center"><FONT size="2">(Exact name of registrant as specified in its chapter)
</FONT>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>California</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2"><B>0-8789</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2"><B>94-2918118</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><FONT size="2">(State or other jurisdiction</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">(Commission</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">(IRS Employer</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">of incorporation)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">File Number)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">Identification No.)</FONT></TD>
</TR>
</TABLE>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="70%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Four Embarcadero Center, Suite&nbsp;3700, San Francisco, CA</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>94111</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">(Address of principal executive offices)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">(Zip Code)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</DIV>

<P align="center"><FONT size="2">Registrant&#146;s telephone number, including area code <B>415-788-5300</B>
</FONT>

<P align="center"><FONT size="2">(Former name or former address, if changed since last report)</FONT>
<P align="center"><FONT size="2">&nbsp;
</FONT>

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<!-- link2 "ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS" -->

<P align="left"><FONT size="2"><B>ITEM 7:&nbsp;&nbsp;&nbsp;FINANCIAL STATEMENTS AND EXHIBITS</B>
</FONT>


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">(c)</FONT></TD>
 <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Exhibits
</FONT></TD>
</TR>

<TR valign="top"><td>&nbsp;</td></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">99.1</FONT></TD>
 <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Earnings Press Release, dated 07/22/04
</FONT></TD>
</TR>

<TR valign="top"><td>&nbsp;</td></TR>


<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">99.2</FONT></TD>
 <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Transcript for conference call held on July 22, 2004 discussing financial results of
operations for the three and six months ended June 30, 2004.
</FONT></TD>
</TR>
</TABLE>

<!-- link2 "ITEM 9: REGULATION FD DISCLOSURE" -->

<P align="left"><FONT size="2"><B>ITEM 9:&nbsp;&nbsp;&nbsp;REGULATION FD DISCLOSURE</B>
</FONT>


<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July 22, 2004, the Company announced its
financial results for the three and six months ended June 30, 2004.  A copy of the press release containing
the announcement is included as Exhibit 99.1 to this Current Report and is incorporated herein by reference.
A copy of the transcript for the conference call discussing the financial results
for the three and six months ended June 30, 2004 is included as
Exhibit 99.2 to this Current Report and is incorporated herein by reference.
The Company does not intend for this exhibit to be incorporated by reference into future filings under
the Securities Exchange Act of 1934.  The foregoing information is provided pursuant to Item 12 (Results of Operations
and Financial Condition) of Form 8-K.
</FONT>



<P align="center"><FONT size="2">&nbsp;
</FONT>

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<P align="center"><FONT size="2"><B>SIGNATURE</B>
</FONT>


<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
</FONT>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="43%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="44%">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD align="left" nowrap valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Date:July 29, 2004</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2"><B>American Shared Hospital Services</B></FONT></TD>
</TR>

<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD align="center" nowrap valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By:
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">/s/ Ernest A. Bates, M.D.<BR>
</FONT><HR size="1" noshade><FONT size="2">
Ernest A. Bates, M.D.<BR>
Chairman and CEO</FONT></TD>
</TR>
</TABLE>
</DIV>




<P align="center"><FONT size="2">&nbsp;
</FONT>


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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>f00633exv99w1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
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<P align="right"><FONT size="2"><B>Exhibit&nbsp;99.1</B>
</FONT>


<P align="center"><FONT size="2"><B>AMERICAN SHARED HOSPITAL SERVICES ANNOUNCES SECOND QUARTER<BR>
12% OPERATING INCOME GROWTH AND 16% NET INCOME INCREASE</B>
</FONT>


<P align="center"><FONT size="2"><B>Earnings Call will take place at 4:00 pm Eastern today</B>
</FONT>

<P align="left"><FONT size="2"><B>San Francisco, CA, July&nbsp;22, 2004 &#151; AMERICAN SHARED HOSPITAL SERVICES
(AMEX,PCX:AMS)</B>, the leading provider of Gamma Knife&#174; radiosurgery services,
announced today financial results for the three and six months ended June&nbsp;30,
2004.
</FONT>

<P align="left"><FONT size="2">For the second quarter of 2004, the Company&#146;s revenue was $4,114,000 compared
to $4,105,000 in the same period last year. Operating income rose 12% to
$794,000 from $712,000 the prior year. Net income rose 16% to $389,000 or
$0.08 per share (diluted)&nbsp;from net income of $334,000 or $0.07 per share
(diluted)&nbsp;in the same period last year.
</FONT>

<P align="left"><FONT size="2">For the six months ended June&nbsp;30, 2004, the Company reported revenue of
$8,343,000, a 7% gain from revenue of $7,774,000 in the same period a year ago.
Operating income grew 12% to $1,611,000 from $1,439,000 in the same period
last year. Net income increased to $759,000 or $0.15 per share (diluted)&nbsp;from
net income of $670,000 or $0.13 per share (diluted)&nbsp;in the same period a year
ago.
</FONT>

<P align="left"><FONT size="2">Treatments in second quarter 2004 decreased 9% and treatments from Gamma Knife
units in operation more than one year decreased 19% compared to the same period
in the prior year. Two reasons treatments were down in the second quarter were
the Leksell Gamma Knife Users meeting held in Vienna, Austria, which occurs
every two years and only one treatment performed at a center due to staffing
issues.
</FONT>

<P align="left"><FONT size="2">Commenting on American Shared Hospital Services&#146; recent results, Craig K.
Tagawa, Chief Operating and Financial Officer, said, &#147;Second quarter operating
income was driven by strong new Gamma Knife unit performance. Our Gamma Knife
unit at Lehigh Valley Hospital is expected to commence operation in August
2004. The Company&#146;s Gamma Knife contract with Baptist of East Tennessee is
scheduled to open in late fourth quarter 2004 or early 2005. The Northern
Westchester Hospital Gamma Knife project is pending Certificate of Need
approval. Our recently signed Gamma Knife contract with Mercy Health Center in
Oklahoma City is anticipated to open in mid 2005.&#148;
</FONT>

<P align="left"><FONT size="2">Ernest A. Bates, M.D., Chairman and Chief Executive Officer, said, &#147;This
quarter represents our 14th consecutive quarter of operating income increase
compared to the same period in the prior year. The consistency of our business
model allowed us to increase our quarterly dividend by 6% in third quarter
2004. Our stock currently provides a 3.2% dividend yield based on
annualization of third quarter&#146;s dividend at yesterday&#146;s market close. We
currently have four additional Gamma Knife units, a 24% increase, scheduled
over the next one year period to continue to fuel our growth.&#148;
</FONT>


<P align="left"><FONT size="2"><B>Earnings Conference Call</B>
</FONT>

<div align="left"><FONT size="2">American Shared has scheduled its conference call for 4:00 pm Eastern time
(1:00 pm Pacific time) today. During the call, Company management will discuss
the financial results announced today.
</FONT></div>

<P align="left"><FONT size="2">To participate, please call 800/559-1203 at least 10 minutes prior to the start
of the call. A live on-demand webcast of the call will be provided by CCBN and
posted at <u>www.ashs.com</u> and <u>www.companyboardroom.com.</u>
</FONT>

<P align="left"><FONT size="2">A replay of the call will be available for 30&nbsp;days by calling 888/843-8996 and
enter pass code 9492715. The replay will also be available at <u>www.ashs.com</u> and
<u>www.companyboardroom.com.</u>
</FONT>


<P align="left"><FONT size="2"><B>American Shared Hospital Services (www.ashs.com)</B>
</FONT>

<div align="left"><FONT size="2">American Shared Hospital Services is building a profitable medical services
company in an underserved niche &#151; turnkey technology solutions for advanced
radiosurgical procedures. The Company&#146;s core business is supplying hospitals
with the Gamma Knife &#151; a non-invasive treatment for malignant and benign brain
tumors, vascular malformations and trigeminal neuralgia (facial pain). The
Gamma Knife, the gold standard in radiosurgery, reduces surgical risk and
patient discomfort, resulting in a shorter hospital stay and lower risk of
complications. In most cases, Gamma Knife patients resume their normal
activities within a few days of treatment, compared to</font>
</div>

<P align="center"><FONT size="2">&nbsp;
</FONT>

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<P align="left"><FONT size="2">weeks or months for patients who undergo conventional surgery. More than
250,000 patients worldwide have already received this treatment. American
Shared Hospital Services is the world leader in providing Gamma Knife
radiosurgery services.
</FONT>


<P align="left"><FONT size="2"><B>Safe Harbor Statement</B>
</FONT>

<div align="left"><FONT size="2">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 business and the
risks of developing its IMRT and The Operating Room for the 21st Century&#174;
programs. 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&#146;s Annual Report on Form 10-K for
the year ended December&nbsp;31, 2003, its Quarterly Report on Form 10-Q for the
period ended March&nbsp;31, 2004 and the definitive Proxy Statement for the Annual
Meeting of Shareholders held on June&nbsp;17, 2004.
</FONT>
</div>


<P align="center"><FONT size="2">&nbsp;
</FONT>

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<P align="center"><FONT size="2"><B>AMERICAN SHARED HOSPITAL SERVICES</B>
</FONT>
<P align="left"><FONT size="2">PRESS RELEASE<BR>Second Quarter 2004 Financial Results
</FONT>

<P align="right"><FONT size="2">July&nbsp;22, 2004<br>Page 3
</FONT>
<P align="center"><FONT size="2">Selected Financial Data<br>(unaudited)
</FONT>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR  valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Summary of Operations Data</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR  valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR  valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Three months ended June 30,</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Six months ended June 30,</B></FONT></TD>
</TR>
<TR  valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR  valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
</TR>
<TR  valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Revenue</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4,114,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4,105,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,343,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">7,774,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost of operations</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,996,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,883,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,030,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,418,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gross margin</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,118,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,222,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,313,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,356,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Selling &#038; administrative</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">762,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">839,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,528,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,665,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest expense</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">562,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">671,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,174,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,252,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">794,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">712,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,611,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,439,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest &#038; other income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">28,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">43,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">72,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Minority interest</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(246,000</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(237,000</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(497,000</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(475,000</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income before income taxes</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">568,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">503,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,157,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,036,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income tax expense</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">179,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">169,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">398,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">366,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">389,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">334,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">759,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">670,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Earnings per common share:</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Basic</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.09</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Assuming dilution</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR  valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Balance Sheet Data</B></FONT></TD>
</TR>
<TR  valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR  valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>6/30/2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>6/30/2003</B></FONT></TD>
</TR>
<TR  valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">9,344,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">11,032,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Restricted cash</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">50,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">50,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Current assets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">12,520,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">14,561,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total assets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">44,399,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">47,924,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Current liabilities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,059,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">7,334,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Shareholders&#146; equity</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">15,899,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">14,718,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</DIV>




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<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>f00633exv99w2.htm
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<P align="right"><FONT size="2">Exhibit&nbsp;99.2
</FONT>


<P align="right"><FONT size="2">July&nbsp;22, 2004
</FONT>


<P align="left"><FONT size="2">AMERICAN SHARED HOSPITAL SERVICES
</FONT>

<P align="left"><FONT size="2">American Shared Hospital Services&#146; Second Quarter 2004 Conference Call
hosted by Dr.&nbsp;Ernest Bates on July&nbsp;22, 2004, at 3:00 p.m. CST. Confirmation
#9492715.
</FONT>


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2"><i>Operator:</i></FONT></TD>
 <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2"><I>Good afternoon everyone and welcome to the Second Quarter 2004
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 where you can press
star/one on your phone to enter the queue. I would now like to
turn the call over to Dr.&nbsp;Ernest Bates, Chairman and Chief
Executive Officer; Craig Tagawa, Chief Operating and Financial
Officer and Norm Houck, Controller of American Shared Hospital
Services. Mr.&nbsp;Tagawa, you may begin.</I>
</FONT></TD>
</TR>
<TR valign="top"><td>&nbsp;</td></TR>


<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Craig Tagawa: </FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Thank you Brandy. We would like to thank all the participants
on this call and welcome every one joining us through our live
webcast. I am sure most of you have already seen our second
quarter earnings release issued this morning. On this call we
will provide a brief summary of our results and then open the
call to questions. Before we begin our presentation I need to
read our Safe Harbor Statement.
</FONT></TD>
</TR>
<TR valign="top"><td>&nbsp;</td></TR>

<TR valign="top">

<TD width="9%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Various remarks that we may make about future expectations,
plans and prospects for the Company constitute forward-looking
statements for the purposes of Safe Harbor Provision under the
</FONT></TD>
</TR>
</TABLE>


<P align="center"><FONT size="2">1 of 10
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<P align="right"><FONT size="2">July&nbsp;22, 2004
</FONT>


<P align="left"><FONT size="2">AMERICAN SHARED HOSPITAL SERVICES
</FONT>

<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="8%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">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&#146;s filings
with Securities Exchange Commission including the Company&#146;s
Annual Report on Form 10-K, 10-KA for the year ended December
31, 2003, Quarterly Report on Form 10-Q for the period ended
March&nbsp;31, 2004 and the definitive Proxy Statement for the
Annual Meeting of Shareholder held on June&nbsp;17, 2004. The
Company assumes no obligation to update the information
contained in this conference call.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Now I would like to ask Norm Houck to discuss the financial
highlights for the second quarter.
</FONT></TD>
</TR>

<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD nowrap align="right"><FONT size="2">Norm Houck:</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">For second quarter 2004 the Company&#146;s revenue was $4,114,000
compared to $4,105,000 in the same period last year. Operating
income rose 12% to $794,000 from $712,000 a year earlier. Net
income for second quarter 2004 rose 16% to $389,000 or $0.08 per
diluted share compared to net income of $334,000 or $0.07 per
diluted share for the second quarter last year.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Second quarter 2004 revenue benefited from the strong
performances by our Gamma Knife units that opened during 2003.
</FONT></TD>
</TR>
</TABLE>

<P align="center"><FONT size="2">2 of 10
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<P align="right"><FONT size="2">July&nbsp;22, 2004
</FONT>


<P align="left"><FONT size="2">AMERICAN SHARED HOSPITAL SERVICES
</FONT>


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="7%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">This offset a down quarter by our units that have been opened
more than one year, which is partially attributable to the
Leksell Gamma Knife Users meeting held in Vienna, staffing
issues at one Gamma Knife site and a very strong second
quarter 2003.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD width="7%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">A total of 513 procedures were performed during the quarter
compared to 561 in second quarter 2003, a 9% decrease.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD width="7%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Lower selling and administrative expense and interest expense
allowed operating income to increase 12% over the prior year.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD width="7%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">During the quarter the Company&#146;s Chairman and Chief Executive
Officer exercised 75,000 previously expensed options to
purchase common stock which generated a tax benefit of
$49,000 to the Company and reduced the effective tax rate to
32%. The effective tax rate in second quarter 2003 was 34%
as a result of an exercise of 50,000 options. To date
485,000 of these options have been exercised leaving
1,010,000 to be exercised by fourth quarter 2005.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>

<TR valign="top">
    <TD width="7%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Earnings before interest, taxes, depreciation and
amortization was $2,331,000 in second quarter 2004 compared
to $2,205,000 in the same period of the prior year, a 6%
increase.
</FONT></TD>
</TR>
</TABLE>


<P align="center"><FONT size="2">3 of 10
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<P align="right"><FONT size="2">July&nbsp;22, 2004
</FONT>


<P align="left"><FONT size="2">AMERICAN SHARED HOSPITAL SERVICES
</FONT>



<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="9%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">At June&nbsp;30, 2004 we had approximately 4,025,000 common shares
and 5,027,000 common shares and options outstanding.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD width="9%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">At June&nbsp;30, 2004, our cash balance was $9,344,000. During
the quarter the Company paid shareholder dividends of
$157,000 and an installment of approximately $340,000 toward
the purchase of a new Gamma Knife. In addition, the earlier
timing of the large vendor payment historically paid up the
first of the month reduced cash by approximately $600,000.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD width="9%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Now I will turn the call back to Craig for additional
comments.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Craig Tagawa:</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Thank you Norm. I would just like to address the decrease in
second quarters (Inaudible) unit treatments and give you a little, some of
the reasons why that occurred. The staffing issue that we mentioned in
the press release this morning accounted for approximately 3% of that
decrease, another couple percent was due to the Lexsell Gamma Knife Users
meeting that Norm mentioned and other 2% roughly was due to the two units
that we mentioned in the first quarter of this year. Also, there are
seasonal vagaries, as we have mentioned, in the past due to when a person
is diagnosed with a brain tumor and when that person is treated. We have
seen that in second quarters previously but we did not
</FONT></TD>
</TR>
</TABLE>

<P align="center"><FONT size="2">4 of 10
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<P align="right"><FONT size="2">July&nbsp;22, 2004
</FONT>


<P align="left"><FONT size="2">AMERICAN SHARED HOSPITAL SERVICES
</FONT>


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="7%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">see that last year. Also as mentioned in our press release
this morning, our Lehigh Valley Hospital Gamma Knife unit is
expected to open next month. Including our Lehigh Valley
Hospital unit we have scheduled four new Gamma Knife units to
commence operation in the next 12&nbsp;months. This represents a
24% increase in Gamma Knife units from our current 17 units
in operation.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Now I would like to ask Brandy to open the call for
questions.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2"><i>Operator: </i></FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2"><I>Thank you. We will now begin the question and answer session.
If you have a question you will need to press star/one on your
touchtone phone. You will hear an acknowledgement that you have
been placed in queue. If your question has been answered and you
wish to be removed from the queue please press the pound sign.
Your questions will be queued in the order they are received. If
you are using a speakerphone please pickup the handset before
pressing the numbers. Once again, if there are any questions
please press star/one on your touchtone phone. Lenny Dunn is now
online; please go ahead.</I>
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Lenny Dunn:</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2"><B>This question I guess is for Dr.&nbsp;Bates. I know that you do
marketing to improve same store sales or same location sales, I
guess, is probably more appropriate because these aren&#146;t</B>
</FONT></TD>
</TR>
</TABLE>


<P align="center"><FONT size="2">5 of 10
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<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2"><B>McDonald&#146;s; but going forward is there more that can be done
or do you feel you are doing whatever can be done and that
the numbers should look pretty good going forward anyhow? My
second question is on the IMRT; are we making some progress
to get at least our first sale done there?</B>
</FONT></TD>
</TR>

<tr><TD><FONT size="2">&nbsp;</FONT></TD></tr>

<tr valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Dr.&nbsp;Ernest Bates: </FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Thank you for those questions, Mr.&nbsp;Dunn. Let me answer the
marketing question and then I am going to ask Craig who is directly in
charge of marketing to comment further. We have an extensive marketing
program now. We have a full compliment of marketing people and we are
seeing wherever they visit an account the number of procedures goes up. I
just want to explain again the downed number. I think that in healthcare
this is not unusual. Tumors don&#146;t always occur at the same rate as we see
the incidents change from month-to-month and that is sometimes to be
expected. We also had the unusual meeting of Gamma Knife Users in Vienna
and it was a one week meeting, but most of the attendees came and made
that a trip to Europe and that will occur every 24&nbsp;months, so you can
expect that. And we also had some other professional meetings and some
people taking (Inaudible). Again, we have the unusual situation that one
of our busier machines where we had a staffing issue was unfortunate that
it happened, but it did occur and that machine only did one treatment
</FONT></TD>
</TR>
</table>

<P align="center"><FONT size="2">6 of 10
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<TR valign="top">
    <TD width="10%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">for the whole quarter. Now that has been corrected and I
don&#146;t think that is ever going to happen again, we don&#146;t
expect. It is just one of those unusual things that does
occur. Looking at this month, things are looking good. We are
already 25&nbsp;days into the month and things are looking good.
It looks like we have returned to normal. But these things
do occasionally occur, but on the whole the business is
healthy and it is growing. We have new machines coming on.
Lehigh Valley has already 15 patients scheduled for next
month. Our machine in Albuquerque is probably going to break
all records for first year. The business is generally doing
quite well.
</FONT></TD>
</TR>

<tr><td>&nbsp;</td></tr>

<TR valign="top">
    <TD width="10%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">The other question about IMRT, yes we have a salesman now
that is concentrating on that. I will let Craig tell you the
number of hospitals that we are in discussions with. It
looks very exciting. My own feeling is that that business
will eventually be larger than the Gamma Knife business
because it is a replacement business of at least 2,000
machines. We are seeing a revolution in radiation care. We
are seeing this image guided therapy is the wave of the
future. It is my feeling and I feel strongly about this that
people will eventually be treated for their cancers with the
radiation therapy and a combination of drugs and less and
less surgery. We are
</FONT></TD>
</TR>
</table>

<P align="center"><FONT size="2">7 of 10
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<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">quite excited about IMRT. I will let Craig give you more
details. I hope that answers...
</FONT></TD>
</TR>


<tr><td>&nbsp;</td></tr>

<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Lenny Dunn: </FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">It does. Thank you very much. You certainly answered the
first part (Inaudible)...
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>

<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Craig Tagawa: </FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Mr.&nbsp;Dunn, this is Craig Tagawa. We certainly are very
optimistic about the role we can play in IMRT (Inaudible)
business model. We do have a salesman now that is working
both on IMRT and getting Gamma Knife contracts. He has
been in contact with various hospitals to push the IMRT
along and we hope to have something for you in the early
not to distant future.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>


<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Lenny Dunn: </FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Certainly look forward to that, because I once the first
sale is made the rest will come more easily.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>

<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Dr.&nbsp;Ernest Bates: </FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Also, Mr.&nbsp;Dunn, I think we forgot to mention in new sales
that we are, we do have a (Inaudible) going forward to a
hospital in Italy in Milan, which will be our first
European contract. We are very encouraged about that. We
are in almost what I hope will be the final stages of
negotiation there. I think that it is going to be an
opportunity for us in the European market. We are
discovering
</FONT></TD>
</TR>
</TABLE>


<P align="center"><FONT size="2">8 of 10
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<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">that reimbursement there for the Gamma Knife is not much
different than what it is here in the United States.
</FONT></TD>
</TR>

<tr><td>&nbsp;</td></tr>

<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Lenny Dunn: </FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Something unexpected and also...
</FONT></TD>
</TR>

<tr><td>&nbsp;</td></tr>

<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Dr.&nbsp;Ernest Bates: </FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Are there additional questions?
</FONT></TD>
</TR>


<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2"><i>Operator:</i></FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2"><I>Mr.&nbsp;Tagawa, there are no further questions. Would you like to make a closing remark?</I>
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>

<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Craig Tagawa: </FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">We would just like to thank everybody for participating on the call and that is it.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Dr.&nbsp;Ernest Bates: </FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">I just want to again add that thank you all for participating in this call. We are still quite encouraged about
our business. It really looks strong going forward. I might also mention you may recall I think we indicated
that we have found new financing sources for our Gamma Knife that is very encouraging. Our previous financing
source, DBI, is no longer in business and we have replaced them with people that are giving us a better rate.
That is also quite exciting.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>

<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Dr.&nbsp;Ernest Bates:</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2"> Norm, do you have anything else to say, any closing remarks?
</FONT></TD>
</TR>
 </TABLE>

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<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">Norm Houck: </FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Excuse me, Brandy that is it.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>

<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2"><i>Operator:
</i></FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2"><I>Thank you. This call will be available in digital replay immediately following today&#146;s conference. To access
the system dial 888-843-8996 and enter the pass code of 9492715 to access the replay. The webcast of this call
will be available at www.ashs.com and www.companyboardroom.com. This concludes today&#146;s teleconference. Thank
you for participating. You may now disconnect.</I>
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>

<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2"><I>Thank you for participating.</I>
</FONT></TD>
</TR>
</TABLE>

<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" nowrap align="right"><FONT size="2">*</FONT></TD>
 <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
 <TD><FONT size="2">Please Note: Proper names/organizations spelling not verified.
</FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2">C93861061/1133<BR>
JOB #: 1989286<BR>
DT: 07/22/04
</FONT>




<P align="center"><FONT size="2">10 of 10
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