Note C – The Southern California Regional Gamma Knife Center

During 2007, the Company, through a noncontrolling interest in joint ventures, managed the formation of the Southern California Regional Gamma Knife Center at San Antonio Regional Hospital (“SARH”) in Upland, California. 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 included a balance of $668,000 from the prior lease obligations. This new lease was payable over 60 months. The first payment of $31,000 was paid in April 2016 and the final payment was paid in March 2021.

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, through its joint ventures, 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.

At March 31, 2021 and December 31, 2020, the Company’s recorded investment of NeuroPartners LLC and CGK was $24,000 and $26,000, respectively. For the three months ended March 31, 2021, the Company’s equity in loss of NeuroPartners LLC and CGK was $2,000 and compared to equity in earnings of $53,000 for the three months ended March 31, 2020. At March 31, 2021 and December 31, 2020, amounts due from related parties was $11,000 and $9,000, respectively.

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

NeuroPartners LLC and CGK Condensed Combined Income Statement Information

	Three Months Ended March 31,
	2021			2020

Patient Revenue	$	166,000		$	316,000

Net income	$	19,000		$	156,000

USNC's equity in (loss) earnings of NeuroPartners LLC and CGK	$	(2,000	)	$	53,000

NeuroPartners LLC and CGK Condensed Combined Balance Sheet Information

		March 31, 2021		December 31, 2020

Current assets	$	140,000	$	121,000

Noncurrent assets		487,000		551,000

Total assets	$	627,000	$	672,000

Current liabilities	$	570,000	$	634,000

Equity		57,000		38,000

Total liabilities and equity	$	627,000	$	672,000