U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

 

September 30,
2016
 
 

December 31,
2015
 
 
 

(UNAUDITED)
 
 
 
 

ASSETS
 
 
 
 
 
 

Current assets:
 
 
 
 
 
 

Cash and cash equivalents
 

$

2,320,000
 
 

$

1,068,000
 

Accounts receivable
 
 

249,000
 
 
 

626,000
 

Due from related parties
 
 

-
 
 
 

21,000
 

Short term loan receivable
 
 

35,000
 
 
 

35,000
 

Other current assets
 
 

137,000
 
 
 

98,000
 

Total current assets
 
 

2,741,000
 
 
 

1,848,000
 
 
 
 
 
 
 
 
 
 

Other Assets:
 
 
 
 
 
 
 
 

Notes receivable
 
 

210,000
 
 
 

210,000
 

Investments in unconsolidated entities
 
 

337,000
 
 
 

364,000
 

Total other assets
 
 

547,000
 
 
 

574,000
 
 
 
 
 
 
 
 
 
 

Property and equipment:
 
 
 
 
 
 
 
 

Gamma knife (net of accumulated depreciation of $1,601,000 in 2016 and $1,097,000 in 2015)
 
 

3,690,000
 
 
 

3,294,000
 

Leasehold improvements (net of accumulated amortization of $729,000 in 2016 and $510,000  in 2015)
 
 

1,409,000
 
 
 

1,670,000
 

Total property and equipment
 
 

5,099,000
 
 
 

4,964,000
 
 
 
 
 
 
 
 
 
 

TOTAL ASSETS
 

$

8,387,000
 
 

$

7,386,000
 
 
 
 
 
 
 
 
 
 

LIABILITIES
 
 
 
 
 
 
 
 

Current liabilities:
 
 
 
 
 
 
 
 

Obligations under capital lease - current portion
 

$

1,005,000
 
 

$

866,000
 

Income tax payable
 
 

98,000
 
 
 

-
 

Deferred tax liability - current portion
 
 

43,000
 
 
 

191,000
 

Accounts payable and accrued expenses
 
 

61,000
 
 
 

80,000
 

Deferred revenue
 
 

180,000
 
 
 

149,000
 

Due to related parties
 
 

-
 
 
 

13,000
 

Total current liabilities
 
 

1,387,000
 
 
 

1,299,000
 
 
 
 
 
 
 
 
 
 

Obligations under capital lease - net of current portion
 
 

2,992,000
 
 
 

2,945,000
 

Deferred tax liability - net of current portion
 
 

660,000
 
 
 

303,000
 

Guarantee liability
 
 

11,000
 
 
 

15,000
 

Asset retirement obligations
 
 

484,000
 
 
 

466,000
 

Total liabilities
 
 

5,534,000
 
 
 

5,028,000
 
 
 
 
 
 
 
 
 
 

Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 

Common stock - par value $.01; 25,000,000 shares authorized; 7,797,185 shares issued and outstanding  at September 30, 2016 and December 31, 2015.
 
 


78,000
 
 
 

78,000
 

Additional paid-in capital
 
 

3,100,000
 
 
 

3,100,000
 

Accumulated deficit
 
 

(325,000

)
 
 

(820,000

)

Total stockholders' equity
 
 

2,853,000
 
 
 

2,358,000
 
 
 
 
 
 
 
 
 
 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 

$

8,387,000
 
 

$

7,386,000
 


The accompanying notes to condensed consolidated financial statements are an integral part hereof.
 

3

 Table of Contents

U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

  

Three Months Ended
September 30,
  
 

2016
 
 

2015
 
 
 
 
 
 
 

Revenue
 

$

722,000
 
 

$

772,000
 
 
 
 
 
 
 
 
 
 

Costs and expenses:
 
 
 
 
 
 
 
 

Patient expenses
 
 

321,000
 
 
 

314,000
 

Selling, general and administrative
 
 

298,000
 
 
 

291,000
 
 
 
 
 
 
 
 
 
 

Total
 
 

619,000
 
 
 

605,000
 
 
 
 
 
 
 
 
 
 

Operating income
 
 

103,000
 
 
 

167,000
 
 
 
 
 
 
 
 
 
 

Interest expense
 
 

(34,000

)
 
 

(47,000

)

Other expense
 
 

(1,000

)
 
 

(13,000

)

Income from investments in unconsolidated entities
 
 

135,000
 
 
 

36,000
 
 
 
 
 
 
 
 
 
 

Income before income taxes
 
 

203,000
 
 
 

143,000
 
 
 
 
 
 
 
 
 
 

Provision for income tax expense
 
 

(83,000

)
 
 

(53,000

)
 
 
 
 
 
 
 
 
 

Net income
 

$

120,000
 
 

$

90,000
 
 
 
 
 
 
 
 
 
 

Basic and diluted net income per share
 

$

0.02
 
 

$

0.01
 
 
 
 
 
 
 
 
 
 

Weighted average common shares outstanding
 
 

7,797,185
 
 
 

7,797,185
 


The accompanying notes to condensed consolidated financial statements are an integral part hereof.
 

4

 Table of Contents

U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

 
  

Nine Months Ended
September 30,
  
 

2016
 
 

2015
 
 
 
 
 
 
 
 

Revenue
 

$

2,329,000
 
 

$

2,253,000
 
 
 
 
 
 
 
 
 
 

Costs and expenses:
 
 
 
 
 
 
 
 

Patient expenses
 
 

933,000
 
 
 

875,000
 

Selling, general and administrative
 
 

959,000
 
 
 

958,000
 
 
 
 
 
 
 
 
 
 

Total
 
 

1,892,000
 
 
 

1,833,000
 
 
 
 
 
 
 
 
 
 

Operating income
 
 

437,000
 
 
 

420,000
 
 
 
 
 
 
 
 
 
 

Interest expense
 
 

(114,000

)
 
 

(137,000

)

Other income
 
 

5,000
 
 
 

13,000
 

Income from investments in unconsolidated entities
 
 

473,000
 
 
 

25,000
 
 
 
 
 
 
 
 
 
 

Income before income taxes
 
 

801,000
 
 
 

321,000
 
 
 
 
 
 
 
 
 
 

Provision for income tax expense
 
 

(306,000

)
 
 

(120,000

)
 
 
 
 
 
 
 
 
 

Net income
 

$

495,000
 
 

$

201,000
 
 
 
 
 
 
 
 
 
 

Basic and diluted net income per share
 

$

0.06
 
 

$

0.03
 
 
 
 
 
 
 
 
 
 

Weighted average common shares outstanding
 
 

7,797,185
 
 
 

7,797,185
 


The accompanying notes to condensed consolidated financial statements are an integral part hereof.
 

5

 Table of Contents

U.S. NEUROSURGICAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

  

Nine Months Ended
September 30,
  
 

2016
 
 

2015
 
 
 
 
 
 
 
 

Cash flows from operating activities:
 
 
 
 
 
 

Net income
 

$

495,000
 
 

$

201,000
 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization
 
 

723,000
 
 
 

701,000
 

Income from investment in unconsolidated entities
 
 

(473,000

)
 
 

(25,000

)

Accretion of asset retirement obligations
 
 

18,000
 
 
 

29,000
 

Change in guarantee liability
 
 

(4,000

)
 
 

-
 

Deferred income taxes
 
 

209,000
 
 
 

120,000
 

Changes in:
 
 
 
 
 
 
 
 

Accounts receivable
 
 

377,000
 
 
 

135,000
 

Elekta refund due
 
 

-
 
 
 

115,000
 

Other current assets
 
 

(39,000
) 
 
 

12,000
 

Income tax payable
 
 

98,000

 
 
 

-
 

Accounts payable and accrued expenses
 
 

(19,000

)
 
 

13,000
 

Deferred revenue
 
 

31,000
 
 
 

64,000
 

Net cash provided by operating activities
 
 

1,416,000
 
 
 

1,365,000
 
 
 
 
 
 
 
 
 
 

Cash flows from investing activities:
 
 
 
 
 
 
 
 

Repayment of amounts advanced to uncosolidated entities
 
 

20,000
 
 
 

-
 

Advances - short term receivable and note receivable
 
 

-
 
 
 

(245,000

)

Purchase of leasehold improvements
 
 

-
 
 
 

(341,000

)

Decrease (increase) in due from related parties
 
 

8,000
 
 
 

(103,000

)

Distributions from, investments in unconsolidated entities
 
 

480,000
 
 
 

(7,000

)

Net cash provided by (used in) investing activities
 
 

508,000
 
 
 

(696,000

)
 
 
 
 
 
 
 
 
 

Cash flows from financing activities:
 
 
 
 
 
 
 
 

Repayment of capital lease obligations
 
 

(672,000

)
 
 

(652,000

)

Net cash used in financing activities
 
 

(672,000

)
 
 

(652,000

)
 
 
 
 
 
 
 
 
 

Net change in cash and cash equivalents
 
 

1,252,000
 
 
 

17,000
 

Cash and cash equivalents - beginning of period
 
 

1,068,000
 
 
 

1,053,000
 

Cash and cash equivalents - end of period
 

$

2,320,000
 
 

$

1,070,000
 
 
 
 
 
 
 
 
 
 

Supplemental disclosures of cash flow information:
 
 
 
 
 
 
 
 

Cash paid for:
 
 
 
 
 
 
 
 

Interest
 

$

118,000
 
 

$

159,000
 
 
 
 
 
 
 
 
 
 

Supplemental disclosure of of noncash investing and financing activities:
 
 
 
 
 
 
 
 

Increase in gamma knife equipment through a capital lease obligation
 

$

900,000
 
 

$

-
 

Reduction in capital lease liability due to sales tax refund applied to lease
 

$

42,000
 
 

$

-
 

Increase in investment in unconsolidated entities through recording of guarantee liability
 

$

-
 
 

$

25,000
 

Increase in guarantee liability recorded
 

$

-
 
 

$

15,000