Elite Health Systems Inc. Enters $525K CEO Subordinated Note and Warrants

What Happened
Elite Health Systems Inc. announced that, on July 31, 2026, its independent board members approved a $525,000 subordinated promissory note with the Company’s CEO and chair, Dr. Prasad Jeereddi. The note is unsecured, bears interest at 10% per annum, is due July 31, 2027, and includes a 2% prepayment penalty. At the same time the Company issued a warrant to Dr. Jeereddi to purchase up to 110,526 shares of common stock at $0.95 per share, exercisable through July 31, 2031; the warrant may be exercised cashlessly if the underlying shares are not registered.

Key Details

• $525,000 subordinated note, unsecured, 10% annual interest, maturity July 31, 2027, 2% prepayment penalty.
• Warrant to purchase 110,526 shares at $0.95 per share, exercisable through July 31, 2031; cashless exercise permitted if shares aren’t registered.
• Shares issuable under the warrant are not currently registered and carry transfer restrictions.
• Note Agreement allows the Company to accept additional investments on the same terms up to a $1.5 million aggregate.

Why It Matters
This is a related-party financing (CEO is the lender / warrant holder), though approved by independent board members, so investors should note both the immediate cash infusion and the potential for dilution. The 110,526-warrant position, if exercised, would increase share count; cashless exercise could convert warrants to shares without bringing new cash into the company. The note’s 10% interest and prepayment penalty indicate the cost of the financing, and the provision allowing up to $1.5M aggregate could increase leverage or dilution if further advances are made. Review future filings for any registration of the warrant shares or additional related investments.