Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

Results of operations

2025 Compared to 2024

The Company acquired PSS in November 2025 and recorded revenue associated with leasing of employees and other consulting services to its health clinic customers of $1,024,000 for the two months ended December 31, 2025. No revenue was recorded in 2024. Costs of revenue, $906,000 in 2025, represent costs of employees and benefits billed to such customers. There were no patient revenue or expenses in 2026 or 2025.

SG&A increased by $2,164,000 or 121% from $1,793,000 in 2024 to $3,957,000 in 2025, due to costs associated with preparing for and making its application to the State of California to operate a Medicare Advantage plan. In addition, the Company incurred operating costs of PSS beginning in November 2025 including human resource, accounting, technical and management costs. Loss from investments in unconsolidated entities decreased from $524,000 in 2024 to nothing in 2025. The Company reported a net loss of $7,804,000 in 2025, as compared to $2,055,000 in 2024. The Company incurred no income tax expense or benefit in 2025 as compared to a benefit of $163,000 in 2024.

Liquidity and capital resources

At December 31, 2025, the Company had working capital of $3,144,000 as compared to $4,155,000 at December 31, 2024. Total assets increased by $2,343,000 from 2024 to 2025 principally due to goodwill and accounts receivable associated with the Company's purchase of PSS as well as investment in software solutions for its Medicare Advantage business. Cash and cash equivalents at December 31, 2025, were $ 3,758,000 compared to $4,034,000 at December 31, 2024.

Net cash used by operating activities was $(2,940,000) in 2025, as compared to $(1,515,000) in 2024. Net cash provided by financing activities was $3,728,000 in 2025, associated primarily with common stock issued to acquire PSS and as part of a private placement to investors, compared to $4,820,000 in 2024.

For the year ended December 31, 2025, net cash used in investing activities was $(1,064,000) as compared to net cash of $263,000 provided by investing activities in 2024. The increase represents goodwill associated with the purchase of PSS as well as an investment in capitalized software and website costs to launch our Medicare Advantage plan in California.

The Company has determined that its best opportunity for long term success is to build on opportunities presented by Elite Health and concentrate its efforts and resources on establishing a managed care organization that will develop and operate Medicare Advantage plans for seniors in California and other areas in the U.S. and to pursue other opportunities related to this activity. Elite Health is applying to operate initially in California, and later in other states, with the objective of addressing the growing number of Medicare eligible seniors in those markets.

The Company raised total proceeds of an aggregate of $3.7 and $4.8 million in private placements of shares in fiscal 2025 and 2024, respectively. As a result of these issuances, shares issued for board compensation and the acquisition of PSS, shares of the Company's common stock outstanding at April 8, 2026, were 28,521,620.

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 to establish a managed care organization that will operate as a Medicare Advantage plan for seniors.

In fiscal year 2025, the Company incurred a net loss of $7,804,000 compared to $2,055,000 in fiscal year 2024. As of December 31, 2025, the Company had an accumulated deficit of $12,249,000, cash and cash equivalents of $3,758,000 and working capital of $3,144,000. 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 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. As noted above, the Company raised gross proceeds of approximately $3.7 million in fiscal 2025 to support this business opportunity through the sale of its Common Stock in a private placement and believes it has access to additional capital through 2026. 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 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.

Off-balance sheet arrangements

None

Critical accounting policies

Estimates and assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Revenue Recognition

The Company recorded revenue from customers of PSS following its acquisition in November 2025. Such revenue is primarily related to billing for the leasing of employees for health clinics in California.

Investments in unconsolidated entities

The Company accounts for its investments in unconsolidated entities by the equity method. The Company records its share of such earnings (losses) in the consolidated statements of operations as "Income (loss) from investments in unconsolidated entities". The carrying value of the Company's investments in unconsolidated entities is recorded in the consolidated balance sheets. The Company records losses of the unconsolidated entities only to the extent of the Company's interest in, and advances to, the entities.