Company: EHSI
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001437749-25-026553
Chunk: 19

Company: Elite Health Systems Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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 and others as well as the sharing of rental space and other services. Dr. Jeereddi is the majority owner of PSS and our Executive Director is an employee.

Note I – Line of Credit

On April 25, 2025 the Company’s subsidiary, Elite Health Plan, Inc. (“Plan”) entered into a Note and Line of Credit with Rao R. Yalamanchili (“Lender”) for $2,500,000, the (“LOC”). The LOC is available to be drawn in the future, in whole or in part, to aid Plan in meeting the tangible net equity requirements of the State of California, Department of Managed Health Care for licensure as a health care service plan. Simultaneously with execution of the note, Plan entered into a Subordination Agreement that subordinates the rights of Lender to all present and future creditors of Plan. There is no outstanding balance under the LOC.

Note J – Subsequent Events

In July, 2025 the Company commenced a private placement of shares of the Company’s common stock for expected proceeds of a minimum of $2,000,000 and up to a maximum of $5,000,000 at a price per share of $0.95.

In July, 2025, the Company also announced that it had entered into a non-binding letter of intent to acquire all the outstanding shares of PSS in exchange for 3,158,000 shares of the Company’s common stock. Dr. Prasad Jeereddi, the Company’s Chief Executive Officer, owns 51% of PSS and Dr. Praveena Jeereddi (Dr. Prasad Jeereddi’s daughter) owns 49% of PSS. The completion of the PSS transaction is subject to and contingent on a number of factors including: (i) satisfactory completion of due diligence by the Company, (ii) execution of the definitive Acquisition Agreement by the Company and the selling stockholders of PSS, and (iii) the approval by the Company stockholders of the Acquisition Agreement as well as an increase in the authorized common stock of the Company.

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In August, 2025 the Board approved the establishment of an equity incentive plan with a maximum number of shares issuable pursuant to the plan of 4,500,000. The plan is subject to approval by the Company’s stockholders and approval of an increase in the maximum number of shares authorized for issuance.

Item 2.  Management Discussion and Analysis of Financial Condition and Results of Operations.

Critical Accounting Policies