<PAGE> 1
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)
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<S> <C>
CALIFORNIA 94-2918118
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
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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. [ ]
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CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
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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 -- -- --
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Common Shares Underlying
Warrants........................ 441,147 shares -- -- $237.31
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Total Registration Fee............ $931.70
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(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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<PAGE> 2
AMERICAN SHARED HOSPITAL SERVICES
------------------------
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
FORM S-3 ITEM NUMBER AND CAPTION LOCATION IN REGISTRATION STATEMENT OR PROSPECTUS
--------------------------------------------------- -------------------------------------------------
<S> <C> <C>
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
</TABLE>
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* Not applicable.
<PAGE> 3
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
<PAGE> 4
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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<PAGE> 5
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.
3
<PAGE> 6
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.
4
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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-
5
<PAGE> 8
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.
6
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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.
7
<PAGE> 10
CAPITALIZATION
The following table sets forth the capitalization of the Company at
December 31, 1996:
<TABLE>
<CAPTION>
DECEMBER 31,
1996
------------
<S> <C>
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
============
</TABLE>
- ---------------
(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.
8
<PAGE> 11
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
9
<PAGE> 12
Warrants owned by such Selling Securityholders and the number of Common Shares,
including Common Shares subject to Warrants, offered for sale.
<TABLE>
<CAPTION>
PERCENTAGE OF
COMMON
COMMON SHARES COMMON
SHARES WARRANTS BENEFICIALLY SHARES
NAME OWNED OWNED OWNED OFFERED
- ----------------------------------------------- ---------- -------- ------------- ----------
<S> <C> <C> <C> <C>
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
======== ======= =========
</TABLE>
- ---------------
* 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.
10
<PAGE> 13
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.
11
<PAGE> 14
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.
12
<PAGE> 15
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.
13
<PAGE> 16
======================================================
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
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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
</TABLE>
======================================================
======================================================
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
======================================================
<PAGE> 17
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:
<TABLE>
<S> <C>
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
===========
</TABLE>
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
II-1
<PAGE> 18
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:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ --------------------------------------------------------------------------
<C> <S>
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.
</TABLE>
- ---------------
* 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-
II-2
<PAGE> 19
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.
II-3
<PAGE> 20
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------------------- ----------------------------- ---------------
<S> <C> <C>
/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)
</TABLE>
II-4
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER EXHIBIT DESCRIPTION PAGE NUMBER
------ ------------------------------------------------------------------- -----------
<S> <C> <C>
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.................................................. *
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Post-Effective Amendment No. 1 on Form S-3 to the Registration Statement on Form
S-1 (Form S-3 No. 33-63721) and related Prospectus of American Shared Hospital
Services for the registration of 1,632,300 shares of its common stock and to the
incorporation by reference therein of our report dated March 6, 1997, with
respect to the consolidated financial statements and schedule of American Shared
Hospital Services included in its Annual Report (Form 10-K) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
April 2, 1997
Walnut Creek, California
