Basis of Preparation

9 Months Ended

Sep. 30, 2022

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, 2022, and 2021, are unaudited. However, in the opinion of management, such statements include all adjustments necessary for a fair statement of the information presented therein. The Consolidated Balance Sheet at December 31, 2021, has been derived from the audited Consolidated Financial Statements at that date appearing in the Company’s Annual Report on Form 10-K/A.

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 Consolidated Financial Statements.

Consolidated results of operations for interim periods are not necessarily indicative of those to be achieved for full fiscal years. The only change to the Company’s equity in the three and nine months ended September 30, 2022, and 2021 was net loss for the periods.

The Company applies the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation to noncontrolling interests in consolidated financial statements. The guidance requires noncontrolling interests to be reported as a component of equity separate from the parent’s equity and purchases and sales of equity interests, that do not result in a change in control, to be accounted for as equity transactions. In addition, net (loss) income attributable to noncontrolling interests are to be included in net (loss) income and, upon a loss of control, the interest sold, as well as any interest retained, is to be recorded at fair value, with any gain or loss recognized in net (loss) income.

The Company recognizes revenue in accordance with two different accounting standards: 1) Topic 606 and 2) Accounting Standards Codification (“ASC”) Topic 842, Leases.

The Company primarily generated revenue, in 2021, from a leasing arrangement with New York University, which is not within the scope of Revenue from Contracts with Customers (Topic 606), and from the sale of maintenance, under the same agreement, with a single performance obligation. The NYU agreement ended in March 2021.

The tables below present financial information associated with our leases.

	Classification	September 30,
Assets		2022		2021
Long-term
Operating lease assets	Operating lease right-of-use asset	$	30,000	$	68,000
Total leased assets		$	30,000	$	68,000

Liabilities
Current
Operating lease liabilities	Operating lease right-of-use liability - current portion	$	34,000	$	42,000

Long-term
Operating lease liabilities	Operating lease right-of-use liability - net of current portion	$	-	$	34,000
Total lease liabilities		$	34,000	$	76,000

Lease Cost
Operating lease cost	Selling, general and administrative	$	31,000	$	31,000

Finance lease cost
Interest on lease liabilities	Interest expense		-		2,000

Sublease income	Interest income - sales-type sublease		-		8,000
Net lease expense		$	31,000	$	25,000

Maturity of lease liabilities (as of September 30, 2022)	Operating lease
2022	$	11,000
2023		24,000
Total		35,000
Less amount representing interest		1,000
Present value of lease liabilities	$	34,000
Discount rate		5.850	%