ehsi20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from to .

Commission file number: 0-15586

Elite Health Systems Inc.

(Exact name of registrant as specified in its charter)

Delaware	47-5370333
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1131 W 6^th Street, Ontario, CA 91762

(Address of principal executive offices)

(909) 657-2705

(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. Yes ☒ No ☐

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). Yes ☒ No ☐

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):

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒
	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 ☐ No ☒

The number of shares of the registrant’s common stock, $0.01 par value, outstanding as of April 30, 2026 was 28,521,620.

Table of Contents

	March 31,			December 31,
	2026			2025
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,602,000		$	3,758,000
Other current assets		325,000			296,000
Accounts receivable from related parties		245,000			330,000
Stock subscriptions receivable		100,000			100,000
Total current assets		3,272,000			4,484,000

Non-current assets, net
Goodwill		984,000			984,000
Website development costs		66,000			71,000
Capitalized software under development		1,073,000			1,081,000
Fixed asset		10,000			7,000
Operating lease right-of-use asset		28,000			37,000
Total property and equipment		2,161,000			2,180,000

TOTAL ASSETS	$	5,433,000		$	6,664,000

LIABILITIES
Current liabilities:
Operating lease right-of-use liability - current portion	$	29,000		$	38,000
Accounts payable and accrued expenses		899,000			922,000
Claims incurred but not reported		94,000			-
Share pending issuance		100,000
Customer advances from related parties		240,000			380,000
Total current liabilities		1,362,000			1,340,000

Guarantee liability		11,000			11,000
Total liabilities		1,373,000			1,351,000

EQUITY
Common stock - par value $.01; 50,000,000 shares authorized; 28,521,620 and 28,521,620 shares issued and outstanding at March 31, 2026 and December 31, 2025.		285,000			285,000
Stock based compensation		107,000			66,000
Additional paid-in capital		17,211,000			17,211,000
Accumulated deficit		(13,543,000	)		(12,249,000	)
Total stockholders' equity		4,060,000			5,313,000

TOTAL LIABILITIES AND EQUITY	$	5,433,000		$	6,664,000

	Three Months Ended
	March 31,
	2026			2025

Income
Revenue	$	1,398,000		$	-
Cost of revenue		(1,281,000	)		-
		117,000

Costs and expenses:
Selling, general and administrative		1,415,000			427,000

Total		1,415,000			427,000

Operating loss		(1,298,000	)		(427,000	)

Total other income (expense)
Interest income (expense)		4,000			3,000
Total other (expense)		4,000			3,000

Net loss		(1,294,000	)		(424,000	)
Net loss attributable to Elite Health Systems Inc.	$	(1,294,000	)	$	(424,000	)

Basic and diluted net loss per share attributable to Elite Health Systems Inc	$	(0.05	)	$	(0.02	)

Weighted average common shares outstanding, basic and diluted		28,521,620			21,082,146

	Common Stock
	Number				Additional					(Accumulated
	of				Paid-In		Stock to			Deficit)
	Shares		Amount		Capital		Be Issued			Retained Earnings			Total Equity

Balance - December 31, 2024		19,984,924	$	200,000	$	8,185,000	$	238,000		$	(4,445,000	)	$	4,178,000
Issued from prior period								(238,000	)					(238,000	)
Issuance of common stock		1,425,000		14,000		698,000								712,000
Net loss for the quarter ended March 31, 2025											(424,000	)	$	(424,000	)
Balance March 31, 2025		21,409,924		214,000		8,883,000		-			(4,869,000	)	$	4,228,000

Balance -December 31, 2025		28,521,620	$	285,000	$	17,277,000	$	-		$	(12,249,000	)	$	5,313,000
Stock-based compensation expense						41,000								41,000
Net loss for the quarter ended March 31,2026		-		-		-					(1,294,000	)		(1,294,000	)
Balance - March 31, 2026		28,521,620	$	285,000	$	17,318,000	$	-		$	(13,543,000	)	$	4,060,000

	Three Months Ended
	March 31,
	2026			2025

Cash flows from operating activities:
Net loss	$	(1,294,000	)	$	(424,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of network development costs		10,000			-
Amortization of operating lease right-of-use asset		9,000			9,000
Stock-based compensation expense		41,000			-
Income from investments in unconsolidated entities, net		-			-
Changes in:
Stock subscription receivable		-			175,000
Other current assets		(29,000	)		(5,000	)
Accounts receivable		85,000			-
Accounts payable and accrued expenses		(23,000	)		(44,000	)
Claims incurred but not reported		94,000			-
Customer advances		(140,000	)
Operating lease right-of-use liability		(9,000	)		(8,000	)
Net cash used in operating activities		(1,256,000	)		(297,000	)

Cash flows from investing activities:
Receipt of distributions outstanding					11,000
Capitalization of software development costs		-			(526,000	)
Net cash provided by (used in) investing activities		-			(515,000	)

Cash flows from financing activities:
Sale of Shares (not yet issued)		100,000			474,000
Net cash provided by (used in) financing activities		100,000			474,000

Net change in cash and cash equivalents		(1,156,000	)		(338,000	)
Cash and cash equivalents - beginning of period		3,758,000			4,034,000
Cash and cash equivalents - end of period	$	2,602,000		$	3,696,000

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

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.

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.

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 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.

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.

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:

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.

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.

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

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

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.

	Three Months Ended
	March 31,
	2026			2025

Patient revenue	$	213,000		$	285,000

Net (loss) income	$	(266,000	)	$	(305,000	)

EHSHI's equity in (loss) income of CBOP	$	(80,000	)	$	(92,000	)

	March 31,			December 31,
	2026			2025

Current assets	$	296,000		$	348,000

Noncurrent assets		1,033,000			1,185,000

Total assets	$	1,329,000		$	1,533,000

Current liabilities	$	4,341,000		$	4,648,000

Noncurrent liabilities		3,635,000			3,263,000

Deficit		(6,647,000	)		(6,378,000	)

Total liabilities and deficit	$	1,329,000		$	1,533,000

	Three Months Ended March 31,
	2026			2025
Expected life (in years)		5.5			-
Expected volatility		139.3	%		-
Dividend yield		0.0	%		-

	Number of Shares		Weighted Average Exercise Price		Aggregate Fair Market Value		Weighted Average Remaining Contractual Term
Outstanding at December 31, 2025		398,000	$	0.95	$	0.86		9.6
Granted		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at March 31, 2026		398,000	$	0.95	$	0.86		9.4
Exercisable at March 31, 2026		-

	●	The Company believes the Acquisition will strengthen the Company’s health experience, access to providers and management team;
	●	PSS is an operating business with revenue, creating a stronger set of financial statements of the Company;
	●	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;
	●	The Board believes the combined enterprise, the Company with PSS, will have greater access to capital and recognition by the public markets;
	●	A stronger financial and operating company will likely be viewed positively by State and Federal regulators and the commercial insurance and healthcare markets;
	●	The Special Committee believes the terms of the transaction are favorable to the Company;

PART I - FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations.	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	19
Item 4. Controls and Procedures	19
PART II – OTHER INFORMATION	21
Item 1. Legal Proceedings	21
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	21
Item 3. Defaults Upon Senior Securities	21
Item 4. Submission of Matters to a Vote of Security Holders	21
Item 5. Other Information	21
Item 6. Exhibits	21
SIGNATURES	22

ELITE HEALTH SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	Classification	March 31,
		2026		2025
Assets
Long-term
Operating lease assets	Operating lease right-of-use asset	$	28,000	$	63,000
Total leased assets		$	28,000	$	63,000

Liabilities
Current
Operating lease liabilities	Operating lease right-of-use liability - current portion	$	29,000	$	35,000

Long-term
Operating lease liabilities	Operating lease right-of-use liability - net of current portion	$	-	$	29,000
Total lease liabilities		$	29,000	$	64,000

Lease Cost
Operating lease cost	Selling, general and administrative	$	9,000	$	9,000
Net lease expense		$	9,000	$	9,000

	Operating
Maturity of lease liabilities (as of March 31, 2025)	lease
2026		29,000
Total	$	29,000
Less amount representing interest		-
Present value of lease liabilities	$	29,000
Discount rate		4.140	%

	Fair Value
Assets acquired:
Due from clients	$	783,127
Prepaid expense		6,581
Goodwill		4,962,304
Total assets acquired		5,752,012

Liabilities assumed:
Due to clients		612,752
Accounts payable		58,887
Credit cards and accrued liabilities		438,113
Total liabilities assumed		1,109,752
Total purchase price	$	4,642,260

31.1	Certification of President and Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2	Certification of Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1	Certifications of Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

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.

104	The Cover Page Interactive Data File, formatted in Inline XBRL (included within the Exhibit 101 attachments)

	Elite Health Systems, Inc. (Registrant)


Date: May 20, 2026	By	/s/ Dr. Prasad Jeereddi
		Prasad Jeereddi
		Director, President and CEO

	By	/s/ Kenneth Minor
		Kenneth Minor
		CFO and Secretary