FCHS 10-Q
First Choice Healthcare Solutions, Inc. (FCHS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended:
OR
For the transition period from ___________to ____________.
Commission
File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
(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.
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.
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 accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging 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 shares outstanding of the registrant’s Common Stock, par value $.
| 2 |
FIRST CHOICE HEALTHCARE SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in dollars)
As of September 30, 2025 | As of December 31, 2024 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Other Current Assets | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Deposits | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Operating lease liabilities, current portion | ||||||||
| Notes payable | ||||||||
| Total current liabilities | ||||||||
| Long term liabilities: | ||||||||
| PPP loan payable | ||||||||
| Operating lease liabilities, non-current portion | ||||||||
| Total liabilities | $ | $ | ||||||
| Stockholders’ deficit: | ||||||||
| Series A Super Voting Preferred Stock; shares authorized, issued and outstanding at September 30, 2025 and December 31, 2024 | ||||||||
| Series A Convertible Preferred stock; $ par value, shares authorized, and shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively | ||||||||
| Common stock, $ par value, shares authorized and shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock, common shares, at cost | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
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 | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Gross profit | ( | ) | ( | ) | ||||||||||||
| Operating expenses | ||||||||||||||||
| Compensation expense | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Gain (loss) on sale of equipment | ( | ) | ||||||||||||||
| PPP Loan Forgiveness | ||||||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expenses), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from continuing operations before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income taxes expense (benefit) | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Preferred stock dividends | ( | ) | ( | ) | ||||||||||||
| Net loss attributable to common shareholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted loss per common share | ||||||||||||||||
| Net loss per common share | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of common shares outstanding, basic and diluted | ||||||||||||||||
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 Paid in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Dividends payable on Preferred Stock | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Dividends payable on Preferred Stock | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Dividends payable on Preferred Stock | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Common stock | Preferred stock | Additional Paid in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Dividends payable on Preferred Stock | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Dividends payable on Preferred Stock | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Dividends payable on Preferred Stock | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
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 | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | ||||||||
| Loss on sale of assets | ||||||||
| Forgiveness of PPP Loan | ( | ) | ||||||
| Interest expense | ||||||||
| Amortization of debt discount | ||||||||
| Preferred dividends – accrued | ||||||||
| Provision for bad debts | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Other current assets | ( | ) | ||||||
| Decrease in leased assets | ||||||||
| Increase in deposits | ||||||||
| Increase in accounts payable and accrued liabilities | ||||||||
| Decrease in lease liabilities | ( | ) | ||||||
| Net cash provided by (used in) operating activities | $ | ( | ) | $ | ||||
| Cash flows from investing activities: | ||||||||
| Proceeds from the sale of fixed assets | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Net cash (used in) provided by investing activities | $ | $ | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Interest paid | ( | ) | ||||||
| Proceeds from issuance of convertible notes | ||||||||
| Net cash provided by (used in) financing activities | $ | $ | ||||||
| Net change in cash | ( | ) | ( | ) | ||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| 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 | $ | $ | ||||||
| Common shares issued for convertible notes - inducement | $ | $ | ||||||
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 |
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.
| Nine months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Numerator: | ||||||||
| Net loss attributable to First Choice Healthcare Solutions, Inc. | $ | ( | ) | $ | ( | ) | ||
| Denominator: | ||||||||
| Weighted-average common shares, basic and dilutive | ||||||||
| Basic and dilutive loss per common share | $ | ) | $ | ) | ||||
| 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:
| September 30, 2025 | December 31, 2024 | |||||||
| Convertible debt | ||||||||
| Warrants to purchase common stock | ||||||||
| Incentive shares payable issued with non convertible notes | ||||||||
| Restricted stock awards | ||||||||
| Total | ||||||||
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
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 |
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 1 – Quoted prices in active markets for identical assets or liabilities. | |
| ● | Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. | |
| ● | Level 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.
| 10 |
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 $
PPP Loans
In
2020, the Company and its two subsidiaries received Paycheck Protection Plan (“PPP”) loans under the Cares Act totaling $
| 11 |
Other Non-Convertible Notes
As
of September 30, 2025 and December 31, 2024, there were $
Non-convertible notes payable as of September 30, 2025 and December 31, 2024 are comprised of the following:
| September 30, 2025 | December 31, 2024 | |||||||
| 20% Cash Payment Notes | $ | $ | ||||||
| PPP Loans Payable | ||||||||
| Other Non-Convertible Notes | ||||||||
| Less current portion | ( | ) | ( | ) | ||||
| Long term portion | $ | $ | ||||||
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 $
Convertible Notes Payable
10% OID Senior Secured Convertible Notes
At
September 30, 2025 and December 31, 2024, the balance of 10% notes was $
35% OID Super Priority Senior Secured Convertible Notes
At
September 30, 2025 and December 31, 2024, the balance of 35% notes was $
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 $
| 12 |
20% OID Senior Secured Convertible Notes Payable
At
September 30, 2025 and December 31, 2024, the balance of 20% Notes was $
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 $
Convertible notes payable as of September 30, 2025 and December 31, 2024 were comprised of the following:
| September 30, 2025 | December 31, 2024 | |||||||
| 10% OID Senior Convertible Notes Payable, past due, interest at | $ | $ | ||||||
| Amount 35% OID Super Priority Senior Convertible Notes Payable, due in | ||||||||
| 20% OID Senior Convertible Notes Payable, past due, interest at | ||||||||
| Total | ||||||||
| Less: unamortized discounts | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
| Less current portion | ( | ) | ( | ) | ||||
| Long-term portion | $ | $ | ||||||
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
| 13 |
Operating
leases consist of an office and clinic locations and have remaining terms of approximately
Contractual lease payments were as follows as of September 30, 2025:
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total Lease Payments | ||||
| Less Interest | ( | ) | ||
| Total Lease Liabilities | $ | |||
| Less: Current Portion | ( | ) | ||
| Long-Term Liabilities | $ |
Sale/Leaseback
On
March 31, 2016,
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
of $ |
| ● | The following rent installment payments: |
| I. | $ | |
| II. | $ | |
| III. | $ | |
| IV. | $ | |
| V. | $ | |
| VI. | $ | |
| VII. | $ |
Upon
receipt of the Order, the Company recorded a liability and lease settlement expense for the amount of the order, or $
| 14 |
NOTE 5 — CAPITAL STOCK
The
Company has shares of Common Stock, par value $ per share, authorized for issuance,
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
Warrants in 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
Warrants in 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
Warrants in 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
| 15 |
Warrants in 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
Warrants in 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 $
Other Warrants issued to Service Providers
The
Company issued
Warrants outstanding as of September 30, 2025 and December 31, 2024.
| September 30, 2025 | December 31, 2024 | |||||||
| 10% OID Senior Secured Convertible Notes | ||||||||
| 35% OID Super Priority Senior Secured Convertible Notes | ||||||||
| 20% OID Unsecured Convertible Notes Payable | ||||||||
| Series B Preferred Convertible Stock | ||||||||
| Non-Convertible Notes | ||||||||
| Other Warrants | ||||||||
| Total | ||||||||
Transactions involving stock warrants issued are summarized as follows:
| Number of | ||||
| Shares | ||||
| Outstanding at December 31, 2024: | ||||
| Issued | ||||
| Exercised | ||||
| Expired | ||||
| Outstanding at September 30, 2025: | ||||
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 $
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.
| 16 |
Item 2. 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.
Results of Operations
Nine months 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.
| 17 |
Operating Expenses
Operating expenses include the following:
Nine Months Ended Sept. 30, 2025 | Nine Months Ended 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.
Net Loss 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.
Interest Income (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.
Net Loss 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.
Liquidity and 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.
| 18 |
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-Balance Sheet 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.
New Accounting 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.
Item 3. 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.
Item 4. Controls and Procedures
Evaluation of 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.
Changes in 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 |
PART II
Item 1. 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.
Item 1A. Risk Factors
Not required for smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3. Defaults upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
| EX-101.INS | INLINE XBRL INSTANCE DOCUMENT | |
| EX-101.SCH | INLINE XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT | |
| EX-101.CAL | INLINE XBRL TAXONOMY EXTENSION CALCULATION LINKBASE | |
| EX-101.DEF | INLINE XBRL TAXONOMY EXTENSION DEFINITION LINKBASE | |
| EX-101.LAB | INLINE XBRL TAXONOMY EXTENSION LABELS LINKBASE | |
| EX-101.PRE | INLINE XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
** Furnished herewith.
| 20 |
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: November 12, 2025 | By: | /s/ Lance Friedman |
| Lance Friedman | ||
| Chief Executive Officer (Principal Executive Officer) | ||
| Dated: November 12, 2025 | By: | /s/ Lance Friedman |
| Lance Friedman | ||
| (Principal Accounting Officer) | ||
| 21 |