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<SEC-DOCUMENT>0000950134-07-022519.txt : 20080317
<SEC-HEADER>0000950134-07-022519.hdr.sgml : 20080317
<ACCEPTANCE-DATETIME>20071101142523
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950134-07-022519
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20071101

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:		CORRESP

	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>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">October&nbsp;25, 2007<br>&nbsp;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Tia Jenkins<BR>
Senior Assistant Chief Accountant<BR>
Officer of Emerging Growth Companies<BR>
U.S. Securities and Exchange Commission<BR>
100 F Street, N.E.<BR>
Washington D.C. 20549

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Re: American Shared Hospital Services- Form&nbsp;10-KA for the Year Ended December&nbsp;31, 2006
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dear Ms.&nbsp;Jenkins:<br>&nbsp;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This letter responds to comments of the Staff (&#147;Staff&#148;) of the Securities and Exchange Commission
to Ernest A. Bates, M.D. of American Shared Hospital Services (the &#147;Company&#148;) in the letter
regarding the Company&#146;s Form 10-KA for the year ended December&nbsp;31, 2006 (&#147;2006 Form 10-KA&#148;). We
have reproduced below the Staff&#146;s comments and the corresponding response of the Company. This
letter has been approved by the Company&#146;s Audit committee and reviewed by its independent
registered public accounting firm, Moss Adams, LLP and our outside securities counsel, Davis Polk &#038;
Wardwell.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Other 1934 Act Filings</U>
</DIV>


<DIV style="margin-top: 6pt">
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We note your response to prior comment five of our letter dated June&nbsp;21, 2007. We
note that the financial statements were revised but no Item&nbsp;4.02 8-K was filed. Since the
revised presentation of the capital lease transactions appears to have materially affected
cash flows from investing and financing activities, please tell us how you evaluated the
requirements of Item&nbsp;4.02 of Form 8-K.</TD>
</TR>

</TABLE>
</DIV>

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    <TD>Response: Prior to submitting its July&nbsp;18, 2007 response to the Staff&#146;s inquiry letter of
June&nbsp;21, 2007, we and our independent public accountants considered whether it was
necessary to file an Item&nbsp;4.02 Form 8-K. The Company&#146;s management concluded that it was
not necessary because we believed that the previously filed financial statements could
continue to be relied upon. Our auditors reached the same conclusion.</TD>
</TR>

</TABLE>
</DIV>

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    <TD>We respectfully submit that Item&nbsp;4.02 of Form 8-K is properly analyzed in conjunction with
SEC Staff Accounting Bulletin: No.&nbsp;99 &#151; Materiality. The tests are both quantitative and
qualitative and require management to assess a misstatement of an item in a financial
report as material if, &#147;in the light of the
</TD>
</TR>
</TABLE>
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    <TD>surrounding circumstances, the magnitude of the item is such that it is probable that the
judgment of a reasonable person relying on the report would have been changed or influenced
by the inclusion or correction of the item.&#148;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company revised its presentation of certain capital lease transactions in the Form
10-K/A. In the initial filing, these transactions were properly described as an investing
and financing activity on the face of the statement of cash flows, and footnote 5 provided
detailed data on the obligations under the capital leases. In the Form 10-K/A, we amended
this presentation to clarify that these were non-cash investing and financial activities.
This had the effect of moving amounts between investing and financing activities for 2006,
but did not change either net cash from operating activities or net increase (decrease)&nbsp;in
cash and cash equivalents for the year or the end-of-year balance. The Company believes
that this amended treatment is more informative and technically correct, but does not
believe that it is quantitatively significant in light of the overall presentation of cash
flows.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
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    <TD width="2%" style="background: transparent">&nbsp;</TD>
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    <TD width="1%">&nbsp;</TD>
    <TD>Equally significant, the Company does not believe that the new presentation would impact
the ability of investors to make informed decisions based on the information provided in
the original Form 10-K filing. First, of course, the capital lease information was fully
disclosed in the 10-K. Second, the Company believes that investors analogize capital
leases to long-term debt for the purchase of equipment, which is essentially how the
transactions were presented in the 10-K. As evidence of the Company&#146;s belief, we
respectfully refer the Staff to page 12 of the Form&nbsp;10-K &#151; &#147;Risk Factors&#151;The Company Has
a High Level of Debt,&#148; where we aggregate the amount of long-term debt and the present
value of capital leases in describing the risk to investors. The revised presentation in
the Form 10-K/A does not change, or even impact, this fundamental use of the information.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
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    <TD width="2%" style="background: transparent">&nbsp;</TD>
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    <TD width="1%">&nbsp;</TD>
    <TD>In summary, the Company respectfully submits that its conclusion that no Item&nbsp;4.02 Form 8-K
was required was a proper decision based on the available accounting guidance.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If you have any questions or comments concerning our response, please contact me at 415-788-5300 or
Dan Kelly, Davis Polk &#038; Wardwell, at 650-752-2001.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Sincerely,<br>&nbsp;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><u>/s/Craig K. Tagawa&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><BR>
Craig K. Tagawa<BR>
Chief Operating Officer

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">Cc:</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Ernest A. Bates, M.D.<br>
Norman Houck<br>
Dan Kelly, Esq.</TD>
</TR>

</TABLE>
</DIV>


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