10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from                     to                     .

Commission file number:  0-15586

U.S. Neurosurgical, Inc.

(Exact name of registrant as specified in its charter)

Delaware	52-1842411
(State of other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2400 Research Blvd, Suite 325, Rockville, Maryland 20850

(Address of principal executive offices)

(301) 208-8998

(Registrant's telephone number)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o No  x

The number of shares of the registrant’s common stock, $0.01 par value, outstanding as of November 9, 2012 was 7,797,185.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		4
Item 1.	Financial Statements	4
Item 2.	Management Discussion and Analysis of Financial Condition and Results of Operations.	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	19
Item 4.	Controls and Procedures	19
PART II - OTHER INFORMATION		22
Item 1.	Legal Proceedings	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Submission of Matters to a Vote of Security Holders	22
Item 5.	Other Information	22
Item 6.	Exhibits	22
SIGNATURES		23

3

PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements

U.S. NEUROSURGICAL, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2012			2011
ASSETS
Current assets:
Cash and cash equivalents	$	945,000		$	830,000
Accounts receivable		616,000			313,000
Due from related parties		203,000			208,000
Other current assets		23,000			7,000
Total current assets		1,787,000			1,358,000
Investment in unconsolidated entities		283,000			471,000
Gamma Knife (net of accumulated depreciation of $1,737,000 in 2012 and  $1,372,000 in 2011)		1,855,000			2,221,000
Leasehold improvements (net of accumulated amortization of $152,000 in 2012 and $134,000 in 2011)		97,000			115,000
Total property and equipment		1,952,000			2,336,000
TOTAL	$	4,022,000		$	4,165,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	105,000		$	24,000
Obligations under capital lease - current portion		576,000			539,000
Total current liabilities		681,000			563,000
Obligations under capital lease -net of current portion		1,726,000			2,163,000
Asset retirement obligations		100,000			100,000
Total long term liabilities		1,826,000			2,263,000
Total liabilities		2,507,000			2,826,000
Stockholders’ equity:
Common stock		78,000			78,000
Additional paid-in capital		3,101,000			3,100,000
Accumulated deficit		(1,664,000	)		(1,839,000	)
Total stockholders’ equity		1,515,000			1,339,000
TOTAL	$	4,022,000		$	4,165,000

The accompanying notes to financial statements are an integral part hereof.

4

U.S. NEUROSURGICAL, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended
	September 30,
	2012			2011
Revenue:
Patient revenue	$	617,000		$	503,000
Expenses:
Patient expenses		187,000			277,000
Selling, general and administrative		279,000			255,000
Total		466,000			532,000
Operating income		151,000			(29,000	)
Gain (loss) from investments in unconsolidated entites		23,000			(32,000	)
Interest expense		(53,000	)		(70,000	)
Interest income		4,000			-
Net income (loss)	$	125,000		$	(131,000	)
Basic and diluted income (loss) per share	$	0.02		$	(0.02	)
Weighted average shares outstanding		7,797,185			7,747,185

The accompanying notes to financial statements are an integral part hereof.

5

U.S. NEUROSURGICAL, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Nine Months Ended
	September 30,
	2012			2011
Revenue:
Patient revenue	$	1,681,000		$	1,547,000
Expenses:
Patient expenses		613,000			604,000
Selling, general and administrative		767,000			743,000
Total		1,380,000			1,347,000
Operating income		301,000			200,000
Interest expense		(169,000	)		(206,000	)
Gain from sales of investments in unconsolidated entities		24,000			-
Gain (loss) from investments in unconsolidated entities - net		8,000			(32,000	)
Interest income		12,000			-
Income from continuing operations		176,000			(38,000	)
Discontinued operations
Impairment loss		-			(89,000	)
Gain from operations		-			28,000
		-			(61,000	)
Net income (loss)	$	176,000		$	(99,000	)
Basic and diluted income (loss) per share	$	0.02		$	(0.01	)
Net income per common share from continuing operations – basic and diluted	$	0.02		$	-
Net income (loss) per common share from discontinued operations – basic and diluted	$	-		$	(0.01	)
Weighted average shares outstanding		7,797,185			7,747,185

The accompanying notes to financial statements are an integral part hereof.

6

U.S. NEUROSURGICAL, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	September 30,
	2012			2011
Cash flows from operating activities:
Net income (loss)	$	176,000		$	(99,000	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		384,000			533,000
Gain from sales of member interests in unconsolidated entities		(24,000	)		-
Loss from investments in unconsolidated entities		8,000			32,000
Changes in:
Loss on impairment of Gamma Knife equipment at
Kansas City center		-			89,000
Changes in:
Accounts receivable		(303,000	)		188,000
Due from related parties		89,000			(217,000	)
Other current assets		(16,000	)		(6,000	)
Accounts payable and accrued expenses		81,000			(32,000	)
Net cash provided by operating activities		395,000			488,000
Cash flows from investing activities:
Distributions from unconsolidated entities		120,000			-
Investments in unconsolidated entities		-			(225,000	)
Cash from settlement of Gamma Knife equipment at Kansas City center		-			322,000
Net cash provided by investing activities		120,000			97,000
Cash flows from financing activities:
Repayment of capital lease obligations		(400,000	)		(639,000	)
Decrease of cash held in escrow		-			51,000
Net cash used in financing activities		(400,000	)		(588,000	)
Net change in cash and cash equivalents	$	115,000		$	(3,000	)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	$	830,000		$	820,000
CASH AND CASH EQUIVALENTS - END OF PERIOD	$	945,000		$	817,000
Supplemental disclosures of cash flow information:
Cash paid for
Interest	$	169,000		$	209,000
Supplemental disclosure of noncash investing and financing activities Leasehold improvements financed by a capital lease	$	-		$	277,000
Sales proceeds from sale of member interests in unconsolidated entities included in due from related parties	$	112,000		$	-
Investment in unconsolidated entities included in due from related parties	$	28,000		$	-

The accompanying notes to financial statements are an integral part hereof.

7

U.S. NEUROSURGICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note A - Basis of Preparation

The accompanying condensed consolidated financial statements of U.S. Neurosurgical and subsidiaries (“USN” or the “Company”) at September 30, 2012, and for the three and nine months ended September 30, 2012 and 2011, are unaudited.  However, in the opinion of management, such statements include all adjustments necessary for a fair statement of the information presented therein.  The balance sheet at December 31, 2011 has been derived from the audited financial statements at that date appearing in the Company's Annual Report on Form 10-K.

Pursuant to accounting requirements of the Securities and Exchange Commission applicable to quarterly reports on Form 10-Q, the accompanying condensed consolidated financial statements and notes do not include all disclosures required by accounting principles generally accepted in the United States of America for complete financial statements.  Accordingly, these statements should be read in conjunction with the Company's most recent annual financial statements.

Consolidated results of operations for interim periods are not necessarily indicative of those to be achieved for full fiscal years.

Note B – Sale of Kansas City Gamma Knife Center and Focus on Continuing Businesses

In April 2011, the Company finalized certain transactions and agreements with Midwest Division – RMC, LLC (“RMC”), which owned the property and operates the medical facilities in Kansas City at which the Company’s Gamma Knife center was located.

Sale of Gamma Knife Equipment at Kansas City Center

The Company sold to RMC the Leksell Gamma Knife radiosurgery equipment, along with related supplies and inventory, located at the Kansas City Center for an aggregate purchase price of $250,000.  RMC also indicated its intention to employ the physicist who, up to the time of the sale, operated the Gamma Knife equipment on the Company’s behalf.  The Company will, upon request of RMC and at RMC’s cost and expense, assist RMC in replenishing the Gamma Knife equipment’s radioactive cobalt 60 as is necessary for the proper operation of the Gamma Knife.

Termination of Arrangements with RMC and Settlement of Outstanding Claims

In connection with the sale of the Gamma Knife equipment described above, the Company and RMC entered into an agreement terminating the Gamma Knife Neuroradiosurgery Equipment Agreement and the Ground Lease Agreement, each originally entered into between the parties in 1993, and concluded all arrangements between the parties relating to the operation of the Gamma Knife center and the lease of the premises.  Immediately preceding the termination of these agreements, the Company and RMC satisfied all outstanding obligations between the parties, resulting in a net payment of $385,355 to the Company.  In connection with the agreement, the parties also entered into a mutual release respecting all other outstanding claims and disputes between them relating to the Kansas City center.

8

The Company agreed with RMC that through September 2015, it will not participate in Gamma Knife operations in the states of Missouri, Kansas, Nebraska, Iowa and Arkansas.

Effect of Discontinued Kansas City Operations

The amounts of revenue and pretax or loss reported in discontinued operations for the nine months ended September 30, 2011 are as follow:

Revenue from operations	$	184,000
Pretax loss		(61,000	)

Included in the pretax loss for the nine months ended September 30, 2011 is an impairment recorded on the Gamma Knife for the Kansas City Center totaling $161,000.  This impairment loss is being offset by $72,000 received by the Company attributed to revenues from prior years which had been disputed by RMC, and, as such, never recorded by the Company due to the uncertainty of collection.

Continuing Businesses and Business Strategy

The Company will continue to own and operate the Gamma Knife center at NYU Hospital and participate in the newer Gamma Knife and radiosurgery centers in California and Florida.

USN is currently exploring other opportunities for Gamma Knife centers and centers that provide related healthcare services located near hospitals throughout the United States.  Discussions regarding such centers are preliminary and there can be no assurance that any such discussions will result in the opening of new centers.

As a result of the Company’s experiences over the past few years, the Company has expanded its focus to the broader based cancer treatment market.  In order to reduce the risk and broaden its opportunities for profitable growth, the Company, where possible, has been pursuing partnerships with local investors/providers to develop and operate oncology centers that utilize linear accelerators (LINACs) to treat cancers in the whole body.  The Company also continues to evaluate opportunities to develop additional Gamma Knife facilities.  The Southern California Regional Gamma Knife Center and Florida Oncology Partners typify this new strategy.

9

Note C – The Southern California Regional Gamma Knife Center

During 2007, the Company managed the formation of the Southern California Regional Gamma Knife center at San Antonio Community Hospital (“SACH”) in Upland, California.  The Company participates in the ownership and operation of the center through its wholly-owned subsidiary, USN Corona, Inc. (“USNC”).  Corona Gamma Knife, LLC (“CGK”) is party to a 14-year agreement with SACH to renovate space in the hospital and install and operate a Leksell PERFEXION Gamma Knife.  CGK leased the Gamma Knife from Neuro Partners LLC, which holds the Gamma Knife equipment.  In addition to returns on its ownership interests, USNC expects to receive fees for management services relating to the facility.

USNC is a 20% owner of Neuro Partners LLC.  USNC also owned initially 27% of CGK, and increased its ownership to 44% during 2011 to accommodate a member who desired to transfer his interest.  Subsequently, in the first quarter of 2012, USNC sold a portion of its ownership to a new member, resulting in a decrease in its ownership to 39%.

Construction of the SACH Gamma Knife center was completed in December 2008 and the first patient was treated in January 2009.  The project has been funded principally by outside investors.  While USN has led the effort in organizing the business and overseeing the development and operation of the SACH center, its investment to date in the SACH center has been minimal.

10

Because the Company’s interest in Neuro Partners LLC may be considered  significant relative to its other assets and operations, the following summarized financial information with respect to Neuro Partners LLC is presented:

Neuro Partners LLC Condensed Income Statement Information

	Nine Months Ended
	September 30,
	2012			2011
Net sales	$	666,000		$	666,000
Net income (loss)	$	(22,000	)	$	76,000
USNC's equity in loss of Neuro Partners LLC	$	(4,000	)	$	15,000

	Three Months Ended
	September 30,
	2012			2011
Net sales	$	222,000		$	222,000
Net income (loss)	$	(11,000	)	$	95,000
USNC's equity in loss of Neuro Partners LLC	$	(2,000	)	$	19,000

Neuro Partners LLC Condensed Balance Sheet Information

	September 30,			December 31,
	2012			2011
Current assets	$	432,000		$	482,000
Noncurrent assets		2,420,000			2,603,000
Total assets	$	2,852,000		$	3,085,000
Current liabilities	$	580,000		$	22,000
Noncurrent liabilities		2,449,000			3,144,000
Equity		(177,000	)		(81,000	)
Total liabilities and equity	$	2,852,000		$	3,085,000

11

Note D –Gamma Knife at NYU Medical Center

The Company installed a Leksell Gamma Knife, the Perfexion model, at the NYU Medical Center in March 2009 in replacement of the older Gamma Knife equipment at that location.  The net cost to the Company of the machine was $3,593,000 after a credit for the trade-in of the older machine.  The purchase price was financed through a capital lease with Elekta Capital.  The Company incurred construction costs of $251,000 in connection with the installation of the equipment and the upgrades to the facility.  In connection with this upgrade, the Company modified its arrangement with NYU to extend the term for 12 years from March 2009.  The Company is responsible under the lease agreement with Elekta Capital for 81 months of lease payments which began in July 2009 of approximately $61,000 per month.  In addition, lease payments of $2,379 per month began in July 2010 and continue through June 2017 to cover construction costs.

Note E – Florida Oncology Partners

During the quarter ended September 30, 2010, the Company participated in the formation of Florida Oncology Partners, consisting of, Florida Oncology Partners, LLC (“FOP”), and Florida Oncology Partners RE, LLC, (“FOPRE”) (collectively referred to as “Florida Oncology Partners”), which operates a cancer center located in West Kendall, Florida.  The center diagnoses and treats patients utilizing a Varian Rapid Arc linear accelerator and a GE CT scanner.  USNC owns a 20% interest in Florida Oncology Partners and invested $200,000.  The remaining 80% is owned by other outside investors.  The center opened and treated its first patient in May 2011.  The Company's recorded investment in Florida Oncology Partners is $200,000 at September 30, 2012, consisting of a $160,000 investment in FOP and a $40,000 investment in FOPRE.

The Company entered into a note receivable with FOP for working capital purposes, for $200,000 in August 2011, bearing interest at 10% per annum and due in August 2012. The note receivable and accrued interest total $208,000 at December 31, 2011.  This note (principal) was repaid in May 2012.

During 2011, FOP entered into a capital lease with Key Bank.  Under the terms of the capital lease, USNC agreed to guarantee 20% of the outstanding lease obligation of $5,060,255 at September 30, 2012 in the event of default.

In June of 2012, FOPRE completed the financing agreement to purchase the building that is occupied by FOP. The amount of the loan was $1,534,275 to be paid at a monthly rate of approximately $8,500 for 120 months with the final payment due in June 15, 2022.

12

Because the Company’s interest in FOP may be considered significant relative to its other assets and operations, the following summarized financial information with respect to FOP is presented:

Florida Oncology Partners LLC Condensed Income Statement Information

	Nine Months Ended
	September 30,
	2012		2011
Net sales	$	2,322,000	$	1,110,000
Net income	$	364,000	$	86,000
USNC's equity in income of Florida Oncology Partners LLC	$	73,000	$	17,000
	Three Months Ended
	September 30,
		2012		2011
Net sales	$	839,000	$	465,000
Net income	$	178,000	$	390,000
USNC's equity in income of Florida Oncology Partners LLC	$	36,000	$	78,000

Florida Oncology Partners LLC Condensed Balance Sheet Information

	September 30,		December 31,
	2012		2011
Current assets	$	1,076,000	$	1,297,000
		.
Noncurrent assets		5,115,000		5,467,000
Total assets	$	6,191,000	$	6,764,000
Current liabilities	$	968,000	$	905,000
Noncurrent liabilities		4,416,000		4,944,000
Equity		807,000		915,000
Total liabilities and equity	$	6,191,000	$	6,764,000

13

Note F – Boca Oncology Partners

During the quarter ended June 30, 2011, the Company participated in the formation of Boca Oncology Partners, LLC (“BOP”), for the purpose of owning and operating a cancer care center in Boca Raton, Florida. In June 2011, Boca Oncology Partners RE, LLC (“BOPRE”), an affiliated entity, purchased a 20% interest in Boca West IMP, the owner of a medical office building in West Boca, Florida in which BOP plans to operate.  BOP will occupy approximately 6,000 square feet of the 32,000 square foot building.  The Company’s wholly-owned subsidiary, USNC, invested $225,000 initially, giving it a 22.5% interest in BOP and BOPRE.  The remaining 77.5% was initially owned by other outside investors.  The cancer center in Boca Raton opened in August of 2012. As of September 30, 2012, there has been no significant income to offset expenses in BOP.  The Company loaned $160,000 to BOP for working capital and facility improvements during 2011.

During the first quarter of 2012, BOP sold a 50% interest to certain investors, reducing the ownership of USNC in BOP by 50% to 11.25% interest.  The price paid for such interest was $250,000, of which USNC received approximately $46,000 after legal expenses.  In addition, during the first quarter of 2012, BOPRE purchased an additional 3.75% of Boca West IMP and simultaneously sold a 30% interest to a new investor.  The net proceeds from the sale of the new interest in BOPRE was $124,000 after legal expenses, of which $27,000 was received by USNC.

Note G - Subsequent Event

On October 29-30, 2012, due to flooding of the lower floors  at the NYU Medical Center in Manhattan caused by storms associated with Hurricane Sandy, the Company’s Gamma Knife and other equipment at that location was damaged.  As a result, the Company’s New York center was shut down and it is expected that virtually all of the equipment will have to be replaced.  For the nine months ended September 30, 2012, all patient revenue and patient expenses were generated at this facility.

The Company is unable to estimate the time that it will take to resume operations at the NYU facility, but it anticipates that the center will be closed for at least several months.  While working to restore operations, management is seeking alternative arrangements for the patients that were scheduled for treatment at the center during this period.  The Company believes that its insurance policies will cover all of the property damage at the center, but it is possible that the interruption of activity will adversely impact the long term profitability and growth of operations at the NYU facility.

14

Item 2.  Management Discussion and Analysis of Financial Condition and Results of Operations.

Critical Accounting Policies

The condensed consolidated financial statements of U.S. Neurosurgical, Inc. (“USN” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America.  As such, some accounting policies have a significant impact on amounts reported in the condensed consolidated financial statements.  A summary of those significant accounting policies can be found in Note B to the Consolidated Financial Statements, in our 2011 Annual Report on Form 10-K.  In particular, judgment is used in areas such as determining the allowance for doubtful accounts and assessing possible asset impairments.

The following discussion and analysis provides information which the Company’s management believes is relevant to an assessment and understanding of the Company’s results of operations and financial condition. This discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere herein.

Results of Operation

In April 2011, the Company finalized certain transactions and agreements with Midwest Division – RMC, LLC, which resulted in the disposition of its assets and business at the Kansas City Gamma Knife center, as described in Note B to the unaudited condensed consolidated financial statements of the Company included in this report.  Previous Kansas City center operations are excluded from the presentation of results of continuing operations for the nine months ended September 30, 2012 and 2011.

Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011

Patient revenue increased 23% to $617,000 in the quarter ended September 30, 2012 from $503,000 for the quarter ended September 30, 2011.  This increase was largely due to the increased number of patients treated during third quarter of 2012.  Patient expenses decreased 32% to $187,000 for the third quarter of 2012 compared to $277,000 in the same period a year ago.  Patient expenses do not vary materially with the number of procedures performed, but are tied to depreciation, maintenance and other fixed expenses.  The decrease in patient expenses for the third quarter of 2012 was due to a decrease in maintenance expense for the Gamma Knife from the prior year at the Company’s New York center.

Selling, general and administrative expense of $279,000 for the third quarter of 2012 was 9% higher than the $255,000 incurred during the comparable period in 2011.  The increase in SG&A expenses was largely due to  an increase of expenses related to the new SEC filing requirements.

15

The Company incurred interest expense of $53,000 in the third quarter of 2012 as compared to interest expense of $70,000 for the same period a year ago – a 24% decrease.  This reduction was due to the normal amortization schedule of the capital lease at the New York center.

For the three months ended September 30, 2012, the Company reported a profit of $125,000 as compared to a net loss of $131,000 for the same period a year earlier.

Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011

Patient revenue increased 9% to $1,681,000 in the nine months ended September 30, 2012 from $1,547,000 for the nine months ended September 30, 2011.  This increase was largely the result of an increase in patients at the NYU Center.  Patient expenses increased 1% to $613,000 for the first nine months of 2012 compared to $604,000 in the same period a year ago.  Patient expenses do not vary materially with the number of procedures performed, but are tied to depreciation, maintenance and other fixed expenses.

Selling, general and administrative expense of $767,000 for the first nine months of 2012 was 3% higher than the $743,000 incurred during the comparable period in 2011.  This increase was largely related to the increase of expenses related SEC reporting requirements.

The Company incurred interest expense of $169,000 in the first nine months of 2012 as compared to interest expense of $206,000 for the same period a year ago – an 18% decrease.  This reduction was due to the normal amortization schedule of the capital lease at the New York center.

For the nine months ended September 30, 2012, the Company reported income from continuing operations of $176,000 as compared to a net loss of $38,000 for the same period a year earlier.

Liquidity and Capital Resources

At September 30, 2012, the Company had working capital of $1,106,000 as compared to $795,000 at December 31, 2011.  Cash and cash equivalents at September 30, 2012 were $945,000 as compared with $830,000 at December 31, 2011.  This increase in cash resulted from net cash provided by operating activities, offset partially by the repayment of capital lease obligations during the period.

Net cash provided by operating activities for the nine months ended September 30, 2012 was $395,000 as compared to the $488,000 that was provided in the same period a year earlier.  Net income from operations for the nine months ended September 30, 2012 includes depreciation and amortization of $384,000 as compared to $533,000 the same nine month period in 2011.  Net income for the first nine months of 2011 also reflects an impairment loss of $89,000 on the equipment at the Company’s former Gamma Knife center in Kansas City, which did not affect operations in the same period in 2012.  Accounts receivable increased by $303,000 during the first nine months of 2012 as compared to a decrease of $188,000 during the same period on 2011, while accounts payable increased $81,000 during the first nine months of 2012 as compared to a decrease of $32,000 in the prior period.  Finally, cash flow provided by operating activities was increased during the first nine months of 2012 by the net reduction in amounts due from related parties of $89,000, as compared to the net increase in these items of $217,000 experienced during the same period of 2011.

16

With respect to investing activities, the Company received $120,000 in distributions from its unconsolidated entities during the first nine months of 2012 as compared to payments to such entities of $225,000 in the comparable period in 2011.  The payments in 2011 were more than offset by payments received in the amount of $322,000 in settlement of the Gamma Knife equipment during that period.

With respect to financing activities, the Company paid $400,000 towards its capital lease obligations during the nine months ended September 30, 2012 as compared to $639,000 in the same period a year ago.

With our current cash position, continued collection on our accounts receivable and expected insurance proceeds from the NYU center, the Company believes that its cash position will be sufficient to support operations for at least the next twelve months.

Subsequent Event

On October 29-30, 2012, due to flooding of the lower floors  at the NYU Medical Center in Manhattan caused by storms associated with Hurricane Sandy, the Company’s Gamma Knife and other equipment at that location was damaged.  As a result, the Company’s New York center was shut down and it is expected that virtually all of the equipment will have to be replaced.  For the nine months ended September 30, 2012, all patient revenue and patient expenses were generated at this facility.

The Company is unable to estimate the time that it will take to resume operations at the NYU facility, but it anticipates that the center will be closed for at least several months.  While working to restore operations, management is seeking alternative arrangements for the patients that were scheduled for treatment at the center during this period.  The Company believes that its insurance policies will cover all of the property damage at the center, but it is possible that the interruption of activity will adversely impact the long term profitability and growth of operations at the NYU facility.

Risk Factors

We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.  The following factors, as well as the factors listed under the caption “Risk Factors” in our Form 10-K for the fiscal year ended December 31, 2011, have affected or could affect our actual results and could cause such results to differ materially from those expressed in any forward-looking statements made by us.  Investors should carefully consider these risks and speculative factors inherent in and affecting our business and an investment in our common stock.

Recent Operating Losses.  We have experienced operating losses in recent periods and may do so in the future.  With the increased obligations in connection with the capital lease financing established during 2009 for the new Gamma Knife at the New York center, the Company must now operate at a higher level of revenues to generate positive net income.

17

While the Company has taken steps to improve long term profitability, it is possible that the Company will experience material losses in future periods.

Availability of Working Capital.  To date, we have earned sufficient income from operations to fund periodic operating losses and support efforts to pursue new Gamma Knife and other centers.  If the Company experiences losses again, we will be required to seek additional capital to support continued operations and the development of new centers, but we cannot assure you that we will be able to raise such additional capital as and when required and on terms that will be acceptable.

Restoration of Operations at New York Gamma Knife Center.  Due to the flooding at the NYU Medical Center caused by the storm associated with Hurricane Sandy in late October 2012, the Company’s Gamma Knife and other equipment at that location will require replacement and operations will be suspended indefinitely.  The Company is currently unable to predict the time that it will take to restore operations or the impact that the suspension of operations will have on the future level of activity at the center.  In addition, while the Company has in place policies of insurance to mitigate the damage and loss caused by  such events, it cannot be certain that such insurance will cover all losses incurred.  In any event, the property damage and interruption of operations at NYU will likely have an adverse impact on the Company’s profitability and growth

Disclosure Regarding Forward Looking Statements

The Securities and Exchange Commission encourages companies to disclose forward looking information so that investors can better understand a company's future prospects and make informed investment decisions.  This document contains such "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, particularly statements anticipating future growth in revenues and cash flow.  Words such as "anticipates," "estimates," "expects," "projects," "intends," "plans," "believes," "will be," "will continue," "will likely result," and words and terms of similar substance used in connection with any discussion of future operating or financial performance identify such forward-looking statements.  Those forward-looking statements are based on management's present expectations about future events.  As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances, and the Company is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of such changes, new information, future events or otherwise.

The Company operates in a highly competitive and rapidly changing environment and in business segments that are dependent on our ability to: achieve profitability; increase revenues; sustain our current level of operations; maintain satisfactory relations with business partners; attract and retain key personnel; maintain and expand our strategic alliances; and protect our intellectual property.  The Company's actual results could differ materially from management's expectations because of changes in such factors.  New risk factors can arise and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.  Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

18

Investors should also be aware that while the Company might, from time to time, communicate with securities analysts, it is against the Company's policy to disclose to them any material non-public information or other confidential commercial information. Accordingly, investors should not assume that the Company agrees with any statement or report issued by any analyst irrespective of the content of the statement or report. Furthermore, the Company has a policy against issuing or confirming financial forecasts or projections issued by others.  Thus, to the extent that reports issued by securities analysts or others contain any projections, forecasts or opinions, such reports are not the responsibility of the Company.

In addition, the Company’s overall financial strategy, including growth in operations, maintaining financial ratios and strengthening the balance sheet, could be adversely affected by increased interest rates, failure to meet earnings expectations, significant acquisitions or other transactions, economic slowdowns and changes in the Company’s plans, strategies and intentions.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, as appropriate, to allow timely decisions regarding required disclosure.  Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  We do realize that we are a very small company and as a small company with only the officers and directors participating in the day to day management, with the ability to override controls, each officer and director has multiple positions and responsibilities that would normally be distributed among several employees in larger organizations with adequate segregation of duties to ensure the appropriate checks and balances.  Because the Company does not currently have a separate chief financial officer, the Chief Executive Officer performs these functions with the support of one of the Company’s outside directors who assists in the reporting and disclosure process (the “Lead Director”).

19

Our management evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report.  Based upon that evaluation the Company’s Chief Executive Officer concluded that the Company’s disclosure controls and procedures were not effective as of the end of the period covered by this report for the information required to be disclosed by the Company in the reports it files or submits under the Securities Exchange Act of 1934, as amended, to be recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, due to the material weakness in internal control over financial reporting described below.

Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934).  Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.  The Company’s internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

20

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2012. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. A material weakness is a control deficiency, or a combination of control deficiencies in internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. In connection with the assessment described above, management identified the following material weakness as of September 30, 2012: the Company did not maintain sufficient qualified personnel with the appropriate level of knowledge, experience and training in the application of accounting principles generally accepted in the United States of America and in internal controls over financial reporting commensurate with its financial reporting requirements. Specifically, effective controls were not designed and in place to ensure that the Company maintained, or had access to, appropriate resources with adequate experience and expertise in the area of financial reporting for investments in unconsolidated entities and discontinued operations.  The Company is in the process of considering steps to rectify this material weakness.

Changes in Internal Control over Financial Reporting

While there have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended September 30, 2012, management is in the process of developing plans to remediate the material weakness identified above.

21

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

None

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3.  Defaults Upon Senior Securities

Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders

Not applicable.

Item 5.  Other Information

Not applicable.

Item 6.  Exhibits

31.1          Certification of President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1          Certification of President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

101           Interactive Data Files providing financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 in XBRL (eXtensible Business Reporting Language).  Pursuant to Regulation 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, and are otherwise not subject to liability.

22

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	U.S. Neurosurgical, Inc.
	(Registrant)
Date:  November 12, 2012	By:	/s/Alan Gold
		Alan Gold
		Director, President and
		Chief Executive Officer
		and
		Principal Financial Officer
		of the Registrant

23

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER (PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER)

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Alan Gold, certify that:

1. I have reviewed this Report on Form 10-Q of U.S. Neurosurgical, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures,and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and;

5. I have disclosed, based on my most recent evaluationof internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 12, 2012	/s/Alan Gold
	Alan Gold
	President & Chairman of the Board
	(Principal Executive Officer
	and Principal Financial
	Officer)

EX-32.2

EXHIBIT 32.1

Certificate pursuant to 18 U.S.C. Section 1350,

as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of U.S. Neurosurgical, Inc. on Form 10-Q for the period ending September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alan Gold, President and Chief Executive Officer of U.S. Neurosurgical, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of U.S. Neurosurgical, Inc.

/s/ Alan Gold

Alan Gold

President and Chief Executive Officer

(Principal Executive Officer

and Principal Financial Officer)

November 12, 2012

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Gamma Knife at NYU Medical Center

9 Months Ended

Sep. 30, 2012

Gamma Knife at NYU Medical Center [Abstract]

Gamma Knife at NYU Medical Center

Note D –Gamma Knife at NYU Medical Center

The Company installed a Leksell Gamma Knife, the Perfexion model, at the NYU Medical Center in March 2009 in replacement of the older Gamma Knife equipment at that location.  The net cost to the Company of the machine was $3,593,000 after a credit for the trade-in of the older machine.  The purchase price was financed through a capital lease with Elekta Capital.  The Company incurred construction costs of $251,000 in connection with the installation of the equipment and the upgrades to the facility.  In connection with this upgrade, the Company modified its arrangement with NYU to extend the term for 12 years from March 2009.  The Company is responsible under the lease agreement with Elekta Capital for 81 months of lease payments which began in July 2009 of approximately $61,000 per month.  In addition, lease payments of $2,379 per month began in July 2010 and continue through June 2017 to cover construction costs.

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The Southern California Regional Gamma Knife Center

9 Months Ended

Sep. 30, 2012

The Southern California Regional Gamma Knife Center [Abstract]

The Southern California Regional Gamma Knife Center

Note C – The Southern California Regional Gamma Knife Center

During 2007, the Company managed the formation of the Southern California Regional Gamma Knife center at San Antonio Community Hospital ("SACH") in Upland, California.  The Company participates in the ownership and operation of the center through its wholly-owned subsidiary, USN Corona, Inc. ("USNC").  Corona Gamma Knife, LLC ("CGK") is party to a 14-year agreement with SACH to renovate space in the hospital and install and operate a Leksell PERFEXION Gamma Knife.  CGK leased the Gamma Knife from Neuro Partners LLC, which holds the Gamma Knife equipment.  In addition to returns on its ownership interests, USNC expects to receive fees for management services relating to the facility.

USNC is a 20% owner of Neuro Partners LLC.  USNC also owned initially 27% of CGK, and increased its ownership to 44% during 2011 to accommodate a member who desired to transfer his interest.  Subsequently, in the first quarter of 2012, USNC sold a portion of its ownership to a new member, resulting in a decrease in its ownership to 39%.

Construction of the SACH Gamma Knife center was completed in December 2008 and the first patient was treated in January 2009.  The project has been funded principally by outside investors.  While USN has led the effort in organizing the business and overseeing the development and operation of the SACH center, its investment to date in the SACH center has been minimal.

Because the Company's interest in Neuro Partners LLC may be considered significant relative to its other assets and operations, the following summarized financial information with respect to Neuro Partners LLC is presented:

Neuro Partners LLC Condensed Income Statement Information

	Nine Months Ended
	September 30,
	2012			2011
Net sales	$	666,000		$	666,000
Net income (loss)	$	(22,000	)	$	76,000
USNC's equity in loss of Neuro Partners LLC	$	(4,000	)	$	15,000
	Three Months Ended
	September 30,
		2012			2011
Net sales	$	222,000		$	222,000
Net income (loss)	$	(11,000	)	$	95,000
USNC's equity in loss of Neuro Partners LLC	$	(2,000	)	$	19,000

Neuro Partners LLC Condensed Balance Sheet Information

	September 30,			December 31,
		2012			2011
Current assets	$	432,000		$	482,000
Noncurrent assets		2,420,000			2,603,000
Total assets	$	2,852,000		$	3,085,000
Current liabilities	$	580,000		$	22,000
Noncurrent liabilities		2,449,000			3,144,000
Equity		(177,000	)		(81,000	)
Total liabilities and equity	$	2,852,000		$	3,085,000

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 945,000	$ 830,000
Accounts receivable	616,000	313,000
Due from related parties	203,000	208,000
Other current assets	23,000	7,000
Total current assets	1,787,000	1,358,000
Investment in unconsolidated entities	283,000	471,000
Gamma Knife (net of accumulated depreciation of $1,737,000 in 2012 and $1,372,000 in 2011)	1,855,000	2,221,000
Leasehold improvements (net of accumulated amortization of $152,000 in 2012 and $134,000 in 2011)	97,000	115,000
Total property and equipment	1,952,000	2,336,000
TOTAL	4,022,000	4,165,000
Current liabilities:
Accounts payable and accrued expenses	105,000	24,000
Obligations under capital lease - current portion	576,000	539,000
Total current liabilities	681,000	563,000
Obligations under capital lease - net of current portion	1,726,000	2,163,000
Asset retirement obligations	100,000	100,000
Total long term liabilities	1,826,000	2,263,000
Total liabilities	2,507,000	2,826,000
Stockholders' equity:
Common stock	78,000	78,000
Additional paid-in capital	3,101,000	3,100,000
Accumulated deficit	(1,664,000)	(1,839,000)
Total stockholders' equity	1,515,000	1,339,000
TOTAL	$ 4,022,000	$ 4,165,000

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Basis of Preparation

9 Months Ended

Sep. 30, 2012

Basis of Preparation [Abstract]

Basis of Preparation

Note A - Basis of Preparation

The accompanying condensed consolidated financial statements of U.S. Neurosurgical and subsidiaries ("USN" or the "Company") at September 30, 2012, and for the three and nine months ended September 30, 2012 and 2011, are unaudited.  However, in the opinion of management, such statements include all adjustments necessary for a fair statement of the information presented therein.  The balance sheet at December 31, 2011 has been derived from the audited financial statements at that date appearing in the Company's Annual Report on Form 10-K.

Pursuant to accounting requirements of the Securities and Exchange Commission applicable to quarterly reports on Form 10-Q, the accompanying condensed consolidated financial statements and notes do not include all disclosures required by accounting principles generally accepted in the United States of America for complete financial statements.  Accordingly, these statements should be read in conjunction with the Company's most recent annual financial statements.

Consolidated results of operations for interim periods are not necessarily indicative of those to be achieved for full fiscal years.

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Sale of Kansas City Gamma Knife Center and Focus on Continuing Businesses

9 Months Ended

Sep. 30, 2012

Sale of Kansas City Gamma Knife Center and Focus on Continuing Businesses [Abstract]

Sale of Kansas City Gamma Knife Center and Focus on Continuing Businesses

Note B – Sale of Kansas City Gamma Knife Center and Focus on Continuing Businesses

In April 2011, the Company finalized certain transactions and agreements with Midwest Division – RMC, LLC ("RMC"), which owned the property and operates the medical facilities in Kansas City at which the Company's Gamma Knife center was located.

Sale of Gamma Knife Equipment at Kansas City Center

The Company sold to RMC the Leksell Gamma Knife radiosurgery equipment, along with related supplies and inventory, located at the Kansas City Center for an aggregate purchase price of $250,000.  RMC also indicated its intention to employ the physicist who, up to the time of the sale, operated the Gamma Knife equipment on the Company's behalf.  The Company will, upon request of RMC and at RMC's cost and expense, assist RMC in replenishing the Gamma Knife equipment's radioactive cobalt 60 as is necessary for the proper operation of the Gamma Knife.

Termination of Arrangements with RMC and Settlement of Outstanding Claims

In connection with the sale of the Gamma Knife equipment described above, the Company and RMC entered into an agreement terminating the Gamma Knife Neuroradiosurgery Equipment Agreement and the Ground Lease Agreement, each originally entered into between the parties in 1993, and concluded all arrangements between the parties relating to the operation of the Gamma Knife center and the lease of the premises.  Immediately preceding the termination of these agreements, the Company and RMC satisfied all outstanding obligations between the parties, resulting in a net payment of $385,355 to the Company.  In connection with the agreement, the parties also entered into a mutual release respecting all other outstanding claims and disputes between them relating to the Kansas City center.

The Company agreed with RMC that through September 2015, it will not participate in Gamma Knife operations in the states of Missouri, Kansas, Nebraska, Iowa and Arkansas.

Effect of Discontinued Kansas City Operations

The amounts of revenue and pretax or loss reported in discontinued operations for the nine months ended September 30, 2011 are as follow:

Revenue from operations	$	184,000
Pretax loss		(61,000	)

Included in the pretax loss for the nine months ended September 30, 2011 is an impairment recorded on the Gamma Knife for the Kansas City Center totaling $161,000.  This impairment loss is being offset by $72,000 received by the Company attributed to revenues from prior years which had been disputed by RMC, and, as such, never recorded by the Company due to the uncertainty of collection.

Continuing Businesses and Business Strategy

The Company will continue to own and operate the Gamma Knife center at NYU Hospital and participate in the newer Gamma Knife and radiosurgery centers in California and Florida.

USN is currently exploring other opportunities for Gamma Knife centers and centers that provide related healthcare services located near hospitals throughout the United States.  Discussions regarding such centers are preliminary and there can be no assurance that any such discussions will result in the opening of new centers.

As a result of the Company's experiences over the past few years, the Company has expanded its focus to the broader based cancer treatment market.  In order to reduce the risk and broaden its opportunities for profitable growth, the Company, where possible, has been pursuing partnerships with local investors/providers to develop and operate oncology centers that utilize linear accelerators (LINACs) to treat cancers in the whole body.  The Company also continues to evaluate opportunities to develop additional Gamma Knife facilities.  The Southern California Regional Gamma Knife Center and Florida Oncology Partners typify this new strategy.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 31, 2011
ASSETS
Gamma Knife, accumulated depreciation	$ 1,737,000	$ 1,372,000
Leasehold improvement, accumulated amortization	$ 152,000	$ 134,000

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The Southern California Regional Gamma Knife Center (Details) (USD $)	9 Months Ended						3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 CGK [Member]	Sep. 30, 2012 CGK [Member] USNC [Member]	Mar. 31, 2012 CGK [Member] USNC [Member]	Dec. 31, 2011 CGK [Member] USNC [Member]	Sep. 30, 2012 Neuro Partners LLC [Member]	Sep. 30, 2011 Neuro Partners LLC [Member]	Sep. 30, 2012 Neuro Partners LLC [Member]	Sep. 30, 2011 Neuro Partners LLC [Member]	Dec. 31, 2011 Neuro Partners LLC [Member]	Sep. 30, 2012 Neuro Partners LLC [Member] USNC [Member]
Schedule of Equity Method Investments [Line Items]
Renovation installation and operation agreement period			14 years
Ownership percentage (in hundredths)					39.00%	44.00%						20.00%
Initial ownership percentage (in hundredths)				27.00%
Neuro Partners LLC Condensed Income Statement Information [Abstract]
Net sales							$ 222,000	$ 222,000	$ 666,000	$ 666,000
Net income (loss)							(11,000)	95,000	(22,000)	76,000
USNC's equity in loss of Neuro Partners LLC	24,000	0					(2,000)	19,000	(4,000)	15,000
Neuro Partners LLC Condensed Balance Sheet Information [Abstract]
Current assets							432,000		432,000		482,000
Noncurrent assets							2,420,000		2,420,000		2,603,000
Total assets							2,852,000		2,852,000		3,085,000
Current liabilities							580,000		580,000		22,000
Noncurrent liabilities							2,449,000		2,449,000		3,144,000
Equity							(177,000)		(177,000)		(81,000)
Total liabilities and equity							$ 2,852,000		$ 2,852,000		$ 3,085,000

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 09, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	US NEUROSURGICAL INC
Entity Central Index Key	0001089815
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		7,797,185
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012

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Gamma Knife at NYU Medical Center (Details) (USD $)	9 Months Ended
	Sep. 30, 2012
Gamma Knife at NYU Medical Center [Abstract]
Net cost of the gamma knife	$ 3,593,000
Construction costs for installation and upgradation of gamma knife	251,000
Extended term of arrangement with NYU	12 years
Lease payments period	81 months
Lease periodic payments	61,000
Additional lease periodic payments	$ 2,379

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenue:
Patient revenue	$ 617,000	$ 503,000	$ 1,681,000	$ 1,547,000
Expenses:
Patient expenses	187,000	277,000	613,000	604,000
Selling, general and administrative	279,000	255,000	767,000	743,000
Total	466,000	532,000	1,380,000	1,347,000
Operating income	151,000	(29,000)	301,000	200,000
Gain (loss) from investment in unconsolidated entities, net	23,000	(32,000)
Interest expense	(53,000)	(70,000)	(169,000)	(206,000)
Gain from sales of investments in unconsolidated entities			24,000	0
Gain (loss) from invesment in unconsolidated entities			8,000	(32,000)
Interest income	4,000	0	12,000	0
Income from continuing operations			176,000	(38,000)
Discontinued operations
Impairment loss			0	(89,000)
Gain from operations			0	28,000
Gain (loss) from discontinued operations			0	(61,000)
Net income (loss)	$ 125,000	$ (131,000)	$ 176,000	$ (99,000)
Basic and diluted income (loss) per share (in dollars per share)	$ 0.02	$ (0.02)	$ 0.02	$ (0.01)
Net income per common share from continuing operations - basic and diluted (in dollars per share)			$ 0.02	$ 0
Net income (loss) per common share from discontinued operations - basic and diluted (in dollars per share)			$ 0	$ (0.01)
Weighted average shares outstanding (in shares)	7,797,185	7,747,185	7,797,185	7,747,185

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Subsequent Event

9 Months Ended

Sep. 30, 2012

Subsequent Event [Abstract]

Subsequent Event [Text Block]

Note G - Subsequent Event

On October 29-30, 2012, due to flooding of the lower floors  at the NYU Medical Center in Manhattan caused by storms associated with Hurricane Sandy, the Company's Gamma Knife and other equipment at that location was damaged.  As a result, the Company's New York center was shut down and it is expected that virtually all of the equipment will have to be replaced.  For the nine months ended September 30, 2012, all patient revenue and patient expenses were generated at this facility.

The Company is unable to estimate the time that it will take to resume operations at the NYU facility, but it anticipates that the center will be closed for at least several months.  While working to restore operations, management is seeking alternative arrangements for the patients that were scheduled for treatment at the center during this period.  The Company believes that its insurance policies will cover all of the property damage at the center, but it is possible that the interruption of activity will adversely impact the long term profitability and growth of operations at the NYU facility.

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Boca Oncology Partners

9 Months Ended

Sep. 30, 2012

Boca Oncology Partners [Abstract]

Boca Oncology Partners

Note F – Boca Oncology Partners

During the quarter ended June 30, 2011, the Company participated in the formation of Boca Oncology Partners, LLC ("BOP"), for the purpose of owning and operating a cancer care center in Boca Raton, Florida. In June 2011, Boca Oncology Partners RE, LLC ("BOPRE"), an affiliated entity, purchased a 20% interest in Boca West IMP, the owner of a medical office building in West Boca, Florida in which BOP plans to operate.  BOP will occupy approximately 6,000 square feet of the 32,000 square foot building.  The Company's wholly-owned subsidiary, USNC, invested $225,000 initially, giving it a 22.5% interest in BOP and BOPRE.  The remaining 77.5% was initially owned by other outside investors.  The cancer center in Boca Raton opened in August of 2012. As of September 30, 2012, there has been no significant income to offset expenses in BOP.  The Company loaned $160,000 to BOP for working capital and facility improvements during 2011. 

During the first quarter of 2012, BOP sold a 50% interest to certain investors, reducing the ownership of USNC in BOP by 50% to 11.25% interest.  The price paid for such interest was $250,000, of which USNC received approximately $46,000 after legal expenses.  In addition, during the first quarter of 2012, BOPRE purchased an additional 3.75% of Boca West IMP and simultaneously sold a 30% interest to a new investor.  The net proceeds from the sale of the new interest in BOPRE was $124,000 after legal expenses, of which $27,000 was received by USNC.

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Florida Oncology Partners (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Aug. 31, 2011
Schedule of Equity Method Investments [Line Items]
Outstanding lease obligation	$ 5,060,255		$ 5,060,255
Recorded investments	283,000		283,000		471,000
Florida Oncology Partners LLC Condensed Income Statement Information [Abstract]
USNC's equity in loss of Neuro Partners LLC			24,000	0
Florida Oncology Partners RE, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Recorded investments	40,000		40,000
Florida Oncology Partners [Member]
Schedule of Equity Method Investments [Line Items]
Recorded investments	200,000		200,000		200,000
Ownership percentage by outside investors (in hundredths)			80.00%
Florida Oncology Partners, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Recorded investments	160,000		160,000
Notes receivable from related parties						200,000
Notes receivable interest rate (in hundredths)				10.00%
Notes receivable including accrued interest					208,000
Outstanding Loan	1,534,275		1,534,275
Monthly payment of loan			8,500
Loan, Frequency of Periodic Payment			monthly
Maturity Date of loan			Jun. 15, 2022
Number of Monthly Installment			120
Florida Oncology Partners LLC Condensed Income Statement Information [Abstract]
Net sales	839,000	465,000	2,322,000	1,110,000
Net income	178,000	390,000	364,000	86,000
USNC's equity in loss of Neuro Partners LLC	36,000	78,000	73,000	17,000
Florida Oncology Partners LLC Condensed Balance Sheet Information [Abstract]
Current assets	1,076,000		1,076,000		1,297,000
Noncurrent assets	5,115,000		5,115,000		5,467,000
Total assets	6,191,000		6,191,000		6,764,000
Current liabilities	968,000		968,000		905,000
Noncurrent liabilities	4,416,000		4,416,000		4,944,000
Equity	807,000		807,000		915,000
Total liabilities and equity	$ 6,191,000		$ 6,191,000		$ 6,764,000
Florida Oncology Partners, LLC [Member] | USNC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage (in hundredths)	20.00%		20.00%
Percentage of guarantee obligations (in hundredths)			20.00%

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Florida Oncology Partners (Tables) (Florida Oncology Partners, LLC [Member])

9 Months Ended

Sep. 30, 2012

Florida Oncology Partners, LLC [Member]

Schedule of Equity Method Investments [Line Items]

Summarized financial information with respect to Florida Oncology Partners

Because the Company's interest in FOP may be considered significant relative to its other assets and operations, the following summarized financial information with respect to FOP is presented:

Florida Oncology Partners LLC Condensed Income Statement Information

	Nine Months Ended
	September 30,
	2012		2011
Net sales	$	2,322,000	$	1,110,000
Net income	$	364,000	$	86,000
USNC's equity in income of Florida Oncology Partners LLC	$	73,000	$	17,000
	Three Months Ended
	September 30,
		2012		2011
Net sales	$	839,000	$	465,000
Net income	$	178,000	$	390,000
USNC's equity in income of Florida Oncology Partners LLC	$	36,000	$	78,000

Florida Oncology Partners LLC Condensed Balance Sheet Information

	September 30,		December 31,
		2012		2011
Current assets	$	1,076,000	$	1,297,000
		.
Noncurrent assets		5,115,000		5,467,000
Total assets	$	6,191,000	$	6,764,000
Current liabilities	$	968,000	$	905,000
Noncurrent liabilities		4,416,000		4,944,000
Equity		807,000		915,000
Total liabilities and equity	$	6,191,000	$	6,764,000

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Sale of Kansas City Gamma Knife Center and Focus on Continuing Businesses (Tables)

9 Months Ended

Sep. 30, 2012

Sale of Kansas City Gamma Knife Center and Focus on Continuing Businesses [Abstract]

Revenue and pretax loss reported in discontinued operations

The amounts of revenue and pretax or loss reported in discontinued operations for the nine months ended September 30, 2011 are as follow:

Revenue from operations	$	184,000
Pretax loss		(61,000	)

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The Southern California Regional Gamma Knife Center (Tables) (Neuro Partners LLC [Member])

9 Months Ended

Sep. 30, 2012

Neuro Partners LLC [Member]

Schedule of Equity Method Investments [Line Items]

Summarized financial information with respect to Neuro Partners

Because the Company's interest in Neuro Partners LLC may be considered significant relative to its other assets and operations, the following summarized financial information with respect to Neuro Partners LLC is presented:

Neuro Partners LLC Condensed Income Statement Information

	Nine Months Ended
	September 30,
	2012			2011
Net sales	$	666,000		$	666,000
Net income (loss)	$	(22,000	)	$	76,000
USNC's equity in loss of Neuro Partners LLC	$	(4,000	)	$	15,000
	Three Months Ended
	September 30,
		2012			2011
Net sales	$	222,000		$	222,000
Net income (loss)	$	(11,000	)	$	95,000
USNC's equity in loss of Neuro Partners LLC	$	(2,000	)	$	19,000

Neuro Partners LLC Condensed Balance Sheet Information

	September 30,			December 31,
		2012			2011
Current assets	$	432,000		$	482,000
Noncurrent assets		2,420,000			2,603,000
Total assets	$	2,852,000		$	3,085,000
Current liabilities	$	580,000		$	22,000
Noncurrent liabilities		2,449,000			3,144,000
Equity		(177,000	)		(81,000	)
Total liabilities and equity	$	2,852,000		$	3,085,000

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Sale of Kansas City Gamma Knife Center and Focus on Continuing Businesses (Details) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Midwest Division - RMC, LLC [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sale price of gamma knife equipment along with supplies and inventory	$ 250,000
Amount received in settlement of all outstanding obligations	385,355
Amounts of revenue and pretax loss reported in discontinued operations [Abstract]
Impairment on gamma knife for Kansas City Center		161,000
Prior period disputed revenue		72,000
Kansas City Operations [Member]
Amounts of revenue and pretax loss reported in discontinued operations [Abstract]
Revenue from operations		184,000
Pretax loss		$ (61,000)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net income (loss)	$ 176,000	$ (99,000)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	384,000	533,000
Gain from sales of member interest in unconsolidated entities	(24,000)	0
Gain (loss) from investment in unconsolidated entities	8,000	32,000
Loss on impairment of Gamma Knife equipment at Kansas City center	0	89,000
Changes in:
Accounts receivable	(303,000)	188,000
Other current assets	(16,000)	(6,000)
Due from related parties	89,000	(217,000)
Accounts payable and accrued expenses	81,000	(32,000)
Net cash provided by operating activities	395,000	488,000
Cash flows from investing activities:
Investment in unconsolidated entities	120,000	(225,000)
Cash from settlement of Gamma Knife equipment at Kansas City center	0	322,000
Net cash provided by investing activities	120,000	97,000
Cash flows from financing activities:
Repayment of capital lease obligations	(400,000)	(639,000)
Decrease of cash held in escrow	0	51,000
Net cash used in financing activities	(400,000)	(588,000)
Net change in cash and cash equivalents	115,000	(3,000)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	830,000	820,000
CASH AND CASH EQUIVALENTS - END OF PERIOD	945,000	817,000
Cash paid for
Interest	169,000	209,000
Supplemental disclosure of noncash investing and financing activities
Leasehold improvements financed by a capital lease	0	277,000
Sales proceeds from sale of member interest in unconsolidated entities included in due from related parties	112,000	0
Investment in unconsolidated entites included in due from related parties	$ 28,000	$ 0

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Florida Oncology Partners

9 Months Ended

Sep. 30, 2012

Florida Oncology Partners [Abstract]

Florida Oncology Partners

Note E – Florida Oncology Partners

During the quarter ended September 30, 2010, the Company participated in the formation of Florida Oncology Partners, consisting of, Florida Oncology Partners, LLC ("FOP"), and Florida Oncology Partners RE, LLC, ("FOPRE") (collectively referred to as "Florida Oncology Partners"), which operates a cancer center located in West Kendall, Florida.  The center diagnoses and treats patients utilizing a Varian Rapid Arc linear accelerator and a GE CT scanner.  USNC owns a 20% interest in Florida Oncology Partners and invested $200,000.  The remaining 80% is owned by other outside investors.  The center opened and treated its first patient in May 2011.  The Company's recorded investment in Florida Oncology Partners is $200,000 at September 30, 2012, consisting of a $160,000 investment in FOP and a $40,000 investment in FOPRE.

The Company entered into a note receivable with FOP for working capital purposes, for $200,000 in August 2011, bearing interest at 10% per annum and due in August 2012. The note receivable and accrued interest total $208,000 at December 31, 2011.  This note (principal) was repaid in May 2012.

During 2011, FOP entered into a capital lease with Key Bank.  Under the terms of the capital lease, USNC agreed to guarantee 20% of the outstanding lease obligation of $5,060,255 at September 30, 2012 in the event of default.

In June of 2012, FOPRE completed the financing agreement to purchase the building that is occupied by FOP. The amount of the loan was $1,534,275 to be paid at a monthly rate of approximately $8,500 for 120 months with the final payment due in June 15, 2022.

Because the Company's interest in FOP may be considered significant relative to its other assets and operations, the following summarized financial information with respect to FOP is presented:

Florida Oncology Partners LLC Condensed Income Statement Information

	Nine Months Ended
	September 30,
	2012		2011
Net sales	$	2,322,000	$	1,110,000
Net income	$	364,000	$	86,000
USNC's equity in income of Florida Oncology Partners LLC	$	73,000	$	17,000
	Three Months Ended
	September 30,
		2012		2011
Net sales	$	839,000	$	465,000
Net income	$	178,000	$	390,000
USNC's equity in income of Florida Oncology Partners LLC	$	36,000	$	78,000

Florida Oncology Partners LLC Condensed Balance Sheet Information

	September 30,		December 31,
		2012		2011
Current assets	$	1,076,000	$	1,297,000
		.
Noncurrent assets		5,115,000		5,467,000
Total assets	$	6,191,000	$	6,764,000
Current liabilities	$	968,000	$	905,000
Noncurrent liabilities		4,416,000		4,944,000
Equity		807,000		915,000
Total liabilities and equity	$	6,191,000	$	6,764,000

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Boca Oncology Partners (Details) (USD $)			3 Months Ended			3 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011 sqft	Mar. 31, 2012 USNC [Member]	Mar. 31, 2012 Boca Oncology Partners, LLC [Member]	Dec. 31, 2011 Boca Oncology Partners, LLC [Member] sqft	Mar. 31, 2012 Boca Oncology Partners RE, LLC [Member]	Dec. 31, 2011 Boca Oncology Partners RE, LLC [Member]	Dec. 31, 2011 BOP and BOPRE [Member]	Dec. 31, 2011 BOP and BOPRE [Member] USNC [Member]
Schedule of Equity Method Investments [Line Items]
Percentage of interest in medical office building (in hundredths)							20.00%
Area of building (in square feet)		32,000			6,000
Investment in BOP and BOPRE	$ 283,000	$ 471,000							$ 225,000
Ownership percentage in BOP and BOPRE (in hundredths)									22.50%
Ownership percentage by outside investors (in hundredths)								77.50%
Loan for working capital and facility improvements	160,000
Sale of ownership percentage to outside investors (in hundredths)				50.00%
Reduced ownership percentage (in hundredths)			11.25%
Proceeds from sale of ownership interest						250,000
Proceeds from sale of interest to certain investors			46,000
Additional interest purchased in specified entity (in hundredths)						3.75%
Additional sale of ownership percentage to outside investors (in hundredths)						30.00%
Proceeds from sale of additional interest			$ 27,000			$ 124,000