10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2016

or

☐ 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 Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	47-5370333
(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)

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 ☒ No ☐

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 ☒ No ☐

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 ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒

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

The number of shares of the registrant’s common stock, $0.01 par value, outstanding as of November 11, 2016 was 7,797,185.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		3
	Item 2.  Management Discussion and Analysis of Financial Condition and Results of Operations.	16
	Item 3.  Quantitative and Qualitative Disclosures About Market Risk.	20
	Item 4.  Controls and Procedures	20
PART II - OTHER INFORMATION		23
	Item 1.  Legal Proceedings	23
	Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	23
	Item 3.  Defaults Upon Senior Securities	23
	Item 4.  Submission of Matters to a Vote of Security Holders	23
	Item 5.  Other Information	23
	Item 6.  Exhibits	23
SIGNATURES		24

2

PART I - FINANCIAL INFORMATION

Item1. Financial Statements

U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2016			December 31, 2015
	(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents	$	2,320,000		$	1,068,000
Accounts receivable		249,000			626,000
Due from related parties		-			21,000
Short term loan receivable		35,000			35,000
Other current assets		137,000			98,000
Total current assets		2,741,000			1,848,000
Other Assets:
Notes receivable		210,000			210,000
Investments in unconsolidated entities		337,000			364,000
Total other assets		547,000			574,000
Property and equipment:
Gamma knife (net of accumulated depreciation of $1,601,000 in 2016 and $1,097,000 in 2015)		3,690,000			3,294,000
Leasehold improvements (net of accumulated amortization of $729,000 in 2016 and $510,000  in 2015)		1,409,000			1,670,000
Total property and equipment		5,099,000			4,964,000
TOTAL ASSETS	$	8,387,000		$	7,386,000
LIABILITIES
Current liabilities:
Obligations under capital lease - current portion	$	1,005,000		$	866,000
Income tax payable		98,000			-
Deferred tax liability - current portion		43,000			191,000
Accounts payable and accrued expenses		61,000			80,000
Deferred revenue		180,000			149,000
Due to related parties		-			13,000
Total current liabilities		1,387,000			1,299,000
Obligations under capital lease - net of current portion		2,992,000			2,945,000
Deferred tax liability - net of current portion		660,000			303,000
Guarantee liability		11,000			15,000
Asset retirement obligations		484,000			466,000
Total liabilities		5,534,000			5,028,000
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Common stock - par value $.01; 25,000,000 shares authorized; 7,797,185 shares issued and outstanding  at September 30, 2016 and December 31, 2015.		78,000			78,000
Additional paid-in capital		3,100,000			3,100,000
Accumulated deficit		(325,000	)		(820,000	)
Total stockholders' equity		2,853,000			2,358,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	8,387,000		$	7,386,000

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

3

U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended September 30,
	2016			2015
Revenue	$	722,000		$	772,000
Costs and expenses:
Patient expenses		321,000			314,000
Selling, general and administrative		298,000			291,000
Total		619,000			605,000
Operating income		103,000			167,000
Interest expense		(34,000	)		(47,000	)
Other expense		(1,000	)		(13,000	)
Income from investments in unconsolidated entities		135,000			36,000
Income before income taxes		203,000			143,000
Provision for income tax expense		(83,000	)		(53,000	)
Net income	$	120,000		$	90,000
Basic and diluted net income per share	$	0.02		$	0.01
Weighted average common shares outstanding		7,797,185			7,797,185

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

4

U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Nine Months Ended September 30,
	2016			2015
Revenue	$	2,329,000		$	2,253,000
Costs and expenses:
Patient expenses		933,000			875,000
Selling, general and administrative		959,000			958,000
Total		1,892,000			1,833,000
Operating income		437,000			420,000
Interest expense		(114,000	)		(137,000	)
Other income		5,000			13,000
Income from investments in unconsolidated entities		473,000			25,000
Income before income taxes		801,000			321,000
Provision for income tax expense		(306,000	)		(120,000	)
Net income	$	495,000		$	201,000
Basic and diluted net income per share	$	0.06		$	0.03
Weighted average common shares outstanding		7,797,185			7,797,185

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

5

U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended September 30,
	2016			2015
Cash flows from operating activities:
Net income	$	495,000		$	201,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		723,000			701,000
Income from investment in unconsolidated entities		(473,000	)		(25,000	)
Accretion of asset retirement obligations		18,000			29,000
Change in guarantee liability		(4,000	)		-
Deferred income taxes		209,000			120,000
Changes in:
Accounts receivable		377,000			135,000
Elekta refund due		-			115,000
Other current assets		(39,000	)		12,000
Income tax payable		98,000			-
Accounts payable and accrued expenses		(19,000	)		13,000
Deferred revenue		31,000			64,000
Net cash provided by operating activities		1,416,000			1,365,000
Cash flows from investing activities:
Repayment of amounts advanced to uncosolidated entities		20,000			-
Advances - short term receivable and note receivable		-			(245,000	)
Purchase of leasehold improvements		-			(341,000	)
Decrease (increase) in due from related parties		8,000			(103,000	)
Distributions from, investments in unconsolidated entities		480,000			(7,000	)
Net cash provided by (used in) investing activities		508,000			(696,000	)
Cash flows from financing activities:
Repayment of capital lease obligations		(672,000	)		(652,000	)
Net cash used in financing activities		(672,000	)		(652,000	)
Net change in cash and cash equivalents		1,252,000			17,000
Cash and cash equivalents - beginning of period		1,068,000			1,053,000
Cash and cash equivalents - end of period	$	2,320,000		$	1,070,000
Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	118,000		$	159,000
Supplemental disclosure of of noncash investing and financing activities:
Increase in gamma knife equipment through a capital lease obligation	$	900,000		$	-
Reduction in capital lease liability due to sales tax refund applied to lease	$	42,000		$	-
Increase in investment in unconsolidated entities through recording of guarantee liability	$	-		$	25,000
Increase in guarantee liability recorded	$	-		$	15,000

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

6

U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note A - Basis of Preparation

The accompanying condensed consolidated financial statements of U.S. Neurosurgical Holdings, Inc. and subsidiaries (the “Company”) as of September 30, 2016 and 2015, 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, 2015 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 – Holding Company Structure

On September 3, 2015, pursuant to the Agreement and Plan of Reorganization (the “Merger Agreement”), dated as of September 3, 2015, by and among U.S. NeuroSurgical, Inc. (“USN”), U.S. NeuroSurgical Holdings, Inc. (“Holdings”) and U.S. NeuroSurgical Merger Sub, Inc. (“Merger Sub”), the Company adopted a new holding company organizational structure whereby USN is now a wholly owned subsidiary of Holdings. This structure did not result in any changes to the assets or operations of the Company, but management believes that it will create a more flexible framework for possible future transactions and organizational and operational adjustments.

The holding company organizational structure was effected by a merger (the “Merger”) conducted pursuant to Section 251(g) of the Delaware General Corporation Law (the “DGCL”), which provides for the formation of a holding company structure without a vote of the stockholders of the constituent corporations.  Because the holding company organizational structure occurred at the parent company level, the remainder of the Company’s subsidiaries, operations and customers were not affected by this transaction.

In order to effect the Merger, USN formed Holdings as its wholly owned subsidiary and Holdings formed Merger Sub as its wholly owned subsidiary.  Under the terms of the Merger Agreement, Merger Sub merged with and into USN, with USN surviving the merger and becoming a direct, wholly owned subsidiary of Holdings.   Immediately prior to the Merger, Holdings had no assets, liabilities or operations.

7

Pursuant to the Merger Agreement, all of the outstanding capital stock of USN was converted, on a share for share basis, into capital stock of Holdings.  As a result, each former stockholder of USN became the owner of an identical number of shares of capital stock of Holdings, evidencing the same proportional interests in Holdings and having the same designations, rights, powers and preferences, qualifications, limitations and restrictions, as those that the stockholder held in USN.

Following the Merger, Holdings’s common stock continued to trade on the over-the-counter market and continued to be quoted on the OTCQB marketplace under the same symbol, “USNU.”  The conversion of shares of capital stock under the Merger Agreement occurred without an exchange of physical certificates.  Accordingly, physical certificates formerly representing shares of outstanding capital stock of USN are deemed to represent the same number of shares of capital stock of Holdings.

Pursuant to Section 251(g) of the DGCL, the provisions of the certificate of incorporation and bylaws of Holdings are substantially identical to those of USN prior to the date on which the Merger Agreement took effect.  The authorized capital stock of Holdings, the designations, rights, powers and preferences of such capital stock, and the qualifications, limitations and restrictions thereof are also substantially identical to those of the capital stock of USN immediately prior to the date of the Merger.  Further, the directors and executive officers of Holdings are the same individuals who were directors and executive officers, respectively, of USN immediately prior to the date of the Merger.

Note C – Destruction of Gamma Knife at NYU Medical Center; Replacement and Restoration

USN opened its New York gamma knife treatment center in July 1997 on the campus of New York University (“NYU”) Medical Center.  USN installed a new Leksell gamma knife, the PERFEXION model, at the NYU Medical Center in March 2009 in replacement of the older gamma knife equipment.  In connection with this upgrade, USN modified its arrangement with NYU to extend the term for 12 years from March 2009.

In October 2012, USN’s facility at NYU was totally destroyed as a result of flooding from Hurricane Sandy. The gamma knife had to be removed to prevent any cobalt leakage that might occur due to rusting of the equipment. The removal cost was $525,000. USN paid a lease settlement of the outstanding principal balance only and received from insurance coverage $930,000 above the lease principal payments and removal costs.

USN finalized arrangements with NYU regarding the restored gamma knife center and USN’s long term contract with NYU in early 2014. USN’s new facility, with the Leksell PERFEXION gamma knife, is located in the Tisch Hospital of NYU Langone Medical Center. The facility reopened and began receiving patients at the end of April 2014.

USN entered into a six year lease in the amount of $4.7 million for the purchase of the replacement equipment and associated leasehold improvements. The first payment of $78,000 was made on September 1, 2014, including $18,000 of interest, and the final payment is due on May 1, 2020. USN entered into a second two year lease in the amount of $250,000 for the cost of the construction required at the relocated site. The first payment of $12,000 was made on November 1, 2014, and the final payment was paid on July 1, 2016.

8

In April of 2016 USN entered into an agreement with Elekta for the installation of new ICON imaging technology in the NYU Gamma Knife equipment with a total cost, including sales taxes, of approximately $816,000. This ICON technology was installed during the month of July 2016 and the gamma knife center reopened on August 5, 2016. The Company has obtained lease financing of approximately $900,000 at an interest rate of approximately 4.45% to finance the acquisition of the ICON technology and associated installation costs. The monthly lease payment is expected to be approximately $20,500 to be paid over 48 months commencing October 2016, with the final payment to be made September 2020. A monthly maintenance agreement will commence a year after the installation date and is estimated to be about $6,000 per month.

In July of 2016 USN entered into an agreement with NYU regarding the installation of the new ICON technology.  Following the installation, NYU will adjust the monthly fee structure by adding $30,000 to the monthly payment for the remaining term of the agreement. A final payment of $17,000 will be made for the partial month of operations in March 2021.

The major terms of the agreement with NYU continue in effect, terminating at the end of March 2021.  USN is responsible for the maintenance and insurance for the gamma knife equipment at the NYU facility and is reimbursed for use of the gamma knife based on a fee per procedure performed with the equipment.  NYU provides the medical and technical staff to operate the facility.  At the end of the contract term, costs associated with closing and restoring the NYU facility to its original condition are the responsibility of USN.

Note D – 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 Regional Hospital (“SARH”) 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 SARH to renovate space in the hospital and install and operate a Leksell PERFEXION gamma knife.  CGK leases the gamma knife from NeuroPartners 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 NeuroPartners LLC and owns 39% of CGK.

9

USNC was a 20% guarantor on NeuroPartners, LLC’s seven-year lease with respect to the gamma knife equipment and certain leasehold improvements at SARH.  In February 2016, NeuroPartners, negotiated a new five- year lease to fund the reloading of cobalt and the necessary construction to do so. The new lease of $1,663,000 includes a balance of $668,000 from the prior lease obligations. This new lease will be paid over 60 months. The first payment of $31,000 was paid on April 1, 2016 and the final payment will be due on March 1, 2021. The Company continues to be a 20% guarantor on the new lease and expects any potential obligations from this guarantee would be reduced by the recovery of the related collateral and expects any amounts arising from this guarantee to be insignificant.

Construction of the SARH 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 the Company has led the effort in organizing the business and overseeing the development and operation of the SARH center, its investment to date in the SARH center has been minimal.

The Company’s share of cumulative losses associated with its investment in NeuroPartners LLC and CGK has exceeded its investment.  Due to the outstanding loans made to NeuroPartners LLC and CGK, NeuroPartners LLC and CGK are considered to be variable interest entities of the Company.  However, as the Company is not deemed to be the primary beneficiary of NeuroPartners LLC and CGK, since it does not have the power to direct the operating activities that most significantly affect NeuroPartners LLC’s and CGK’s economic performance, certain disclosures are required rather than consolidation.  During the three months ended June 30, 2016, the Company received $20,000 of repayments of amounts previously advanced to NeuroPartners LLC and GCK. Those repayments reduced the amount of loses incurred on prior advances to NeruoPartners LLC and CGK and are included as additional income from investments in unconsolidated entities for the nine months ended September 30, 2016. The Company has $116,000 of remaining advances to NeuroPartners LLC and CGK at September 30, 2016.  For the three months ended September 30, 2016, the Company’s equity in loss of NeuroPartners LLC and CGK was $4,000, but was not recorded due to prior losses.

10

The following tables present the aggregation of summarized financial information of NeuroPartners LLC and CGK:

Neuro Partners, LLC and CGK Condensed Income Statement Information

	Nine Months Ended September 30,
	2016		2015
Patient revenue	$	759,000	$	683,000
Net income (loss)	$	218,000	$	(153,000	)
USNC's equity in earnings (loss) of Neuro Partners, LLC and CGK	$	9,000	$	(78,000	)

	Three Months Ended September 30,
		2016		2015
Patient revenue	$	243,000	$	185,000
Net income (loss)	$	46,000	$	(84,000	)
USNC's equity in earnings (loss) of Neuro Partners, LLC and CGK	$	-	$	(39,000	)

NeuroPartners, LLC and CGK Condensed Balance Sheet Information

	September 30, 2016			December 31, 2015
Current assets	$	169,000		$	66,000
Noncurrent assets		931,000			394,000
Total assets	$	1,100,000		$	460,000
Current liabilities	$	501,000		$	1,359,000
Noncurrent liabilities		1,280,000			-
Deficit		(681,000	)		(899,000	)
Total liabilities and (deficit)	$	1,100,000		$	460,000

11

Note E – Florida Oncology Partners

During the quarter ended September 30, 2010, the Company participated in the formation of Florida Oncology Partners, LLC (“FOP”) and Florida Oncology Partners RE, LLC (“FOPRE”), which operates a cancer center located in West Kendall (Miami), Florida.  The center diagnoses and treats patients utilizing a Varian Rapid Arc linear accelerator and a GE CT scanner. USNC originally invested $200,000 for 20% ownership interest in FOP and FOPRE. The remaining 80% was owned by other outside investors. In January of 2015, one of the investors was removed from the entities, and his ownership interest was distributed among the remaining members in relationship to the percentage they owned. This distribution resulted in an increase of ownership interest for the Company of 4% in each entity. As of January 1, 2015, the Company has a 24% ownership in both FOP and FOPRE.

The center opened and treated its first patient in May 2011. During 2012 and 2013, FOP made several distributions that reduced the Company’s investment significantly.  The Company’s recorded investment in FOP and FOPRE is $200,000 and $225,000 at September 30, 2016 and December 31, 2015, respectively. Amounts due from FOP and FOPRE included in due from related parties total $0 and $21,000 at September 30, 2016 and December 31, 2015 respectively.

During 2011, Florida Oncology Partners, LLC entered into a seven year capital lease with Key Bank for approximately $5,800,000. Under the terms of the capital lease, USN agreed to guarantee a maximum of $1,433,000, approximately 25% of the original lease obligation in the event of default. It is a guarantor jointly with most of the other members (except USNC who is not a named guarantor) of FOP.  The outstanding balance on the lease obligation was $1,780,000 at September 30, 2016. The Company expects any potential obligations from this guarantee would be reduced by the recoveries of the respective collateral and has recorded a liability of $11,000 associated with this guarantee at September 30, 2016.

In June 2012, FOPRE completed the financing agreement to purchase the building that is occupied by FOP.  The amount of the loan was $1,534,000 and was to be paid at a monthly rate of approximately $8,500 for 120 months with the final payment due on June 15, 2022. In December 2015, FOPRE sold the building, for a gain on sale of $577,000. The Company’s share of the gain was $139,000. The related mortgage was repaid upon closing of the sale.

In December of 2015, FOP entered into an agreement with 21^st Century Oncology for the purchase of FOP’s Varian machine and other medical equipment. 21^st Century Oncology paid FOP $1,000,000 as a down payment for the machine and other medical equipment and is currently making monthly payments of $172,000 for the machine, and making all monthly payments due under the capital lease, until such time as the sale is finalized. 21^st Century has not to date satisfied all of the terms of the rental agreement and on May 1, June 1, and July 1, of 2016 it has paid an additional $30,000 in accelerated payments each month, and since August 1, 2016 it has paid $50,000 in accelerated payments each month. These accelerated payments have been recorded as unearned revenue.

12

The following tables present the aggregation of summarized financial information of FOP and FOPRE:

FOP and FOPRE Condensed Income Statement Information

	Nine Months Ended September 30,
	2016		2015
Patient revenue	$	-	$	2,074,000
Rental Income	$	3,040,000	$	-
Net income	$	1,865,000	$	310,000
USNC's equity in income of FOP and FOPRE	$	456,000	$	75,000

	Three Months Ended September 30,
	2016		2015
Patient revenue	$	-	$	811,000
Rental Income	$	953,000	$	-
Net income	$	551,000	$	157,000
USNC's equity in income of FOP and FOPRE	$	135,000	$	38,000

FOP and FOPRE Condensed Balance Sheet Information

	September 30, 2016		December 31, 2015
Current assets	$	714,000	$	1,024,000
Noncurrent assets		2,125,000		3,066,000
Total assets	$	2,839,000	$	4,090,000
Current liabilities	$	1,386,000	$	1,848,000
Noncurrent liabilities		742,000		1,529,000
Equity		711,000		713,000
Total liabilities and equity	$	2,839,000	$	4,090,000

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 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, LLC (“Boca West IMP”), owner of a medical office building in West Boca, Florida in which BOP operates.  BOP occupies approximately 6,000 square feet of the 32,000 square foot building.  The Company’s wholly-owned subsidiary, USNC invested $225,000 initially and had a 22.5% interest in BOP and BOPRE.

In January 2012, an additional investor purchased 50% of the partnership reducing the Company’s ownership to 11.25%.  The Company loaned the proceeds of $56,250 back to BOP as a 5 year note at 7% interest. The remaining 88.75% was owned by other outside investors.  In June 2012, BOPRE purchased an additional 3.75% of Boca West IMP from another investor bringing its total interest to 23.75%. BOPRE accounts for this investment under the cost method since it does not exercise significant influence over Boca West IMP. Then the members of BOPRE sold 31.5% of their interests in BOPRE to a new investor. The proceeds of $28,000 were loaned to BOP and USNC’s investment in BOPRE was reduced to 15.4%.

Although the Company reduced its investment to 11.25% of BOP and 15.4% of BOPRE, the Company continues to account for these investments under the equity method due to its participation in the management of the administration and accounting functions of BOP and BOPRE. Due to the outstanding loans made to BOP, BOP was considered to be a variable interest entity of the Company.  However, as the Company was not deemed to be the primary beneficiary of BOP, since it did not have the power to direct the operating activities that most significantly affect BOP’s economic performance, certain disclosures are required rather than consolidation.  The center opened in August 2012.

In February 2014, the Company and other members sold their interests in BOP.

The Company’s recorded investment in BOPRE is $137,000 at September 30, 2016 and $139,000 at December 31, 2015.

USNC is a 10% guarantor on 50% of the outstanding balance of Boca West IMP’s ten-year mortgage.  This mortgage had an original balance of $3,000,000 and is secured by the medical office building in which BOP operates. The outstanding balance on the mortgage is $2,554,000 at September 30, 2016.  The Company expects any potential obligations from this guarantee would be reduced by the recovery of the real estate and expects any amounts arising from this guarantee to be insignificant.

14

The following tables present the summarized financial information of BOPRE:

BOPRE Condensed Income Statement Information

	Nine Months Ended September 30,
	2016			2015
Rental Income	$	-		$	-
Net loss	$	(3,000	)	$	(2,000	)
USNC's equity in loss in BOPRE	$	-		$	-

	Three Months Ended September 30,
		2016			2015
Rental Income	$	-		$	-
Net loss	$	(2,000	)	$	(1,000	)
USNC's equity in loss in BOPRE	$	-		$	-

BOPRE Condensed Balance Sheet Information

	September 30, 2016		December 31, 2015
Current assets	$	23,000	$	40,000
Noncurrent assets		851,000		837,000
Total assets	$	874,000	$	877,000
Current liabilities	$	-	$	-
Noncurrent liabilities		-		-
Equity		874,000		877,000
Total liabilities and equity	$	874,000	$	877,000

15

Note G – Income Taxes

The Company’s income tax rate, which includes federal and state income taxes, was approximately 38%, for the nine months ended September 30, 2016. The Company recorded a tax charge of $306,000 for the nine months ended September 30, 2016.

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 Holdings, Inc. and subsidiaries (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 2015 Annual Report on Form 10-K.  In particular, judgment is used in areas such as determining and assessing possible asset impairments and determination of the asset retirement obligation.

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

Three months ended September 30, 2016 Compared to Three Months Ended September 30, 2015

Patient revenue for the three months ended September 30, 2016 was $722,000, a decrease of 6% compared to $772,000 the previous year. This decrease in revenue was largely due to an increased number of procedures at NYU and a true-up to the effective rate per procedure in the current quarter, partly offset by an amendment to the Company’s agreement with NYU resulting in $30,000 of additional revenue per month for the months of August and Sepember 2016. Patient expenses for the three months ended September 30, 2016 and 2015 were $321,000 and $314,000 respectively.

Selling, general and administrative expenses were $298,000 and $291,000 for the third quarter of 2016 and 2015 respectively. This 2% increase was due to an increase in flood insurance to protect the new ICON technology at the NYU gamma knife center.

The Company incurred $34,000 of interest expense in the third quarter of 2016 related to the capital lease. Interest expense for the same period in 2015 was $47,000. The decrease in interest expense is primarily due to the fact that the final payment for the leasehold improvement lease was paid in July of 2016, and a lower principal balance remaining on the Company’s gamma knife capital lease.

16

During the three months ended September 30, 2016, the Company recognized an income tax charge of $83,000. The 2016 tax expense is due to the Company’s successful operations at NYU during 2016, and higher income from investments in unconsolidated entities.

For the three months ended September 30, 2016, the Company reported a net income of $120,000 as compared to a net income of $90,000 for the same period a year earlier. The increase in net income is primarily due to successful operations at NYU and higher income from investments in unconsolidated entities.

Nine months ended September 30, 2016 Compared to Nine months ended June 30 September 30, 2015

Patient revenue for the nine months ended September 30, 2016 was $2,329,000, an increase of 3% compared to $2,253,000 the previous year. This increase in revenue was largely due to an additional $30,000 of revenue per month for the months of August and September 2016, following the installation of the new ICON technology at NYU in August 2016. Patient expenses for the nine months ended September 30, 2016 were $933,000, an increase of 7% as compared to the $875,000 reported for the comparable period in the previous year. This increase in patient expenses was largely due to a new maintenance agreement, which went into effect as of April 1, 2015. The first year of maintenance was included in the installation of the equipment.

Selling, general and administrative expense of $959,000 for the first nine months of 2016 was consistent with the $958,000 incurred during the comparable period in 2015.

The Company incurred $114,000 of interest expense in the first nine months of 2016 related to the capital lease. Interest expense for the same period in 2015 was $137,000. The lower interest expense in 2016 is primarily due to the final payment of the leasehold improvement loan being made in July of 2016 and a lower principal balance remaining on the Company’s gamma knife lease.

During the nine months ended September 30, 2016, the Company recognized an income tax charge of $306,000. The 2016 tax expense is due to the Company’s successful operations at NYU during 2016, and higher income from investments in unconsolidated entities.

For the nine months ended September 30, 2016, the Company reported a net income of $495,000 as compared to a net income of $201,000 for the same period a year earlier. The increase in net income is primarily due to successful operations at NYU and higher income from investments in unconsolidated entities.

Liquidity and Capital Resources

At September 30, 2016, the Company had working capital of $1,354,000 as compared to $549,000 at December 31, 2015.  This increase was primarily due to the successful operations at NYU. Cash and cash equivalents at September 30, 2016 were $2,320,000 as compared to $1,068,000 at December 31, 2015.

17

With respect to the notes receivable of $210,000 at September 30, 2016, the Company has been in discussions with one of the borrowers regarding the possible future conversion of one of the notes in the principal amount of $172,500 into an equity interest in a future business activity.  As a result, that note receivable has been classified as a non-current asset.

Net cash provided by operating activities for the nine months ended September 30, 2016 was $1,416,000 as compared to $1,365,000 in the same period a year earlier. The increase was primarily due to cash inflows from the operation of the new gamma knife center, net of working capital requirements. Accounts receivable decreased $377,000 for the nine months ended September 30, 2016 as compared to a decrease of $135,000 the previous year.

With respect to financing activities, the Company paid $672,000 towards its capital lease obligations during the nine months ended September 30, 2016, compared with $652,000 in 2015.

USN entered into a six year lease in the amount of $4.7 million for the purchase of the replacement Leksell PERFEXION gamma knife at the NYU Medical Center. The first payment of $78,000 was made on September 1, 2014, and the final payment is due on May 1, 2020. USN entered into a second two year lease in the amount of $250,000 for the cost of the construction required at the relocated site. The first payment of $12,000 was made on November 1, 2014, and the final payment which was due on July 1, 2016, has been made. The agreement with NYU to operate the gamma knife facility continues through March 2021.

In April of 2016 USN entered into an agreement with Elekta for the installation of new ICON imaging technology in the NYU Gamma Knife equipment with a total cost, including sales taxes, of approximately $816,000. This ICON technology was installed during the month of July 2016 and the gamma knife center reopened on August 5, 2016. The Company has obtained lease financing of approximately $900,000 at an interest rate of 4.45% to finance the acquisition of the ICON technology and associated installation costs. The monthly lease payment is expected to be approximately $20,500 to be paid over 48 months commencing October 2016, with the final payment to be made September 2020. A monthly maintenance agreement will commence a year after the installation date and is estimated to be about $6,000 per month.

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 Annual Report on our Form 10-K for the fiscal year ended December 31, 2015, 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.

18

Reliance on Business of the New York University Gamma Knife Center; Recent Destruction of Equipment and Discontinuation of Business at NYU.  While it is the Company’s objective to expand activities to additional cancer centers that rely on a broad range of diagnostic and radiation treatments, the Company has relied on the NYU gamma knife for substantially all of its revenue.  In recent periods, services provided at NYU have represented over 90% of the Company’s revenues.  Unless and until the Company is successful in building its activities at other centers and at new locations, disruptions at NYU could have a materially adverse effect on the Company.

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 or other types of cancer treatment centers.

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," "targets," "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 businesses 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.

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.

19

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, construction delays 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”).

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.

20

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.

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2016, 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, 2016: 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 transactions such as investments in unconsolidated entities and income taxes. The Company is in the process of developing efficient approaches to remediate this material weakness.  To do this in a cost-effective manner, considering the current extent of the Company’s operations, management is making arrangements with consultants and advisors to assist on an as-needed basis.

21

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, 2016, management is in the process of developing plans to remediate the material weakness identified above.

22

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 March 31, 2016 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.

23

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 Holdings, Inc.
	(Registrant)
Date:  November 14, 2016	By:	/s/ Alan Gold
		Alan Gold
		Director, President and  Chief Executive Officer and
		Principal Financial Officer of the Registrant

24

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 Holdings, 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 14, 2016	/s/ Alan Gold
	Alan Gold
	President & Chairman of the Board
	(Principal Executive Officer and Principal Financial Officer)

EX-32.1

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 Holdings, Inc. on Form 10-Q for the period ending September 30, 2016 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 Holdings, 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 Holdings, Inc.

/s/ Alan Gold

Alan Gold

President and Chief Executive Officer

(Principal Executive Officer and Principal Financial Officer)

Date:  November 14, 2016

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 11, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	U.S. NeuroSurgical Holdings, 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	2016
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 2,320,000	$ 1,068,000
Accounts receivable	249,000	626,000
Due from related parties	0	21,000
Short term loan receivable	35,000	35,000
Other current assets	137,000	98,000
Total current assets	2,741,000	1,848,000
Other Assets:
Notes receivable	210,000	210,000
Investments in unconsolidated entities	337,000	364,000
Total other assets	547,000	574,000
Property and equipment:
Gamma knife (net of accumulated depreciation of $1,601,000 in 2016 and $1,097,000 in 2015)	3,690,000	3,294,000
Leasehold improvements (net of accumulated amortization of $729,000 in 2016 and $510,000 in 2015)	1,409,000	1,670,000
Total property and equipment	5,099,000	4,964,000
TOTAL ASSETS	8,387,000	7,386,000
Current liabilities:
Obligations under capital lease - current portion	1,005,000	866,000
Income tax payable	98,000	0
Deferred tax liability - current portion	43,000	191,000
Accounts payable and accrued expenses	61,000	80,000
Deferred revenue	180,000	149,000
Due to related parties	0	13,000
Total current liabilities	1,387,000	1,299,000
Obligations under capital lease - net of current portion	2,992,000	2,945,000
Deferred tax liability - net of current portion	660,000	303,000
Guarantee liability	11,000	15,000
Asset retirement obligations	484,000	466,000
Total liabilities	5,534,000	5,028,000
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock - par value $.01; 25,000,000 shares authorized;7,797,185 shares issued and outstanding at September 30, 2016 and December 31, 2015	78,000	78,000
Additional paid-in capital	3,100,000	3,100,000
Accumulated deficit	(325,000)	(820,000)
Total stockholders' equity	2,853,000	2,358,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 8,387,000	$ 7,386,000

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Property and equipment:
Gamma Knife, accumulated depreciation	$ 1,601,000	$ 1,097,000
Leasehold improvements, accumulated depreciation	$ 729,000	$ 510,000
STOCKHOLDERS' EQUITY
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	25,000,000	25,000,000
Common stock, shares issued (in shares)	7,797,185	7,797,185
Common stock, shares outstanding (in shares)	7,797,185	7,797,185

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) [Abstract]
Revenue	$ 722,000	$ 772,000	$ 2,329,000	$ 2,253,000
Costs and expenses:
Patient expenses	321,000	314,000	933,000	875,000
Selling, general and administrative	298,000	291,000	959,000	958,000
Total	619,000	605,000	1,892,000	1,833,000
Operating income	103,000	167,000	437,000	420,000
Interest expense	(34,000)	(47,000)	(114,000)	(137,000)
Other expense	(1,000)	(13,000)	5,000	13,000
Income from investments in unconsolidated entities	135,000	36,000	473,000	25,000
Income before income taxes	203,000	143,000	801,000	321,000
Provision for income tax expense	(83,000)	(53,000)	(306,000)	(120,000)
Net income	$ 120,000	$ 90,000	$ 495,000	$ 201,000
Basic and diluted net income per share (in dollars per share)	$ 0.02	$ 0.01	$ 0.06	$ 0.03
Weighted average common shares outstanding (in shares)	7,797,185	7,797,185	7,797,185	7,797,185

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income	$ 495,000	$ 201,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	723,000	701,000
Income from investment in unconsolidated entities	(473,000)	(25,000)
Accretion of asset retirement obligations	18,000	29,000
Change in guarantee liability	(4,000)	0
Deferred income taxes	209,000	120,000
Changes in:
Accounts receivable	377,000	135,000
Elekta refund due	0	115,000
Other current assets	(39,000)	12,000
Income tax payable	98,000	0
Accounts payable and accrued expenses	(19,000)	13,000
Deferred revenue	31,000	64,000
Net cash provided by operating activities	1,416,000	1,365,000
Cash flows from investing activities:
Repayment of amounts advanced to unconsolidated entities	20,000	0
Advances - short term receivable and note receivable	0	(245,000)
Purchase of leasehold improvements	0	(341,000)
Decrease (increase) in due from related parties	8,000	(103,000)
Distributions from, investments in unconsolidated entities	480,000	(7,000)
Net cash provided by (used in) investing activities	508,000	(696,000)
Cash flows from financing activities:
Repayment of capital lease obligations	(672,000)	(652,000)
Net cash used in financing activities	(672,000)	(652,000)
Net change in cash and cash equivalents	1,252,000	17,000
Cash and cash equivalents - beginning of period	1,068,000	1,053,000
Cash and cash equivalents - end of period	2,320,000	1,070,000
Cash paid for:
Interest	118,000	159,000
Supplemental disclosure of noncash investing and financing activities:
Increase in gamma knife equipment through a capital lease obligation	900,000	0
Reduction in capital lease liability due to sales tax refund applied to lease	42,000	0
Increase in investment in unconsolidated entities through recording of guarantee liability	0	25,000
Increase in guarantee liability recorded	$ 0	$ 15,000

XML

Basis of Preparation

9 Months Ended

Sep. 30, 2016

Basis of Preparation [Abstract]

Basis of Preparation

Note A - Basis of Preparation

The accompanying condensed consolidated financial statements of U.S. Neurosurgical Holdings, Inc. and subsidiaries (the “Company”) as of September 30, 2016 and 2015, 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, 2015 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.

XML

Holding Company Structure

9 Months Ended

Sep. 30, 2016

Holding Company Structure [Abstract]

Holding Company Structure

Note B – Holding Company Structure

On September 3, 2015, pursuant to the Agreement and Plan of Reorganization (the “Merger Agreement”), dated as of September 3, 2015, by and among U.S. NeuroSurgical, Inc. (“USN”), U.S. NeuroSurgical Holdings, Inc. (“Holdings”) and U.S. NeuroSurgical Merger Sub, Inc. (“Merger Sub”), the Company adopted a new holding company organizational structure whereby USN is now a wholly owned subsidiary of Holdings. This structure did not result in any changes to the assets or operations of the Company, but management believes that it will create a more flexible framework for possible future transactions and organizational and operational adjustments.

The holding company organizational structure was effected by a merger (the “Merger”) conducted pursuant to Section 251(g) of the Delaware General Corporation Law (the “DGCL”), which provides for the formation of a holding company structure without a vote of the stockholders of the constituent corporations.  Because the holding company organizational structure occurred at the parent company level, the remainder of the Company’s subsidiaries, operations and customers were not affected by this transaction.

In order to effect the Merger, USN formed Holdings as its wholly owned subsidiary and Holdings formed Merger Sub as its wholly owned subsidiary.  Under the terms of the Merger Agreement, Merger Sub merged with and into USN, with USN surviving the merger and becoming a direct, wholly owned subsidiary of Holdings.   Immediately prior to the Merger, Holdings had no assets, liabilities or operations.

Pursuant to the Merger Agreement, all of the outstanding capital stock of USN was converted, on a share for share basis, into capital stock of Holdings.  As a result, each former stockholder of USN became the owner of an identical number of shares of capital stock of Holdings, evidencing the same proportional interests in Holdings and having the same designations, rights, powers and preferences, qualifications, limitations and restrictions, as those that the stockholder held in USN.

Following the Merger, Holdings’s common stock continued to trade on the over-the-counter market and continued to be quoted on the OTCQB marketplace under the same symbol, “USNU.”  The conversion of shares of capital stock under the Merger Agreement occurred without an exchange of physical certificates.  Accordingly, physical certificates formerly representing shares of outstanding capital stock of USN are deemed to represent the same number of shares of capital stock of Holdings.

Pursuant to Section 251(g) of the DGCL, the provisions of the certificate of incorporation and bylaws of Holdings are substantially identical to those of USN prior to the date on which the Merger Agreement took effect.  The authorized capital stock of Holdings, the designations, rights, powers and preferences of such capital stock, and the qualifications, limitations and restrictions thereof are also substantially identical to those of the capital stock of USN immediately prior to the date of the Merger.  Further, the directors and executive officers of Holdings are the same individuals who were directors and executive officers, respectively, of USN immediately prior to the date of the Merger.

XML

Destruction of Gamma Knife at NYU Medical Center; Replacement and Restoration

9 Months Ended

Sep. 30, 2016

Destruction of Gamma Knife at NYU Medical Center; Replacement and Restoration [Abstract]

Destruction of Gamma Knife at NYU Medical Center; Replacement and Restoration

Note C – Destruction of Gamma Knife at NYU Medical Center; Replacement and Restoration

USN opened its New York gamma knife treatment center in July 1997 on the campus of New York University (“NYU”) Medical Center.  USN installed a new Leksell gamma knife, the PERFEXION model, at the NYU Medical Center in March 2009 in replacement of the older gamma knife equipment.  In connection with this upgrade, USN modified its arrangement with NYU to extend the term for 12 years from March 2009.

In October 2012, USN’s facility at NYU was totally destroyed as a result of flooding from Hurricane Sandy. The gamma knife had to be removed to prevent any cobalt leakage that might occur due to rusting of the equipment. The removal cost was $525,000. USN paid a lease settlement of the outstanding principal balance only and received from insurance coverage $930,000 above the lease principal payments and removal costs.

USN finalized arrangements with NYU regarding the restored gamma knife center and USN’s long term contract with NYU in early 2014. USN’s new facility, with the Leksell PERFEXION gamma knife, is located in the Tisch Hospital of NYU Langone Medical Center. The facility reopened and began receiving patients at the end of April 2014.

USN entered into a six year lease in the amount of $4.7 million for the purchase of the replacement equipment and associated leasehold improvements. The first payment of $78,000 was made on September 1, 2014, including $18,000 of interest, and the final payment is due on May 1, 2020. USN entered into a second two year lease in the amount of $250,000 for the cost of the construction required at the relocated site. The first payment of $12,000 was made on November 1, 2014, and the final payment was paid on July 1, 2016.

In April of 2016 USN entered into an agreement with Elekta for the installation of new ICON imaging technology in the NYU Gamma Knife equipment with a total cost, including sales taxes, of approximately $816,000. This ICON technology was installed during the month of July 2016 and the gamma knife center reopened on August 5, 2016. The Company has obtained lease financing of approximately $900,000 at an interest rate of approximately 4.45% to finance the acquisition of the ICON technology and associated installation costs. The monthly lease payment is expected to be approximately $20,500 to be paid over 48 months commencing October 2016, with the final payment to be made September 2020. A monthly maintenance agreement will commence a year after the installation date and is estimated to be about $6,000 per month.

In July of 2016 USN entered into an agreement with NYU regarding the installation of the new ICON technology.  Following the installation, NYU will adjust the monthly fee structure by adding $30,000 to the monthly payment for the remaining term of the agreement. A final payment of $17,000 will be made for the partial month of operations in March 2021.

The major terms of the agreement with NYU continue in effect, terminating at the end of March 2021.  USN is responsible for the maintenance and insurance for the gamma knife equipment at the NYU facility and is reimbursed for use of the gamma knife based on a fee per procedure performed with the equipment.  NYU provides the medical and technical staff to operate the facility.  At the end of the contract term, costs associated with closing and restoring the NYU facility to its original condition are the responsibility of USN.

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The Southern California Regional Gamma Knife Center

9 Months Ended

Sep. 30, 2016

The Southern California Regional Gamma Knife Center [Abstract]

The Southern California Regional Gamma Knife Center

Note D – 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 Regional Hospital (“SARH”) 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 SARH to renovate space in the hospital and install and operate a Leksell PERFEXION gamma knife.  CGK leases the gamma knife from NeuroPartners 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 NeuroPartners LLC and owns 39% of CGK.

USNC was a 20% guarantor on NeuroPartners, LLC’s seven-year lease with respect to the gamma knife equipment and certain leasehold improvements at SARH.  In February 2016, NeuroPartners, negotiated a new five- year lease to fund the reloading of cobalt and the necessary construction to do so. The new lease of $1,663,000 includes a balance of $668,000 from the prior lease obligations. This new lease will be paid over 60 months. The first payment of $31,000 was paid on April 1, 2016 and the final payment will be due on March 1, 2021. The Company continues to be a 20% guarantor on the new lease and expects any potential obligations from this guarantee would be reduced by the recovery of the related collateral and expects any amounts arising from this guarantee to be insignificant.

Construction of the SARH 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 the Company has led the effort in organizing the business and overseeing the development and operation of the SARH center, its investment to date in the SARH center has been minimal.

The Company’s share of cumulative losses associated with its investment in NeuroPartners LLC and CGK has exceeded its investment.  Due to the outstanding loans made to NeuroPartners LLC and CGK, NeuroPartners LLC and CGK are considered to be variable interest entities of the Company.  However, as the Company is not deemed to be the primary beneficiary of NeuroPartners LLC and CGK, since it does not have the power to direct the operating activities that most significantly affect NeuroPartners LLC’s and CGK’s economic performance, certain disclosures are required rather than consolidation.  During the three months ended June 30, 2016, the Company received $20,000 of repayments of amounts previously advanced to NeuroPartners LLC and GCK. Those repayments reduced the amount of loses incurred on prior advances to NeruoPartners LLC and CGK and are included as additional income from investments in unconsolidated entities for the nine months ended September 30, 2016. The Company has $116,000 of remaining advances to NeuroPartners LLC and CGK at September 30, 2016.  

The following tables present the aggregation of summarized financial information of NeuroPartners LLC and CGK:

Neuro Partners, LLC and CGK Condensed Income Statement Information

	Nine Months Ended September 30,
	2016		2015
Patient revenue	$	759,000	$	683,000
Net income (loss)	$	218,000	$	(153,000	)
USNC's equity in earnings (loss) of Neuro Partners, LLC and CGK	$	9,000	$	(78,000	)

	Three Months Ended September 30,
		2016		2015
Patient revenue	$	243,000	$	185,000
Net income (loss)	$	46,000	$	(84,000	)
USNC's equity in earnings (loss) of Neuro Partners, LLC and CGK	$	-	$	(39,000	)

NeuroPartners, LLC and CGK Condensed Balance Sheet Information

	September 30, 2016			December 31, 2015
Current assets	$	169,000		$	66,000
Noncurrent assets		931,000			394,000
Total assets	$	1,100,000		$	460,000
Current liabilities	$	501,000		$	1,359,000
Noncurrent liabilities		1,280,000			-
Deficit		(681,000	)		(899,000	)
Total liabilities and (deficit)	$	1,100,000		$	460,000

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Florida Oncology Partners

9 Months Ended

Sep. 30, 2016

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, LLC (“FOP”) and Florida Oncology Partners RE, LLC (“FOPRE”), which operates a cancer center located in West Kendall (Miami), Florida.  The center diagnoses and treats patients utilizing a Varian Rapid Arc linear accelerator and a GE CT scanner. USNC originally invested $200,000 for 20% ownership interest in FOP and FOPRE. The remaining 80% was owned by other outside investors. In January of 2015, one of the investors was removed from the entities, and his ownership interest was distributed among the remaining members in relationship to the percentage they owned. This distribution resulted in an increase of ownership interest for the Company of 4% in each entity. As of January 1, 2015, the Company has a 24% ownership in both FOP and FOPRE.

The center opened and treated its first patient in May 2011. During 2012 and 2013, FOP made several distributions that reduced the Company’s investment significantly.  The Company’s recorded investment in FOP and FOPRE is $200,000 and $225,000 at September 30, 2016 and December 31, 2015, respectively. Amounts due from FOP and FOPRE included in due from related parties total $0 and $21,000 at September 30, 2016 and December 31, 2015 respectively.

During 2011, Florida Oncology Partners, LLC entered into a seven year capital lease with Key Bank for approximately $5,800,000. Under the terms of the capital lease, USN agreed to guarantee a maximum of $1,433,000, approximately 25% of the original lease obligation in the event of default. It is a guarantor jointly with most of the other members (except USNC who is not a named guarantor) of FOP.  The outstanding balance on the lease obligation was $1,780,000 at September 30, 2016. The Company expects any potential obligations from this guarantee would be reduced by the recoveries of the respective collateral and has recorded a liability of $11,000 associated with this guarantee at September 30, 2016.

In June 2012, FOPRE completed the financing agreement to purchase the building that is occupied by FOP.  The amount of the loan was $1,534,000 and was to be paid at a monthly rate of approximately $8,500 for 120 months with the final payment due on June 15, 2022. In December 2015, FOPRE sold the building, for a gain on sale of $577,000. The Company’s share of the gain was $139,000. The related mortgage was repaid upon closing of the sale.

In December of 2015, FOP entered into an agreement with 21^st Century Oncology for the purchase of FOP’s Varian machine and other medical equipment. 21^st Century Oncology paid FOP $1,000,000 as a down payment for the machine and other medical equipment and is currently making monthly payments of $172,000 for the machine, and making all monthly payments due under the capital lease, until such time as the sale is finalized. 21^st Century has not to date satisfied all of the terms of the rental agreement and on May 1, June 1, and July 1, of 2016 it has paid an additional $30,000 in accelerated payments each month, and since August 1, 2016 it has paid $50,000 in accelerated payments each month. These accelerated payments have been recorded as unearned revenue.

The following tables present the aggregation of summarized financial information of FOP and FOPRE:

FOP and FOPRE Condensed Income Statement Information

	Nine Months Ended September 30,
	2016		2015
Patient revenue	$	-	$	2,074,000
Rental Income	$	3,040,000	$	-
Net income	$	1,865,000	$	310,000
USNC's equity in income of FOP and FOPRE	$	456,000	$	75,000

	Three Months Ended September 30,
	2016		2015
Patient revenue	$	-	$	811,000
Rental Income	$	953,000	$	-
Net income	$	551,000	$	157,000
USNC's equity in income of FOP and FOPRE	$	135,000	$	38,000

FOP and FOPRE Condensed Balance Sheet Information

	September 30, 2016		December 31, 2015
Current assets	$	714,000	$	1,024,000
Noncurrent assets		2,125,000		3,066,000
Total assets	$	2,839,000	$	4,090,000
Current liabilities	$	1,386,000	$	1,848,000
Noncurrent liabilities		742,000		1,529,000
Equity		711,000		713,000
Total liabilities and equity	$	2,839,000	$	4,090,000

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Boca Oncology Partners

9 Months Ended

Sep. 30, 2016

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 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, LLC (“Boca West IMP”), owner of a medical office building in West Boca, Florida in which BOP operates.  BOP occupies approximately 6,000 square feet of the 32,000 square foot building.  The Company’s wholly-owned subsidiary, USNC invested $225,000 initially and had a 22.5% interest in BOP and BOPRE.

In January 2012, an additional investor purchased 50% of the partnership reducing the Company’s ownership to 11.25%.  The Company loaned the proceeds of $56,250 back to BOP as a 5 year note at 7% interest. The remaining 88.75% was owned by other outside investors.  In June 2012, BOPRE purchased an additional 3.75% of Boca West IMP from another investor bringing its total interest to 23.75%. BOPRE accounts for this investment under the cost method since it does not exercise significant influence over Boca West IMP. Then the members of BOPRE sold 31.5% of their interests in BOPRE to a new investor. The proceeds of $28,000 were loaned to BOP and USNC’s investment in BOPRE was reduced to 15.4%.

Although the Company reduced its investment to 11.25% of BOP and 15.4% of BOPRE, the Company continues to account for these investments under the equity method due to its participation in the management of the administration and accounting functions of BOP and BOPRE. Due to the outstanding loans made to BOP, BOP was considered to be a variable interest entity of the Company.  However, as the Company was not deemed to be the primary beneficiary of BOP, since it did not have the power to direct the operating activities that most significantly affect BOP’s economic performance, certain disclosures are required rather than consolidation.  The center opened in August 2012.

In February 2014, the Company and other members sold their interests in BOP.

The Company’s recorded investment in BOPRE is $137,000 at September 30, 2016 and $139,000 at December 31, 2015.

USNC is a 10% guarantor on 50% of the outstanding balance of Boca West IMP’s ten-year mortgage.  This mortgage had an original balance of $3,000,000 and is secured by the medical office building in which BOP operates. The outstanding balance on the mortgage is $2,554,000 at September 30, 2016.  The Company expects any potential obligations from this guarantee would be reduced by the recovery of the real estate and expects any amounts arising from this guarantee to be insignificant.

The following tables present the summarized financial information of BOPRE:

BOPRE Condensed Income Statement Information

	Nine Months Ended September 30,
	2016			2015
Rental Income	$	-		$	-
Net loss	$	(3,000	)	$	(2,000	)
USNC's equity in loss in BOPRE	$	-		$	-

	Three Months Ended September 30,
		2016			2015
Rental Income	$	-		$	-
Net loss	$	(2,000	)	$	(1,000	)
USNC's equity in loss in BOPRE	$	-		$	-

BOPRE Condensed Balance Sheet Information

	September 30, 2016		December 31, 2015
Current assets	$	23,000	$	40,000
Noncurrent assets		851,000		837,000
Total assets	$	874,000	$	877,000
Current liabilities	$	-	$	-
Noncurrent liabilities		-		-
Equity		874,000		877,000
Total liabilities and equity	$	874,000	$	877,000

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Income Taxes

9 Months Ended

Sep. 30, 2016

Income Taxes [Abstract]

Income Taxes

Note G – Income Taxes

The Company’s income tax rate, which includes federal and state income taxes, was approximately 38%, for the nine months ended September 30, 2016. The Company recorded a tax charge of $306,000 for the nine months ended September 30, 2016.

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The Southern California Regional Gamma Knife Center (Tables)

9 Months Ended

Sep. 30, 2016

Neuro Partners LLC and CGK [Member]

Schedule of Cost-method Investments [Line Items]

Schedule of Equity Method Investment Summarized Financial Information

The following tables present the aggregation of summarized financial information of NeuroPartners LLC and CGK:

Neuro Partners, LLC and CGK Condensed Income Statement Information

	Nine Months Ended September 30,
	2016		2015
Patient revenue	$	759,000	$	683,000
Net income (loss)	$	218,000	$	(153,000	)
USNC's equity in earnings (loss) of Neuro Partners, LLC and CGK	$	9,000	$	(78,000	)

	Three Months Ended September 30,
		2016		2015
Patient revenue	$	243,000	$	185,000
Net income (loss)	$	46,000	$	(84,000	)
USNC's equity in earnings (loss) of Neuro Partners, LLC and CGK	$	-	$	(39,000	)

NeuroPartners, LLC and CGK Condensed Balance Sheet Information

	September 30, 2016			December 31, 2015
Current assets	$	169,000		$	66,000
Noncurrent assets		931,000			394,000
Total assets	$	1,100,000		$	460,000
Current liabilities	$	501,000		$	1,359,000
Noncurrent liabilities		1,280,000			-
Deficit		(681,000	)		(899,000	)
Total liabilities and (deficit)	$	1,100,000		$	460,000

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Florida Oncology Partners (Tables)

9 Months Ended

Sep. 30, 2016

FOP and FOPRE [Member]

Schedule of Cost-method Investments [Line Items]

Schedule of Equity Method Investment Summarized Financial Information

The following tables present the aggregation of summarized financial information of FOP and FOPRE:

FOP and FOPRE Condensed Income Statement Information

	Nine Months Ended September 30,
	2016		2015
Patient revenue	$	-	$	2,074,000
Rental Income	$	3,040,000	$	-
Net income	$	1,865,000	$	310,000
USNC's equity in income of FOP and FOPRE	$	456,000	$	75,000

	Three Months Ended September 30,
	2016		2015
Patient revenue	$	-	$	811,000
Rental Income	$	953,000	$	-
Net income	$	551,000	$	157,000
USNC's equity in income of FOP and FOPRE	$	135,000	$	38,000

FOP and FOPRE Condensed Balance Sheet Information

	September 30, 2016		December 31, 2015
Current assets	$	714,000	$	1,024,000
Noncurrent assets		2,125,000		3,066,000
Total assets	$	2,839,000	$	4,090,000
Current liabilities	$	1,386,000	$	1,848,000
Noncurrent liabilities		742,000		1,529,000
Equity		711,000		713,000
Total liabilities and equity	$	2,839,000	$	4,090,000

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Boca Oncology Partners (Tables)

9 Months Ended

Sep. 30, 2016

Boca Oncology Partners RE, LLC ("BOPRE") [Member]

Schedule of Cost-method Investments [Line Items]

Schedule of Equity Method Investment Summarized Financial Information

The following tables present the summarized financial information of BOPRE:

BOPRE Condensed Income Statement Information

	Nine Months Ended September 30,
	2016			2015
Rental Income	$	-		$	-
Net loss	$	(3,000	)	$	(2,000	)
USNC's equity in loss in BOPRE	$	-		$	-

	Three Months Ended September 30,
		2016			2015
Rental Income	$	-		$	-
Net loss	$	(2,000	)	$	(1,000	)
USNC's equity in loss in BOPRE	$	-		$	-

BOPRE Condensed Balance Sheet Information

	September 30, 2016		December 31, 2015
Current assets	$	23,000	$	40,000
Noncurrent assets		851,000		837,000
Total assets	$	874,000	$	877,000
Current liabilities	$	-	$	-
Noncurrent liabilities		-		-
Equity		874,000		877,000
Total liabilities and equity	$	874,000	$	877,000

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Destruction of Gamma Knife at NYU Medical Center; Replacement and Restoration (Details) - USD ($)				1 Months Ended		9 Months Ended
	Nov. 01, 2014	Sep. 01, 2014	Oct. 31, 2012	Jul. 31, 2016	Apr. 30, 2016	Sep. 30, 2016
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Terms of agreement with NYU						12 years
Removal cost			$ 525,000
Insurance coverage			$ 930,000
Capital lease obligation					$ 900,000
Installation cost of new ICON imaging technology for gamma knife equipment					$ 816,000
Interest rate on capital lease					4.45%
Monthly lease payment					$ 20,500
Estimated cost of monthly maintenance agreement					$ 6,000
Increase in capital lease minimum monthly payment				$ 30,000
Final lease payment amount, partial month				$ 17,000
Lease One [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Capital lease term						6 years
Capital lease obligation		$ 4,700,000
Capital lease payment		78,000
Interest on lease		$ 18,000
Lease Two [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Capital lease term						2 years
Capital lease obligation	$ 250,000
Capital lease payment	$ 12,000

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The Southern California Regional Gamma Knife Center (Details) - USD ($)				1 Months Ended	3 Months Ended			9 Months Ended
	Apr. 01, 2016	Nov. 01, 2014	Sep. 01, 2014	Feb. 29, 2016	Sep. 30, 2016	Jun. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Apr. 30, 2016	Dec. 31, 2015
Schedule of Cost-method Investments [Line Items]
Renovation installation and operation agreement period								14 years
Capital lease obligation										$ 900,000
Repayment of amounts advanced to unconsolidated entities								$ 20,000	$ 0
Neuro Partners, LLC and CGK Condensed Income Statement Information [Abstract]
Patient revenue					$ 722,000		$ 772,000	2,329,000	2,253,000
USNC's equity in earnings (loss) of Neuro Partners, LLC and CGK					$ 135,000		36,000	$ 473,000	25,000
CGK [Member]
Schedule of Cost-method Investments [Line Items]
Ownership percentage					39.00%			39.00%
Lease One [Member]
Schedule of Cost-method Investments [Line Items]
Lease term								6 years
Capital lease obligation			$ 4,700,000
Capital lease payment			$ 78,000
Lease One [Member] | Neuro Partners LLC [Member]
Schedule of Cost-method Investments [Line Items]
Ownership percentage					20.00%			20.00%
Share of guarantee in lease obligations								20.00%
Lease term								7 years
Lease Two [Member]
Schedule of Cost-method Investments [Line Items]
Lease term								2 years
Capital lease obligation		$ 250,000
Capital lease payment		$ 12,000
Lease Two [Member] | Neuro Partners LLC [Member]
Schedule of Cost-method Investments [Line Items]
Lease term								5 years
Capital lease obligation				$ 1,663,000
Prior year lease obligations				$ 668,000
Capital lease payment	$ 31,000
Neuro Partners LLC and CGK [Member]
Schedule of Cost-method Investments [Line Items]
Repayment of amounts advanced to unconsolidated entities						$ 20,000
Remaining amount of advances to unconsolidated entities								$ 116,000
Neuro Partners, LLC and CGK Condensed Income Statement Information [Abstract]
Patient revenue					$ 243,000		185,000	759,000	683,000
Net income (loss)					46,000		(84,000)	218,000	(153,000)
USNC's equity in earnings (loss) of Neuro Partners, LLC and CGK					0		$ (39,000)	9,000	$ (78,000)
Neuro Partners, LLC and CGK Condensed Balance Sheet Information [Abstract]
Current assets					169,000			169,000			$ 66,000
Noncurrent assets					931,000			931,000			394,000
Total assets					1,100,000			1,100,000			460,000
Current liabilities					501,000			501,000			1,359,000
Noncurrent liabilities					1,280,000			1,280,000			0
Deficit					(681,000)			(681,000)			(899,000)
Total liabilities and equity (deficit)					$ 1,100,000			$ 1,100,000			$ 460,000

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Florida Oncology Partners (Details) - USD ($)						3 Months Ended			9 Months Ended		12 Months Ended
	Aug. 01, 2016	Jul. 01, 2016	Jun. 01, 2016	May 01, 2016	Jun. 30, 2012	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2010	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2011	Apr. 30, 2016	Jan. 02, 2015
Schedule of Cost-method Investments [Line Items]
Due from related parties						$ 0			$ 0		$ 21,000
Capital leases, amount													$ 900,000
Liability associated with guarantee						11,000			11,000		15,000
Gain on sale of building											139,000
Monthly payments of capital leases													$ 20,500
FOP and FOPRE Condensed Income Statement Information [Abstract]
Patient revenue						722,000	$ 772,000		2,329,000	$ 2,253,000
Income from investments in unconsolidated entities						135,000	36,000		473,000	25,000
FOP and FOPRE [Member]
Schedule of Cost-method Investments [Line Items]
Recorded investments						200,000		$ 200,000	200,000		225,000
Ownership percentage								20.00%						24.00%
Ownership percentage by outside investors								80.00%
Increase in ownership percentage								4.00%
Due from related parties						0			$ 0		21,000
Lease term									7 years
Capital leases, amount												$ 5,800,000
Percentage of guarantee obligations												25.00%
Outstanding lease obligation						1,780,000			$ 1,780,000
Liability associated with guarantee						11,000			$ 11,000
Outstanding Loan					$ 1,534,000
Monthly loan payment					$ 8,500
Debt maturity period									120 months
Maturity date									Jun. 15, 2022
Gain on sale of building											577,000
Down payment of capital leases											1,000,000
Monthly payments of capital leases											172,000
Payment of penalties on capital leases	$ 50,000	$ 30,000	$ 30,000	$ 30,000
FOP and FOPRE Condensed Income Statement Information [Abstract]
Patient revenue						0	811,000		$ 0	2,074,000
Rental income						953,000	0		3,040,000	0
Net income						551,000	157,000		1,865,000	310,000
Income from investments in unconsolidated entities						135,000	$ 38,000		456,000	$ 75,000
FOP and FOPRE Condensed Balance Sheet Information [Abstract]
Current assets						714,000			714,000		1,024,000
Noncurrent assets						2,125,000			2,125,000		3,066,000
Total assets						2,839,000			2,839,000		4,090,000
Current liabilities						1,386,000			1,386,000		1,848,000
Noncurrent liabilities						742,000			742,000		1,529,000
Equity						711,000			711,000		713,000
Total liabilities and equity (deficit)						$ 2,839,000			$ 2,839,000		$ 4,090,000
FOP and FOPRE [Member] | Maximum [Member]
Schedule of Cost-method Investments [Line Items]
Amount of guarantee obligations												$ 1,433,000

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Boca Oncology Partners (Details)			3 Months Ended		9 Months Ended
	Jun. 30, 2012 USD ($)	Jan. 31, 2012 USD ($)	Sep. 30, 2016 USD ($) ft²	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) ft²	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)	Jun. 30, 2011 USD ($)
Schedule of Cost-method Investments [Line Items]
Investments in unconsolidated entities			$ 337,000		$ 337,000		$ 364,000
Condensed Income Statement Information [Abstract]
USNC's equity in loss in BOPRE			$ 135,000	$ 36,000	$ 473,000	$ 25,000
USNC [Member] | Boca West IMP [Member]
Schedule of Cost-method Investments [Line Items]
Share of guarantee in mortgage			10.00%		10.00%
Share of guarantee in outstanding mortgage			50.00%		50.00%
Mortgage term of guarantee					10 years
Original balance of mortgage			$ 3,000,000		$ 3,000,000
Outstanding balance on mortgage			$ 2,554,000		$ 2,554,000
Boca Oncology Partners, LLC [Member]
Schedule of Cost-method Investments [Line Items]
Area of building | ft²			6,000		6,000
Ownership percentage, cost method		11.25%
Amount loaned to related parties	$ 28,000	$ 56,250
Debt maturity period					5 years
Company loan interest rate		7.00%
Boca Oncology Partners RE, LLC ("BOPRE") [Member]
Schedule of Cost-method Investments [Line Items]
Investments in unconsolidated entities			$ 137,000		$ 137,000		139,000
Ownership percentage, equity method								20.00%
Ownership percentage by outside investors	31.50%
Condensed Income Statement Information [Abstract]
Rental income			0	0	0	0
Net loss			(2,000)	(1,000)	(3,000)	(2,000)
USNC's equity in loss in BOPRE			0	$ 0	0	$ 0
Equity Method Investment Summarized Financial Information Balance Sheet [Abstract]
Current assets			23,000		23,000		40,000
Noncurrent assets			851,000		851,000		837,000
Total assets			874,000		874,000		877,000
Current liabilities			0		0		0
Noncurrent liabilities			0		0		0
Equity			874,000		874,000		877,000
Total liabilities and equity (deficit)			$ 874,000		$ 874,000		$ 877,000
Boca Oncology Partners RE, LLC ("BOPRE") [Member] | Boca West IMP [Member]
Schedule of Cost-method Investments [Line Items]
Ownership percentage, cost method	23.75%
Additional investor purchased	3.75%
Boca Oncology Partners RE, LLC ("BOPRE") [Member] | USNC [Member]
Schedule of Cost-method Investments [Line Items]
Ownership percentage, cost method	15.40%
BOP and BOPRE [Member]
Schedule of Cost-method Investments [Line Items]
Area of building | ft²			32,000		32,000
Investments in unconsolidated entities								$ 225,000
Additional investor purchased		50.00%
Ownership percentage by outside investors		88.75%
BOP and BOPRE [Member] | USNC [Member]
Schedule of Cost-method Investments [Line Items]
Ownership percentage, equity method								22.50%

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Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Taxes [Abstract]
Federal and state income taxes, rate			38.00%
Tax liability	$ 83,000	$ 53,000	$ 306,000	$ 120,000