Elite Health Systems Inc 10-Q for FY2026 Q1
Elite Health Systems Inc. (EHSI)
About this 10-Q
Elite Health Systems Inc filed this 10-Q on May 20, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.4M
- compared with $0 a year earlier
- Net loss
- $1.29M
- compared with a net loss of $424K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT |
For the transition period from to .
Commission file number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of |
(I.R.S. Employer |
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incorporation or organization) |
Identification No.) |
(Address of principal executive offices)
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(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).
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):
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Large accelerated filer ☐ |
Accelerated filer ☐ |
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Smaller reporting company |
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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
The number of shares of the registrant’s common stock, $0.01 par value, outstanding as of April 30, 2026 was
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Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations. |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk. |
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
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ELITE HEALTH SYSTEMS INC. AND SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS |
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March 31, |
December 31, |
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2026 |
2025 |
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(Unaudited) |
(Audited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
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Other current assets |
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Accounts receivable from related parties |
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Stock subscriptions receivable |
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Total current assets |
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Non-current assets, net |
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Goodwill |
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Website development costs |
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Capitalized software under development |
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Fixed asset |
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Operating lease right-of-use asset |
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Total property and equipment |
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TOTAL ASSETS |
$ | $ | ||||||
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LIABILITIES |
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Current liabilities: |
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Operating lease right-of-use liability - current portion |
$ | $ | ||||||
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Accounts payable and accrued expenses |
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Claims incurred but not reported |
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Share pending issuance |
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Customer advances from related parties |
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Total current liabilities |
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Guarantee liability |
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Total liabilities |
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EQUITY |
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Common stock - par value $; |
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Stock based compensation |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders' equity |
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TOTAL LIABILITIES AND EQUITY |
$ | $ | ||||||
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See accompanying notes to the consolidated financial statements |
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ELITE HEALTH SYSTEMS INC. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(UNAUDITED) |
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Three Months Ended |
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March 31, |
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2026 |
2025 |
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Income |
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Revenue |
$ | $ | ||||||
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Cost of revenue |
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Costs and expenses: |
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Selling, general and administrative |
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Total |
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Operating loss |
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Total other income (expense) |
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Interest income (expense) |
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Total other (expense) |
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Net loss |
( |
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Net loss attributable to Elite Health Systems Inc. |
$ | ( |
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Basic and diluted net loss per share attributable to Elite Health Systems Inc |
$ | ( |
) | $ | ( |
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Weighted average common shares outstanding, basic and diluted |
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The accompanying notes to condensed consolidated financial statements are an integral part hereof. |
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ELITE HEALTH SYSTEMS INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF EQUITY |
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(UNAUDITED) |
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Common Stock |
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Number |
Additional |
(Accumulated |
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of |
Paid-In |
Stock to |
Deficit) |
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Shares |
Amount |
Capital |
Be Issued |
Retained Earnings |
Total Equity | |||||||||||||||||||
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Balance - December 31, 2024 |
$ | $ | $ | $ | ( |
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Issued from prior period |
( |
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Issuance of common stock |
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| Net loss for the quarter ended March 31, 2025 | (424,000 | ) | $ | ( |
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| Balance March 31, 2025 | ( |
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Balance -December 31, 2025 |
$ | $ | $ | $ | ( |
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Stock-based compensation expense |
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| Net loss for the quarter ended March 31,2026 | - | ( |
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Balance - March 31, 2026 |
$ | $ | $ | $ | ( |
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See accompanying notes to the consolidated financial statements |
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ELITE HEALTH SYSTEMS INC. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(UNAUDITED) |
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Three Months Ended |
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March 31, |
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2026 |
2025 |
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Cash flows from operating activities: |
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Net loss |
$ | ( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Amortization of network development costs |
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Amortization of operating lease right-of-use asset |
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Stock-based compensation expense |
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Income from investments in unconsolidated entities, net |
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Changes in: |
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Stock subscription receivable |
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Other current assets |
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Accounts receivable |
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Accounts payable and accrued expenses |
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Claims incurred but not reported |
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Customer advances |
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Operating lease right-of-use liability |
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Net cash used in operating activities |
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| Cash flows from investing activities: | ||||||||
| Receipt of distributions outstanding | ||||||||
| Capitalization of software development costs | ( |
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| Net cash provided by (used in) investing activities | ( |
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Cash flows from financing activities: |
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Sale of Shares (not yet issued) |
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Net cash provided by (used in) financing activities |
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Net change in cash and cash equivalents |
( |
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Cash and cash equivalents - beginning of period |
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Cash and cash equivalents - end of period |
$ | $ | ||||||
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The accompanying notes to condensed consolidated financial statements are an integral part hereof |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Preparation
Organization and Business
Elite Health Systems Inc, formerly U.S. NeuroSurgical Holdings, Inc., is focused on improving and providing access to healthcare and offering other healthcare related services through its wholly-owned subsidiaries, Elite Health Plan, Inc. and Physician Support Systems Inc. As used herein, unless the context indicates otherwise, the term "Company" and "Registrant" means Elite Health Systems Inc. and its wholly-owned subsidiaries, Elite Health Systems Holdings Inc. (“EHSH”), and the wholly-owned subsidiaries of USN, USN Corona, Inc., Elite Health Plan, Inc., Elite Health Plan of Nevada, Inc. and Physician Support Systems Inc. (“PSS”).
Company Background.
The Company is focused on improving and providing access to healthcare and offering other healthcare related services. Through its subsidiaries the Company is developing and offering one or more Medicare Advantage plans and providing healthcare management solutions to physician and other health groups.
In October 2021, the Company’s wholly-owned subsidiary, Elite Health Systems Holdings Inc. (“EHSH”), acquired all of the outstanding shares of capital stock of Elite Health Plan, Inc., a California corporation and, in exchange therefor, the former holders of which were issued newly-issued shares of EHSH, which at the time of the transaction represented
Beginning in 2021, the Company through its subsidiaries dedicated resources to exploring the regulatory requirements and timelines to apply and secure licenses to operate a Medicare Advantage plan in California and Nevada. EHSH formed Elite Health Plan of Nevada, Inc. (“Elite Nevada”) to apply for a license to operate a Medicare Advantage plan in Nevada while Elite Health Plan, Inc. pursued a plan to establish a Medicare Advantage plan in California. The Company then determined it would be more expeditious to apply and secure a license in California and then, if and when appropriate, apply for a license in Nevada. Elite Health applied for a Knox-Keene license to offer managed health care plans in California in 2024, which was approved by the State of California and CMS the Centers for Medicare and Medicaid Services “(CMS”) in 2025. Elite Health and Elite Health Plan of Nevada, Inc. are wholly-owned subsidiaries of EHSH, are managed and operated in a similar manner. In California, Elite Health has developed a network of providers who are well-versed in Medicare Advantage plans and addressing the healthcare needs of seniors in the communities in which they practice, and following licensure began onboarding members of its Medicare Advantage Plans in October 2025. Though it may do so in the future, Elite Health Plan of Nevada, Inc., at this time, has not taken any further steps to advance or submit an application for a Knox-Keene license to offer managed health care plans in Nevada. Elite Health began reporting member revenue on January 1, 2026. There can be no assurance that the Company and Elite Health will be successful in maintaining the necessary licenses to operate Medicare Advantage plans in any jurisdiction or be effective in establishing the network of providers and developing the systems required to operate a managed care business.
In November 2025 the Company purchased all the outstanding stock of PSS from its former shareholders and began operations as part of EHSI providing a suite of tailored healthcare management solutions to medical practices that enhance operational efficiency, compliance, and patient care.
The Company’s headquarters are now located at 1131 W 6th Street, Suite 225, Ontario, CA 91762 and its telephone number is (949) 249-1170.
Recent Accounting Pronouncements
FASB ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
The FASB issued ASU 2023-07 on November 27, 2023, which is intended to improve reportable segment disclosure requirements. Under previous guidance, while entities were required to disclose segment revenue and profit or loss, there has been limited disclosure around the reporting of segment expenses. In addition to enhanced disclosures about significant segment expenses, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company has adopted the requirements of the expanded segment disclosures as of December 31, 2025.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, aimed at increasing transparency in income tax reporting. It requires entities to disaggregate their effective tax rate reconciliation (using percentages and amounts) and income taxes paid, breaking them down by specific categories and jurisdictions. The pronouncement is effective for fiscal periods beginning after December 15, 2024. The Company has adopted the additional disclosure as of December 31, 2025.
In September 2025, FASB ASU 2025-06 modernizes internal-use software accounting by replacing rigid "project stage" rules with a principles-based framework aligned with agile development. It streamlines capitalization, integrates website development costs, and mandates clearer disclosures, effective for annual periods beginning after Dec. 15, 2027. The Company is currently evaluating the impact of ASU 2025-06.
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.
All amounts are shown in nearest thousands in the Consolidated Financial Statements and accompanying notes therein.
Liquidity and Going Concern
In fiscal year 2025, the Company incurred a net loss of $
However, management has considered its plans to continue the Company as a going concern, concentrating on the establishment and operation of managed health care plans. The Company raised gross proceeds of approximately $
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 months ended March 31, 2026 and 2025 was net loss for the periods and issuance of common stock.
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. However, the Company is not currently generating revenue.
Basic loss per share has been computed using the weighted-average number of shares of common stock outstanding during the period. The numerator for the calculation of basic and diluted earnings per share is net loss and the denominator is the weighted-average number of common shares outstanding during the period.
The tables below present financial information associated with our leases.
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Classification |
March 31, |
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2026 |
2025 |
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Long-term |
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Operating lease assets |
Operating lease right-of-use asset |
$ | $ | |||||||
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Total leased assets |
$ | 28,000 | $ | |||||||
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Liabilities |
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Current |
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Operating lease liabilities |
Operating lease right-of-use liability - current portion |
$ | $ | |||||||
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Long-term |
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Operating lease liabilities |
Operating lease right-of-use liability - net of current portion |
$ | $ | |||||||
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Total lease liabilities |
$ | 29,000 | $ | |||||||
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Lease Cost |
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Operating lease cost |
Selling, general and administrative |
$ | $ | |||||||
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Net lease expense |
$ | 9,000 | $ | |||||||
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Operating |
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Maturity of lease liabilities (as of March 31, 2025) |
lease | |||
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2026 |
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Total |
$ | |||
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Less amount representing interest |
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Present value of lease liabilities |
$ | |||
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Discount rate |
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Note B- CB Oncology Partners
CBOP was organized September 1, 2017, to acquire the rights of a new center in Cutler Bay, FL. Effective November 15, 2019, CBOP assumed, a loan with BB&T bank, that it had entered into in order to finance the purchase of equipment and build out of the new center, as well as the associated property and equipment. The Company and other investors were guarantors of the loan. In July 2020 CBOP and BB&T agreed to a reduction in the monthly payments for the life of the loan and an extension in the term of the loan to July of 2027.
During the years ended December 31, 2025 and 2024, the Company did not lend any additional funds to CBOP. This equity investment was fully impaired due to Equity Method accounting. These allowances and write-offs were recorded as losses from investments in unconsolidated entities. For the years ended December 31, 2025 and 2024, the Company’s equity in loss of CBOP was $
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 Company was approached by one of the investors in CBOP where the investor would payoff the outstanding loan, releasing the Company of its guarantee in exchange for the Company’s ownership interest in CBOP. The Company has evaluated the proposal and in return wrote off the remaining value of amounts due the Company from CBOP of $
The following table presents the summarized financial information of CBOP:
CBOP Condensed Income Statement Information
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Three Months Ended |
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2026 |
2025 |
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Patient revenue |
$ | $ | ||||||
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Net (loss) income |
$ | ( |
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EHSHI's equity in (loss) income of CBOP |
$ | ( |
) | $ | ( |
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CBOP Condensed Balance Sheet Information
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March 31, |
December 31, |
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2025 |
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Current assets |
$ | $ | ||||||
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Noncurrent assets |
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Total assets |
$ | $ | ||||||
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Current liabilities |
$ | $ | ||||||
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Noncurrent liabilities |
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Deficit |
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Total liabilities and deficit |
$ | $ | ||||||
Note C – Elite Health
Background. Elite Health Plan was formed in 2017 with the purpose of establishing a managed care organization that will develop and operate Medicare Advantage plans for seniors in California. In addition to obtaining the required authorizations, including a Knox-Keene license from California’s Department of Managed Health Care (“DMHC”), necessary for the operation of full service health plans in California, and approval from the Centers for Medicare & Medicaid Services (“CMS”), the Company is considering engaging in related business and health services to support this mission.
Medicare Advantage plans are offered by private companies and are regulated by the federal government and licensed by the state in which those companies operate. Now that its initial plans are approved for 2026 to operate in the California counties of San Bernadino, Riverside, and Los Angeles, it plans to expand the types of plans it provides to include special needs plans with the objective of addressing the growing number of Medicare eligible seniors in those markets and growing the number of members in its plans through a combination of marketing and other strategies. The Company ultimately expects to apply to the State of Nevada and other states. Because of the collective experience of its founders and affiliates as physicians, software executives, and health plan administrators, we believe that EHP will be positioned to bring to California and Nevada a comprehensive, community-based and cost-effective health care management service solution for these communities.
Filing in California. The Company initially applied for a license to operate a Medicare Advantage plan in Nevada. However, the Company determined that a reciprocity agreement between California and Nevada would result in a more expedient path to licensing in Nevada upon the securing of approvals in California first. For this reason, Elite Health applied for and obtained the Knox-Keene license in California, and secured necessary approvals from CMS in 2025. The Company began operating as a Medicare Advantage plan in January 2026. Such license is subject to many attestations and audits and as a result there can be no assurance that such license can be maintained.
Note D – 2025 Equity Incentive Plan
The Company’s stockholders approved the 2025 Equity Incentive Plan at a special meeting of stockholders on October 31, 2025. The plan provides for an aggregate maximum of
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Three Months Ended March 31, |
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2026 |
2025 |
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Expected life (in years) |
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Expected volatility |
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Dividend yield |
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Number of Shares |
Weighted Average Exercise Price |
Aggregate Fair Market Value |
Weighted Average Remaining Contractual Term |
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Outstanding at December 31, 2025 |
$ | $ | 9.6 | |||||||||||||
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Granted |
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Forfeited or expired |
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Outstanding at March 31, 2026 |
$ | $ | ||||||||||||||
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Exercisable at March 31, 2026 |
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Note E – Income Taxes
The Company’s income tax rate, which includes federal and state income taxes, was
NOTE F – Acquisition of Physician Support Systems, Inc.
Following approval of the Company’s stockholders at a meeting held on October 31, 2025, the Company completed its acquisition of all of the outstanding shares of Physician Support Systems, Inc. from its stockholders in exchange for
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The Company believes the Acquisition will strengthen the Company’s health experience, access to providers and management team; |
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PSS is an operating business with revenue, creating a stronger set of financial statements of the Company; |
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The Board believes the addition of an operating business with significant provider connections and management expertise will benefit the Company’s business and thus the stockholders of the Company; |
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The Board believes the combined enterprise, the Company with PSS, will have greater access to capital and recognition by the public markets; |
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A stronger financial and operating company will likely be viewed positively by State and Federal regulators and the commercial insurance and healthcare markets; |
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The Special Committee believes the terms of the transaction are favorable to the Company; |
The Company recorded the acquired tangible and intangible assets and liabilities assumed based on their estimated fair values. The company attributed all the intangible assets to assembled workforce, expected synergies, strategic positioning, and other future economic benefits that do not meet the contractual or separability for recognition as distinct intangible assets under ASC 805. Accordingly, management concluded that all the intangible assets be allocated to goodwill.
The company assessed the significance of the acquisition and determined it did not meet the definition of a significant subsidiary as defined in Reg S-X, Rule 1-02(w). Accordingly, no proforma results are provided.
The following table summarizes the fair values of the assets acquired and liabilities assumed on the date of the acquisition :
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Fair Value |
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Assets acquired: |
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Due from clients |
$ | |||
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Prepaid expense |
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Goodwill |
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Total assets acquired |
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Liabilities assumed: |
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Due to clients |
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Accounts payable |
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Credit cards and accrued liabilities |
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Total liabilities assumed |
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Total purchase price |
$ | |||
Note G – Goodwill impairment
Goodwill and intangible assets that have indefinite useful lives are recorded at cost and are not amortized but, instead, tested at least annually for impairment. The Company assesses the impairment of goodwill on an annual basis or whenever events or changes in circumstances indicate that the fair value of these assets is less than the carrying value. The Company determined that the loss of a customer of PSS was a circumstance that required a review of the carrying value of goodwill associated with the acquisition of PSS, despite the fact that the acquisition was completed just two months prior to the balance sheet date. As noted above in footnote G, the value considered by the Special Committee of the Board was primarily related to assembled workforce, expected synergies, strategic positioning, and other future economic benefits which are not easily quantified in a discounted cash flow analysis. The Company assessed the cash flow of the stand-alone PSS business and considered the going concern, lack of available debt capacity and anticipated equity returns an investor would require in a start-up business in evaluating the weighted average cost of capital in discounting such cash flows to present value. As a result, the Company adjusted goodwill to a newly calculated fair value of $
Note H – Segment Reporting
The Company applies ASC 280, Segment Reporting, in determining reportable segments for its financial statement disclosure. Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer (“CEO”). The Company has determined that it operates two operating segments, EHP and PSS, but that these segments meet the criteria for aggregation for reporting purposes as one reportable segment.
Note I – Transactions with Related Parties
The Company recorded compensation with directors and officers of the Company for the year ended December 31, 2025 consisting of stock grants valued at $
During the year ended December 31, 2025 and the quarter ended March 31, 2026, the Company compensated PSS for services of Ms. Reeher and others as well as the sharing of rental space and other services. Dr. Jeereddi was the majority owner of PSS and Ms. Reeher was the Executive Director. PSS was acquired by the Company on November 4, 2025. In addition, each of the customers of PSS are companies with either a familial and or management relationship to Dr. Jeereddi. Accordingly, revenue associated with PSS of $
Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations.
Critical Accounting Policies
The Condensed Consolidated Financial Statements of Elite Health Systems 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 2025 Annual Report on Form 10-K. In particular, judgment is used in areas such as determining and assessing possible asset impairments, including investments in, and advances, to unconsolidated entities.
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.
Recent events
None
Results of Operations
Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025
Selling, general, and administrative expenses of $1,165,000 for the first quarter of 2025 were 148% higher than the $427,000 incurred during the comparable period in 2025, due mostly to the acquisition of PSS and an increase in cost at EHP now that the health plan is operating.
During the three months ended March 31, 2026 and 2025 the Company recorded no income tax benefit or provision.
For the three months ended March 31, 2026, the Company reported a net loss of $1,355,000 as compared to $424,000 for the same period a year earlier. The net loss was primarily due to the acquisition of PSS.
Liquidity and Capital Resources
The Company’s primary sources of liquidity are from equity transactions discussed below.
Net cash used in operating activities for the three months ended March 31, 2026, was $1,256,000 as compared to $461,000 for the same period a year earlier. This change is primarily due to the Company’s acquisition of PSS and higher expenses of EHP now that the plan has begun operations.
The Company raised total proceeds of an aggregate of $100,000 and $474,000 during the quarters ended March 31, 2026 and 2025, respectively. As a result of these issuances, as of March 31, 2026, there were outstanding 28,521,620 shares of the Company’s Common Stock.
For this sale of securities in connection with private placement, no general solicitation was used, no commissions were paid, all participants in the private placement were accredited investors, and the Company relied on the exemption from registration available under Section 4(a)(2) and/or Rule 506(b) of Regulation D promulgated under the Securities Act with respect to transactions by an issuer not involving any public offering.
The Company presently intends to use the net proceeds from the private placement principally to execute the plan of Elite Health to establish a managed care organization that will operate as a Medicare Advantage plan for seniors.
The Company presently intends to use the net proceeds from the private placement principally to execute the plan of Elite Health to establish a managed care organization that will operate as a Medicare Advantage plan for seniors.
The Company incurred a net loss of $7,804,000 compared to $2,055,000 in fiscal year 2024 with a further loss of $1,294,000 during the quarter ended March 31, 2026 as a result of the launch on January 1, 2026 of its EHP’s Medicare Advantage plans. As a result, it has limited revenue and significant expenses. The Company has funded operations through the sale of common stock. The Company had an accumulated deficit in stockholders’ equity of $13,543,000 and $12,249,000 at March 31, 2026 and December 31, 2025, respectively; cash and cash equivalents of $2,602,000 and $3,758,000 at March 31, 2026 and December 31, 2025, respectively; and working capital of $1,849,000 and $3,144,000 at March 31, 2026 and December 31,2025, respectively. In addition, the Company currently does not have access to capital through a line of credit nor other readily available sources of capital. Together, these factors raised substantial doubt regarding the Company’s ability to continue as a going concern at March 31, 2026. The Company raised an additional $3.7 million through the private sale of shares of Common stock in fiscal 2025 to support its plan, bringing the total outstanding to 28,521,620 shares as of March 31, 2026 and December 31, 2025.
However, management has considered its plans to continue the Company as a going concern, concentrating on the establishment and operation of managed health care plans. The Company raised gross proceeds of approximately $14 million in support of this business opportunity through the sale of its Common Stock in private placements and will need additional capital in 2026. The Company is evaluating different approaches to raise the capital that it will require, as well as other strategic options to support operations. Management believes its plan alleviates the substantial doubt and that it will be successful in its planned business initiatives and will be able to continue as a going concern through at least the next twelve months. However, there can be no assurance that sources of capital will be available to the Company at that time or, if available, can be obtained on terms favorable to the Company.
Risk Factors
We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The factors listed under the caption “Risk Factors” in Annual Report on our Form 10-K for the fiscal year ended December 31, 2025, 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.
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. Factors that could cause actual results to differ materially from those currently anticipated include the following:
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Uncertainties relating to our ability to successfully implement our strategy of developing a Medicare Advantage plan under our Elite Health subsidiaries; |
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Uncertainty over our ability to achieve a Medicare Advantage license in California in a timely manner, acquire managed health consumers in California, expand consumer enrollment beyond this initial state, or diversify and expand our portfolio of products and services, our business and results of operations will be significantly impaired; |
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Our ability to raise capital in the future on satisfactory terms; |
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Our financial condition and liquidity; |
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Uncertainty over our ability to successfully implement management's plan to improve liquidity, including the ability to manage costs, systems and growth; |
All forward looking statements should be considered in the context of the risks and other factors described above and in "Risk Factors" (Part I, Item 1A of the Company’s Annual Report on Form 10-K for the Fiscal Year ended December 31, 2025), "Quantitative and Qualitative Disclosures about Market Risk" (Part II, Item 7A of the Company’s Annual Report on Form 10-K for the Fiscal Year ended December 31, 2025), and "Management’s Discussion and Analysis" (Part I, Item 2 of this Form 10-Q). We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.
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 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.
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.
(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, 2026. 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 no material weakness as of March 31, 2026
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 September 30, 2024, management is in the process of developing plans to remediate the material weakness identified above.
The Company is subject to lawsuits, investigations and potential claims arising out of the ordinary conduct of its business. The Company is not currently involved in any material litigation.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
applicable.
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31.1 |
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31.2 |
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32.1 |
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101 |
Interactive Data Files providing financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 in iXBRL (Inline 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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The Cover Page Interactive Data File, formatted in Inline XBRL (included within the Exhibit 101 attachments) |
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.
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Elite Health Systems, Inc. (Registrant) |
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Date: May 20, 2026 |
By |
/s/ Dr. Prasad Jeereddi |
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Prasad Jeereddi |
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Director, President and CEO |
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| By | /s/ Kenneth Minor | ||
| Kenneth Minor | |||
| CFO and Secretary | |||
EXHIBIT 31.1
CERTIFICATION OF PRESIDENT AND CEO (PRINCIPAL EXECUTIVE OFFICER)
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Prasad Jeereddi, certify that:
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I have reviewed this Report on Form 10-Q of Elite Health Systems Inc.; |
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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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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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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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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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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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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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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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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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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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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. |
| Date: May 20, 2026 |
/s/ Prasad Jeereddi Prasad Jeereddi President & CEO (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER
(PRINCIPAL FINANCIAL OFFICER)
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kenneth Minor, certify that:
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I have reviewed this Annual Report on Form 10-Q of Elite Health Systems Inc.; |
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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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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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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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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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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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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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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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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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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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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: May 20, 2026 |
/s/ Kenneth Minor Kenneth Minor CFO & Secretary (Principal Financial Officer) |
EXHIBIT 32.1
Certificate pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Elite Health Systems Inc. on Form 10-Q for the period ending March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Prasad Jeereddi, President and Chief Executive Officer of Elite Health Systems, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
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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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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Elite Health Systems, Inc. |
/s/ Prasad Jeereddi
Prasad Jeereddi
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 20, 2026