☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
|
Delaware
|
47-5370333
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.) |
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☒
|
(do not check if a smaller reporting company)
|
Emerging Growth Company☐
|
3
|
||
3
|
||
21
|
||
27
|
||
28
|
||
30
|
||
30
|
||
30
|
||
30
|
||
30
|
||
30
|
||
30
|
||
31
|
June 30,
2020
(Unaudited)
|
December 31,
2019
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
1,989,000
|
$
|
1,335,000
|
||||
Accounts receivable
|
233,000
|
356,000
|
||||||
Investment in sales-type sublease - current
|
984,000
|
888,000
|
||||||
Other current assets
|
98,000
|
102,000
|
||||||
Total current assets
|
3,304,000
|
2,681,000
|
||||||
Other assets:
|
||||||||
Note receivable
|
38,000
|
38,000
|
||||||
Due from related parties
|
1,150,000
|
1,422,000
|
||||||
Investment in sales-type sublease - net of current portion
|
-
|
532,000
|
||||||
Investments in unconsolidated entities
|
250,000
|
179,000
|
||||||
Deferred tax asset
|
203,000
|
17,000
|
||||||
Total other assets
|
1,641,000
|
2,188,000
|
||||||
Property and equipment:
|
||||||||
Operating lease right-of-use asset
|
112,000
|
128,000
|
||||||
Total property and equipment
|
112,000
|
128,000
|
||||||
TOTAL ASSETS
|
$
|
5,057,000
|
$
|
4,997,000
|
||||
LIABILITIES
|
||||||||
Current liabilities:
|
||||||||
Obligations under finance lease - current portion
|
$
|
323,000
|
$
|
901,000
|
||||
Operating lease right-of-use liability - current portion
|
38,000
|
36,000
|
||||||
Accounts payable and accrued expenses
|
236,000
|
255,000
|
||||||
Deferred revenue
|
554,000
|
226,000
|
||||||
Income taxes payable
|
435,000
|
220,000
|
||||||
Total current liabilities
|
1,586,000
|
1,638,000
|
||||||
Obligations under finance lease - net of current portion
|
-
|
89,000
|
||||||
Operating lease right-of-use liability - net of current portion
|
87,000
|
106,000
|
||||||
Guarantee liability
|
11,000
|
11,000
|
||||||
Total liabilities
|
1,684,000
|
1,844,000
|
||||||
STOCKHOLDERS’ EQUITY
|
||||||||
Common stock - par value $.01; 25,000,000 shares authorized; 7,792,185 shares issued and outstanding at June 30, 2020 and December 31, 2019.
|
78,000
|
78,000
|
||||||
Additional paid-in capital
|
3,100,000
|
3,100,000
|
||||||
Retained earnings (accumulated deficit)
|
195,000
|
(25,000
|
)
|
|||||
Total stockholders’ equity
|
3,373,000
|
3,153,000
|
||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
5,057,000
|
$
|
4,997,000
|
Three Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Revenue
|
$
|
596,000
|
$
|
825,000
|
||||
Costs and expenses:
|
||||||||
Patient expenses
|
116,000
|
84,000
|
||||||
Selling, general and administrative
|
342,000
|
365,000
|
||||||
Total
|
458,000
|
449,000
|
||||||
Operating income
|
138,000
|
376,000
|
||||||
Interest expense
|
(7,000
|
)
|
(25,000
|
)
|
||||
Interest income - sales-type sublease
|
20,000
|
35,000
|
||||||
Loss from investments in unconsolidated entities, net
|
(91,000
|
)
|
(470,000
|
)
|
||||
Income (loss) before income taxes
|
60,000
|
(84,000
|
)
|
|||||
(Provision) benefit for income taxes
|
(15,000
|
)
|
25,000
|
|||||
Net income (loss)
|
$
|
45,000
|
$
|
(59,000
|
)
|
|||
Basic and diluted net income (loss) per share
|
$
|
0.01
|
$
|
(0.01
|
)
|
|||
Weighted average common shares outstanding
|
7,792,185
|
7,792,185
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Revenue
|
$
|
1,343,000
|
$
|
1,666,000
|
||||
Costs and expenses:
|
||||||||
Patient expenses
|
195,000
|
170,000
|
||||||
Selling, general and administrative
|
644,000
|
673,000
|
||||||
Total
|
839,000
|
843,000
|
||||||
Operating income
|
504,000
|
823,000
|
||||||
Interest expense
|
(19,000
|
)
|
(54,000
|
)
|
||||
Interest income - sales-type sublease
|
44,000
|
73,000
|
||||||
Loss from investments in unconsolidated entities, net
|
(236,000
|
)
|
(664,000
|
)
|
||||
Income before income taxes
|
293,000
|
178,000
|
||||||
Provision for income taxes
|
(73,000
|
)
|
(51,000
|
)
|
||||
Net income
|
$
|
220,000
|
$
|
127,000
|
||||
Basic and diluted net income per share
|
$
|
0.03
|
$
|
0.02
|
||||
Weighted average common shares outstanding
|
7,792,185
|
7,792,185
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
220,000
|
$
|
127,000
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Amortization of operating lease right-of-use asset
|
16,000
|
17,000
|
||||||
Loss from investments in unconsolidated entities, net
|
236,000
|
664,000
|
||||||
Distributed earnings from unconsolidated entities
|
63,000
|
-
|
||||||
Deferred income taxes
|
(186,000
|
)
|
(183,000
|
)
|
||||
Changes in:
|
||||||||
Accounts receivable
|
123,000
|
(93,000
|
)
|
|||||
Income taxes receivable/payable
|
215,000
|
90,000
|
||||||
Other current assets
|
4,000
|
36,000
|
||||||
Accounts payable and accrued expenses
|
(19,000
|
)
|
(11,000
|
)
|
||||
Deferred revenue
|
328,000
|
312,000
|
||||||
Operating lease right-of-use liability
|
(17,000
|
)
|
(17,000
|
)
|
||||
Net cash provided by operating activities
|
983,000
|
942,000
|
||||||
Cash flows from investing activities:
|
||||||||
Advances to unconsolidated entities
|
(232,000
|
)
|
(928,000
|
)
|
||||
Repayments from loans to unconsolidated entities
|
170,000
|
351,000
|
||||||
Captial contributions to unconsolidated entities
|
(36,000
|
)
|
-
|
|||||
Principal payments received under sales-type sublease
|
436,000
|
407,000
|
||||||
Net cash provided by (used in) investing activities
|
338,000
|
(170,000
|
)
|
|||||
Cash flows from financing activities:
|
||||||||
Repayment of finance lease obligations
|
(667,000
|
)
|
(673,000
|
)
|
||||
Net cash used in financing activities
|
(667,000
|
)
|
(673,000
|
)
|
||||
Net change in cash and cash equivalents
|
654,000
|
99,000
|
||||||
Cash and cash equivalents - beginning of year
|
1,335,000
|
1,519,000
|
||||||
Cash and cash equivalents - end of year
|
$
|
1,989,000
|
$
|
1,618,000
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$
|
18,000
|
$
|
58,000
|
||||
Income taxes
|
$
|
47,000
|
$
|
140,000
|
||||
Supplemental disclosure of noncash investing and financing activities:
|
||||||||
Recognition of a right-of-use asset
|
$
|
-
|
$
|
161,000
|
||||
Recognition of a right-of-use liability
|
$
|
-
|
$
|
176,000
|
||||
Derecognition of deferred rent liability (previously included in accounts payable and accrued expenses)
|
$
|
-
|
$
|
15,000
|
Classification |
June 30, 2020
|
June 30, 2019
|
|||||||
Assets
|
|||||||||
Current
|
|||||||||
Finance lease assets
|
Investment in sales-type sublease - current
|
$
|
984,000
|
$
|
858,000
|
||||
Long-term
|
|||||||||
Finance lease assets
|
Investment in sales-type sublease - net of current portion
|
-
|
984,000
|
||||||
Operating lease assets
|
Operating lease right-of-use asset
|
112,000
|
144,000
|
||||||
Total leased assets
|
$
|
1,096,000
|
$
|
1,986,000
|
|||||
Liabilities
|
|||||||||
Current
|
|||||||||
Finance lease liabilities
|
Obligations under finance lease - current portion
|
$
|
323,000
|
$
|
1,391,000
|
||||
Operating lease liabilities
|
Operating lease right-of-use liability - current portion
|
38,000
|
34,000
|
||||||
Long-term
|
|||||||||
Finance lease liabilities
|
Obligations under finance lease - net of current portion
|
-
|
323,000
|
||||||
Operating lease liabilities
|
Operating lease right-of-use liability - net of current portion
|
87,000
|
125,000
|
||||||
Total lease liabilities
|
$
|
448,000
|
$
|
1,873,000
|
|||||
Lease Cost
|
|||||||||
Operating lease cost
|
Selling, general and administrative
|
$
|
21,000
|
$
|
21,000
|
||||
Finance lease cost
|
|||||||||
Interest on lease liabilities
|
Interest expense
|
16,000
|
52,000
|
||||||
Sublease income
|
Interest income - sales-type sublease
|
44,000
|
73,000
|
||||||
Net lease (income)
|
$
|
(7,000
|
)
|
$
|
-
|
Maturity of lease liabilities (as of June 30, 2020)
|
Operating lease
|
Finance lease
|
||||||
2020
|
22,000
|
240,000
|
||||||
2021
|
45,000
|
90,000
|
||||||
2022
|
46,000
|
- | ||||||
2023
|
24,000
|
-
|
||||||
Total
|
$
|
137,000
|
$
|
330,000
|
||||
Less amount representing interest
|
12,000
|
7,000
|
||||||
Present value of lease liabilities
|
$
|
125,000
|
$
|
323,000
|
||||
Discount rate
|
5.850
|
%
|
4.555
|
%
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
|
||||||||
Patient Revenue
|
$
|
670,000
|
$
|
489,000
|
||||
Net income
|
$
|
332,000
|
$
|
147,000
|
||||
USNC’s equity in earnings of NeuroPartners LLC and CGK
|
$
|
114,000
|
$
|
45,000
|
Three Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Patient Revenue
|
$
|
354,000
|
$
|
189,000
|
||||
Net income
|
$
|
176,000
|
$
|
22,000
|
||||
USNC’s equity in earnings of NeuroPartners LLC and CGK
|
$
|
61,000
|
$
|
1,000
|
June 30,
2020
|
December 31,
2019
|
|||||||
Current assets
|
$
|
439,000
|
$
|
163,000
|
||||
Noncurrent assets
|
679,000
|
807,000
|
||||||
Total assets
|
$
|
1,118,000
|
$
|
970,000
|
||||
Current liabilities
|
$
|
788,000
|
$
|
380,000
|
||||
Noncurrent liabilities
|
-
|
593,000
|
||||||
Equity (deficit)
|
330,000
|
(3,000
|
)
|
|||||
Total liabilities and equity
|
$
|
1,118,000
|
$
|
970,000
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Patient Revenue
|
$
|
-
|
$
|
1,922,000
|
||||
Rental Income
|
$
|
-
|
$
|
362,000
|
||||
Net income (loss)
|
$
|
37,000
|
$
|
(591,000
|
)
|
|||
USNC’s equity in income (loss) of FOP
|
$
|
9,000
|
$
|
(143,000
|
)
|
Three Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Patient revenue
|
$
|
-
|
$
|
891,000
|
||||
Rental income
|
$
|
-
|
$
|
181,000
|
||||
Net income (loss)
|
$
|
89,000
|
$
|
(409,000
|
)
|
|||
USNC’s equity in income (loss)of FOP
|
$
|
22,000
|
$
|
(99,000
|
)
|
June 30,
2020
|
December 31,
2019
|
|||||||
Current assets
|
$
|
165,000
|
$
|
165,000
|
||||
Noncurrent assets
|
1,148,000
|
1,202,000
|
||||||
Total assets
|
$
|
1,313,000
|
$
|
1,367,000
|
||||
Current liabilities
|
$
|
3,972,000
|
$
|
4,003,000
|
||||
Noncurrent liabilities
|
1,031,000
|
1,091,000
|
||||||
Deficit
|
(3,690,000
|
)
|
(3,727,000
|
)
|
||||
Total liabilities and deficit
|
$
|
1,313,000
|
$
|
1,367,000
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Rental Income
|
$
|
-
|
$
|
-
|
||||
Net Income
|
$
|
7,000
|
$
|
-
|
||||
USNC’s equity in earnings of BOPRE
|
$
|
1,000
|
$
|
-
|
Three Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Rental Income
|
$
|
-
|
$
|
-
|
||||
Net income
|
$
|
-
|
$
|
-
|
||||
USNC’s equity in earnings of BOPRE
|
$
|
-
|
$
|
-
|
|
June 30,
2020
|
December 31,
2019
|
||||||
Current assets
|
$
|
40,000
|
$
|
64,000
|
||||
Noncurrent assets
|
757,000
|
935,000
|
||||||
Total assets
|
$
|
797,000
|
$
|
999,000
|
||||
Current liabilities
|
$
|
-
|
$
|
-
|
||||
Noncurrent liabilities
|
-
|
-
|
||||||
Equity
|
797,000
|
999,000
|
||||||
Total liabilities and equity
|
$
|
797,000
|
$
|
999,000
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Patient revenue
|
$
|
932,000
|
$
|
1,347,000
|
||||
Net loss
|
$
|
(696,000
|
)
|
$
|
(103,000
|
)
|
||
USNC’s equity in loss in MOP
|
$
|
(249,000
|
)
|
$
|
(37,000
|
)
|
Three Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Patient revenue
|
$
|
417,000
|
$
|
737,000
|
||||
Net loss
|
$
|
(462,000
|
)
|
$
|
(65,000
|
)
|
||
USNC’s equity in loss in MOP
|
$
|
(165,000
|
)
|
$
|
(23,000
|
)
|
June 30,
2020
|
December 31,
2019
|
|||||||
Current assets
|
$
|
228,000
|
$
|
247,000
|
||||
Noncurrent assets
|
652,000
|
807,000
|
||||||
Total assets
|
$
|
880,000
|
$
|
1,054,000
|
||||
Current liabilities
|
$
|
2,413,000
|
$
|
1,907,000
|
||||
Noncurrent liabilities
|
344,000
|
427,000
|
||||||
Deficit
|
(1,877,000
|
)
|
(1,280,000
|
)
|
||||
Total liabilities and deficit
|
$
|
880,000
|
$
|
1,054,000
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Patient revenue
|
$
|
894,000
|
$
|
748,000
|
||||
Net loss
|
$
|
(400,000
|
)
|
$
|
(573,000
|
)
|
||
USNC’s equity in loss in CBOP
|
$
|
(100,000
|
)
|
$
|
(139,000
|
)
|
Three Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Patient revenue
|
$
|
427,000
|
$
|
335,000
|
||||
Net loss
|
$
|
(184,000
|
)
|
$
|
(340,000
|
)
|
||
USNC’s equity in loss in CBOP
|
$
|
(48,000
|
)
|
$
|
(83,000
|
)
|
June 30,
2020
|
December 31,
2019
|
|||||||
Current assets
|
$
|
474,000
|
$
|
380,000
|
||||
Noncurrent assets
|
4,571,000
|
4,869,000
|
||||||
Total assets
|
$
|
5,045,000
|
$
|
5,249,000
|
||||
Current liabilities
|
$
|
3,251,000
|
$
|
3,026,000
|
||||
Noncurrent liabilities
|
3,673,000
|
4,019,000
|
||||||
Deficit
|
(1,879,000
|
)
|
(1,796,000
|
)
|
||||
Total liabilities and deficit
|
$
|
5,045,000
|
$
|
5,249,000
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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.
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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.
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101
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Interactive Data Files providing financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 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.
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U.S. NeuroSurgical Holdings, Inc.
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(Registrant)
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Date: August 14, 2020
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By:
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/s/ Alan Gold
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Alan Gold
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Director, President and
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Chief Executive Officer
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and
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Principal Financial Officer
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of the Registrant
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1. |
I have reviewed this Report on Form 10-Q of U.S. NeuroSurgical Holdings, Inc.;
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
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4. |
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and
15d–15(f)) for the registrant and have:
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a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
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b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
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d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and;
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5. |
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
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a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
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b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: August 14, 2020
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/s/ Alan Gold
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Alan Gold
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President & Chairman of the Board
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(Principal Executive Officer
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and Principal Financial Officer)
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(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of U.S. NeuroSurgical Holdings, Inc.
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