Elite Health Plan, Inc. |
12 Months Ended | |||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||
Elite Health Plan, Inc. [Abstract] | ||||||||||||||||||||||||||
Elite Health Plan, Inc. |
Note F – Elite Health Plan, Inc.
The Company has been exploring opportunities to expand to other businesses that could benefit its current operations and
relationships. Effective October 1, 2021, USN acquired all of the outstanding shares of capital stock of Elite Health, a California corporation. The transaction with Elite
Health was structured as an investment by Elite Health shareholders in USN, and as such did not have an immediate effect on the percentage ownership of the shareholders of the Company. However, the Company’s interest in USN, which currently holds
substantially all of the interest in the Company’s businesses and operations, was effectively 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 the Company 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 Company shares.
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, management believes 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.
Management 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 will be effective in doing so.
The results of the acquisition were included in the consolidated financial statements from the closing date. The acquisition
was not considered material to the consolidated financial statements. As a result, no pro forma information has been provided.
The total fair value of the
purchase price for the acquisition was $315,000, which included the fair value of the noncontrolling shares issued, including the
acquired Company. To date Elite Health is still in its infancy and the Company tested its investment for impairment as of December 31, 2022, and determined that the investment was impaired, and an impairment loss was recorded against the Goodwill
balance.
The following table summarizes the changes in the carrying value of goodwill for the acquisition of Elite Health Plan, Inc.:
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