Note G - Obligations Under Capital Lease

In 2009, the Company installed a PERFEXION model gamma knife at the NYU center with a seven-year lease from Elekta Capital. The amount financed, covering the cost of the new gamma knife equipment and certain space improvements, was approximately $3,742,000 in total. This lease became payable as a result of damage sustained at the NYU facility in October 2012, due to flooding from Hurricane Sandy, and the remainder of the balance due was paid in January 2013. In 2013, the Company entered into a modification of the above capital lease agreement to finance the new gamma knife installation, the related construction costs and the removal costs of the old equipment for approximately $4.7 million at an interest rate of 4.49% to be repaid beginning in May 2014 over 72 months with no payments for the first three months and $78,000 monthly payments thereafter through May 2020. The Company entered into another capital lease in 2014 to finance a further $250,000 of installation and construction costs, which was repaid over 24 months. In 2016, the Company entered into a capital lease in the amount of $879,000 at an interest rate of 4.45% to finance the installation of the ICON technology for the NYU Gamma Knife equipment to be repaid over 48 months with $20,000 monthly payments beginning October 2016 through September 2020. In October 2018, the Company entered into a capital lease in the amount of $833,000 at an interest rate of 5.85% to partially finance the reload of the cobalt to be repaid over 30 months with $30,000 monthly payments from October 2018 through March 2021.

The obligations under the capital leases are as follows:

	December 31,
	2018			2017

Capital leases - Gamma Knife	$	2,387,000		$	2,638,000

Less current portion		(1,399,000	)		(972,000	)

	$	988,000		$	1,666,000

Effective October 1, 2018, when the NYU agreement was determined to be a to be a sales-type sublease between USN, the lessor, and NYU, the lessee, all of the leased property and equipment held by the Company was derecognized (Note E). As a result, no leased assets included in property and equipment remain on the Company’s Consolidated Balance Sheet at December 31, 2018.

At December 31, 2017, leased assets included in property and equipment are as follows:

Capitalized costs	$	5,182,000

Less - accumulated depreciation		(2,577,000	)

Capitalized lease equipment and improvements- reported as property and equipment - net	$	2,605,000

Depreciation and amortization expense for assets under capital leases totaled $688,000 and $804,000 for the years ended December 31, 2018 and 2017, respectively.

Future payments as of December 31, 2018 on the capital leases are as follows:

Year Ending December 31,

2019	$	1,499,000
2020		923,000
2021		90,000
		2,512,000
Less interest		(125,000	)
Present value of net minimum obligation	$	2,387,000