10-Q
First Choice Healthcare Solutions, Inc. (FCHS)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: ### September 30, 2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ___________to ____________.
Commission
File Number: 000-53012
FIRST
CHOICE HEALTHCARE SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 90-0687379 |
|---|---|
| (State<br> or other jurisdiction<br><br> <br>of<br> incorporation) | (IRS<br> Employer<br><br> <br>Identification<br> No.) |
95Bulldog Blvd, Suite 202, Melbourne, Florida 32901
(Address of principal executive offices)
(321)725-0090
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large<br> accelerated filer | ☐ | Accelerated<br> filer | ☐ |
|---|---|---|---|
| Non-accelerated<br> filer | ☒ | Smaller<br> reporting company | ☒ |
| Emerging<br> growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As
of November 11, 2025, there were 32,958,288 shares outstanding of the registrant’s Common Stock, par value $0.001.
| PART I. FINANCIAL INFORMATION | |||
|---|---|---|---|
| ITEM<br> 1 | Financial<br> Statements | ||
| Condensed consolidated balance sheets as of September 30, 2025 (unaudited) and December 31, 2024 | 3 | ||
| Condensed<br> consolidated statements of operations for the three and nine months ended September 30, 2025 and September 30, 2024<br> (unaudited) | 4 | ||
| Condensed consolidated statement of stockholders’ deficit for the three and nine months ended September 30, 2025 and September 30, 2024 (unaudited) | 5 | ||
| Condensed<br> consolidated statements of cash flows for the nine months ended September 30, 2025 and September 30, 2024<br> (unaudited) | 6 | ||
| Notes to condensed consolidated financial statements (unaudited) | 7 | ||
| ITEM<br> 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 17 | |
| ITEM<br> 3. | Quantitative and Qualitative Disclosures about Market Risk | 19 | |
| ITEM<br> 4. | Controls and Procedures | 19 | |
| PART II. OTHER INFORMATION | |||
| ITEM<br> 1. | Legal Proceedings | 20 | |
| ITEM<br> 1A. | Risk Factors | 20 | |
| ITEM<br> 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 20 | |
| ITEM<br> 3. | Defaults Upon Senior Securities | 20 | |
| ITEM<br> 4. | Mine Safety Disclosures | 20 | |
| ITEM<br> 5. | Other Information | 20 | |
| ITEM<br> 6. | Exhibits | 20 | |
| SIGNATURES | 21 |
| 2 |
| --- |
FIRST
CHOICE HEALTHCARE SERVICES, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(indollars)
| As of<br> <br>December 31, 2024 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 2,430 | $ | 19,915 | ||
| Other Current Assets | 1,173 | 72,270 | |||
| Total current assets | 3,603 | 92,185 | |||
| Property, plant and equipment, net | 150,653 | 222,816 | |||
| Operating lease right-of-use assets | 3,445,332 | 3,734,869 | |||
| Deposits | 513,522 | 461,132 | |||
| Total assets | 4,113,110 | $ | 4,511,002 | ||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||
| Current liabilities: | |||||
| Accounts payable and accrued expenses | 11,098,453 | $ | 8,634,991 | ||
| Operating lease liabilities, current portion | 404,447 | 367,125 | |||
| Notes payable | 25,658,086 | 24,272,066 | |||
| Total current liabilities | 37,160,986 | 33,274,182 | |||
| Long term liabilities: | |||||
| PPP loan payable | - | 471,300 | |||
| Operating lease liabilities, non-current portion | 2,994,260 | 3,237,060 | |||
| Total liabilities | 40,155,246 | $ | 36,982,542 | ||
| Stockholders’ deficit: | |||||
| Series A Super Voting Preferred Stock; 4 shares authorized, issued and outstanding at September 30, 2025 and December 31, 2024 | - | - | |||
| Series A Convertible Preferred stock; 0.01 par value, 40,000 shares authorized, 147 and 147 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively | 1 | 1 | |||
| Preferred stock | 1 | 1 | |||
| Common stock, 0.001 par value, 100,000,000 shares authorized 32,958,288 and 32,958,288 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively | 32,958 | 32,958 | |||
| Additional paid-in capital | 35,206,268 | 35,276,650 | |||
| Treasury stock, 74,453 common shares, at cost | — | — | |||
| Accumulated deficit | (71,281,363 | ) | (67,781,149 | ) | |
| Total stockholders’ deficit | (36,042,136 | ) | (32,471,540 | ) | |
| Total liabilities and stockholders’ deficit | 4,113,110 | $ | 4,511,002 |
All values are in US Dollars.
See
the accompanying notes to these unaudited condensed consolidated financial statements.
| 3 |
| --- |
FIRST
CHOICE HEALTHCARE SERVICES, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited,in dollars)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Revenue | ||||||||||||
| Revenue, net of discounts | $ | 230 | $ | (29,955 | ) | $ | 5,686 | $ | (19,801 | ) | ||
| Gross profit | 230 | (29,955 | ) | 5,686 | (19,801 | ) | ||||||
| Operating expenses | ||||||||||||
| Compensation expense | 145,616 | 111,660 | 400,854 | 330,815 | ||||||||
| Selling, general and administrative expenses | 475,778 | 308,338 | 1,384,866 | 1,075,158 | ||||||||
| Total operating expenses | 621,394 | 419,998 | 1,785,720 | 1,405,973 | ||||||||
| Operating loss | (621,164 | ) | (449,953 | ) | (1,780,034 | ) | (1,425,774 | ) | ||||
| Other income (expenses) | ||||||||||||
| Gain (loss) on sale of equipment | 1,100 | (48,327 | ) | 5,250 | ||||||||
| PPP Loan Forgiveness | - | 471,300 | - | |||||||||
| Interest expense, net | (841,724 | ) | (368,354 | ) | (2,143,153 | ) | (2,464,387 | ) | ||||
| Total other income (expenses), net | (841,724 | ) | (367,254 | ) | (1,720,180 | ) | (2,459,137 | ) | ||||
| Loss from continuing operations before income taxes | (1,462,888 | ) | (817,207 | ) | (3,500,214 | ) | (3,884,911 | ) | ||||
| Income taxes expense (benefit) | - | - | - | - | ||||||||
| Net loss | (1,462,888 | ) | (817,207 | ) | (3,500,214 | ) | (3,884,911 | ) | ||||
| Preferred stock dividends | - | (23,209 | ) | - | (69,624 | ) | ||||||
| Net loss attributable to common shareholders | $ | (1,462,888 | ) | $ | (840,416 | ) | $ | (3,500,214 | ) | $ | (3,954,535 | ) |
| Basic and diluted loss per common share | ||||||||||||
| Net loss per common share | $ | (0.04 | ) | $ | (0.02 | ) | $ | (0.11 | ) | $ | (0.12 | ) |
| Weighted average number of common shares outstanding, basic and diluted | 32,958,288 | 32,958,288 | 32,958,288 | 32,958,288 |
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
| --- |
FIRST
CHOICE HEALTHCARE SOLUTIONS, INC.
CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
For
the Nine Months Ended September 30, 2025 and September 30, 2024
(unaudited, in dollars)
| Common stock | Preferred stock | Additional<br> <br>Paid in | Accumulated | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | |||||||||||
| Balance, December 31, 2023 | 32,958,288 | $ | 32,958 | 147 | $ | 1 | $ | 35,369,995 | $ | (63,933,006 | ) | $ | (28,530,052 | ) | |||
| Dividends payable on Preferred Stock | — | — | — | — | (23,209 | ) | — | (23,209 | ) | ||||||||
| Net loss | — | — | — | — | — | (1,205,341 | ) | (1,205,341 | ) | ||||||||
| Balance, March 31, 2024 | 32,958,288 | $ | 32,958 | 147 | $ | 1 | $ | 35,346,786 | $ | (65,138,347 | ) | $ | (29,758,602 | ) | |||
| Dividends payable on Preferred Stock | — | — | — | — | (23,206 | ) | — | (23,206 | ) | ||||||||
| Net loss | — | — | — | — | — | (1,862,361 | ) | (1,862,361 | ) | ||||||||
| Balance, June 30, 2024 | 32,958,288 | $ | 32,958 | 147 | $ | 1 | $ | 35,323,580 | $ | (67,000,708 | ) | $ | (31,644,170 | ) | |||
| Dividends payable on Preferred Stock | — | — | — | — | (23,210 | ) | — | (23,210 | ) | ||||||||
| Net loss | — | — | — | — | — | (817,207 | ) | (817,207 | ) | ||||||||
| Balance, September 30, 2024 | 32,958,288 | $ | 32,958 | 147 | $ | 1 | $ | 35,300,370 | $ | (67,817,914 | ) | $ | (32,484,587 | ) | |||
| Common stock | Preferred stock | Additional<br> <br>Paid in | Accumulated | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | |||||||||||
| Balance, December 31, 2024 | 32,958,288 | $ | 32,958 | 147 | $ | 1 | $ | 35,276,650 | $ | (67,781,149 | ) | $ | (32,471,540 | ) | |||
| Dividends payable on Preferred Stock | (23,460 | ) | (23,460 | ) | |||||||||||||
| Net loss | — | — | — | — | — | (1,397,892 | ) | (1,397,892 | ) | ||||||||
| Balance, March 31, 2025 | 32,958,288 | $ | 32,958 | 147 | $ | 1 | $ | 35,253,190 | $ | (69,179,041 | ) | $ | (33,892,892 | ) | |||
| Dividends payable on Preferred Stock | (23,461 | ) | (23,461 | ) | |||||||||||||
| Net loss | — | — | — | — | — | (639,436 | ) | (639,436 | ) | ||||||||
| Balance, June 30, 2025 | 32,958,288 | $ | 32,958 | 147 | $ | 1 | $ | 35,229,729 | $ | (69,818,477 | ) | $ | (34,555,789 | ) | |||
| Balance | 32,958,288 | $ | 32,958 | 147 | $ | 1 | $ | 35,229,729 | $ | (69,818,477 | ) | $ | (34,555,789 | ) | |||
| Dividends payable on Preferred Stock | (23,460 | ) | (23,460 | ) | |||||||||||||
| Net loss | — | — | — | — | — | (1,462,887 | ) | (1,462,888 | ) | ||||||||
| Balance, September 30, 2025 | 32,958,288 | $ | 32,958 | 147 | $ | 1 | $ | 35,206,269 | $ | (71,281,364 | ) | $ | (36,042,136 | ) | |||
| Balance | 32,958,288 | $ | 32,958 | 147 | $ | 1 | $ | 35,206,269 | $ | (71,281,364 | ) | $ | (36,042,136 | ) |
See
the accompanying notes to these unaudited condensed consolidated financial statements.
| 5 |
| --- |
FIRST
CHOICE HEALTHCARE SOLUTIONS, INC
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in dollars)
| For the Nine Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||
| Cash flows from operating activities: | ||||||
| Net loss | $ | (3,500,214 | ) | $ | (3,884,911 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||
| Depreciation | 13,836 | 25,965 | ||||
| Loss on sale of assets | 48,327 | - | ||||
| Forgiveness of PPP Loan | (471,300 | ) | - | |||
| Interest expense | 2,143,153 | - | ||||
| Amortization of debt discount | - | 260,246 | ||||
| Preferred dividends – accrued | - | 69,624 | ||||
| Provision for bad debts | - | 1,582 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | - | 41,661 | ||||
| Other current assets | 18,707 | (301,920 | ) | |||
| Decrease in leased assets | 289,537 | 260,373 | ||||
| Increase in deposits | - | |||||
| Increase in accounts payable and accrued liabilities | 1,110,947 | 2,978,967 | ||||
| Decrease in lease liabilities | (205,478 | ) | 1,233,798 | |||
| Net cash provided by (used in) operating activities | $ | (552,485 | ) | $ | 685,385 | |
| Cash flows from investing activities: | ||||||
| Proceeds from the sale of fixed assets | 10,000 | - | ||||
| Purchase of property and equipment | (1,638,987 | ) | ||||
| Net cash (used in) provided by investing activities | $ | 10,000 | $ | (1,638,987 | ) | |
| Cash flows from financing activities: | ||||||
| Interest paid | (90,000 | ) | - | |||
| Proceeds from issuance of convertible notes | 615,000 | 942,500 | ||||
| Net cash provided by (used in) financing activities | $ | 525,000 | $ | 942,500 | ||
| Net change in cash | (17,485 | ) | (11,102 | ) | ||
| Cash, beginning of period | 19,915 | 12,607 | ||||
| Cash, end of period | $ | 2,430 | $ | 1,505 | ||
| Supplemental disclosure of cash flow information: | ||||||
| Cash paid for interest | $ | - | $ | - | ||
| Cash paid for income taxes | $ | - | $ | - | ||
| Supplemental disclosure of cash flow information: | ||||||
| Note Payable addition from OID | $ | - | $ | 235,625 | ||
| Common shares issued for convertible notes - inducement | $ | - | $ | 15,812 |
See
the accompanying notes to these unaudited condensed consolidated financial statements.
| 6 |
| --- |
FIRST
CHOICE HEALTHCARE SOLUTIONS, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2025
(Unaudited)
NOTE
1— ORGANIZATION, BUSINESS AND PRINCIPLES OF CONSOLIDATION
First Choice Healthcare Solutions, Inc. (“FCHS,” “the Company,” “we,” “our” or “us”) is actively engaged in implementing a defined growth strategy aimed at building a network of localized, integrated healthcare services platforms, comprised of nurse practitioner driven primary care clinics providing services including family primary care, anti-aging, dermatology, weight loss, hormone replacement therapy, functional and genetic testing, nutritional counseling, as well as behavioral health.
The audited condensed consolidated financial statements of First Choice Healthcare Solutions, Inc., a Delaware corporation, since February 13, 2012, include the accounts of the Company and its direct and indirect wholly owned subsidiaries: FCID Medical, Inc. (“FCID Medical”) is the subsidiary under which we own and operate First Choice Medical Group of Brevard, LLC, (“FCMG”), our original medical services practice, and The Good Clinic Properties, LLC.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principals in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all the information and disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of September 30, 2025 and for the nine months ended September 30, 2025 and 2024. The results of operations for the nine months ended September 30, 2025 are not necessarily indicative of the operating results for the full year ending December 31, 2025 or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures of the Company as of December 31, 2024, and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on Form 10-K on May 13, 2025.
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES
Use of estimates
The preparation of the financial statements in conformity with U. S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Significant estimates include the recoverability and useful lives of long-lived assets, provision against bad debt, the fair value of the Company’s stock, and stock-based compensation. Actual results may differ from these estimates.
Revenue Recognition
The Company recognizes revenue when: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.
| 7 |
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Patient Service Revenue
Our revenues relate to net patient fees received from various payers and patients themselves under contracts in which our performance obligations are to provide services to the patients. Revenues are recorded during the period our obligations to provide services are satisfied. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges and provide for payments based upon predetermined rates for services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.
Concentrations of credit risk
The Company’s financial instruments are exposed to a concentration of customer risk and accounts receivable risk. Occasionally, the Company’s cash and cash equivalents in interest-bearing accounts may exceed FDIC insurance limits. The financial stability of these institutions is periodically reviewed by senior management.
Accounts receivables
Accounts receivables are carried at their estimated collectible amounts net of doubtful accounts. The Company analyzes its history and identifies trends for each major payer sources of revenue to estimate the appropriate allowance for doubtful accounts and provision for bad debts. Management regularly reviews data about these major payer sources of revenue in evaluating the sufficiency of the contractual allowances.
Patient receivables are accounts receivables from services provided to patients who have third-party coverage. The Company analyzes contractually due amounts and provides a provision for bad debts, if necessary. The Company records a provision for bad debts in the period of service on the basis of past experience or when indications are the patients are unable or unwilling to pay the portion of their bill for which they are responsible. The difference between the standard rates (or the discounted rates if negotiated) and the amounts actually collected after all reasonable collection efforts have been exhausted, is charged off against the allowance for doubtful accounts.
Net loss per share
Basic net loss per common share is based upon the weighted-average number of common shares outstanding. Diluted net loss per common share is the same as basic net loss per common share as the inclusion of potentially dilutive common shares would be anti-dilutive.
SCHEDULE
OF BASIC NET LOSS PER COMMON SHARE
| Nine months ended September 30, | ||||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||
| Numerator: | ||||||
| Net loss attributable to First Choice Healthcare Solutions, Inc. | $ | (3,500,214 | ) | $ | (3,954,535 | ) |
| Denominator: | ||||||
| Weighted-average common shares, basic and dilutive | 32,958,288 | 32,958,288 | ||||
| Basic and dilutive loss per common share | $ | (0.11 | ) | $ | (0.12 | ) |
| 8 |
| --- |
Basic net loss per share is computed on the basis of the weighted average number of common shares outstanding during each year. Diluted net loss per share is computed similar to basic net loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company uses the “if-converted” method for calculating the earnings per share impact of outstanding convertible debentures, whereby the securities are assumed converted and an earnings per incremental share is computed. Options, warrants and their equivalents are included in earnings per share calculations through the treasury stock method. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. In addition, there were no vested restricted stock for periods presented. Potentially dilutive securities excluded from the basic and diluted net income per share are as follows:
SCHEDULE
OF ANTI-DILUTIVE WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
| September 30, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Convertible debt | 1,025,231,949 | 1,132,213,935 | ||
| Warrants to purchase common stock | 11,656,581 | 13,756,977 | ||
| Incentive shares payable issued with non convertible notes | 4,410,938 | 3,271,875 | ||
| Restricted stock awards | - | 1,357,308 | ||
| Total | 1,041,299,468 | 1,150,600,095 | ||
| Anti-dilutive securities | 1,041,299,468 | 1,150,600,095 |
Stock-based compensation
The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by the Company in the same expense classifications in the consolidated statements of operations, as if such amounts were paid in cash. Upon exercise of a common stock equivalent, the Company issues new shares of common stock out of its authorized shares.
Long-lived assets
The Company follows a “primary asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.
Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For financial statement purposes, property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives of 5 to 15 years.
The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Leases
In
February 2016, the FASB issued ASC 842, Leases, (“ASC 842”) to increase transparency and comparability among organizations by requiring the recognition of right-of-use (ROU) assets and lease liabilities on the balance sheet for leases previously classified as operating leases. The Company adopted ASC 842 effective January 1, 2022 and recognized and measured operating leases existing at, or entered into after, January 1, 2021 (the beginning of the earliest comparative period presented) using a modified retrospective approach, with certain practical expedients available (see Note 4). The Company’s accounting for finance leases under ASC 842 remained unchanged.
| 9 |
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In accordance with ASC 842, the Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates corresponding to the reasonably certain lease term. If the estimate of our incremental borrowing rate was changed, our operating lease assets and liabilities could differ materially.
Finance leases lease assets and liabilities are recognized at the lease commencement date at the present value of the future lease payments not yet paid using the Company’s incremental borrowing rate, Assets acquired under finance lease are included in property and equipment, while finance lease obligations are included in other current liabilities and other long- term liabilities on the consolidated balance sheets.
Income taxes
The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse.
The Company follows a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s consolidated financial statements as of September 30, 2025 or December 31, 2024. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date.
Treasury Stock
The Company uses the cost method when it purchases its own common stock as treasury shares and displays treasury stock as a reduction of shareholders’ deficit.
Fair Value of Financial Instruments
Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:
| ● | Level<br> 1 – Quoted prices in active markets for identical assets or liabilities. |
|---|---|
| ● | Level<br> 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets<br> with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs<br> are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the<br> assets or liabilities. |
| ● | Level<br> 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. |
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.
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The carrying value of the Company’s cash, accounts receivable, accounts payable, short-term borrowings (including lines of credit and notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity.
As of September 30, 2025, and December 31, 2024, the Company did not have any items that would be classified as level 1, 2 or 3 disclosures.
Reclassifications
Certain reclassifications have been made to prior year data to conform to the current year’s presentation. These reclassifications had no impact on reported loss.
Recent accounting pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements. The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial position or results of operations.
NOTE
3— NOTES PAYABLE
See Footnote 1 for the potential exchange of Series C Preferred stock to settle certain notes payable liabilities in connection with the Offering.
Non-Convertible Notes Payable
20%Cash Payment Notes
During
the years ended December 31, 2022 and December 31, 2021, the Company issued eighteen non-convertible notes payable to individuals for a total face value of $2,076,158. The notes were due within 60 days from the dates of issuance, were interest free, with a 20% cash payment on the principal amount of the note and were unsecured. During the years ended December 31, 2024 and 2023, the Company repaid or refinanced cumulative principal of $1,283,521 and $156,000, respectively. The balance of the non-convertible notes payable as of September 30, 2025 and December 31, 2024 was $3,376,387 and $2,607,636 respectively.
PPP Loans
In
2020, the Company and its two subsidiaries received Paycheck Protection Plan (“PPP”) loans under the Cares Act totaling $1,386,580. The PPP loans were expected to be forgiven by the U.S. Small Business Association (“SBA”) and as such, were not made eligible for any distributions under the amended joint Plan of Reorganization which was approved on February 23, 2021(the “Plan”). The Plan further required the Company to file proper forgiveness applications with the SBA no later than February 19, 2021. The Company successfully filed for and received forgiveness confirmation for one of the PPP loans for $103,618 plus interest. The remaining two PPP loans forgiveness applications were not properly completed and filed. The Company reinitiated the two forgiveness applications with the SBA and expects the remaining loans to be forgiven in full. As of December 31, 2024, the Company had a total of PPP loans payable of $471,300 including accrued interest. The Company received confirmation from the SBA of full forgiveness of the final PPP loan for $471,300 on April 24, 2025.
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OtherNon-Convertible Notes
As
of September 30, 2025 and December 31, 2024, there were $2,293,963 and $2,239,019, respectively, of Other Non-Convertible Notes. The Notes have fixed interest rates that range up to 18%. As of September 30, 2025, the Notes include $2,142,105 due to the Company’s Chief Executive Officer and $151,858 due to the Company’s prior Chief Financial Officer. The Notes due to the Chief Executive Officer and prior Chief Financial Officer relate to deferred compensation, payments to third party service provides, and other normal course of business items. As of December 31, 2024, the Notes include $1,626,983 due to the Company’s Chief Executive Officer, $151,858 due to the Company’s prior Chief Financial Officer, and $460,178 due to multiple unrelated parties. The Notes due to the Chief Executive Officer and prior Chief Financial Officer relate to deferred compensation, payments to third party service provides, and other normal course of business items.
Non-convertible notes payable as of September 30, 2025 and December 31, 2024 are comprised of the following:
SCHEDULE
OF NON CONVERTIBLE NOTES PAYABLE
| September 30, 2025 | December 31, 2024 | |||||
|---|---|---|---|---|---|---|
| 20% Cash Payment Notes | $ | 3,376,387 | $ | 2,607,636 | ||
| PPP Loans Payable | - | 471,300 | ||||
| Other Non-Convertible Notes | 2,293,963 | 2,239,019 | ||||
| Less current portion | (5,670,350 | ) | (4,846,655 | ) | ||
| Long term portion | $ | - | $ | 471,300 |
Fees
and discounts are deferred and amortized over the life of the non-convertible note payable. During the nine months ended September 30, 2025 and 2024, the Company recognized a total of $583,736 and $0, respectively, from the amortization of original issuance debt discounts. The outstanding balance of debt discount as of September 30, 2025 and December 31, 2024 was $8,507 and $214,812 respectively.
Convertible Notes Payable
10%OID Senior Secured Convertible Notes
The Company entered into Security Purchase Agreements with lenders for the sale of 10% original issue discount senior secured promissory notes (“10% Notes”) and warrants to purchase shares of the Company’s common stock equal to 50% of the face value. The 10% Notes accrue interest at 10% per annum payable quarterly, are convertible into shares of the Company’s common stock at the option of the holder at any time. The conversion price in effect on the conversion date shall be equal to: the lesser of 75% of the price per share of Common Stock paid by other investors for a majority of the Common Stock issued in the qualified financing (as defined under the 10% Notes) or seventy five cents ($0.75), subject to adjustment therein.
The 10% Notes have full ratchet and anti-dilution provisions, a principal adjustment provision upon default, providing for a principal increase to 110% at maturity if unpaid, 120% at Nine months if unpaid and 130% at 12 months if unpaid. The 10% Notes were due March 31, 2022 and to date, all default provisions have been waived. The amounts due under the 10% Secured Convertible Notes are secured by assets of the Company pursuant to a security agreement.
Warrants to purchase shares of the Company’s common stock have a five-year term, are exercisable upon the completion of a “Qualified Financing” at a cash exercise price equal to the lower of 93.75% of the per share price of Company’s common stock sold to third-party investors in that Qualified Financing, or $0.75 per share, subject to adjustment. The value of the warrants was recorded as debt discounts that are being amortized to interest expense over the life of the notes.
At
September 30, 2025 and December 31, 2024, the balance of 10% notes was $5,973,000 and $5,973,000, original issuance discounts were $0 and $0, discounts from warrants were $0 and $0, discounts from deferred finance costs were $0 and $0 respectively.
35%OID Super Priority Senior Secured Convertible Notes
The Company entered into Security Purchase Agreements with lenders for the sale of 35% original issue discount senior secured promissory notes (“35% Notes”), warrants to purchase shares of the Company’s common and shares of the Company’s common stock as incentives. The 35% Notes have a 35% original issuance discount being amortized to interest expense through maturity, are non-interest bearing, are due at the earlier of six months from the date of issue or upon the occurrence of a liquidity event and are prepayable by the Company at any time at a premium of 120% of the outstanding balance. Upon the occurrence of default, the holder shall have the right, at the holder’s option, to convert the 35% Note in whole or in part, including any outstanding principal amount, interest and any fees and any and all other outstanding amounts owing thereon, in each case, at the lower of 1) 75% of average of the two lowest closing prices of the Company’s common stock during the fifteen (15) consecutive trading days ending on the trading day immediately prior to the applicable conversion; or 2) a 25% discount to lowest share price sold by the Company based on any subsequent financings with other investors.
Warrants to purchase shares of the Company’s common stock warrants have a five-year term, are exercisable upon the completion of a Qualified Financing at a cash exercise price equal to 93.75% of the per share price of the Company’s common stock sold to third-party investors in a Qualified Financing.
At
September 30, 2025 and December 31, 2024, the balance of 35% notes was $5,600,462 and $5,600,462, original issuance discounts were $0 and $0, discounts from warrants were $0 and $0, discounts from deferred finance costs were $0 and $0 and discounts from incentive shares were $0 and $0, respectively.
The original issuance discount, deferred financing costs and the relative fair value of the warrants and incentive shares are being amortized to interest expense through maturity. During the nine months ended September 30, 2025 and 2024, the Company recognized $0 and $0 in interest expense from the amortization of original issuance discounts, $0 and $0 in interest expense from the amortization of debt discounts from warrants and $0 and $0 in amortization of incentive shares, respectively.
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20%OID Senior Secured Convertible Notes Payable
The Company entered into Security Purchase Agreements with lenders for the sale of 20% original issue discount promissory notes (“20% Notes”), warrants to purchase shares of the Company’s common stock with a five-year term, exercisable at any time at the option of the holder at a cash exercise price equal to 85% of the per share price of Company’s common stock sold to third-party investors in a qualified financing and incentive shares of the Company’s common stock. The 20% Notes accrue interest at 10% per annum, principal and interest are due at the earlier of six months from the date of issue or upon the occurrence of a liquidity event.
The holder shall have the right to convert the principal amount of the 20% Note and any accrued interest into Common Stock (i) on a qualified financing at a price equal to 85% of the qualified offering price ;or (i) otherwise at a conversion price equal to: a 10% discount to the VWAP for the five days preceding the date of conversion subject to a maximum price of $1.00, subject to adjustment therein. The 20% OID Notes are not convertible into shares of Series C Preferred Stock of the Company.
At
September 30, 2025 and December 31, 2024, the balance of 20% Notes was $2,427,500.
The
original issuance discount, relative fair value of the warrants and incentive shares are being amortized to interest expense through maturity. During the nine months ended September 30, 2025, the Company recognized $0 in interest expense from the amortization of original issuance discounts of the 20% Notes and $0 in amortization of incentive shares and $0 in accrued interest on the 20% Notes. During the nine months ended September 30, 2025, the Company recognized $8,250 in interest expense from the amortization of original issuance discounts of the 20% Notes and $1,803 in amortization of incentive shares and $1,727 in accrued interest on the 20% Notes.
Convertible notes payable as of September 30, 2025 and December 31, 2024 were comprised of the following:
SCHEDULE
OF CONVERTIBLE NOTES PAYABLE
| December 31, 2024 | |||||
|---|---|---|---|---|---|
| 10% OID Senior Convertible Notes Payable, past due, interest at 10%, secured by assets, convertible at 0.75 per share | 5,973,000 | $ | 5,973,000 | ||
| Amount 35% OID Super Priority Senior Convertible Notes Payable, due in 2 years from date of issuance, interest at 35%, secured by assets, convertible upon qualifying financing | 5,600,462 | 5,600,462 | |||
| 20% OID Senior Convertible Notes Payable, past due, interest at 10%, secured by assets, convertible at max 1.00 per share | 2,427,500 | 2,427,500 | |||
| Total | 14,000,962 | 14,000,962 | |||
| Less: unamortized discounts | (251,809 | ) | (214,812 | ) | |
| Total | 13,749,153 | $ | 13,786,150 | ||
| Less current portion | (13,749,153 | ) | (13,786,150 | ) | |
| Long-term portion | - | $ | - |
All values are in US Dollars.
NOTE
4— LEASES
See Footnote 1 for the potential exchange of Series C Preferred stock to settle certain lease liabilities in connection with the Offering.
Operating Leases
As
a result of the adoption of ASC 842 on January 1, 2021, the Company recognized a lease liability which represents the present value of the remaining operating lease payments discounted using our incremental borrowing rate of 5.0%, and a right-of-use asset.
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Operating leases consist of an office and clinic locations and have remaining terms of approximately 7 and 1 years, respectively, and include options to extend the leases for additional periods. Generally, the lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods. If the estimate of our reasonably certain lease term was changed, our depreciation and rent expense could differ materially.
Contractual lease payments were as follows as of September 30, 2025:
SCHEDULE
OF MATURITIES OF LEASE LIABILITIES
| 2025 | $ | 320,256 | |
|---|---|---|---|
| 2026 | 721,131 | ||
| 2027 | 739,152 | ||
| 2028 | 756,907 | ||
| 2029 | 773,719 | ||
| Thereafter | 1,726,996 | ||
| Total Lease Payments | 5,038,161 | ||
| Less Interest | (1,639,454 | ) | |
| Total Lease Liabilities | $ | 3,398,707 | |
| Less: Current Portion | (404,447 | ) | |
| Long-Term Liabilities | $ | 2,994,260 |
Sale/Leaseback
On March 31, 2016, the Company entered into a lease of Marina Towers under a sale/leaseback transaction, via a 10-year absolute triple-net master lease agreement, to expire in 2026. The Company has two successive options to renew the lease for five-year periods on the same terms and conditions and did not have any residual interest or the option to repurchase the facility at the end of the lease term.
During October 2021, the Company, through the eighteenth judicial circuit court in Brevard County, Florda, received an order approving joint stipulation for alternative resolution to the Company’s real estate lease in Melbourne, Florida. The order terminated the Company’s use of floors three and four of the building immediately, while terminating its right to possession and use of floors three and five at December 31, 2021. The order also terminated the existing lease payment schedule, replacing it with the following:
| ● | Payment<br> of $50,000 on October 12, 2021 |
|---|---|
| ● | The<br> following rent installment payments: |
| --- | --- |
SCHEDULE OF RENT INSTALLMENT PAYMENTS
| I. | $200,000<br> by October 19, 2021 |
|---|---|
| II. | $250,000<br> by November 15, 2021 |
| III. | $306,166<br> by December 15, 2021 |
| IV. | $275,000<br> by January 7, 2022 |
| V. | $31,166<br> by January 15, 2022 |
| VI. | $300,000<br> by February 8, 2022 |
| VII. | $31,166<br> by February 15, 2022 |
Upon
receipt of the Order, the Company recorded a liability and lease settlement expense for the amount of the order, or $1,443,498. As of September 30, 2025, the Company has paid approximately $200,000 of this obligation and has an open accounts payable liability remaining of approximately $1,200,000. The Company is working to reach a settlement with the landlord.
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NOTE
5 — CAPITAL STOCK
The
Company has 100,000,000 shares of Common Stock, par value $0.001 per share, authorized for issuance, 1,000,000 shares of Preferred Stock, of which (i) 40,000 Preferred shares were allocated to the Series B Convertible Preferred Stock, par value $0.01 per share, (ii) 4 Preferred shares were allocated to the Series A Super Voting Preferred Stock, par value $0.10 per share and (iii) 50,000 Preferred shares were allocated to Series C Preferred Stock, par value $0.0001 per share, authorized for issuance.
Series A Super Voting Preferred Stock
The holders of the Series A Super Voting Preferred Stock shall be entitled to vote on all matters subject to a vote or written consent of the holders of the Company’s Common Stock, and on all such matters, the four (4) shares of Series A Super Voting Preferred Stock shall be entitled to that number of votes equal to the number of votes that all issued and outstanding shares of the Common Stock and all other voting securities of the Company are entitled to, as of any such date of determination, plus one million (1,000,000) votes, it being the intention that the holders of the Series A Super Voting Preferred Stock shall have effective voting control of the Company, on a fully diluted voting basis. Accordingly, each share of Series A Super Voting Stock shall entitle the Holder to that number of votes as is equal to 12.5% of the outstanding shares of Common Stock and all other voting securities of the Company are entitled to, as of such date of determination, plus 250,000 votes. The holders of the Series A Super Voting Preferred Stock shall vote together with the holders of Common Stock as a single class. Currently, Lance Friedman, our Chief Executive Officer holds all 4 outstanding shares of the Series A Super Voting Preferred Stock.
In connection with the issuance of the 20% OID Convertible Notes, the Company was to issue incentive shares of unrestricted common stock. As of September 30, 2025, none of the incentive shares were issued and were recorded as a Common Share Payable current liability.
NOTE
6 — STOCK OPTIONS, WARRANTS AND RESTRICTED STOCK UNITS
Options
The Company does not have an Incentive Stock Plan in place.
Restricted Stock Units (“RSU”)
All previously issued RSUs were terminated as part of the bankruptcy. No RSUs were issued after the bankruptcy. As such, there are no RSUs outstanding as of September 30, 2025 and December 31, 2024
Warrants
Warrantsin connection with 10% OID Senior Secured Convertible Notes
In connection with the issuance of the 10% Senior Secured Convertible Notes the Company issued warrants. The warrants can only be exercised upon a qualified offering. The warrants have an exercise price equal to 93.75% of the price of the qualified offering, subject to a minimum exercise price of $1, coverage of 50% and a term of five years.
Warrantsin connection with 35% OID Super Priority Senior Secured Convertible Notes
In connection with the issuance of the 35% Senior Secured Convertible Notes the Company issued warrants. The warrants can only be exercised upon a qualified offering. The warrants have an exercise price equal to 93.75% of the price of the qualified offering, subject to a minimum exercise price of $1, coverage of 50% and a term of five years.
Warrantsin connection with 20% OID Unsecured Convertible Notes Payable
In connection with the issuance of the 20% Unsecured Convertible Notes the Company issued warrants. The warrants have an exercise price equal to 85% of the price of the qualified financing price (s defined under the warrant), coverage of 150% and a term of five years from the date of the warrant.
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Warrantsin connection with Series B Preferred Convertible Stock
In connection with the issuance of the Series B Preferred Convertible Stock the Company issued warrants. The warrants can only be exercised upon a qualified offering. The warrants have an exercise price equal to 93.75% of the price of the qualified offering, subject to a minimum exercise price of $1, coverage of 50% and a term of five years.
Warrantsin connection with Non-Convertible Notes
In
connection with the issuance of the Non-Convertible Notes the Company issued warrants. The warrants have an exercise price equal to $0.05 and a term of 5 years.
OtherWarrants issued to Service Providers
The
Company issued 850,000 warrants to four holders in consideration provided by them to the Company during its restructuring and bankruptcy proceedings. Of these, 200,000 warrants issued to one holder have a term of 5 years and an exercise price of $0.05, 350,000 warrants issued to one holder have a term of 5 years and an exercise price of $0.25 and 300,000 warrants (150,000 each issued to two separate holders) have a term of 5 years and an exercise price of 93.75% of the next qualifying offering.
Warrants outstanding as of September 30, 2025 and December 31, 2024.
SCHEDULE
OF WARRANTS OUTSTANDING
| September 30, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| 10% OID Senior Secured Convertible Notes | 2,986,500 | 2,986,500 | ||
| 35% OID Super Priority Senior Secured Convertible Notes | 2,800,231 | 2,800,231 | ||
| 20% OID Unsecured Convertible Notes Payable | 3,641,250 | 3,641,250 | ||
| Series B Preferred Convertible Stock | 528,600 | 528,600 | ||
| Non-Convertible Notes | 850,000 | 850,000 | ||
| Other Warrants | 850,000 | 850,000 | ||
| Total | 11,656,581 | 11,656,581 |
Transactions involving stock warrants issued are summarized as follows:
SCHEDULE
OF STOCK WARRANT ISSUED
| Number of | ||
|---|---|---|
| Shares | ||
| Outstanding at December 31, 2024: | 11,656,581 | |
| Issued | — | |
| Exercised | — | |
| Expired | — | |
| Outstanding at September 30, 2025: | 11,656,581 |
NOTE
7 – GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis of accounting which contemplates continuity of operations, realization of assets, liabilities, and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company has a working capital deficit as of September 30, 2025 and has generated recurring net losses since its emergence from bankruptcy in April 2022.
During
the nine months ending September 30, 2025, the Company experienced operating losses of approximately $3.5 million and corresponding cash outflows from operations of approximately $0.55 million. This performance reflected challenges in operating and restructuring the Company because of the previous issues that confronted the Company in the healthcare market, such as growing referral bases and negotiating favorable contract rates with third party payors for services rendered, as well as the negative impact of the CEO indictment in November 2018 and the bankruptcy from June 2020. As a result of the former CEO’s actions the Company has been subject to litigation as well as incurring damage to its relationships with its employees and referral sources. The Company’s ability to continue as a going concern is dependent upon the success of its continuing efforts to acquire profitable companies, grow its revenue base, reduce operating costs, especially as related to provider services, and access additional sources of capital, and/or sell assets. The Company believes that it will be successful in repairing its relationships with employees and referral sources, generating growth and improved profitability resulting in improved cash flows from operations. Additionally, headcount was reduced in October 2021 and again in January 2023 to generate reductions in operating costs while the Company focused on developing and executing its future business strategy.
However, in order to execute the Company’s business development plan, which there can be no assurance we will achieve, the Company may need to raise additional funds through public or private equity offerings, debt financing, corporate collaborations or other means and potentially reduce operating expenditures. If the Company is unable to secure additional capital, it may have to curtail its business development initiatives and take additional measures to reduce costs in order to conserve its cash, thus raising substantial doubt about its ability to continue as a going concern more than one year from the date of issuance of the 2024 financial statements included in this filing.
NOTE
8 – SUBSEQUENT EVENTS
The Company evaluated its September 30, 2025, financial statements for subsequent events and transactions through November 11, 2025, the date the financial statements were available to be issued for possible disclosure and recognition in the financial statements. On September 24, 2024, the Company filed an S-1/A with the Securities and Exchange Commission.
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Item2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”). Forward-looking statements reflect the current view about future events. When used in this quarterly report on Form 10-Q, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking statements. Such statements include, but are not limited to, statements contained in this quarterly report on Form 10-Q relating to our business strategy, our future operating results, and our liquidity and capital resources outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward–looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees of assurance of future performance. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, the execution of our strategy; evolving healthcare laws and regulations; changes in the rates or methods of third-party reimbursements for medical services; accelerated pace of consolidation in the hospital industry; changes in our medical technology as it relates to our services and procedures; any failures in our information technology systems to protect the privacy and security of protected information and other similar cyber security risks; our ability to raise capital to fund continuing operations; and other factors relating to our industry, our operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.
Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Overview
For the Nine Months Ended September 30, 2025, and September 30, 2024, we reported a net loss of $3,500,214 and $3,954,535, respectively, a decrease of $454,319 or 11.5%. The decrease in the net loss was attributable to decreased interest for the nine months ending September 30, 2025 and PPP forgiveness in the amount of $471,300 as compared to September 30, 2024.
Resultsof Operations
Ninemonths ended September 30, 2025, as Compared to Nine months ended September 30, 2024
The following is a discussion of the results of operations for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.
Revenues
Total revenue was $5,686 for the nine months ended September 30, 2025, increasing from ($19,801) in the prior year. Net patient service revenue accounted for all of total revenue in 2025. The effective increase in patient service revenue was the result of a write-off in 2024.
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OperatingExpenses
Operating expenses include the following:
| Nine Months Ended<br> <br>Sept. 30, 2025 | NineMonths Ended<br> <br>Sept, 30, 2024 | |||
|---|---|---|---|---|
| Salaries and benefits | $ | 400,854 | $ | 330,815 |
| Other operating expenses | 792,356 | 810,983 | ||
| General and administrative | 578,674 | 238,210 | ||
| Depreciation and amortization | 13,836 | 25,965 | ||
| Total operating expenses | $ | 1,785,720 | $ | 1,405,973 |
The major components of operating expenses include salaries and benefits, practice supplies and other operating costs, depreciation and general and administrative expenses, which included legal, accounting and professional fees associated with being a public entity.
General and administrative expenses were $578,674 for the nine months ended September 30, 2025 as compared to $238,210 for the nine months ended September 30, 2024, an increase of $340,464. The increase in spending is primarily due to additional rent expenses for the new leases in Minnesota.
NetLoss from Operations
Net loss from operations for the nine months ended September 30, 2025 totaled $3,500,214, which compared to a loss from operations of $3,954,535 for the nine months ended September 30, 2024. The decrease is a result of the interest expenses and PPP forgiveness as discussed above.
InterestIncome (expense)
Interest expense decreased to $2,143,153 for the nine months ended September 30, 2025, which compared to interest expense of $2,464,385 for the nine months ended September 30, 2024. The decrease in 2025 was primarily due to forgiveness of the PPP loan.
NetLoss attributable to FCHS Shareholders
As a result of all the above, we reported net loss attributable to common shareholders of $3,500,514 for the nine months ended September 30, 2025 as compared to net loss attributable to common shareholders of $3,954,535 reported for the same year period in the prior year.
Liquidityand Capital Resources
As of September 30, 2025, we had cash of $2,430 and accounts receivables of $0. This is compared to cash of $19,915 and accounts receivable of $0 as of December 31, 2024.
The Company believes that the current cash balance as of September 30, 2025, along with the continued execution of its business development plan, will allow the Company to further improve its working capital.
However, in order to execute the Company’s business development plan, which there can be no assurance we will achieve, the Company may need to raise additional funds through public or private equity offerings, debt financings, corporate collaborations or other means and potentially reduce operating expenditures. If the Company is unable to secure additional capital, it may be required to curtail its business development initiatives and take additional measures to reduce costs to conserve its cash. See Note 7 Going Concern.
Net cash used in our operating activities for the nine months ended September 30, 2025 totaled $552,485, which compared to net cash provided in our operations for the nine months ended September 30, 2024 of $685,385. The decrease in cash used for the nine months ended September 30, 2025 was due primarily to a decrease in accounts payable.
Net cash flow in investing activities was $10,000 for the nine months ended September 30, 2025, compared to net cash used in investing activities of $1,638,987 for the nine months ended September 30, 2024 was primarily the result of proceeds from the sale of assets.
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Net cash provided in financing activities was $525,000 for nine months ended September 30, 2025, compared to net cash provided in financing activities of $942,500 for the nine months ended September 30, 2024. The cash flows provided in our financing activities were the result of additional convertible debt investment.
| Nine Months Ended | Nine Months Ended | ||||
|---|---|---|---|---|---|
| Sept. 30, 2025 | Sept. 30, 2024 | ||||
| Proceeds from issuance of convertible notes | $ | 615,000 | $ | 942,500 | |
| Interest paid | (90,000 | ) | — | ||
| Net cash provided by financing activities | $ | 525,000 | $ | 942,500 |
Inflation
Our opinion is that inflation has not had, and is not expected to have, a material effect on our operations.
Off-BalanceSheet Arrangements
At September 30, 2025, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.
NewAccounting Pronouncements
We do not expect recent accounting pronouncements will have a material impact on our condensed consolidated financial position, results of operations or cash flows. See Footnote 2 in the accompanying condensed consolidated financial statements for additional information.
Item3. Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information required by this Item.
Item4. Controls and Procedures
Evaluationof Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Principal Accounting Officer, of the effectiveness of our disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Principal Accounting Officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Principal Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changesin Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 19 |
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PART
II
Item1. Legal Proceedings
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
Our contracts with hospitals generally require us to indemnify them and their affiliates for losses resulting from the negligence of our care providers. Although we currently maintain liability insurance coverage intended to cover professional liability and certain other claims, we cannot assure that our insurance coverage will be adequate to cover liabilities arising out of claims asserted against us in the future where the outcomes of such claims are unfavorable to us. Liabilities in excess of our insurance coverage, including coverage for professional liability and certain other claims, could have a material adverse effect on our business, financial condition, and results of operations.
We are currently not a party to any pending legal proceedings, nor is our property the subject of a pending legal proceeding, that is not in the ordinary course of business or otherwise material to the financial condition of our business.
Item1A. Risk Factors
Not required for smaller reporting companies.
Item2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item3. Defaults upon Senior Securities
None
Item4. Mine Safety Disclosures
Not applicable.
Item5. Other Information
None.
Item6. Exhibits
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.
| FIRST CHOICE HEALTHCARE SOLUTIONS, INC. | ||
|---|---|---|
| Dated:<br> November 12, 2025 | By: | /s/ Lance Friedman |
| Lance<br> Friedman | ||
| Chief<br> Executive Officer (Principal Executive Officer) | ||
| Dated:<br> November 12, 2025 | By: | /s/ Lance Friedman |
| Lance<br> Friedman | ||
| (Principal<br> Accounting Officer) |
| 21 |
| --- |
Exhibit31.1
CERTIFICATION
I, Lance Friedman, certify that:
| 1. | I<br> have reviewed this quarterly report on Form 10-Q of First Choice Healthcare Solutions, Inc., a Delaware corporation (the “registrant”); |
|---|---|
| 2. | Based<br> on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary<br> to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to<br> the period covered by this report; |
| 3. | Based<br> on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material<br> respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in<br> this report; |
| 4. | The<br> registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures<br> (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange<br> Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others<br> within those entities, particularly during the period in which this report is being prepared; |
| --- | --- |
| (b) | Designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our<br> supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about<br> the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; |
| (d) | Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,<br> or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The<br> registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial<br> reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing<br> the equivalent functions): |
| --- | --- |
| (a) | All<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and |
| --- | --- |
| (b) | Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting. |
| Date:<br> November 12, 2025 | |
| --- | |
| /s/ Lance Friedman | |
| Lance<br> Friedman | |
| Chief<br> Executive Officer and Director<br><br> <br>(Principal<br> Executive Officer) |
Exhibit31.2
CERTIFICATION
I, Lance Friedman certify that:
| 1. | I<br> have reviewed this quarterly report on Form 10-Q of First Choice Healthcare Solutions, Inc., a Delaware corporation (the “registrant”); |
|---|---|
| 2. | Based<br> on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary<br> to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to<br> the period covered by this report; |
| 3. | Based<br> on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material<br> respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in<br> this report; |
| 4. | The<br> registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures<br> (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange<br> Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others<br> within those entities, particularly during the period in which this report is being prepared; |
| --- | --- |
| (b) | Designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our<br> supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about<br> the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; |
| (d) | Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,<br> or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The<br> registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial<br> reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing<br> the equivalent functions): |
| --- | --- |
| (a) | All<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and |
| --- | --- |
| (b) | Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting. |
| Date:<br> November 12, 2025 | |
| --- | |
| /s/ Lance Friedman | |
| Lance<br> Friedman | |
| (Principal<br> Accounting Officer) |
Exhibit32.1
CertificationPursuant to 18 U.S.C. §1350, as adopted
Pursuantto §906 of the Sarbanes-Oxley Act of 2002
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), each of the undersigned hereby certifies in his capacity as an officer of First Choice Healthcare Solutions, Inc. (the “Company”), that, to the best of his knowledge:
(1) the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025 to which this Certification is attached as Exhibit 32.1 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Lance Friedman |
|---|
| Lance<br> Friedman |
| Chief<br> Executive Officer and Director |
| (Principal<br> Executive Officer) |
| Date:<br> November 11, 2025 |
| /s/ Lance Friedman |
| Lance<br> Friedman |
| (Principal<br> Accounting Officer) |
| Date:<br> November 12, 2025 |
Acertification furnished pursuant to this Item will not be deemed “filed” for purposes of section 18 of the Exchange Act (15U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by referenceinto any filing under the Securities Act or the Exchange Act, except to the extent that the small business issuer specifically incorporatesit by reference.