Item 1.01. Entry into a Material Definitive Agreement.
U.S. NeuroSurgical, Inc.("USN"), a wholly-owned subsidiary of the registrant,
U.S. NeuroSurgical Holdings, Inc. ("USNU" or the "Company"), entered into a
Share Exchange Agreement and Plan of Reorganization dated as of October 1, 2021
(the "Share Exchange Agreement") with Elite Health Plan, Inc., a California
corporation ("Elite Health") and its shareholders. Under the terms of the Share
Exchange Agreement, USN will acquire all of the outstanding shares of capital
stock of Elite Health and, in exchange therefor, the former holders of Elite
Health will receive newly-issued shares of USN, which when issued will represent
15% of the shares of USN after the transaction.
The transaction with Elite Health is structured as an investment by Elite Health
shareholders in USN, a subsidiary of the Company, and as such will not have an
immediate effect on the percentage ownership of the shareholders of USNU.
However, USNU's interest in USN, which currently holds substantially all of the
interest in USNU's businesses and operations, will be diluted by 15% as a result
of the issuance of the new USN shares to the former holders of Elite Health. In
addition, the Company agreed with the former Elite Health shareholders that if
there is no trading market for the shares of USN after six months from the
closing of the transaction, such holders may request that USNU take steps that
would give such holders access to the public trading market, which could be
accomplished at the Company's election through an exchange of such holders'
shares for USNU shares.
The above description of the Share Exchange Agreement does not purport to be a
complete description and is qualified in its entirety by reference to the full
text of the Share Exchange Agreement, which is attached hereto as Exhibit 2.1
and is incorporated herein by reference.
Elite Health is a private company with a limited operating history. It was
formed in 2017 with the purpose of establishing a managed care organization that
will operate as a Medicare Advantage plan for seniors. It is expected that
Elite Health will operate in California, initially San Bernadino, Riverside, and
Orange Counties, with the objective of addressing the growing number of Medicare
eligible seniors in those markets. 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
southern California a comprehensive and cost-effective solution for these
communities.
Elite Health is in the process of applying for a Knox Keene license to operate a
Medicare Advantage plan in California, and has taken preliminary steps toward
identifying a network of providers who are well-versed in the healthcare needs
of seniors in the communities in which they practice. Elite Health founders and
affiliates also have considerable experience with healthcare record based
software and will endeavor to utilize the latest advances in information
systems, including AI and data analytics, in its processes to enhance each
patient experience and control medical costs.
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.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description of Exhibit
2.1 Share Exchange Agreement and Plan of Reorganization, dated as of
October 1, 2021, between U.S. NeuroSurgical, Inc., Elite Health Plan,
Inc. and all of the shareholders of Elite Health Plan, Inc.
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