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, 2018

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, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company, and “emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒
(do not check if a smaller reporting company)	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

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 September 30, 2018 was 7,792,185.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	3
Item 1.  Financial Statements	3
Item 2.  Management Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.  Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.  Controls and Procedures	26
PART II - OTHER INFORMATION	28
Item 1.  Legal Proceedings	28
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.  Defaults Upon Senior Securities	28
Item 4.  Submission of Matters to a Vote of Security Holders	28
Item 5.  Other Information	28
Item 6.  Exhibits	28
SIGNATURES	29

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2018		December 31, 2017
	(UNAUDITED)
Current assets:
Cash and cash equivalents	$	1,614,000	$	2,684,000
Accounts receivable		359,000		767,000
Due from related parties		1,132,000		169,000
Short term loan receivable		575,000		299,000
Other current assets		174,000		67,000
Total current assets		3,854,000		3,986,000
Other assets:
Notes receivable		38,000		38,000
Investments in unconsolidated entities		173,000		164,000
Total other assets		211,000		202,000
Property and equipment:
Gamma knife (net of accumulated depreciation of $3,391,000 in 2018 and $2,637,000 in 2017)		3,349,000		2,700,000
Leasehold improvements (net of accumulated amortization of $1,340,000 in 2018 and $1,111,000 in 2017)		798,000		1,027,000
Total property and equipment		4,147,000		3,727,000
TOTAL ASSETS	$	8,212,000	$	7,915,000
LIABILITIES
Current liabilities:
Obligations under capital lease - current portion	$	1,397,000	$	972,000
Accounts payable and accrued expenses		109,000		208,000
Deferred revenue		675,000		370,000
Income taxes payable		616,000		64,000
Total current liabilities		2,797,000		1,614,000
Obligations under capital lease - net of current portion		1,353,000		1,666,000
Deferred tax liability		63,000		675,000
Guarantee liability		11,000		11,000
Asset retirement obligations		537,000		517,000
Total liabilities		4,761,000		4,483,000
STOCKHOLDERS’ EQUITY
Common stock - par value $.01; 25,000,000 shares authorized; 7,792,185 shares issued and outstanding at September 30, 2018 and December 31, 2017.		78,000		78,000
Additional paid-in capital		3,100,000		3,100,000
Retained earnings		273,000		254,000
Total stockholders' equity		3,451,000		3,432,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	8,212,000	$	7,915,000

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,
	2018			2017
Revenue	$	803,000		$	803,000
Costs and expenses:
Patient expenses		506,000			352,000
Selling, general and administrative		268,000			278,000
Total		774,000			630,000
Operating income		29,000			173,000
Interest expense		(25,000	)		(40,000	)
Interest income		46,000			-
Loss from investments in unconsolidated entities		(151,000	)		(101,000	)
(Loss) income before income taxes		(101,000	)		32,000
Provision for income tax expense		(19,000	)		(21,000	)
Net (loss) income	$	(120,000	)	$	11,000
Basic and diluted net (loss) income per share	$	(0.02	)	$	0.00
Weighted average common shares outstanding		7,792,185			7,792,185

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,
	2018			2017
Revenue	$	2,789,000		$	2,627,000
		.
Costs and expenses:
Patient expenses		1,262,000			1,076,000
Selling, general and administrative		934,000			927,000
Total		2,196,000			2,003,000
Operating income		593,000			624,000
Interest expense		(85,000	)		(117,000	)
Interest income		50,000			-
(Loss) income from investments in unconsolidated entities		(341,000	)		140,000
Income before income taxes		217,000			647,000
Provision for income tax expense		(198,000	)		(257,000	)
Net income	$	19,000		$	390,000
Basic and diluted net income per share	$	0.00		$	0.05
Weighted average common shares outstanding		7,792,185			7,792,185

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,
	2018			2017
Cash flows from operating activities:
Net income	$	19,000		$	390,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		983,000			850,000
Loss (income) from investment in unconsolidated entities		341,000			(140,000	)
Distributed earnings from unconsolidated entities		-			315,000
Accretion of asset retirement obligations		20,000			19,000
Deferred income taxes		(612,000	)		(141,000	)
Changes in:
Accounts receivable		408,000			784,000
Elekta refund due		-			12,000
Other current assets		(107,000	)		(2,000	)
Accounts payable and accrued expenses		(99,000	)		111,000
Deferred revenue		305,000			(77,000	)
Income taxes payable		552,000			400,000
Net cash provided by operating activities		1,810,000			2,521,000
Cash flows from investing activities:
Repayment of amounts advanced to unconsolidated entities		-			53,000
Capital contributions to unconsolidated entities		(4,000	)		(20,000	)
Advances to unconsolidated entities		(1,309,000	)		(116,000	)
Advances made under short term loans		(276,000	)		-
Purchase of gamma knife equipment		(570,000	)		(46,000	)
Increase in due from related parties		-			(15,000	)
Net cash used in investing activities		(2,159,000	)		(144,000	)
Cash flows from financing activities:
Repayment of capital lease obligations		(721,000	)		(771,000	)
Net cash used in financing activities		(721,000	)		(771,000	)
Net change in cash and cash equivalents		(1,070,000	)		1,606,000
Cash and cash equivalents - beginning of period		2,684,000			1,962,000
Cash and cash equivalents - end of period	$	1,614,000		$	3,568,000
Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	85,000		$	117,000
Income Taxes	$	254,000		$	-
Supplemental disclosure of noncash investing and financing activities:
Purchase of gamma knife equipment included in capital lease obligations	$	833,000		$	-

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, 2018 and 2017, 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, 2017 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.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“Topic 606”), amending existing revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Topic 606 defines a five-step process to accomplish this objective, including identifying the contract with the customer and the performance obligations within the contract, determining the transaction price including estimates of any variable consideration, allocating the transaction price to each separate performance obligation, and recognizing revenue as the company satisfies the performance obligation. We adopted the provisions of Topic 606 as of January 1, 2018 on a modified retrospective basis and applied it to the Company's sole contract at the date of adoption. We concluded that the impact to the manner in which we recognize revenue is immaterial. Our revenue is primarily generated from a leasing arrangement with New York University, which is not within the scope of Topic 606, and from the sale of maintenance services with a single performance obligation, under which revenue is recognized in a similar manner as compared to the method under the prior revenue standards. The Company recognizes maintenance income ratably over time as patient procedures are performed.

We plan to adopt the provisions of ASU 2016-02, Leases ("Topic 842"), as amended, as of January 1, 2019. We are evaluating the standard in accordance with our adoption plan, which will include performing a completeness assessment over the lease population, reviewing all forms of leases and analyzing the practical expedients in order to determine the best implementation strategy. We will then determine the impact of adoption on our condensed consolidated financial statements, as well as disclosures, accounting policies, business processes and internal controls. While our evaluation is ongoing, we expect to adopt the standard on a modified retrospective basis and recognize additional lease liabilities and right of use assets. The extent of the increase to assets and liabilities associated with these amounts remains to be determined, and we are currently unable to estimate if there will be a material impact to our consolidated financial statements.

7

Note B – Gamma Knife at NYU Medical Center

U.S. NeuroSurgical, Inc. (“USN”), a wholly-owned subsidiary of U.S. NeuroSurgical Holdings, Inc., 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 which it had been leasing to NYU.  In connection with this upgrade, USN modified its arrangement with NYU to extend the term for 12 years from March 2009.

In October 2012, the Company’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.  The Company 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.

The Company finalized arrangements with NYU regarding the restored gamma knife center and entered into an amendment to the Gamma Knife Neuroradiosurgery Equipment Agreement. The Company’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.

The Company 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. The Company 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 made in July 2016.

In April 2016 USN entered into an agreement with Elekta for the installation of new ICON imaging technology for 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 $879,000 at an interest rate of approximately 4.45% to finance the acquisition of the ICON technology and associated installation costs totaling approximately $63,000. The monthly lease payment is approximately $20,000 which commenced October 2016, with the final payment scheduled for September 2020. A monthly maintenance agreement commenced a year after the installation date at a cost of about $6,000 per month.

In July 2016, USN and NYU entered into an amendment to the Gamma Knife Neuroradiosurgery Equipment Agreement relating to the newly installed ICON imaging technology, increasing the monthly payment due to the Company by $30,000 for the remaining term of the agreement.

8

In September 2017, USN and NYU entered into an additional amendment to the Gamma Knife Neuroradiosurgery Equipment Agreement, whereby NYU committed to purchase all of the gamma knife equipment at the NYU Medical Center for a purchase price of $2,400,000, consisting of 41 monthly installments of $50,000 commencing at the end of October 2017 and continuing through the end of February 2021, with a final payment of $350,000 on March 31, 2021.  Upon receipt of final payment, title to all the equipment at the center will pass to NYU. Payments received before USN can pass title to the gamma knife equipment to NYU, or before USN has satisfied substantially all of its obligations under the agreement, will be recorded as deferred revenue.

Previously, the agreement with NYU ended on March 17, 2021 and NYU had an option to purchase the gamma knife equipment at the appraised value of the equipment at that time.  In June 2017, the Company obtained an independent estimate of $2,570,000 for the fair value of the equipment in March 2021.  The Company believes that the accelerated payments amounting to $2,400,000 represent fair consideration considering all aspects of the transaction.

The Company will continue to be responsible for the maintenance and insurance for the gamma knife equipment at the NYU facility through the contract period and will continue to be 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.

In July 2018 USN entered into an agreement with Elekta for the cobalt reload on the NYU gamma knife equipment with a cost, including sales taxes, of approximately $925,000. This cobalt reload took place during the month of July 2018, and the gamma knife center reopened on August 6, 2018. At this time, the Company has obtained lease financing of approximately $833,000 at an interest rate of approximately 5.85% to partially finance the reload of the cobalt, and has paid the remaining balance directly to Elekta. In addition, the Company incurred costs to install the new cobalt totaling $478,000, which is paid directly to the contractor. When the final costs have been calculated and billed, they may be rolled into the lease. The current monthly lease payment for the reload is approximately $30,000.  Lease payments commenced October 2018, with the final payment scheduled for March 2021. As part of the agreement with NYU, including the commitment by NYU to purchase the equipment and the Company’s undertaking to reload the cobalt, the Company will be relieved of its obligation to close and restore the NYU facility to its original condition.

Note C – The Southern California Regional Gamma Knife Center

During 2007, the Company managed the formation of the Southern California Regional Gamma Knife Center at San Antonio Regional Hospital (“SARH”) in Upland, California.  The Company participates in the ownership and operation of the center through 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.

9

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 LLC negotiated a new five- year lease to fund the reloading of cobalt and related construction services.  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 thus expects any exposure from this guarantee to be remote.

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.

During the year ended December 31, 2017, the Company received $65,000 in repayments of amounts previously advanced to NeuroPartners LLC and CGK and $24,000 in distributions.  Those repayments and distributions reduced the amount of losses incurred on prior advances to NeuroPartners LLC and CGK. At December 31, 2017, NeuroPartners LLC and CGK had repaid all of the outstanding advances. For the nine months ended September 30, 2018 and 2017, the Company’s equity in earnings of NeuroPartners LLC and CGK was $120,000 and $105,000, respectively, but only $5,000 in 2018 was recorded due to prior losses.

10

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

NeuroPartners LLC and CGK Condensed Combined Income Statement Information

	Nine Months Ended September 30,
	2018		2017
Patient revenue	$	825,000	$	782,000
Net income	$	396,000	$	356,000
USNC's equity in earnings of NeuroPartners LLC and CGK	$	120,000	$	105,000

	Three Months Ended September 30,
	2018		2017
Patient Revenue	$	315,000	$	254,000
Net income	$	169,000	$	132,000
USNC's equity in earnings of NeuroPartners LLC and CGK	$	55,000	$	36,000

NeuroPartners LLC and CGK Condensed Combined Balance Sheet Information

	September 30, 2018		December 31, 2017
Current assets	$	439,000	$	165,000
Noncurrent assets		620,000		745,000
Total assets	$	1,059,000	$	910,000
Current liabilities	$	323,000	$	641,000
Noncurrent liabilities		536,000		464,000
Equity (deficit)		200,000		(195,000	)
Total liabilities and equity (deficit)	$	1,059,000	$	910,000

Note D – Florida Oncology Partners

During 2010, the Company expanded its market strategy to include opportunities to develop cancer centers featuring radiation therapy.  These centers utilize linear accelerators with IMRT (Intensity Modulated Radiation Therapy) and IGRT (Image Guided Radiation Therapy) capabilities.  In 2010, the Company formed Florida Oncology Partners, LLC (“FOP”) in partnership with local physicians and other investors.  USNC owns a 24% interest in the venture.  FOP’s first center was located in Miami, Florida and opened in the second quarter of 2011. During the quarter ended September 30, 2010, the Company participated in the formation of Florida Oncology Partners RE, LLC (“FOPRE”), which owned a building previously occupied by FOP.  The center diagnoses and treats patients utilizing a Varian Rapid Arc linear accelerator and a GE CT scanner. USNC originally invested $200,000 for a 20% ownership interest in FOP and FOPRE. The remaining 80% was owned by other outside investors. In January of 2015 one of the investors relinquished its ownership interest in both FOP and FOPRE, and that interest was distributed among the remaining members in relationship to their percentages owned. This distribution resulted in an increase of ownership interest for the Company of 4% in each of FOP and FOPRE.  As of January 1, 2015, the Company held a 24% ownership in both FOP and FOPRE.

11

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.  USN is a guarantor jointly with most of the other members of FOP (except USNC, which is not a named guarantor).  The outstanding balance on the lease obligation was $0 at September 30, 2018, as the lease was fully repaid in May 2018, and $468,000 at December 31, 2017. Accordingly, the Company wrote off the liability associated with this guarantee during the three months ended June 30, 2018.

In June 2012, FOPRE financed the purchase of the building that was 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 and FOPRE has ceased operations. In May 2017, FOPRE was dissolved.

In December of 2015, FOP entered into an agreement with 21^st Century Oncology for the sale of FOP’s Varian Rapid Arc linear accelerator and other medical equipment at the FOP location.  21^st Century Oncology paid FOP $1,000,000 as a down payment for the equipment and agreed to make monthly payments of $172,000 for the equipment and all monthly payments due under the equipment lease with Key Bank.  As of this date, 21^st Century Oncology has not satisfied all of the terms of the agreement.  In late May 2017, 21^st Century Oncology filed for Chapter 11 bankruptcy protection and FOP was listed as an unsecured creditor. As a result, since June 2017, FOP has not received the agreed rental payments beyond the monthly payments for the equipment lease.  FOP will continue to monitor the impact of 21^st Century’s bankruptcy and pursue amounts that it is owed.  However, there can be no assurance that FOP be successful in these efforts.

Late in 2016, FOP took initial steps toward the development of a new radiation therapy center in Homestead, Florida.   In December 2016, FOP entered into a ten-year lease agreement for office space located at 20405 Old Cutler Towne Center.  FOP had to deliver an $88,000 letter of credit in conjunction with this office lease which collateral is being held in a restricted certificate of deposit. FOP began incurring architecture costs for planning/refitting the new space.  During the first half of 2017, a financing agreement with BB&T Bank for the medical equipment and leasehold improvements was negotiated and then signed on August 31, 2017.  In November 2017, the amounts for the equipment and leasehold improvements costs were finalized and paid under this financing agreement for a total loan of $4,106,000 to be paid over 7 years.  Under the terms of the financing agreement, USN agreed to guarantee the amount initially borrowed. USN is the guarantor with several other members of FOP. The outstanding balance on the financing facility was approximately $3,790,000 at September 30, 2018, and $4,100,000 at December 31, 2017. The Company expects any potential liability from this guarantee to be reduced by the recoveries of the respective collateral but has recorded a liability of $11,000 associated with this guarantee at September 30, 2018.

12

Late in the third quarter of 2017, it was determined that the business opportunity at this new location should be pursued by a different investor group, and FOP arranged to sell the opportunity to this group.  CB Oncology Partners, LLC, was organized on September 1, 2017, to acquire the assets and rights in this new center from FOP.

In June 2017, FOP entered into an agreement with a third-party owner of a radiation therapy center located in Miami, Florida, whereby FOP took over the operation of the center effective September 22, 2017, for a ten-year initial term, and up to three additional terms of five years each. This agreement has been accounted for as a capital lease and, accordingly, FOP recorded assets and capital lease liabilities totaling $14,321,000 at September 22, 2017. The lease required monthly payments in the first year of $160,000, increasing by 2% each year; currently the payment is $163,200.

The Company’s recorded investment in FOP at September 30, 2018 and December 31, 2017 has been reduced to zero due to FOP recording distributions of $950,000 in the fourth quarter of 2017. Amounts due from FOP included in due from related parties total $222,000 and $169,000 at September 30, 2018 and December 31, 2017 respectively. In addition, FOP owes $575,000 of principal and $20,000 of accrued interest to the Company under a promissory note, due on demand, bearing interest at 6% per anum entered into in October 2017. The Company made $52,000 of additional advances to FOP, and additional short term loans, totaling $276,000 during the nine months ended September 30, 2018, to assist with the funding of operations of the radiation therapy center in Miami.

No equity in earnings have been recorded by the Company for the nine months ended September 30, 2018, due to FOP’s deficit at September 30, 2018.

Due to loans made to FOP, FOP is considered to be a variable interest entity of the Company.  However, as the Company is not deemed to be the primary beneficiary of FOP, since it does not have the power to direct the operating activities that most significantly affect FOP’s economic performance, the entity is not consolidated, but certain disclosures are provided herein.

13

The following tables present the summarized financial information of FOP

FOP Condensed Income Statement Information

	Nine Months Ended September 30,
	2018			2017
Patient revenue	$	2,369,000		$	-
Rental income	$	1,071,000		$	2,148,000
Net (loss) income	$	(1,277,000	)	$	856,000
USNC's equity in (loss) earnings of FOP	$	(310,000	)	$	207,000

	Three Months Ended September 30,
	2018			2017
Patient revenue	$	63,000		$	-
Rental income	$	181,000		$	344,000
Net loss	$	(1,386,000	)	$	(177,000	)
USNC's equity in loss of FOP	$	(336,000	)	$	(43,000	)

FOP Condensed Balance Sheet Information

	September 30, 2018			December 31, 2017
Current assets	$	557,000		$	664,000
Noncurrent assets		17,046,000			18,961,000
Total assets	$	17,603,000		$	19,625,000
Current liabilities	$	3,577,000		$	3,228,000
Noncurrent liabilities		15,748,000			16,842,000
Deficit		(1,722,000	)		(445,000	)
Total liabilities and equity	$	17,603,000		$	19,625,000

FOPRE had no significant assets or liabilities at December 31, 2017 and no significant income and expenses for the three and nine months ended September 30, 2017.

14

Note E – 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 whichBOP 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 BOP reducing the Company’s ownership to 11.25%.  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, and USNC’s investment in BOPRE was reduced to 15.4%.

During the nine months ended September 30, 2018 and the years ended December 31, 2017 and 2016, several investors relinquished part of their ownership interest in BOPRE, and those interests were distributed among the remaining investors in relationship to their percentages owned. As a result, the Company holds a 21.22% ownership interest in BOPRE, which it accounts for under the equity method, at December 31, 2017 and September 30, 2018. The center operated by BOP opened in August 2012.

The Company’s recorded investment in BOPRE is $168,000 and $164,000 at September 30, 2018 and December 31, 2017, respectively.

USNC is a 10% guarantor of 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 $2,332,000 at September 30, 2018 and $2,417,000 at December 31, 2017.  Any liability from this guarantee would be mitigated by the recovery from the underlying real estate, and the Company expects its potential exposure from this guarantee to be remote.

15

The following tables present the summarized financial information of BOPRE:

BOPRE Condensed Income Statement Information

	Nine Months Ended September 30,
	2018			2017
Rental income	$	-		$	-
Net loss	$	(4,000	)	$	(7,000	)
USNC's equity in loss of BOPRE	$	(1,000	)	$	(1,000	)

	Three Months Ended September 30,
	2018		2017
Rental income	$	-	$	-
Net loss	$	-	$	(7,000	)
USNC's equity in loss of BOPRE	$	-	$	(1,000	)

BOPRE Condensed Balance Sheet Information

	September 30, 2018		December 31, 2017
Current assets	$	18,000	$	17,000
Noncurrent assets		935,000		920,000
Total assets	$	953,000	$	937,000
Current liabilities	$	-	$	-
Noncurrent liabilities		-		-
Equity		953,000		937,000
Total liabilities and equity	$	953,000	$	937,000

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Note F - Medical Oncology Partners

In April 2015 Medical Oncology Partners, LLC (“MOP”), was formed in partnership with local physicians and other investors. MOP was established to acquire a 100% equity interest in United Oncology Medical Associates of Florida, LLC (“UOMA”). USNC was not a member of MOP at the time of formation as it was not able to participate due to the fact that USNC was not a physician. Nevertheless, USNC wished to eventually obtain an equity interest in MOP and loaned Dr. Jaime Lozano, the principal investor in MOP and a co-investor in FOP, $173,000.  Dr. Lozano used these funds, along with an equal amount of his own funds (a total of $345,000), to purchase a 76.67% interest in MOP. Other investors paid a further $105,000 for the remaining equity in MOP. MOP used the $450,000 of financing to acquire a 100% equity interest in UOMA.  An application was filed for a waiver to allow USNC to hold an equity interest notwithstanding the physician requirement and on December 22, 2016, USNC was cleared to become a part owner of MOP. Dr. Lozano agreed to exchange half of his membership interest to USNC in settlement of the note to USNC.  USNC and Dr. Lozano also agreed to share equally in providing a 5% equity interest in MOP to an additional investor as a consulting fee for services rendered in the administration of MOP and UOMA. At December 22, 2016, USNC owned 35.83% of MOP with an initial carrying value of $161,000. The Company recorded its share of losses of $12,000 for the period from December 22, 2016 to December 31, 2016, against its investment which resulted in a reduction of its equity investment to $149,000.

Due to increasing costs, continued net losses since April 2015, and reliance on related party and other debt for operating cash flows, the fair value of UOMA is less than its carrying amount. The Company tested its investment for impairment at December 31, 2016 and determined that the investment was impaired, and an impairment loss was recorded against the entire equity balance in MOP, as well as loans from USN and USNC to MOP and UOMA. For the nine months ended September 30, 2018 and September 30, 2017, the Company’s equity in loss of MOP was $51,000 and $59,000 respectively, but was not recorded due to prior losses.

During the nine months ended September 30, 2018 and September 30, 2017, the Company recorded $209,000 and $120,000 respectively of allowances against advances to MOP. These charges have been recorded as losses from investments in unconsolidated entities.

Due to loans made to MOP, MOP is considered to be a variable interest entity of the Company.  However, as the Company is not deemed to be the primary beneficiary of MOP, since it does not have the power to direct the operating activities that most significantly affect MOP’s economic performance, the entity is not consolidated, but certain disclosures are provided herein.

17

The following tables present the summarized financial information of MOP:

MOP Condensed Consolidated Income Statement Information

	Nine Months Ended September 30,
	2018			2017
Patient revenue	$	1,639,000		$	789,000
Other income	$	-		$	84,000
Net loss	$	(144,000	)	$	(164,000	)
USNC's equity in loss in MOP	$	(51,000	)	$	(59,000	)

	Three Months Ended September 30,
	2018			2017
Patient revenue	$	582,000		$	250,000
Other income	$	-		$	84,000
Net loss	$	(8,000	)	$	(38,000	)
USNC's equity in loss in MOP	$	(2,000	)	$	(14,000	)

MOP Condensed Consolidated Balance Sheet Information

	September 30, 2018			December 31, 2017
Current assets	$	92,000		$	41,000
Noncurrent assets		126,000			108,000
Total assets	$	218,000		$	149,000
Current liabilities	$	907,000		$	693,000
Noncurrent liabilities		-			-
Deficit		(689,000	)		(544,000	)
Total liabilities and equity	$	218,000		$	149,000

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Note G - CB Oncology Partners

CB Oncology Partners, LLC, (“CBOP”) was organized September 1, 2017 to acquire the rights of the new center from FOP. The Company has a 24% equity interest in CBOP.  Beginning in October of 2017, CBOP began paying the remainder of the costs associated with opening the center. CBOP had no assets at the end of 2017. The medical center opened and treated its first patient in January of 2018.

The Company has not yet contributed equity to CBOP and, accordingly has not recorded an investment in the entity. The Company advanced $143,000 to CBOP during the year ended December 31, 2017, and further advanced $1,048,000 during the nine months ended September 30, 2018, to assist with the funding of the build out and initial operations of the entity. The Company has absorbed its share of equity in losses of CBOP through September 30, 2018, totaling $282,000, against these advances, including losses of $137,000 recorded during the third quarter of 2018. The remaining advances have a carrying value of $912,000 at September 30, 2018.

Due to loans made to CBOP, CBOP is considered to be a variable interest entity of the Company.  However, as the Company is not deemed to be the primary beneficiary of CBOP, since it does not have the power to direct the operating activities that most significantly affect CBOP’s economic performance, the entity is not consolidated, but certain disclosures are provided herein.

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The following tables present the summarized financial information of CBOP:

CBOP Condensed Income Statement Information

	Nine Months Ended September 30,
Patient revenue	$	828,000
Net loss	$	(765,000	)
USNC's equity in loss in CBOP	$	(185,000	)

	Three Months Ended September 30,
Patient revenue	$	340,000
Net loss	$	(264,000	)
USNC's equity in loss in CBOP	$	(64,000	)

CBOP Condensed Balance Sheet Information

	September 30, 2018			December 31, 2017
Current assets	$	276,000		$	-
Noncurrent assets		-			-
Total assets	$	276,000		$	-
Current liabilities	$	1,289,000		$	248,000
Noncurrent liabilities		-			-
Deficit		(1,013,000	)		(248,000	)
Total liabilities and equity	$	276,000		$	-

Note H – Income Taxes

The Company’s income tax rate, which includes federal and state income taxes, was approximately 91%, for the nine months ended September 30, 2018 and 40% for the nine months ended September 30, 2017.  The 2018 tax charge includes a $33,000 adjustment to the estimated effective state tax rate and $101,000 of permanent differences arising from the $341,000 of losses from investments in unconsolidated entities.  The Company recorded a tax charge of $198,000 for the nine months ended September 30, 2018.

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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 2017 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.

We adopted the provisions of Topic 606 as of January 1, 2018 on a modified retrospective basis and applied it to the Company's sole contract at the date of adoption. We concluded that the impact to the manner in which we recognize revenue is immaterial. Our revenue is primarily generated from a leasing arrangement with New York University, which is not within the scope of Topic 606, or from the sale of maintenance services with a single performance obligation, under which revenue is recognized in a similar manner as compared to the method under prior revenue standards.

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 Operations

Three Months Ended September 30, 2018 Compared to Three Months Ended September 30, 2017

Patient revenue for the three months ended September 30, 2018 and September 30, 2017 was $803,000. Patient expenses for the three months ended September 30, 2018 were $506,000 an increase of 44% as compared to the $352,000 reported for the comparable period in the previous year. This increase in patient expenses was primarily due to the cobalt reload and its associated depreciation expense totaling $128,000 for the three months ended September 30, 2018.

Selling, general and administrative expense of $268,000 for the third quarter of 2018 was 4% lower than the $278,000 incurred during the comparable period in 2017, due to lower rent, insurance, and legal costs.

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The Company incurred $25,000 of interest expense in the third quarter of 2018 and $40,000 in 2017 related to the capital lease, due to lower principal balances on the gamma knife and ICON unit leases, notwithstanding the $833,000 of new capital lease obligations incurred during the three months ended September 30, 2018, to partly finance the cobalt reload.

During the three months ended September 30, 2018 and 2017, the Company recognized an income tax charge of $19,000 notwithstanding lower net income in the current year, due to an increased effective state tax rate and higher permanent differences, in particular, higher non-deductible losses from investments in unconsolidated entities.

For the three months ended September 30, 2018, the Company reported a net loss of $120,000 as compared to a net income of $11,000 for the same period a year earlier. The decrease in net income is largely due to increased patient expenses and losses from investments in unconsolidated entities, partly offset by the interest income earned on amounts due from related parties and the short term loans receivable.

Nine months ended September 30, 2018 Compared to Nine months ended September 30, 2017

Patient revenue for the nine months ended September 30, 2018 was $2,789,000, an increase of 6% compared to $2,627,000 the previous year. This increase in revenue was largely due to an increased number of procedures at NYU. The increased number of procedures did not change the estimated effective rate per procedure used to recognize revenue. Patient expenses for the nine months ended September 30, 2018 were $1,262,000, an increase of 17% as compared to $1,076,000 reported for the comparable period in the previous year. This increase in patient expenses was primarily due to the cobalt reload and its associated depreciation expense, totaling $128,000 for the nine months ended September 30, 2018, and increased maintenance costs related to the gamma knife equimpment.

Selling, general and administrative expenses of $934,000 for the first nine months of 2018 was 1% higher than $927,000 incurred during the comparable period in 2017.

The Company incurred $85,000 of interest expense in the first nine months of 2018 and $117,000 in 2017, related to the capital leases, due to lower principal balances on the gamma knife and ICON unit leases.

During the nine months ended September 30, 2018, the Company recognized an income tax charge of $198,000 compared to $257,000 for the same period a year earlier, notwithstanding lower net income, and a reduced federal income tax rate, in the current year, due to an increased effective state tax rate and higher permanent differences, in particular, higher non-deductible losses from investments in unconsolidated entities.

For the nine months ended September 30, 2018, the Company reported a net income of $19,000 compared to a net income of $390,000 for the same period a year earlier. The decrease in net income is largely due to losses from investments in unconsolidated entities.

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Liquidity and Capital Resources

At September 30, 2018, the Company had working capital of $1,057,000 as compared to $2,372,000 at December 31, 2017.  Cash and cash equivalents at September 30, 2018 were $1,614,000 as compared to $2,684,000 at December 31, 2017.  The decrease in working capital is primarily comprised of higher deferred revenue, income taxes payable and the current portion of capital lease obligations, and lower cash and accounts receivable balances, at September 30, 2018 compared with December 31, 2017, partly offset by higher amounts due from related parties and a short term loan receivable balance.

Net cash provided by operating activities for the nine months ended September 30, 2018 was $1,810,000 as compared to $2,521,000 in the same period a year earlier. The decrease was primarily due to lower net income and distributions received from unconsolidated entities and other working capital changes, including higher deferred income taxes, partly offset by payments from NYU included in deferred revenue. Accounts receivable decreased $408,000 for the nine months ended September 30, 2018 as compared to a decrease of $784,000 in the nine months ended September 30, 2017. The larger decrease in 2017 was due to a build up of accounts receivable at the end of 2016.

With respect to investing activities, the Company made $1,309,000 of advances to FOP, CBOP, and MOP to assist with new business operations and working capital requirements, as well as $276,000 of additional short term loans to FOP.  The Company also invested $570,000 in gamma knife equipment improvements, specifically the cobalt reload. Advances of $116,000 made during the nine months ended September 30, 2017 was comprised primarily of working capital advances to MOP.

With respect to financing activities, the Company paid $721,000 towards its capital lease obligations during the nine months ended September 30, 2018, compared with $771,000  in 2017.

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.

In April 2016 USN entered into an agreement with Elekta for the installation of new ICON imaging technology for 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 approximately $20,500 which commenced October 2016, with the final payment scheduled for September 2020. In September of 2017, the lease was finalized for an amount of $879,000 and the monthly payment was reduced to $20,200. A monthly maintenance agreement began August 2017 and is approximately $6,000 per month.

In July 2016, USN entered into an agreement with NYU relating to the newly installed ICON imaging technology, increasing the monthly payment due to the Company by $30,000 for the remaining term of the agreement.

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In September 2017, NYU committed to purchase all of the gamma knife equipment at the NYU Medical Center for a purchase price of $2,400,000, consisting of 41 monthly installments of $50,000 commencing at the end of October 2017 and continuing through the end of February 2021, with a final payment of $350,000 on March 31, 2021.  Upon receipt of final payment, title to all of the equipment at the center will pass to NYU.

Previously, the agreement with NYU ended on March 17, 2021 and NYU had an option to purchase the gamma knife equipment at the appraised value of the equipment at that time.  In June 2017, the Company obtained an independent estimate of $2,570,000 for the fair value of the equipment in March 2021.  The Company believes that the accelerated payments amounting to $2,400,000 represent fair consideration considering all aspects of the transaction.

The Company will continue to be responsible for the maintenance and insurance for the gamma knife equipment at the NYU facility through the contract period and will continue to be 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.

In July 2018 USN entered into an agreement with Elekta for the cobalt reload on the NYU gamma knife equipment with a cost, including sales taxes, of approximately $925,000. This cobalt reload took place during the month of July 2018, and the gamma knife center reopened on August 6, 2018. At this time, the Company has obtained lease financing of approximately $833,000 at an interest rate of approximately 5.85% to partially finance the reload of the cobalt, and has paid the remaining balance directly to Elekta. In addition, the Company incurred costs to install the new cobalt totaling $478,000, which is paid directly to the contractor. When the final costs have been calculated and billed, they may be rolled into the lease. The current monthly lease payment for the reload is approximately $30,000.  Lease payments commenced October 2018, with the final payment scheduled for March 2021. As part of the agreement with NYU, including the commitment by NYU to purchase the equipment and the Company’s undertaking to reload the cobalt, the Company will be relieved of its obligation to close and restore the NYU facility to its original condition.

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, 2017, 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.

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. In addition, in September 2017, the Company entered into an agreement to sell its gamma knife to NYU at the end of its current lease agreement with NYU, in March 2021.

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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.

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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.

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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, 2018. 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, 2018: 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, related party receivables, impairments and income taxes, and to properly assess the application of new accounting pronouncements. 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.

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, 2018, management is in the process of developing plans to remediate the material weakness identified above.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None

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

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

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

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

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

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

101         Interactive Data Files providing financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 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.

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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, 2018	By:	/s/ Alan Gold
		Alan Gold
		Director, President and Chief Executive Officer and
		Principal Financial Officer of the Registrant

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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, 2018	/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, 2018 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, 2018

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Document and Entity Information	9 Months Ended
	Sep. 30, 2018 shares
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 Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding	7,792,185
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 1,614,000	$ 2,684,000
Accounts receivable	359,000	767,000
Due from related parties	1,132,000	169,000
Short term loan receivable	575,000	299,000
Other current assets	174,000	67,000
Total current assets	3,854,000	3,986,000
Other assets:
Notes receivable	38,000	38,000
Investments in unconsolidated entities	173,000	164,000
Total other assets	211,000	202,000
Property and equipment:
Gamma knife (net of accumulated depreciation of $3,391,000 in 2018 and $2,637,000 in 2017)	3,349,000	2,700,000
Leasehold improvements (net of accumulated amortization of $1,340,000 in 2018 and $1,111,000 in 2017)	798,000	1,027,000
Total property and equipment	4,147,000	3,727,000
TOTAL ASSETS	8,212,000	7,915,000
Current liabilities:
Obligations under capital lease - current portion	1,397,000	972,000
Accounts payable and accrued expenses	109,000	208,000
Deferred revenue	675,000	370,000
Income taxes payable	616,000	64,000
Total current liabilities	2,797,000	1,614,000
Obligations under capital lease - net of current portion	1,353,000	1,666,000
Deferred tax liability	63,000	675,000
Guarantee liability	11,000	11,000
Asset retirement obligations	537,000	517,000
Total liabilities	4,761,000	4,483,000
STOCKHOLDERS' EQUITY
Common stock - par value $.01; 25,000,000 shares authorized; 7,792,185 shares issued and outstanding at September 30, 2018 and December 31, 2017.	78,000	78,000
Additional paid-in capital	3,100,000	3,100,000
Retained earnings	273,000	254,000
Total stockholders' equity	3,451,000	3,432,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 8,212,000	$ 7,915,000

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
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)	7,792,185	7,792,185
Common stock, shares outstanding (in shares)	7,792,185	7,792,185
Gamma Knife [Member]
Property and equipment:
Accumulated depreciation	$ 3,391,000	$ 2,637,000
Leasehold Improvements [Member]
Property and equipment:
Accumulated depreciation	$ 1,340,000	$ 1,111,000

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) [Abstract]
Revenue	$ 803,000	$ 803,000	$ 2,789,000	$ 2,627,000
Costs and expenses:
Patient expenses	506,000	352,000	1,262,000	1,076,000
Selling, general and administrative	268,000	278,000	934,000	927,000
Total	774,000	630,000	2,196,000	2,003,000
Operating income	29,000	173,000	593,000	624,000
Interest expense	(25,000)	(40,000)	(85,000)	(117,000)
Interest income	46,000	0	50,000	0
(Loss) income from investments in unconsolidated entities	(151,000)	(101,000)	(341,000)	140,000
(Loss) income before income taxes	(101,000)	32,000	217,000	647,000
Provision for income tax expense	(19,000)	(21,000)	(198,000)	(257,000)
Net (loss) income	$ (120,000)	$ 11,000	$ 19,000	$ 390,000
Basic and diluted net (loss) income per share (in dollars per share)	$ (0.02)	$ 0	$ 0	$ 0.05
Weighted average common shares outstanding (in shares)	7,792,185	7,792,185	7,792,185	7,792,185

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net income	$ 19,000	$ 390,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	983,000	850,000
Loss (income) from investment in unconsolidated entities	341,000	(140,000)
Distributed earnings from unconsolidated entities	0	315,000
Accretion of asset retirement obligations	20,000	19,000
Deferred income taxes	(612,000)	(141,000)
Changes in:
Accounts receivable	408,000	784,000
Elekta refund due	0	12,000
Other current assets	(107,000)	(2,000)
Accounts payable and accrued expenses	(99,000)	111,000
Deferred revenue	305,000	(77,000)
Income taxes payable	552,000	400,000
Net cash provided by operating activities	1,810,000	2,521,000
Cash flows from investing activities:
Repayment of amounts advanced to unconsolidated entities	0	53,000
Capital contributions to unconsolidated entities	(4,000)	(20,000)
Advances to unconsolidated entities	(1,309,000)	(116,000)
Advances made under short term loans	(276,000)	0
Purchase of gamma knife equipment	(570,000)	(46,000)
Increase in due from related parties	0	(15,000)
Net cash used in investing activities	(2,159,000)	(144,000)
Cash flows from financing activities:
Repayment of capital lease obligations	(721,000)	(771,000)
Net cash used in financing activities	(721,000)	(771,000)
Net change in cash and cash equivalents	(1,070,000)	1,606,000
Cash and cash equivalents - beginning of period	2,684,000	1,962,000
Cash and cash equivalents - end of period	1,614,000	3,568,000
Cash paid for:
Interest	85,000	117,000
Income Taxes	254,000	0
Supplemental disclosure of noncash investing and financing activities:
Purchase of gamma knife equipment included in capital lease obligations	$ 833,000	$ 0

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Basis of Preparation

9 Months Ended

Sep. 30, 2018

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, 2018 and 2017, 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, 2017 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.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“Topic 606”), amending existing revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Topic 606 defines a five-step process to accomplish this objective, including identifying the contract with the customer and the performance obligations within the contract, determining the transaction price including estimates of any variable consideration, allocating the transaction price to each separate performance obligation, and recognizing revenue as the company satisfies the performance obligation. We adopted the provisions of Topic 606 as of January 1, 2018 on a modified retrospective basis and applied it to the Company's sole contract at the date of adoption. We concluded that the impact to the manner in which we recognize revenue is immaterial. Our revenue is primarily generated from a leasing arrangement with New York University, which is not within the scope of Topic 606, and from the sale of maintenance services with a single performance obligation, under which revenue is recognized in a similar manner as compared to the method under the prior revenue standards. The Company recognizes maintenance income ratably over time as patient procedures are performed.

We plan to adopt the provisions of ASU 2016-02, Leases ("Topic 842"), as amended, as of January 1, 2019. We are evaluating the standard in accordance with our adoption plan, which will include performing a completeness assessment over the lease population, reviewing all forms of leases and analyzing the practical expedients in order to determine the best implementation strategy. We will then determine the impact of adoption on our condensed consolidated financial statements, as well as disclosures, accounting policies, business processes and internal controls. While our evaluation is ongoing, we expect to adopt the standard on a modified retrospective basis and recognize additional lease liabilities and right of use assets. The extent of the increase to assets and liabilities associated with these amounts remains to be determined, and we are currently unable to estimate if there will be a material impact to our consolidated financial statements.

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Gamma Knife at NYU Medical Center

9 Months Ended

Sep. 30, 2018

Gamma Knife at NYU Medical Center [Abstract]

Gamma Knife at NYU Medical Center

Note B – Gamma Knife at NYU Medical Center

U.S. NeuroSurgical, Inc. (“USN”), a wholly-owned subsidiary of U.S. NeuroSurgical Holdings, Inc., 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 which it had been leasing to NYU.  In connection with this upgrade, USN modified its arrangement with NYU to extend the term for 12 years from March 2009.

In October 2012, the Company’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.  The Company 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.

The Company finalized arrangements with NYU regarding the restored gamma knife center and entered into an amendment to the Gamma Knife Neuroradiosurgery Equipment Agreement. The Company’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.

The Company 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. The Company 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 made in July 2016.

In April 2016 USN entered into an agreement with Elekta for the installation of new ICON imaging technology for 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 $879,000 at an interest rate of approximately 4.45% to finance the acquisition of the ICON technology and associated installation costs totaling approximately $63,000. The monthly lease payment is approximately $20,000 which commenced October 2016, with the final payment scheduled for September 2020. A monthly maintenance agreement commenced a year after the installation date at a cost of about $6,000 per month.

In July 2016, USN and NYU entered into an amendment to the Gamma Knife Neuroradiosurgery Equipment Agreement relating to the newly installed ICON imaging technology, increasing the monthly payment due to the Company by $30,000 for the remaining term of the agreement.

In September 2017, USN and NYU entered into an additional amendment to the Gamma Knife Neuroradiosurgery Equipment Agreement, whereby NYU committed to purchase all of the gamma knife equipment at the NYU Medical Center for a purchase price of $2,400,000, consisting of 41 monthly installments of $50,000 commencing at the end of October 2017 and continuing through the end of February 2021, with a final payment of $350,000 on March 31, 2021.  Upon receipt of final payment, title to all the equipment at the center will pass to NYU. Payments received before USN can pass title to the gamma knife equipment to NYU, or before USN has satisfied substantially all of its obligations under the agreement, will be recorded as deferred revenue.

Previously, the agreement with NYU ended on March 17, 2021 and NYU had an option to purchase the gamma knife equipment at the appraised value of the equipment at that time.  In June 2017, the Company obtained an independent estimate of $2,570,000 for the fair value of the equipment in March 2021.  The Company believes that the accelerated payments amounting to $2,400,000 represent fair consideration considering all aspects of the transaction.

The Company will continue to be responsible for the maintenance and insurance for the gamma knife equipment at the NYU facility through the contract period and will continue to be 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.

In July 2018 USN entered into an agreement with Elekta for the cobalt reload on the NYU gamma knife equipment with a cost, including sales taxes, of approximately $925,000. This cobalt reload took place during the month of July 2018, and the gamma knife center reopened on August 6, 2018. At this time, the Company has obtained lease financing of approximately $833,000 at an interest rate of approximately 5.85% to partially finance the reload of the cobalt, and has paid the remaining balance directly to Elekta. In addition, the Company incurred costs to install the new cobalt totaling $478,000, which is paid directly to the contractor. When the final costs have been calculated and billed, they may be rolled into the lease. The current monthly lease payment for the reload is approximately $30,000.  Lease payments commenced October 2018, with the final payment scheduled for March 2021. As part of the agreement with NYU, including the commitment by NYU to purchase the equipment and the Company’s undertaking to reload the cobalt, the Company will be relieved of its obligation to close and restore the NYU facility to its original condition.

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The Southern California Regional Gamma Knife Center

9 Months Ended

Sep. 30, 2018

The Southern California Regional Gamma Knife Center [Abstract]

The Southern California Regional Gamma Knife Center

Note C – The Southern California Regional Gamma Knife Center

During 2007, the Company managed the formation of the Southern California Regional Gamma Knife Center at San Antonio Regional Hospital (“SARH”) in Upland, California.  The Company participates in the ownership and operation of the center through 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 LLC negotiated a new five- year lease to fund the reloading of cobalt and related construction services.  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 thus expects any exposure from this guarantee to be remote.

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.

During the year ended December 31, 2017, the Company received $65,000 in repayments of amounts previously advanced to NeuroPartners LLC and CGK and $24,000 in distributions.  Those repayments and distributions reduced the amount of losses incurred on prior advances to NeuroPartners LLC and CGK. At December 31, 2017, NeuroPartners LLC and CGK had repaid all of the outstanding advances. For the nine months ended September 30, 2018 and 2017, the Company’s equity in earnings of NeuroPartners LLC and CGK was $120,000 and $105,000, respectively, but only $5,000 in 2018 was recorded due to prior losses.

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

NeuroPartners LLC and CGK Condensed Combined Income Statement Information

	Nine Months Ended September 30,
	2018		2017
Patient revenue	$	825,000	$	782,000
Net income	$	396,000	$	356,000
USNC's equity in earnings of NeuroPartners LLC and CGK	$	120,000	$	105,000

	Three Months Ended September 30,
	2018		2017
Patient Revenue	$	315,000	$	254,000
Net income	$	169,000	$	132,000
USNC's equity in earnings of NeuroPartners LLC and CGK	$	55,000	$	36,000

NeuroPartners LLC and CGK Condensed Combined Balance Sheet Information

	September 30, 2018		December 31, 2017
Current assets	$	439,000	$	165,000
Noncurrent assets		620,000		745,000
Total assets	$	1,059,000	$	910,000
Current liabilities	$	323,000	$	641,000
Noncurrent liabilities		536,000		464,000
Equity (deficit)		200,000		(195,000	)
Total liabilities and equity (deficit)	$	1,059,000	$	910,000

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Florida Oncology Partners

9 Months Ended

Sep. 30, 2018

Florida Oncology Partners [Abstract]

Florida Oncology Partners

Note D – Florida Oncology Partners

During 2010, the Company expanded its market strategy to include opportunities to develop cancer centers featuring radiation therapy.  These centers utilize linear accelerators with IMRT (Intensity Modulated Radiation Therapy) and IGRT (Image Guided Radiation Therapy) capabilities.  In 2010, the Company formed Florida Oncology Partners, LLC (“FOP”) in partnership with local physicians and other investors.  USNC owns a 24% interest in the venture.  FOP’s first center was located in Miami, Florida and opened in the second quarter of 2011. During the quarter ended September 30, 2010, the Company participated in the formation of Florida Oncology Partners RE, LLC (“FOPRE”), which owned a building previously occupied by FOP.  The center diagnoses and treats patients utilizing a Varian Rapid Arc linear accelerator and a GE CT scanner. USNC originally invested $200,000 for a 20% ownership interest in FOP and FOPRE. The remaining 80% was owned by other outside investors. In January of 2015 one of the investors relinquished its ownership interest in both FOP and FOPRE, and that interest was distributed among the remaining members in relationship to their percentages owned. This distribution resulted in an increase of ownership interest for the Company of 4% in each of FOP and FOPRE.  As of January 1, 2015, the Company held a 24% ownership in both FOP and FOPRE.

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.  USN is a guarantor jointly with most of the other members of FOP (except USNC, which is not a named guarantor).  The outstanding balance on the lease obligation was $0 at September 30, 2018, as the lease was fully repaid in May 2018, and $468,000 at December 31, 2017. Accordingly, the Company wrote off the liability associated with this guarantee during the three months ended June 30, 2018.

In June 2012, FOPRE financed the purchase of the building that was 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 and FOPRE has ceased operations. In May 2017, FOPRE was dissolved.

In December of 2015, FOP entered into an agreement with 21^st Century Oncology for the sale of FOP’s Varian Rapid Arc linear accelerator and other medical equipment at the FOP location.  21^st Century Oncology paid FOP $1,000,000 as a down payment for the equipment and agreed to make monthly payments of $172,000 for the equipment and all monthly payments due under the equipment lease with Key Bank.  As of this date, 21^st Century Oncology has not satisfied all of the terms of the agreement.  In late May 2017, 21^st Century Oncology filed for Chapter 11 bankruptcy protection and FOP was listed as an unsecured creditor. As a result, since June 2017, FOP has not received the agreed rental payments beyond the monthly payments for the equipment lease.  FOP will continue to monitor the impact of 21^st Century’s bankruptcy and pursue amounts that it is owed.  However, there can be no assurance that FOP be successful in these efforts.

Late in 2016, FOP took initial steps toward the development of a new radiation therapy center in Homestead, Florida.   In December 2016, FOP entered into a ten-year lease agreement for office space located at 20405 Old Cutler Towne Center.  FOP had to deliver an $88,000 letter of credit in conjunction with this office lease which collateral is being held in a restricted certificate of deposit. FOP began incurring architecture costs for planning/refitting the new space.  During the first half of 2017, a financing agreement with BB&T Bank for the medical equipment and leasehold improvements was negotiated and then signed on August 31, 2017.  In November 2017, the amounts for the equipment and leasehold improvements costs were finalized and paid under this financing agreement for a total loan of $4,106,000 to be paid over 7 years.  Under the terms of the financing agreement, USN agreed to guarantee the amount initially borrowed. USN is the guarantor with several other members of FOP. The outstanding balance on the financing facility was approximately $3,790,000 at September 30, 2018, and $4,100,000 at December 31, 2017. The Company expects any potential liability from this guarantee to be reduced by the recoveries of the respective collateral but has recorded a liability of $11,000 associated with this guarantee at September 30, 2018.

Late in the third quarter of 2017, it was determined that the business opportunity at this new location should be pursued by a different investor group, and FOP arranged to sell the opportunity to this group.  CB Oncology Partners, LLC, was organized on September 1, 2017, to acquire the assets and rights in this new center from FOP.

In June 2017, FOP entered into an agreement with a third-party owner of a radiation therapy center located in Miami, Florida, whereby FOP took over the operation of the center effective September 22, 2017, for a ten-year initial term, and up to three additional terms of five years each. This agreement has been accounted for as a capital lease and, accordingly, FOP recorded assets and capital lease liabilities totaling $14,321,000 at September 22, 2017. The lease required monthly payments in the first year of $160,000, increasing by 2% each year; currently the payment is $163,200.

The Company’s recorded investment in FOP at September 30, 2018 and December 31, 2017 has been reduced to zero due to FOP recording distributions of $950,000 in the fourth quarter of 2017. Amounts due from FOP included in due from related parties total $222,000 and $169,000 at September 30, 2018 and December 31, 2017 respectively. In addition, FOP owes $575,000 of principal and $20,000 of accrued interest to the Company under a promissory note, due on demand, bearing interest at 6% per anum entered into in October 2017. The Company made $52,000 of additional advances to FOP, and additional short term loans, totaling $276,000 during the nine months ended September 30, 2018, to assist with the funding of operations of the radiation therapy center in Miami.

No equity in earnings have been recorded by the Company for the nine months ended September 30, 2018, due to FOP’s deficit at September 30, 2018.

Due to loans made to FOP, FOP is considered to be a variable interest entity of the Company.  However, as the Company is not deemed to be the primary beneficiary of FOP, since it does not have the power to direct the operating activities that most significantly affect FOP’s economic performance, the entity is not consolidated, but certain disclosures are provided herein.

The following tables present the summarized financial information of FOP

FOP Condensed Income Statement Information

	Nine Months Ended September 30,
	2018			2017
Patient revenue	$	2,369,000		$	-
Rental income	$	1,071,000		$	2,148,000
Net (loss) income	$	(1,277,000	)	$	856,000
USNC's equity in (loss) earnings of FOP	$	(310,000	)	$	207,000

	Three Months Ended September 30,
	2018			2017
Patient revenue	$	63,000		$	-
Rental income	$	181,000		$	344,000
Net loss	$	(1,386,000	)	$	(177,000	)
USNC's equity in loss of FOP	$	(336,000	)	$	(43,000	)

FOP Condensed Balance Sheet Information

	September 30, 2018			December 31, 2017
Current assets	$	557,000		$	664,000
Noncurrent assets		17,046,000			18,961,000
Total assets	$	17,603,000		$	19,625,000
Current liabilities	$	3,577,000		$	3,228,000
Noncurrent liabilities		15,748,000			16,842,000
Deficit		(1,722,000	)		(445,000	)
Total liabilities and equity	$	17,603,000		$	19,625,000

FOPRE had no significant assets or liabilities at December 31, 2017 and no significant income and expenses for the three and nine months ended September 30, 2017.

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Boca Oncology Partners

9 Months Ended

Sep. 30, 2018

Boca Oncology Partners [Abstract]

Boca Oncology Partners

Note E – 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 whichBOP 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 BOP reducing the Company’s ownership to 11.25%.  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, and USNC’s investment in BOPRE was reduced to 15.4%.

During the nine months ended September 30, 2018 and the years ended December 31, 2017 and 2016, several investors relinquished part of their ownership interest in BOPRE, and those interests were distributed among the remaining investors in relationship to their percentages owned. As a result, the Company holds a 21.22% ownership interest in BOPRE, which it accounts for under the equity method, at December 31, 2017 and September 30, 2018. The center operated by BOP opened in August 2012.

The Company’s recorded investment in BOPRE is $168,000 and $164,000 at September 30, 2018 and December 31, 2017, respectively.

USNC is a 10% guarantor of 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 $2,332,000 at September 30, 2018 and $2,417,000 at December 31, 2017.  Any liability from this guarantee would be mitigated by the recovery from the underlying real estate, and the Company expects its potential exposure from this guarantee to be remote.

The following tables present the summarized financial information of BOPRE:

BOPRE Condensed Income Statement Information

	Nine Months Ended September 30,
	2018			2017
Rental income	$	-		$	-
Net loss	$	(4,000	)	$	(7,000	)
USNC's equity in loss of BOPRE	$	(1,000	)	$	(1,000	)

	Three Months Ended September 30,
	2018		2017
Rental income	$	-	$	-
Net loss	$	-	$	(7,000	)
USNC's equity in loss of BOPRE	$	-	$	(1,000	)

BOPRE Condensed Balance Sheet Information

	September 30, 2018		December 31, 2017
Current assets	$	18,000	$	17,000
Noncurrent assets		935,000		920,000
Total assets	$	953,000	$	937,000
Current liabilities	$	-	$	-
Noncurrent liabilities		-		-
Equity		953,000		937,000
Total liabilities and equity	$	953,000	$	937,000

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Medical Oncology Partners

9 Months Ended

Sep. 30, 2018

Medical Oncology Partners [Abstract]

Medical Oncology Partners

Note F - Medical Oncology Partners

In April 2015 Medical Oncology Partners, LLC (“MOP”), was formed in partnership with local physicians and other investors. MOP was established to acquire a 100% equity interest in United Oncology Medical Associates of Florida, LLC (“UOMA”). USNC was not a member of MOP at the time of formation as it was not able to participate due to the fact that USNC was not a physician. Nevertheless, USNC wished to eventually obtain an equity interest in MOP and loaned Dr. Jaime Lozano, the principal investor in MOP and a co-investor in FOP, $173,000.  Dr. Lozano used these funds, along with an equal amount of his own funds (a total of $345,000), to purchase a 76.67% interest in MOP. Other investors paid a further $105,000 for the remaining equity in MOP. MOP used the $450,000 of financing to acquire a 100% equity interest in UOMA.  An application was filed for a waiver to allow USNC to hold an equity interest notwithstanding the physician requirement and on December 22, 2016, USNC was cleared to become a part owner of MOP. Dr. Lozano agreed to exchange half of his membership interest to USNC in settlement of the note to USNC.  USNC and Dr. Lozano also agreed to share equally in providing a 5% equity interest in MOP to an additional investor as a consulting fee for services rendered in the administration of MOP and UOMA. At December 22, 2016, USNC owned 35.83% of MOP with an initial carrying value of $161,000. The Company recorded its share of losses of $12,000 for the period from December 22, 2016 to December 31, 2016, against its investment which resulted in a reduction of its equity investment to $149,000.

Due to increasing costs, continued net losses since April 2015, and reliance on related party and other debt for operating cash flows, the fair value of UOMA is less than its carrying amount. The Company tested its investment for impairment at December 31, 2016 and determined that the investment was impaired, and an impairment loss was recorded against the entire equity balance in MOP, as well as loans from USN and USNC to MOP and UOMA. For the nine months ended September 30, 2018 and September 30, 2017, the Company’s equity in loss of MOP was $51,000 and $59,000 respectively, but was not recorded due to prior losses.

During the nine months ended September 30, 2018 and September 30, 2017, the Company recorded $209,000 and $120,000 respectively of allowances against advances to MOP. These charges have been recorded as losses from investments in unconsolidated entities.

Due to loans made to MOP, MOP is considered to be a variable interest entity of the Company.  However, as the Company is not deemed to be the primary beneficiary of MOP, since it does not have the power to direct the operating activities that most significantly affect MOP’s economic performance, the entity is not consolidated, but certain disclosures are provided herein.

The following tables present the summarized financial information of MOP:

MOP Condensed Consolidated Income Statement Information

	Nine Months Ended September 30,
	2018			2017
Patient revenue	$	1,639,000		$	789,000
Other income	$	-		$	84,000
Net loss	$	(144,000	)	$	(164,000	)
USNC's equity in loss in MOP	$	(51,000	)	$	(59,000	)

	Three Months Ended September 30,
	2018			2017
Patient revenue	$	582,000		$	250,000
Other income	$	-		$	84,000
Net loss	$	(8,000	)	$	(38,000	)
USNC's equity in loss in MOP	$	(2,000	)	$	(14,000	)

MOP Condensed Consolidated Balance Sheet Information

	September 30, 2018			December 31, 2017
Current assets	$	92,000		$	41,000
Noncurrent assets		126,000			108,000
Total assets	$	218,000		$	149,000
Current liabilities	$	907,000		$	693,000
Noncurrent liabilities		-			-
Deficit		(689,000	)		(544,000	)
Total liabilities and equity	$	218,000		$	149,000

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CB Oncology Partners

9 Months Ended

Sep. 30, 2018

CB Oncology Partners [Abstract]

CB Oncology Partners

Note G - CB Oncology Partners

CB Oncology Partners, LLC, (“CBOP”) was organized September 1, 2017 to acquire the rights of the new center from FOP. The Company has a 24% equity interest in CBOP.  Beginning in October of 2017, CBOP began paying the remainder of the costs associated with opening the center. CBOP had no assets at the end of 2017. The medical center opened and treated its first patient in January of 2018.

The Company has not yet contributed equity to CBOP and, accordingly has not recorded an investment in the entity. The Company advanced $143,000 to CBOP during the year ended December 31, 2017, and further advanced $1,048,000 during the nine months ended September 30, 2018, to assist with the funding of the build out and initial operations of the entity. The Company has absorbed its share of equity in losses of CBOP through September 30, 2018, totaling $282,000, against these advances, including losses of $137,000 recorded during the third quarter of 2018. The remaining advances have a carrying value of $912,000 at September 30, 2018.

Due to loans made to CBOP, CBOP is considered to be a variable interest entity of the Company.  However, as the Company is not deemed to be the primary beneficiary of CBOP, since it does not have the power to direct the operating activities that most significantly affect CBOP’s economic performance, the entity is not consolidated, but certain disclosures are provided herein.

The following tables present the summarized financial information of CBOP:

CBOP Condensed Income Statement Information

	Nine Months Ended September 30,
Patient revenue	$	828,000
Net loss	$	(765,000	)
USNC's equity in loss in CBOP	$	(185,000	)

	Three Months Ended September 30,
Patient revenue	$	340,000
Net loss	$	(264,000	)
USNC's equity in loss in CBOP	$	(64,000	)

CBOP Condensed Balance Sheet Information

	September 30, 2018			December 31, 2017
Current assets	$	276,000		$	-
Noncurrent assets		-			-
Total assets	$	276,000		$	-
Current liabilities	$	1,289,000		$	248,000
Noncurrent liabilities		-			-
Deficit		(1,013,000	)		(248,000	)
Total liabilities and equity	$	276,000		$	-

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Income Taxes

9 Months Ended

Sep. 30, 2018

Income Taxes [Abstract]

Income Taxes

Note H – Income Taxes

The Company’s income tax rate, which includes federal and state income taxes, was approximately 91%, for the nine months ended September 30, 2018 and 40% for the nine months ended September 30, 2017.  The 2018 tax charge includes a $33,000 adjustment to the estimated effective state tax rate and $101,000 of permanent differences arising from the $341,000 of losses from investments in unconsolidated entities.  The Company recorded a tax charge of $198,000 for the nine months ended September 30, 2018.

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The Southern California Regional Gamma Knife Center (Tables)

9 Months Ended

Sep. 30, 2018

Neuro Partners LLC and CGK [Member]

Schedule of Equity Method Investments [Line Items]

Equity Method Investment Summarized Financial Information

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

NeuroPartners LLC and CGK Condensed Combined Income Statement Information

	Nine Months Ended September 30,
	2018		2017
Patient revenue	$	825,000	$	782,000
Net income	$	396,000	$	356,000
USNC's equity in earnings of NeuroPartners LLC and CGK	$	120,000	$	105,000

	Three Months Ended September 30,
	2018		2017
Patient Revenue	$	315,000	$	254,000
Net income	$	169,000	$	132,000
USNC's equity in earnings of NeuroPartners LLC and CGK	$	55,000	$	36,000

NeuroPartners LLC and CGK Condensed Combined Balance Sheet Information

	September 30, 2018		December 31, 2017
Current assets	$	439,000	$	165,000
Noncurrent assets		620,000		745,000
Total assets	$	1,059,000	$	910,000
Current liabilities	$	323,000	$	641,000
Noncurrent liabilities		536,000		464,000
Equity (deficit)		200,000		(195,000	)
Total liabilities and equity (deficit)	$	1,059,000	$	910,000

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Florida Oncology Partners (Tables)

9 Months Ended

Sep. 30, 2018

FOP [Member]

Schedule of Equity Method Investments [Line Items]

Equity Method Investment Summarized Financial Information

The following tables present the summarized financial information of FOP

FOP Condensed Income Statement Information

	Nine Months Ended September 30,
	2018			2017
Patient revenue	$	2,369,000		$	-
Rental income	$	1,071,000		$	2,148,000
Net (loss) income	$	(1,277,000	)	$	856,000
USNC's equity in (loss) earnings of FOP	$	(310,000	)	$	207,000

	Three Months Ended September 30,
	2018			2017
Patient revenue	$	63,000		$	-
Rental income	$	181,000		$	344,000
Net loss	$	(1,386,000	)	$	(177,000	)
USNC's equity in loss of FOP	$	(336,000	)	$	(43,000	)

FOP Condensed Balance Sheet Information

	September 30, 2018			December 31, 2017
Current assets	$	557,000		$	664,000
Noncurrent assets		17,046,000			18,961,000
Total assets	$	17,603,000		$	19,625,000
Current liabilities	$	3,577,000		$	3,228,000
Noncurrent liabilities		15,748,000			16,842,000
Deficit		(1,722,000	)		(445,000	)
Total liabilities and equity	$	17,603,000		$	19,625,000

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Boca Oncology Partners (Tables)

9 Months Ended

Sep. 30, 2018

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

Schedule of Equity Method Investments [Line Items]

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,
	2018			2017
Rental income	$	-		$	-
Net loss	$	(4,000	)	$	(7,000	)
USNC's equity in loss of BOPRE	$	(1,000	)	$	(1,000	)

	Three Months Ended September 30,
	2018		2017
Rental income	$	-	$	-
Net loss	$	-	$	(7,000	)
USNC's equity in loss of BOPRE	$	-	$	(1,000	)

BOPRE Condensed Balance Sheet Information

	September 30, 2018		December 31, 2017
Current assets	$	18,000	$	17,000
Noncurrent assets		935,000		920,000
Total assets	$	953,000	$	937,000
Current liabilities	$	-	$	-
Noncurrent liabilities		-		-
Equity		953,000		937,000
Total liabilities and equity	$	953,000	$	937,000

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Medical Oncology Partners (Tables)

9 Months Ended

Sep. 30, 2018

Medical Oncology Partners LLC [Member]

Schedule of Equity Method Investments [Line Items]

Equity Method Investment Summarized Financial Information

The following tables present the summarized financial information of MOP:

MOP Condensed Consolidated Income Statement Information

	Nine Months Ended September 30,
	2018			2017
Patient revenue	$	1,639,000		$	789,000
Other income	$	-		$	84,000
Net loss	$	(144,000	)	$	(164,000	)
USNC's equity in loss in MOP	$	(51,000	)	$	(59,000	)

	Three Months Ended September 30,
	2018			2017
Patient revenue	$	582,000		$	250,000
Other income	$	-		$	84,000
Net loss	$	(8,000	)	$	(38,000	)
USNC's equity in loss in MOP	$	(2,000	)	$	(14,000	)

MOP Condensed Consolidated Balance Sheet Information

	September 30, 2018			December 31, 2017
Current assets	$	92,000		$	41,000
Noncurrent assets		126,000			108,000
Total assets	$	218,000		$	149,000
Current liabilities	$	907,000		$	693,000
Noncurrent liabilities		-			-
Deficit		(689,000	)		(544,000	)
Total liabilities and equity	$	218,000		$	149,000

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CB Oncology Partners (Tables)

9 Months Ended

Sep. 30, 2018

CB Oncology Partners LLC [Member]

CB Oncology Partners [Abstract]

Equity Method Investment Summarized Financial Information

The following tables present the summarized financial information of CBOP:

CBOP Condensed Income Statement Information

	Nine Months Ended September 30,
Patient revenue	$	828,000
Net loss	$	(765,000	)
USNC's equity in loss in CBOP	$	(185,000	)

	Three Months Ended September 30,
Patient revenue	$	340,000
Net loss	$	(264,000	)
USNC's equity in loss in CBOP	$	(64,000	)

CBOP Condensed Balance Sheet Information

	September 30, 2018			December 31, 2017
Current assets	$	276,000		$	-
Noncurrent assets		-			-
Total assets	$	276,000		$	-
Current liabilities	$	1,289,000		$	248,000
Noncurrent liabilities		-			-
Deficit		(1,013,000	)		(248,000	)
Total liabilities and equity	$	276,000		$	-

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Gamma Knife at NYU Medical Center (Details) - NYU [Member]				1 Months Ended				9 Months Ended
	Nov. 01, 2014 USD ($)	Sep. 01, 2014 USD ($)	Oct. 31, 2012 USD ($)	Jul. 31, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jul. 31, 2016 USD ($)	Apr. 30, 2016 USD ($)	Sep. 30, 2018 Installment
Gamma Knives at NYU Medical Center [Abstract]
Monthly lease payment					$ 50,000
Installation cost of new ICON imaging technology for gamma knife equipment					2,400,000
Number of monthly installments | Installment								41
Final lease payment amount, partial month					350,000
Estimated fair value of equipment					$ 2,570,000
Perfexion Gamma Knife [Member]
Gamma Knives at NYU Medical Center [Abstract]
Terms of agreement with NYU								12 years
Removal cost			$ 525,000
Insurance coverage			$ 930,000
Perfexion Gamma Knife, Purchase and Replacement [Member]
Gamma Knives at NYU Medical Center [Abstract]
Term of lease agreement with NYC								6 years
Operating lease amount		$ 4,700,000
Lease payment		78,000
Interest on lease payment		$ 18,000
Perfexion Gamma Knife, New Installation and Related Construction Costs [Member]
Gamma Knives at NYU Medical Center [Abstract]
Term of lease agreement with NYC								2 years
Operating lease amount	$ 250,000
Lease payment	$ 12,000
ICON Imaging Technology [Member]
Gamma Knives at NYU Medical Center [Abstract]
Operating lease amount							$ 879,000
Cost of new equipment installed							816,000
Capital lease obligation							$ 879,000
Interest rate on lease							4.45%
Installation costs of technology							$ 63,000
Monthly lease payment							20,000
Monthly maintenance agreement cost							$ 6,000
Increase in monthly lease agreement amount received						$ 30,000
Gamma Knife Cobalt Reload [Member]
Gamma Knives at NYU Medical Center [Abstract]
Operating lease amount				$ 833,000
Cost of new equipment installed				925,000
Capital lease obligation				$ 833,000
Interest rate on lease				5.85%
Installation costs of technology				$ 478,000
Monthly lease payment				$ 30,000

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The Southern California Regional Gamma Knife Center (Details)		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Apr. 01, 2016 USD ($)	Feb. 29, 2016 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Payment	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
The Southern California Regional Gamma Knife Center [Abstract]
Renovation installation and operation agreement period					14 years
Condensed Income Statement Information [Abstract]
Patient revenue			$ 803,000	$ 803,000	$ 2,789,000	$ 2,627,000
USNC's equity in earnings			(151,000)	(101,000)	(341,000)	140,000
Neuro Partners LLC and CGK [Member]
The Southern California Regional Gamma Knife Center [Abstract]
Repayment of amounts advanced to unconsolidated entities							$ 65,000
Distributions from unconsolidated entities							24,000
Recorded amount of equity method income					5,000
Condensed Income Statement Information [Abstract]
Patient revenue			315,000	254,000	825,000	782,000
Net income			169,000	132,000	396,000	356,000
USNC's equity in earnings			55,000	$ 36,000	120,000	$ 105,000
Condensed Balance Sheet Information [Abstract]
Current assets			439,000		439,000		165,000
Noncurrent assets			620,000		620,000		745,000
Total assets			1,059,000		1,059,000		910,000
Current liabilities			323,000		323,000		641,000
Noncurrent liabilities			536,000		536,000		464,000
Equity (deficit)			200,000		200,000		(195,000)
Total liabilities and equity (deficit)			$ 1,059,000		$ 1,059,000		$ 910,000
Neuro Partners LLC [Member]
The Southern California Regional Gamma Knife Center [Abstract]
Ownership percentage			20.00%		20.00%
Neuro Partners LLC [Member] | Lease One [Member]
The Southern California Regional Gamma Knife Center [Abstract]
Share of guarantee in lease obligations					20.00%
Lease term					7 years
Neuro Partners LLC [Member] | Lease Two [Member]
The Southern California Regional Gamma Knife Center [Abstract]
Lease term					5 years
Number of lease payments | Payment					60
Capital lease obligation		$ 1,663,000
Prior year lease obligations		$ 668,000
Capital lease payment	$ 31,000
CGK [Member]
The Southern California Regional Gamma Knife Center [Abstract]
Ownership percentage			39.00%		39.00%

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Florida Oncology Partners (Details)	1 Months Ended	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2010 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Term	Sep. 30, 2017 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2011 USD ($)	Nov. 30, 2017 USD ($)	Sep. 22, 2017 USD ($)	Dec. 31, 2014	Jun. 30, 2012 USD ($)
Florida Oncology Partners [Abstract]
Outstanding Loan			$ 4,100,000
Liability associated with guarantee		$ 11,000	11,000		$ 11,000
Gain on sale of building							$ 139,000
Recorded distribution					0	$ 315,000
Due from related parties		1,132,000	169,000		1,132,000
Outstanding amount		575,000	299,000		575,000
Advances made under short term loans					276,000	0
Equity in earnings		173,000	164,000		173,000
Condensed Income Statement Information [Abstract]
Patient revenue		803,000		$ 803,000	2,789,000	2,627,000
USNC's equity in (loss) earnings		(151,000)		(101,000)	(341,000)	140,000
FOP and FOPRE [Member]
Florida Oncology Partners [Abstract]
Ownership percentage	20.00%										24.00%
Investments in unconsolidated entities	$ 200,000
Increase in ownership percentage	4.00%
Loan amount												$ 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 for capital leases							$ 172,000
FOP and FOPRE [Member] | FOP and FOPRE [Member]
Florida Oncology Partners [Abstract]
Ownership percentage by outside investors	80.00%
FOP [Member]
Florida Oncology Partners [Abstract]
Lease term					7 years
Capital lease obligation								$ 5,800,000
Percentage of guarantee obligations								25.00%
Outstanding lease obligation		0	468,000		$ 0
Recorded distribution			950,000
Due from related parties		222,000	169,000		222,000
Outstanding amount		$ 575,000			575,000
Accrued interest					$ 20,000
Note bearing interest		6.00%			6.00%
Equity in earnings		$ 0			$ 0
Condensed Income Statement Information [Abstract]
Patient revenue		63,000		0	2,369,000	0
Rental income		181,000		344,000	1,071,000	2,148,000
Net (loss) income		(1,386,000)		(177,000)	(1,277,000)	856,000
USNC's equity in (loss) earnings		(336,000)		$ (43,000)	(310,000)	$ 207,000
Condensed Balance Sheet Information [Abstract]
Current assets		557,000	664,000		557,000
Noncurrent assets		17,046,000	18,961,000		17,046,000
Total assets		17,603,000	19,625,000		17,603,000
Current liabilities		3,577,000	3,228,000		3,577,000
Noncurrent liabilities		15,748,000	16,842,000		15,748,000
Deficit		(1,722,000)	(445,000)		(1,722,000)
Total liabilities and equity (deficit)		17,603,000	19,625,000		$ 17,603,000
FOP [Member] | Maximum [Member]
Florida Oncology Partners [Abstract]
Amount of guarantee obligations								$ 1,433,000
FOP [Member] | Office Space [Member]
Florida Oncology Partners [Abstract]
Lease term					10 years
Loan amount									$ 4,106,000
Outstanding Loan		3,790,000			$ 3,790,000
Liability associated with guarantee		11,000			$ 11,000
Debt maturity period					7 years
FOP [Member] | Radiation Therapy Center [Member]
Florida Oncology Partners [Abstract]
Lease term					10 years
Capital lease obligation										$ 14,321,000
Monthly payments for capital leases		163,200	$ 160,000		$ 163,200
Percentage of increase of monthly payments each year					2.00%
Maximum number of additional terms extended | Term					3
Extension of agreement					5 years
Advances to unconsolidated entities		52,000			$ 52,000
Advances made under short term loans					276,000
FOP [Member] | Letter of Credit [Member] | Office Space [Member]
Florida Oncology Partners [Abstract]
Letter of credit, amount		$ 88,000			$ 88,000
FOP [Member] | USNC [Member]
Florida Oncology Partners [Abstract]
Ownership percentage		24.00%			24.00%

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Boca Oncology Partners (Details)	1 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2012	Jan. 31, 2012	Jun. 30, 2011 USD ($)	Sep. 30, 2018 USD ($) ft²	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) ft²	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Condensed Income Statement Information [Abstract]
USNC's equity in (loss) earnings				$ (151,000)	$ (101,000)	$ (341,000)	$ 140,000
USNC [Member] | Boca West IMP [Member]
Boca Oncology Partners [Abstract]
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
Secured long term debt, original balance				$ 3,000,000		$ 3,000,000
Outstanding balance on mortgage				$ 2,332,000		$ 2,332,000		$ 2,417,000
Boca Oncology Partners, LLC [Member]
Boca Oncology Partners [Abstract]
Ownership percentage		11.25%
Area of real estate property (in square foot) | ft²				6,000		6,000
Boca Oncology Partners RE, LLC ("BOPRE") [Member]
Boca Oncology Partners [Abstract]
Ownership percentage				21.22%		21.22%		21.22%
Investments in unconsolidated entities						$ 168,000		$ 164,000
Condensed Income Statement Information [Abstract]
Rental income				$ 0	0	0	0
Net loss				0	(7,000)	(4,000)	(7,000)
USNC's equity in (loss) earnings				0	$ (1,000)	(1,000)	$ (1,000)
Condensed Balance Sheet Information [Abstract]
Current assets				18,000		18,000		17,000
Noncurrent assets				935,000		935,000		920,000
Total assets				953,000		953,000		937,000
Current liabilities				0		0		0
Noncurrent liabilities				0		0		0
Equity				953,000		953,000		937,000
Total liabilities and equity (deficit)				$ 953,000		$ 953,000		$ 937,000
Boca Oncology Partners RE, LLC ("BOPRE") [Member] | Boca West IMP [Member]
Boca Oncology Partners [Abstract]
Percentage of interest in medical office building			20.00%
Ownership percentage	23.75%
Additional investor purchased ownership percentage	3.75%
Boca Oncology Partners RE, LLC ("BOPRE") [Member] | USNC [Member]
Boca Oncology Partners [Abstract]
Ownership percentage	15.40%
Boca Oncology Partners RE, LLC ("BOPRE") [Member] | Boca Oncology Partners, LLC [Member]
Boca Oncology Partners [Abstract]
Ownership percentage by outside investors	31.50%
BOP and BOPRE [Member]
Boca Oncology Partners [Abstract]
Area of real estate property (in square foot) | ft²				32,000		32,000
Additional investor purchased ownership percentage		50.00%
BOP and BOPRE [Member] | USNC [Member]
Boca Oncology Partners [Abstract]
Ownership percentage			22.50%
Investments in unconsolidated entities			$ 225,000
BOP and BOPRE [Member] | BOP and BOPRE [Member]
Boca Oncology Partners [Abstract]
Ownership percentage by outside investors		88.75%

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Medical Oncology Partners (Details) - USD ($)		3 Months Ended		9 Months Ended
	Dec. 31, 2016	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 23, 2016
Medical Oncology Partners [Abstract]
Carrying value of investment		$ 173,000		$ 173,000		$ 164,000
Condensed Consolidated Income Statement Information [Abstract]
Patient revenue		803,000	$ 803,000	2,789,000	$ 2,627,000
USNC's equity in (loss) earnings		(151,000)	(101,000)	$ (341,000)	140,000
Medical Oncology Partners LLC [Member]
Medical Oncology Partners [Abstract]
Equity interest percentage to be acquired by subsidiary				100.00%
Investments in unconsolidated entities				$ 450,000
Allowances for advances to unconsolidated entities				209,000	120,000
Condensed Consolidated Income Statement Information [Abstract]
Patient revenue		582,000	250,000	1,639,000	789,000
Other income		0	84,000	0	84,000
Net loss		(8,000)	(38,000)	(144,000)	(164,000)
USNC's equity in (loss) earnings	$ (12,000)	(2,000)	$ (14,000)	(51,000)	$ (59,000)
Condensed Consolidated Balance Sheet Information [Abstract]
Current assets		92,000		92,000		41,000
Noncurrent assets		126,000		126,000		108,000
Total assets		218,000		218,000		149,000
Current liabilities		907,000		907,000		693,000
Noncurrent liabilities		0		0		0
Deficit		(689,000)		(689,000)		(544,000)
Total liabilities and equity (deficit)		218,000		218,000		$ 149,000
Medical Oncology Partners LLC [Member] | Other Investor [Member]
Medical Oncology Partners [Abstract]
Investments in unconsolidated entities				105,000
Medical Oncology Partners LLC [Member] | USNC [Member]
Medical Oncology Partners [Abstract]
Investments in unconsolidated entities				173,000
Ownership percentage							35.83%
Carrying value of investment		$ 149,000		149,000			$ 161,000
Medical Oncology Partners LLC [Member] | USNC [Member] | Dr. Jaime Lozano [Member]
Medical Oncology Partners [Abstract]
Investments in unconsolidated entities				$ 345,000
Ownership percentage		76.67%		76.67%
Percentage of equity interest to an additional investor as a consulting fee for services				5.00%

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CB Oncology Partners (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
CB Oncology Partners [Abstract]
Advances to unconsolidated entities			$ 1,309,000	$ 116,000
Condensed Consolidated Income Statement Information [Abstract]
Patient revenue	$ 803,000	$ 803,000	2,789,000	2,627,000
USNC's equity in (loss) earnings	$ (151,000)	$ (101,000)	$ (341,000)	$ 140,000
CB Oncology Partners LLC [Member]
CB Oncology Partners [Abstract]
Ownership percentage	24.00%		24.00%
Advances to unconsolidated entities			$ 1,048,000		$ 143,000
Absorbed equity in (loss) earnings against advances	$ (137,000)		(282,000)
Carrying value of advances	912,000		912,000
Condensed Consolidated Income Statement Information [Abstract]
Patient revenue	340,000		828,000
Net loss	(264,000)		(765,000)
USNC's equity in (loss) earnings	(64,000)		(185,000)
Condensed Consolidated Balance Sheet Information [Abstract]
Current assets	276,000		276,000		0
Noncurrent assets	0		0		0
Total assets	276,000		276,000		0
Current liabilities	1,289,000		1,289,000		248,000
Noncurrent liabilities	0		0		0
Deficit	(1,013,000)		(1,013,000)		(248,000)
Total liabilities and equity (deficit)	$ 276,000		$ 276,000		$ 0

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Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Taxes [Abstract]
Federal and state income taxes, rate			91.00%	40.00%
Tax charge adjustment to estimated effective state tax rate			$ 33,000
Permanent differences			101,000
(Loss) income from investments in unconsolidated entities	$ (151,000)	$ (101,000)	(341,000)	$ 140,000
Tax charge	$ 19,000	$ 21,000	$ 198,000	$ 257,000