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Item 1.01.
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Entry into a Material Definitive Agreement.
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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.