Company: EHSI
Filing Date: 2025-09-02
Form Type: PRE 14A
Source: 0001437749-25-028137
Chunk: 15

Company: Elite Health Systems Inc.
Filing Date: 2025-09-02
Form: PRE 14A
Chunk 15
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ute the voting power of current stockholders of the Company. Having this diluted share position will reduce the influence that current stockholders of the Company have on the management of the Company.

Pursuant to the Acquisition Agreement, the Company will issue 3,158,000 new shares of its common stock to the stockholders of PSS. Accordingly, the issuance of the shares of Company’s common stock to the stockholders of PSS in the Acquisition will significantly reduce the ownership stake and relative voting power of each share of Company’s common stock held by its current stockholders. Consequently, following the Acquisition, the ability of the Company’s current stockholders to influence the management of the Company will be substantially reduced.

The number of the Company’s common stock issued as consideration for the Acquisition is not adjustable based on the applicable market price at the time of the issuance so the Acquisition consideration at the closing may have a greater value than at the time the Acquisition Agreement was signed.

The number of the Company’s common stock issued as consideration for the Acquisition will not be adjusted in the event of any change in the stock price of the Company’s common stock prior to the closing of the Acquisition. Any changes in the market price of Company common stock before the completion of the Acquisition will not affect the number of shares the Selling Stockholders will be entitled to receive pursuant to the Acquisition Agreement. As a result, if by the time of completion of the Acquisition the market price of the Company’s common stock has increased from the current market price, then the Selling Stockholders could receive acquisition consideration with substantially increased value for their equity interests in PSS. For example, for each one percentage point that the market value of Company’s common stock rises, there would be a corresponding one percentage point rise in the value of the total acquisition consideration issued to the Selling Stockholders.

Because PSS is a private company, it is difficult to evaluate the value of the combined companies, and the agreed upon consideration the Selling Stockholders will receive for the Acquisition may be greater than the value of the businesses of PSS.

The lack of a public market makes it extremely difficult to determine the fair market value of the businesses of PSS. Since the consideration of the Acquisition was determined based on negotiations between the parties, it is possible that the agreed upon value of the Company’s common stock to be issued in connection with the Acquisition will be greater than the value the businesses of PSS.

If the Company and PSS are not successful in integrating their businesses and organizations, the anticipated benefits of the Acquisition may not be realized