Elite Health Systems Inc.

Elite Health Systems Inc, formerly U.S. NeuroSurgical Holdings, Inc. (“Holdings”) through its wholly-owned subsidiaries, is developing a business to provide Medicare Advantage plans and related services, concentrating initially in California and Nevada. As used herein, unless the context indicates otherwise, the term "Company" and "Registrant" means Elite Health Systems Inc. and its wholly-owned subsidiary, Elite Health Systems Holdings Inc. (“EHSH”), and the wholly-owned subsidiaries of EHSH, U.S. NeuroSurgical Physics, Inc., USN Corona, Inc., Elite Health Plan, Inc. and Elite Health Plan of Nevada, Inc. Elite Health Systems Inc, a Delaware corporation, was formed in July 1993 originally as U.S. NeuroSurgical, Inc (“USN”). On September 3, 2015, pursuant to the Agreement and Plan of Reorganization (the “Merger Agreement”), dated as of September 3, 2015, by and among USN, Holdings and U.S. NeuroSurgical Merger Sub, Inc., the Company adopted a new holding company organizational structure whereby USN was a wholly owned subsidiary of Holdings. This structure did not result in any changes to the assets or operations of the Company, but management believes that it will create a more flexible framework for possible future transactions and organizational and operational adjustments. On September 30, 2024, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment (the “Charter Amendment”) to its Certificate of Incorporation (as amended, the “Charter”) to change the legal name of the Company from U.S, Neurosurgical Holdings, Inc. to Elite Health Systems Inc., effective as of September 30, 2024. The Company’s board of directors (the “Board”) approved the Charter Amendment pursuant to Section 242 of the General Corporation Law of the State of Delaware.

Company Background.

The Company was previously engaged in the ownership and operations of radiation treatment centers. Most of these businesses have been sold or wound down, and the Company has been actively pursuing opportunities to expand to other businesses that could benefit its current operations and relationships. Effective October 1, 2021, the Company acquired all of the outstanding shares of capital stock of Elite Health Plan, Inc., a California corporation (“Elite Health”) and, in exchange therefor, the former holders of Elite Health were issued newly-issued shares of EHSH, which following the transaction represent 15% of the outstanding shares of EHSH. Effective November 27, 2023, the Company entered into a Share Exchange Agreement with the holders of these minority interests in EHSH, which resulted in making EHSH’s wholly-owned subsidiary of the Company and the former minority holders of EHSH 15% owners of the Company immediately following the exchange. As a result of the November 27, 2023, transaction, 1,392,739 shares of the Company’s Common Stock were issued, bringing the total outstanding to 9,284,924 shares as of that date. Since that time, the Company raised an additional $5,825,000 through the private sale of 11,650,000 shares of Common stock and in addition to 475,000 shares issued as compensation to certain officers and directors, bringing the total outstanding to 21,409,924 shares as of March 24, 2025 and 19,984,924 at December 31, 2024.

The Company has determined that its best opportunity for long term success is to concentrate its efforts and resources on establishing a managed care organization that will develop and operate Medicare Advantage plans for, and provide related health services to, seniors in California and other areas in the U.S., and could pursue growth through other commercial opportunities and strategic transactions, including partnerships, acquisitions or mergers related and complementary to these activities and services.

In furtherance of this plan, Elite Health Plan, Inc. has submitted documentation for a Knox-Keene license to offer managed health care plans in California. In addition, EHSH recently formed Elite Health Plan of Nevada, Inc. to apply for a license to operate a Medicare Advantage plan in Nevada. Elite Heath Plan, Inc. and Elite Health Plan of Nevada, Inc., both 100% owned by EHSH and managed and operated in a similar manner, are collectively referred to herein as “Elite Health.” In California, Elite Health has taken preliminary steps toward identifying 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. Elite Health currently has no revenue, and will not be in a position to generate significant revenue while it seeks to obtain a license to operate a Medicare Advantage plan in California. The success of Elite Health will depend, in part, on timely obtaining all necessary approvals and gaining access to a sufficient network of providers and enrolling a critical level of subscribers. There can be no assurance that the Company and Elite Health will be successful in obtaining 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.

Until January 2024, the Company's executive offices were located at 2400 Research Boulevard, Suite 325, Rockville, MD 20850. The Company’s headquarters are now located at 1131 W 6 th Street, Suite 225, Ontario, CA 91762 and its telephone number is (949) 249-1170.

Elite Health

Background. Elite Health Plan, Inc. 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 pursuing 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 businesses 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. Once its plans are approved, Elite Health expects to initially operate in the California counties of San Bernadino, Riverside, and Los Angeles, with the objective of addressing the growing number of Medicare eligible seniors in those markets. The Company then expects to apply to the State of Nevada and begin operations in Clark County, Nevada. Because of the collective experience of its founders and affiliates as physicians, software executives, and health plan administrators, we believe that Elite Health will be positioned to bring to California and Nevada a comprehensive, community-based and cost-effective health care management service solution for these communities.

Medicare; Medicare Advantage. Medicare is the federal health insurance program for people aged 65 and over, which was expanded to cover people under 65 with certain disabilities and people with end-stage renal disease requiring dialysis or kidney transplant. Medicare consists of four parts, labeled A through D. Part A provides hospitalization benefits financed largely through Social Security taxes and requires beneficiaries to pay out-of-pocket deductibles and coinsurance. Part B provides benefits for medically necessary services and supplies including outpatient care, physician services and home health care. Parts A and B are referred to as Original Medicare.

As an alternative to Original Medicare, beneficiaries may elect to receive their Medicare benefits through Part C, also known as Medicare Advantage. Under Medicare Advantage, managed care organizations contract with CMS to provide services directly to Medicare beneficiaries as well as through employer and union groups. Managed care organizations typically receive a fixed monthly premium per member from CMS that varies based upon the county in which the member resides, demographic factors of the member such as age, gender and institutionalized status and the health status of the member.

Medicare prescription drug coverage, or Medicare Part D, is a voluntary benefit for Medicare beneficiaries. The Medicare Part D prescription drug benefit is supported by risk sharing with the federal government through risk corridors designed to limit the losses and gains of the participating drug plans and by providing reinsurance for catastrophic drug costs.

Enrollment in Medicare is experiencing significant growth from an aging population with growth in Medicare Advantage plans in particular seeing large gains over the last several years. According to a 2024 Kaiser Family Foundation article, Medicare Advantage enrollment includes 32.8 million members, accounts for 54% of the eligible Medicare population and $462 billion of Federal Medicare spending. The Congressional Budget Office (CBO) projects that the share of all Medicare beneficiaries enrolled in Medicare Advantage plans will rise to 64% by 2034. The Medicare Advantage market is currently dominated by major traditional health insurance entities UnitedHealth Group and Humana accounting for nearly half of all Medicare Advantage enrollees nationwide.

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 secure approvals in California first. For this reason, Elite Health is focusing on completing the process toward obtaining a Knox-Keene license in California and securing necessary approvals from CMS with a final submission of plan details in June 2025. There can be no assurance that a license will be issued or, if issued, it will be done in a timely manner.

Management and Capabilities. Elite Health has identified and is relying on experienced personnel, consultants and other industry-centric service providers and experts to assist Elite Health in applying for and securing appropriate licensing and establishing the necessary corporate infrastructure to operate Medicare Advantage plans in California.

Dr. Prasad Jeereddi was the founder of the Elite Health business and was overseeing the activities of Elite Health at the time of its sale to the Company in 2021. In July of 2024, , Dr. Jeereddi joined the Company as Chairman of the Board and CEO. He is an accomplished endocrinologist and has been involved extensively in strategy, management, technological advancements and general operations of multiple healthcare enterprises. Many of the recent private placement investors are through relationships that Dr. Jeereddi has established with physicians and healthcare professionals in California and in India, where he has significant relationships with major hospitals and healthcare organizations.

Elite’s Approach to Healthcare Delivery. Elite Health has taken preliminary steps toward identifying 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. Elite has already met network adequacy at over 90% in all required physician primary/specialty, and facility specialty categories for its intended service area of Los Angeles, Riverside and San Bernardino counties. Elite Health founders and affiliates also have considerable experience with health care record-based software and have contracted with RAM Technologies and their exclusive focus on Medicare Advantage, Managed Medicaid, and Special Needs health plans, leading to major enhancements blending knowledge and best practices, from successful launch, administration, to optimization of subscriber benefit products.

The Company plans to contract with health care providers, hospitals and facilities, for health care services for its Medicare Advantage plan enrollees. The Company will seek to rely on local preferred providers and other entities located within the areas in which the majority of the enrollees reside, providing a localized focus and leveraging the established reputation and wide range of services of the healthcare system. The Company will endeavor to offer beneficiaries a greater choice of providers than a standard health maintenance organization. Furthermore, with a localized focus, Elite Health will strive to develop a unique marketing advantage and reduce the need for a broad mass marketing undertaking.

The same approach will also apply for local healthcare providers as we aim to simplify required “prior authorizations,” owing to a close-knit network of providers, thus saving clinicians countless hours. Furthermore, we believe that many clinicians will have a preference for a local entrant into the market, enabling them to avoid the larger well-known insurance names with relatively burdensome processes and protocols along with an opportunity to participate in the success of the Company’s platform.

Competition. If and when the required approvals are obtained, we will operate in highly competitive markets across the full expanse of health care benefits and services. Our competitors include organizations ranging from startups to highly sophisticated Fortune 50 global enterprises, for-profit and non-profit companies, and private and government-sponsored entities. New entrants to our markets and business combinations among our competitors and suppliers also contribute to a dynamic and competitive environment. We expect to compete fundamentally on the quality and value we provide to those we provide, which can include elements such as product and service innovation; use of technology; consumer and provider engagement and satisfaction; and sales, marketing and pricing. See Part I, Item 1A, “Risk Factors” for additional discussion of our risks related to competition.

Regulation. Any Medicare Advantage plans that are offered by Elite Health will be regulated by the federal government and licensed by the state in which those companies operate. At the federal level, CMS exercises authority to oversee and approve the premiums and premium amounts that will be charged to beneficiaries under Medicare Advantage plans and applicable regulation requires plans to adhere to the premium and deductible amounts that will be determined by the actuarial formulas utilized by CMS. At the state level, any Medicare Advantage plan must be licensed by the state in which the offering company operates as a risk bearing entity.

Delivery of Services. The Company and Elite Health understand that the keys to success with a managed care organization are delivering comprehensive patient care and containing costs. In addition to developing a plan to obtain necessary approvals, gaining access to a competent network of providers and enrolling a critical level of subscribers, it will be necessary for the plan to provide high quality patient care efficiently and cost effectively. There can be no assurance that the Company and Elite Health will be effective in doing so. Elite Health currently has no revenue and will not be in a position to generate revenue for an indefinite period while it seeks to obtain a license to operate a Medicare Advantage plan in California and then Nevada.

Based on the demographics in the US, including an aging population, the Company’s management believes that there will be a growing need to provide this population with comprehensive health care programs. Specifically, due to the historical growth and expansion trends of Medicare Advantage plans nationally, including increased member enrollment, the Company believes that this type of plan presents an opportunity for Elite Health. While the principals of Elite Health were formerly active in the development of Medicare Advantage plans, and the delivery of services under such plans, neither the Company nor its subsidiaries have any operating history in Medicare plans.

Employees

The Company has three full time employees hired through a staffing agency, who are supported by industry experts and external consultants throughout the licensing and start-up process. Detailed recruitment plans are in place to manage compliance, finance and operational needs to support needs following the licensing process, if successfully completed.

Disclosure Regarding Forward Looking Statements

Statements contained in this Annual Report on Form 10-K that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from that projected or suggested herein due to certain risks and uncertainties including, without limitation, the timing and ultimate collectability of accounts receivable for gamma knife procedures from different payor groups such as Medicare and private payors; competition; technological obsolescence; government regulation and malpractice liability. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested are included in Item 1A, Risk Factors, and may also be identified from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”) and the Company’s public announcements, copies of which are available from the SEC or from the Company upon request.