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EX-32.1 - EXHIBIT 32.1 - U.S. NeuroSurgical Holdings, Inc.ex32_1.htm
EX-31.1 - EXHIBIT 31.1 - U.S. NeuroSurgical Holdings, Inc.ex31_1.htm

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 March 31, 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 March 31, 2018 was 7,792,185.
 


TABLE OF CONTENTS

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PART I - FINANCIAL INFORMATION

Item 1.
Financial Statements

U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
   
March 31,
2018
   
December 31,
2017
 
   
(UNAUDITED)
       
Current assets:
           
Cash and cash equivalents
 
$
2,266,000
   
$
2,684,000
 
Accounts receivable
   
803,000
     
767,000
 
Due from related parties
   
959,000
     
169,000
 
Short term loan receivable
   
301,000
     
299,000
 
Other current assets
   
251,000
     
67,000
 
Total current assets
   
4,580,000
     
3,986,000
 
                 
Other assets:
               
Notes receivable
   
38,000
     
38,000
 
Investments in unconsolidated entities
   
164,000
     
164,000
 
Total other assets
   
202,000
     
202,000
 
                 
Property and equipment:
               
Gamma knife (net of accumulated depreciation of $2,846,000 in 2018 and $2,637,000 in 2017)
   
2,492,000
     
2,700,000
 
Leasehold improvements (net of accumulated amortization of $1,187,000 in 2018 and $1,111,000 in 2017)
   
950,000
     
1,027,000
 
Total property and equipment
   
3,442,000
     
3,727,000
 
                 
TOTAL ASSETS
 
$
8,224,000
   
$
7,915,000
 
                 
LIABILITIES
               
Current liabilities:
               
Obligations under capital lease - current portion
 
$
988,000
   
$
972,000
 
Accounts payable and accrued expenses
   
108,000
     
208,000
 
Deferred revenue
   
881,000
     
370,000
 
Income taxes payable
   
394,000
     
64,000
 
Total current liabilities
   
2,371,000
     
1,614,000
 
                 
Obligations under capital lease - net of current portion
   
1,393,000
     
1,666,000
 
Deferred tax liability
   
431,000
     
675,000
 
Guarantee liability
   
11,000
     
11,000
 
Asset retirement obligations
   
524,000
     
517,000
 
Total liabilities
   
4,730,000
     
4,483,000
 
                 
STOCKHOLDERS’ EQUITY
               
Common stock - par value $.01; 25,000,000 shares authorized; 7,792,185 shares issued and outstanding at March 31, 2018 and December 31, 2017.
   
78,000
     
78,000
 
Additional paid-in capital
   
3,100,000
     
3,100,000
 
Retained earnings
   
316,000
     
254,000
 
Total stockholders’ equity
   
3,494,000
     
3,432,000
 
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
8,224,000
   
$
7,915,000
 

The accompanying notes to condensed consolidated financial statements are an integral part hereof
 
U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

   
Three Months Ended
March 31,
 
   
2018
   
2017
 
             
Revenue
 
$
865,000
   
$
984,000
 
     
 
         
Costs and expenses:
               
Patient expenses
   
378,000
     
368,000
 
Selling, general and administrative
   
278,000
     
295,000
 
                 
Total
   
656,000
     
663,000
 
                 
Operating income
   
209,000
     
321,000
 
                 
Interest expense
   
(32,000
)
   
(41,000
)
Interest income
   
1,000
     
-
 
(Loss) income from investments in unconsolidated entities
   
(30,000
)
   
112,000
 
                 
Income before income taxes
   
148,000
     
392,000
 
                 
Provision for income tax expense
   
(86,000
)
   
(149,000
)
                 
Net income
 
$
62,000
   
$
243,000
 
                 
Basic and diluted net income per share
 
$
0.01
   
$
0.03
 
                 
Weighted average common shares outstanding
   
7,792,185
     
7,792,185
 

The accompanying notes to condensed consolidated financial statements are an integral part hereof.
 
U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

 
Three Months Ended
March 31,
 
   
2018
   
2017
 
             
Cash flows from operating activities:
           
Net income
 
$
62,000
   
$
243,000
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
   
285,000
     
282,000
 
Loss (income) from investment in unconsolidated entities
   
30,000
     
(112,000
)
Distributed earnings from unconsolidated entities
   
-
     
315,000
 
Accretion of asset retirement obligations
   
7,000
     
6,000
 
Accrued interest from short term loan receivable
   
(2,000
)
   
-
 
Deferred income taxes
   
(244,000
)
   
(50,000
)
Changes in:
               
Accounts receivable
   
(36,000
)
   
376,000
 
Other current assets
   
(184,000
)
   
9,000
 
Accounts payable and accrued expenses
   
(100,000
)
   
94,000
 
Deferred revenue
   
511,000
     
424,000
 
Income taxes payable
   
330,000
     
200,000
 
Net cash provided by operating activities
   
659,000
     
1,787,000
 
                 
Cash flows from investing activities:
               
Advances to unconsolidated entities
   
(820,000
)
   
(37,000
)
Increase in due from related parties
   
-
     
(21,000
)
Net cash used in investing activities
   
(820,000
)
   
(58,000
)
                 
Cash flows from financing activities:
               
Repayment of capital lease obligations
   
(257,000
)
   
(250,000
)
Net cash used in financing activities
   
(257,000
)
   
(250,000
)
                 
Net change in cash and cash equivalents
   
(418,000
)
   
1,479,000
 
Cash and cash equivalents - beginning of year
   
2,684,000
     
1,962,000
 
Cash and cash equivalents - end of year
 
$
2,266,000
   
$
3,441,000
 
                 
Supplemental disclosures of cash flow information:
               
Cash paid for:
               
Interest
 
$
35,000
   
$
40,000
 

The accompanying notes to condensed consolidated financial statements are an integral part hereof
 
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 March 31, 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 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 to the prior revenue standard. 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 prospective 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.

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.  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 emergency 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 and associated maintenance based on a fee per procedure performed with the equipment.  NYU provides the medical and technical staff to operate the facility.
 
USN retains the obligation to reload the cobalt for the gamma knife at its expense, the cost of which is estimated to be $1,100,000 and is expected to be performed by mid-July 2018.  The Company will also bear the cost of site work involved in reloading the cobalt, up to a maximum of $1,088,000, although management believes that the actual cost will be approximately $300,000 less than this amount.  The Company believes that it will be able to finance these costs through Elekta, the same entity through which the Company is leasing the gamma knife equipment.  With NYU’s commitment to purchase the equipment, provided that the Company fulfills its obligation to reload the cobalt as required under the new arrangement, the Company will be relieved of its obligation to close and restore the NYU facility to its original condition at the end of the contract period. In recent years, services provided at NYU have represented over 90% of all the Company’s revenues.

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.

The Company’s share of cumulative losses associated with its investment in NeuroPartners LLC and CGK has exceeded its investment.  Due to loans made to NeuroPartners LLC and CGK, NeuroPartners LLC and CGK are considered to be variable interest entities of the Company.  However, as the Company is not deemed to be the primary beneficiary of NeuroPartners LLC and CGK, since it does not have the power to direct the operating activities that most significantly affect NeuroPartners LLC’s and CGK’s economic performance, these entities are not consolidated, but certain disclosures are provided herein.
 
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. During the quarter ended March 31, 2018, the Company advanced an additional $6,000 to CGK. For the three months ended March 31, 2018 and 2017, the Company’s equity in earnings of NeuroPartners LLC and CGK was $13,000 and $38,000, respectively, but was not 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 Income Statement Information

   
Three Months Ended
March 31,
 
   
2018
   
2017
 
             
Patient Revenue
 
$
211,000
   
$
276,000
 
                 
Net income
 
$
57,000
   
$
124,000
 
                 
USNC’s equity in earnings of NeuroPartners, LLC and CGK
 
$
13,000
   
$
38,000
 

NeuroPartners, LLC and CGK Condensed Balance Sheet Information

   
March 31,
2018
   
December 31,
2017
 
             
Current assets
 
$
199,000
   
$
165,000
 
                 
Noncurrent assets
   
691,000
     
745,000
 
                 
Total assets
 
$
890,000
   
$
910,000
 
                 
Current liabilities
 
$
347,000
   
$
641,000
 
                 
Noncurrent liabilities
   
681,000
     
464,000
 
                 
Deficit
   
(138,000
)
   
(195,000
)
                 
Total liabilities and equity
 
$
890,000
   
$
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 holds 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 $189,000 at March 31, 2018, and $468,000 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 March 31, 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 21st Century Oncology for the sale of FOP’s Varian Rapid Arc linear accelerator and other medical equipment at the FOP location.  21st 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, 21st Century Oncology has not satisfied all of the terms of the agreement.  In late May 2017, 21st 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 21st 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.
 
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 requires monthly payments in the first year of $160,000, increasing by 2% each year.

The Company’s recorded investment in FOP at March 31, 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 $410,000 and $169,000 at March 31, 2018 and December 31, 2017 respectively. The Company made additional advances of $241,000 to FOP during the three months ended March 31, 2018, to assist with the funding of operations of the radiation therapy center in Miami. In addition, FOP owes $301,000 of principal and accrued interest to the Company under a promissory note bearing interest at 6% per anum entered into in October 2017.

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

   
Three Months Ended
March 31,
 
   
2018
   
2017
 
             
Patient Revenue
 
$
600,000
   
$
-
 
Rental Income
   
482,000
     
1,013,000
 
                 
Net (loss) income
 
$
(468,000
)
 
$
619,000
 
                 
USNC’s equity in (loss) earnings of FOP
 
$
(113,000
)
 
$
150,000
 

FOP  Condensed Balance Sheet Information

   
March 31,
2018
   
December 31,
2017
 
             
Current assets
 
$
692,000
   
$
664,000
 
                 
Noncurrent assets
   
18,208,000
     
18,961,000
 
                 
Total assets
 
$
18,900,000
   
$
19,625,000
 
                 
Current liabilities
 
$
3,318,000
   
$
3,228,000
 
                 
Noncurrent liabilities
   
16,481,000
     
16,842,000
 
                 
Equity
   
(899,000
)
   
(445,000
)
                 
Total liabilities and equity
 
$
18,900,000
   
$
19,625,000
 

FOPRE had no significant assets or liabilities at December 31, 2017 and no significant income and expenses for the three months ended March 31, 2017.
 
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 which BOP operates.  BOP occupies approximately 6,000 square feet of the 32,000 square foot building.  The Company’s wholly-owned subsidiary, USNC invested $225,000 initially and had a 22.5% interest in BOP and BOPRE.

In January 2012, an additional investor purchased 50% of the partnership reducing the Company’s ownership to 11.25%.  The 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 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 21.05% ownership interest in BOPRE, which it accounts for under the equity method, at December 31, 2017. The center operated by BOP opened in August 2012.

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

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 $2,389,000 at March 31, 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

   
Three Months Ended
March 31,
 
   
2018
   
2017
 
             
Rental Income
 
$
-
   
$
-
 
                 
Net loss
 
$
-
   
$
-
 
                 
USNC’s equity in loss of BOPRE
 
$
-
   
$
-
 

BOPRE Condensed Balance Sheet Information

   
March 31,
2018
   
December 31,
2017
 
             
Current assets
 
$
12,000
   
$
17,000
 
                 
Noncurrent assets
   
925,000
     
920,000
 
                 
Total assets
 
$
937,000
   
$
937,000
 
                 
Current liabilities
 
$
-
   
$
-
 
                 
Noncurrent liabilities
   
-
     
-
 
                 
Equity
   
937,000
     
937,000
 
                 
Total liabilities and equity
 
$
937,000
   
$
937,000
 
 
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 three months ended March 31, 2018 the Company’s equity in loss of MOP was $6,000 but was not recorded due to prior losses.

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 table present the summarized financial information of MOP:

MOP Condensed Consolidated Income Statement Information

   
Three Months Ended
March 31,
 
   
2018
   
2017
 
             
Patient revenue
 
$
520,000
   
$
230,000
 
                 
Net loss
 
$
(17,000
)
 
$
(45,000
)
                 
USNC’s equity in loss in MOP
 
$
(6,000
)
 
$
(16,000
)

MOP Condensed Consolidated Balance Sheet Information

   
March 31,
2018
   
December 31,
2017
 
             
             
Current assets
 
$
34,000
   
$
41,000
 
                 
Noncurrent assets
   
143,000
     
108,000
 
                 
Total assets
 
$
177,000
   
$
149,000
 
                 
Current liabilities
 
$
738,000
   
$
693,000
 
                 
Noncurrent liabilities
   
-
     
-
 
                 
Deficit
   
(561,000
)
   
(544,000
)
                 
Total liabilities and equity
 
$
177,000
   
$
149,000
 

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 a further $543,000 during the three months ended March 31, 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 March 31, 2018, totaling $143,000 against these advances and the remaining advances have a carrying value of $543,000 at March 31, 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 table presents the summarized financial information of CBOP:

CBOP Condensed Consolidated Income Statement Information

   
Three Months Ended
March 31, 2018
 
       
Patient revenue
 
$
112,000
 
         
Net loss
 
$
(341,000
)
         
USNC’s equity in loss in CBOP
 
$
(83,000
)

CBOP Condensed Consolidated Balance Sheet Information

   
March 31,
2018
   
December 31,
2017
 
             
             
Current assets
 
$
107,000
   
$
-
 
                 
Noncurrent assets
   
-
     
-
 
                 
Total assets
 
$
107,000
   
$
-
 
                 
Current liabilities
 
$
696,000
   
$
248,000
 
                 
Noncurrent liabilities
   
-
     
-
 
                 
Deficit
   
(589,000
)
   
(248,000
)
                 
Total liabilities and equity
 
$
107,000
   
$
-
 

Note H – Income Taxes

The Company’s income tax rate, which includes federal and state income taxes, was approximately 58%, for the three months ended March 31, 2018 and 38% for the three months ended March 31, 2017.  The 2018 tax charge includes a $33,000 adjustment to the estimated effective state tax rate.  The Company recorded a tax charge of $86,000 for the three months ended March 31, 2018.
 
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 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 to the prior revenue standard.

The following discussion and analysis provides information which the Company’s management believes is relevant to an assessment and understanding of the Company’s results of operations and financial condition. This discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere herein.

Results of Operation

Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017

Patient revenue for the three months ended March 31, 2018 was $865,000 a decrease of 12% compared to $984,000 the previous year. This decrease in revenue was due to a decreased number of procedures at NYU. Patient expenses for the three months ended March 31, 2018 were $378,000 an increase of 3% as compared to the $368,000 reported for the comparable period in the previous year. This increase in patient expenses was primarily due to higher maintenance costs due to the ICON equipment.

Selling, general and administrative expense of $278,000 for the first quarter of 2018 was 6% lower than the $295,000 incurred during the comparable period in 2017.  The decrease in SG&A expenses was mostly due to lower accounting fees and insurance expenses in the first quarter of 2018 compared to the same period the previous year.

The Company incurred $32,000 of interest expense in the first quarter of 2018 and $41,000  in 2017 related to the capital lease, due to lower principal balances on the gamma knife and ICON unit leases.

During the three months ended March 31, 2018, the Company recognized an income tax charge of $86,000 compared to $149,000 during the same period in 2017 due to lower net income in the current year, partly offset by an increased effective state tax rate.

For the three months ended March 31, 2018, the Company reported a net income of $62,000 as compared to a net income of $243,000 for the same period a year earlier. The decrease in net income is primarily due a decrease of income from  investments in unconsolidated entities and lower revenue at NYU.
 
Liquidity and Capital Resources

At March 31, 2018, the Company had working capital of $2,209,000 as compared to $2,372,000 at December 31, 2017.  This decrease was primarily due to the successful operations at NYU less a $330,000 increase in income taxes payable. Cash and cash equivalents at March 31, 2018 were $2,266,000 as compared to $2,648,000 at December 31, 2017.

Net cash provided by operating activities for the three months ended March 31, 2018 was $659,000 as compared to $1,787,000 in the same period a year earlier. The decrease was primarily due to lower distributions received from unconsolidated entities and other working capital changes, including a buildup of accounts receivable.  Accounts receivable increased $36,000 for the three months ended March 31, 2018 as compared to a decrease of $376,000 in the three months ended March 31, 2017.

With respect to investing activities, the Company advanced $241,000 to FOP and $543,000 to CBOP during the three months ended March 31, 2018, to assist with their new business operations, as well as $30,000 and $6,000 of advances to MOP and CGK, respectively, during the same period. Advances made during the three months ended March 31, 2017 comprised solely of working capital advances to MOP.

With respect to financing activities, the Company paid $257,000 towards its capital lease obligations during the first three months of 2018, compared with $250,000  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.
 
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.

USN retains the obligation to reload the cobalt for the gamma knife at its expense, the cost of which is estimated to be $1,100,000 and is expected to be performed by mid-July 2018.  The Company will also bear the cost of site work involved in reloading the cobalt, up to a maximum of $1,088,000, although management believes that the actual cost will be approximately $300,000 less than this amount.  The Company believes that it will be able to finance these costs through Elekta, the same entity through which the Company is leasing the gamma knife equipment.  With NYU’s commitment to purchase the equipment, provided that the Company fulfills its obligation to reload the cobalt as required under the new arrangement, the Company will be relieved of its obligation to close and restore the NYU facility to its original condition at the end of the contract period.

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 NYUWhile 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.
 
Availability of Working CapitalTo 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.

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.
 
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 March 31, 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 March 31, 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 March 31, 2018, management is in the process of developing plans to remediate the material weakness identified above.
 
PART II - OTHER INFORMATION

Item 1.
Legal Proceedings

None

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

Not applicable.

Item 3.
Defaults Upon Senior Securities

Not applicable.

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

Not applicable.

Item 5.
Other Information

Not applicable.

Item 6.
Exhibits

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

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

101          Interactive Data Files providing financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 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.
 
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: May 15, 2018
By:
/s/ Alan Gold
 
   
Alan Gold
   
Director, President and Chief Executive Officer and
   
Principal Financial Officer of the Registrant
 
 
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