Elite Health Systems Inc

Previous wording

The Condensed Consolidated Financial Statements of U.S. NeuroSurgical Holdings, 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 2023 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.

Current wording

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 2023 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.

Previous wording

Selling, general and administrative expense of $437,000 for the second quarter of 2024 was 81% higher than the $242,000 incurred during the comparable period in 2023, due mostly to the start-up costs for Elite Health in 2024.

Current wording

Selling, general, and administrative expenses of $387,000 for the third quarter of 2024 were 156% higher than the $151,000 incurred during the comparable period in 2023, due mostly to the start-up costs for Elite Health in 2024.

Previous wording

During the three months ended June 30, 2024, the Company recognized $2,000 gain from its investment in unconsolidated entities compared to a loss of $269,000 during the same period in 2023.

Current wording

During the three months ended September 30, 2024, the Company recognized $97,000 gain from its investment in unconsolidated entities compared to $2,000 during the same period in 2023 due to the gain on the sale of the Company’s interest in Boca West IMP.

Previous wording

For the three months ended June 30, 2024, the Company reported a net loss of $435,000 as compared to $511,000 for the same period a year earlier. The net loss was primarily due to investment in Elite prior to generation of any revenue.

Current wording

For the three months ended September 30, 2024, the Company reported a net loss of $290,000 as compared to $127,000 for the same period a year earlier. The net loss was primarily due to investment in Elite prior to generation of any revenue.

Previous wording

Six Months Ended June 30, 2024, Compared to Three Months Ended June 30, 2023

Current wording

Nine Months Ended September 30, 2024, Compared to Nine Months Ended September 30, 2023

Previous wording

Selling, general and administrative expense of $913,000 for the first six months of 2024 was 146% higher than the $371,000 incurred during the comparable period in 2023, due mostly to the start-up costs for Elite Health in 2024.

Current wording

Selling, general, and administrative expenses of $1,299,000 for the first nine months of 2024 were 149% higher than the $522,000 incurred during the comparable period in 2023, due mostly to the start-up costs for Elite Health in 2024.

Previous wording

During the six months ended June 30, 2024, the Company recognized $4,000 gain from its investment in unconsolidated entities compared to a loss of $267,000 during the same period in 2023.

Current wording

During the nine months ended September 30, 2024, the Company recognized $101,000 gain from its investment in unconsolidated entities compared to a loss of $266,000 during the same period in 2023 due to the gain on the sale of the Company’s interest in Boca West IMP.

Previous wording

During the six months ended June 30, 2024, and 2023, the Company recorded no income tax benefit or provision.

Current wording

During the nine months ended September 30, 2024, and 2023, the Company recorded no income tax benefit or provision.

Previous wording

For the six months ended June 30, 2024, the Company reported a net loss of $747,000 as compared to $638,000 for the same period a year earlier. The net loss was primarily due to the lack of revenue.

Current wording

For the nine months ended September 30, 2024, the Company reported a net loss of $1,034,000 as compared to $670,000 for the same period a year earlier. The net loss was primarily due to the lack of revenue.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2024, was $916,000 as compared to $433,000 for the same period a year earlier. This change is primarily due to the Company using cash to invest in the Elite business. During the six months ended June 30, 2024, the Company received no distributed earnings from unconsolidated entities as compared to $23,000 in the first six months of 2023.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2024, was $988,000 as compared to $571,000 for the same period a year earlier. This change is primarily due to the Company using cash to invest in the Elite business. During the nine months ended September 30, 2024, the Company received $268,000 of distributed earnings from unconsolidated entities as compared to $23,000 in the first nine months of 2023.

Previous wording

On January 16, 2024, the Company held an initial closing of a private placement of shares of the Company’s common stock to raise gross proceeds of not less than $1,000,000, and up to $2,000,000, at a price of $0.50 per share. Since the initial closing, the Company amended the terms of the private placement to raise up to $3,000,000 maximum on April 15, 2024 and amended further on July 10, 2024 to increase the maximum pursuant to the private placement to $5,000,000. As of August 15, 2024 the Company raised an aggregate of $3,000,000. As a result of these issuances, as of August 15, 2024, there were outstanding 13,484,924 shares of the Company’s Common Stock.

Current wording

On January 16, 2024, the Company held an initial closing of a private placement of shares of the Company’s common stock to raise gross proceeds of not less than $1,000,000, and up to $2,000,000, at a price of $0.50 per share. Since the initial closing, the Company amended the terms of the private placement to raise up to $3,000,000 maximum on April 15, 2024 and amended further on July 10, 2024 to increase the maximum pursuant to the private placement to $5,000,000. As of September 30, 2024 the Company raised an aggregate of $4,050,000. As a result of these issuances, as of September 30, 2024, there were outstanding 17,384,924 shares of the Company’s Common Stock.

Previous wording

In fiscal year 2023, the Company incurred a net loss of $816,000 compared to $1,572,000 in fiscal year 2022 and a net loss of $747,000 and $638,000 during the six months ended June 30, 2024, and 2023, respectively. As of June 30, 2024, the Company had an accumulated deficit in stockholders’ equity of $3,137,000, cash and cash equivalents of $2,195,000 and working capital of $1,265,000. 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 June 30, 2024. 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. As noted above, during the six months ended June 30, 2024, the Company raised gross proceeds of $3 million in support of this business opportunity through the sale of its Common Stock in a private placement and believes it has access to additional capital through the remainder of 2024. Additionally, the Company believes that these activities and resulting expenses can be managed to the level of cash resources on hand and expected to be raised. Management believes its plan alleviates the substantial doubt, 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.

Current wording

In fiscal year 2023, the Company incurred a net loss of $816,000 compared to $1,572,000 in fiscal year 2022 and a net loss of $1,034,000 and $670,000 during the nine months ended September 30, 2024, and 2023, respectively. As of September 30, 2024, the Company had an accumulated deficit in stockholders’ equity of $3,424,000, cash and cash equivalents of $3,173,000 and working capital of $3,098,000. 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 September 30, 2024. 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. As noted above, during the nine months ended September 30, 2024, the Company raised gross proceeds of $4,050,000 million in support of this business opportunity through the sale of its Common Stock in a private placement and believes it has access to additional capital in fiscal 2025. Additionally, the Company believes that these activities and resulting expenses can be managed to the level of cash resources on hand and expected to be raised. Management believes its plan alleviates the substantial doubt, 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.