Quarterly Report for Quarter Ending September 30, 2024 (Form 10-Q)

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, 2024

Commission File Number: 000-53012

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware		90-0687379
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)

95 Bulldog 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 accelerated filer	☐		Accelerated filer	☐
Non-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 13, 2024, there were 32,958,288shares outstanding of the registrant's Common Stock, par value $0.001.

PART I.	FINANCIAL INFORMATION
	ITEM 1	Financial Statements
		Condensed consolidated balance sheets as of September 30, 2024 (unaudited) and December 31, 2023	3
		Condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 (unaudited)	4
		Condensed consolidated statement of stockholders' equity for the nine months ended September 30, 2024 (unaudited)	5
		Condensed consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023 (unaudited)	6
		Notes to condensed consolidated financial statements (unaudited)	7
	ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	19
	ITEM 4.	Controls and Procedures	19
PART II. OTHER INFORMATION
	ITEM 1.	Legal Proceedings	20
	ITEM 1A.	Risk Factors	20
	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
	ITEM 3.	Defaults Upon Senior Securities	20
	ITEM 4.	Mine Safety Disclosures	20
	ITEM 5.	Other Information	20
	ITEM 6.	Exhibits	20
	SIGNATURES	21

FIRST CHOICE HEALTHCARE SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in dollars, unaudited)

		As of			As of
		September 30, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents		$	1,505			$	12,607
Accounts receivable, net			49,201				92,444
Deposits			396,488				-
Other Current Assets			112,063				206,631
Total current assets			559,257				311,682
Property, plant and equipment, net			236,278				262,243
Operating lease right-of-use assets			3,815,972				2,437,358
Deferred tax asset			111,949				111,949
Total assets		$	4,723,456			$	3,123,232
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses			9,279,593			$	8,410,879
Operating lease liabilities, current portion			515,020				299,244
Notes payable, current portion			22,669,266				19,217,018
Total current liabilities			32,463,879				27,927,141
Long term liabilities:
PPP loan payable			1,283,624				1,283,624
Operating lease liabilities, non-current portion			3,460,539				2,442,519
Convertible notes			-				-
Total liabilities		$	37,208,042			$	31,653,284
Stockholders' equity (deficit):
Series A Convertible Preferred stock; $0.01par value, 40,000shares authorized, 147and 147shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively			1				1
Common stock, $0.001par value, 100,000,000shares authorized 32,958,288and 32,958,288shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively			32,958				32,958
Additional paid-in capital			35,300,370				35,369,995
Treasury stock, 74,453common shares, at cost			-				-
Accumulated deficit			(67,817,915	)			(63,933,006	)
Total stockholders' equity (deficit)			(32,484,586	)			(28,530,052	)
Total liabilities and stockholders' equity (deficit)		$	4,723,456			$	3,123,232

The accompanying notes are an integral part of these consolidated financial statements.

FIRST CHOICE HEALTHCARE SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in dollars, unaudited)

		Three Months Ended September 30,			Nine Months Ended September 30,
		2024			2023			2024			2023
Revenue
Revenue, net of discounts		$	(29,955	)		$	12,556			$	(19,801	)		$	(13,450	)
Cost of sales			-				-				-				-
Gross (deficit) profit			(29,955	)			12,556				(19,801	)			(13,450	)
Operating expenses
Compensation expense			111,660				171,795				330,815				529,064
Selling, general and administrative expenses			308,338				388,275				1,075,158				1,889,789
Total operating expenses			419,998				560,070				1,405,973				2,418,853
Operating loss			(449,953	)			(547,514	)			(1,425,774	)			(2,432,303	)
Other income (expenses)
Gain (loss) on sale of equipment			1,100				(100,742	)			5,250				(82,051	)
Miscellaneous income (expense)			-				-				-				-
Interest expense, net			(368,354	)			(2,379,551	)			(2,464,387	)			(5,189,461	)
Total other income (expenses), net			(367,254	)			(2,480,293	)			(2,459,137	)			(5,271,512	)
Net Loss before income taxes			(817,207	)			(3,027,807	)			(3,884,911	)			(7,703,815	)
Income taxes expense (benefit)			-				-				-				-
Net loss			(817,207	)			(3,027,807	)			(3,884,911	)			(7,703,815	)
Preferred stock dividends			(23,209	)			(23,208	)			(69,624	)			(67,523	)
Net loss attributable to common shareholders		$	(840,416	)		$	(3,051,015	)		$	(3,954,535	)		$	(7,771,338	)
Basic and diluted income (loss) per common share
Net loss per common share		$	(0.03	)		$	(0.09	)		$	(0.12	)		$	(0.24	)
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 consolidated financial statements.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

For the Nine Months Ended September 30, 2024

(unaudited, in dollars)

														Additional
		Common stock			Preferred stock			Paid in			Accumulated
		Shares			Amount			Shares			Amount			Capital			Deficit			Total
Balance, December 31, 2023			32,958,288			$	32,958				147			$	1.00			$	35,369,995				(63,933,006	)		$	(28,530,052	)
Dividends payable on Preferred Stock			-				-				-				-				(23,209	)			-				(23,209	)
Net loss			-				-				-				-				-				(1,205,341	)			(1,205,342	)
Balance, March 31, 2024			32,958,288			$	32,958				147			$	1			$	35,346,786			$	(65,138,347	)		$	(29,758,603	)
Dividends payable on Preferred Stock			-				-				-				-				(23,206	)			-				(23,206	)
Net loss			-				-				-				-				-				(1,862,361	)			(1,862,362	)
Balance, June 30, 2024			32,958,288			$	32,958				147			$	1			$	35,323,580			$	(67,000,708	)		$	(31,644,171	)
Dividends payable on Preferred Stock			-				-				-				-				(23,210	)			-				(23,209	)
Net loss			-				-				-				-				-				(817,207	)			(817,207	)
Balance, September 30, 2024			32,958,288			$	32,958				147			$	1			$	35,300,370			$	(67,817,915	)		$	(32,484,586	)

The accompanying notes are an integral part of these consolidated financial statements.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in dollars)

		For the Nine Months Ended September 30,
		2024			2023
Cash flows from operating activities:
Net loss		$	(3,884,911	)		$	(7,703,815	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation			25,965				36,123
Loss on disposition of assets			-				99,876
Amortization of debt discount			260,246				1,421,136
Amortization of debt discount			-				(89,991	)
Preferred dividends - accrued			69,624				67,524
Provision for bad debts			1,582				38,297
Changes in operating assets and liabilities:
Accounts receivable			41,661				1,184,957
Other current assets			(301,920	)			28,129
(Increase) decrease in leased assets			260,373				1,945,037
Accounts payable and accrued liabilities			2,978,967				(394,901	)
(Increase) decrease in lease liabilities			1,233,798				(1,710,330	)
Net cash provided by (used in) operating activities		$	685,385			$	(5,077,958	)
Cash flows from investing activities:
Proceeds from sale of fixed assets			-				146,697
Purchase of property and equipment			(1,638,987	)			(3,794	)
Net cash (used in) provided by investing activities		$	(1,638,987	)		$	142,903
Cash flows from financing activities:
Payments on notes payable			-				(173,764	)
Proceeds from issuance of convertible notes			942,500				5,058,068
Proceeds from sale of preferred stock			-				45,000
Net cash provided by (used in) financing activities		$	942,500			$	4,929,304
Net change in cash			(11,102	)			(5,751	)
Cash, beginning of period			12,607				7,219
Cash, end of period		$	1,505			$	1,468
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			$	258,462
Warrants issued for debt discount			-				1,672
Common shares issued for convertible notes - inducement		$	15,812			$	900

The accompanying notes are an integral part of these consolidated financial statements.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

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 unaudited 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 subsidiary under which we have leased clinic facilities.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted 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, 2024 and for the three and nine months ended September 30, 2024 and 2023. The results of operations for the nine months ended September 30, 2024 are not necessarily indicative of the operating results for the full year ending December 31, 2024 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, 2023, and for the year then ended, which were filed with the Securities and Exchange Commission ("SEC") on Form 10-K on May 13, 2024.

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 in accordance with Accounting Standards Codification No. 606, "Revenue from Contracts with Customers", 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.

Patient Service Revenue

Our revenues relate to (i) net patient fees received from various third-party payers and patients themselves under contracts in which our performance obligations are to provide services to the patients and (ii) and patient fees, co-pays, and deductibles paid by patients themselves.

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. Gross revenues are recorded at our standard rates upon completion of the performance obligations to the patients, and an estimate of the discounts applicable to third-party payers is recorded as contra revenue in the same period, based on the contractual arrangements with those third-party payers. 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.

The payment terms with third party payers typically involve processing time allowances resulting in payment within 30 to 60 days from the date of service. The payment terms with patients provides for services fees, co-pays, and deductibles to be due at the time of service.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(unaudited)

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 income per common share is based on the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding and computed as follows:

		Nine months ended September 30,
		2024			2023
Numerator:
Net loss attributable to First Choice Healthcare Solutions, Inc. common shareholders		$	(3,954,535	)		$	(7,771,338	)
Denominator:
Weighted-average common shares, basic			32,958,288				32,958,288
Weighted-average common shares, diluted			32,958,288				32,958,288
Basic:		$	(0.12	)		$	(0.24	)
Diluted:		$	(0.12	)		$	(0.24	)

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

The computation excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period.

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 EPS 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, 2024			December 31, 2023
Convertible debt			2,811,914,442				2,810,648,817
Warrants to purchase common stock			13,494,477				11,774,164
Incentive shares payable issued with convertible notes			5,758,375				1,568,250
Restricted stock awards			1,357,308				1,357,308
Options to purchase common stock			-				-
Total			2,832,524,602				2,825,348,539

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 5to 15years.

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.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

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.

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, 2024 and 2023. 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' equity.

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.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

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.

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, 2024, and 2023, 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 income or losses.

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 AND CAPITAL LEASES

Non-Convertible Notes Payable

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, had original issuance discounts totaling $408,000and were unsecured. During the years ended December 31, 2023, 2022, and 2021, the Company repaid or refinanced principal of $156,000, $310,000, and $817,521, respectively. During the nine month period ending September 30, 2024, the Company repaid $0of the non-convertible notes payable. The balance of the non-convertible notes payable as of September 30, 2024 and September 30, 2023 was $792,637and $792,637, 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 $103,618plus interest. The remaining two PPP loans forgiveness applications were not properly completed and filed by former management. As of September 30, 2024, the SBA's website shows those two remaining PPP loans reflected as "Charged Off". As a result of this recent discovery, the Company has reinitiated forgiveness applications with the SBA and expects those loans to be forgiven in full during 2024. As of September 30, 2024 and December 31, 2023, the Company had a total of PPP loans payable of $1,341,485and $1,331,318including accrued interest, respectively.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

Non-convertible notes payable including accrued interest as of September 30, 2024 and December 31, 2023 are comprised of the following:

		September 30, 2024			December 31, 2023
Notes Payable		$	2,620,593			$	2,861,425
Note Payable - Equipment			-				-
PPP Loans Payable			1,341,485				1,331,318
Less current portion			(2,620,593	)			(2,861,425	)
Long term portion		$	1,341,485			$	1,331,318

Fees and discounts are deferred and amortized over the life of the related note payable. For non-convertible notes payable, during the three and nine months ended September 30, 2024 and 2023, the Company recognized a total of $0and $0and $0and $0, respectively, from the amortization of original issuance debt discounts. The outstanding balance of debt discount at September 30, 2024 and December 31, 2023 was $0and $0, 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 at a fixed ceiling price of $0.75 per share. 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.

At September 30, 2024 and December 31, 2023, the balance of 10% notes was $5,808,000and $5,808,000, and accrued interest was $2,174,253and $1,652,965, respectively. The Company did not accrue additional interest on the notes during the three month period ending September 30, 2024 as a result of the holders of the 10% Notes entering into exchange agreements with a fixed exchange value (see Note 5). During the three and nine months ended September 30, 2024 and September 30, 2023, the Company recognized $0and $521,288and $185,334and $360,382in interest expense, respectively.

35% OID Super Priority Senior Secured Convertible Notes

During the years ended December 31, 2023 and 2022, 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 nine 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 an occurrence of default, the 35% Notes are subject to 10% default interest and the holder shall have the right to convert the 35% Note and outstanding interest at the lower of a discount to market or subsequent financings. The amounts due under the 35% Notes are secured by assets of the Company pursuant to a security agreement.

At September 30, 2024 and December 31, 2023, the balance of 35% notes was $5,600,462and $5,600,462, 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 three and nine months ended September 30, 2024 and 2023, the Company recognized $0and $0and $3,852and $6,478in interest expense from the amortization of original issuance discounts, $0and $0and $0and $1,672in interest expense from the amortization of debt discounts from warrants and $0and $0and $0and $900in amortization of incentive shares, respectively. During the three and nine months ended September 30, 2024 and 2023, the Company recognized $0and $346,151and $884,543and $1,684,497in default interest expense. The Company did not accrue additional interest on the notes in during the three month period ending September 30, 2024 as a result of the holders of the 35% Notes entering into exchange agreements with a fixed exchange value (see Note 5).

20% OID Convertible Notes Payable

During 2023 and 2024, the Company entered into Security Purchase Agreements with lenders for the sale of (i) 20% original issue discount unsecured promissory notes ("20% Notes"), (ii) warrants to purchase shares of the Company's common stock equal to 150% of the face value of the 20% Notes, , and (iii) a number of incentive shares of the Company's common stock equal to three times the face value of the 20% Notes. The warrants have 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. The 20% Notes accrue interest at 10% per annum, principal and interest are due at the earlier of nine months from the date of issue or upon the occurrence of a liquidity event. The 20% Notes mature six months from issuance and in the event the note is not paid upon the maturity date, the principal amount of the note shall be increased by 20% and the default interest rate of 18% will apply.

The holder shall have the right to convert the 20% Notes and outstanding interest on a qualified financing at a price equal to 85% of the offering price, or a 15% discount to the volume weighted average price of the Company's common stock for the five days preceding the dates of conversions, subject to a maximum price of $1.00.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

During the nine months ended September 30, 2024, the Company issued 20% Notes with a face value of $1,265,625and original issuance discounts of $253,125for cash of $1,012,500. The holders received warrants to purchase 1,851,563shares of the Company's common stock and 3,703,125incentive shares of the Company's common stock. At September 30, 2024 and December 31, 2023, the balance of 20% notes was $1,734,375and $468,250, original issuance discounts were $147,255and $77,999, and accrued interest totaled $81,883and $1,727respectively.

The original issuance discount, relative fair value of the warrants and incentive shares are being amortized to interest expense through maturity. During the three and nine months ended September 30, 2024 and 2023, the Company recognized $105,870and $268,496and $0and $0in interest expense from the amortization of original issuance discounts of the 20% Notes and $6,536and $14,382and $0and $0in amortization of incentive shares, respectively. The Company continued to accrue interest on the notes during the three month period ending September 30, 2024 as the holders of the 20% Notes are not participating in exchange agreements for the Series C Convertible Preferred stock (see Note 5).

Convertible notes payable are comprised of the following:

		September 30, 2024			December 31, 2023
10% OID Senior Convertible Notes Payable, past due, interest at 10%, secured by assets, convertible at $0.75per share		$	5,808,000			$	5,808,000
35% OID Super Priority Senior Convertible Notes Payable, due in 2years 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 $1.00per share			1,734,375				468,250
Total			13,142,837				11,876,712
Less: unamortized discounts			(147,255	)			(85,000	)
Total		$	12,995,582			$	11,791,712
Less current portion			(12,995,582	)			(11,791,712	)
Long-term portion		$	-			$	-

NOTE 4- LEASES

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.

Operating leases consist of an office and a clinic location and have remaining terms of approximately 7and 1years, respectively, and both 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.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

On August 1, 2024, the Company entered into a lease of a clinic facility sixty six monthtriple-net lease agreement, to expire in 2029. The Company has one option to renew the lease for a five-year period on the same terms and conditions with fair market value rent increases.

On September 1, 2024, the Company entered into a lease of a clinic facility six yeartriple-net lease agreement, to expire in 2030. The Company has one option to renew the lease for a five-year period on the same terms and conditions with annual rent increases.

Maturities of the above lease liabilities are as follows as of September 30, 2024:

2024		$	120,920
2025			762,060
2026			541,613
2027			572,837
Thereafter			3,118,468
Total Lease Payments			5,115,898
Less Interest			(1,140,339	)
Total Lease Liabilities		$	3,975,559
Less: Current Portion			(515,020	)
Long-Term Liabilities		$	3,460,539

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 one, two and five at December 31, 2021. The order also terminated the existing lease payment schedule, replacing it with the following:

	●	Payment of $50,000on October 12, 2021
	●	The following rent installment payments:

I.		$200,000by October 19, 2021
II.		$250,000by November 15, 2021
III.		$306,166by December 15, 2021
IV.		$275,000by January 7, 2022
V.		$31,166by January 15, 2022
VI.		$300,000by February 8, 2022
VII.		$31,166by 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, 2024, the Company has paid approximately $200,000of 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.

NOTE 5 - CAPITAL STOCK

Series A Preferred Convertible Stock

The Company is authorized to issue 40,000shares, $0.01par value Series A preferred stock.

Each share of the Series A preferred stock is convertible into 10,000shares of common stock in the Company. The Series A 10% Convertible Preferred Stock shall have a 10% dividend rate and have preference in liquidation so that holders of Series A 10% Convertible Preferred Stock are paid in full prior to any payments to holders of common stock of the Corporation. The Series A 10% Convertible Preferred Stock shall be automatically converted into shares of common stock of the Corporation on the effective date of the Corporation's S-1 filing with the Securities Exchange Commission.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

During the nine months ended September 30, 2024 and September 30, 2023, the Company did not issue any shares of Series A preferred stock.

As of September 30, 2024 and 2023, the total Series A preferred shares outstanding were 147and 147shares, respectively.

Proposed Series C Preferred Convertible Stock

In July 2024, contingent to a qualified financing occurring no later than six months from the exchange agreement date, the Company proposed the exchange of (i) all outstanding 10% Senior Secured Convertible Notes including accrued interest, (ii) all outstanding 35% Senior Secured Convertible Notes including accrued interest, (iii) all outstanding Promissory Notes including accrued interest, (iv) all outstanding Series A Preferred Convertible Stock including accrued dividends payable, and (v) certain open trade payables, for shares of a newly proposed Series C preferred stock with an exchange value of $1,000 per share. The proposed exchange value of (i), (ii), (iii), and (iv) above included a 35% premium to the book value of those instruments. The proposed exchange also included the exchange of all warrants to purchase common stock and incentive shares payable, each previously issued in conjunction with (i), (ii), (iii), and (iv) above for new warrants at a quantity calculated at 50% of the original face value of each of the notes and a holder's initial investment in the Series A Preferred Convertible Stock. The proposed exchange agreements all stated that the proposed exchange would be null and void if the Company did not close a qualified financing within six months from the exchange agreement date.

Common stock

During the nine months ended September 30, 2024 and September 30, 2023, the Company did not issue any shares of its common stock.

In connection with the issuance of the 20% OID Convertible Notes in 2023, the Company was to issue 468,250incentive shares of unrestricted common stock. In connection with the issuance of the 20% OID Convertible Notes in 2024, the Company was to issue incentive shares of common stock. As of September 30, 2024, 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")

Transactions involving restricted stock units issued are summarized as follows:

Restricted share units as of December 31, 2023			1,357,308
Granted			-
Forfeited			-
Unvested restricted shares as of September 30, 2024			1,357,308

During the nine months ended September 30, 2024, the Company granted 0performance-based, restricted stock units.

As of September 30, 2024, stock-based compensation related to restricted stock awards of $0remains unamortized.

Warrants

The Company issued warrants in 2024 and 2023 in connection with debt issuances. Warrants to purchase shares of the Company's common stock warrants have a five-yearterm, are fully vested upon issuance, exercisable upon the completion of a qualified financing typically at a cash exercise price equal to 93.75% of the per share price of Company's common stock sold to third-party investors in that qualified financing. The Company issued 1,720,313and 0warrants for the nine months ended September 30, 2024 and September 30, 2023 respectively in connection with debt issuances. In the nine months ended September 30, 2024 and September 30, 2023, the issued warrants had an estimated fair value of $0and $0, on the date of issuance, respectively.

Transactions involving stock warrants issued are summarized as follows:

		Number of
		Shares
Outstanding at December 31, 2023:			11,774,164
Issued			1,720,313
Exercised			-
Forfeited			-
Expired			-
Outstanding at September 30, 2024:			13,494,477

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Unaudited)

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 of $31,881,414as of September 30, 2024 and has generated recurring net losses since its emergence from bankruptcy in April 2022.

During the three and nine months ended September 30, 2024, the Company experienced net operating losses of approximately $817,207and $3,884,911, respectively, and corresponding cash from operations of $1,318,978and $685,385, respectively. As of September 30, 2024, the Company had an accumulated deficit of $67,817,915. This performance reflected challenges in operating and restructuring the company as a result 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 former CEO indictment in November 2018 and the bankruptcy from September 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.

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 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 September 30, 2024 financial statements included in this filing.

NOTE 8 - SUBSEQUENT EVENTS

The Company evaluated its September 30, 2024, financial statements for subsequent events and transactions through November 6, 2024, the date the financial statements were available to be issued for possible disclosure and recognition in the financial statements.

On September 9, 2024, the Company filed an S-1/A with the Securities and Exchange Commission.

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.

Results of Operations

Overview

For the nine months ended September 30, 2024, and September 30, 2023, we reported a net loss of $3,884,911 and $7,703,815, respectively, a decrease of $3,818,904 or 50%. The decrease the net loss was attributable to a reduction in operating expenses and non-operating expenses for the nine months ending September 30, 2024 as compared to September 30, 2023, The decrease in operating expenses resulted from a decrease in selling, general and administrative expenses. The decrease in non-operating expenses was the result of decreases in interest expenses, including suspending of accruing interest on debt that was subject to the Series C Preferred Stock exchanges, and reduction in the amortization of original issue discount and deferred financing costs.

The following table sets forth, for the periods indicated, our results of operations expressed as dollars and percentages of total revenues:

FIRST CHOICE HEALTHCARE SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in dollars)

		9 Months Ended September 30, 2024			% of Revenue			9 Months Ended September 30, 2023			% of Revenue
Revenue
Revenue, net of discounts		$	(19,801	)			100	%		$	(13,450	)			100	%
Cost of sales			-				0	%			-				0	%
Gross (deficit) profit			(19,801	)							(13,450	)
Operating expenses
Compensation expense			330,815				-1671	%			529,064				-3934	%
Selling, general and administrative expenses			1,049,193				-5299	%			1,856,290				-13801	%
Depreciation expense			25,965				-131	%			33,499				-249	%
Total operating expenses			1,405,973				-7101	%			2,418,853				-17984	%
Operating loss			(1,425,774	)			7201	%			(2,432,303	)			18084	%
Other income (expenses)
Loss on sale of assets			5,250				-27	%			(82,051	)			610	%
Miscellaneous income (expense)			-				0	%			-				0	%
Interest expense, net			(2,464,387	)			12446	%			(5,189,461	)			38583	%
Total other income (expenses), net			(2,459,137	)			12419	%			(5,271,512	)			39193	%
Loss from operations before income taxes			(3,884,911	)			19620	%			(7,703,815	)			57277	%
Income taxes expense (benefit)			-				0	%			-				0	%
Net loss			(3,884,911	)			19620	%			(7,703,815	)			57277	%
Preferred stock dividends			(69,624	)							(67,523	)
Net loss attributable to common shareholders		$	(3,954,535	)						$	(7,771,338	)
Basic and diluted income (loss) per common share
Net loss per common share		$	(0.12	)						$	(0.24	)
Weighted average number of common shares outstanding, basic and diluted			32,958,288								32,958,288

Nine Months Ended September 30, 2024, as Compared to Nine Months Ended September 30, 2023

The following is a discussion of the results of operations for the nine ended September 30, 2024, compared to the nine months ended September 30, 2023.

Revenues

Total revenue was ($19,801) for the nine months ended September 30, 2024, decreasing 47% from ($12,450) in the prior year. Net patient service revenue accounted for all of total revenue. The decrease in patient service revenue was the result of the reduction of service offerings and an increase in bad debt reserves.

Operating Expenses

Operating expenses include the following:

		Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023
Salaries and benefits		$	330,815			$	529,064
Other operating expenses			-				-
General and administrative			1,049,193				1,856,290
Depreciation and amortization			25,965				33,499
Total operating expenses		$	1,405,973			$	2,418,853

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.

Salaries and benefits decreased by 37% to $330,815 for the nine months ended September 30, 2024, compared to for the nine months ended September 30, 2023. The decrease was primarily due to the company's strategic pivot initiative which includes a reduction in highly compensated physicians and contract staff for the interim period.

General and administrative expenses decreased by $807,097 or 43% to $1,049,193 for the nine months ended September 30, 2024 as compared to $1,856,290 for the nine months ended September 30, 2023. The decrease in spending is primarily related to lower facility, legal, and professional costs.

Depreciation and amortization decreased by $7,534 or 22% to $ for the nine months ended September 30, 2024, compared to $25,965 for the nine months ended September 30, 2023. The decrease is primarily due to the retirement or sale of physical therapy equipment.

Net Loss from Operations

Net loss from operations for the nine months ended September 30, 2024 totaled $1,425,774, which compared to a loss from operations of $2,432,303 for the prior year, a decrease of $1,006,529 or 41%. The reduction is a result of the operating expenses discussed above, partially offset by an increase in net revenue.

Interest Income (expense)

Interest expense decreased by $2,725,074 or 53% to $2,464,387 for the nine months ended September 30, 2024, which compared to interest expense of $5,189,461 for the nine months ended September 30, 2023. The decrease is primarily due to lower original issue discounts amortized to interest expense and suspending interest expense on debt that is committed to the Series C Preferred Stock exchange agreements.

Net Loss attributable to FCHS Shareholders

As a result of all the above, we reported net loss attributable to common shareholders of $3,954,535 for the nine months ended September 30, 2024 as compared to net loss attributable to common shareholders of $7,771,338 reported for the same period in the prior year, a reduction of $3,816,803 or 49%.

Liquidity and Capital Resources

As of September 30, 2024, we had cash of $1,505 and accounts receivables, net totaling $49,201. This compared to cash of $1,468 and accounts receivable, net of $92,747 as of September 30, 2023.

The Company believes that the current cash balance as of September 30, 2024, along with continued execution of its business development plan, will provide the opportunity for 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 will 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 provided by our operating activities for the nine months ended September 30, 2024 totaled $685,385, which compared to net cash used in our operations for the nine months ended September 30, 2023 of $5,077,958. The increase of $5,763,343 in cash provided for the nine months ended September 30, 2024 was due primarily to decreases in accounts payable, short term debt, accrued liabilities, partially offset by an increase in other current assets associated with lease deposits on new leased clinic facilities.

Net cash flows used in investing activities was ($1,638,987) for the nine months ended September 30, 2024, compared to net cash provided of by investing activities $142,903 for the nine months ended September 30, 2023. The decrease in the net cash provided from investing activities in the nine months ended September 30, 2024 was primarily the result of an increase of right to use assets associated with new leased clinic facilities.

Net cash provided in financing activities was $942,500 for nine months ended September 30, 2024, compared to net cash provided in financing activities of $4,929,304 for the nine months ended September 30, 2023. The cash flows provided in our financing activities were the result of:

		Nine Months Ended			Nine Months Ended
		September 30, 2024			September 30, 2023
Proceeds from sale of common stock		$	-			$	-
Proceeds from sale of preferred stock			-				45,000
Proceeds from note payable			942,500				5,058,068
Proceeds from line of credit			-				-
Purchase of treasury stock			-				-
Payments on notes payable			-				(173,764	)
Net cash provided by financing activities		$	942,500			$	4,929,304

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, 2024, 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 Interim Chief Financial 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 Interim Chief Financial 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 Interim Chief Financial 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, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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.

Estimates of reasonably possible additional losses, both for each individual matter and in the aggregate, are not material to our consolidated financial position, results of operations or cash flows.

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

3.1		Certificate of Incorporation of First Choice Healthcare Solutions, Inc. (incorporated by reference to Annex B to the Company's Information Statement on Schedule 14C, filed with the SEC on March 14, 2012)
3.2		Certificate of Designation for Series C Preferred Stock of the Company (incorporated by reference to Exhibit 3.2 to the Company's quarterly report on Form 10-Q filed on August 14, 2024)
10.1		Form of Exchange Agreement (along with the form of Warrant, and form of Registration Rights Agreement, certificate of designation and form of term sheet) dated on or around July 8, 2024 between the Company and holders of Series A Convertible Preferred Stock, 10% Senior Secured Convertible Notes, 35% Senior Secured Convertible Notes, and certain other promissory note and warrants issued by the Company (incorporated by reference to Exhibit 10.8 to the Company's Registration Statement on Form S-1/A, filed with the SEC on September 9, 2024)
31.1		Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended.*
31.2		Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended.*
32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(b) or 15d-14(b) of the Securities Exchange Act, as amended, and 18 U.S.C. Section 1350.**

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.

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 13, 2024	By:	/s/ Lance Friedman
		Lance Friedman
		Chief Executive Officer (Principal Executive Officer)
Dated: November 13, 2024	By:	/s/ Ernest J. Scheideman Jr.
		Ernest J. Scheideman Jr.
		Interim Chief Financial Officer (Principal Financial Officer)

Public link

Please use the above public link if you want to share this noodl on another website.