Elite Health Systems inks $525K note with CEO
Elite Health Systems Inc. entered into a financing with its CEO, Dr. Prasad Jeereddi, consisting of a $525,000 subordinated note and an accompanying warrant.
Rhea-AI Filing Summary
Elite Health Systems Inc. entered into a financing with its CEO, Dr. Prasad Jeereddi, consisting of a $525,000 subordinated note and an accompanying warrant. The note is unsecured, bears 10% annual interest, includes a 2% prepayment penalty, and matures on July 31, 2027.
The warrant allows Dr. Jeereddi to purchase up to 110,526 shares of common stock at $0.95 per share, exercisable in whole or part through July 31, 2031, including on a cashless basis if the shares are not then registered. These warrant shares are currently unregistered and subject to transfer restrictions. The agreement permits additional investment on the same terms up to an aggregate of $1.5 million.
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8-K Event Classification
2 items: 1.01, 9.01
2 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Subordinated Note Principal: $525,000
Note Interest Rate: 10% per annum
Prepayment Penalty: 2%
+5 more
8 metrics
Subordinated Note Principal
$525,000
Principal amount of the subordinated note with the CEO
Note Interest Rate
10% per annum
Annual interest rate on the subordinated note
Prepayment Penalty
2%
Penalty applied to prepayment of the note
Note Maturity Date
July 31, 2027
Maturity date of the subordinated note
Warrant Shares
110,526 shares
Maximum number of common shares purchasable under the warrant
Warrant Exercise Price
$0.95 per share
Exercise price for shares under the warrant
Warrant Expiration
July 31, 2031
Final exercise date for the warrant
Aggregate Investment Capacity
$1.5 million
Maximum aggregate investment permitted on the same terms
Key Terms
subordinated note, warrant agreement, cashless basis, restrictions on transfer
4 terms
subordinated note financial
"approved entering into a $525,000 subordinated note and warrant agreement"
A subordinated note is a loan-like security a company issues that ranks below its other debts when paying creditors; if the company runs into trouble, holders of subordinated notes are repaid only after senior lenders. Because they are lower in the repayment order, these notes typically offer higher interest to compensate for greater risk, so investors balance the chance of higher returns against a higher likelihood of loss in distress—like taking a back-seat on a bus with a bigger fare.
warrant agreement financial
"entered into a warrant agreement with Dr. Jeereddi to purchase shares"
A warrant agreement is the legal document that lays out the rules for stock warrants — special certificates that let their holder buy company shares at a set price within a certain time. It explains how and when warrants can be exercised, transferred, changed, or canceled, and what happens to them if the company raises money or is sold; investors care because these terms affect potential future ownership, dilution of shares, and the real value of the warrants.
cashless basis financial
"may be exercised ... on a cashless basis in the event the shares are not registered"
An agreement executed on a cashless basis lets a holder convert or exercise a security (like options, warrants, or conversion rights) without paying money upfront; instead the holder receives a smaller number of shares equal in value to what the cash would have purchased. Think of trading a coupon for fewer slices of a cake rather than handing over cash for the full slice. For investors, it affects how much ownership and dilution occur and avoids immediate cash outlays.
restrictions on transfer financial
"Shares issuable pursuant to the warrant are not currently registered and accordingly carry certain restrictions on transfer"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What financing did Elite Health Systems (EHSI) approve on July 31, 2026?
Elite Health Systems approved a $525,000 subordinated note and related warrant with its CEO, Dr. Prasad Jeereddi. The note is unsecured, carries 10% annual interest, and matures on July 31, 2027, forming part of a broader potential $1.5 million facility.
What are the key terms of EHSI’s subordinated note with its CEO?
The note has a principal amount of $525,000, is unsecured, and bears 10% interest per year. It is due on July 31, 2027 and includes a 2% prepayment penalty, with the instrument subordinated to other obligations as described.
What warrant rights were granted by Elite Health Systems (EHSI)?
Elite Health Systems issued a warrant for up to 110,526 shares of common stock at an exercise price of $0.95 per share. The warrant is exercisable in whole or in part through July 31, 2031, including on a cashless basis under specified registration conditions.
How much additional capital can Elite Health Systems (EHSI) raise on these terms?
The note agreement allows Elite Health Systems to accept additional investment on the same terms up to an aggregate of $1.5 million. The disclosed $525,000 tranche is part of this capacity, leaving room for further similar financings if pursued.
AI-generated analysis. How Rhea-AI works. Not financial advice.
